By Prashanth Nanjundappa, Vice President of Product Management, CHEF Business Unit at Progress
Experimentation is at the heart of innovation and although it is the norm in creative fields, it is not always the essential approach in business. Many associate it with failure – while your experiment may succeed, it may also fail – and in business, no one wants to fail. Therefore, many business leaders often try to stay away. This is why true innovation happens so rarely. But to create something new and unheard of, you have to get out of your comfort zone and experiment without knowing what’s in store for you.
Introducing an experimental mindset in the development and commercialization of new products is crucial. Knowing the right way to integrate it into the development process can determine the success of all efforts across teams and functions. In this article, I share some of my experiences in building the experimental mindset through the key stages of new product development, along with the lessons I learned and the challenges and opportunities I saw. .
Innovation starts with discovering a problem worth solving
A McKinsey Global Institute study found that for every seven product ideas, only 1.5 launch and one succeeds. Identifying a key problem that needs to be solved is essential for product development and can be a concern for entrepreneurs.
Asking customers what they want may not lead to ideas or suggestions that can be implemented, because the customers themselves may not be aware of what is possible beyond the obvious. Innovation teams need to embark on a journey of discovery to ensure they are on the right track.
The first step in this journey is to find a problem faced by a large group of people or businesses and for which there is no satisfactory solution available or those available are not effective or commercially viable. The problem must be critical for users to be willing to pay for its solution. Additionally, the problem is aligned with your organization’s business strategy, and finally, you must have the expertise, experience, and resources to solve it.
Interestingly, sometimes those who are faced with a certain problem for which you can find a solution may not be the primary decision makers in their business. In this case, product teams must balance end-customer satisfaction and revenue generation.
Sometimes we invest in a project only to find later that it doesn’t go as planned. There is little or no room for course correction or recovery. The best thing about an experience is that failure is a learning opportunity. Innovators and product managers must be prepared to fail quickly and recover. Once we see that the investment will not work, we have to stop, adapt quickly and make the necessary course corrections or sometimes even withdraw the investment.
Design a framework that delivers, based on experimentation and learning from failure
It is essential to meet the challenges of product development. Establishing a culture of innovation helps companies move quickly through each stage of the innovation cycle through collaboration between different teams. I have found that creating a repeatable process and framework, based on an experimental mindset, works best. This framework should cover the entire product development process – from creating the concept and overview to tracking the execution of each small step towards completion.
The following table summarizes the framework that is put into practice to create repeatable processes.
|Arrange||Time||Objective||Metric for next step|
|1. Problem/Solution Adjustment||+2 Months
+1 month buffer
|Identify market segment and pain points
Define personas (users and buyers)
Calculation of addressable markets
UI simulations or user journey documents OR POC
|X customer conversations
Y Pilot Ready-Leads
|2. Customer validation||+3 Months
+1 month buffer
|· Implementation in the customer environment
· Obtain customer testimonials
POC, Landing Pages, Sales Enablement
|X Pilots (Not GA, may be free)
Y SQO (Qualified Business Opportunities)
Z SQLs (qualified business leads)
|3. Product launch
1-PM, 1-UX, X Sales, large engineering team
+1 month buffer
|Go Live||X paying customers
Z SQO (Z++ SQL)
|4. Scale product||· Continue the process|
In the first step, after identifying your problem and deciding on a framework, you focus on understanding market segments and their pain points, defining personas, such as users and buyers, and estimating the addressable market. Easier said than done. This includes building artifacts, such as user experience simulations or user journey documents. We can then start building the product. At this stage of customer validation, we implement our pilots in a customer environment and collect their feedback.
In the next two steps, we use learnings to accelerate iterative product development. We are preparing it for release in the smallest segment of the market and refining it based on feedback to make it available for a larger segment. This step takes a lot of time as we work on finalizing the product, conducting trials, defining sales targets, planning the release and organizing customer support. Also, if customer feedback is not as good as expected, we go back to the drawing board to develop a new product. If we are unable to get the traction we need during this cycle, stopping further investment is also an obvious possibility. We cut our losses, learn from experience, and apply our learnings in other experiences or products under development.
The step involves scaling the product – you have paying customers and based on the traction received decide how much more to invest and scale the product. At that time, you would have found a set of paying customers and many prospects who showed interest at different levels to buy the product if certain conditions are met.
We have applied this framework in many products, but this is an example. Our team and I worked back-end on a free tool that had around a million monthly active users and good brand recall value. The product was not making money, but we still had to support a growing user base. We had rationalized the investment in developers supporting this product without any revenue as it was a loyal user base and the product was also used in business critical operations. Our research showed that customers faced some fundamental issues and were willing to pay for a product that filled those gaps. We have identified them and introduced a new product with these features in a paid version. This was done by applying the framework, thanks to which, in one year, we were able to identify the product-solution fit, validate the customers and launch the paid version of the product, alongside the free version, maintaining the differentiation between the of them.
Bringing innovation and business transformation
Creating an experimental mindset is not without its challenges. Without management support, this will not work. It needs to be something the whole organization embraces. Failure is the inability to identify when the project is not going as planned. I believe in failing fast and applying the learnings to future experiences. As this requires increased agility and responsiveness, we also need a flexible team that can move from project to project and stay motivated.
Following an experimental mindset is an evolving methodology that has shown greater success of products that are launched and faster time to market. A flexible team that has adopted agile development methodologies and processes is needed. This is not only essential for business continuity, but also for business growth.