And, What is the Answer to It?
What was the first business question to plague the minds of the ancients? It is the same question that I have been asked most frequently over my 25-years as a strategic marketing professional. If you thought it was, “What is the meaning of life?” you would be wrong. It is, “How do I bring my product to market and make lots of money?” Well, no one asks the question in those precise words, but that is the root of all of the questions clients pose. And, what is the fundamental answer to that question? “Don’t make any big mistakes!” OK, you got me…that is not the answer I give them along with a bill for my services. However, at the heart of it, that is what my client and I will work together to accomplish. Bringing a product or a technology to market and not making any big mistakes does not guarantee wealth and fame, but stumbles can, and often do, lead to financial catastrophe.
Without a good team and a process – good luck! Without a good process and team, and an exceptional helping of luck (all of it GOOD), you are bound to make a slew of blunders. Since the fundamentals of creating a core team to steer development were discussed in an earlier article (Lessons From Skiing Can Keep Your Company From Going Downhill), let’s focus on the process.
Process vs. Winging It
A good process has two components: speed control and cost control. The speed control will keep a not-fully-baked product or idea from being launched prematurely. Everybody wants to get to market as soon as possible to get revenue and market experience. But, the cost of getting to the market with the wrong product is huge, costing the company piles of money, months of wasted time and generally devastating group moral. Believe me, I have seen this movie, and it ain’t pretty!
The key to successful product development is to know the market (buyers and users, competitors’ offerings and market mechanics) as well, or better, than you know your own technology. Only then can you convert your technology to offer the greatest market value, which leads to more sales and at higher prices. That is the speed control element of a good process, which keeps the team in the market probing for more and more data and converting that data into a killer, gotta’-have-it product.
Spend Time Now – Money Later
To control costs and avoid horrific failures, use a phase-driven, budgeted, go/no-go approval process – often called a stage gate review process. Two fundamental features of the stage gating process are: an approval at each phase must be earned and is never guaranteed, and the cost of early concepting phases is low compared to later development stages. A “GO” for engaging significant capital and energy is given only after there is a VALIDATED business plan for the project. Validation requires confirmation, with high confidence, of the revenue, costs and timelines by the market panels, vendors and the technical team, what I refer to as the EX-Market (external market). An EX-Market approval must be seconded by a thoughtful review and approval by the IN-Market (internal market of investors, board, senior management, etc.).
Successful Development is Like the Wheel of Life, Grasshopper
Think of the development process as if it were a wheel that is turned by the development team, usually comprised of a technical specialist, product marketing expert and a financial whiz. Each lap or turn of the wheel gathers the latest ideas and hypotheses, analyzes the cost, timelines and revenue implications, renders them into a business planning format and tests the plan in the crucible of the IN-Markets and the EX-Markets. If the business plan passes the market tests, it can move to the next phase of development. Each stage, from idea to final production approval requires mushrooming capital outlays. If a review fails an approval, you just avoided a BIG MISTAKE…take another lap of the wheel! An EX-Market or IN-Market thumbs-down should not kill a project, it may not even be a set-back, but rather lead to identifying some new unmet needs and an opportunity in a vast, new market segment.
Now Roll On!!
And that is the answer to the biggest, mystical, magical business question of all times – a great process and team will find the greatest value and the lowest costs and guard against making big mistakes. KEEP THE DEVELOPMENT WHEEL ROLLIN’ FORWARD TO SUCCESS!