Do you think you’re building the next killer feature for your product? Meet its potential killers first.

Today, we dive into a critical aspect often overlooked in the realms of product: the art of recognizing risks.

I have worked in product for over ten years and learned that success in this field isn't just about crafting the next groundbreaking feature. It's equally, if not more, about understanding and addressing potential pitfalls.

The enthusiastic founder or product leader might naturally gravitate towards the allure of a product's potential. However, this optimism needs to be balanced with a healthy dose of pragmatism.

Those who have witnessed the storms of product management understand this well.

They've witnessed firsthand how a feature promoted as a game-changer ultimately fails to make a ripple in the product's trajectory.

Such experiences mold anyone into a figure resembling the cautious elder - the experienced professional who advises restraint and careful consideration.

This evolution in mindset shifts the focus from merely seeking the next big thing to a more nuanced approach: evaluating and minimizing risks to ensure impactful results.

This shift, though necessary, isn't without its discomforts. There's no magic formula, no single solution that guarantees success. As I've found, the best approach involves a two-sided strategy: first, identify the risks at hand and then tackle them methodically.

This often means zeroing in on and neutralizing the most significant risk. Doing so can add immense value.

In the next section, I'll share the techniques that have proven most effective in identifying risks throughout my career. We'll focus on the 'Four Big Risks' that everyone should be aware of.

Let's dive into these strategies and understand how they can transform challenges into opportunities for your product.

The Four Product Risks

Value Risk: The Soul of the Product

Take the case of Juicero, the infamous $400 Wi-Fi-enabled juicer.

This example stands as a stark reminder of the perils of misjudging value risk. Juicero overlooked a fundamental question: Did their product offer a compelling enough value to justify its price? 

The answer became painfully clear when customers realized they could achieve the same results without the machine. This was a textbook case of failing to align a product's value with customer expectations.

At its heart, Value Risk probes whether customers find enough merit in your product to invest their hard-earned money or precious time.

It's not just a feature of your product; it's the essence of its market resonance.

If there's a mismatch between what customers value and what you're offering, your product is on shaky ground.

This risk isn't just one of many - it's a critical factor that can make or break your product. Missing the mark on Value Risk means striking at the very foundation of market demand.

In this scenario, all other factors become secondary.

The statistics are revealing. CB Insights reports that a staggering 42% of startup failures can be attributed to a lack of market need. This is a substantial portion, underlining the criticality of understanding and aligning with market demands.

Customers are bombarded with endless choices, and failing to demonstrate clear, tangible value is a direct route to obscurity. Your product must not only meet but exceed customer expectations in terms of value to stand a chance in this competitive landscape.

Usability Risk: The User’s Lens

Usability Risk is an important aspect that is different from the value concept. It's not merely about whether customers recognize the value of your product; it's about their ability to access and utilize that value effectively.

Can they interact with your product without feeling the urge to toss their device aside in frustration?

Consider the tale of Google Glass.

Its downfall wasn't rooted in a lack of value but in usability challenges. The device was perceived as awkward or intrusive, making people hesitant to incorporate it into their daily lives. Google Glass became synonymous with a usability conundrum, never truly realizing its potential in the mainstream market.

Usability Risk is a different dimension when compared to Value Risk. While Value Risk is concerned with market demand and the product's intrinsic worth, Usability Risk is all about the user's journey - from the moment they encounter your product to their day-to-day interactions with it.

If Value Risk is the soul of your product, Usability is its heartbeat. They are interdependent; one cannot thrive without the other.

The implications of neglecting Usability Risk are starkly illustrated by statistics from Amazon Web Services, which highlight that a massive 88% of online shoppers will not return to a site after a poor user experience.

This figure underscores the significant revenue implications of failing to prioritize usability.

If users find themselves lost in a complex, unintuitive maze when engaging with your product, they're likely to leave - and not return. Usability isn't just a nice-to-have; it's a crucial element of your product's design that demands attention and thoughtful execution.

Feasibility Risk: The Art of the Possible

Feasibility Risk takes us on a journey into the realms of practicality and possibility, distinct from market demands or user experience. This risk centers around a fundamental question that targets your team's core capabilities:

Can you realistically transform your visionary ideas into tangible products?

The story of Theranos serves as a cautionary tale in this regard.

They ambitiously promised revolutionary blood testing technology, claiming to conduct a wide array of tests with just a drop of blood. However, they hit a wall of scientific impossibility.

Their failure to acknowledge and address feasibility risks led to their downfall. It was a costly oversight that starkly highlights the perils of ignoring the bounds of current technology and your team's capabilities.

Feasibility Risk is the bedrock of your product development process.

It goes beyond the desirability or usability of your product, probing whether your vision can be actualized given the available resources, technology, and expertise. It's the structural integrity of your product idea, the foundation upon which all else is built.

The significance of this risk is underscored by data from The Standish Group, which reveals a startling reality: only 29% of projects are completed on time and within budget. This statistic is a sobering reminder of the challenges inherent in bringing complex projects to fruition.

In the context of product development, choosing an inappropriate technology stack or an unsuitable development methodology isn't just a minor setback; it can be a project-ender.

Missteps in assessing and managing Feasibility Risk can lead to insurmountable delays or complete project failure in the worst cases. It's a critical aspect of product management that necessitates careful consideration and strategic planning.

Viability Risk: The Multi-Dimensional Chess Game

Business Viability Risk is akin to playing a multi-dimensional chess game. It raises a fundamental yet complex question:

Does your product align with and enhance the broader narrative of your business? Will it thrive amidst the intricate web of regulations, market channels, and financial considerations?

This risk differs significantly from the others because it extends beyond the product itself, encompassing the entire business ecosystem.

It's about strategic fit and alignment, a layer that interweaves through every facet of your product development and market introduction.

Consider the case of Kodak, a cautionary tale in the annals of business history. Kodak, despite pioneering the digital camera, faltered disastrously in integrating this innovation into its business model.

Their hesitation, driven by the fear of cannibalizing their lucrative film business, led to a failure to adapt to the shifting technological landscape.

The outcome was stark: Kodak filed for bankruptcy in 2012, a stunning fall for a once-dominant industry leader.

This scenario underscores the critical nature of Viability Risk. It serves as a loud warning bell, signaling the dire consequences of misaligning product innovation with overall business strategy.

A product that doesn't harmonize with your business's broader objectives and capabilities isn't just a mistake; it's a potential liability.

Viability Risk demands a thorough understanding of your product and market and how these elements interact with and impact your overall business strategy.

It's about ensuring that your product not only meets market needs but also propels your business forward in a sustainable and profitable manner.

Putting It All Together

Most companies are only as good as the products they sell, and product teams are only as good as their product leaders. If all these approaches aren’t implemented, it’s usually because of a lack of competence of the people involved.

Your core capabilities should be:

1. Deep knowledge about their users and customers. Get in front of customers and build relationships to understand their challenges. It takes more than a handful of conversations, and you always need to be learning.

2. Deep knowledge of their data. User analytics, sales analytics, and data warehousing should all be part of your daily routine to get on top of how your product performs.

3. Deep knowledge of the industry. You have to learn a lot about the context in which you operate. This means becoming an expert in the things your users understand and spend their day discussing – including competitors and trends.

4. Deep knowledge of technology. You have to be aware of the latest technological advancements and understand how they can be applied to your product. It's about recognizing the potential of emerging technologies and being able to integrate them effectively into your product strategy.

Have a great week!

- Dimitris

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