De-risking Physical Products
PM for the Physical World Series: Part VIII
The Challenge for Hardware MVPs
An MVP, or a Minimally Viable Product, is a development stage used to create a new product with enough features to attract early adopter customers and validate an idea early in the development cycle.
While software products are easily amenable to this strategy, in part for their modularity and the vast underlying infrastructure in place.
Consider a mobile application, or a web app. Most of what's going on are infrastructures that cater to ALL apps, and are reused innumerable times.
Note how shared web infrastructures, cloud included, are built to serve billions of users (beside your own app users).
It is fair to say app developers stand on the shoulders of giants, and as a result, the pace and scale of innovation they can bring is without match, notably beacuse the infrastructure is built to support multiple tech-stacks and business cases, so that, should you pivot, you are not to loose a lot of the things that make your product tick.
That is not the case with physical products.
The challenge with meaningful MVP creation in hardware products is that, from a functional point of view, they are often integrated monoliths.
By this, I refer to the need to recreate almost every part of critical functional layers, with limited potential for component reuse.
Consider the main subsystems for a typical passenger car. These subsystems are characterized by different availability and development costs.
Notice that with the exemption of infotainment and control systems, the most differentiating factors are also the most expensive parts of any car development.
The lead time and cost of recreation of manufacturing infrastructures and replenish critical inventories for these systems are much too prohibitive, and in fact are equivalent to the launch of a new model altogether.
Passenger cars are at the extreme of this continuum, but in general, physical product face similar rigidity in their development process, meaning that unless they operate within an extremely cash rich environment, physical product innovators have one bullet in their proverbial pistol.
This makes the challenge of early validation even more acute:
How can you experiment?
Can you bring your product in the hands of users, before all costs are sunk?
Problem Validation
"Fall in love with the problem, not the solution" (Uri Levine)
This quotation addresses one of the most common fallacies within early stage product companies: Talented and motivated teams could and frequently would fall into the building stage fast. This is a symptom of a problem known as "a solution in search of a problem".
But whereas pivoting software products might still be possible (at cost), steering massive manufacturing infrastructures efforts oftentimes proves impossible. Usually there is not enough time, and not enough money to change course.
Validation, therefore, is key to success. But how does one do that?
Market need and Positioning
First and foremost comes a sound understanding of the market dynamics (size and trends), the competitive landscape, the customers' needs, and hopefully, existing gaps in the market.
This includes the study of the competition's features, language and messaging, which will result in a set of positioning maps, organizing the "lines of battle" along messaging aimed to influence prospective customers' minds when they think about their problems and the solution they would like to pick.
Consider the following perceptual map for the smartphone market, which is centered around "feature - like" qualities: the available range of models, and the perceived level of technology integrated into the brand's product.
If I were a marketeer with Samsung, I would be satisfied with this perception of my brand in the target audience.
If I were a product manager with them, I'd work really hard to keep this coming: Identify more niche segments to build specialty phones to, and find novel technologies to keep leading the pack.
For similar perceptual maps help us understand our place (for existing brands), or where we want to be, for new products. They show us what are the needs important to the market segments we're after, and therefore enable us to design features tailored to answer them.
Feature scoping by competitive analysis
Consider the following competitive feature review by Insight Quantum, listing key features and their relative scores
The table can be translated into a spider graph:
Crucially, when we are building a product, in contrast with marketing it, we are making this table to identify the areas where we want to shine, which are the areas where we want to position our product as a winner.
Feature validation
The crucial part of the process is validation of the insights we gained:
First we identify and prioritize the features according to our positioning
These feature may be contradictory (such as performance vs. fuel efficiency)
Then we model these differentiating features on top of the other, less controversial ones
Now we find a way to present these features to users, and have them experience them to the best of our ability.
For instance, we can generally only tell consumers of the average fuel consumption, once tested in controlled environment to an industry agreed benchmark.
Oftentimes we use mockups for the look and feel.
CAF (Construcciones y Auxiliar de Ferrocarriles) is a is a spanish company which manufactures railway vehicles and equipment and buses.
Catering to the public transportation sector, their process includes bidding for open or close tenders, in which they present mockups showing their vision for the design and usability of the railroad car - ticking the boxes for the particular demands of the tender at hand.
In this mockup for the NS sprinter series, for Dutch operator Nederlandse Spoorwegen, CAF shows the bodywork, as well as interiors, including electric sockets for passengers' devices, separate trash bins and toilets, and have focus groups (including target users and customer representatives) experience this solution first hand.
It is no small fit, either. A similar mockup takes almost a year to build, and can cost up to a million Euro. But once the get go is given, the manufacturer can securely continue with provisioning, including:
Investments in manufacturing equipment
Tooling
Logistics (inventory provisioning for components and raw materials)
Indeed, to most users, the technicalities of drivetrains, electricity consumption, and HVAC specifications are nothing more than tech babble. Furthermore, it would be almost prohibitive to test those publicly, as most of the trial and error are done within the lab or on the manufacturing floor, and would not allow the public to experience.
On the other hand, these would generally be satisfied with technical specification documentation the vendor commits to contractually, as part of a multi decade operation agreement.
The importance of Look & Feel
Consider the onboarding process for physical products. How different is it from digital products?
It starts with the oh-so-important unboxing, enshrined in countless youtube channels, and for what? It is a single time experience consumer typically perform once, before throwing the package or stowing it away, for some reason.
Unboxing is the concerted journey in which consumers first lay their hands on their new purchase, and learn to appreciate its features, its look and its feel.
The first iPhone slab form factor was chosen among other configurations after wooden block mockups were shaped, then handled and carried by the development team to mimic the size and heft.
In another canonic launch, the late Steve Jobs pulled a MacBook Air from a standard envelope - a jaw dropper, targeted on the most important feature of that laptop: Portability.
And boy! what validation they must have had to do, what with the razor sharp focus on portability, ditching CDROM drive, and almost accidentally launching the connected device revolution, for what is a laptop worth, if it is not connected, portable, and has hours on end of battery life - features that turned heads then, and still today.
Conclusion
In this installment in the series, I reiterate the urgent need for early validation for physical products, and discuss strategies for such validation, focusing on differentiating aspects of the product at hand, making necessary shortcuts.