In the age of entrepreneurs and new tech companies popping up every second, product design is fast becoming the most popular conversation down the pub.
The romance and populism of start-ups means everybody has the ambition to be the next Mark Zuckerberg. Every business wants to design that killer product that will instantly make them a billionaire.
The truth is that building successful products requires a lot of components to come together, but the glue that brings them in and holds them in place is a huge amount of hard work.
Just before you go off and hole up in your basement for 2 years building the next big thing, here are 10 mistakes to avoid when you're designing your next killer product. I've made all of them, some more than once. Read on to learn what not to do!
Let's open with something that sounds super obvious, but is probably the single biggest offender when it comes to new business ventures failing in the first year.
How many times have you heard of business ideas being described as the Uber of Retail or the Facebook of Shopping?
If you are designing a product and somebody asks you to explain why you're designing it, the answer should never be a cliché that says you are building something that is mighty similar to a recent successful tech business but in a completely different space.
The reason these tech giants have succeeded is not because they have fundamentally found a new way that every single business can now operate. They are successful because they understood the specific market they are in and built a great product for that market.
By 2014, a 2-year old start-up called Kitchensurfing raised $20M to build an online business that allows customers to book chefs to come and cook in their kitchen. By early 2016 the company went bust. Guess what? Nobody wanted a chef to come to their kitchen to cook them a meal.
Customers could already order any food of their choosing cooked by professional chefs in professional kitchens to be delivered to their table in minutes. There was no problem to be solved and so nobody wanted the solution that was built.
It is incredibly easy to go down empty rabbit holes when you don't listen to your customers. And it's all too common for business leaders to think they understand their customers, but more often than not, that proves not to be case.
Steve Jobs' 2007 presentation of the first iPhone has produced a new wave of business leaders. These innovators firmly believe that they know what the customer wants before the customer does – just look at what Apple only did a decade ago!
Sadly, the more common outcome of businesses not listening to their customers is very painful and unfortunate.
A lot of the time the business leadership is just too far removed from their consumers to understand the mindset and how these customers think. No amount of analytics will get you thinking the way your customers think.
The answer is to understand what your customers prefer by scrupulously analysing everything they do and leaving all of your preconceptions at the door.
In 1990, some bright marketeers at Coors decided to expand their brand and launch Coors Rocky Mountain Spring Water. The experiment didn't work out too well because it turns out that loyal customers who like beer don't really want to buy water instead.
The likelihood is that market research and focus groups were on the thin side and so the new venture was shut down briefly after launch.
Companies around the world are realising that making money from existing customers is much easier than finding new customers. Your customers are loyal, already like your brand and have already bought from you.
But how many times do companies neglect to consider any of these things when designing products and chase a short-term cash grab instead?
Remember when Facebook launched the Facebook Home Android app? No? That's probably because it didn't even make it a month after a huge development cycle that cost Facebook a pretty sum.
Facebook were busy trying to figure out how to quickly monetise their userbase and decided to sell an app which converts your phone's home screen into… Facebook. And users were charged $99 for the privilege.
Needless to say, the greed of fast short-term gains didn't play out. While this might be an extreme example, it's not uncommon for companies to pull on the blinkers trying to chase short term financial wins, which will often come at the expense of long-term revenue and customer loyalty.
Granted, Facebook didn't suffer too much from this failure, but they certainly learned from this lesson.
Here is another problem inspired by some of the largest technology giants of today. Movies like The Social Network propagate a popular belief that the number one objective of a business should be to build a large network. Figuring out how to make money can come later.
Unfortunately, the world is harsh on aspirational business ideas. If you are not in the for-profit business mindset, you might find that time and money chases after you a little too fast. Too many companies, including dozens of social networks with huge investments folded because the revenue model just wasn't there year after year.
Today, challenger banks and fintechs provide abundant examples of this behaviour. A massively popular business model in the current venture capital bubble means that almost anything with a fintech label attracts investors like kids to candy.
