Module 3: Solution and Differentiation

Once you have a solid understanding of the target market, the needs and wants of the end users and economic buyers whom you serve, and the pain points that they are facing, you are ready to move on to solution space. Your work in building knowledge about your market and customer will become your GPS in guiding you towards developing a Minimum Viable Product (MVP) that truly solves the problems your customers are facing, and brings demonstrable value to your economic buyers. Only then will you have the basis of a viable business venture.

In this module, we will cover three key topics:

  • Defining your MVP: We will cover efficient ways to define your solution for both internal and external use.
  • Building your MVP: We will cover basic principles of product design, product development and project management.
  • Testing your MVP: We will cover techniques in usability benchmarks, digital experimentation and more.

Product definition

The first step in developing a solution is to define it effectively. According to best practices in design thinking or user-centered design, the best way to define a product is to start with the user’s perspective and let their needs and wants guide the definition and prioritization of functional requirements. This means that the product should be defined in terms of what it does for the user and how it makes their lives better – not in terms of what the product does from a feature set standpoint, and how it is built from a technical standpoint.

Following are some common artifacts that we use in product management to define the product.

Competitive Advantage

For new venture creation, your solution needs to be different and better than anything else that the customer can adopt. The customer is comparing your solution to what they are doing (or not), not against the companies and products that you consider to be your competitors in your industry sector. Both analyses are important sources of insight.

In this section, we will share how you might map both analyses and use this knowledge to inform how you might frame your differentiation & build your competitive advantage.

Unique Value Proposition (UVP)

Understanding what it is that you are building and why, and developing a strategy for your competitive advantage are two pieces of the puzzle. The last piece is to clearly articulate your unique value proposition (UVP) (also known as unique selling proposition, or USP).

This is critically important and often overlooked by entrepreneurs as they tend to rattle off a list of 5+ features. Customers don’t care about features. They care about benefits. They also don’t want to hear 5 benefits, they want you to lead with the #1 benefit that solves their #1 problem. This section helps you do just that.

Product design

Product design is chiefly relevant for ventures in general technology – if we define a product or service as a system that includes hardware and/or software, then product design is the discipline where we translate user needs and wants into something that guides the user’s experience when using the product or service. For physical products the discipline is typically called industrial design. For software products the discipline is variously called user experience design, interactive design and many more. Product design is relatively less relevant for biotech ventures (such as Strand Therapeutics – a cancer therapeutic company) or tough tech ventures involving things like materials or processes (such as Liquiglide – nonstick coating for the inside of plastic bottles for thick liquids like glue).

Read on to learn about different aspects of product design.

Product development

Product development refers to the actual technical work involved in bringing a product or service to the market. In most usages of the word, the discipline of product development includes product design itself as it spans the gamut from concept to market release and beyond.

In startup circles the Lean Startup / Agile methodologies are very helpful, however, applying these frameworks and principles naively to a venture without considering the type of product is not helpful. For instance there is not one answer to the question: “How long would it take to bring a product to market?” Hardware tends to take longer than software. Industrial hardware tends to take longer than consumer electronics. Enterprise software takes longer than consumer software. Biotech is its own category altogether.

Read on to learn more.

 

Product vs. Project Management

Many first time entrepreneurs confuse three roles: Product manager, Product owner and project manager. These are very different roles.

  • Product Manager”: According to Agile Insider, product managers are in charge of product strategy and product roadmap. They incorporate knowledge about the market/customer to guide product definition and positioning. They manage tradeoffs between customers/UX/tech/business needs to optimize outcomes.
  • “Product Owner”: The product owner manages the “backlog”, i.e. a list of things to be done by engineers. Product owners communicate product mission/vision/customer needs to developers on a daily basis.
  • “Project Manager”: Manages timeline, deliverables, balances resources, tracks progress against plan. 

 

Rapid prototyping

One key tenet in modern product design and development is to stay nimble and be able to quickly create a prototype to test with your end customers. The key idea is that the prototype does not need to be perfect – in fact, the prototype does not even need to work in the early stages. As mentioned earlier, the starting point for a product prototype is often just a high level product specification or a landing page. However at some point you will need to graduate to something more tangible that you can test with customers. This is where rapid prototyping comes in (for hardware and software alike).

 

 

MVP Testing and Problem-Solution Fit

Once you have followed the process and segmented your market, chosen a beachhead to start with, done some primary market research to understand your customers and end users, came up with a differentiable solution and validated that there is purchase interest, and has got your very first rapid prototype of your Minimum Viable Product (MVP), you are ready to test it with humans. This section provides you with some ideas on common techniques for user testing to help you gauge whether you have built the right solution to solve your user’s problem – i.e. it helps you gauge your problem-solution fit.

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