Pushing the button on product development

Software product management is not the same as software project management, and the sooner startup founders understand this, the better.

Product development is a core capability for any tech startup.

The ‘lean’ startup philosophy has ‘build, measure, learn’ as its core mantra. But while ‘build’ comes first, it’s no simple thing to build a software product – product development is a discipline in its own right.

It’s common to hear new startup founders with commercial experience talk about ‘projects management’. They assume that software product management is much the same as software project management. This is not true.

Consider the average commercial software project. The management team has analysed the situation and approved the plan. The budget has been allocated and stakeholders identified and brought on board.

Management has provided enough resources for the project’s anticipated length, it has specified the criteria for success, identified key deliverables and set timescales for them.

All this has been done all this before anyone writes any code.

Consider the average product-based startup. The founder(s) have some ideas about what revenue goals they need to hit. There are a fixed amount of resources available, regardless of product spec. The only measure of success is how many customers use it. There are no hard deadlines. The budget may change if the company gets funded. And most of all, there is no defined conclusion.

Tell him he’s dreamin’

The fantasy of product development is that: the founder comes up with a perfect idea for a product; they design the product on paper, draw up some wireframes and some specification documents; they might apply for a patent; they take the spec to a developer, who quotes them a price and a time to build the complete product. If the founder agrees, the developer starts work.

Some month later, the developer delivers the agreed product for the agreed price. The founder then takes the product and launches it on the market, makes a fortune, and retires.

This is fantasy. Successful software products are never developed like this. But it’s a common fantasy, because every new founder seems to believe it.

New founders often ask how much their product will cost to build. However the question is mistaken for several reasons, but principally because it assumes that the product will be complete (and products are never complete, there are always more features waiting on the list).

The correct to the question is: ‘Whatever you want to spend’. Not surprisingly, that’s an unacceptable answer.

Developers get used to answering the question in an acceptable way, such as: ‘It will take $xx,000 to build enough of the product that it can go to market’. This is pragmatic and serves the purpose, allowing everyone to proceed.

But the truth is that ‘going to market’ is the start of real product development, not the end.

The goal of a business launching a new product is to discover what customers actually want. The only way of discovering this is to measure their behaviour. The only way of measuring their behaviour is to give them a product to play with. So the goal of a first release of a product is to not to make sales, but to measure customer behaviour.

First versions of startup products tend to be rough sketches of the product vision.

The first phase of a startup is the ‘discovery’ phase. During this phase the goal is to discover what customers actually want. Building a product that solves the customer problem is almost a by-product. The goal is a complete and thorough understanding of the customer problem and behaviour.

For this reason, startups tend to launch much earlier than a conventional business would, because the sooner the iteration cycle based on customer behaviour can start, the better. Less development time will be wasted on developing features that customers don’t actually want.

Customer interaction with the product is what drives product development. Successful product teams use the measured customer behaviour to steer the product development.

Startups talk about conducting ‘tests’, which are experiments designed to discover what customers want. ‘Lean startup’ refers to this process as the ‘build, measure, learn’ cycle.

‘Product-solution fit’ is the point at which the product fits the customer’s needs. At this point, the business can switch focus and think about revenue and sales. Product development doesn’t stop, the experiments just change – their focus becomes finding a scalable business model based on the discovered solution. But that’s another story.