Value Proposition Sells, Not Technology

Here’s My Marketing Plan

I met with the marketing lead of a tech startup recently. He was developing his 2018 marketing plan and wanted my feedback. The company’s business model was B2B with a focus on “industry distributors” as the sales force to the end customer, employers. My first question was, “What is your value proposition?”

He had a great timeline that included the appropriate different campaigns, content, and targeting. He told me the areas he would be focusing on. It was all good stuff but with a limited budget, it would not maximize the results. He was highly underselling the value of their disruptive offering by promoting the wrong elements.

What Problems Does It Fix

The most important of all marketing dimensions is your actual value proposition. What is it that your product or service does better than anyone else? Why would someone want to buy what you have over what they are currently using? If you can answer those, without listing features, you have your value proposition. As innovation guru, Clayton Christianson would ask, “What job does it do?”

This should answer questions such as: Does it make my work easier? My life better? Is it cheaper? Can I expect higher performance levels using it? Particularly with B2B models, you are displacing an incumbent and must show a significant improvement to be worth the extra hassle of dealing with a new vendor.

Technology for technology’s sake is not good.

Although people may be wowed by it, your technology is not the value proposition, it simply enables it. Technology for technology’s sake is not good. It must solve a problem. The more widespread the problem, the higher the potential for success. The better it solves the problem the more people will be willing to spend.

If you can clearly articulate the one to three customer “pain points” solved by your solution, you can get a buyer and you can easily enable your salesforce. The harder it is to articulate a value proposition, the more difficult it will be to sell your product.

The Value Proposition Sells Itself

As you can see, your go-to-market strategy should be a natural extension of your product development. Even if your salespeople can sell ice to an Eskimo, it’s better to give them messaging that makes their job easier and you will sell much more. It can be as simple as a clever rewording of the information you uncovered during the early design thinking stage. You will have an excellent message.

With everything in development, it should be tested. It’s very easy to get early feedback by meeting face-to-face with the sales members and key customers. Do this at least once prior to campaign launch to ensure success.

Lead with what your solution can do, not what makes it do it. 

Um, that’s not an MVP

One of the questions I get frequently when I am speaking at conferences or training clients on how to improve their new product/service development process is this, “what about the minimum viable product?” This article is to help managers and executives understand today’s implications and limitations of a minimum viable product. 

Defining MVP

The minimum viable product (MVP) was popularized by Eric Ries’ book The Lean Startup. Eric states that “the goal of the MVP is to test fundamental business processes.” He goes on to say “Any additional work beyond what is needed to start learning is waste.” Technopedia defines MVP as “a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users.”

Technopedia defines MVP as “a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users.”

Since its introduction, the concept of MVP has been abused by software and hardware designers alike. Unfortunately, most MVPs I see serve the impatient and undisciplined as a way to justify their rushed approach to launch a scaled-down product with plans to add additional features in the future.

In classic Silicon Valley style, proponents push the MVP model just like entrepreneurs push unicorn valuations for software companies that have no sustainable business model: it’s not ready for prime time yet. In the valley, something that hasn’t been updated in a week is “old” and if a month goes by without an update, a product is knocking on death’s door. Heaven forbid you update a product quarterly. Despite “real time” updates, this method is fraught with problems.

No Quality

One of the things I hate the most are poor quality products. To me, it is a sign of poor engineering. Although it could be that the product or service was produced or manufactured poorly, it is most likely a failing product was due to a bad design and insufficient testing during development. The damage due to a poor quality product can be long-lasting. Dodge Dart’s initial quality problems & Sling TV’s poor streaming issues are great recent examples of not delivering a quality product. People tell more people about poor experiences than good ones. One lost customer due to a poor experience can lead to many others never trying it. I’m not the only one that feels this way.

