Whether we like it or not, product design always comes with a certain element of risk. These risks are tough to quantify. There are countless moving parts and subject to the butterfly effect, a tiny change in one area may have massive impacts in another. 

Here’s the thing: you’ll never be able to truly eliminate risk within your product’s design.  The very nature of product design is risky.  The best you can do is try to minimise the amount of risk you take by accurately assessing the threats, manage what you can, and put less on the line so there’s less at stake. 

So how can you find those manageable risks and put in place a strategy to try to avoid them or at least mitigate your losses? We take a look at the 7 steps every product manager can take to assess and manage risk for a new product design.

1. Do the groundwork first

It might seem like it goes without saying, but every good product begins with research. Every. Single. One. Before you jump into designing and building, you need to gather as much information as possible about the industry you’re playing in. This will save you a ton of headache down the line, and ensure you’re investing your energy in creating the right product for your customer’s needs.

Your objective at this stage is to take a step back from your initial product vision to investigate fundamental concepts like who your audience actually is (not who you think they are!), who the other players in the market are, the gravity of the problem you’re trying to solve, and so on.

Aim to collect quantitative and qualitative data, if you have the time and the resources. Sit down and interview your target audience. Conduct market surveys. Download all the trend reports, insights, and white papers out there. Listen to understand, and seek to learn — you’ll be surprised what you discover before you’ve even started your build. 

“The key to research is you aren’t trying to confirm a hypothesis, you just try to understand the space better. This reduces the chance you will start by building the wrong thing.” – James Billson, Founder of Primary

Checklist of questions to ask:

  • Who is my audience? Who do I think they are? Are there discrepancies between the two?
  • What problem is my audience trying to solve?
  • What’s the state of play right now? Are there any trends I should be aware of? New technologies that are being introduced? Is the industry being disrupted?
  • What already exists out there?
  • Who are the key players in the market right now? Are there any emerging players?

2. Begin with an MVP

A key step to minimising risk is minimising your build quality from the outset. Traditional product teams rely on high-fidelity designs that require a ton of research, investment and resources before they even hit the user. Naturally, high investment = high risk, particularly when your product design hasn’t been tested pre-market.

The Minimum Viable Product (MVP) is the minimum product that you need to design and develop to attract your initial target audience (i.e. your early adopters). The goal is to launch into the market quickly and on a lean budget, test the concept, then iterate based on user feedback and behaviour. Once you’ve got this, you’ll continue learning, improving and iterating your MVP until it becomes your final product.

This is a massive paradigm shift for many product teams, especially those in established companies who are likely to have a robust and thorough process of designing and developing a prototype before launching in market. Building an MVP is quick and dirty — the mantra of “done is better than perfect” is the perfect embodiment of this — but allows you to release a product quickly with minimal investment, then reduce risk by building a finished product based on actual user feedback. 

So how do you figure out which features to develop straight away, and which ones can wait until later?

Sit down and list all of the features you want a user to have at a particular phase of the customer journey. Once you’ve done this, start categorising them into:

  • Must-haves: those that are essential to the product functionality or to help the user solve their problem
  • Good-to-have: those that enhance the experience, but don’t affect the overall functionality of the product.
  • Don’t care: the features that aren’t important to the core functionality of the product and don’t significantly improve the experience.

Once you’ve added all the features and their importance, you can start to sort them out by priority based on each stage:

Product Design for User journey map

 

From here, you can design and prototype the first version of your product based on the minimum features that you need to have at each stage. Product modelling is a great method to use here, as it allows you to capture your vision and reconcile the user journey, without needing to create a full build.

Test your model with your alpha or beta users, then iterate and add in the remaining features as you go along. This will help you ensure you’re investing the least resources possible but still delivering the core value to your users.

Build Learn Measure to minimise Product Design Risks

Image source: Ruby Garage

Checklist of questions to ask:

  • What is the most important action I want my users to accomplish?
  • What other features do I want to offer?
  • How does each feature in the MVP benefit the users? 

“Invest in the lowest spend without compromising perceived quality. This significantly decreases your upfront investment and the risk of building a product that users won’t love, while also allowing you to test and improve the concept.” – James Billson, Founder of Primary

3. Evaluate your market risk

It’s every product manager’s nightmare: you pour countless hours into a product design, develop it, and put it into the market…only to find that another product out there basically does the same thing yours does.

While you can’t predict what other product teams are working on right this minute, you can do your due diligence to ensure that you’ve got your competitive advantage down before jumping into a full build.

If you’re designing something that already exists in the market, take the time to list out your competitors and conduct a SWOT analysis. Evaluate each one’s strengths and weaknesses, as well as what differentiates them from others in the market. At the end of this, you should be able to pull out some key themes at a macro level, then evaluate the opportunities for your product to stand out from the crowd.

If you’re building something from scratch, you should also conduct a SWOT analysis to understand the value your product brings to users, any potential weaknesses or pitfalls that you can identify, opportunities to grow or develop your product/market, and any present or future threats (such as tech disruption, macro-economic shifts, or new competitors).

At the same time, you need to step back and take a broader look at your market. How big is the pool of fish you’re going after, and what share do your competitors have, if any? If you’re playing in an already saturated space, this significantly increases your risk level as you need a stronger product and rollout plan to gain penetration.

“Take small steps, and iterate often. The key is to check in with your user as frequently as possible, so you can build every feature and component with confidence.” – James Billson, Founder of Primary

Checklist of questions to ask:

  • Is your product already in the market?
  • What’s the market size?
  • Who are our competitors?
  • What are the strengths of our product compared to our competitors?
  • What are the weaknesses of our product compared to our competitors?
  • How could innovations in the future disrupt the market (i.e. automation)?

