A Funnel Process To Exploring New Product
Breaking free from a disastrous waste of time
Recently I caught up with a good friend who runs their own online retail business. He was sharing with me that they recently launched a new product after a lot of sweat and tears by their team. Unfortunately though, since launch the product has only sold once per day making it largely a failure. The team were demoralised and they felt like all that effort was for naught. Now you might read this and resonate which other projects that you might’ve worked on that sounded great at the start but after a lot of hard work resulted in very little gain.
I believe this happens due to too much investment into an idea without enough proof of value upfront.
Of course, most businesses want to innovate and introduce new products to the market, its a worthwhile cause to remain relevant, get market share or improve customer experience.
What typically occurs is that businesses will develop an annual plan based on a strategy, which provides a budgeted amount of funds to go into each project to execute on for the year. Accountable owners will have some for incentive to deliver the project and so these projects get pushed through to completion. And the cycle repeats year on year.
Instead of this approach, I have noticed that the most innovative organisations don’t followed this paradigm but instead take a funnel process in introducing new products.
Rather than waiting once a year to decide on ideas to work on, the funnel is always on to detect new ideas. The difference is that every idea is not executed but instead put through a level of assessment beforehand, and only after providing enough evidence of success does the idea receive additional funding, which may not just occur as a once off.
How organisations do this is through sprints that can take anywhere between 1-6 weeks to quickly assess, build a testable prototype to assess whether it is worthwhile to implement based on customer desirability, feasibility, viability and alignment to strategy.
This assessment will then provide evidence as to whether to invest, kill, or pivot.
The result of following this process is that you minimise the risk of failure. You don’t invest more than should on an idea.
Of course there is always a margin for failure but protecting yourself by doing some work upfront goes a long way to avoiding increased failure but also developing products with greater success.
So how do you go about doing this?
Articulate your strategy - what is your vision and how will you get there
List out your most promising ideas that will help you execute on your vision
Choose the most promising and assemble a team around the idea
Give the team a deadline for assessing whether the idea is worth pursuing (could be anywhere from 1-6 weeks, but don’t go any longer)
Report back and decide whether to kiss or kill the idea or perhaps pivot based on the learnings
Go again and pick the next ones.
There are many ways to go about this but hopefully from reading you’ll see the principles in place of trying to learn quickly, inexpensively test ideas, and killing ideas early and often.
We’ve helped several organisations build out their funnels, let me know if you’d like to find out more and how we can help your organisation.