According to EY, a global leader in knowledge management, Australian businesses are losing more than $720 for every negative customer experience. That’s a lot of money to lose and a number MVP practitioners likely don’t share with the CFO when pitching a new product. Your product has to be high quality from the start. You can add new, valuable features in the future to differentiate it from the competition, making sure each product or service release is successful from the start. 

In software, the rush to release a revenue-producing MVP leads to many issues from their poor workflow, missing features or annoying bugs. These software issues are then addressed and updated on a continual basis. This is one of my biggest frustrations in software. The number of updates that companies are pushing to their smartphone apps is unacceptable. I have my app auto update settings turned off because I don’t want my phone to automatically download the latest version. Consumers should know what changes have been made before they update an app.

Because of this, I often have dozens of apps that are always in need of an update. I scan the description of every update before I make my decision to update or leave as is. If it says bug fixes or minor improvements, I am passing on the update. I will usually only update when there is an interesting new feature being introduced. Many times, I have seen apps change their user interface, just to be different. I think this is confusing and causes the end-user to relearn the app, leaving her in frustration. 

Excuse to Appease Sales

I can’t tell you how many software teams I’ve seen say “We’ll add it or fix it in a future release, we’re working on the MVP.” This is simply the sign of a poor development capability and leadership. If the marketing team has identified a pain point the customer has now, it needs to be developed now. If there are known bugs or workflow issues, they need to be fixed before release. MVP is not permission to release a substandard product. 

Although many companies are now pushing for MVPs, an MVP is not an excuse to throw a poor quality product or service into the market faster. 
There can be a great harm done if the next iteration of the product occurs fairly quickly after the original. In B2B applications, the software must be pushed out to the whole enterprise again and an entire workforce needs to be retrained on new features or capabilities.

Companies that sell software as a service (SaaS) rely on subscriptions. Poorly done MVPs may result in cancellation. A customer won’t spring for the next period of subscription or wonders why fixes weren’t included in the first release. 

Hardware is NOT the Same

In hardware, the implications are much more significant. The investment is not simply a software engineer’s salary for writing lines of code but instead huge investments in tooling, manufacturing and service readiness. Going from an initially released MVP to an updated can be extremely expensive. 

MVP was never meant to be developer lingo for “release something to the market as soon as you can.”

An MVP is a prototype to validate your hypotheses. (read this again)

Prior to creating the prototype, you need to understand the major pain points you’re trying to solve. Fixing these is what will create differentiation for your product. The software or hardware development team, its capacity, and their agile-epic-train-sprint-release protocol is not the determining factor for what a successful release needs. 

Development teams need to focus on creating what the product’s owner has defined as what is required to win. The MVP is the first attempt at delivering that solution. After validating with a subset of the customer base, the company can then make the final changes prior to release.

You don’t release an MVP as a formal product. You don’t rush something out the door hoping to fix it later. An MVP is a chance to test a prototype with your future customer base. Period. Use it for such and benefit from the learnings prior to release. Then, you will experience success.

Never Fail

There is a phrase that is being misinterpreted. “Fail fast and fail often” should never be the mantra of a development team with regards to projects.

Not a project badge of honor

“We want to fail fast, fail often.” I hear clients say all the time. This is no doubt repeating what they have interpreted from popular innovation books, when discussing their product pipeline. 

I disagree completely. 

Every product idea requires development team effort. Teams consume more resources as they go through the development process. Development resources are among the most precious of all corporate resources. They are extremely finite, have a long gestation for their work and create the soul source of future revenue for the company. One bad bet could sink the company. A project failure means you have wasted time. There is certainly no room for failing often. 

Instead, your mantra should be “Never Fail” with the tagline: “…with projects, but fail regularly with options.” Approach every project with the mentality to succeed. However, this assumes that the team will not pursue a singular solution option from the start 

Fail on Options

At every decision point on a project, consider a minimum of three options. In addition to this, the team should never jump ahead more than one critical decision at a time. Teams can’t focus on a singular solution or jump ahead to a defined solution. Doing so increases the likelihood that a product will eventually fail.

