In the realm of evidence-based management, we often discuss various areas of focus, but one key value area that frequently slips under the radar is unrealised value. This aspect is just as crucial as the others, yet it tends to be overlooked by many organisations and teams. Today, I want to delve into what unrealised value means and why it’s essential for your product development strategy.
Understanding Unrealised Value
Unrealised value refers to features that you either haven’t developed yet or don’t even know you need. This could be due to a lack of market insight or simply because the features are still on the drawing board. The market, whether external customers or internal stakeholders, drives the need for these features.
- External Market: If your product is aimed at the general public, your market is outside your organisation.
- Internal Market: If you’re delivering solutions within your organisation, your market is your colleagues and internal users.
The crux of the matter is that unrealised value is about understanding what your users truly need. It’s not enough to assume that a feature will be valuable; actual value only materialises when you present it to real users. Until then, everything is merely an assumption.
The Importance of Market Understanding
Let’s consider a practical analogy: renovating a house. If you’re targeting a family of four, you wouldn’t want to concrete over the garden. Instead, you’d want a spacious lawn for the kids to play on. Conversely, if your target market is a childless couple, a low-maintenance garden would be more appealing.
This principle applies to product development as well. You need to ask yourself:
- Who will use our product?
- What do they want now, and what might they want in the future?
- How can we attract new users to maximise our product’s value?
The more users your product serves, the greater its value, whether through a commercial relationship or internal utility.
Hypothesis-Driven Development
I firmly believe in hypothesis-driven practices in product management. When you have a belief that a feature will add value, it’s essential to break it down into a hypothesis. For instance, if you think a new feature will attract more users, quantify that belief:
- Hypothesis: If we build this feature, we expect a 10% increase in users.
- Validation: What’s the smallest version of this feature we can create to test our hypothesis?
This approach allows you to validate your assumptions without committing extensive resources upfront.
A Case Study: Dropbox
A classic example of this is Dropbox. When the founder sought investment, he faced scepticism about whether anyone would want the product. To prove demand, he created a simple video showcasing the features and set up a landing page for interested users to submit their email addresses. The result? Millions of sign-ups, which he used as evidence to secure funding.
This illustrates the power of validating hypotheses before fully developing a product. You can test market interest without building the entire solution.
The Role of Deployment Frequency
Once your product is live, the speed at which you deploy updates is critical. Your deployment frequency dictates the minimum length of your feedback loop. For example, if you deploy every two weeks, you can’t gather feedback any faster than that.
- Feedback Loop: If you deploy twice in a month, your feedback loop could take up to four weeks to complete.
- Continuous Deployment: If you deploy continuously, you can significantly shorten this feedback loop, allowing for quicker adjustments based on user feedback.
Conclusion
In summary, unrealised value is a vital component of product development that deserves your attention. By understanding your market, validating your assumptions through hypothesis-driven practices, and optimising your deployment frequency, you can unlock the full potential of your product. Remember, the goal is to serve your users effectively, and that requires a commitment to continuous learning and adaptation.
Let’s not forget that the journey to realising value is ongoing. By staying attuned to your users and their needs, you can ensure that your product remains relevant and valuable in an ever-changing landscape.