Why - The Purpose of the Product

Ultimately, every single product can be reduced to a specific user need, and hence to an individual user. To increase the chances of making a succesful product, you need to find out if there is a critical amount of users that have a specific need, which can be better met with your product, and isn’t served well enough with anything else out there. Chances here though are against you - there is already very likely a product or a solution the user is equipped with to tackle their problems and to fulfill their needs.

The space where you are working in, could be anything from enhancing the mobile experience for brick and mortar stores selling to online marketplaces, building a platform for short form content creators or building tools to organize the work for reachtstack drivers in a container ship terminal. Whatever the context is, your intended product will be competing with existing ways of working, established habits and products already available at the market - be it your own or your competitors.

Is there a large enough audience for my product, which is currently underserved in the market? Can my product offer them something that isn’t offered by anything else out there? Is the product compelling enough to get large enough audience rallying behind my product? Finding the unique value proposition for your product that fits the current market is essential.

The key value proposition as the product purpose could be stated for example as The home for video meme creators or The number one online destination for fashion. Based on the maturity of the product, this typically doesn't change much over time. When creating a completely new direction and purpose for the product, it is often considered a pivot. This could be a result of not finding enough growth with the existing product, a significant shift in the market or a new competitor entering the market and changing the game.

Frameworks, like the Blue Ocean / Red Ocean strategy framework, or the work of Clayton Christensen on Innovators Solution, help you frame your product idea and solution against that existing world, where your users are interacting with existing solutions. What are the elements of my product that are directly competing against the existing market? What are the users' existing expectations from a product in the market? What are the elements of my product that provide value other products currently can’t?

Focusing on the current users, their current needs and how the existing product solves those problems, you may end up iterating on the existing products or offerings - and end up competing with similar, but better features or with a cheaper solution, but fail to look beyond what are the unmet needs and potential to create new innovations.

Blue Ocean strategy framework helps you identify where the current industry competition and investments are the highest - where you should do the minimal investments to offer a minimal level of service, and instead put most of your investments into the areas of your product where you create value beyond what is currently available in the market. Alternatively, if you can't find that competitive edge from your product, chances are users will not choose your product over the one they already use.

This is the part in product building which is usually referred to "finding the product-market-fit". To make a dent in the world with your product, you need to understand the world and the market where your prouduct operates.

Example of a blue ocean strategy from the video streaming space: Founders of Twitch recognized that gamers had unique needs not met by the then existing incumbent video streaming services, such as YouTube. YouTube was built for video content creators with the mindset that you first record the content, then publish it, and then engage with it. And how YouTube was built and operated, and how the content was monetised, was based on this core idea. Twitch on the other hand focused on the real-timeness of the video streaming and audience engagement experience, including the live chat. All of this was enabled by new technologies that made real-time livestreaming possible. Twitch also introduced new subscription models and donation systems that enabled the content creators to monetise their audience in a completely new way compared to the incumbent platforms at the time. Essentially Twitch built a platform tailored to live gameplay, where the audience could interact in real time. This focus allowed them to bypass the crowded and competitive mainstream streaming market. While YouTube continues to be the largest video streaming platform, Twitch has created a sizable business from capturing the audience in the live streaming market, making it the billion dollar business it is today.

Your product does not operate in a vacuum. Users have needs - which are already solved by one way or the other. Find out what is the minimum you need to invest to match the existing solutions and put most of your bets in the competing factors other solutions don’t offer.

Inspiration and Further Reading:

• The Innovator's Solution: Creating and Sustaining Successful Growth by Clayton Christensen
• Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim, Renee Mauborgne