4 Signs Your Product Is TOO High Risk

As the old saying goes; “no risk, no reward”. In the world of product management, there’s no such thing as a risk-free product.

Some of the biggest products ever launched had huge risks of failure (cost and time wasted) but defined their industry.

Don’t believe us? Look no further than the iPod or Netflix’s move to streaming from DVDs by post.

But even in the biggest product gambles of all time, they weren’t 100% gambles. Teams saw where technology was going, validated user problems and produced something definitively better.

In short, they felt their risk was at a tolerable enough level to make their big product a reality.

There are however big warning signs you shouldn’t ignore when going through the product development process.

Read on for our top 4 signs that your product is too high of a risk (and the things you can do to make that risk smaller).

Warning lights for product risk

1. User feedback is bad (beyond the aesthetics)

Knowing how a user feels about a product during the product development cycle is an absolute must.

Granted, this can be positive or negative. Users may say your product solves a problem for them. Users may say it’s a bit hard to navigate round.

Whatever the result, you can take all these points forward into future iterations and work them into the ideal solution.

This big warning light is when you get a resounding “no” to it solving the target user’s problems.

Pushing forward with a product that has a majority or flat out rejection of your product idea is a huge risk, and is unlikely to be fixed by any number of changes to the navigation or aesthetics.

How to make your product less risky:

We’re big believers of user testing at the design phase through no-code prototyping because you can gather valuable insights on what users think early (read more about why we advocate for design sprints for product managers here).

Doing it as early in the product development process also comes with plenty of pros:

It’s far cheaper than testing with a fully working product as you don’t have to spend money engineering it before finding out if it’s a good product
You can iterate faster with a design prototype
You can verify overall usability so you don’t have an embarrassing launch

2. Scope keeps creeping

When your original idea has its scope balloon out of control, you make your product a higher risk the more the scope creeps.

Not only does allowing scope creep mean that resources continue to be sunk into the project beyond what original plans (making a live launch more precarious), but it also means you can lose focus on what you were trying to accomplish in the first place.

Outside of resourcing and focus, having the scope creep can have an impact on how competitive you are, giving other teams time to launch to market and capitalise on your delays.

How to make your product less risky:

Scope creep occurs for a number of reasons, but the risk can be resolved in most cases by robust product management early in the process.

Starting off the product development process with a mission statement of what you’re looking to achieve or questions you’re looking to answer can act as a north star for all your efforts.

Team workshops can be a great way of unifying teams early and getting them to buy into a single purpose for the product. This can prevent adding further tasks to the job that don’t solve that defined scope and prevent creep associated with having no scope at all.

Group workshops can help unify teams and best define the scope early, resulting in less scope creep.

If the issue persists that stakeholders or more features are communicated for the product, scheduling in set times where these points can be discussed and having an in-house system for managing requests can keep scope from creeping out of hand.

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3. A lack of market familiarity

Not understanding the market you’re launching a product into is an inherently risky thing to do.

In an ideal world, companies would launch products to solve problems they have first-hand experience with or know a lot about in general, helping founders build products that present real value.

If the team is on the outside of the market looking in and have no underlying market research to draw on, it’s near impossible to build a product that isn’t a high risk let alone build empathy for the existing market.

This understanding of the market also extends to competitors. The number of people in the space can also be indicative of if your product is too risky:

Too many people in the market: Oversaturation that you’ll need to solve something the others don’t to differentiate. Even then, the incumbents might aim to solve that problem first.
Too few people in the market: Makes you wonder why there aren’t more people. Is it profitability or are you really first in creating a new market category, which carries its own risks.
Companies are leaving the market: Is the market dying and even profitable enough for a new company?

How to make your product less risky:

This can be a big challenge and has multiple ways you can go about trying to mitigate risk.

Learn about your target market then get the product idea

First things first, we recommend getting a level understanding of the market. We really don’t recommend going in blind, but this can be resolved by understanding the market and the problem they face.

This can be done by talking to experts. This could be existing/potential users or competitor customers to build up your knowledge before putting forward a challenge to solve in a new product.

Conduct small tests

With that data available, you can make an informed decision about what might solve a big problem, limiting the risk for product failure.

Small tests using methodologies like the design sprint mean that you can compress what would otherwise be months of build up into a 5 day run at validating your concepts.

This could be everything from testing an entirely new product to trialing features that will differentiate your existing product from competitors.

With each set of results, you can figure out what works and what doesn’t without having to spend crazy amounts of time and money building the wrong thing.

4. Technology is moving faster than you are

Admittedly, it’d be unfair to write off all technology from the past. After all, vinyl players are back in fashion!

But more often than not, being behind on technology can mean you run a higher risk of failing.

Teams that are too slow to adopt better technology (adopting even the absolute latest tech can even be risky in its own way) often get left behind by teams that are more innovative and have found novel ways of solving the challenges users face.

In its simplest form, not being able to keep up with technological change in your product’s industry can mean spending a lot of time and money turning up to the party late.

How to make your product less risky:

Product discovery and collaboration are the main two tools for combatting technology shifts.

In product discovery’s case, this means focusing collaboratively on establishing what would benefit the customer and it’s feasibility.

‘Feasibility’ is the key word – by working with your product and engineering team, you can hear what would make the most sense to deploy, using the existing technology stack, emerging technologies and the project’s context framing the end decision.

By making technology decisions this way, you avoid deploying products and features in isolation from the outside world, and bring together experts who can help you make the best informed decision.

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