Don't Fall Into This Software Development Trap
Joshua Berry
Guiding leaders & teams towards sustainable growth through people-centered innovation, leadership, and culture
When you have a great idea, it’s tempting to launch straight into product development. The sooner you have a new product, the sooner you’re making money, right? But your efforts can go horribly wrong if the product is launched before adequate customer discovery and validation. Software development is a common culprit.
Case in point: Econic recently worked with a company who had spent over a million dollars developing new software that turned out to be a bad fit for the originally intended market. When you spend a ton of money to solve what turns out to be a mosquito-bite problem instead of a shark-bite problem the results are rarely good. They came to us asking for help turning this situation around. We’re peeling it back and seem to have found an adjacent market that might have a stronger need for parts of the original software but are still working through rapid experiments to cross off the next riskiest assumptions, primarily around customer acquisition.
Where did the project go wrong? At the very beginning. The organization had a hunch that this product was the right one to build. Like most companies the move from idea to building something is much more natural than asking the question “Should we be doing this at all?” And if you are already talking to an outsourced software development group, it’s almost unnatural for them to stop and ask, “Should your company be creating this product?” Most software development shops assume their client knows their market and what to build?—?plus asking the question could potentially result in losing the work.
Some software companies are more savvy about innovation vetting than others. But, even if they CAN do it, the question remains whether they can be unbiased in their evaluation. We’ve seen it work for the same company to do both idea vetting and product development, but only if there is a firewall of some kind between the two work groups to remove the conflict of interest.
Think of it this way: Would you ask a home builder if you should rent, buy or build? Of course not! They will tell you to build, because that’s their livelihood. They will have statistics and case studies to back up their opinion, too. They can’t impartially evaluate your finances, job, family situation and other factors that could lead to a decision other than building.
Vetting a Software Idea: If You Build It They Might Not Come
We can tell you from firsthand experience with our clients, it’s not worth taking a chance on software development before vetting the idea. Too much money can be lost if your target audience doesn’t react to the product as you believe they will. A lot of time can be lost, too… and time is money.
If your company is considering a new software product, before you even think about development (either in-house or especially outsourced), ensure a process is in place to determine whether the product has a good chance of being successful. Here are some of the steps you should ask your corporate innovation team to complete:
- Establish a preliminary customer validation process to determine which ideas your team should take time to vet. Proper customer development processes help thoroughly validate aspects of the business model before expending time and money on development, such as the problem, market and potential solutions. This is true whether you develop software internally or externally. One example is testing a potential new product with screen shots before creating working pages. Among other things, you need to determine whether there is a large enough market to make your idea profitable. Check out our friend and mentor, Justin Wilcox, and his resources for customer development.
- Create a solid process to work through build/buy/partner decisions. Just because your team came up with a good idea doesn’t mean your company is the best one to build it. There are other options, including engaging startup companies that might help you get to market faster, with less risk. You should embrace a solution that takes into account all aspects of your business model.
- Be cautious of software development shops that offer to help consult on your innovation strategy. If a majority of their revenue comes from writing code, their bias might be toward building, when another product or path would be best?—?or no product at all. It doesn’t mean you can’t work with them if they are good at development. Just make sure you make provisions for evaluation of your idea first.
- Ask the software development company how many projects they have turned down or helped their customers decide NOT to build because it didn’t make sense for the client or their customers. Keep in mind, most agile and design thinking methods don’t automatically address the question, “should this product be built,” so don’t be duped by these buzzwords.
Software development outsourcing is an invaluable tool for corporations that want or need to innovate?—?but only when it makes sense for the new product or business model and if it’s being done by a trusted partner who has your best interests at heart. It’s up to your team to make sure motivations are in the right place. Don’t put the innovation software development cart before the evaluation horse!