Startups are faced with the need to develop successful products or services as fast and as efficiently as possible. Getting a grip on this helps them stay afloat. And we are all aware of how this leads to increased revenue, meaningful business partnerships, a solid public reputation, and more. However, startups cannot stand out from the competition (in terms of the uniqueness of the products they develop and their efficiency at product development) unless they come down to learn the many different approaches to building a successful product, and then carefully determine which approach best fits their business model. This article outlines one of such keen approaches to successful product development which is the Product Success Threshold. 

What is a Product Success Threshold?

Product Success Threshold is a term that identifies and enforces a set of minimum criteria for creating a product that will be successful. These minimum criteria all come together to form an imaginary threshold, boundary, or limit below which a product development team must not cross if they want to see their product succeed. The threshold concept is used by startups through a three-fold step that involves:

• Defining a product

Product Success Thresholds revolve around products so, of course, the very first step will be to clearly and precisely determine the product you want to develop.

• Defining what success looks like for that product

Let’s say that your product hits 10 million users, completely resolves a specific market issue, or becomes the preferred product in a target market, would you consider any of these to be a success? By answering this, you will already be creating a picture of what the success of your product will look like.  

• Defining the minimum conditions/criteria that must be met in realizing success regarding that product

What are the unnegotiable steps that must be taken to ensure that the product being developed succeeds (based on the already defined terms of success)? Outline them and bear in mind that there is no chance of adjusting the list once you begin developing the product,    

The product success threshold is designed, more or less, to build a successful product. But thresholds differ from one startup or product to another and this is because startups generally have varying ideas about products, and every new instance of a product is expected to have a unique expression of success. 

Understanding the Product Success Threshold

It is possible to think of a product success threshold as the entrepreneurial application of the “if-then” or “when-then” logic statements. Logic statements are generally used within programming languages, and the “if-then” statement is specifically applied in the operation of smart contracts and vending machines. For those who haven’t heard of it before, the if-then statement describes a condition that goes in the form of: “If” ABC happens “then” XYZ will happen. 

In terms of the three-step process of building a product success threshold, we can have that: “if '' the outlined minimum conditions are met “then” the product will be a success. Of course, this is a hard, non-negotiable declaration that following the minimum conditions set up in the threshold will result in a successful product. It details the need for development teams and entire startups to be crystal clear on what success means for a particular product and be pinpoint accurate on how different conditions will impact the success of the product. 

Relevant Metrics for Determining Product Success Thresholds

A product success threshold is unique for each product being developed. Thresholds could be determined using metrics that focus on the target market, the pain points being addressed, and the conditions or capabilities of the development team. Some of these product success metrics include:

• Product Usage and Engagement Metrics

One of the best ways to achieve product improvements is to constantly measure the usage and engagement received. Two metrics that appear useful for this are the:

i) Activity and Engagement Metric: This metric takes care of detecting/measuring the activity of users, for example, the amount of time spent using a product. It also goes further to investigate the kind of actions that are initiated, for example, whether customers are making purchases and/or subscription renewals. 

ii) Net Promoter Score: The net promoter score is a metric that investigates the possibility of users introducing a product to other users. Having such recommendations indicates a critical achievement for startups in the form of customer satisfaction. Simply, having a high net promoter score dictates that users are satisfied with the product enough to tell a friend or relative about it or even urge them to use it. 

• Product Technical Performance Metrics

These metrics ensure that a company or startup’s products are delivering as expected, whether in addressing a range of customer requirements or a very specific challenge within a market. They include:

i) Product Defects Metric: A defective product could ruin the reputation of entire startups. Assessing the defective conditions of products allows startups to monitor and mitigate these occurrences. The metric also helps startups evaluate and adjust their development solutions. 

ii) Product Downtime Metric: The product downtime metric allows startups to identify the frequency of downtime (inaccessibility or unavailability of a product). Understanding and forecasting product downtimes can significantly improve sales and revenue analysis and also manage the expectations of customers.  

It is important to realize that since the product success threshold points to the minimum set of conditions that must be met for a product’s success, then the product will be a failure if even one of the outlined conditions is not met. 

Building your Product Success Threshold

Bear in mind that you are trying to set out minimum conditions for the success of your product. If that is exactly what you have in mind, then the next few paragraphs will be of help. 