It is the options at every decision point that fail fast and fail often. Therefore, the amount of failure should exponentially increase in proportion to the number of people working on the project. Every designer should be studying a myriad of options for all of the solutions they are responsible for at every decision point. 

Let’s take buying a house as an example. One of the first decisions you’re going to make when buying a house is where you want it. Unless somebody gave you some property or you have your mind set on an exact lot, there are a myriad of options for exactly where your next house could be. Multiple factors impact the location: proximity to work, distance to amenities, closeness of relatives and so on. For every home location option, each one of those factors have a better “rating.” Over time, you will narrow down to the city and  neighborhoods that are options. 

The process will proceed when one chooses a location. Every other location “failed,” but the home buying project did not. However, if you blindly chose the house without regards to location and then discover after closing that it was too far from many destinations, the project failed. You are regretfully stuck in a home would rather not be in. 

Shoot for success with EVERY project
Your Project House

Every decision about the project should have multiple options that are studied, feasibility conducted and alternative solutions partially developed. Only one option makes it to the next step of project maturity. The next decision should also have multiple options. 

If a project fails, it usually means that due diligence was not done on a previous decision or that the development team took to long to introduce the product to the market. Never take the approach that you want to project to fail. You certainly don’t want to fail often. Instead, you want to kill a near infinite number of options on your way to project success. 

Market Always Wins – Figure Out What It Needs

There is a quote in capitalism that says “The market always wins.” It does. I was trained as a mechanical engineer. For 12 years I had design responsibilities. I used CAD. I knew how to design parts that had to be molded in plastic, cast for metal, stamped, assembled with clips, screws or adhesive, extruded and coated. For years, I took the styling inputs, our testing requirements, and manufacturing requests and then balanced those with cost, weight, investment, performance and packaging to design the optimal parts worthy of being on a Honda. I didn’t question what I worked on. I didn’t know why. I simply designed. 

Then I became curious. Why did we design specific things and not others. How did we make trade offs? What did our customer want? I went back to grad school, not for engineering, but for business. How could I know what we should be working on? During my MBA program, I took every elective related to defining and understanding the market. 

I was exposed to our own market research process while in b-school. During development for the Model X, our code name for the project, I participated in focus groups as we sought feedback on several concepts for this all-new vehicle. We were targeting the college and young adult population so we visited several college campuses with our sketches and mock ups. We had three concepts: Lifeguard, Triathlete and Adventure Sport. 


Despite generating the most conversation, attention and approval, Triathlete, a CRX on steroids, our marketing team pushed for the least-discussed model, Lifeguard. I couldn’t understand why. There were clearly no Gen Xers, male or female, that wanted it. The team pushed forward anyway, studying surfers, skiers and other outdoor sports fanatics to create this segment buster. With a price of $16k, youth would flock to the dealers to get it. 

Executives were unsure. It was quite different than anything we had done. Our team was small and we had several other vehicles competing for resources. It wasn’t convincing enough. The work was shelved for several months and then suddenly development was restarted and accelerated.  Toyota presented a similar concept at the ’99 Tokyo Auto Show. We had to beat them to market. 

We did beat them, launching the Honda Element at the 2002 New York Auto Show before the Scion xB (which was a full year later). The Element was not a raving success. Teenagers and twenty-somethings did not flood the showroom floors. There was no clamoring for keys by the much-needed younger generation. Outdoor sports enthusiasts, dog owners and small businesses bought it, most older. 

(The entire Scion brand, birthed out of Toyota’s ’99 Project Genesis, also failed to connect meaningfully with the younger generation, eventually succumbing to business pressure, was shut down in ’16.)

Element sales only hit the annual target for two years, dropping to less than 20% of the original target by its last model year. The Element never hit its intended audience and never saw a redesign. It was canceled after a single, albeit extended, lifecycle. (This product launch was my first and hopefully last major mistake with the press–see article here.) 

