Products and Services

You’ve figured out your ‘why’. Product development – the ‘what’ for your organisation – can be a relatively complicated process. And it is but one side of a two-sided conundrum. In this module, we’ll deal with both sides – product development and customer development.

For this module, we’ll assume that you’ve already developed your strategy, and defined your value proposition, and defined the pain points you will be addressing for your stakeholders. If not, head back to the Strategy module.

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Video Tutorials

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Why Product Development?

It’s worth clarifying that when we say ‘product’, we use it as a generic term that can refer to: a tangible product or an institutionalised service. We are talking about something that is a solution to a pain point, the workflow has been standardised, the cost structure is roughly consistent and so is the price point. We’re less concerned about what form your product takes, and whether it’s a product or a service.

You may ask why product development is even necessary, especially if you are in the non-profit sector. It depends on your definition of the word ‘product’. Generally, we think of a products as goods, ideas, methods, information, objects or services created as a result of a process, that serve a need or satisfy a want.

But a product doesn’t just serve a need or create value haphazardly; it does so in an institutionalised manner. When we think of a product, we automatically associate it with some form of consistency or standards. Even if it is a service, there would be some consistency in the service delivery. There would be standardised process, methods and associated cost to deliver the same product. And that’s what products do - deliver value in a consistent manner.

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A 2-Sided Conundrum - Product and Customer Development

In the product development cycle, you start with a hypothesis of your product such as – potential use cases, the early feature set required, distribution channels, and pricing strategies. You develop an early prototype, then you get feedback, which helps you to validate or invalidate those early hypotheses, and then you refine and build a second version…. And the whole cycle repeats.

At the same time, you’re managing another cycle in parallel. This cycle, which can be more challenging, is the customer development cycle. Again, you start with a hypothesis of who your potential customers are. You try to define their pain points, behaviour and wants. You build a customer persona. You go out to the market, speak to people and see if your initial hypothesis holds true. You come back and redefine your customer segment and details. You come up with a new persona. You go back to the market to get feedback…. And the cycle repeats.

Product-Market Fit

Now you will go around and around both cycles, trying to balance your time between both sides until something magical happens: Product-Market Fit. This is something all start-ups and new organisations work towards. It’s when you have found a real customer segment that has a real pain that your product can solve.

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Product Development Cycle

You can find many representations of new product development cycles. Most would be along these lines:

1. You first come up with an idea.
2. And then you research and develop it further into a fully-fledged concept.
3. And you iterate as necessary.
4. From the concept you develop it further into a...
5. Prototype.
6. And again, you iterate as necessary and test the prototype repeatedly to get the right feedback until hopefully, you get your...
7. Minimum viable product or service

And this is an iterative process.

What Product Does a Convenor Sell?

At Asia P3 Hub, we soon realised that if, like us you are a convener, a connecter, a broker, or an ecosystem builder, there’s an added layer of complexity. This lies in the fact that we have no clarity of delivery capability, since it’s not fulfilled by us.

Let’s revisit our ‘why’: We exist to tackle effects of poverty by enabling multi-sector partnerships to create solutions which multiply resources, break poverty cycles and benefit families, communities and societies. In other words, we convene multi-stakeholder partnerships, bringing together unlikely collaborators to co-create market-driven solutions to development and humanitarian problems.

If we were developing software, we’d clearly know what our internal capabilities are and be able to propose projects and ideas that are within our means of fulfilling. However, as conveners, we are the middle-men and it’s challenging to match supply and demand when we don’t have clarity on whether supply is possible.

For example, when Asia P3 Hub first started, we wanted to see how we can leverage World Vision National Offices’ footprint to create market-driven solutions. But we didn’t know the capability and capacity of each and every National Office. Without having visibility of that, it was difficult for us to figure out something of value that prospective partners can engage with. It was almost like selling something when you don’t know whether it existed, or could be realistically fulfilled.

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Working Models to Define and Test Boundaries

We came up with a workaround that we called ‘working models’. Basically, it is a rough boundary or an operating domain within which we’ll operate. We defined at a very high level the possible modes of engagement between Asia P3 Hub’s partners.

