To understand the reality we face, let’s take a look at the numbers. According to Clayton Christensen, a professor at Harvard Business School, 95% of new digital products launched into the market fail.
This statistic is staggering and leads us to wonder: how is it possible that only 5% manage to survive? The answer is simple: many teams don’t properly validate their business hypotheses.
Correctly validating the business hypothesis: the key to success.
Over time, working across more than nine countries in the region, we’ve had the opportunity to collaborate with many teams aiming to develop digital products. However, it’s surprising that even today, just as 30 years ago, teams are developing their ideas without first validating critical aspects of the business initiative, such as problem-solution fit and product-market fit.
It seems that the viability of their idea is simply consulted with a pillow, which of course always gives positive responses. If you relate to this situation, I invite you to analyze the following chart:
The chart shows us how, by following a timeline and validating aspects of our initiative like Purpose, Problem-Solution fit, and subsequent Scalability analysis, we can reduce risk and increase revenue.
One of the fundamental reasons behind this high failure rate is the lack of understanding of what proper validation entails. Validation isn’t just about creating a product and launching it to see if it works; it requires a methodical approach that involves customers from the early stages of development.
Flexibility in the face of change: a fundamental element in validating business hypotheses.
Validation involves listening to users, understanding their needs and problems, and constantly adjusting the product based on their feedback. It’s a continuous process that, when done correctly, can lead to a product that precisely fits market demands.
Another common challenge when validating business hypotheses is resistance to change. Many teams fall into the trap of sticking to their original ideas, even when data and customer feedback indicate that adjustments are needed.
This stubborn mindset can be costly and lead to the loss of valuable resources. It’s crucial to be willing to pivot and adapt your approach based on what you learn during the validation process. Instead of seeing changes as failures, consider them opportunities to improve and refine your product.
“It’s crucial to be willing to pivot and adapt your approach based on what you learn during the validation process.”
The chart we presented earlier illustrates how the validation approach can significantly influence the success of your digital product. By effectively going through the stages of purpose, problem-solution, product-market fit, and finally, scaling, you can reduce risk and sustainably increase your revenue.
This process not only increases the chances of success for your product but also provides you with the ability to make more informed decisions at each stage of development.
Properly validating your business hypotheses is essential to keep your product in the 5% of digital products that thrive in a highly competitive market.
To do this, it’s important to start with adequate product discovery that allows you to detect the four fundamental aspects to consider: desirability, viability, feasibility, and adaptability.
This stage should not be underestimated as it will define the probabilities of success for your digital product. That’s why at Bowery, we recently partnered with LeanALM360 to take a quality leap in Product Discovery. With this new alliance, we are now able to offer a superior service that enhances the value provided to our clients.
Contact us today and let’s build something amazing together!
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