Is there any part of a product manager’s job that is more exciting then being responsible for introducing a new product? For that matter, is there any experience that can be more nerve racking than introducing a new product? If only there was some way that we could take out “flop insurance” that would help to prevent our becoming known as the product manager who introduced the next “new Coke” disaster…
Why New Product Fail
In 2003 34,000 new products were introduced. 90% of them failed. In 2008 122,743 new products were introduced and the failure rate was about 80%. Those odds don’t look so good for your next new product introduction, do they?
Dr. Rita Gunther McGrath has been studying the tools that companies use to plan for new product launches and she thinks that she knows what we’ve been doing wrong. It turns out that we’ve been using the wrong tools.
What’s Wrong With The Way That We’ve Been Doing Things?
As any product manager who has spent any time working for a large firm knows, there is no shortage of tools available to help product managers plan for the introduction of a new product. It turns out that most of these tools no longer work correctly.
The problem is caused by the simple fact that things have changed. A lot. Most of the tools that are currently available to product managers are based on an assumption that what’s happened in the past can be used to predict what will happen in the future. Now that most of the markets that we design new products for are moving so quickly, these assumptions are no longer valid.
Is There A Better Way To Plan For A New Product Launch?
Thankfully, yes there is a better way. Dr. McGrath proposes that we start to use what she calls “discovery driven growth”. This approach is basically a plan for learning more as the launch process moves forward. The part that I like about this way of doing things is that it doesn’t require the product manager to have a lot of analytical information at the start of the launch process. In my opinion that’s a good idea simply because there generally isn’t a lot of information available!
What Makes This Approach Different?
So in the graveyard of products that were bad ideas from the start (e.g. New Coke, Pets.com, etc.) what went wrong? These products had bright, smart product managers running the show and they created elaborate, beautiful plans that they followed to the letter when launching their products.
It turns out that they did two things wrong and these conspired to cause them to fail. The first was that they started with untested assumptions and then used them as facts on which they built their launch plans.
The second thing that they did wrong is that they built a false reality that blocked out the truth. They built products, and then second generation products, they launched advertising programs, etc. They did so much work that it all started to seem real to them, when in fact everything was built on some bad guesses about what the market really wanted.
What Is The Right Way To Launch A Product?
Dr. McGrath says that what we should do is to start any launch process by writing down what our assumptions are as we are creating the business plan. Overtime we’ll forget what our assumptions are.
Next you need to identify the milestones that you’ll be reaching as you get closer and closer to launching your new product. Once the milestones are known, you need to determine which of your assumptions you’ll revisit at that milestone in order to determine if they are still valid.
The ultimate goal of this is to spot when any assumptions are found to be no longer be valid as early in the process as possible. You may end up killing the new product, but you’ll save the company a lot of money.
What All Of This Means For You
Launching a new product is the ultimate thrill for a product manager. If successful it can make your career. Likewise, if it’s a flop then there is a good chance that your career at your company may be over and done with.
One of the biggest problems that product managers face when launching new products is that the planning tools that we use are out-of-date. They assume that the future will be like the past, and that just ain’t true any more.
Using the discovery-driven growth approach allows product managers to document what their initial assumptions were and to revisit them during the launch process. This allows any fundamentally wrong assumptions to be detected as early as possible and corrective action (including killing the product) to be taken.
Launching a new product is never easy. However, this new approach to launch planning just might make it turn out successful more often!
Have you ever based a new product launch on assumptions that turned out to not be correct?
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What We’ll Be Talking About Next Time
Quick: what’s the most valuable item in the world? Gold? Diamonds? Nope, it turns out that the thing that most of us would gladly give our left arm for more of is: time. Now since I can see that you are nodding your head in agreement with this, I’ve got a question for you. Why aren’t you selling time along with your product?