Being a digital product owner can be overwhelming at times—like you’re battling some kind of hydra. Between managing the expectations of your executive team, trying to stay focused on the needs of the core user, and wrapping your mind around a never-ending list of technical tradeoffs, it’s a daunting task. By managing risks the right way, you can put some of that overwhelm to rest and create a more effective product.
At Differential, we help product owners reduce negative outcomes while increasing the opportunity for positive outcomes, so they get better ROI and dramatically improved user experiences. That’s de-risking in a nutshell.
In this article, you’ll find more about de-risking, why you need it, and how you can get started.
TL;DR: a digital product is a significant investment. By taking the time to de-risk and validate the idea, you end up with a smarter, stronger product that’s more likely to succeed. (And you’ll sleep better at night knowing you’ve come at it from all angles.)
What exactly do we mean by “de-risk”?
De-risk = manage risk. While you can’t remove all uncertainty from a project, you can increase the likelihood of good outcomes while reducing negative outcomes. For digital products, de-risk means defining what success looks like and understanding the likelihood of achieving that success.
Why de-risk a digital product?
Risks to digital products vary from organization to organization, but one thing remains the same: De-risking is a good idea.
What are the benefits of de-risking?
- See 10x ROI: more revenue and lower costs. Isn’t this everyone’s goal? Many great digital products accomplish both.
- Avoid over-investing in the wrong thing
- Gain an objective understanding of user value (would you find value in this?) and usability (do you know how to use/navigate this product?)
- Continuous growth
- Users increase and become more engaged
- Updates to product features are in line with user expectations
How do you de-risk?
Effective de-risking happens through the build process. De-risking never really stops. It’s like the angel on your shoulder prompting you to do better.
De-risking requires thinking through scenarios, and getting beyond “is this product what the market wants?” We recommend starting with a Design Sprint, and continuing to ask tough questions.
We understand that when a product idea is still in its infancy, conceptualizing risks and threats is hard. We have a plan to help you think through potential challenges at a higher level.
Start by outlining threats and vulnerabilities in these areas:
- 📈 Market: Is there a demand for your digital product (inside or outside your organization)? How big is the market/opportunity? How will you get the word out when the product is ready for launch.
- 💰 Financial: Does your organization have the appetite and financial resources to invest in building a great digital product? What is the cost to build, market, and maintain it?
- 🧰 Technical: What are the internal technical requirements? Are there any other digital transformation initiatives underway?
- ⚙️ Operational: What processes will be changed because of the digital product and what would happen if these failed? Are there other areas of the business that will be impacted by the digital product (i.e. what impact will a new sales tool have on the fulfillment team)?
Once the idea has been validated and the strategy is defined, product owners still need to consider:
- User experience and interface
- Technical requirements
- Technical challenges and tradeoffs
- Interpreting user data and behaviors
- Changing consumer needs and preferences
- Scalability of the digital product
- Macro-level changes in technology and the market
- And so many more…
Ok, now what?
The goal here isn’t to worsen that battling-the-hydra feeling. The goal is to help product owners increase the likelihood of success on their journey to build great digital products. At Differential, we strongly believe in de-risking digital products early and often. Addressing risks and considering threats to success is a critical step.
Still trying to figure out your next step? Want help de-risking a digital product idea? Perhaps we can help. Differential is a team of product designers, developers, and strategists partnering with brands to build great digital products. You can learn more about how we define, de-risk, and deliver great digital products here.