Reverse Engineer Your Product Development

Just about any book on product development would be structured around the idea. How to analyze and synthesize it. How to validate it. How to build a business plan around it. Sure, that does make sense. But…

Optimism Bias

Entrepreneurs are subject to the optimism bias. Well, everyone is, but let's stick to product people here.

In plain English, it means that:

a) We acknowledge an appalling rate of success of new ventures.

b) Yet, we believe we are different, and we will succeed.

That's a trap. Based on our unjustified optimism, we overbet.

We make bigger gradual investments than we could have (arguably, should have). We keep going longer than we could have (should have). We commit when we could have (should have) waited instead.

It makes sense. If we know exactly where we're going and what our future successful product should look like, big steps are the most efficient way to get there.

The problem is that the assumption that we know where we're heading is based on optimism bias. It's unjustified.

Financial Focus

So, instead of kicking things off with an idea as a constraining factor, how about we start with the financials? What's the initial budget we can spend?

Whatever that number is, cut it by 5 to 10 times. Yes, if what you started with was, say, $30k, we're talking about the neighborhood of $5,000. This is how much you can spend on your first experiment.

Now, reverse engineer the whole product development process from there.

Yes, it means you won't be able to build anything close to an MVP you dreamt about. Not even remotely close. It means reinventing the whole effort altogether, as you won't have a fully blown SaaS product with security and payments and bells and whistles just for a few grand.

What *can* you get for such a budget?

Now, that's the question you should be asking yourself. And the follow-up should be: How can I learn most spending that initial chunk so that the next step will bring you closer to business sustainability?

Why So Tight?

One can rightfully ask, why do I advise such a harsh constraint? After all, when one has $30k, why shouldn't they spend it all on the first shot or at least a half?

That's because the chances to "get it right" at the first attempt are close to zero. We don't see slam dunks in product development. We need several cycles to validate what works and what doesn't. Not one, not two. That's why betting even half of the available money is reckless.

Also, cutting the budget by just a half can still keep us in the idea mindset, trying to cram in as much as we can or maybe looking for cheaper options to build it all anyway.

What I'm aspiring to do here is to push you beyond the point where such scenarios can still be viable. Only then will the questions change from "How much does *it* cost?" to "What's *the most valuable thing* I can do for that much?"

That mindset change is absolutely crucial to getting on a path toward building a sustainable product.

Is Everyone Wrong?

OK, so why does almost everyone focus on an idea, not the budget at hand?

When we tell a story about a successful product, in hindsight, it necessarily is a story about, well, a product. Also, what ultimately succeeds or fails is the product, too. The process may only increase or reduce the chances of a happy end.

However, we don't learn enough from failures. I mean, show me a product development book built around failure stories and how they could have been made still failures but less dramatic.

Stuff like how someone could have quit earlier. Or not do the thing altogether.

If we agree on a made-up statistic that 90% of startups fail, that should be totally interesting for us. And yet, it isn't.

So, no, everyone is not wrong. They're just focused on a happy path.

And yes, everyone is wrong precisely because they're overly focused on a happy path.

So do yourself a favor and start with a down-to-earth, harsh, and hard financial constraint. Reverse engineer further steps from that point. I won't promise you a home run. However, if your optimism bias ends up unjustified, you'll save yourself quite some money, effort, and frustration.

Or, if it's still hard to do it yourself, let me know. I'm happy to help.