There’s a large body of research pointing to the fact that between 85 and 95% of products fail. While these numbers are disheartening, you could avoid becoming a statistic in the failure category. There are many factors that go into building a successful product company, but these three basic aspects to get right.
Don’t put the cart before the horse
Entrepreneurs are notorious for being full of ideas. They are often convinced that each new product they develop will be embraced, loved, and purchased their target market. This is approaching product development backwards, and frequently leads to frustration and poor results. Yet business owners keep repeating this mistake, and because of this they experience failure more often.
At Nxt Step our Product System has market valuation as the very first step in product development. Rather than come up with the answer, the key to success is first finding a problem worth solving. Before doing anything else you should be searching for an “obvious unmet need”.
A viable business model is critical
Aside from filling a void in the market by providing a solution to a problem, your product also needs to be something that people need so much that they are willing to pay for it. And they need to be willing to pay enough so that you can make a profit, otherwise you’ve only created a hobby for yourself.
Your pricing structure needs to be simple enough so that buyers are very clear on exactly what benefits and features they will be receiving for the price they are paying. Many companies have successfully used a limited time free trial to convince customers that the product offered is something they need so much they would happily pay for it. The “freemium” model – where a lighter version of the product is offered for free, but a customer can get more desirable features by paying for the product – has also worked well for some companies. Another successful pricing strategy is to offer different levels of features and benefits at different price points.
Product weaknesses sink many businesses
Once you’ve identified an appropriate product-market fit, and devised a profitable revenue model, the next step is to deliver the product to your customers. Unfortunately, this is another area where many businesses fail. The product stage is all about delivering what you promised, but sometimes the devil is in the details.
Many business owners believe that packing their products full of features and functions makes it more valuable to consumers. This is often untrue, especially when you go back and examine the problem you’ve set out to solve with your product. Making your product complicated may mean your customer needs much more time learning how to get the product to work, when all they really wanted was a simple, easy-to-use solution to their problem. The sooner a customer can get up to speed with your product, the happier they are likely to be. Also, a complicated product takes longer to develop, likely costs more to create, and more things can go wrong in the execution. So, keep your product as simple as possible!
Nxt Step’s Product Launch System can help you develop a successful, profitable product that solves customers’ problems. Visit our website at NxtStep.io for more information on how we can help you refine your product’s value proposition, or contact us at hello@NxtStep.io. Subscribe to our YouTube channel, for more insights on product marketing.