Olympics & How to evaluate new Product Offering Success Probability
Citius. Altius. Fortius — The 3 Latin words meaning Faster. Higher. Stronger proposed by Pierre De Coubertin (& coined by Henri Didon) as the Official Motto of the Olympics is striking in its cry for evolution. This came in handy the other day when one of my Clients who is the CIO of a leading Logistics & Supply Chain Enterprise was brainstorming on what makes new startup offerings successful. The classical thinking is that it has to be a new ‘Product Category’, or it has to be ‘Disruptive’ or ‘Innovative’ or a combination of the above. Since some of the above terms are a bit ‘abstract’, a lot ‘generic’ and lacks ‘specificity’, I have found that the sheer subjectivity leads to incorrect interpretations.
I personally believe that in a lot of cases, for new Offerings to be successful in existing Products & Services category , the Delivery Mechanism & User Experience for the End User has to be far differentiated….and that’s how this Olympic inspired framework of Faster.Easier.Smarter.Cheaper (FESC) came up.
So what does it mean? The odds of success based on sheer value Differentiation for a new Product/Service in an existing category increases multifold if it fulfils any 3 of the 4 criteria of being Faster, Easier, Smarter & Cheaper than the existing category leader i.e. it passes the Minimum-3-FESC-Product-Offering-Viability-Criteria
To be more specific:
Faster: In this world where Speed has a high multiplier impact both from being a Competitive Edge, or a Productivity Enhancer or a Time Saver, if your offering enables Faster Outcomes by at least a factor of 2X than the current way of doing it, you definitely have a distinct edge.
Easier: To tear your target customer/user away from the habituated/comfort zone of the incumbent, your offering has to double down on the Ease of Onboarding , Use & Adoption aspect. Unless the User Experience (UX) is strong (I mean wildly positive here), then the wow factor to overcome the replacement inertia would simply not be there, and kill your product sooner rather than later once you move past the accommodative early adopters.
Smarter: Google Suggest or AutoComplete , Ride Tracking on Uber, Automated Prioritization and/or Recommendation in Enterprise Software etc. were early examples of Smarter Features giving the product an edge in Market penetration. In short, your Product Offering has to have some key features which are significantly smarter than the competition, and makes the user go WOW!
Cheaper: In the world of software which is increasingly getting commoditized, and/or metered(i.e. Pay for Use); newer pricing / billing models which makes it ‘cheaper’ gives the CFO / Procurement Office or the Household Budget a very tangible reason for moving in your products favor. If it happens to be costlier, then your offering really has to score high on the Faster, Smarter criteria to justify the additional spend.
Now the interesting part about the above 4 criteria is that none of them by themselves would be sufficient enough for you to have an edge. If your product meets any 3 of the above criteria, then it has a very impressive chance of making it in the initial phase. Of course, a lot of it depends on your GTM strategy, your product marketing/awareness campaigns , the User Engagement focus (typically & fatally underrated), your Product Feature Prioritization framework et al, and of course, once you succeed in the initial stages, making a conscious move to stay ahead of the pack by ensuring that no one else takes your place in the Customer’s mind (and wallet) by always making that your product continuously evolves to meet the Minimum 3 Rule of FESC (Faster.Easier.Simpler.Cheaper).
Now let’s back test this rule against some notable Product Success stories of the recent past:
Amazon.com: Displaced Existing Categories of Brick & Mortar Stores . How? : Cheaper than the competition ; Easier to shop in the comfort of your home (and office ;-) ) ; Smarter with endless range & prioritized recommendations ; Not necessarily Faster (i.e. if you wanted something the same day). Clearly 3 out 4.
Amazon AWS: Displaced On-Premise/Captive/Data Centers. How? : Cheaper i.e. Pay Per Use with no upfront (typically high sunk investments). Easier i.e Pick & Choose , configure without needing a big team of IT Infra Admin Engineers ; Smarter — Auto Scaling ; Shared Resources et al; Faster — too. 4 out of 4 leading to a runaway success (launches in 2006, currently has a revenue of $13B annually).
Uber : Displaced existing Taxis by being Faster (90% of rides pick you up in 5 mins or less) , Easier to hail & pay (enough said) , Smarter (no cash to carry, choose your ride et al) and maybe Cheaper (not sustainable currently). Clearly a 3 out of 4.
Reliance Jio : Displaced all the incumbents to become no.1 in India’s telecom sector. How? Cheaper — way cheaper than competition ; Easier — easy, digital signup that took 2 minutes or less ; Faster — 4g networks 30% faster than existing 2G/3G. 3 out of 4.
Swiggy: Took Top Position in a fragmented Food Delivery market and consolidated market share in spite of being a late entrant by playing the Faster (delivery in 20–25mins), Easier (curated best seller menu), Smarter( insourced delivery to control experience) card. 3 out of 4.
And closer Home, Saama’s LSAC Smart Data Query(SDQ) disrupted traditional Clinical Data Management of Clinical Trials. Helped Pfizer by using its unique AI-enabled, Domain Trained SDQ LSAC platforms to deliver the vaccine Faster (30 days faster) , Smarter (machine learning to flag critical data points), & Easier (integrated into existing process & systems to help Data Managers reduce manual effort). Clearly a 3 out of a 4, and if you look at the pricing model based on machine identified data points, then clearly a win-win making it far Cheaper and a complete 4 out of 4 from the end user perspective.
For a angel investor/VC or an executive, Iwould recommend to use Minimum-3-FESC model as one of the criteria to evaluate new offerings that are being considered. Needless to say, there will always be exceptions based on certain unique contexts, but again for most cases, the value that this model provides in your decision making can be enlightening, especially considering its implicit simplicity and focus on only first principles.
If you have any comments or feedback on improving this model, please reach out to me. Until then, have fun applying this to all the success product stories of the recent past which displaced the erstwhile market leaders and find out which ones out of the FESC model worked in its favor.
Related Inspiration:
1) In a 1997 letter to Amazon shareholders, Jeff Bezos mentions that it isn’t easy to work at the online retail powerhouse. In a parenthetical, the Amazon CEO offers some insight into why:
When I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”.
2) The simple, but powerful 3 out of 3 model followed by Sourabh Mukherjea & the team @ Marcellus. https://marcellus.in/wp-content/uploads/2020/01/Marcellus_Creating_Consistent-Compounders_Jan-2020.pdf