Becoming popular in the US, UK and Europe around 2015, loosening of the regulatory environment has led to new banks and financial services companies being launched almost on a monthly basis.
Some of the most established fintechs have been continuously loss-making since launch. Funding Circle has never turned a profit – something they continue to attribute to growth and marketing spend, losing over £35m in their most recent filings for 2017. For a business that is almost 9 years old and with a huge valuation of £1.5bn when they launched on the London Stock Exchange in September, one wonders if profits will ever come.
Here's a bit of advice for you that might be the single most important factor in product design in 2019:
But what does it mean to keep your product design simple?
A common trend in product design today is to take an existing proposition that somebody else has built somewhere else and add some extra features, bells and whistles. Hey – you've just taken a product and made it better, right?
Problem is – if you keep doing it, you're just adding plasters on top of old plasters. Keep doing it long enough and nobody knows what's underneath all of the mess.
Look at today's credit card industry – credit cards have become so complicated that even people who work in the industry often don't understand how they work. How much interest per month does a customer have to pay on a £4,000 balance at 19.9% APR? The majority of people who work in a retail bank won't be able to tell you the answer. What hope do customers have?
Add in a myriad of difference balance buckets, daily vs monthly interest calculations, transaction authorisation, post and statement dates – credit cards have grown from a super simple concept in the 60s to a ridiculously complicated financial tool that offers you 0% balance transfers for 4 years.
Earlier last year, Strategy Desk worked with 118 118 Money to design, build and launch their credit card business. In the spirit of making it simple and designing a product for a specific near-prime audience, we designed their ground-breaking 118 118 Money Card.
No interest. At all. Ever.
No fees. At all. Ever.
Just one monthly subscription fee.
That was the proposition when we launched this product in April 2018. Granted this is not a product for the super prime customers who are used to getting credit virtually for free. But customers traditionally served by loan sharks and struggling to understand endless penalty fees have shown an unbelievable response, with 118 118 Money having the fastest growing credit card business last year.
The excitement of building something new can lead product developers to think big. Really big. So big that sometimes the remit of the original product gets thrown out of the window and the sky becomes the target rather than the limit.
When Strategy Desk was first launching LazyTrips, we thought we had the perfect product in place. We built a master tool where you could plan big complex trips, customise and save your itinerary, reserve all your preferred hotels and book it all in one go.
Nobody had a tool that came close – you could go ahead and book 10 different hotels on different platforms with one super easy process and one payment.
The launch date came, and we sat on the edge of our seats waiting for the crowds to pile through our doors planning and booking their trips with our new tool. Except the crowds didn't come and our idea flopped.
We made a few of the mistakes on this list all at the same time. We didn't even ask our customers let alone listen to them. We didn't solve a real problem and boy – we did NOT keep it simple.
We quickly learned from our mistakes and changed the proposition to a much simpler hotel booking tool and hey presto – it turns out customers like a great looking hotel booking website with cheaper prices than big name players.
I can't stress enough how important it is to be your own customer. I have lost count of the number of times I have asked a business CEO whether they actually have and actively use the product that they sell only for them to raise an eyebrow.
Companies will spend billions on market research, armies of management consultants and analytical software, but don't take the time to try out their own product first hand.
I can guarantee that the moment you buy/apply for your own product and use it for a week, you will identify a bigger list of improvements, optimisation and development ideas than any other form of research.
Absolutely nothing beats the “I didn't know that's what it does” moment when you realise that a process just doesn't work like you thought it did.
A few years ago, we were working on a big user experience project with Tesco and I still remember the amount of interest our research and optimisation recommendations gained inside Tesco. What did we do? We just went and used the different products ourselves and wrote down what we experienced.
A lot of people who work in product design are not marketeers. They are technology geeks, analytics gurus and coding enthusiasts but they are not into spending hours on marketing efforts and sales.
You have probably heard the phase “Build it and they will come” – coined by Kevin Costner's character in Field of Dreams. Unfortunately in the real world of business, that is not how life works.
