Launching a new product is exciting but often a trial by error and very creative process. It can be easy to assume that, based on the visible successes in the marketplace, it is formulaic or straight forward to launch a product successfully. What you do not often see in the market are the 100 failed products that preceded or followed the successful product that made it. As a design firm and a collection of entrepreneurs ourselves, we felt it would be helpful to share a few quick critical learnings from our experience in dealing with and launching thousands of products over the years.
So, without further adieu, here are 5 major pitfalls to avoid when launching a new product:
1. Not doing extensive market research.
Market research sounds like an obvious step in launching a product or new business but it is amazing how frequently new entrepreneurs skip doing even the most basic research. Before spending any money or a substantial amount of time developing and launching your product, it is important to:
(b) research your competitors in the market and try to think of how people are currently solving the problem your product addresses and whether your product is necessary, (c) have in-depth conversations with wholesalers and other buyers (either direct or intermediary) about the market, the process of selling the product, and viability of the product in the marketplace,
(d) thoroughly think through how end users might misuse your product and whether this poses a problem that needs to be solved before manufacturing or if it will likely hinder the product’s saleability and, therefore, should cause you to not make the product,
(e) assess whether the market demand for your product is growing or shrinking and what your realistic target market size is,
(f) determine if your product is going to be profitable based on market prices, your likely sales volume, and cost structure.
The list above is not everything that needs to be considered but is a good start when evaluating potential opportunity and landmines in the product development and launch process. Although it’s fun to relish in the romantic view that your product will be a runaway success, it’s important to make sure your market and potential product’s fit in the market is favorable for you and trending in the right direction
2. Underestimating the importance of selling at every stage of the development and launch
After you have a firm grip on the ups and downs of your market, as outlined in point #1, it’s extremely important to start selling your idea to those around you, your suppliers, partners, potential investors, and potential buyers. You will learn more about what’s in store for your product by talking with others about it than by any other means other than actually seeing the transactions occur. Take the opportunities whenever possible to describe your product, highlight its benefits, and necessity. During this process, you will discover new insights, better ways to describe things, and new ways to improve your concept. Pay special attention to the reactions of those you are talking to, including their body language, and excitement levels. Almost everyone will say your idea is a good one to avoid confrontation so it is up to you to assess what the real reaction is and why that reaction is what it is. From our experience, you are much better off getting validation and real responses from buyers early on than finding out if the demand is there after you have spent resources and time on a particular path.
3. Over spending before market validation
Building on point #2, it is critical that you get your concept validated by the market before spending more than necessary on your product. There is no shortage of questionable uses of cash during the start-up process. When evaluating whether you need to purchase something, ask yourself: “Is this necessary for my current business or is this better suited for what I hope my future business looks like?”. Often, services and products are really best suited for large operations with many customers and sales and are just not necessary for a startup to be successful. Remember that there is a reason that most successful new businesses literally started in a garage rather than grade A office space downtown with a full staff of employees. Once the product and business is proven, you can spend your profit or sometimes investor money on frills if you so choose. Doing so prematurely is often a deathwish for a new business.
4. Under spending on services and software that help you perform and look professional
This might sound contradictory to point #3 but there is an important distinction between needs and wants in a startup. Remember that your business’ customer interactions and touchpoints are critical to your sales and revenue growth. Therefore, it is critical that your product look and perform the best it can and that the image you convey to your buyer(s) be as professional as possible. It is important that you have the customer exposure necessary to reach operational breakeven as soon as possible.
Our recommendation in this regard is to prioritize: (a) amplifying and enhancing your main selling channel - this might entail purchasing advertising, engaging with reputable sales partners in the market, utilizing a pre-selling platform, developing killer sales and explainer videos, and investing in product imagery and photography that conveys the right image, (b) investing in making your product unique and valuable to your buyer - this is often done by working with talented designers and manufacturers that can help you create something that is both new and substantially better than current products in the market, (c) investing in some of the basic infrastructure of your business (i.e. a basic website on Shopify, Wix, Clickfunnels, etc., a file management system like Dropbox or Basecamp or both, a 1-800 phone number, and an email system that utilizes your business’ domain).
5. Not doing it yourself first
One of the best exercises you can go through when starting a new business or product is to literally try doing everything yourself at the start so you can better understand where you actually need help and should spend your precious startup funds. Mistakes are often made when you do not understand what a service or software does and how it will or will not add value to your operation. Doing it yourself doesn’t mean you need to do it yourself for very long but it’s important to recognize what your strengths are and where you need help. It is also important to try doing things one way so you can determine if you need to re-evaluate your business model.
For instance, when you are launching a new product, it is tempting to want to hand everything over to someone else to sell and manage for you before you have tried selling it yourself. Although this is appealing, it removes you from the heartbeat of your market and product and makes it much more difficult to know how you need to adjust and fine tune your operation. Additionally, the person or group you hire is never going to be as frugal with your funds as you are and, therefore, are likely not going to be as sensitive to when adjustments need to be made or directions need to be completely changed. It is important to remember that there is no magical silver bullet that will guarantee sales of your product and many marketing groups are much more concerned about their own bottom line than yours. Often it is best to learn to do it yourself at first and then hire others to perform certain functions or take it over once you determine what works best for you and you are able to supervise from a position of understanding. This same principle applies to product fulfillment, product vision & direction, and financing. If you don’t understand something, you need to do the research to become informed. The resources are available to you on the internet and from other entrepreneurs.
Launching a new product can be the experience of a lifetime but it needs to be approached with an abundance of caution, an understanding of where the risks lie in wait, and the guts to move quickly in taking acceptable risks. You can do it and we hope you take the leap when the right opportunity becomes apparent. It is important that you do your market research, be smart in how you allocate funds, learn your business, and always be selling. If you do these things right and supplement with partners that complement your abilities, you will be well on your way to launching a successful product and business.