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PRODUCT DNA: How successful product companies innovate

March 25, 2019 - Nirmal-satyendra

product DNA

A popular perception is that companies can drive innovation and build great products by talking to and seeking regular and timely feedback from potential and existing customers. While this may sound reasonable, unfortunately it is not true. Building a great market-leading product requires more than that. It needs something called “a product DNA”.

Most of us love music. But can most of us describe music in a manner that if someone composes it as per our liking or interest, then we will like it for sure? All we do is develop fondness (or dislike) for certain kind of music once someone composes it.

Similarly, most customers cannot describe how your product should look like or what they really need. If you create a product, then they may like it or dislike it.

If mobile phone manufacturers had conducted a survey about the features customers want in their mobile phones in the 90s, the most probable answers/requests would have been: Increase in battery power, more storage for address/contacts, Increased size of text messages and address book retrieval if the phone is lost. In all likelihood, a smart phone wouldn’t have been a preference or suggestion as part of the survey findings. Not by any single customer. Not by the entire set of survey respondents collectively.

Similarly, if a survey of customers of dot matrix printer was carried out they would have in all probability come up with demands like faster printing rate, multiple paper sizes, printing on both sides of paper or color printing. None of them would have come up with a description of laser printer.

So, essentially neither the sum of all customer feedback would have helped produce an innovative product feature set nor individual feedback. The popular perception that customer feedback is the foundation of innovation is potentially false.

Sometimes a product is an outcome of an objective and sometimes it is a consequence of an unrelated objective. A classic example of objective-based outcome is the most efficient search engine on the block – Google – developed by Larry Page and Sergei Brin. Driverless car is also an example of objective-based outcome. A great example of consequence-based product is Amazon Web Services. It is a consequence of the technology Amazon built to run its flagship product – the Amazon e-commerce web site. Or consider the phenomenon that led Percy Spencer to the invention of a microwave. Percy was experimenting with a radar related vacuum tube when a candy bar in his pocket started melting and he applied this knowledge to build the prototype for a microwave.

To build a successful product, a company needs product-centricity in its DNA. It needs a product-mindset and skill. This influences the entire process of product creation right from ideation, calculation and estimation of market potential, through to execution. Let us see what “product DNA” really means and why it pays a key role in product development:

  • Ideation:

During the ideation phase, the ability to come up with product requirements is considered as the Product DNA. The idea may be an outcome of a general observation of a current problem, it may address future problems or it could be a technology innovation to improve the efficiency of an existing solution.

The ability to assess requirements based on general observation and come up with an innovative solution is best illustrated in Levi Strauss’s discovery and the consequent apparel invention. Strauss observed that the jeans of the gold mine workers were all tattered due to the weight of sand. He riveted the pockets and patented the same. Most of the times these kind of scenarios don’t require any major research investments.

On the other hand, driverless cars and most of the stuff Elon Musk does, fall under this category of potential solutions to “future problems”. These kind of problems usually require major research and sometimes infrastructure investments.

Job search portals, matrimony sites, auction marketplaces and other similar online platforms that came up after the world wide web gained popularity are classic examples of using new technologies to increase the efficiency of existing solutions.

The ability to see what customer needs without the customer explicitly telling you is an essential trait of what I call the “Product DNA”.

  • Calculating Market potential:

There is no free lunch in life and especially in business. Investors are driven by revenues. So whatever you build should generate revenue for the investors.
Calculating market potential and growth prospects becomes extremely difficult when there is no precedence for the product that you are developing. On top of it, need and want are two different things. Just because a customer needs something, doesn’t necessarily mean he wants it and he will pay for it.

The ability to see the impact of the product on the customers when there are no existing customers/precedence, and foreseeing how to transform the need of the customer to a want is one of the essential traits of “Product DNA”.

  • Execution:

While I do not undermine the value of an idea, conceiving an idea is the easiest thing. Ninety nine percent of the success of a product depends on execution.

The first mover advantage doesn’t really guarantee prolonged market leadership. There were several established search engines before google. Google beat them all by building a search engine that was technologically superior to others. The rise of Facebook and the demise of Orkut is also an example that proves this.

Customer feedback becomes effective once the product is in the market. Facebook started as a college bulletin board but morphed into social media platform based on the customer feedback/demand and their observation of customer needs.

Patience, constant and continuous meaningful innovation is integral to Product DNA traits during the execution phase.

Summarizing, the traits exhibited by an individual or company who successfully address the challenges mentioned above during the ideation, market potential estimation and execution phases is what Product DNA is. History is witness to the fact that all successful product companies have invariably displayed the above traits.

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17 thoughts on “PRODUCT DNA: How successful product companies innovate

  • Nice article, looking for your next in the series.

  • Good one

  • We need to think out of the box to deliver something exceptional.

  • Disruptive and very good article.

  • Lot of study and experience required to write this article. Well written thought provoking and creative.

  • Good kese

  • Great insights.

  • Nice article

  • Well explained article

  • The idea that customer feedback does not create new products but is essential once a new product is launched is described in a crisp manner.

  • Good research. Great article

  • That ws grt hatts off

  • Very good article.

  • Thank you for sharing this with us.

  • Wow, what n extensive research and study of the product DNA, an eye opener n interestingly jhakaas blog

  • Good thoughtful writeup

  • Nice Article

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