It is likely that, after focusing on the problem and understanding the job to be done, as described in the previous articles, you will find not only one but a few opportunities to develop a new product or new features for your software product.
I’ve never seen in an organization where there’s abundance of resources and scarcity of opportunities. Usually, there are always a lot of opportunities ahead, and we don’t know which ones to pursue, because we can’t go after all of them since we don’t hold the necessary resources (time, money and people) available.
In these situations, I like using the opportunity assessment model, proposed by Marty Cagan in his book Inspired: how to create products customers love. Cagan is ex-VP of product management at eBay and currently works as a product management consultant.
Answering these 10-questions set, we can gather more information to decide if it’s worth to pursue a given opportunity or if it’s best to re-evaluate it in the future. The questions are very simple:
- Which problem will it solve? (value proposition);
- To whom this problem will be solved? (target market);
- What is the size of this opportunity? (market size);
- What are the alternatives? (competition scenario);
- Why are we better qualified to pursue this opportunity? (our uniqueness);
- Why now? (window of opportunity);
- How are we going to take this opportunity to the market? (launching strategy);
- How are we going to measure success and make money with this product? (metrics and revenue);
- What are the critical factors for success? (essential requirements);
- After answering the above, what is the recommendation? (go or no-go).
Questions 1 to 4 will help to understand the opportunity.
Questions 5 and 6 are very interesting because it is not enough to understand the opportunity and find it a good one. It is necessary to be sure that this is the right moment and that we have the required expertise to pursue it.
From 7 to 9, there are the “what if” questions, that is, considering that the decision is to pursue this opportunity, how is it going to be presented to the market, how the success will be measured and what are the critical factors for success.
Answering these questions is good not only to decide if itÃs worth to develop a given product, but it also help the partnership opportunities, opportunities to develop new features, and opportunity to attend a special client that needs changes in the product. Ultimately, every opportunity will require your or your teamÃs effort and should be analyzed to see if the revenue pays the required investment.
How many opportunities to pursue at the same time?
Another important advice is not pursuing many opportunities at the same time; otherwise, you and your team will lose focus and end up not getting any return from any of the pursued opportunities.
In an ideal world, the recommended is to pursue one opportunity at a time. However, knowing that this is utopic, we will end up pursuing more than one opportunity simultaneously. Try to limit this amount to a few units (2, 3 or 4, maximum), reminding that, at any time, you and your team can only concentrate in one thing at a time.
In other words, if you are working on more than one opportunity simultaneously, every time you want to work in one of them you’ll not be working in the other ones momentarily. Therefore, stick yourself to pursue a few opportunities, preferably one at a time.
After analyzing opportunities, the next step is to validate them, that is, see if there are people interested in this product of yours that will solve the problem you researched. There are some ways of doing that. The first one is going back to the street and talk to possible clients. This will be an exploratory conversation in which you expose the problem to people who probably deal with it. Later, you tell about the solution that will be developed, and evaluate the reaction. Whereas, the problem of telling about a solution is that, as better as the description is, it is still not a finished product, and forces the person to imagine something that can be quite different from what you are conceiving.
In 2011, I decided to perform a little more realistic validation. At that time, I’ve conducted a startup experiment, did my initial research and ended up with 3 product ideas to develop. Having a hard time choosing in which of the 3 ideas to invest my money, energy and time, I decided to run a simple test. I chose a name and a domain for each one of the ideas and registered them. Later, I created a webpage for each of the ideas of web product I’ve had. As I’m not a designer, nor have any skills to build beautiful pages, I used a site called unbounce, that enables us to create simple pages and even A/B tests in a very easy way. Using Unbounce, I created the following page:
Note that this page only has 3 points that describe the product: one to talk about the problem; another one to talk about the solution; and a third one to inform the price.
The email form was useful to gather the amount of people interested. I’ve made a Google Adwords campaign of $ 10.00 per day per product that I wanted to text, during a month.
Below is a partial result for this validation:
This image is a screen of Unbounce. After 30 days of tests, I ended up with 216 email addresses interested on ContaCal – the product I’ve launched that is running until today – and 1,043 pageviews, giving me 20.7% in conversion rate.
The other two ideas also kept the same trend of this partial result. But I preferred to let them unreadable in order to not influence anyone to bet in any of them without further validation.
For those who don’t know, ContaCal is a nutrition journal in which users record what they ate and the system informs the total amount of calories, with a twist. Aside the total amount of calories, it also informs the quality of calories through a color system. The colors indicate how healthy that food is. If the calories are red, it is best to avoid. Yellow calories can be ingested moderately. And the green calories have no restriction.
The total cost of this test was R$ 990.00:
- AdWords campaign: R$ 900.00.
- Domains: R$ 90.00.
- Unbounce site: free for 30 days; after this period, R$ 85.00 per month for up to 5 different domains that I would want to test at the same time.
Each new idea costs R$ 30.00 by domain .br, and another R$ 300.00 per month with a Google Adwords campaign if we make an investment of R$ 10.00 per day.
A very important point to notice is that ContaCal was not necessarily the best of the 3 opportunities, but the one that I was able to communicate best. Therefore, this validation is interesting, for it helps not only to test the idea of a product but also our capacity to communicate it properly.
Product Management: how to increase the success of your software
In 2015 I wrote a book on Software Product Management in Portuguese. In 2016, Paulo Caroli talked to me about how he enjoyed the book and how this book could be useful to people in the software industry not only in Brazil but anywhere in the world. For this reason, we decided to create an English version of my book.
The book is organized in 5 sections:
- Definitions and requirements
- Life cycle of a software product
- Relationship with other areas
- Product portfolio management
- Where to use software product management
This book is suitable for anyone working with software. Even companies that do not have software as its core business use software in their day to day and often have developed some software that interfaces with its customers such as a website or a mobile application. It is important for these companies to understand the software product management role and responsibilities, so they can better manage this software and increase its chances of success.
We are working on the translation but as we progress we are already releasing the content. If you want to see the work in progress, please visit the book page at LeanPub. Still in beta but already with valuable content. Feedbacks are not only welcome, but needed!