Every entrepreneur and technical leader wants to build the next blockbuster product and wildly successful company. Despite the desire and vision, success is not easy to find. Studies have shown that only 60 percent of new products introduced[1] and 25 percent of capital-backed ventures[2] achieve success.
How do we improve our odds of success? The graphic below suggests that we are often introducing or making improvements to a product offering or business model. However, too often the designer focuses on developing a great product and packs it with too many features, failing to consider the business model that is needed to support it in the marketplace. Alternately, the entrepreneur conceives of the perfect business model for a new venture but doesn’t spend the time to work with the designers to develop a product line that has the right features aligned with the business model.
Even in established organizations that have a great product concept and supporting business model, the need for an implementation and execution model is often overlooked. Introducing new products or making business model changes requires support from engineering, operations, marketing or sales groups—and all may not be supportive. This is the situation of an organization that has a great product but can’t or doesn’t want to take it to market.
Develop and Align Your Three Key Elements
The first step towards success requires recognizing that there are three elements or models to be developed and aligned: the product, business and execution models. Recent work has shown that the introduction and use of canvas tools can greatly assist in developing models to align these three elements.[3]
The models developed are conceptual in nature and enable the collection and alignment of relevant information to determine overall fit and whether it’s a go or no-go without spending significant resources on prototyping and development. The real benefit of exploring with canvas tools is that it brings together the various people and operating groups in the organization, enabling them to work together through the key elements of these three issues and achieve alignment if possible.
Achieving product or new venture success is not easy but identifying and focusing attention on product, business model and execution issues will greatly increase an organization’s odds of success.
[1] Castellion, G. and Markham, S. K. “Perspective: New Product Failure Rates: Influence of Argumentum ad Populum and Self-Interest,” Journal of Product Innovation Management, 30: 976–979, September 2013.
[2] Gage, Deborah. “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Wall Street Journal, Sept. 20, 2012.
