the 10 major misconceptions about the nature of product Dorea Team, May 10, 2024May 11, 2024 There are so many misconceptions about startups that you don’t know. Here are the 10 misconceptions about the nature of the product by Marty Cagan: 1. You need to solve a problem that nobody has solved before: Almost all the most successful companies have solved a problem that has existed for so long. Example: The Google search engine is one of the best examples of solving an old problem. When Google created its search engine, engineers said they were mad! we had plenty famous search engines like Yahoo, AltaVista, InfoSeek, etc. But why do people want to use a new search engine? What problem did they solve? the answer is pretty simple; other search engines was pure disaster! Their queries are mostly irrelevant to the “search word,” or the relevant page was shown on the second or third page and not the first page or first query! So, they just created a better solution for an old problem. 2. You need to spend as much time as possible understanding “the problem space.”: First of all, we need to know what the “problem space” is. The problem space is a process that involves components for defining and solving a problem. The problem space theory is a concept in the problem-solving category of social science. The purpose of the problem space is to help individuals or organizations find problems and work solutions from an inside-out approach. [study.com] If you have time, it’s a good approach to interview customers and do user research, but mostly you don’t. If you are a startup, you’re going to run out of money, if you’re a big company, your manager is going to run out of patience. The clock is ticking. “The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing”. Ben Horowitz Example: Airbnb, Inc. is an American company operating an online marketplace for short- and long-term homestays and experiences. Airbnb was facing off against a terrible competitor, Wimdu, in Europe. It had 10 times the money, 10 times the employees, and it was going to go and spread to 20 countries at once in Europe. It was a big issue for a travel company, because if you don’t offer accommodations in Europe, you’re no longer going to be in business. So, it’s time for Blitzscaling. You don’t have much time or resources to do user research; you’re losing the race. Yes, the blitzscale is a race, and even the whole market is a race. For the three months ending March 31, 2023, Airbnb achieved impressive revenue growth, marking its highest first quarter ever. Revenue surged by 20%, reaching $1.8 billion compared to the same period in 2022. but how? One of Airbnb’s key strategies for growth has been to expand its offerings beyond traditional hotel rooms. This expansion has helped Airbnb to attract a wider range of customers, including those who may have been hesitant to use the service in the past due to concerns about privacy, cleanliness, or other factors. Airbnb has been aggressive in its international expansion efforts. The company has expanded to over 220 countries and regions around the world, with a particular focus on emerging markets like China and India. This has allowed Airbnb to tap into new sources of demand and diversify its revenue streams. 3. You need to be an expert in the domain: hiring domain experts whose problem is in that domain is not always a good approach. If you have a banking product solution, you think it’s better to implement an expert with a banking background, but it’s wrong. That’s because B2C products have much better design compared to B2B products. “True domain expertise is domain knowledge minus domain dogma”. Shereyas Doshi The people outside of the domain have an open mind to that domain, but the expertise has a dogma around that topic, the dogma stops you from understanding the real needs of the market. Example: Bowery Farming is one of the most successful businesses, and the founder of it had never had any experience in farming or agriculture. Bowery Farming announced a $300 million Series C round, making it the largest private fundraising round to date for an indoor farming company. The ability to not know what lies around every single corner is actually an advantage because it forces you to look around corners that you normally would never go towards,” he says. There’s no playbook for what we’re doing here. That’s both what makes it incredibly exciting and exhilarating, and it’s also what makes it very difficult at times. [First Round] 4. You need to listen to your customers: it’s not a bad approach to listen to your customers, but your startup doesn’t necessarily need to do this to make a market-fit product. It applies to both B2B and B2C. “No customers ever asked Amazon to create the Prime Membership program”. Jeff Bezos The customers can tell you about the general features of a possible product, but they can’t tell you the solution you need to build. The point of the product is to combine customers problem with the solution that is now possible and will work for our business. Customers don’t know what’s possible we do. Your job is to invent great solutions on our customers behalf. Example: Amazon Prime has become a big hit with consumers since it launched in February 2005. The subscription membership, which has at least 66 million users by some third-party estimates, has transformed shoppers’ expectations around delivery. In turn, Prime has spearheaded an all-out arms race for faster shipping — an area other companies such as Google (GOOG, GOOGL), eBay (EBAY) and even Uber itself want a piece of. Prime, meanwhile, has successfully evolved far beyond its simple roots into an all-inclusive package that also includes streaming entertainment, e-book lending and serves as a tool for acquiring and retaining customers. Prime’s original content has been well-received, with shows such as “Transparent” nabbing awards. [Yahoo News] “Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.” 