Your startup is humming along nicely. You’ve established your positioning and product market fit, have a happy and growing customer base, and your acquisition strategy is paying off. It’s at this point that it becomes relatively easy to get complacent with your product development.
As you know, hitting cruise control on any part of your business can be problematic. Customer demands can change, technology can change, and competitors can appear out of nowhere and take a market share of everything you worked so hard to build. So how do you continue to maintain and prioritize the evolution of your product?
In this article, we’re looking at why you should develop a product innovation strategy, and some examples of what this might look like for your startup.
What happens after you achieve product market fit?
As your company grows, it can be challenging to find time to address the many moving parts that will help you move forward and evolve. One of these key parts is ensuring your team has time to develop fresh ideas for your product.
It’s important that you create enough space (both creatively and literally) to allow for brainstorming and innovating around your products. This helps to avoid stagnation and keep ahead of your competition.
Ideation, building, project pacing, navigating iteration challenges, and developing new value-added services all take time away from juggling other important internal priorities. But product innovation is something that demands your attention – it’s not “set and forget”. Without it, your business will eventually reach a growth plateau and risk going backwards.
What is a product innovation strategy?
A recent study revealed that 84% of executives believe innovation is critical to their growth. Yet only 6% felt they knew what their exact problems were, and how to solve them through research and design. In addition, 80% of those surveyed felt their business was at risk because they lacked clarity on the how, what, and why of product improvement. Developing a product innovation strategy gives you this clarity and ensures you maintain your innovation and design momentum.
Innovation can be a complex process, and should involve your entire team to varying degrees. Creating a robust strategy helps you plan and structure the next steps for your product’s evolution. It encourage a pro-innovation mindset within your team, plus it gives you a pathway to ensure ideas are tabled, developed, and tested – not forgotten.
Here are some key things to keep in mind as you think about developing your strategy:
Determine your company objectives
This will help you establish how you’ll approach product innovation moving forward. Be clear with your product goals, and the “why” behind them. This will help joining the dots between where you are now and where you aim to be a lot easier.
Understand your market at all times
This includes your customers and competitors. Seeking to find new ways to provide value to your current and potential customers is critical, and should drive your product innovation. Keeping an eye on your competing innovators gives you insights into what else is going on within your market, but as their product and customer base is different from yours, it’s important not to follow in their footsteps (see the Coca Cola story further down!).
Ensure you have a clear value proposition
The main purpose of your product innovation strategy is to ensure you always have a competitive advantage. Your unique value proposition helps you focus on what differentiates you in the market and sets you apart from competing products so you can design, iterate, and grow with this specific advantage in mind.
Ensure your strategy is realistic and that you have enough time, budget, and team power available to achieve what you’re mapping out.
How will you release and test your innovations? Have systems in place for launching, testing, and measuring success. It’s also wise to ensure that your existing customers can transition seamlessly into using any new products or features to avoid user downtime and loss in revenue from cancelled subscriptions.
Examples of product innovation strategy
I look towards Apple for examples of many business strategies, and product innovation is one of these. We can all relate to Apple’s relentless product rollouts, each one more interesting than the last. Their dedication to constant innovation and design that hits the mark with buyers never seems to falter.
While you might not have the same dedicated Innovation Factory as this $1.3 trillion company, the product innovation pathway is still the same. Talk to your customers at every opportunity, form ideas around their changing needs, test and optimize until the product is desirable and solves actual problems for your customers, release it onto the market, rinse and repeat.
Product innovation mishaps
We all love juicy product innovations from big brands – but secretly more so when there’s a lot of hype…followed by a very public flop.
If you’re old enough to remember Coca Cola’s “New Coke” release in 1985, its hasty rebranding as “Coke II”, plus the launch of “Coca Cola Classic” in an attempt to undo this awkward product mistake (all within the space of three months), you’ll get a feeling for how innovation can go wrong on a large scale.
Losing market share to Pepsi, Coca Cola decided they needed to compete more fiercely on the flavor side of their product. Instead of launching a new line, Coca Cola innovated in the direction of replacing their staple product with a sweeter flavor that was closer to Pepsi’s. It’s a cautionary tale of trying to fix something that isn’t broken, and how other avenues of innovation could have (and have since) served them better.
Amazon is no stranger to innovation mistakes either. In July 2014, the Fire Phone was launched after a lot of hype – but drew mixed reviews from buyers and critics. 12 months later, Amazon pulled the plug on manufacture due to lack of sales, leaving a loss of $170 million in its wake – and $83 million of Fire Phones which nobody wanted.
The lessons these failures teach smaller companies and startups is that continued attention to product innovation is crucial – even if it doesn’t turn out quite as planned. Some product ideas will fail, and some will be your next big winners, but if you’re not placing a focus on innovating and testing, you’ll never know which is which.