Beyond The Early Adopter

Expanding Beyond Your Early Adopter

Last November I was asked to support an evening themed around different stages and strategies within a Product Lifecycle with two other speakers at Product Tank London. Each of us focused on a different area with David Scalzo from YPlan discussing moving from Idea to Production and how Design Thinking can play an integral part, Myself sharing insights from my experiences at Pearson on how you grow from Early Adopters and accelerate your customer base, Lisa Long from appear.in sharing insights on how to kill zombie products and features.

For the past few years I have been heavily focused on developing and enhancing the product development process from the very first moment you have an idea, through to taking that idea and forming a product right through to retirement. This purely aims to help organisations and teams innovate and improve product performance by identifying and addressing customer needs. This work has manifested itself as the Global Product Lifecycle at Pearson which has drawn heavily upon my background and experience using Agile and Lean methodologies. We are a small, but very diverse team which has helped contribute immensely to structure and depth of the Product Lifecycle.

So now that has provided some context to the wider concept of our work with the Global Product Lifecycle, let me share some insights in how we can use the Product Lifecycle to develop products and in particular, go beyond your early adopters. I’ve highlighted some key points below from the presentation.

1. 6 Stages Of the Product Lifecycle Grouped Into Before and After Product Market Fit

At a very high level the 6 stages can be defined as the following :

6 Stages Product Lifecycle
Pearson Global Product Lifecycle
  1. Idea (max couple of days) : This is a very light weight ideation phase designed to provide just enough detail to understand the customer need or problem you have identified and intend on solving as well as how this strategically aligns to the organisation.
  2. Explore (Usually 2-5 weeks): This is all about need/problem validation and exploration. During this phase we advocate a very small team to go to the customer environment to learn and observe. We discourage premature convergence on solutions and deliberately discourage solution thinkers being involved too early. Experiments are very disposable during this phase, it’s all about learning and collecting evidence that the need/problem is apparent and painful enough that the potential customer will pay to solve it. You might meet your first potential early adopters here.
  3. Validate (Around 3 months) : Using the evidence collected in Explore, this phase is all about creating several potential solutions and pivoting as necessary on the business model to achieve product market fit. Again we encourage lateral thinking around solutions to try and prevent focusing too early on a local maxima. The goal is simple to present evidence that you have a solution which solves the need with a viable business model. It’s during this phase you’ll likely first engage with early adopters of the solution and you’ll begin to test the foundations of your solution. All the interactions are still light weight and the behaviours and effort is very manual. Considering scaling here is way too early and not advocated. First find something worth considering to scale.
  4. Grow (Years) : This is where you’re aggressively hacking your growth hypotheses to maximise your market reach and adoption. This can be a complex phase where you will reach beyond early adopters to the early and late majorities. This can span across multiple markets for example against this framework Uber, AirBnB, Appear.In, Apple’s Watch, Netflix would all be in this phase and I presume their growth trend will support this.  Most startups you hear about are likely to be in the early stages of Grow/Early Majority. The first part of Grow is explained further below.
  5. Sustain (Years) : This is where you have reached market saturation point and you’re focusing on. As a guide if you’re maintaining a user base on average +/- 5/10% then this would be considered to be sustain. That’s not to say development stops here, you need to continuously improve and enhance you’re product to keep it relevant particularly for digital products. However you have enough knowledge and experience here to enhance operational excellence and should have a moved from the complex to complicated or obvious. See my other post here on Projects Vs Products which will also support some of the enterprise thinking and pitfalls of digital products.
  6. Retire (Months) : Here the product is marked for retirement for reasons of performance or strategy. Although naturally retirement invokes thoughts of failure, in fact managed correctly and actively freeing up these resources is a key element for investing into innovation. Retirement is investment into waste reduction and needs to be managed and handled well to minimise negative impact on your company and customers.

You’ll notice each of the above phases are very different strategically. As such they call upon very different success metrics, where each should be in the context of the product strategy such as the 3 horizons.

2. Searching And Executing Are Different 

Search And Executing
Searching And Executing – Business Models

As you’ll notice from the above, the first 3 phases (Idea/Explore/Validate) are focused on searching for a business model and product market fit and from there on it’s about executing through (Grow and Sustain). This divide is absolutely crucial to recognise. Enterprises often struggle with this notion and have governance and cultures which bet big by going from idea to grow unknowingly which presents huge risk and assumption. There are a number of Scalable Agile Frameworks which fail on this front and they often get used in Enterprises going from Idea straight to Grow as we used to do with traditional manufacturing processes. Don’t be fooled with the term Agile in the title, understand the principles, goals and needs and focus on the customers not just stakeholders. When fully understood, searching for a business model let’s you focus better on discovering, understanding and serving the customer needs. It’s here you find and collaborate with true early adopters and then cross the chasm. To put this in context, I’ve aligned the 6 stages in our Product Lifecycle above to Geoffrey Moore’s crossing the chasm. For the purpose of the narrative you phases are linear and segmented equally, don’t be fooled to think that a product lifecycle is proportional or even linear. There are many external factors which will challenge your products lifecycle including aggressive changes in your envionment.

