Is your product development about value creation or brand perception?

Product development is a crucial aspect of any tech-driven business, and it is critical to strike a balance between value creation and brand perception. However, in my experience working with business leaders around product development, I have observed a common trend where most of them seem eager to build a proprietary solution, even when it is evident that there is a SaaS solution that would do an excellent job. The question then arises, is product development about value creation or brand perception?

On one hand, building a proprietary solution could be a way for a company to differentiate itself from competitors and create a unique brand identity. For instance, consider Apple's iPhone. The iPhone is a proprietary product that has helped Apple create a brand identity of being innovative and premium. In this case, product development is not just about creating value for customers but also about creating a brand perception that aligns with the company's values.

On the other hand, building a proprietary solution may not always be the best way to create value for customers. In some cases, off-the-shelf SaaS solutions could be a better option. For instance, consider a company that wants to implement a CRM system. There are several SaaS solutions available in the market that could do an excellent job, and building a proprietary CRM system may not provide any significant value to customers. In this case, product development should be about creating value for customers and not just about building a brand perception.

So, which approach is better? It depends on the specific context and goals of the company. If the goal is to create a unique brand identity and differentiate from competitors, building a proprietary solution could be the way to go. However, if the goal is to create value for customers, then off-the-shelf SaaS solutions could be a better option.

It is important to note that the decision to build a proprietary solution should not be based on ego or the desire to be different. Instead, it should be based on a thorough analysis of the company's goals, customer needs, and market trends.

Let us take a look at some specific examples.

Consider a company that wants to develop a new CRM system.?

They have two options - either to build their CRM system or use a SaaS CRM solution like Salesforce or HubSpot. While building their CRM system may provide them with more control and customization, using a SaaS solution can save them a lot of time and resources. However, if they opt for building their CRM system, it may be to differentiate themselves from competitors by creating a unique product that aligns with their brand perception.

Another example is that of a company that wants to develop a new e-commerce platform.?

They could either build their platform or use a SaaS solution like Shopify. In this case, building their platform could allow them to create something that caters to their specific needs and requirements. However, using a SaaS solution can be a much more cost-effective option, especially for smaller businesses. Again, if they opt for building their platform, it may be to differentiate themselves from competitors and build their brand perception.

While both of these examples may seem like valid reasons for building a proprietary solution, it is important to consider whether these reasons are genuinely driven by the desire to create value for customers or merely to build brand perception.

Building a proprietary solution does not necessarily equate to creating more value for customers. In some cases, it can even lead to a decline in value creation.?

For example, building a CRM system that is not as good as the SaaS solution available in the market may lead to customers becoming frustrated and eventually leaving for a better alternative. Similarly, building an e-commerce platform that is not user-friendly may lead to customers abandoning their carts and turning to competitors who provide a more seamless experience.

In conclusion, when it comes to product development, it's important to balance the creation of value for customers with the potential benefits of building a proprietary solution to differentiate your brand. While brand perception is important, it should not be the sole focus, and leaders must assess whether a proprietary solution truly creates more value for customers or is simply a way to stand out from competitors. Ultimately, the goal of product development should be to create value for customers and build a sustainable business, which requires a customer-centric approach and a thorough analysis of the specific context and goals of the company.

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