I left the small world of Honda and the global automotive market. Since then, my job has exposed me to one industry after another: medical device, financial, education, industrial, military, government and healthcare. For over ten years, I’ve been a consultant on new product/service development. Clients pay me to improve their development output and the corresponding contribution to corporate profitability. 

I always start with understanding the market. There’s nothing worse than improving a development team’s process just to have them release stuff that misses the mark. It just makes the corporate financial problem get bigger faster. The Element was my real world lesson on this. 

If you’re going to invest money, time and limited resources on developing a new product or service, make sure you know what the customers are really wanting. Nothing screams waste more than giving them something they don’t want. 

Sure, the Element made money. Many products and services I’ve seen launched fail to do that. But what could have been in its place? The Acura MDX, Acura TL and Honda Pilot are three vehicles that were and continue to be huge successes, also launched as brand new when I worked on them. When you have limited development resources, your company needs Pilots, not Elements. 

It may be easy to say “Adam, you have to have failures. Fail fast.” After market launch isn’t the time to fail, especially with physical products, the tooling ramp up is too long and expensive, especially in regulated industries. Software can do that, doing simple A/B testing on a portion of their user base. 

Fail before launch. I saw the rejection signs years before the Element launched–when it was still a foam core cutout–that it wasn’t going to be what product managers expected. The Acura RDX was in danger of the same fate before it was fixed for Gen 2. The Acura ZDX was an utter failure as well. Honda was pushing product to market not responding to pull. 

(Still, Honda remains one of the premier mobility companies in terms of profit. I only pick on them because of my familiarity with them. Where is Pontiac or its hideous Aztec, Saturn and their plastic-bodied cars, Fiskar, the Tesla Roadster or any other of many auto brands and cars that failed to deliver, losing billions of dollars.)

My advice, from seeing this over and over again is simple, take some time, maybe a lot of time, and deeply understand what the market needs. Your future depends on it, whether it’s a product or a service. Customers can’t always articulate what they need, but their pain points become obvious after close observation. I’ve never seen a thoroughly researched segment that was well executed fail.

Think Outside of the Box? Ugh…

Think. You’ve seen them. I recently saw another post on LinkedIn that was centered around business jargon. It is funny to read the phrases and colloquialisms used in the professional world. This particular one had 25 listed and was asking to comment on which phrase was our pet peeve. After reading through all of them and reminiscing about the most memorable times I’ve heard each of them used, I narrowed down my finalists. They included ones like “synergy,” “apples to apples,” and “bandwidth.” 

However, as an innovation consultant, there was one clear winner for me. I added my phrase to the comment section: “think outside of the box.” It’s not that I don’t agree with the concept, I actually live in it most of the time; it’s the fact that I don’t think people actually mean it. 

According to Wikipedia editors, it means “is a metaphor that means to think differently, unconventionally, or from a new perspective.” A new perspective. New. That’s the tricky part. 

While I believe that people saying the phrase actually believe they want a new perspective, I don’t think they actually want one. In practice, for those that actually do want a new perspective, there are even fewer that appreciate the new perspective. Then, there is an even smaller percentage that will take the idea and “execute” on it. 

The reason “thinking outside of the box” is so disturbing to me is because it is my modus operandi. I love it. I thrive in it. If you present a problem statement to me, my brain goes into overdrive to imagine a novel solution. Operating within imagined constraints, I modify and update the idea to be a practical, if difficult one, to deliver. There are people who operate this way naturally. (See my post on brainstorming.)

With novel solutions, the biggest issue is that it feels impossible to implement. It takes more “out of the box” thinking to make it a reality. This means effort. Sometimes lots and lots of effort. By definition it also means change. It.means.NEW. 

Difficulty and change are not things that most people like to do. Out-of-the-box thinking demands a penchant for personal adaptation and hard work. That makes it off limits for the masses, but it’s where innovators reside. It’s where the best ideas come from. It’s where disruption and revolution are birthed. It’s a challenging path that yields incredible results. It’s not for everyone. 

