The traditional approach of building a product is creating a 5-year business plan full of assumptions, finding a budget through investment and then executing the 5-year plan in order to achieve the goal of the product. A business plan is hard to define, as it is close to impossible to predict the next 5 years in today’s fast changing environment. But there are better ways of building a better product for people to buy.
Alex Osterwalder and Ash Maurya suggest product managers to use a faster approach called a Canvas. With the Business Model or Lean Canvas it is easy to write down assumptions on a product in different categories. Then, starting with the riskiest assumptions, it is important for product managers to create experiments with the goal to verify if the assumptions are correct. Eric Ries (author of Lean Startup) calls this the Build – Measure – Learn cycle.
A better product through Build – Measure – Learn
The Build – Measure – Learn cycle gives product managers the opportunity to quickly develop a solution/prototype, measure it’s success with small investment on the basis of data (first qualitative then quantitative) and then learn to either persevere (assumptions is correct), pivot (change the assumption) or quit (assumptions is incorrect). With a sequence of experiments the product manager will eventually find a solution that is proven to solve a problem and for which customers will be paying. The arrival of the first customer also gives the product manager his Minimum Viable Product.
As we know, 9 out of 10 startups fail. The unreported numbers of failed innovations in established enterprises is probably even higher. A build – measure – learn cycle to build upon an approach and manage time to market better will reduce the cost of failure instead of investing too much money ahead. And consequently result into a better product as it has the customer’s needs in mind.