S01E02 What are the challenges in building a great digital product?

Drew: Welcome to the Differential Product Conversations podcast where we try to demystify how great digital products are made by answering questions product owners have but are too afraid to ask.

In our last episode, we talked about what makes a digital product great. What are the characteristics of them? What are some examples? What do we even believe a digital product is in defining it and all of that.

We also want to talk about why it's hard to build digital products and why so many people fail at it. Why are there so many startups that go under and can't get things off the ground? There's a huge saturation in the market.

The question is, what are the challenges of building a great digital product? 

So, Colin, you want to kick us off?

Colin: Yeah. When I talked to a lot of people about this, I like to say the digital product journey is really hard, and I use journey as a good operative word. It is what it feels like; it's a very long road.

I use the analogy of climbing a really big mountain. So that will be a long journey. You need to prepare yourself physically and mentally for that journey, and even with a lot of preparation, you can't control everything. There are things you're going to face on that trip that you could not expect, and you need to be able to handle them.

You need to be agile enough to read and react on how to deal with that. Like, if you're actually physically on a mountain you can't control the weather, and you can't control the conditions you might face on the mountain. It also helps (staying with that analogy) if you have the right gear. If it's going to be that cold you need to make sure you have the right gear to do that. It may even be more important that you have people who are going along that journey that you trust, who have done this before and have some specialized skills to help get you there. So, you think about the Sherpas and the stuff helping you climb a mountain. Those are the people who have been there, done that, know how those things work, and they help serve as a guide for that.

The journey is hard, and we use the journey as the analogy for how to think about digital products. But even before I get into what are those specific challenges in the digital product context, I'd love to talk about all the different statistics and studies that people throw around. I have to put them in the show notes or whatever on what are the links to the different places. But we all hear the adage that 90% of startups fail in the first five years. And there's another article on the subject of enterprise IT projects and 70% of those fail, which is those projects are either not getting close to the scope that they plan to, they went way over time or they went way over budget.

Those are big failures when they're 2x the budget - that's not a good thing - or 3x the timeline. That's a really bad thing. It's hard. There's a lot of factors involved in it. Some are within your control and influence and some are not. Now I can dive into some of those, like what are those in a digital product contexts and now we can go back and forth in addressing this.

The first one I always think about is you have to have a vision, you have to have an idea. That's where basically most people start, and that's great. But ideas are easy; execution is hard. Now good ideas that there are still good ideas out there that are better ideas than other ones, but having some kind of consumer insight, some idea that is like, “ahh, there's a problem here.” We need to start from there. 

But even from there, I think of them as big challenges: you have to fundraise. So whether it’s internal fundraising, you need to cash out your 401k, you need to do the different things to get the money to build and start that Journey. You need to recruit a team. So you need people around you. You need to, if you're in an organization, to get internal alignment and buy-in. So you have a team but how do you get them on board?

How do you get them to really see what you're seeing and get excited about that and motivated for it. Then you need to actually just build a product. Can you actually physically build a product and design the designs and code the product so that it actually can work? Then you have to launch it which is like how do we get people to know about it?

And then you have to gain users, which is a whole thing of ongoing marketing. Not just “hey, we launched!” If nobody shows up, launch again. You have to launch again. So you have to gain users through that, and that's product marketing as well as just general brand marketing. 

Then you have to engage your users. Are they using the product as you thought they were going to use the product? Or how do you get them to engage with it? What features do they need to engage in that product? How do you retain users is another challenge. So, people are leaving; why are they leaving? Is it because your app is buggy and it's not reliable? Is it because they don't get the value from it? What is the reason they're leaving and should they stay? Are they the right target audience for you? And then [ask these questions] all the way through product iteration. 

So, how do you figure out what that roadmap is? What you should be building, why you should build certain things, how do you use data as well as your intuition and consumer insights that you're getting along the way to say, “yeah, this is what we should build.” 

So huge amount of challenges it’s probably ten times more the amount of challenges than that. But those are some high-level buckets that come to my mind when we talk about “what are the types of challenges you could face when building a digital product.”

Drew: Yeah, it's funny too. Looking at that list to thinking about those challenges to me, I kept having this struggle where I read one or would think about one and then I would think that is the one that's the hardest but then I go to the next one and “No! No, that's harder than this, that's harder than this.”

I just see there's such a wide range of skills necessary across all of those. I mean, you're talking about business and financial upfront. Team and leading a team, picking the right pieces, putting that together, internal alignment and buy-in, having the right personality tand people skills, to be able to talk and figure out how you can get people to buy into something, that's politics. That's what we talked about earlier in the last episode with product owners building the product.

Obviously, there's a thousand things just with development challenges and actually creating the thing. You could say, “that's the hardest!” But I still think there's so much. If you build a great product, but you don't know how to have the money to do it or the right team or the buy-in or able to launch it with good users and grow that, it doesn't really matter.

So I think that's really one of those things that crosses this whole group is, they're all dependent on each other. You know, you need to have this flow to get the right end-product, and it does take every single one of those pieces coming together, which is really hard. So I think it makes sense when they're that diverse of challenges.

Colin: Well, that's I think why I go back to the ideas are cheap or ideas are easy and execution is hard. This is every step along the way. And it's not just a linear step. Different times you’ll need to go back. Maybe you got so far, you launch the product but now you need to go back to fundraise to get to the next iteration of the thing. We need to see some traction and that's a good stewards of capital to kind of do that. 

It's definitely like there were a lot of challenges, and I believe that product owners - as the people we think are listening to this podcast - are like “yeah, these are the ones we’re going to face,” and they should know about those ahead of time. And I think one of the biggest things that they can do to face those is to keep having that North Star of “what started you on that thing?” What's the key core user problem that you're solving or customer pain point that the digital product is meant to do? And keep that vision crystal clear to your team throughout the whole thing.

That's what helps you pitch. That helps you get the team because they're motivated by solving that same challenge. It gets through all the challenges of, “oh, we’re staying close to our users.” So in all the digital products we build it's, “who's the user? What is the problem they have and how do we do that?”

It gets you to, “Hey, we're trying to summit that mountain; that's the goal. We still have the goal. Look up! That's where we're going. Yeah, it looks steeper now than it was before. Oh, we are more tired than we were yesterday. But we can keep going back to: why are we doing this? What are we doing?” 

So if you don't have that to begin with, it's going to be really hard to face some of those challenges, and that's why 90% of those startups fail. They just drop off way before they even give it a real shot because they lost the vision. They lost sight of why they're doing or they didn't have a good reason to do it from the beginning. 

So we spend a lot of time on what it must define, what that challenge is. Let's define what the idea is because it carries you through so many of the hard, dark days of building digital products.

Drew: Yep. I totally agree. So if we were to summarize all of this, I think we would just say that digital products are hard. It's difficult. There's lots of challenges in front of you. But what really matters is that you have, like you said, that North Star, this vision that you're going towards. It's clear, you stick with it, know there are challenges. 

But I think one thing we found that's probably the most important is really having a team that you trust to go through those challenges with because they (the challenges) will always be there. They will always evolve, and you just have to be able to face them together.

Colin: Thanks for listening. As always, we want to hear from you. So please reach out and give us your questions and challenges. We will try to address them on a future episode. You can reach us at podcast@differential.com or you can find us on Twitter at @BeDifferential.