A few years ago when Strategy Desk's office was in a WeWork building in London's Moorgate, I would ask some of the entrepreneurs in offices near us how they planned on growing and scaling their business.
The most common response I got back was that if they built a product that was good enough, customers would come naturally.
Nice as it sounds, unfortunately this is just not true.
When you are first building a new product, the only reason people will come and buy it is because of your marketing. You can have a product that is better, bigger, smaller, lighter, stronger and certainly much cheaper than all of your competition, but without the right marketing, none of that matters.
Competition in almost every market is rife. Companies are spending billions on their marketing budgets. Are you here to offer a cheaper alternative? Great. Try convincing customers that they should switch.
If you are going to succeed, you only have two options.
First option is to become crazy good at marketing. Tough it may be, but a combination of learning everything you can and persistent trial and error can get you a hell of a long way. It won't be fast. And it won't be easy, but eventually you will find what works for you and what doesn't.
Your second option is to hire somebody who is crazy good at marketing. Whether it's a seasoned marketeer that you add to your product design crew or an agency that helps when needed, you really have to get somebody whose sole obsession will be to market your product.
Remember this. Your product will not succeed no matter how amazing it is without marketing. You know what else? Even if your product still needs a lot of work, it can do mighty well with the right marketing approach.
How often have you heard about a company delaying the launch of their product month after month, year after year?
There is always the last few finishing touches that are absolute must haves before you release your product and before you know it, timelines get pushed even further and the big launch keeps getting delayed.
The truth is that you will never have a perfect product. If you did, there wouldn't be any point in turning up to work. Other than maybe counting up the crazy amounts of money you'd be earning with it.
This is true whether your product is in its early stages of development or if it's 10 years old.
Here is a quick tip based on seeing too many products taking far too long – get to your minimum viable proposition fast. And then launch it.
Remember the advice on listening to your customers and trying out your product for yourself? The only way you can do that is if you have a product out there that can solicit customers and their opinions.
The main benefit of doing this is that 9 times out of 10, your customer feedback will completely change the direction in which you're going and save you months of development of features which you will then remove. You will quickly begin to think completely differently about your product and you might find that a small part of your original product design becomes the focal point of your business.
Here's what Uber's first website looked like in 2011.
Which brings us nicely to…
Let me tell you a secret about your new product. The product that you first launch after months of long hours, agitation and stress will look nothing like the product you will have 5 years later. Almost every time you will find that the vast majority of your original product doesn't survive.
Because successful businesses have to be agile and think on their feet.
Too many businesses in the recent wave of tech start-ups get an idea and begin working on it with no consideration of whether it continues to make sense. Like a tank, people will continue work on the project despite lack of customer interest and without regard for anybody's feedback. What do they know after all?
This is a common precursor for spectacular business failures. When you look at the most successful businesses today and compare them to when those businesses first started out, you will see a huge transformation and a very responsive journey.
Remember when Amazon sold specialist books in the US?
If you have to keep changing your business focus and direction, it means you're doing something right. You have to try things out. You have to learn from your mistakes. You have to keep moving and adjusting as the world around you changes.
I hope I haven't put you off designing innovative new products. In fact, I really hope that having read these tips you go out there and create something really awesome.
I have designed and built a lot of new products during my career in banking and even more since I launched my strategy consultancy. Sure, Strategy Desk is one of the newer strategy consultancies and is super small compared to the Oliver Wymans and McKinseys of this world, yet we're constantly working with some of the world's largest banks and technology companies.
We help the likes of Barclays, HSBC, Tesco and Royal Bank of Scotland innovate and improve their products, and we've seen firsthand that the best way to do something well is to make mistakes and learn from them.
What's the biggest mistake you've made in designing new products?
Sasha is the Managing Director of Strategy Desk. His favourite food is the New Orleans gumbo and he has launched over 20 new banking products in the last 10 years.