Crossing The Chasm

3. Not Everybody Is Your Customer

If you ever hear anyone say my customer is something like Men aged between 18 and 60 based in London who are employed, consider slapping them across the face with a massive trout. Alternatively express that this simply cannot be true and they will need to be way more specific to have a better chance of success. If you do hear the former, treat this as a signal a lot of work has to be done getting this idea in shape and mapped to customers to have any chance of survival. I doubt there is a product on earth today which reaches that demographic, not even if you were selling sunlight. Understanding this is absolutely key to growing your products success. You need a laser focus on who you customer is and isn’t! This will give you insights into channels to access, partnerships, key relationships, competitors and more. These points need to be well understood and informed by your early adopters before considering your early majority. This will also effect your scaling strategy.

4. Non-Scaleable Interactions

Scaling Beyond Early Adopters

When working with early adopters, to minimise effort and waste it’s advocated that scaling is deliberately an afterthought. There is no point investing time, effort and money into scaling something people don’t want and that time is better used to learn about your customers needs and problems and figuring out a way to solve these. That brings us to a key consideration, when you have satisfied your early adopters and are looking to reach the early majority, then scalability needs to be considered. You’re probably in a position where you can’t scale the process you have in place serving the early adopters. For instance you might be using a Wizard Of Oz or Concierge MVP which cannot be scaled. It’s now time to change operations to recognise this.

Although this might sound like common sense, some companies struggle heavily at this point. The people and skills developed and acquired to get to this point, might no longer be the right skills to scale. There are key moments in a startup’s life where the investors will question if the founder is even the right person to take this forward and this could be one of those points. Different skills are needed to take an idea and discover a business model to scaling it to reach the market. It’s very rare to find people with both, so consider this in your strategy. Very few people successfully have bot You will need to find a way in which your execution to scale supports your growth hypotheses. This is where you are truly crossing the chasm, so make sure you have enough velocity, people and tactics to make it!

5. The Halo Effect – Crossing The Chasm

In the product lifecycle we have recognised the chasm in many forms. One key attribute to be mindful of is your charm and influence. I like to call this the Halo Effect, and if there is already a recognised term for this I would appreciate the correction from your feedback. When you are working with early adopters using non-scalable interactions with customers, you might be personally having an affect on results which is causing a false positive. When you spend time with individuals with a big company name behind you, people feel special. That special influence could be artificially increasing your product uptake and presents a risk. There have been countless studies reenforcing this point in clinical trials with medical patients. Doctors who spend more time with patients need to prescribe less. Customer empathy has a powerful affect.

Although the brand police don’t tend to like you testing or experimenting on customers for reputations sake, actually to the reason above is another risk which can support their reasoning from a different perspective. Some companies new brand names to engage with the customers not for the brand from your existing company. This makes it more disposable should your experiments fail without reputation risk by association to your parent brand. Consider if a reputable company like Mercedes introduced a product. Generally as a potential customer you already have impressions and assumptions of quality around that brand. You’ll therefore provide feedback inadvertently with those conceptions which could affect the results of an experiment.

Therefore when crossing the chasm, the first thing we encourage testing is the Halo Effect before investing heavily in scaling. However when you have product market fit and have resolved the risk of the Halo Effect, you will need aggressive momentum to reach the early majority. Therefore consider utilising all your assets including your brand. This is where having Mercedes reputation behind you could help you grow. This is also a stage for startups to partner wisely to find the right marriage to grow fast and execute well.

6. Know Your Growth Engine

Know Your Growth Engine

switching_costs

When you have understood and answered the previous point, it’s important to include and fully understand your growth engine. This is going to be the secret sauce and fundamental accelerant to reach your early majority. If you have a product which is starting to get traction, you have likely caught the eye of existing and new competitors. The race is now on to gain market share faster than everyone one else whilst balancing your revenue and costs. When you are in grow and have product market fit, keep learning and growth hacking. This isn’t the time for the meek and mild, this is all about executing faster and smarter than everyone else as right now there is a lot of people a piece of the pie. Many companies fail here not because they didn’t know what their customer needs were or that they didn’t have growth partners or the right strategy; they failed because their competitors learnt to execute faster and smarter than them.

From all the potential growth metrics you could focus on, the one metric which I believe is the most important of all is your stickyness! Whether you are using viral, social or paid marketing, your product needs to keep customers. If you get this right, the cost of switching is high and your lifetime value of the customer increases as well yielding higher growth potential. As a rule of thumb is can cost you 5-10 times more to acquire new customers than retain existing ones.

Cost Of New Customers

To summarise some key points to consider :

Key Points

If you have any feedback, questions or additions to add, please comment below as it helps me learn and provides value to the next reader.

Find Out More :

I am fortunate to be part of a small, diverse and very passionate team with my role at Pearson as VP of Global Product Lifecycle Management. If you are interested in this work, you may want to follow some of the other team members I work with who share our progress in the public domain including Sonja Kresojevic- @sonjak18, Jacqueline Krain – @JacquelineKrain, Tendayi Viki @TendayiViki, Shirley Chin – @shirleychin and Adam Berk @adamberk. We share our collective learnings  via @leanplc. Feel free to connect with us.

 

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