Of Customer Problems and Product Problems August 19, 2010
Posted by N.P. Menon in Strategy.Tags: business case, product development, product management
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When considering the development of a new product to fill a particular market opportunity, one of the questions that must be answered as part of the business case is: What kind of a problem do we have here?
Without understanding the nature of a problem, the business case will not be objective or realistic. Most problems tend to be of two kinds – a customer problem, which is to do with an unmet customer need or a product problem, which is to do with a product that is not solving a problem in the best possible way. Because some markets have both kinds of problems, it may be hard pinpointing which one a particular product development effort is targeted at.
For example, one problem Google identified was that despite the success of Googledocs, there is still a sizable chunk of users uncomfortable with web-based documents, while seeking the benefits of such collaboration. Perhaps Google defined this as a customer problem and not a product problem, which is why they acquired Docverse, a plugin that enables users to sync documents with an online service. Docverse is a solution to help users bridge the distance between desktop and web-based documents. If Google had defined this as a product problem, perhaps they would have spent much effort making googledocs work for desktop (which defeats its very concept!)
One good learning from this example is that when some customer segments have a problem understanding or using a product that is otherwise working well, the business case may not support rolling out a variant for this audience or tinkering with the product. Instead, customer problems could have other solutions such as additional training or help on using the product or working with partners who can bridge the gap. (Googledocs also does this by highlighting a number of third-party apps).
In other words, not every customer problem involves a new product opportunity. Some customer problems are short-lived and will not justify a new product while others involve too few customers to be worthwhile. That of course is a question of sizing the market opportunity and a subject for another post!
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