The reason it’s so important to test your product assumptions and find low-cost ways to test is the impact that a product manager’s decisions have on depleting the most important asset at a technology company – the time of an engineer. Any time you make an investment in a particular solution to a problem that a customer rejects, the cost to the company is pretty clear. But it’s potentially more expensive than you realized.
Although a bad solution is costly, the opportunity cost of the investment is typically even more expensive. It’s difficult to quantify opportunity costs because you don’t know what your engineering team could have accomplished instead of working on an untested hypothesis. To minimize these costs, you need to find the quickest test of your hypothesis with the smallest investment possible. When you invest your resources in the right technology, you can have a dramatic impact on your company’s future. It’s probably pretty rare that we, as product managers, choose the right functionality to work on at first. That’s why I emphasize de-risking your solutions with small time horizon investments. Ideally, you don’t use any engineering resources to execute these tests other than including them in brainstorming. It’s likely, however, that you will require some engineering and design investment upfront. When you do, find the smallest iteration that can help you test your assumption. Build a skateboard before you build a scooter and a bicycle before a motorcycle.
Small iterations help you learn the proper solution while de-risking your assumptions. I believe this is the key to your success as a product manager and perhaps it’s the key to the success of the company as well. Investing your most valuable assets should not be taken lightly. When coming up with a list of customer problems and solutions to those, you and the team should involve as many people as you can. Collect information from your customers, sales, engineering, account management, marketing, support – basically every function within the company. Use that information to prioritize the challenges and then brainstorm with your engineers and designers on possible solutions while emphasizing small tests. At NewsCred, we involve the entire company in our prioritization process to help optimize the challenges we’re solving. As you test the functionality, collect feedback, and iterate quickly, you can de-risk any investment as well as build products that your customers will love.
If you’re interested in learning more about product management, please check out my Udemy Course on building products at startups.