This article was written by Matthew Nicholson, Senior Project Delivery Manager. Responsible for the discovery, build, and delivery of greenfield Financial Services apps. Today, Matthew explores: “What is my Product Value?”
As our digital world continues to expand every conceivable product and service you can think of can be accessed at the tap of a screen or the click of a mouse. In a world of saturation how do you know that your product has the XFactor it needs to succeed?
Building digital products unfortunately doesn’t come for free, so whether you are looking for investor funding or submitting an annual budget request the question should always be the same “What is my ROI?”. What is going to keep this thing going, and most importantly what is going to help it grow and scale.
I have never been a fan of the word ROI, I find it too clinical. I much prefer to look at ROI in terms of product value. With an ROI it is very much aimed at once a product has launched but value is something ingrained into the DNA of the product from day one.
Every product starts out life as an idea and 9 times out of 10 that idea is simply a solution to a problem. They normally start with the words “Wouldn’t it be great if……”, but in a world of good ideas being able to stand out is what makes the difference between success and failure. So how do you know if your idea is good or not, and how do you find the elements that will build your Unique Selling Point or Value Proposition? The best place to start is with three simple questions:
1. Who is this for?
2. What does it do?
3. What makes it different?
You may know these answers, but it is easy to get carried away on the crest of a potentially awesome product that is going to change the world. Yes, the product is solving a problem and has a USP or VP, but is this a problem worth solving? Will people buy it and use it? Does this product already exist, and if so is there room for one more? Is there a genuine demand, will this product scale, and can it be monetized? Questions, questions, questions, I hear you shout! But it is better to measure twice and cut once, than end up with a defective product.
In today’s world where data and analytics are at our fingertips, and where customers are happy and willing to get involved in product testing, anyone looking to build a product should roll up their sleeves and do the research. Run customer workshops, create a rapid prototype, and gather as much data as you can. Don’t be in a hurry to build anything that hasn’t been validated, and NEVER assume that you know what the customer wants. In the world of software and product development this is called Discovery, and there has never been a truer word.
You are starting on a journey of discovery, some journeys end well and other don’t quite make it to the open sea. At Waracle we have adopted frameworks such as Google’s five day sprint, and tools such as Invision and Marvel which minimise the development costs and maximise customer validation. When your shiny new App lands in the users’ hands, we want it to ensure it is exactly what they want, what they need, and what they will use time and time again.
After Discovery it is time to Build, and the temptation is to throw everything in including the kitchen sink. It’s easy to get carried away and want to launch a feature rich product, but is this the right thing to do? Walk into any business that is looking to develop a software project and you will hear the tech team repeatedly use the phrase Minimum Viable Product (MVP). It’s a term has been widely adopted, but its application arose in the startup domain when funding only had weeks to run so getting your product to market as fast as possible, so that it will start generating value, was vital.
When you are building an MVP, launching with the right feature set can be the difference between success and failure. For a Product owner the headache is knowing to build only the features that will give you the best value from their development, but as the saying goes one man’s wine is another man’s poison… especially if multiple departments such as Sales, Customer Service, and Marketing all have a vested interest in the launch. Your product sits in the eye of a perfect storm where everything pushes against it as illustrated in the diagram below.
Your key stakeholder might be demanding a new revenue generation feature, your UXteam want to refactor the on-boarding process, and your marketing team are intent in fiddling with the user flow. For a product owner deciding on what makes it to launch, it is difficult as it is ultimately their responsibility to deliver success. So how do you decide what makes your MVP and subsequent releases? While the initial MoSCoW (Must have, Should have, Could have, and Won’t have) will give you the fundamentals of your product you will no doubt have a list of features your team, or business departments, believe should be included, or even worst, you find yourself in a backlog refinement session having an awkward conversations with a HPPO (highest paid person’s opinion). It’s a veritable minefield with the PO’s neck on the chopping block.
We all want “value for money” and the same should be always be applied to the features within your product. But how is this achieved? One of the most helpful techniques is to use a value rating matrix. On the example below the value has been broken down into three elements: User Value, Business Value and Revenue Value, these are just examples and can be anything as long as they are relevant to your product or business. By adding up the values it gives you an ROI rating.
At a glance the order of development should be:
1. Update payment journey
2. Add sales partner page
3. Refactor Login page
However the business value of a feature is just one side of the coin, the other is the amount of time it takes to develop. Every development team should have an estimated timeframe for each version/release.
Combining the two is a great way to understand the build cost versus the business costs, and by dividing the ROI by the Development effort it will give you a Feature Priority score.
As you can see, the order has changed to:
1. Refactor Login page
2. Add sales partner page
3. Update payment journey
To launch all three features in a release would take 16 weeks. However by using the above matrix you could launch the “Refactor Login page” and “Add sales partner page” in half the time, and see an ROI of over half the combined total of all 3. This represents the most efficient MVP build, and would allow the updated payment journey to be released as an additional feature post launch.
In our modern technological society digital products are essential for businesses. Whether for internal or customer usage, to streamline processes or offer new services, apps are an inherent part of our digital ecosystem. Just like when the internet came into prominence, those who are not willing to adapt to the new demands of the market begin to suffer. The imminent threat of lost custom and comparatively declining productivity creates a great deal of urgency for the development of your app, but that is no excuse for not knowing the value of what you are building. Knowing which features are within the sweet spot between development complexity and ROI is a good place to start. Test your concepts, and ensure you are providing your product with the best chance to survive in the unforgiving app marketplace.
Are you thinking of how your business could benefit from the ultimate MVP? From inception to optimisation, Waracle have been building world-class digital products for over a decade. Our specialist teams are experts at API integration, Dynamic Mapping, Augmented Reality, IoT, Android, iOS, and a plethora of other technical skill sets. To kickstart your own digital journey, please click here and let us know your thoughts!