Learning by Shipping

A cool new app or service releases and immediately the debates begin over the magnitude of the offering.  Is it a product, feature, or company?  Within a short time, pundits declare something to be too small, too easy to copy, or too inconsequential to merit the startup label.  It will be swallowed by one of the bigger platform players.  This strikes me as missing some salient elements of product design, even if it is true sometimes.  Context matters.

A new mail client for iOS released this week.  The first wave of buzz was pretty high and reviews very solid in our circles.  Then a writer declares it to be over for them when “Google writes the few lines of code necessary to provide that functionality to my existing proprietary Gmail app”.

The debate over whether something is an app, a feature, or even a whole company goes as far back as most can remember.  I remember having to buy a spelling checker separate from the word processor I used about the same time I had to buy graphing software separate from a spreadsheet.  There were many examples before that and certain many after that.

The richer our software becomes the higher the expectations are for the rich set of features a product must have when it is first released, and the depth of offerings a company must have for its first product.  These expectations are based on some pretty solid consumer notions of switching costs, barrier to entry, and so on.  In other words, a new product should probably do more than an old product if it is to replace what is currently in use.  Similarly, a new business should have to put in some effort to replace a product if what is being replaced is worthwhile at all.

New products can be incremental improvements over existing products.  When released, such a product battles it out within the context of the existing market (one the company is already competing within or maybe a new company with a clear idea of how to improve).  A new product can also take an entirely new, revolutionary, view of a problem space and change the evolutionary path we all thought we were on.  Most new products get started because folks believe that there is a new approach.  New products can also be new companies or come from innovations within existing companies.

A new approach has many potential elements – new user experience, new factoring of the code (app v. browser), new view of scenarios.  New products can also be additive—they can do things that existing products do, but add a new twist.  This new twist can be an intellectually deep approach to solving a problem or it can be a clever solution.  In all cases, a new product is almost always a combination of many previously existing technologies and approaches, brought together in a unique way.

Before writing off a product as a feature or non-company, we should consider the reality that all new products are mostly new combination of old features and that most companies release a first product that has familiarity with something already in the market.  The current market climate, changing dynamics of consumers (or businesses), and every-so-slightly-new approaches can make a huge difference.

What are some things that are worth considering before being so flip as to write something off the week it is released:

Forward-looking / disruptive.  Many times a new product is ahead of its time.  When it is released it is missing features relative to entrenched products, and so to fully “see” the product you need to allow some time for the product to mature.  Our landscape is littered with products that came out deficient in remarkable ways, but the feature combination plus the trajectory of the product more than made up for those deficiencies.  This is the very definition of disruptive innovation so many people like to talk about so quickly.

Focus.  Often new products (and companies) arise because the entrenched products are not as interested in or focused on a scenario, even if there is some work.  Quite often existing businesses have an agenda where a given product is not the true focus of the business, but there are some minimal needs that drive offering something.  Many people are quick to say that photo editing that removes red-eye, crops, and auto-adjusts is all most people need and so it is natural for the device to offer this “90% case” of features.  Yet app stores are filled with photo editing products.  Reviewers debate the merits of filters, sharing, and advanced editing features in each.  These whole companies are by definition building features that can be easily subsumed yet they continue to thrive.

Price, place, promotion.  It is natural for product reviews to ignore the reality of running a business and to focus simply on the features.  In practice, starting a company is also about the full spectrum or offering a product—yes it is the product, but it is also the price, place, and promotion of the traditional marketing mix.  Innovation can take place in any of these.  This innovation could prove to be highly valued by consumers or create the basis for a partnership between a new company and an entrenched/larger company.  How many companies distribute news, weather, sports information but do so uniquely because of business, partnerships or other non-product features?  Often incremental products innovate in these elements just as much as they do in product features.

Moat.  Warren Buffet has famously said “I look for economic castles protected by unbreachable ‘moats’.” The importance of moats is not changed by app stores, mobile, or social, but it does offer a potential to create a new kind of moat that goes beyond the relatively simple view of product features or large companies with the ability to add more code to their existing offerings.  A new product might look a whole lot like an existing product but it might create a vibrant new community of consumers or attract the interest of developers to extend the product because of a creative platform, just to name two possible moats.

All of these and more can change the context in which a new product is released.  What’s super interesting is how the context–consumer needs/desires, platforms, and so on–can change the view of the importance of any of these attributes over time.  What seems important today might not be tomorrow, and vice versa.  The elements that create moats or determine the viability of a product change over time, even if the features look pretty close to the same.

There is no doubt that the app that prompted this post has caught the interest of a lot of folks as hundreds of thousands are using it and at least that many are waiting.  There’s also no doubt that building a new mail program is a challenge.

At the same time, the very existence of this effort – whether it is labeled a company, product, or feature – shows someone has the passion and desire to improve the state of the art.  Someone (and their backers) saw the opportunity to take on the establishment and challenge the notion that the envelope was being pushed or the entrenched folks were simply not making the most of the opportunity they have.

It is more difficult than ever to release a new product to market.  Expectations are high.  Word spreads fast.  Large players are numerous.  Let’s all keep in mind that every product we currently use was once a new product that probably failed more than a few first looks.

–Steven

###