Alternative Approaches to New IT Product Development

    This is a continuation of the article: What if I need to create an innovative product in a traditional company?

    Today I will tell you three alternative patterns of entrepreneurial behavior that I most often see.

    History No. 1. "Built it and they will come"

    A farmer from Iowa Ray Kinsell is perplexed, so the film "Field of Miracles" begins. Recently, he constantly hears a voice that advises him to build a baseball field on the site of his corn fields. To someone, perhaps, such a proposal would have seemed completely devoid of meaning. But I don’t. After all, his late father was once just obsessed with this game. A loving son decides to follow the advice. And now the field is built, and a ghostly team of legendary players appears on it. Rei is not so much scared as puzzled. To understand the meaning of amazing events, he begins his own investigation ... What the hero hears is the phrase “Built it and they will come”.

    Like Ray, sometimes entrepreneurs superficially explore opportunities, and then direct all their energy to product development. Such entrepreneurs are guided by their vision of the perfect product. Their team, which is dominated by developers, is working tirelessly on translating the concept into reality, and work stops only when the product is ready to launch. The scale of the entrepreneur’s fantasy flight is wide, therefore there is no need to test the hypothesis of the business model. Sometimes the use of the concept “Built it and they will come” is rooted in defense of one's ego. The entrepreneur's ego has been heavily invested in the success of his enterprise.

    One way to protect the ego is to protect yourself from feedback, which indicates problems. The other extreme is supposedly diving headlong into product development as an excuse to sit out in the office. An introvert entrepreneur may experience a sense of great timidity by attacks from outsiders.

    There is no feedback from customers until the product is created and launched. If the uncertainty about demand is large enough, then the likelihood of developing exactly the product that is needed on the market using this approach is quite small.

    History No. 2. Waterfall in our life

    So we were taught at the university. So we worked with TK. So we reported to the customer. So we made plans in Project. So we are used to control.

    Once used, then such entrepreneurs translate their vision into a plan, after which they methodically fulfill it. The work is carried out in several successive stages. Efforts at the main stage are made only when the previous stage is completed and successfully passed the checkpoint of completion of the stage. Hence the name of this approach sometimes sounds like “stage-gate planning”.

    Usually it includes the following stages:

    1. The study of the concept, which ends with the development of a business plan that describes the product parameters, target audience, technical problems, competitors, financial prospects, etc.
    2. The product specification outlined in the Product Requirements, where, at least in theory, its functionality is adequately described, will allow engineers to begin its development.
    3. Product design.
    4. Product development.
    5. Internal testing.
    6. Laboratory launch with pilot clients to confirm technical specifications.

    The cascade model looks like this:

    The development team that uses the cascade model starts by studying the maximum possible amount of information and only then creates the simplest model of the product. Research can last for months or even years, and the result will dictate the conditions to the team. The requirements will be fixed before the start of development and their revision is possible not earlier than the appearance of version 2.0 of the product they created. This is how the cascade model works. A complete plan includes stages that must be completed in parallel with other functions. For example, marketers should prepare promotional and informational materials immediately after completing work on a product specification, after which they should begin to develop a plan for a PR company, etc.

    When developing and launching radically new products, strict adherence to cascading planning can often mean problems.

    After the concept research stage, the development team using cascading planning will not receive enough feedback from customers until the laboratory launch of the product. Similarly, when work is completed with large batches, errors that appeared at earlier stages may not be detected until the completion of additional work, as a result of which an additional amount of work aimed at eliminating them is possible. In addition, with a rapid change in the situation within the company itself, initial assumptions turn out to be outdated by the time all stages are completed.

    Thus, the problem is that the cascade model is in principle not compatible with the flexible approach. A flexible approach is based on fast iteration. As a result, every 2-4 weeks a ready-made technological solution is born, and the product is constantly improving instead of making fundamental changes to its design once and for all. This concept is based on a hypothesis, conducting an experiment, quickly manufacturing a product, and performing various measurements in real time.

    History No. 3. Just do it

    The phrase that Nike used in its famous tagline: 'Just Do It'.
    Some people hate planning at all and quench their passions for entrepreneurial action through an improvisational approach. They plunge headlong into starting a startup, using their imagination and expectations, but without a clear vision of the product or a detailed plan for its development. Such entrepreneurs rely heavily on ongoing feedback and on help from people they know and meet.

    They often tailor their offerings to meet the requirements of potential resource providers and customers and to cope with the surprises they inevitably encounter.

    This approach to doing business has its advantages: it helps to cope with the lack of resources by adjusting the supply taking into account the preferences and capabilities of the resource providers. However, without a clear vision, a detailed plan or hypothesis, it will be difficult to understand when to make adjustments to the work or in which direction to move.

    The rules for making a decision are very vague: “if the result improves, continue to do what you did before and think over the next few steps in this direction, if not, stop and start moving in a new direction ... uh, so where did we start there?” But what is this new direction? And what kind of criterion should be used to know when to change direction, and not expect a better result or not increase efforts?
    Without a clear initial understanding of the direction of movement, the search for opportunities through increasing adaptation can lead to serious problems when the entrepreneur cannot foresee a serial relationship between the results of decision-making.

    Consider the following examples of how product development decisions that depend on early feedback can fail if they are not integrated into the global strategy:

    • After receiving positive feedback from the first customers, the company can develop a product to meet the needs of these advanced users only in order to later discover that you are too clever with the design of the product, making it too expensive and too “sophisticated” for those mass users whose Support is critical to the successful launch of the product as a whole.
    • After receiving pleasant feedback from the target audience, you can launch a product that will solve a serious problem for only a small number of customers. Moreover, if you often do not keep in mind that: 1) direct contact with the client will be necessary constantly 2) you may not receive the planned revenue

    What conclusions can be drawn?

    The first two approaches have one common problem: both of them clearly indicate the initial direction of movement, but feedback is unlikely to help them change it. Conversely, the third approach takes into account the feedback, but the absence of the originally specified direction of movement means that some changes associated with the feedback may be erroneous due to the serial relationship between the solutions.

    In the case of putting forward and testing hypotheses, these traps can be avoided. Therefore, recently the Customer Development method and the Lean Startup approach in general have become so popular. This is confirmed by the results of the study, according to which startups that had to rebuild once or twice less are less susceptible to an unsuccessful mass launch of the product, while startups that had to rebuild more than two times are not at all affected by this problem. Sequential testing of a complete set of hypotheses of a business model ensures that restructuring, i.e. adaptation based on the feedback received leads to the creation of a product in demand.

    In the comments, write what other typical product development templates do you know? Maybe I didn’t consider everything. Thanks!

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