4. Develop a product adoption curve

There are plenty of reasons why the iPhone exploded on the market, even though other touchscreen devices were available at the time. 

Was it the excellent product design? Absolutely. Was it the fact that Steve Jobs was a marketing genius? Definitely. Did their brand reputation have something to do with it? 100%. But part of it also boils down to consumer acceptance.

Consumer acceptance plays a significant role in the successful rollout of any product, particularly if you’re trying to disrupt an industry. If you want your product to gain traction and continue the momentum, you need to get your innovators and early adopters on board — then continue iterating and refining your design to appeal to a broader audience.

It’s really important to remember that you are not your user.  The key here is to get into the mindset of who your customers are, what they want, and how your product will benefit them.

Start out by mapping out your customer segments, then order them based on their likelihood to adopt your product. 

Product Adoption Curve by Crazy Egg

Image source: Crazy Egg

List out the features that are important to them, the problems they need to solve, and what needs to happen to get them over the line. From here, you can identify any risks to your product, such as missing features that will be crucial to win over the next group of customers.

Checklist of questions to ask:

  • Who do we think will use the MVP? Do our features address their needs?
  • Who are our early adopters, the early majority, late majority, and laggards?
  • What problem is each group trying to solve?
  • What is important to each group?
  • Does our product meet their needs? How?

“Remember that it’s all about that initial customer experience. Forget the rest, and focus on delivering a top-notch product experience that your users will love.” – James Billson, Founder of Primary

5. Weigh up your economic risk

Every product design involves a certain amount of resourcing, time, and cost. The objective of your risk assessment in the design phase is to ensure that you have factored these costs into your plan, and have the resources to design, develop, launch, promote and iterate your product.

Remember: a high-fidelity product build is inherently more costly, risky, and time-consuming than a low-fidelity build. Primary makes it easy to map the user journey and iterate your product quickly with the lowest fidelity, at the lowest investment. This means you significantly cut down the level of risk involved, while building products that your customers love.

Beyond the costs to design and develop your product, it’s key to think long-term about commercial viability. Your product margins might be solid in the early adopter stage. However, as your business grows, your costs will as well — and your margins might shrink to become razor-thin or, worse, incur a loss. For example, if you’re developing a freemium product, you might quickly find yourself spending excessive amounts on server space as your company grows. It’s important to rationalise how much you can afford as part of the onboarding process, and whether this method is sustainable in the long run.

“Keep the long game in mind. As things progress, you have to increase the product scope and quality. Make sure to include these in your design and dev pipeline, to keep things moving and continuously improve your product. “ – James Billson, Founder of Primary

Checklist of questions to ask:

  • What are the cost structures for our product? How much do we need to design and launch it?
  • What do we need to keep the product in market (i.e labour costs, sales taxes, credit card fees)?
  • How will our costs change as our company grows? 

6. Identify and map the risks to your business

After you’ve completed these steps, you’ll likely have a laundry list of risks that could potentially affect the success and longevity of your product. Keep calm, and don’t get overwhelmed — as we touched on earlier, it’s impossible to completely mitigate risk from the product design process. What you can do, however, is focus on pinpointing the most likely and catastrophic risks to your product.

Look back to your list of risks, and map each one against the severity of the risk (how big a threat it poses to your business) and the likelihood of the risk happening. For example, if you’re Airbnb, the likelihood of travel continuing to be banned is more likely than another competitor springing up onto the market. On the other hand, if you’re a brand new product launching into the market, the risk of not having enough users is intolerable and probable, while not having a nice-to-have feature in place is probable but acceptable.

Here’s a handy design risk assessment template to help:

Product Design Risk Matrix
Image source: Smartsheet

From here, you’ve got a heatmap of risks categorised from most important to least important. This matrix will help guide you through which problems to address first in your product design, and which to put on the back burner.

“Design and build for the appropriate time frame. Don’t get caught up in perfect — it’s all about the MVP.  Design and build as much as you need to go to market with your target audience, without getting bogged down by endless features or details.” – James Billson, Founder of Primary

7. Figure out what’s in your control and develop a game plan

In an ideal world, our design risk analysis would enable us as product managers to eliminate risk altogether. But the reality is that not all risks are in your control. You need to focus on what you can control, while taking every step possible to minimise the impact of those that aren’t.

Go back to your heatmap and identify which risks are within your control. These are the problems your team should be tackling during the design stage, in order to reduce or eliminate them entirely. For those that aren’t, it’s a matter of ensuring you’re ready to respond, have access to enough resources to absorb any losses, or have the right team on board to help you navigate the changes as effectively as possible.

“Keep collaboration open. Product shouldn’t just hand off to developers to simply build their vision. Keep track of previous iterations and the product design documentation process, so your developers understand exactly why a certain decision or change has been made.” – James Billson, Founder of Primary

Checklist of questions to ask:

  • What risks to our business are within our organisation’s control? 
  • What steps will we take to ensure we minimise these risks?
  • What risks are beyond our control? 
  • Are we equipped to manage these risks, and how will we handle them?

Want more product design tips and resources? Check out the Primary Learning Hub.

Minimise risk with a product modelling approach

By adopting a rapid prototyping approach rather than going straight to code, product teams can save money while learning valuable lessons about what works, what doesn’t, and where to invest next.

At Primary, we help teams to create better products, faster with product modelling, while lowering the risk associated with designing and building your vision. Plus, you can try it for absolutely free with a trial — no additional risk needed.

Get started with your free software for product design here.

What did you think of this risk assessment checklist? We’d love to hear your thoughts (or even contributions!) – tweet us @primary_app or @jamesbillson to connect. Or connect with James on LinkedIn here.