One common cause of failure in the developing and marketing of new products is something called “product-market fit.” Marc Andreesen, a technology entrepreneur and investor who has written about this, explains that product-market fit is simply being in a good market with a product that can satisfy that market.
New technologies enhance the ability of companies to bring products to market quickly, but speed doesn’t guarantee the right product-market fit. Without a good fit, companies risk launching a product that doesn’t satisfy the market need.
A couple of innovations in new-product development strategies have had a significant impact on the way companies improve their chances of a successful fit.
Have you ever found a product that seems like it was made for you? You don’t need to read the instructions. You don’t have to learn how to use it. It seems naturally to conform to your preferences and needs. The creation of such products is the goal of user-centered design.
User-centered design is a product development process in which the needs, wants, and limitations of end users are given extensive attention at each stage of the design process. The chief difference from other product design approaches is that user-centered design tries to optimize the product around how users can, want, or need to use the product, rather than forcing the users to change their behavior to accommodate the product.
In a user-centered design process the product team tries to understand user needs and define the requirements to meet those needs—but that’s true of any good product-design process. User-centered design requires the designers to test their assumptions about user behavior and requirements in real-world settings with actual users during every step of the product development process—all the way from product concept and requirements to production and prelaunch. This recursive approach gives designers a steady stream of information that confirms the original requirements or suggests needed modifications. The frequent user testing encourages designers to think of typical or recurring user challenges as design requirements rather than problems that ought to be solved by the user.
For example, most educational institutions want to make the course selection and registration process easier for students. Portland State University decided to employ a user-centered design process when it set out to improve its own system. After a number of student interviews, the university created a prototype of the new process. When they were ready to test the concept, the university registrar went to the homes of students and watched them try to work through the course selection and registration processes on their home computers. The idea was to gain information about students’ real experience of these processes in the places where they actually happen—and make design decisions accordingly. The home-setting experiment revealed a number of unanticipated design flaws and new requirements that hadn’t come to light during interviews or simulations run in the campus computer lab. As a result, by prioritizing the user perspective, the university was able to design a much more effective solution.
The Lean Startup Methodology
The “lean startup methodology” has been described by Eric Ries as an approach that helps new companies achieve product-market fit during their earliest product launch. The methodology is based on the assumption that it’s essential to get real market data from product users as early as possible in the design process. The challenge, as you have learned, is that marketers don’t see substantial, realistic market data (which are used to refine the marketing mix) until well after the product launch. The lean startup methodology tries to get around this problem by shortening the time frame needed to capture the data.
Ries proposes that rather launching a fully developed, full-featured product, companies should begin with a very limited launch of what he calls “the minimum viable product.” The minimum viable product (MVP) is the most streamlined product that any group of users will accept. According to this approach, the company develops and launches its MPV, captures market and user data, and quickly uses that information to make adjustments for its next minimal feature set. In each cycle of development the product team learns from actual market and user data, and uses them to refine the product and stay aligned with company goals.
The lean startup methodology is used by organizations of all sizes, but it’s particularly well suited to small companies that can’t afford the risk of a single product-fit issue and to software-based companies that can launch an online offering to a user base without needing complex manufacturing processes and distribution channels.
Neither of these approaches will address all new-product challenges or guarantee success, but both are considered important innovations in the new-product design process, since they improve the odds of new-product success and reduce the cost of product failure.
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