Your core products or services are your lifeblood. They are what attract customers, drive revenues and enable a company to thrive. And, the better your products are, the more customers want it, the faster you grow and the further you distance yourself from your competitors. But, a common mistake I see with many entrepreneurs is a mindset that once the product is built, they can change their focus to other areas of the business, like sales or marketing. That mindset is their first flawed step right towards their grave.
Your Competition
Never Sleeps
Just because you may have a competitive advantage in the
market today, does not mean you will keep a competitive advantage in the
future. Competition is an entirely fluid
ecosystem. Your existing competitors are
always watching your moves, and the smart ones will be quick to follow and
exceed your efforts. And, new startups
are popping up all the time. If you lift
your foot off the accelerator for one moment, you are providing your racing
competitors the opportunity to drive right by you.
Your Customers Always
Demand More
Your customers are looking for you to help them innovate
over time. Yes, they may love your
product today, but that product may become obsolete over time, and they are
expecting their best vendors to step up their game with new features and
functionality over time. The minute you
sit back and rest on your laurels of past success, is the same minute you
should start to feel the noose tightening around your neck.
Build a Three Year
Product Roadmap
To solve this problem, you need to have a continually
evolving and developing product roadmap.
Lay out your product vision for the long term, and tackle one major
product upgrade per year (e.g., Version 1.0 evolves to Version 2.0 after a
year). That makes it much harder for
your competitors to chase a moving target, and will establish yourself as a
trusted thought leader and innovator with your customers looking to take their
game to the next level.
Gather Ideas From All
Stakeholders
In order to build an effective product roadmap, you need to
gather inputs from all places. You need
to continually keep an eye on new innovations of your competitors. You need to be in constant contact with your
customers, asking them for suggested improvements they would like to see from
your business. And, you need to listen
to your own product team, for their own innovation ideas. So, gather inputs from all three channels, prioritize
them based on which ones will have biggest positive economic impact on your
business, and stage them into your three your product plan over time.
Case Study—Invest
Over Time or Pay the Price Later
I had a Red Rocket
client that was feeling pretty good.
Their business was spitting out healthy profits for several years in a
row and didn’t really feel the need to materially upgrade their products. The business was paying dividends out to the
shareholders, and all was good. Until
they woke up one day and realized several new competitors had launched with
cheaper, faster products and their customers were complaining that the company
had gone stale and was overcharging them for what they were selling. They started losing clients, were forced to
lower their prices (which materially impacted margins and profitability) and had
to start paying refunds for the product that was breaking more than ever. Needless to say, they were not happy to learn
they were staring at a multi-million dollar project to get their products back
into a leadership position in the industry—an unaffordable amount hitting all
in one year, that should have been slowly invested over time.
Closing Thoughts
The point here is: innovate or eventually die. It won’t be a fast death, it will be a long
drawn-out death, and you most likely won’t even see it coming, until it is way
too late or too expensive to fix.
Emulate the innovative spirit of Steve Jobs during his tenure at Apple,
and all will be good. And, if you find
yourself having to make a choice between investing in your product or investing
in other areas of your business (like sales and marketing), it is most likely
time to consider raising capital to afford both. Because, as I have written about in the past,
your
proof-of-concept (driven by sales and marketing) is just as important as your
product, and you need to invest in both.
For future posts, please follow me on Twitter at: @georgedeeb.