To create a new product, we have to peek into the future and state what we believe our product will roughly look like and do. For anyone not blessed with perfect foresight, predicting the future correctly is notoriously difficult. After all, the only thing certain about the future is that it is uncertain! No market research technique can deliver a forecast that is 100 percent accurate. And in the case of disruptive innovations, it’s not possible at all to make a sound prediction, as Clayton Christensen observes in his book The Innovator’s Dilemma: “Markets that do not exist cannot be analyzed.” Investing in a new product always involves risk. We may have targeted the wrong market segment, envisioned the wrong product or the wrong features, or the market may have changed by the time the product is launched.
Envisioning a Lean, Minimal Product
Envisioning a lean, minimal product with the smallest possible feature set is a great strategy to minimise the investment risk. I refer to such a product as the minimal marketable product. It contains just enough functionality to be viable; to launch, market and sell the product successfully. Developing a minimal product is quicker and cheaper than a more ambitious, feature-rich one. If the product bombs, less time and money is lost. If it is a success, the product will earn money sooner. Additionally, a minimal product allows us to receive feedback earlier, so we adapt the product quicker to the market response. Rather than trying to create the perfect product, we follow the motto “get it out, then get it right.” Note that the product’s quality must be high from the start. Otherwise, it will be difficult to adapt the product; bugs may hinder its adoption or even damage the brand.
Getting it Right: The iPhone
The original iPhone, launched in 2007, is an example of a minimal product. One of the secrets behind its success is the narrow set of customer needs Apple selected. The company avoided the trap of trying to please too many people at once, and trying to copy all of its competitors’ features. Instead, Apple took a fresh look at what smartphones should look like and do, and deliberately left out some functionality. The original iPhone shipped without many features standard on existing phones: Copy and paste, the ability to send text messages to multiple recipients, and a software development kit, for instance. These limitations, though, did not hinder its success. Paring down the functionality allowed Apple to develop and ship the product within a competitive timeframe and gave the company a significant lead over its competitors. Building on the success of the first iPhone version, Apple extended the capabilities of the phone both in terms of hardware and software with the launch of the 3G model in 2008. This version also allowed the company to enter a new market segment by targeting business users.
Getting it Wrong: The Apple Newton
Developing a minimal product may sound like a no-brainer, but my experience suggests that many start-ups and established companies alike find it difficult to restrict a new product’s features. It’s often too tempting to opt for a big-bang release, trying to satisfy as many users and customers at once in order to maximise the revenue. Contrast the iPhone with another Apple product: The Apple Newton, first launched in 1993 after five long years of development. Remember those Apple ads that promised a PDA that could do all sorts of wonderful things, including recognizing your handwriting? When it was finally shipped, the Newton proved to be too bulky and heavy. Worse, its most important feature, the handwriting recognition, did not work properly. The product underperformed and was finally withdrawn from the market in 1998. In hindsight, Apple was overly ambitious with its Newton plans. The company launched a product that tried to do too much at once and failed.