The next time you hear the words “think outside of the box,” your immediate replies should be “do you really want this” and “are you willing to stick with the idea until it’s done.” If not, it frustrates everyone and doesn’t “move the needle” at all. If you say it, mean it and then work the ideas and enjoy the fruit of your labor. In the immortal words of Yoda, “Do. Or do not do. There is no try.”

3 Areas to Focus On To Successfully Launch New Product or Service

Portfolio vitality is required if a company is going to ensure future performance and survival. This is achieved through the continual launch of new products and services to the customer. Some organization are referring to a combination of products and services as solutions or offerings. I will use all of these terms interchangeably in this post.

As someone whose domain expertise lies between the idea and launch of a new product, I am frequently asked what the most important things to do when attempting to increase portfolio vitality. There are three areas that organizations of any size need to consider: the new product must fix a pain point, it must be repeatedly available on demand & you must be able tell and deliver it to the customer. Project teams are crucial to addressing these areas. Each area needs a representative on the team. That representative is responsible for their area being successfully done.

The first is fixing a pain point. This requires a deep understanding of what the end customer actually needs. Without giving the customer a differentiated product from what already exists, there is no reason for them to switch. Launching something to the market just because it does something cool doesn’t ensure success. In fact, the biggest mistake in new product development is creating something nobody wants

Take a look at Apple Watch. It hasn’t enjoyed widespread adoption, even after two years and two generations of being in the market. A small percentage of people own one. Why? The price is high, the capabilities are mediocre and it requires a paired iPhone. Apple had its chance but lost out with the proliferation of smart fitness trackers that more closely provided what customers wanted. In order to win, you have to address a pain point.

Understanding the pain points is just the beginning. You have to have a development team that can translate those needs into a workable form. This usually starts with a design that leads to a prototype. It needs to be rigorously tested and then a finalized design completed for launch. The final product is ultimately what must fix the pain point(s). The design inevitably gets watered down with trade-off related to cost, technology readiness, and other areas. Don’t lose the focus on fixing pain points when getting to the final design.

It’s not enough to have a final service ready, the second area for a successful launch is needed. An organization must be able to repeatedly provide that service to the customer. Customers are not very forgiving when they go to purchase your service and it isn’t available. Only in rare cases the customer will be patient. Depending on the ratio of the value added to the wait required, the customer will likely move to a competitor. Your organization must be able to provide your services at the rate of customer demand.

Each unit provided should be defect free, matching the design intent. Two popular methodologies for repeatedly providing defect-free are lean and six sigma. Lean is the industry best practice for establishing waste-free operations, minimizing cost of production. Six sigma focuses on reducing variation to the lowest possible level. A disciplined approach using these principles will ensure the organization meets repeatable provision to the customer.

The last area is that the new offering must get to the customer. This includes the trigger and delivery. Proper advertising and fulfillment after an “order” is placed leads to strong revenue and growth. The better presentation to the intended customer, the more demand will be. The shorter the wait, the happier the customer will be. Marketing in the social media age has its own rules now and the shift in retail due to the Amazon effect has reset the playing field. Companies must keep up with what the leaders in their market are doing.

Each of these areas are critical to launching a new solution to the market. Get one right, you have one right. That doesn’t mean you’ll win. You need more than a great offering. You need all three for a successful launch: fix those pain points, make it available when ordered and be able to get it to the customer. That will win and that will lead to portfolio vitality and the future success of your firm.

Brainstorm Recommendation: Don’t Use a Group

Virtually every week of the year I have a group of employees in a room all working on a task: to redefine what they’re doing today by painting a picture of what they could be doing tomorrow. Due to the limited time together, teams try to get as much done as possible. The exercise I hate leading the most is the group brainstorm. Why? 1) Because most people can’t do it and 2) The team wants to finish the tactical part right afterward.

