Academic talk on Product Development

In this morning's Sentient academic talk, we talked about the adventures in product development. The speaker was Wayne, one of the NOC pioneers who is also an entrepreneur. The Sentient academic talk is a wonderful initiative to engage team members to participate and share insights on a particular theme or topic. I am thankful for the monthly town hall meeting and the Sentient academic talk in which I can gain knowledge in different areas of a business beyond my work scope.

# What's product development?

Product development is the journey of bringing a product from idea to launching. There are many stages involved in this process and it varies for different businesses. Some common phases include the identification of a market need, customer segmentation, validation of the solution and progressive enhancement on a product based on customers' feedback.

# Is market research necessary?

One of the most memorable points in this session was the importance of conducting market research to know the customers. The charismatic innovator Steve Jobs had neither relied on market research nor merely to give the customers what they wanted. As stated by Henry Ford, if he had asked people what they wanted, they would have said faster horses. So, why should we carry out market research when the customers don't know what they want until it is being shown to them?

The reason for that is simple yet thought provoking. Essentially, it is not just about getting customer's answers, instead the goal is to understand what they really need from their responses. And the fastest way to do so is by getting out of the building, reaching out to potential customers, communicating with them and observing how they navigate through the product.

"You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new." - Steve Jobs

Afterall, there’s no substitute for gathering quality information from having discussions with potential customers.

That being said, the targeted market that is initially identified may not be the actual market at the end. There are times when getting an innovative startup running is as much about building a market as the product is being developed. As marketing specialist Charles Spinosa mentions

we tend to think that the inventor produces something for an already existing market and then establishes a more or less traditional company with traditional departments to produce and market the new thing. But entrepreneurs time and time again tell us that this is not the case. The market is always being developed along with the product.

However, getting adoption by the targeted market is often challenging even when market testing is performed. This is worse when it comes to convincing people to pay for the product or service. One prevailing advice in entrepreneurship is to focus on a niche market. It is essential to narrow the market as selling to targeted customers allows customisation of the product or service to their specific needs. The strategy is to focus with flexibility.

# Sometimes... Users ≠ Customers

Another point to note is that users who use the product or service, may not always be the customers who pay for it. This is evident from the childcare industry or even in toy manufacturing as parents are the ones paying for their children. This highlights the importance of customer segments as in this case, the solution to the problem faced by these two customer segments can be vastly different. Therefore, their needs should be addressed distinctively.

# Distributional channel matters

While product development is crucial in attaining customers, the type of distributional channels proves to be a critical factor in customer acquisition too. Many startups fumbled because they didn't have a constructive sales and distribution model. Startups not only have to find out how attractive the product or service is to the customers and the cost and practicalities of building it, but also to think about the delivery of the product or service to the market. The number of customers can surge with a strategically chosen distributional channel despite having a product which may be less appealing than that of the competitors. However, I think that the effect of customer growth from broadcasting on more effective distribution channels, the quality of the product should ultimately outweigh the significance of distributional channels in the long run.