Product development teams often confuse:
- The existence of an opportunity
- The size of that opportunity
- The nature (including the “exploitability”) of that opportunity
- How you intend to intervene to exploit the opportunity
The “outcome” or value created by intervening to exploit the opportunity
The river is known to have fish (1). You see a large school of fish (2). The fish are feeding beneath the shade of a bridge (3). You plan to use an underhanded cast and a natural bait (a local cricket) (4). You catch three fish and one huge fish that got away (5).
A roving band of minstrels knows that any town of >1000 people represents an opportunity. People generally love to be entertained. The minstrels know, roughly, that the bigger the town, the greater the opportunity. Armed with this information, they confidently roam the countryside without knowing in advance the details of the show they’ll offer. They figure it out. Give them a town of >1000, and they will end up making a reasonable profit. Some shows flop. Most are hits. Over time, they come out ahead.
One fine June day, they learn that the riverside town of Rivenshire has a population of 5,000, and that the town once housed a Roman fort (the town-folk love the classics) (1,2,3). With this in mind, they steer their caravan to Rivenshire and prepare a classics medley (4). It’s a hit (5)! They go about their merry way, rinse and repeat (5).
Why do these distinctions matter?
Many teams only perceive value as it relates to the likelihood that a particular intervention will work. Take an opportunity worth an estimated $10,000,000 a month. The team will look for the “best idea”, assume it will unlock 20% of that opportunity, and think of it as a $2,000,000 opportunity. The risk here is that they miss the forest through the trees…the intervention becomes the “problem to solve”, instead of a means to an end. What’s perceived to be possible overshadows what is actually worthwhile (the opportunity).
Why is this a problem? Shouldn’t we all be pragmatists and find that elusive middle ground between possible and worthwhile?
Quick Wins and Blinders
Recently I worked with a team that had a series of (self described) product development “misfires”. The outcomes just didn’t materialize for various reasons. So I asked a senior leader what they would tackle if they were more confident about the team’s ability to “execute”.
He described a large opportunity that had resisted prior efforts. But attacking it was off the table because confidence was low. So I asked how many experiments they had run (3, largish batches with a long feedback loop). Back of napkin, if they had run smaller experiments — given their runway — they could have taken 10–20 “shots” at moving the needle. Meanwhile, the team was tackling “quick wins” that were certain to succeed, but whose opportunities were less lucrative.
It’s also tempting to state the opportunity as it relates to some sort of status quo in your product. For example: “if we improve the reconciliation flow we can _________.” You’ve anchored the opportunity! What is the actual. opportunity? How much friction is there in bank reconciliation overall…not just in your current product? That is the opportunity you are chipping away at.
Anyway… time cut short for writing today, and I always like to wrap up. Baby is about to wake up! I think you get the idea. When we normally talk about opportunities, we mush together four/five different elements. It’s worth calling the up individually.