Risks Involved While Considering New Product Development

07 Mar

How do you think a business sustains through the years?

It's certainly not possible with one stagnant product. It’s got to evolve or rediscover…

Everyone remembers what happened with Blackberry. When iPhone was launched in 2007, Blackberry sales nosedived to less than 20% in the next 2 years.

But why did that happen and why do products actually fail?

With BlackBerry, they just became rigid and refused to accept the path of evolution. However, there are multiple other reasons that cause a new product to fail, let's look at the important ones

Miscalculation of market demand

The assumptions of market demand for a product are the worst enemies of a product's success. CB Insights states “70% of start-ups fail because there is No market need for a product.” Well, that might be true…

These hiccups can be easily avoided. Just answer these questions at the start itself:

  • What problem does my product solve?
  • Who has this problem?
  • How will your product solve the problem?
  • How are other people trying to solve this problem?

If you have reasonable answers to these questions and those are justified to you then you are in the right direction.

Jumping the gun rather than taking one step at a time

Just setting unrealistic goals won’t help the purpose. It is important to understand that we have to educate the consumers, through right marketing strategies, about what problem the product solves. This helps the product to become a daily part of customers' lives.

Take for example, Steve jobs prank called starbucks in an Apple launch just to show the audience how they can order coffee through Maps!

Underestimating human resources

Your team is your biggest asset. Even though some might plan to leave midway or others may lack the motivation and determination that you have, that should not deter you from the actual goal. Build a strong team that resonates with your ambition, even if it takes time.

Using wrong technology

Before starting your ideal project you need to make sure that your technology is updated and working properly. It’s important to choose the tech that is reliable and tested instead of just following the trends blindly. Keeping in mind the platforms you want to target, choose the right team with the right digital transformation services.

Significant types of risks involved:

Now to have a little broader understanding of the topic, let’s understand it from the technical point of view. with every invention of a product, enters a set of risks. Let’s take a look at some of them-

Market Risks: Variations in the scope of the product, inaccurate estimations, hesitation of the audience and undermining stakeholders expectations are major factors contributing to the product failure.

Organizational Risks: Make the internal organization your strength! Conflicts within, can cause hindrance and eventually lead to delay of your target schedules.

Technological Risks: Insufficiency by the tech team in terms of less usage of the future technology or complications in implementation can also restrict your project growth.

Performance Risks: The performance of the product in real life and among people is always unknown. And this fear of the unknown can tend to be a huge risk.

Financial Risks: Over budgeting of a project, stakeholders causing financial restriction or limited capital causes financial risks. The right planning of the overall cost can be one of the solutions to this risk.

Unforeseeable Risks: There are certain hindrances that can not be known to mankind until they have actually occurred. Such risks can actually put a stop to your dreams.

Mitigation of the Risks:

Now that we have plenty of knowledge of all the factors that might cause trouble to our development, lets focus on how to solve some of them-

Early identification of the risks

You can never completely avoid a risk but can only minimize the effect, and one way to do that is by the early identification of the risks involved. Try brainstorming all the potential factors that could hinder your growth and create a rational plan to escape through them.

Communicating about the risks

To convey the message of risk management as an integral part to your team you need to make sure to communicate the risks involved in team meetings and conferences.

Prioritizing the risks

Understanding the impact of risks, one should create a priority list in order to determine which hindrance needs more attention and has a higher probability of occurrence.

Acknowledging the risks and its impact

Ask yourself and your team significant questions like - What can potentially cause risk? What will be the impact of the risk to the project in terms of quality and costs? The solution to these, will help you acknowledge the risk and its impact to your company.

Developing the mitigation plan

The final step after all the Analysis is creating a roadmap for resolving the risks. Create a contingency plan to counter all the hindrances that could harm you, your project or your company.

Risks would always be a part of business, that's why the hit and miss ratio is greater. However, providing consultation to businesses to grow from scratch to more than 9 figures in revenue in less than 6 months, more than a couple of times, we certainly learned a lot along the way.