It’s the product, stupid

In this political season how can anyone forget the blunt slogan uttered by many politicians, “It’s the economy, stupid!” For those of you starting your own business the equivalent expression is; “It’s the product, stupid!”

Product definition is usually the most difficult part of launching any successful business. When you get product definition right, everything else seems to fall into place with relative ease. When it’s wrong, nothing seems to work, NOTHING! Every aspect of your business is hard and doesn’t produce the results you were expecting.

How do can you tell if you have a viable product definition? Successful product definitions usually share some common characteristics; something that can be easily communicated and understood.

“Wal-Mart is a general store that sells everything cheap because it eliminates the wholesaler and buys directly from the manufacturer.”

That’s a relatively simple product definition that is easily understood and communicated. It’s the basis for a multi-billion dollar enterprise. It is also:

Specific: It’s a general store.

Marketable: People love to buy cheap.

Profitable: Elimination of the wholesaler means margins should be much better.

Achievable: Build a warehouse, stock from your own warehouse and never put a store more than 40 miles from a warehouse. (This was Sam Walton’s real genius, the part of his plan that made his vision really work)

Matches owners vision: This product matched the vision that Sam had, it fit!

Easily understood/intuitive: The plan is easily understood by manufacturers, potential investors and potential customers. It’s not too complex or too much of a gimmick. Easily communicated to potential customers: Anyone can understand why there are good prices so they making communication and marketing easier.

Objective: This is objectively a good product definition; anyone hearing about it would see that it is worth pursuing.

Are you considering starting a business?

As you’re planning your new venture, spend as much time as you can afford on product definition. Try to make sure your new product is:

Specific, marketable, profitable, achievable, matching your vision, easily understood/intuitive, easily communicated and objective

Write down each of these characteristics and brainstorm your product definition to meet each of them. Try to make your product specific enough, so you can define a market for it. Who is the customer for this product?

Consider how you will market it to those customers and how you’ll make money on the product. Don’t dismiss profitability quickly. Many people decide to launch businesses and assume profitability will take care of itself. Profitability rarely, if ever, happens without excellent product planning and execution. Making money may seem crass, but defining a profitable product will determine whether success or failure.

Always make sure it matches your vision. Does it conform to why you wanted to go into your own business? Changing product definition to improve marketability can sometimes compromise vision. That’s why product definition is generally a balance between vision and profitability. Avoid products that meet your vision but aren’t profitable and vice-verse.

Try writing a slogan for your product that’s descriptive and complete, but also easily understood. If this is too hard you may want to REFINE your product definition to make it easier to communicate.

The last step, and maybe the most critical for new entrepreneurs, is TRY to be objective! In the passion of starting your own business and launching your dream product, it’s so easy to get carried away and lose your objectivity. If you don’t know how you’re going to build the product or it’s extremely complicated to build the product, you may have lost your objectivity! Usually the product must be relatively straight forward to succeed. I’m not trying to discourage inventors, but complex products are generally difficult to market and fail because of that.

Don’t Hurry!

Try to take as much time as you need on product definition. It’s likely to take you at least six months to refine your product definition. Many people find that creating a prototype and then trying to market the prototype is a great way to refine you product definition prior to you business launch.

Again, it’s the product, stupid! The better the product definition the more likely you are to successfully launch your own business. Remember Sam Walton and you’ll have an excellent model!

For more about product planning please go to Planning