Create Product Specifications:

This aspect of building your product success threshold involves listing out the product specifications. You would go about this by reminding yourself of the problem which you intend to solve using the product. Next, you want to ask what specific aspect(s) of this problem would be addressed. Of course, this will bring you to one very identifiable reason for creating the product, removing ambiguity for your startup and the customers who will later use the product. 

Drilling down on the issue in this manner, and confirming that the solution you want to build matches the personas and immediate or relevant problems of your target customers helps to create a precise and effective blueprint of what the product should have or should be made up of. This is what is known as the product specification. 

Ensure Budget Compliance:

Budgeting is no doubt a crucial part of product and project development. The importance of introducing this into the product success threshold is to ensure that startups do not encounter financial bottlenecks and more importantly, that they do not have to abandon a product halfway - wasting both time and resources. 

The right way to ensure budgetary compliance is to:

• estimate the total cost of the product before putting a screwdriver to a bolt or writing any single line of code (including the resources and manpower to be used). 
• monitor the variation between the estimated cost and the actual cost encountered during product development, and 
• determine if there are any alterations to the actual product design, whether these variations are necessary, and how much they affect the estimated cost. 

Monitor Satisfaction of the Product Development Team

What conditions must be met regarding the development team for the product to be considered a success? One top-list item is having everyone engage with the product and monitor their level of satisfaction. For example, you may set a condition that all seven employees assigned to build product A feel that they are an important part of the team at all times. This could be followed by another condition that all new participants on the project must feel that they are being carried along by the second week after they join the team. 

Creating such environments (through a product success threshold) is thoughtful and highly productive since it guarantees that the development team is energized and motivated all around the clock. This is beneficial as a successful product is primarily the result of a successful team, referring to an upbeat mind and body across the entire workforce. 

Set and Perform Quality Measurements:

Here, you want to introduce and track all of the metrics mentioned above - and even more. You need to ensure that what you are measuring is relevant to your product or startup. In addition to this, you must be able to confirm the accuracy of the information you receive.

Finally, when building a Product Success Threshold, it is critical to ensure that your entire team is in on it. Involving everyone in this manner captures their strengths and level of expertise. It ensures that the product is achievable and that the specifications and path to market success are unambiguous. Moreover, the threshold should be fixed and unaltered once it has been established. 

How Product Success Threshold Impacts Startups

Creating an accurate product success threshold has a huge impact on both the human and material resource components of a startup. These benefits can be outlined as:

Reduces Stress on the Product Development Team: 

Product Success Threshold outlines the minimum conditions that must be met for a product to be considered successful. With this, startups do not have to push their development teams unnecessarily, Instead, these teams have a clear vision of what the product should look like and do not have to create or integrate every single feature that comes to mind. The result is that this process eliminates confusion and unnecessary deliberations and reduces the stress on product development teams. 

Increases Accuracy of Development Processes:

Let’s assume that there are two startups each with their development teams; A and B. Team A has a strategy of putting up a product success threshold before they begin any work. On the other hand, Team B doesn’t care about using such an approach. 

Team A will naturally begin by having an all-house discussion. Here, they will detail what the failure of the new product looks like. This typically looks at the engagement and performance of the product in a market. For example, how many purchases are made on a weekly, monthly, or yearly basis, and what customers think of the usefulness of the product.

Product failure can also point to the project process, for example, not having essential features ready by a particular date or lacking funds to complete the product development. This picture of failure and success helps the team to determine, at any point in time, whether the product is moving in the right direction and whether the final deliverable passes for a successful product or not.  The development process will be much different for Team B as they do not have any minimum conditions in place.  

Creates an Effective and Efficient Product:

Taking the time to establish a product success threshold is almost the same as creating a controlled environment for an experiment. In a controlled or ideal environment, you make all the necessary conditions available. You make them happen and you make sure that they happen at the right times (whether throughout the experiment or at very specific instances). 

The product success threshold intends to accomplish this kind of control over a product development process. Startups and their development teams know the conditions for the success of a product and they want to ensure that a minimum of those conditions are set, that they happen, and they happen at the right times. 

The product success threshold builds the right environment for a perfectly efficient or effective product. 

Remember!!!

A product success threshold is a meticulously crafted benchmark that details the effort startups need to make to ensure that a particular product is successful. We have broken down the concept into three steps: defining a product, defining what success looks like for the product, and defining the minimum conditions that must be met to achieve the success of the product. 

Related: Do you want to know if your business is growing? Then check out these 18 metrics

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