Great ideas can’t be forced. Great ideas don’t have a single iteration. They aren’t instant. Great ideas don’t come from everybody. So why do we expect good results from short brainstorming exercises? Because you can get some pretty good ideas. They may not be game changers but most can be run with immediately. They don’t take a lot of feasibility or work to implement. Good is good enough.

It actually works okay for average to slightly-above average teams. You can survive and even have a small win every now and then. You won’t be a pioneer. You won’t achieve real breakthrough. The following example may seem simplistic, but it’s the essence of what I see work really well in the work world too.

Fifteen years ago I worked with a group of ten teenagers as a director for a musical dance routine. They would first compete at the state level and if did well enough would go to the national level. We had done it the previous two years before with limited success. The first year we somehow made it to nationals but didn’t do well there. The second year we didn’t make it to nationals. This third year I didn’t want to do it. It’s a lot of work and a lot of responsibility rests on the director, especially with a bunch of teens.

Here is what I did: I gave them the picture of what we wanted, what we were looking for and what we could achieve, and then gave them the reins. Of the ten members, one’s creativity stood out. (It’s no wonder he is in a creative field as a fashion videographer now) He came up with an unexpected accompaniment song. The theme flowed naturally from there. I had a couple of ideas for key “wow” moments during performance. That guy always pushed it to the next level. During our preparation for competition he constantly added new ideas. We built off each other, adding one great element after another as the team rehearsed it.

The team dominated at the state level, easily taking first place. Before nationals the routine was further enhanced. In the end, they placed fourth in the nation, a far cry better than anything in the past. The whole group had to execute flawlessly, but I attribute the key creative aspects to just two people, myself as the director and that one member. We did things no one had imagined before, feeding ideas from each other. It took time and it took building from one initial idea.

I have found that group brainstorm activities almost always hinders excellent ideas. The truly great ones get shot down by the self-identified realists. Realists are needed but not at the creative, imagination points. My advice: take them out and add them later. Also, don’t expect greatness from a single session. Iteration is critical. One impossible, crazy idea can loop around and around until a legitimate, amazing idea comes out. Give the creatives some space and time.

The next time you gather a group of employees in a room to brainstorm, remember these examples. If you’re after average or slightly-above average, go ahead with the group over a specified time. If, however, you want a game changing idea, isolate the creatives and give the idea some time to percolate.

Ask Questions Like a Child

A couple of months ago, my youngest was back from college on her winter break. As a sophomore, she is deep into the learning cycle. We were out spending time together one day and she was probing my knowledge on a work-related topic with one question after another. I was engaging in a meaningful conversation that was transferring knowledge without me thinking about it.

Suddenly, she said to me “I’m sorry, am I asking too many questions?”  That thought had literally not crossed my mind. Every day that I’m with clients, I get question after question so it didn’t seem that weird to me. What was it that made my daughter say that? I reflected on that and realized that it’s quite different having a five-year-old and a nearly 20-year-old. we expect 5-year-olds to ask questions like “why is the sky blue?” Apparently there was some stigma, that as an adult she couldn’t ask a series of questions in a row. I told her that she absolutely wasn’t and to never stop asking questions. I told her to ask as many as you need to. I think others struggle with this too.

You can’t extract wisdom from experts in their field without asking big, tough Qs. As a teacher and adviser on innovation and its process, people are always asking me things as if they are lawyers trying to get me to prove something; however, very rarely are they asking meaningful questions like my daughter was asking that day.  I have a great explanation most of the time. I don’t always and when I don’t, I say so.

Organizations that ask the right set of questions gain significant experience and insight into innovation and receive a corresponding cultural benefit to their organization. Ones that ask no questions or the wrong type of questions remain stuck, unwilling to learn. Innovation demands this curiosity. Take advantage of subject matter experts. Ask deep, probing questions. Really want to learn. Don’t act like you know it all, you don’t. Asking them arms you with an competitive advantage and consent you and your organization apart. And like my daughter moving forward, never apologize for asking too many.