We set the parameters, so we had a rough outline for conversations and discussions. It allowed us to define whether a project request was suitable or not. We set expectations from the outset that there was no guarantee we could deliver, as the execution for some projects was outside of our control.

This ‘working models’ approach was a bridge between certainty and uncertainty, that gave us the opportunity to refine and develop our offering further as we got more clarity of what all the parties involved could do.

Working Model/ Operating Domains

• Defines high-level modes of engagement between partners.
• Sets rough boundaries to allows conversation to be started.
• No guarantee that there will definitely be a match between partners, but should ideally result in some pilot projects for feasibility.
• To be refined and developed further with more clarity.

We decided on 4 working models or operating domains. We will:

1. Source and match effective solutions with problem statements from the field.
2. Co-create solutions that scale.
3. Leverage on last mile access of World Vision.
4. Cultivate and grow the multi-sector ecosystem.

From this, you can probably get a sense of what we want to do, although you may not know exactly how we will do it. And that’s precisely the point – we didn’t either at this stage in our journey.

How to get to a working product starting from a working model (for our fellow conveners, ecosystem builders or middle-men):

1. Use proposed working models to define rough operating boundaries or just to facilitate conversations.
2. From discussions within your working models, hopefully you’ll end up with a suggestion that goes further, resulting in a pilot project. The pilot project will help to understand the interests of all parties involved, test partnership models, and gauge operational viability for future reference.
3. If the pilot project works, try to institutionalise it into something more structured, which will begin to look like a prototype of a product. This prototype should ideally incorporate key learnings, best practices and workflow from the previous pilot projects. It should help to validate assumptions and risks with prospective end users and be a tool for testing. Most importantly, the prototype should help the prospective customer understand what the final product will look like.
4. The end goal is a minimum viable product or service, which we define as a streamlined, scalable and working product or service. It has bare-bones features that will fulfill the end-user’s needs; it has defined early users and customers; and we have a rough idea of a preliminary commercial model.

We reiterate that ‘working models’ is a workaround for people whose hub, alliance or department will act as conveners, brokers, or ecosystem builders, where you may not have clarity or control over the fulfilment of projects. If you have more control over the delivery and fulfilment of projects, you can probably skip this and follow a typical product development cycle as above.

From Working Models to Products

How did we progress from working models to more developed pilots and ‘products’? It’s important to note that all these working models were developed when we were hosted by World Vision International, so they are skewed towards that.

1. Source for effective partnering solutions for national needs

   We didn’t have to look too far for this. When we started out, Asia P3 Hub was highly focused on Water, Sanitation and Hygiene. And Kohler Company had been a long-time partner of World Vision globally. So, we worked to expand the partnership across Asia including to Vietnam, Indonesia, Thailand, Malaysia and Philippines. We eventually took the partnership to the next level by developing a 13-year strategic roadmap between World Vision and Kohler in the region.

2. Co-create scalable platforms and solutions

   What do we mean by scalable? There is a difference between scalability and replicability. Scalability means that the more times we do something, the easier, cheaper and faster it becomes. Now this is a lot more challenging.

   We were fortunate that we got to partner with World Vision Canada, U.S. and the Philippines to build the Social Innovation Challenge (SIC) platform. The SIC is a human-centred design open innovation platform for social impact. We source real social challenges in developing countries that World Vision serves, curate these challenges and put them onto a web platform, inviting contestants globally to participate. We just concluded four challenges successfully this round, and in the next round, we have more countries participating. This hopefully increases the value of the platform and decreases the cost of executing each challenge over time.

3. Leveraging WV’s Last Mile Access & Assets In New Ways

   International NGOs like World Vision have an amazing geographical footprint, including unrivalled ‘last mile access’ that prospective partners can leverage in new ways. By last mile access, we mean access to communities in rural, remote and hard to reach places, who are typically poor and living off-grid without access to key technology and infrastructure. We did a pilot project with water filtration company Solar Water Solutions, where we helped them with market penetration and product testing in Sri Lanka and Indonesia. It was much more cost effective for them to partner with World Vision in these countries than to fly their team in, and try to test products in markets they’re not familiar with.

