What Does It Take To Create Value for End-Users and Businesses?
Moving from abstraction to action
Moving from abstraction to action
How often have you heard something like, “Our mission is to create value for our customers.” I already lost the count, and though this sentence makes total sense, it gives you no guidance. People interpret the word value differently, and that’s where the confusion starts.
Don’t get me wrong, I’m not saying talking about value is bad. My point is that product teams won’t be able to create value until they understand what that is.
In Sprint this year, when we crafted our Agile Product Manifesto, we were clear on the importance of products delivering value. Yet, we all worried about teams misunderstanding what value is and how to create it. I will illustrate common mistakes and techniques to identify value during this piece and continuously work towards it.
Creating value for end-users and businesses is what defines success — Agile Product Manifesto, 2022
Common Traps: What’s NOT Value
Before we jump into how to identify opportunities to create value, I find it relevant to understand what misleads teams. Unfortunately, product teams face numerous traps and inevitably end up trapped in them.
The most common traps I identified are:
Velocity Obsession: increasing velocity is all that matters. Teams get obsessed with the output they create Sprint after Sprint and focus on finding ways of maximizing the story points delivered per Sprint.
Features Factory: when frequently adding features to your product becomes the goal; you are trapped in a feature factory. More features are all that matters. Teams focused solely on creating output instead of learning from end-users.
Meeting Deadlines: business stakeholders set deadlines in stone and expect teams to meet them. Product teams use all their energy to meet deadlines. Missing a deadline is a sign of failure, and teams will do whatever it takes to meet the arbitrary date.
Increasing Revenue: it’s dangerous to put too much emphasis on revenue. Although growing revenue may represent growth, it doesn’t mean you’re increasing your product value.
Stakeholders’ Happiness: everyone has opinions and wishes. In business, it’s common to receive requests from stakeholders. The trap is to believe that you’re creating value by delivering on their demands.
I need to be blunt here.
Velocity is meaningless, it may give you a feeling of increasing efficiency, yet it proves nothing. You may be delivering more, and that may contribute to nothing beyond numbers.
Most deadlines are arbitrary, and meeting them may entail cutting corners. Generally, quality is the first to suffer. When teams focus on deadlines, their creativity is endangered as their attention goes to delivering output instead of solving problems.
All features are irrelevant until end-users can benefit from them.
Be careful with your emphasis on revenue. The goal is to create value, and revenue will come as a consequence of an outstanding product. When you invert this order, your decisions will be focused on monetary aspects, which is limiting.
The relationship with business stakeholders is highly important and yet often misunderstood. Product teams aren’t supposed to please stakeholders but partner with them and uncover opportunities to create value. Don’t focus on pleasing stakeholders; their wants may not be the needs of your end-users.
Understanding What Value Is
Value is a buzzword that fools many teams, be careful with it. When discussing value, I strive to understand the product scenario, customer, business, and technology. That helps me understand the situation and then evaluate what could create value.
The first and most important aspect is to understand your customer’s perspective. Observe them; what kind of problems do they face? What impedes them from getting their jobs done? What annoys them? Strive to understand and identify problems worth solving. You want to uncover opportunities that customers care about and that will create desirability.
Once you have identified something that resonates with your customers, it’s time to understand whether you can create business value with it. Valuable opportunities are viable from the business perspective. It means both sides benefit from the opportunity: customers get something to help them get a job done, and in exchange, the business gets something from the customer; sometimes a payment, but it can go beyond that as customers’ data and time (e.g., Facebook is free for customers and business model is to sell ads).
As you have an opportunity that is viable from a business perspective and desirable to customers, it’s time to evaluate its feasibility with your technology. The intersection between customer, business, and tech represents opportunities that tend to create user and business value. But be mindful; you must continuously run experiments with customers to understand what helps and motivates them. Potentially, your first prototypes won’t fit, and adapting according to your learning will define success.
Using the Venn diagram can also save you from wasting your time and having clear expectations. Often, companies ignore customer desirability and focus on tech feasibility and business viability. This is dangerous because you may create something awesome nobody cares about.
Another aspect worth mentioning would be when you identify an opportunity that customers care about and you could deliver on that with your technology, but you see no business viability. It’s a matter of expectation; you may decide to invest in increasing customer engagement even knowing that you see no business value in the short term.
Value Is Related to Your Context
Defining value requires an understanding of the business and product scenario. Don’t limit value to monetary aspects; this is just one form. Let me give you some examples of well-known companies:
Instagram: the company invests significant time in improving its timeline, hoping users can consume content they care about. That makes Instagram attractive for advertisers as they have highly engaged users.
Uber: users can quickly move from a to b. Uber helps riders quickly find drivers. Value for users would be how fast they find a driver, and for Uber, the value would be attractiveness for drivers and a transaction cut on rides.
Dropbox: anyone can store files up to 2GB for free. Users can save their files and access them from multiple devices without any cost. What would be the advantage for Dropbox? Loyalty and recommendations. The more users like the platform, the longer they stay, and the more they recommend it to their friends. Some users will convert into a premium subscription, generating even more value for the company.
I encourage product people to invest time in understanding value and then evaluate what would lead to value for end-users and businesses. Don’t underestimate the importance of clarity on value. Without that, waste becomes inevitable.
Final Thoughts
No process can guarantee you create value. Don’t be blind to any process that can easily mislead you. The vital aspect is to have an open mind. You continuously search for opportunities to improve your customers’ lives and then understand how to make that viable and feasible. It’s a continuous journey.
To create value, you will fail several times before you succeed. Don’t ever let small failures put you down. Focus on learning, and the result can surprise you.
I would be pleased to learn your secrets on creating value. Please share with me your techniques, and let’s learn from each other. Together, we can rock the Product World!
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