Keys to Building a Successful Product Innovation Lab
Digital technologies are disrupting whole industries and radically changing the way we do business. Companies that harness these digital technologies and experiences to deliver innovative products are better positioned to achieve a competitive advantage in the market.
Yet, the road to successful product delivery can be paved with near-misses, dead-ends and failures. Only 30 percent of executives at the world’s 2,000 largest public companies are “very satisfied” with their performance in converting ideas into market-ready products. And nearly the same number (28 percent) cite lateness to market as the key reason for product innovation failure.
Why does product innovation often fail or fall short? As with in any project, the causes sometimes can be traced back to one of three common factors: Lack of time, lack of budget or lack of resources. In other cases, projects may lack stakeholder agreement, suffer from scope creep or get sidetracked as in-house IT staff struggle to make progress in the face of competing operational demands from the business. All of these can play a role in the success or failure of a digital product initiative. However, it is often the process — the way we go about digital product innovation and development — that is chiefly to blame. Successful digital product innovation requires radically different mindsets and methods than traditional software development.
In our experience, the four major keys to successful digital product innovation are: Think Big, Start Small, Move Fast and Iterate Rapidly. Companies adopting these proven approaches are typically rewarded with faster time-to-market, enhanced scalability, lower development costs, enhanced user satisfaction and improved performance from their digital products.
Established companies may have made significant investments in establishing innovation centers that may generate many interesting ideas that may even result in products. Startups often take a “just do it” approach and start down the road of product development, failing to put the proper process and digital product development methodologies in place.
In many cases, businesses may spend years developing and perfecting these products – without spending the necessary time on the front end showing the product to prospective users to determine whether the product fills a real customer need. By the time they uncover critical usability issues or product/market fit problems, it may be too late – too much money already has been spent – and the initiative or the startup fails.
As “The Lean Startup” methodology directs us, “The question is not, ‘Can this product be built?’ Instead, the question is, ‘Should this product be built?’ and ‘Can we build a sustainable business around this set of products and services?’” Those are the guiding questions that must drive our efforts. To think big, we must start by having a clear picture of what overall success looks like. What are the business model and the key performance indicators (KPIs) for the new product (such as net revenue, usage or customer loyalty metrics)?
However, that is not enough. Before we go very far with the product idea, we must identify and validate user needs on the front end. We must learn what the customer problem is that we’re trying to solve. When enterprises spend sufficient time at the outset to conduct market research, analyze existing data such as customer satisfaction statistics, it can help ensure they are armed with the information and insights they need before embarking on a new digital product development initiative.
Part of keeping things small is building the right core team made up of in-house subject matter experts and external digital innovation consultants and partners. A small nimble team can often accomplish much more work and make more progress in a shorter period of time – with fewer communication snafus and other inefficiencies that may occur among larger digital development teams.
Starting out small doesn’t just make the project easier or more manageable. Studies show it can greatly increase the chances of success. Sixty-two percent of smaller projects are deemed successful compared to 9 percent of medium-sized projects or 6 percent of large projects.
By working to solve a smaller business problem first, you can rapidly create a prototype or Minimum Viable Product (MVP) in two to three months or less. The advantage of deploying an MVP as a first step in the software innovation process lies in the build-measure-learn-feedback loop that helps you develop better products faster and more effectively – with better results.
In 2015, in partnership with Huddle, Inc., we launched a mobile ticketing solution for high school events. GoFan is a complete K-12 ticketing-platform, created in just 75 days. Fans can buy tickets online and from mobile devices. Tickets can be printed in advance or presented on a user’s mobile device for admittance into the game. Part of what made this multi-screen experience possible was starting with mobile first, and expanding to cover additional use cases, including: desktop, mobile web, iOS, Android, Gate validators, Event admins.
Initially, we built a thin backend, then expanded it after proving the concept — GoFan now handles event ticketing, purchasing, and reporting for both printed and digital tickets.
The whole focus of a startup – or an innovation center within an established firm – is to transform ideas into products. Then, it’s critical to measure customer satisfaction and determine whether to “pivot or persevere” and accelerating the feedback loop through effective processes.
Markets move swiftly. If you wait a year, a competitor or startup could beat you to market. Since speed is critically important to product innovation success, it’s important that development teams avoid getting bogged down by existing processes, technology stack and tools on the front end. If these factors are allowed to dominate early efforts, they can impede or even doom the digital product innovation process.
In the beginning, focus instead on the design of the product and its market fit rather than on the technology stack. Modern technology tools and frameworks with an agile development process should be adopted and deployed while continuing to iterate the product. For example, depending on the business need, we might deploy an agile technology stack such as the following: Ionic Framework for hybrid mobile application development, React Native for native mobile application development, Elasticsearch for super-fast search, AngularJS for the progressive application, Firebase for a real-time database, and Stripe for payment applications.
Design Sprints, a concept developed by IDEO and Google Ventures, can be an extremely useful, five-day process for answering critical business questions for a product through design, prototyping and testing ideas with customers. The sprint enables you to see a finished “product” and gather customer reactions before making costly research and development investments.
While many people may think the project is complete when the Minimum Viable Product (MVP) launches, we believe that this is where some of the best innovation begins. When it comes to product innovation, great is never good enough; there’s always room for improvement. The iterative process is focused on measuring and assessing product market fit and enhancement. According to Marc Andreessen, market fit is the only thing that should matter to a startup. The iterative process is where we road-test the product and assess its market fit according to activation, acquisition, retention, referral and revenue. At this stage, users become truly part of the team. Their engagement and satisfaction with the Minimum Viable Product (MVP) can be measured, and this feedback can help drive data-driven decisions to power a better user experience – and create a better product that more closely matches the market’s needs. By definition, innovation requires new insights and new ways of seeing. As Einstein put it, “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”
Bob Klein ([email protected]) is Chief Executive Officer and Vishi Gondi ([email protected]) is Chief Technology Officer at Digital Scientists, a product and software innovation lab and one of Atlanta’s top application developers, supporting consumers and business users across all modern devices, mobile, digital display, and Internet of Things.
This article was originally featured in the Winter 2017 issue of Innovation Leader Magazine.