The reality is that 9 out of 10 new products fail the first encounter with real users. On the courage of the “brilliant idea”, after a quick study of competitors and a couple of focus groups with the target audience, the creators proceed to design the prototype. With sufficient funds, they launch a product on the market, and it soon becomes apparent that something has gone wrong. All because they did not pay due attention to one important stage at the beginning of product development. We are talking about Product Discovery - the process of validating an idea regarding the market and future users.
Product Discovery Methodology
The methods that will be discussed are effective not only at the beginning of work on the product but also at subsequent stages of the development of large modules and features. The information will be useful to product managers, business owners, marketers, as well as engineers who create first-class products.
So let's go in order…
Business Model Canvas
In the late 2000s, Swiss business theorist Alexander Osterwalder (Strategyzer AG) introduced the world to the Business Model Canvas (BMC) business model analysis system, a more efficient and practical alternative to the classic business plan. The Navy can replace dozens of pages of analytical formulas.
This tool eliminates non-essential product implementation factors, allowing you to focus on the nine most important business metrics. This also includes product discovery services. Gray areas can occur at different levels: product development, customer segment evaluation, revenue calculation, and so on. Every beginner should go through discovery sessions, which in 99% of cases help to understand their product in a new way.
As a result of filling in the Navy, we will get a screenshot of the company, which is easy to analyze. It will help to identify risks and new business opportunities.
Business Model Canvas is not exactly a Product Discovery technique, but rather a tool that helps mature companies analyze their market positions regularly and develop plans.
The BMC tool quickly gained the attention of a wide audience, but it is not enough for start-up businesses in the early stages of product development. Thus, based on it, the Lean Canvas and Value Proposition Canvas solutions arose, which we will dwell on in more detail.
Lean Canvas
The Lean Canvas methodology developed by Ash Maurya focuses on the users and the problems the product intends to solve. Lean Canvas allows startups to analyze the strengths and weaknesses of their business model, as well as assess the market and minimize risks even before starting product development. This tool is useful in describing the value proposition and finding a competitive advantage that other companies cannot copy.
Lean Canvas is a derivative of the Navy, where the emphasis has shifted in favor of a deeper analysis of the product itself:
- Key Partners → Problem
- Key Activities → Solution
- Customer Relations → Unfair advantage
- Key Resources → Key Metrics
This approach allows you to focus on solving user problems, and not on individual features of the product itself. Interestingly, 78% of social media visitors learn about new products.
Value Proposition Canvas
The Value Proposition Canvas tool, also developed by Alexander Osterwalder, is a way to show context through the lens of a particular user. It will help a startup understand what consumers want and where the product should move to meet their needs. If Lean Canvas is about business as a whole, then here we create our own Value Proposition Canvas for different user segments. In the case of Uber, we will have a driver with their gains and pains (gains & pains) and separate passengers with theirs.
The Value Proposition Canvas is a combination of two of the nine parameters on which the Business Model Canvas is built - Value Proposition (value proposition) and Customer Segments (user segments). Visually, this tool is a geometric collage of two parts that need to be filled with meaning, and then find a balance and a logical connection between them.
Conclusion
We reviewed three tools with a number of their advantages, which were mentioned at the beginning of the article. But they may not be useful if they are used incorrectly: skip required fields, and also ignore recommendations for the sequence of filling them out (where they are emphasized).
We hope the information was useful and you were a little inspired to conquer new heights. Even if you don't plan to create new products, just experiment with these tools, maybe it will give you new ideas. Canvas is equally good for use in a variety of areas of activity - both professional and not so.
