How to Focus on the Product Ideas That Matter

There is no monopoly on good product ideas. They can come from many places.

A competitive analysis provided by the marketing team could highlight new opportunities to differentiate the product. A sales request to add a new feature for a customer could contain an insight that would improve the product for everyone. Technical feedback from engineers could unearth options to make the product better by upgrading its underlying technology.

But resources are limited and not all ideas can be pursued or even investigated. This can be good. In fact, many great products were created in resource-constrained conditions. However, in these conditions, it is important to follow a plan that focuses resources on those ideas with most future benefit.

So, how can we stay focused and pursue the ideas that make the most impact?

Understand What the Customers Value

Good products deliver value to customers in order to create value for the business. Whether it is cereal or software, a good product convinces a customer to give their money, time, or something else they value in return for accessing the product.

A plan that focuses on the best ideas should therefore start by identifying why the target customer chooses the product. Once the underlying needs of the customer are understood, it is far easier to develop a product that caters to those needs. One way to understand customer needs is to identify what the customer is really trying to accomplish with the product – in other words, the job that the product is being hired for.

For example, people use LinkedIn to connect with other professionals and develop their network. However, this is not the underlying reason a person hires LinkedIn. On a deeper level – many people use LinkedIn to find a new job, business owners use it to promote their business, sales professionals use it to find sales leads, HR professionals use it to recruit a new person into their company.

By understanding the different jobs the product is hired for, LinkedIn was able to cater to its customers’ underlying needs through four different products – career, business, sales and hiring.

To focus efforts on what the customer values most, it is also important to identify what the customer values least. By investing resources thinly across multiple ideas in an attempt to be good at everything, products often end up being mediocre across the board. Instead, it is more powerful to focus investment in being the absolute best at those aspects the target customer cares most about and let the product be bad at aspects the customer does not care about.

For example, when the MacBook Air was first released in 2008, it was lighter and thinner than other laptops in the market. It had a beautiful shape, high quality LED screen and long battery life. But, to accommodate the thinness, the product did not have a CD drive. It also had a middle-of-the-range processing speed and limited storage. Nevertheless, despite these downsides, the MacBook Air has been a long-lasting success. Its target customers cared most about owning a product that looked beautiful and was easy to transport. In return, they were more than willing to accept all of its tradeoffs.

Develop a Product Vision Rooted in Customer Values

A product vision is an aspirational description of what the product will strive to deliver and why it should exist. Guided by why a customer would benefit from the product, it should serve as a reference point for all other product decisions. Every product idea can be evaluated for whether it contributes to the vision.

For example, IKEA’s vision is “to create a better everyday life for the many people” through “a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”.

IKEA’s vision is rooted in an understanding of the target customer (the many people). It also refers to the underlying value the product delivers to customers (better everyday life) as well as the product’s key points of differentiation (design, functionality, low prices). Any specific idea for an IKEA furnishing product can be evaluated against this vision, to make sure product development stays focused on achieving a single outcome.

Product vision is also embedded in Amazon’s product development activities, through the process of ‘working backwards’. Working backwards requires a product manager to create a press release announcing the finished product to the world, before starting any development work. The press release describes the ultimate benefit that the product would provide the target customer. If the benefits are not compelling enough, then the product is not built. Iterating on the press release and product vision is cheaper than iterating on the product itself.

Indeed, there are many different approaches to creating a product vision. There is no single template. However, Geoffrey Moore’s positioning framework, when completed using aspirational statements, does offer a comprehensive way to cover key points of a product vision.

Translate the Vision Into a Roadmap

A product roadmap is a high-level overview of the product vision, goals, key initiatives, and measures of success. It outlines the focused plan of work that would help achieve the product vision. While the vision aligns a team behind an outcome, a roadmap aligns a team behind a way to get to that outcome.

Although the roadmap adds detail to the vision, it is not just a list of product features and the timeline of their implementation. A key principle of lean startup methodology is that the solution to a customer problem is unknown at the start and should be identified through a process of testing and iterating ideas with the target customer. A roadmap that outlines features, without the required testing and investigation, can lead to product features that do not benefit the customer.

Instead, a roadmap should contain both product ideas to be investigated and validated as well as the high-level solutions that have already been validated. In the case of IKEA, a roadmap could include questions or ideas like “how can we help customers store more?” or a “storage container that can be extended”. It could also include validated solutions that have been tested with customers, like a design for a new space-efficient set of drawers. As the ideas are investigated and either validated or proven wrong, the contents of the roadmap can change.

Importantly, the roadmap is not a product backlog. The backlog is a specific, prioritized plan of the work to be done, broken down to a high-level of detail. Once a solution on the product roadmap is validated, it can then be translated into the backlog. This includes making decisions on the specific sequencing of work, who would do the work, and precise details about the functionality of features. While the roadmap can constantly change, the backlog should not.

Measure Success

Metrics translate the more abstract vision and roadmap into an action-oriented plan that can be readily acted upon across the business. For example, metrics turn IKEA’s “create a better everyday life for the many people” into sales targets for new products. In this way, metrics are more than just a means to evaluate progress. Instead, they set the direction for a team and focus the team’s activity.

A clear set of metrics that are rooted in the value a product delivers to both the customer and the business can tie together the vision, roadmap and backlog. Therefore, the process of creating metrics is immensely important. One way to develop a clear set of metrics is to instead focus on just two metrics – a north star metric and a key business metric.

The north star metric measures the fundamental value delivered to customers. For example, WhatsApp’s north star metric is ‘number of messages a user sends’. If the fundamental value provided by WhatsApp to customers is the ability to communicate seamlessly with others, the ‘number of messages a user sends’ quite compellingly measures that value. By focusing on ideas that improve performance in that metric, WhatsApp increases the value it provides to customers.

In contrast, the key business metric measures the single business result that the company cares most about – for example, sales, profit, or number of clients. The business metric also fundamentally influences product choices. For example, focusing on profit may lead to changing the underlying technology of a product to save costs, while focusing on the number of clients may lead to more investment in making the product free to trial.

If not thought about correctly, metrics can undermine the product. For example, Wells Fargo bank wanted to build long-term customer relationships. To do so, it used the amount of cross-selling (selling different products to the same customer) as a measure of long-term customer relationships. To increase the amount of cross-selling, employees began to open accounts for customers without customers’ consent – undermining the very customer relationships that the metric was supposed to enhance and resulting in enormous penalties.

Prioritize Ideas Based on Success Metrics

Metrics enable ideas to be evaluated. However, ideas are multi-faceted and may have multiple benefits. Every idea also requires a different amount of resources to investigate and implement.

The tradeoff between potential benefits and resources required to deliver the benefits is at the heart of managing in a resource-constrained environment. For example, the single idea that would add most value to the customer may also require the most resources. On the other hand, it may be possible to investigate and implement three less valuable ideas for same resources. How do we know which of the two options to pursue?

A process is needed to evaluate the different facets of each idea. One approach is to prioritize ideas based on three key dimensions: expected value to the customer, value to the business, and the complexity of the idea. By evaluating ideas based on the value to the customer and the business, the product vision is embedded into the prioritization. By then evaluating based on technical complexity, the resource constraints of the business are considered. By creating a clear structure to measure all three at once for every idea, it is far easier to rationalize why to focus on certain ideas – whether they are quick wins or transformative ideas that are difficult to implement.