Blue Mine Group

Evolution: Maximizing long term product life cycle value

The third and final stage of the Product Innovation Life Cycle is Evolution. The first two stages of our framework, Ideation and Commercialization, begin with idea generation and end with product launch. Having achieved initial market traction and breakeven operating results at the end of Commercialization, the Evolution stage includes the growth, maturity and decline stages of the classic product lifecycle. Evolution is about navigating these stages of the product lifecycle to create and extract the maximum value from your innovation over its lifetime.

Your overall product road map balancing existing products and the next generation of products will have been outlined in the business plan you developed in Ideation and refined in Commercialization. During Evolution, you will continue to update the product road map as needed to reflect the latest plans for existing products.

Key Evolution issues

Once a new product has reached commercial viability, many companies prematurely shift their attention and resources back to new product development. In so doing, they fail to continue to manage existing products with a cross-functional team. As a result, the key activities that enabled their new product development and launch success are not applied to the current portfolio. Product issues arise because of functional silos with little cross-functional communication.

In addition, companies that are ineffective in the Evolution stage fail to adequately adjust their product offerings to deal with rapidly evolving markets. Once you have "crossed the chasm" your product will repeatedly be exposed to shifting customer segment preferences and competitive attacks in the form of new products, feature enhancements or pricing actions. During this time you also have to adjust to internal changes in your overall product portfolio and performance

Next time we will address the evolution stage and the three core processes: measure, refine and exit.

 

Commercialization: Translating Ideas Into Market Success (continued)

 

Continuing on the subject of commercialization...the testing and launching phases

Test

The second major stage of commercialization is the final validation before launch. It consists of live or field testing of the product, sales and marketing approach, and operational processes in real conditions, but on a reduced scale and with appropriate caveats to the market. Based on test results, final modifications are made to the product, processes and launch plans as key information and insights are collected.

Many ventures, under market and investor pressure, omit or skimp on the test stage. Successful ventures find ways to conduct testing, but in such a way as not to slow down time-to-market. A well-known recent example has been Google’s approach, positioning products that are in production use by millions of users as beta versions. In this way, Google is in the market early, yet users do not have expectations of perfectly functioning finished products. 

The following are some of the testing activities that should be performed within each track:

Product – internal (alpha) tests and external (beta) test to rigorously test the product in the native customer environment.

Market – marketing and selling to individual trial customers and to test markets to test the marketing messaging and tactics, and the sales channels and processes.

Process – pilot runs of operational processes in full production mode including sourcing from vendors and partners. 

Launch

With the completion of the test stage, commercialization moves into the critical launch stage. The goals of launch are to release your product to market through a well-planned launch strategy, and get the product as quickly as possible to commercial viability. The point at which this is reached depends on your industry. We generally recommend defining the end of launch as when the product has sufficient market traction to achieve financial breakeven.

The first focus of launch is typically the “early adopters”. Early adopters are people who are either technology innovators who buy because it’s cool, or visionaries who buy to realize their vision or gain a competitive advantage. Typically comprising 5 – 10% of a market, they are easy to spot, asking questions like “What does it do?” and “How does it work?”. For a new product or service, early adopters are easiest to win as customers. In many markets, the early adopters are also key influencers in the market, with the ability to help build momentum until the “tipping point” is reached.

In the beginning, you should focus intensely on these early adopters, and do whatever it takes to secure these customers, including price breaks, extensive support and customization. By doing so you will generate your first vital revenue streams, and perhaps even more importantly, build a base of reference customers that will become important influencers and will play an key role in your success.

In parallel with your focus on early adopters, you should seek to confirm your planning and preparation to date as to your second focus – “crossing the chasm” to your mainstream target market. As Geoffrey Moore described in his well-known book, early adopters and mainstream customers have different needs and characteristic, and many ventures fail because they do not recognize or prepare for this.

The important group of mainstream customers on which to focus, comprising approximately 40 – 50% of the market, are pragmatists, who base their purchase decisions on reliable references and a clear return on investment.  They are also relatively easy to spot, with questions like “Who else has bought this?” and “What’s the ROI?”.

To penetrate this group successfully, you need to focus on a very specific customer with an urgent, unmet need. Pragmatists prefer making no decision, primarily buy to solve problems, and only buy when the problem is so acute that it becomes as “top 3” item on their action lists.

Reaching them and winning them as customers, as you must to build any real revenue, requires intensive efforts, with constant agile adjustments to the details of product offering, sales and marketing approach and operational processes to find the optimal formula to unlock the market. For this reason, identifying and focusing on a specific market and need is a constant theme throughout our methodology, from the beginning of ideation. 

Once you begin to get real traction with mainstream customers, your revenues begin to climb, you reach breakeven, and you transition beyond the commercialization phase of the product life cycle.

Wishing you all a happy holiday and new year - next we will be exploring maximizing the long term product life cycle.

Commercialization: Translating Ideas Into Market Success (continued)

In todays entry we will be exploring the Development aspect of commercializaion

Development is the first significant commitment in the product life cycle. It is here that the planning first needs to become reality, and it has been the dearth of many product concepts that never made it through the development stage.

The foundation for development success is proper completion of the ideation phase. The deliverables from ideation should include:

• detailed final product requirements and specifications based on in-depth market understanding
• a preliminary idea of the technical approach based on an early prototype
• a clear idea of how the product will be positioned, priced, marketed and sold
• a clear idea of how the product will be produced, delivered and supported
• a high level commercialization project plan, together with the budgeted timing, resources and funding.

With these in hand, the development project team is in a good position to move forward. Without them, development is much more likely to fail.

Development basically comprises having a clear idea of the end product desired; breaking the end product into logical component parts; designing and building each component; and then integrating the components into the whole. Historically, this was a fairly linear and functional process, with a primary focus on the components, and integration only at a relatively late stage.

In recent years, development teams have made significant improvements in time, cost and success rates by adopting a more integrated process focused on building a succeeding series of prototypes using an iterative “design-build-test” sequence. This begins with the prototype created during the ideation phase. At the end of each design-build-test loop, feedback is collected and integrated into the next loop to develop the next version of the prototype. This approach allows the team to keep focused on the overall product and not get lost in detailed components. It ensures that integration issues are identified and addressed throughout the process, and are not left till a point where significant re-work is needed. Tradeoffs are made continuously, feature and scope creep is contained, and the team remains focused on delivering an end product.

Good design is the real secret to successful development. With the solid foundation of the ideation deliverables listed above, superb design should be the prime driver of the development stage. Good product design will encompass three primary dimensions: technical design, to allow the product to function as intended; design for users, to make the product appealing and easy to use for customers; and design for manufacture, ensuring the product can be produced within the right cost, quality and time parameters. More time on design saves time in building and testing, and reduces the number of iterations needed to get to a final product.

During the development stage, work progresses using prototyping and design-build-test cycles in all three tracks:

Product – designing and developing the product using rapid prototyping and testing.

Market – designing and developing sales and marketing processes, materials and launch campaigns.

Process – designing and developing the operational processes, including production, delivery and support.

By focusing on all three tracks, and constantly communicating across tracks, the project team ensures all facets required for successful product creation and launch are developed in close coordination. 

Next time we will explore testing and launching aspects of the product life cycle.