A lot of what we write about in product management is what we think we know as far as what the market wants and needs. However, one of the biggest mistakes that I have seen product managers make is not listening to the market. They do the research and the work to figure out what the problems are, come up with a solution, and test it, and it does terribly—and they move forward anyway.
A lot of that has to do with an attachment to what they are building. Or perhaps so much time and money have been spent on it that they don’t want to ‘waste’ it. I get that, but the reality is that they could save time and money by not moving forward and moving on instead.
Say you develop a SaaS product. It is something that you think your market needs and wants. You do all of your research and look at the competition and determine it is something you want to move forward with. You have validated that this is a core problem, but is there an opportunity?
Your competition is charging a lot of money for their product, and you decide to come in and make the new product "free", a.k.a., a value-add to your current product. You do your research and testing on this, and the market tells you that they don’t see a value in free. This is probably a true statement—the reality is that you usually don’t get things of value for free unless it’s something you win.
But you cannot get out of your head how cool it would be to make this free, so you decide to move forward with it anyway. Your customers sign up for the free service but do not use it, and you spend a lot of time and money developing it with zero value add. However, if you had listened to your market, the opportunity was actually to charge for the product. So you could have made revenue, gotten people to use it, and had the value add.
You made it half of the way there. You saw there was a need, but you did not truly capitalize on the opportunity because you didn’t listen to the validation.
We are going to start by validating problems and opportunities. Once we validate and prioritize the problems, we can then validate and prioritize the opportunities.
Finding the problem is probably the hardest job of a product manager. It’s done during the discovery phase, and without identifying a problem you really do not have much to work with. If there is no problem, why do you need a product or solution to solve it? The short answer is that you don’t. This is why identifying a problem is so key.
Then we move to validation, which is done through research. You should talk to and interview as many people as possible to validate the problem. This means internal and external stakeholders. You should conduct formal and informal conversations and interviews with:
Other product managers
Speaking to them and conducting research will allow you to validate (or not validate) the problem you have identified. Once the problem has been validated, you know the opportunity is there. The opportunity to solve the problem will be the product or solution you build.
Prioritization research should be done in a similar manner. What do your internal and external stakeholders feel are the most pressing problems? You could have five problems that you need to come up with a product or solution for, and it is possible that you cannot solve all five with one product or solution.
You should listen to what your stakeholders say is the most important, but also bring in financial research. Whhat is the cost to solve these problems? Perhaps problem number two is an easy lift. It does not require a lot of time, effort, or money, but it is a large priority, although not as large a problem number one. But problem number one requires double the time, effort and money. In this case, the answer is objective, but I would first build the product or solution for problem number two, even though it is lower on the totem pole than problem number one.
By prioritizing the problem, you have, in turn, prioritized the opportunity. You know where your best opportunity lies. By having the financial data to back it up, you will be able to convince the team of how you should move forward.
Validating and prioritizing problems and opportunities is key to your product and overall strategy. Additionally, once these are validated and prioritized, it’s important that you listen to what your customers and market have to say. Acting on instinct instead of fact can lead to wasted time and money. The example I gave illustrates what can happen when you don't validate and prioritize the problems and opportunities.
I also recommend you watch my Executive Briefing on Product Management Pluralsight course. This course will help you understand more about how to communicate with executives and what they expect from you as a product manager.