Creating Products in a Digital World: The Role The Product Mindset Plays
Organizations need to be able to build and sell digital products. Here’s how a product mindset helps.
Digital transformation continues for organizations everywhere. To stay ahead, businesses need to know how to build successful digital products. 3Pillar Global Founder & Board Member, David DeWolf, shares how a product mindset is crucial to success.
The rate at which the world is digitizing continues to increase. According to IDC, global spending on the digital transformation of business practices, products and organizations is forecasted to reach $2.8 trillion in 2025. As digital transformation ramps up for organizations everywhere, business leaders are charged with helping their product teams choose where to focus their efforts amid constant digital disruption and growing competition. This means they must know how to build successful digital products. To do this, they must adopt a Product Mindset.
The Importance of a Product Mindset
A Product Mindset, a collection of characteristics and principles that guide executives and their teams to build digital products that drive outcomes, is critical in a world where digital transformation reigns supreme. But the Product Mindset isn’t just a one-time event; it’s a cultural shift that requires the entire organization to be involved.
Adopting a Product Mindset is beneficial as businesses work to develop digital products that resonate with their customers. The product development process can be taxing as teams work to ensure their product hits all marks and addresses customer pain points before sending it to market. While important, this can stall the product’s progress. The Product Mindset encourages leaders to stop trying to make products the solution for every problem and instead concentrate on what matters, create value quickly and experiment as needed, effectively accelerating product development cycles.
Achieving the Product Mindset and building a successful digital product requires products to possess three elements: be self-funding, be chosen and be continuously improving.
A Self-funding Product
As product development teams work to create products that can compete in the digital landscape, they sometimes get caught in the weeds of getting everything right the first time. Doing this can cause companies to miss out on revenue generated by a released product. A successful product should be self-funding and offer support that fuels the business and justifies further investment.
For example, Mint, a personal financial management product, used consumer sentiment to build a product with broad appeal. During Mint’s concept stage, its founder Aaron Patzer went to a train station and asked people if Mint sounded like something secure and trustworthy. One phrase that stood out to potential users was “bank-level data security.” Because this phrase was important to consumers, Patzer made sure it was highlighted on the company’s website. As a financial product, reassuring consumers (and investors) that their data would be secure was essential for Mint to gain their trust and their business. Mint’s approach to customer development worked, as it reached 1.5 million users within two years of launch before selling to Intuit for $170 million.
To create a self-funding product, business leaders should encourage product development teams to create the smallest solution possible to a customer’s biggest problem, monetize it and then learn how the product can be improved. This requires teams to reject perfection and not wait until a product is finished to release it to customers. The product should solve the problem bothering its customers the most, then work on improving it over time based on their feedback.
See More: How to Ensure Successful Digital Transformation in 2023 and Beyond
A Chosen Product
Once a product is self-funding, it’s essential that customers continuously choose it. This means they’ll use it, share it and keep it even among a revolving door of competitors and new market entrants.
For instance, while Apple and Samsung account for almost 80% of sales in the smartphone market, Apple dominates its biggest competitor with 51% of customers, according to Statista. Is it because Apple produces the most innovative product on the market? That’s debatable, depending on who you ask. But regardless of innovation, Apple customers continue to choose it over other smartphone manufacturers. That’s what a chosen product should be.
Today’s consumers recognize more options are available to them than ever and are exercising their right to choose. Companies must ensure customers continue choosing their product, especially since brand loyalty is wavering. According to the 2022 Digital Consumer Trends Index Content Hub survey, 67% of consumers frequently buy from the same company but are not loyal to that brand.
To be a chosen product, business leaders must ensure product development teams solve customers’ needs. Customers return to a specific product because it meets their needs, such as in price or functionality. Solving for need requires companies to understand their customers and anticipate what will be important to them today and tomorrow. To do this, companies must always conduct fast, flexible and focused research to get to the heart of what matters to customers. Companies will know they’ve solved for need through increased customer engagement and referrals.
A Continuously Improving Product
With the product now self-funding and chosen, the work isn’t finished. In fact, it should never be finished because products should always be evolving.
Take Netflix, for example. Before it was the giant streaming platform it is today, Netflix was a DVD rental company. During this time, Netflix’s biggest competitor was Blockbuster, previously the world’s largest movie and video game provider. But there’s a reason Netflix is still around today while Blockbuster bit the dust along with other relics of the early 2000s. It evolved and adapted to the market. With the improvements made to data speed and bandwidth, Netflix saw the changing Internet landscape and transitioned its product accordingly. For products to thrive in the digital age, change must be baked into product development.
Product teams must be flexible to pivot from the intended course when needed to excel at change. For changes to have maximum impact, product teams should track results, communicate effectively, change in increments, evaluate data and stay curious. Some specific practices developers can use to reinforce this new culture of change includes delivery pipelines, test automation, communication, and continual adjustment.
Recognizing that the most successful products require continual improvements makes striving for perfection futile. By ensuring product development is ongoing, companies can make adjustments as they go instead of trying to do everything in one fell swoop. They can listen to what customers like and don’t like about a product, then incorporate it into making a better product.
As businesses digitize their products to keep up with a digital world, they’ll need to adopt a Product Mindset. This mindset ensures that products are self-funding, consistently chosen and continuously evolving. Once leaders learn to view product development through the lens of the Product Mindset, they have a greater chance of developing products that will help their businesses thrive in the digital age.
How are you adopting a product mindset to build digital success? Share with us on Facebook, Twitter, and LinkedIn.
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