What usually goes wrong in New Product Development?

The Goldilocks Paradigm - anba

 

Entrepreneurs/ Businessmen back their instincts in launching new products or services; to serve a strong underlying unmet need or underserved need. They are almost always right! As these are high caliber people with sharp acumen for business and spotting opportunities. But amidst the ocean of decisions that they get to make, there is a possibility they misdrive into a dead end in one of the turns. How do we stand guard? What are the warning signs ahead of the dead end? I could think of 10 following ways.


1. ‘It’s-my-baby’ effect

A situation where the PO (Product Owner) gets too attached that he/she ends up spending disproportionate amount of time in product development resulting in over runs and delays.


What is the impact?

· A probability that the product never seeing its customers or too late to market.

· Other functions severely hampered and demotivated

· Inability to generate revenue with cost and time over runs.


How could it be overcome?

· Setting Product milestones and tighter budget allocations. Importantly, adherence to it

· Forcing to overtly spending more time on other functions.


2. “Me-too” Syndrome: Catching the train late

A late entrant in the market with no/minimal product differentiation.


What is the impact?

· Inability to cut the clutter and hence low value capture

· Continuous struggle for top and bottom line


How could it be overcome?

· Augmenting with service differentiation

· Packing / delivery differentiation


3. Fear Psychosis: That Missed out feeling

A product developed but never meets the market for the fear of failure.


What is the impact?

· A missed opportunity to be the first entrant

· Missed revenues and customers


How could it be overcome?

· Maintaining an unbiased test schedule; Test marketing across geographies/markets/market segments


4. The Kite and the Monkey tail: Execution failure

The product gets tangled-up in operational mess up due to misdirection and subversion. It ends up differently to the one envisaged originally. While there are some happy endings here, majority ends in mess up.


What the impact?

· Inability to serve the desired need/purpose and hence less traction


How could it be overcome?

· Use of Project management tools and Agile frameworks

· Development of user stories and Having a clear DoD (definition of done)


5. The Millennia Syndrome: Over-Leveraging

Although, almost all the time only equity is used for product development, there are instances where debt servicing becomes increasingly difficult till the time revenues creep in.


What’s the impact?

· Impacts the product development and release of half cooked product in market, thereby affecting long term prospects.


How could it be overcome?

· Prototyping and influx of more equity


6. Perennial stealth mode: Under-exposure

Underexposure to markets/customers in terms of promotion, demonstration or trials


What’s the impact?

· Direct impact on sales.


How could it be overcome?

· Ramp-up Sales force, customer trials & promotions through partnerships with other firms

· Undertaking a Sales funnel approach to achieve a desire target.

· Use of CRM tools


7. The Mirage

As we moved closer, the need disappeared slowly.


What’s the impact?

· The tremendous Sunk cost on product development does not vouch for the amount of sales.

· Further investment requirements on product development.


How could it be overcome?

· Quickness to market and version controls.


8. Counting chickens before they hatch: The grandiose plan

Biting more than one can chew. How to know if the plan is grandiose? Wait until it fails?


What’s the impact?

· Constant undue pressure in chasing large numbers is a motivation to perform but failure

to meet those will impact tactical decision making and some of them could end as strategic

errors.


How could it be overcome?

· With so many moving parts and assumptions underlying a business plan, it could be

guarded with careful, multiple, repeated validations of those with experts and peer

comparisons (if available).


9. Bugs Bunny

The deadliest of faults; a product loaded with bugs or faults.


What’s the impact?

· Product non-acceptance amongst customers.

· Push backs and re-do’s attributing to cost overruns.


How could it be overcome?

· Focus on strong testing and QA abilities.


10. Operation success, patient dead

Successful product launch with great reviews but doesn’t translate into revenues because of lack of infrastructure and support functions.


What’s the impact?

· Loss of sales due to non-availability of products and later translating to brand erosion.


How could it be overcome?

· Building necessary support infrastructure for delivery; the supply chain, distribution,

sales, service, marketing, finance and HR functions.


1. It’s My Baby effect 2. Me-Too syndrome. 3. Fear Psychosis 4. Kite and Monkey tail 5. Millenia Syndrome 6. Perennial stealth mode 7. The Mirage 8. Counting chickens 9. Bugs Bunny. 10. Operation success

The converse of all of the above syndrome, however, cannot probably guarantee a success either, I would assume. A well-gauged need with a realistic plan, right level of product development, right market entry time, right execution, right leveraging and right exposure. Looks quite insane like the goldilocks story, but even if few of critical pieces fall in place to a larger degree, we can say ‘job done’, atleast for the launch.

 

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