This is the second part of our Illustrated Guide to Product Development series.
In the previous article, we made an amazing elevator pitch example storyboard describing our product and making sure the core of our vision was a product people would really want to use.
Although we are still very early on in our product strategy, taking a moment to “jump ahead” to review a few business strategies now will allow us to have deeper conversations throughout the product development process.
At the highest level, typical business and Go-To-Market strategies start with the question, Is the business model
B2B – Business to Business?
B2C – Business to Consumer?
C2C – Consumer to Consumer?
In our experience at Storyboard That, we do a very quick version of this storyboard at this stage of the game, and then come back again and again to improve that storyboard as we have more information.
In the case of SoLoMoFoo – a product to help people easily share and locate free food in the office – we overwhelming heard from our mythical and all-seeing potential investors that they saw two radically different ways we could approach the business: either B2B or B2C. They informed us, without really thinking through these two scenarios, it would be hard to move forward. Depending on the business model chosen, the required technical feature sets and marketing scales would be radically different.
Since we are advocating for customer-centric thinking, it is pretty critical to understand what type of customers we are going to go after… otherwise, how can we think like a customer?
|Business to Business via Enterprise Sales|
Companies with more than 50 employees would like to offer SoLoMoFoo as a nice benefit to encourage community and camaraderie. These businesses would be willing to pay a fee to purchase the product and allocate resources to deploy the application.
|Business to Consumer via Viral Customer Acquisition|
Due to the sharing nature of the product, there is a natural viral spread of this type of product.
Focusing on one dimension and segment of the business at a time using Parallel Thinking allows us to methodically break down our business into bite-sized comparisons.
In this storyboard, we opted to look at four different areas of the business that would change fairly dramatically depending on the revenue model that we choose to approach. Depending on your business needs, the set of questions could be very different.
For the duration of this series, we are going to go with the enterprise business model. This will enable us to discuss a wider range of non-trivial business problems and processes that closely mirror real situations we have witnessed.
Thinking about your business strategy and the pros and cons of various decisions should not be a one-time event. In our example, we looked at a few elements from understanding market fit, business strategy, and risks. The earlier you are in your journey, the more you should be focused on market fit and go-to-market strategy.
A core tenant of our approach is to prevent the number one reason products fail: making a product no one wants.
Asking questions that focus on the reachability of the market and whether or not there is a market is critical in the early stages. Although not trivial, changing from the enterprise to the consumer approach (or vice versa) is doable as long as the core of the product – the assumption that people will provide free food and other people will eat it – is valid.
Questions for any new product are any questions that help illuminate:
For these types of questions, go back to the first part of the series and examine the parts of the problem / solution / benefit approach.
You may even find as you change the business scenario, you radically change the target audience. Below are a few examples of types of dimensions to think on. Feel free to pick and choose for your own needs and evolve our recommendations to best suit your unique circumstances.
|Problem Statement||How does the core problem that your product solves change if you change your business strategy?|
|Target Customer||Does your target customer change if you change the problem or business strategy? In the SoLoMoFoo example for an enterprise license, our customer who is actually buying the product is HR. For the consumer version, we are targeting the end user of the app for advertising. Who are your target customers?|
|User Benefit||If your problem statement, and target customer are different, it is very likely the benefit to the user has also evolved. Remember the benefit needs to be more than just the solution, but rather a compelling vision of an amazing outcome that people will rave about. What will make your customers excited?|
Having an amazing product is only part of the battle; you also need to figure out how to get your product into the hands of your target customers. Customer adoption of the product, and subsequent revenue, are key to a company’s success. For these types of questions, think about ways you can reach, educate, and convert people into paying customers, or the nonprofit KPI relative to your goals. Many of these questions borrow from the AIDA(OR) framework.
We created this series to help educate people like you (our target customer) how storyboarding can help you achieve your goals. Merely knowing we have an amazing product is useless unless you know how to apply our technology to your problems!
|Acquisition Engine /
|What is your primary way of reaching new customers and introducing them to your product? Direct Sales? Viral Product Usage? SEO? To be successful, a company needs many channels, but the core messaging and approach will often be similar. How does your customer acquisition change based on assumptions?|
|On-Boarding Approach||Depending on the complexity of your product or service, will potential users need training before and/or after the purchasing decision? As a general rule, the less expensive the product, even free products, the smaller amount of training is required. For enterprise purchases, there may be extensive month-long training, and for some consumer products, there might not be any training needed.|
|Customer Retention / Repeat Business||It is far cheaper to retain existing customers than acquire new customers. In simplistic terms, physical products generally require the customer to keep consuming and re-purchasing them (i.e. garbage bags), whereas much of the software industry has gone to Software as a Service (SaaS) where a monthly fee is required to keep using the service. What levers do you have?|
Only after you have determined that you have a strong product idea that people will want, and you have a firm go-to-market strategy to acquire target customers, is it worth thinking about company risks and erecting barriers of entry to your competition? Remember, if you don’t have a product people want, it doesn’t matter if it can be easily copied, or never actually made!
|Legal Protection / Legal Risk||Are there certain types of legal barriers that either help or hinder your company? Typical examples include patents, government regulations, or even where the company incorporates or puts their servers. How do these change based on various scenarios?|
|Capital Requirements||Are there significant capital requirements required to enter your space? These can vary greatly from requiring a factory, ability to outsource, or even the capital required to effectively advertise. Pursuing a viral growth strategy decreases marketing capital requirements, but may alter other parts of your plan.|
|Size Advantage||Does size matter for your product? For products with a network effect like Facebook, it has to be large to work the way users wants. Choosing to build your own base may give you a protection, but also examine scenarios where the company leverages existing market places as an add-on to an existing ecosystem.|
Below is a starter template you can use to compare a few business strategies. You can easily add a third scenario by adding a column, and choose the questions that are best for your endeavor based on where you are on your product development journey.
Next up, Personas for Product Development.
Aaron Sherman (@AaronBenSherman) is the CEO and Creator of Storyboard That (www.storyboardthat.com) – the award-winning, world leader in digital storytelling technology. Aaron founded Storyboard That in 2012 after 10 years working the full gamut of product development roles (Developer, Project Manager, Product Owner, and Long Term Strategist) across three continents (North America, Europe and Australia) to fundamentally improve how products were internally prototyped and discussed.
Aaron has spoken as a guest Lecturer to MBA students at Northeastern, and with General Assembly leading workshops on Product Development.