Continue to Innovate Your Products, or Die a Slow Death Make additional investments in your product and companyto prevent a slow death of your business.
By George Deeb Edited by Jessica Thomas
Opinions expressed by Entrepreneur contributors are their own.
Your core products or services are your lifeblood. They are what attract customers, drive revenues and enable a company to thrive. And, the better your products are, the more customers want it, the faster you grow and the further you distance yourself from your competitors. But, a common mistake I see with many entrepreneurs is a mindset that once the product is built, they can change their focus to other areas of the business, like sales or marketing. That mindset is their first flawed step right towards their grave.
Competition never sleeps
Just because you may have a competitive advantage in the market today, does not mean you will keep a competitive advantage in the future. Competition is an entirely fluid ecosystem. Your existing competitors are always watching your moves, and the smart ones will be quick to follow and exceed your efforts. And, new startups are popping up all the time. If you lift your foot off the accelerator for one moment, you are providing your racing competitors the opportunity to drive right buy you.
Related: 4 Steps to Innovation Every Leader Needs to Follow
Customers always demand more
Your customers are looking for you to help them innovate over time. Yes, they may love your product today, but that product may become obsolete over time, and they are expecting their best vendors to step up their game with new features and functionality over time. The minute you sit back and rest on your laurels of past success, is the same minute you should start to feel the noose tightening around your neck.
Build a three year product roadmap
To solve this problem, you need to have a continually evolving and developing product roadmap. Lay out your product vision for the long term, and tackle one major product upgrade per year (e.g., Version 1.0 evolves to Version 2.0 after a year). That makes it much harder for your competitors to chase a moving target, and will establish yourself as a trusted thought leader and innovator with your customers looking to take their game to the next level.
Related: Make Innovation Systematic and Never Again Ask 'Why Didn't We Think of That?'
Gather ideas from all stakeholders
In order to build an effective product roadmap, you need to gather inputs from all places. You need to continually keep an eye on new innovations of your competitors. You need to be in constant contact with your customers, asking them for suggested improvements they would like to see from your business. And, you need to listen to your own product team, for their own innovation ideas. So, gather inputs from all three channels, prioritize them based on which ones will have biggest positive economic impact on your business, and stage them into your three your product plan over time.
Invest over time or pay the price
I had a Red Rocket client who was feeling pretty good. Their business was spitting out healthy profits for several years in a row and didn't really feel the need to materially upgrade their products. The business was paying dividends out to the shareholders, and all was good. Until they woke up one day and realized several new competitors had launched with cheaper, faster products and their customers were complaining that the company had gone stale and was overcharging them for what they were selling. They started losing clients, were forced to lower their prices (which materially impact margins and profitability) and had to start paying refunds for the product that was breaking more than ever. Needless to say, they were not happy to learn they were staring at a multi-million dollar project to get their products back into a leadership position in the industry -- an unaffordable amount hitting all in one year, that should have been slowly invested over time.
Related: The 7 Steps of Effective Product Development
The point here is, innovate or eventually die. It won't be a fast death, it will be a long drawn-out death, and you most likely won't even see it coming, until it is way too late or too expensive to fix. Emulate the innovative spirit of Steve Jobs during his tenure at Apple, and all will be good. And, if you find yourself having to make a choice between investing in your product or investing in other areas of your business (like sales and marketing), it is most likely time to consider raising capital to afford both. Because, as I have written about in the past, your proof-of-concept (driven by sales and marketing) is just as important as your product, and you need to invest in both.
