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News & Insights

News & Insights

Back to School

Russell Perkins‘s recent post a few weeks ago got me to thinking about new product development once again. I knew most of IEI’s clients when their products were in their embryonic stages and we continue to help innovators by keeping their upfront costs low so they can spend those precious startup funds as efficiently as possible. I’ve been there myself many times so I know how easy it is to fail. In fact, as Russell says, the failure, what you do when you fail, and how fast you do it are important parts of the new product development process itself.

Here’s what I have learned about the failure of new information products:

  1. Your model needs more than one revenue stream. Even a subscription-only product needs multiple sales channels, content licensing-repurposing options, upselling hooks, startegic partnership/e-commerce hooks, etc. Betting everything on a yes/no proposition means your odds are 2-to-1 and that’s not good. Poker players call this having multiple “outs,” and they know a bit about odds.
  2. Go after high-margin revenues in high-growth markets. Time and time again I’ve seen new products based on chasing dimes instead of pursuing a 2X return, knowing that that margin will bet eroded, and achieving a reasonable ROI. Aim high, take your lumps, and still wind up ahead of the game.
  3. Never, ever skimp on quality. Over-deliver and blow away the people smart enough to bet on your insight. Content investments are much cheaper than marketing investments and they always yield a high return.
  4. Solve a problem. Every professional faces serious challenges on a daily basis. Forget your ROI when you set out to solve a problem, pretend you are Tinkerbell and can wave a magic wand to solve a problem — what would that look like? That would require bleeding edge software that you don’t have? Fine. Go buy it. Pricing comes last in new product development and problem-solving comes first, second, and third.

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