F.E².A.R. — A Product Framework from Concept to Delivery: The eye of Mordor
Why “FE²AR”
As a technology executive, I have seen my share of successful and not-as-successful products. Introspection into many products and their success levels demonstrated successful outcomes often had all of the following levers tuned optimally: “Fast, Economical, Accurate, and Reliable.”
In the last few years, the advent of connected devices and the power of data have equally made Ecosystems incredibly more powerful. The best products fail nowadays due to a lack of consideration of Ecosystems, an example that I will walk through in Part 2 of this article.
From a Product Management and Strategy viewpoint, I believe internalizing this fear of failure drives some of the best outcomes for the organization and its customers.
Setting the Context
Why are these important considerations, and why is conscious thinking business-critical? I will also do away with the notion of a “Product.” Markets need solutions. This consideration is especially true in B2B and B2B2C environments.
The worst product is the best innovation that your customer doesn’t comprehend or cannot access.
The diagram above represents the four key considerations when conceptualizing a product. This framework is similar to the construct of “Desirability, Viability, Feasibility, and Usability” I find the framework above helps me consciously think through trade-offs to arrive at a product offering. The bubble size determines the limits of acceptance for the offering. The further away from the center of the intersection, the higher cost or a longer time to value. While the use of the framework is evident at the execution stage, it is equally applicable during business prioritization to identify product-market fit, competitive differentiation, and strategic alignment.
Fast — Imagine you scan a QR code with your smartphone, and it takes 10 seconds to return a result. It doesn’t matter what caused the latency — what matters is that it could imply a poor experience. In a different scenario, the acceptable latency might be milliseconds. In the first scenario, reducing this latency to under 3 seconds might not only be unnecessary but can prove to be quite costly. While this looks like a “technical” parameter, this is about the market acceptance (and an opportunity to differentiate) and cost and something you should understand as a Product Manager. The opportunity cost is an equal consideration. Spending unnecessary time on R&D could imply lost revenue or losing the market altogether.
Economic— Cheaper, Faster, Better — Typically, a solution needs to satisfy at least two of the three parameters. The Economics of a product is relative in that sense. The starting point is identifying differentiators that are tangible to the target audience beyond revenues and gross margin customers believe are beneficial. Making something run faster doesn’t automatically translate to market penetration — it has to be something the customers find valuable.
While several considerations around Value Creation and Value Capture are tangible and are critical in delivering exceptional customer value, thinking of intangibles is equally vital.
I am sure you have used this app before, Yelp, to get on the waitlist at a restaurant. This remarkable feature drives a win-win for both the customer and the restaurant. However, imagine that the app doesn’t integrate into the rest of the system resulting in the front-desk navigating between two systems. The restaurant might gravitate to a different offering if you cannot connect with its existing systems. The pain point of training their users on a new product and the need to switch between systems for various tasks might be reason enough to consider another product. The worry about a poor customer experience will drive the non-adoption further. When you think Economics, think TCO and simplicity.
Accurate— There are about 10M pothole incidents in the U.S, costing an average of $300/incident. The city or state is generally required to pay for such incidents. Let’s say a solution reduces the number of occurrences by 30% — Would you deem the product to have poor accuracy? Think again! It saves $1B annually. Accuracy is a relative measure.
On the other hand, would you be okay if the accuracy was 90% to detect defective pills? Whom you are selling to, and their incentives and pain points should inform the desirability of the solution. While considering accuracy, also think about the ROI. Is a 10% boost to the accuracy from their current methods, the switching costs associated with the benefit worth it? What might be some of the other processes they might be able to retire due to the additional accuracy? Actual Value creation is harder to determine and might require rigorous domain expertise. The business question is if the solution is worth the initial capital expenditure. Accuracy is about the qualitative data (identifying and refining business processes) as it analyzes the quantitative data objectively.
Reliable — Assume the same scenario above and imagine your vehicle now slows down erratically even under normal road conditions. How frustrating would that be? Imagine that your factory comes to a standstill due to the failure of a cloud instance. By that same token, what would be the problem if a daily report fails to run — Is that benign? It depends. As with accuracy, reliability is relative too. One of my mentors taught this mindset was to think of reliability in terms of opportunities. We had designed a feature to detect the loss of an audio call under certain exceptions. There was a “small” opportunity it could result in a loud pop. Our rule of thumb was that if it only occurred ~once a week, it was okay (I won’t explain why that was the case here). It turned out we were at about once every four weeks, statistically. Not measuring this would have resulted in a considerable redesign that would have been unnecessary.
Ecosystems — As a Product Strategist or a Manager, it is insufficient to only think about how differentiated your product is. Taking a transactional viewpoint on how to take the offering to the market is not sufficient either. It is crucial to understand the incentives of everyone in the Ecosystem, including potentially invisible ones in the value chain. The key is in building win-win strategies and identifying timing in the market. There are no prizes for being first to the race’s starting line!
Recommendations & Further Reading
When you are considering any new offering or solution, use a framework that you are comfortable with, use consistently, and explain in a simple way to all stakeholders. I often internalize these considerations and break them down depending on the audience.
There are three possible scenarios if you find yourself at a point where there isn’t a good intersection.
- The solution isn’t a good fit. This situation might not be because the idea isn’t valuable but because of alignment with overall company strategy and core competencies. I often come across organizations that look to build out a connected device but lack the expertise or investment mindset. In this case, it is possible to collaborate with another company, possibly a startup, to derisk the investment.
- Re-evaluation of the parameters is required. Overstating the market need or the teams had too little information that required them to buffer for the unknown (increases initial capital to make the product).
- It might need to be on the backburner for a little while. The invention of Turbo codes dates back to the ’90s. However, it didn’t find a practical application (and the compute resources required) until the deployment of 3G wireless services.
Ron Adner is second to none regarding ecosystems and thought leadership! “The Wide Lens” shifts your perspective from Execution to Co-Innovation and Co-Adoption. “Winning the Right game” touches on an essential subject of identifying Value Architecture.
I hope you enjoyed reading the article and had a few takeaways that will be useful in your future endeavors. I will return with Part-2 in this series, which presents examples and strategies to validate products in the market.