5. You need to commit to your solution and iterate until success: Imagine a startup had an idea 3 years ago, they just started with an MVP (minimum viable product), and shockingly, they have the same MVP 3 years later! The startup didn’t work! They changed many things; they changed pricing, they changed the freemium model to a trial model, they tried everything except changing the solution! “Fall in love with the problem, not the solution”. Kaaren Hanson They just needed to try various solutions for the same problem instead of persisting on the same solution. More reading on this topic: Continuous Discovery Habits: Discover Products that Create Customer Value and Business Value by Teresa Torres. Opturinity solution: it’s a simple technique that you can implement to prevent the above problem. The startup tries a solution to a problem for 2 or 3 weeks, if it doesn’t work, it tries another solution and various solutions until it works. Example: Microsoft is a company mostly focused on Windows OS and Office software, but they are not going to focus just on them. Office strategies were not going to last forever; they needed major changes, and cloud computing has changed the world in speed and scale. Recognizing the potential of cloud services, Nadella strategically shifted Microsoft’s focus from software licensing to cloud-based services like Azure, Office 365, and other cloud-based solutions. 6. You need product owners: Let’s know who the product owner is? A product owner is a person dedicated to maximizing the value of a product. [Asana] There is nothing wrong with having a product owner in a team, the problem is that product owners are trained by agile coaches who don’t know anything about products. “a product owner is simply a role in a delivery process. a product manager is responsible for product’s value and viability”. Marty Cagan your company doesnt need to product owner in most cases, Thats Reality! Example: In 2000, Blakely launched the Spanx brand from her apartment, undertaking all initial calls and marketing herself. Her boyfriend at the time, a healthcare consultant, later resigned from his job and joined Blakely in the running of the nascent business. All the processes of this business for a billion-dollar company were initiated without the most serious role like product owner. So, it doesn’t necessarily need a person to make your product valuable. 7. You need to come up with innovative product ideas: Don’t make this mistake with the first number in the list; every new idea isn’t necessarily an innovative idea. “the disease of thinking that an idea is 90% of the work”. Steve Jobs An idea is just the start of product discovery, and in every iteration, you learn something new and make iterations again and again. The idea is not the whole process of making the making the product. Focusing more on ideas than on needs is not a good approach. Example: It’s impossible not to hear about IKEA products. Ikea was not an odd idea or even innovative, it just had two simple rules: simplicity and low price. That’s it. Everyone loved that; they could buy furniture products at the minimum price in the market and then assemble them in simple ways. Ikea removed many mediators and costs of delivery by delivering products in separate parts that occupied little space. 8. You need your engineers to focus on coding: So many people think the only purpose of engineers is to build. the worst form of this approach is when the engineers are not even employees and they’re outsourced. If your company’s engineers are outsourced, then I think your company is not serious about the product. “We don’t hire all these engineers to tell them what to do, we hire them to show us what’s possible”. Steve Jobs all companies have in common; the innovation came from engineers. Example: The idea of an Apple phone came from Jean-Marie Hullot, a software engineer from NextStep, and later, MacOS. Initially, making an Apple phone was not favored by CEO Steve Jobs, but eventually Hullot was able to convince him 9. You need to focus on creating a product your customers love: Creating a product that customers love, is a good thing, but its only half the equation! “One of the biggest mistakes I see companies make is not thinking about both the product and the market side of product/market fit”. Martina Lauchengco Most companies must think about the market side of their products, but they don’t. This is a real problem in Silicon Valley, especially in recent years. Example: I think the LinkedIn app is a good example for this topic. The user experience is not much favored by users ( actually many people hate it) but still it has 1 billion members in more than 200 countries and territories worldwide [Linkedin]. so how? LinkedIn idea is favored by the market rather than customers, the market needed a place to connect job seekers and entrepreneurs. especially companies that need bulk and automated searches. It did work—just that simple!. 10. You need to process people to grow your company: Most big companies are scared to death that their company will be taken over by the process. you should better to focuse on result instead of process. “The problem is that at a lot of big companies, process becomes a substitute for thinking”. Elon Musk Example: I think the best example here is X Company (previously known as Twitter). Elon Musk started to lay off so many people. Actually, his purpose was to focus on a small engineering group that could share their knowledge in a more robust approach rather than acting like gear! Articles