4. Cultivating the Multi-sector Ecosystem

   Finally, we want to be a key driver cultivating the multi-sector ecosystem across Asia. We conducted a series of learning and networking events, and one of the more valuable convening projects we did was with Seagate.

   We collaborated with Seagate to convene a roundtable with government agencies, prominent companies and even World Vision China to discuss the e-waste generated by printed circuit boards and its impact on the environment. The project also included a detailed PCB e-waste whitepaper, and Seagate is collaborating with industry players to take this initiative forward.

Based on your working models, your team can determine the concrete products and services that it will offer to the market. Some factors that your team needs to consider are:

Factor	Action
Customers	Identify potential customers and determine what they want from your team or Hub.
Competitors	Develop products with consideration of those offered by other players in the market.
Resources	Make sure that your team possesses the necessary manpower, expertise, network, initial financial investment for product development and, if any, external resources to deliver the products and services.
Positioning	Examine where the team wants to position itself in the marketplace.
Potential Income Generated	Of all the possible products and services that the team could offer, it would make sense to specialise in those that brings most value either to your team, your parent organisation, or to the ecosystem as a whole.

We have taken our 4 working models to differing levels of maturity – as shown in the chart below – some are at the minimum viable product stage, some are still in solution prototyping stage.

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Customer Development

Why is customer development necessary? The answer is, you don’t yet know who your customers are.

If you’re an established organisation with a mature product, you would know exactly who your customers are, what their pain points are, and why your product or solution is a painkiller to their pain. But if you are in the new product development cycle, that means your product is being developed, which probably means you don’t have a user or customer base yet. How do you find out who could be the customers for your products?

Who is the customer?

First of all, it is important for us to define what who we mean by ‘customer’:

• The customer is one who buys or pays for your product or service.
• The customer may not always be the user or beneficiary of your product. This is an important distinction to make, especially for charities/ NGOs.

Regardless of the nature of your products or services, you will find that your customers tend to spread across the below adoption curve.

• The innovators and early adopters who make up the first 16% are the people who are eager to try the latest things, even if they may not work completely.
• However, to be able to push your solution to the remaining 84%, comprising the early majority, late majority and laggards is a colossal challenge.

In his book Crossing The Chasm, Geoffrey Moore calls this gap between the early market (16%) and the mainstream market (84%) ‘the chasm’. The only way, he suggests, to cross the chasm, is to be laser-focused and to conquer one niche market at a time. Each niche is defined by how you segment your market, maybe it’s by industry or customer demographic. Over time, if you conquer enough niches, you will eventually be able to move your product or service into the mass market.

Geoffrey Moore Crossing The Chasm

Understanding your Potential Customers

In order to understand your potential customers, you need to know their personas. Who are your customers? What do they look like? Where do they hang out? What do they do? Why do they do what they do?

Once you truly understand your customers, you can figure out how to reach them. If, for example, you’re providing an on-demand salad delivery solution, you’re probably reaching out to health-conscious people. Where do these health-conscious people hang out? Should you put your advertisements in all the gyms?

See the Exercises section below for how to define your Customer Persona. Once you have a rough profile of your customer, the next thing to do is go out there and validate. There are no solutions within the four walls of your office. The only way to progress is to step out, talk to people and find out.

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Putting it all Together

You will have to iterate on both product development and the customer development cycle simultaneously. But how do we put them together?

One of the fastest ways to put your hypothesis of product and customer development together is probably using the Business Model Canvas.

The truth is, there’s a lot of trial an error involved. We put forth a hypothesis of our product and our customers and we test and validate and then come back and revise the business model canvas again. This cycle repeats until, if we’re lucky, we will eventually… get to product-market fit.

When it comes to new product development, it’s always better to start quick and iterate fast, than to over-analyse and build slow. Here’s a TED Talk video that illustrates the benefits of rapid prototyping.

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