What is Total Addressable Market
Let’s say you’re a product innovator with a great idea for a startup. Or you’re a product manager working on a potential opportunity that your group can pursue. Through […]
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We’ve done TAM based on market research, our target market, population, demographics, %ages, etc. making assumptions based on how much of the addressable market you want to capture, which helps with financial projections and expected growth in your story, pitch deck. Many investors want to see the research done, your analytical thinking and explanation as to why and having these assumptions, estimates documented. Instead of a number out your you know what. This project is at that stage of getting your feet wet and visually seeing whats out there as a TAM and coming to an agreement with the logical way of thinking it all through and that things make sense on paper in number and visually to a 5 year old and grandma in a story, pitch deck. This project is at the stage of validating that this is a viable product, solution and there is an opportunity, need.
The algorithm, solution that will be what sells this, if and how it progresses based on what is all gathered after the upcoming exercises then yes, that will be the data that people will salivate over to make this attractive to investors and a bigger pool of users for traction, sales, potential strategic partners. Will this be IP? An API? Something that can be white labeled? This may pivot, may wound up reverse engineering, etc. Would love to see what can be put out here for demo so that we can see, as well as a beta test for users. I like the forward thinking.
Nice drafted post, Vipin.
TAM, in its most nascent form, is an estimate. And I have seen a general tendency among product owners to over-estimate this item. TAM is often the foundation for many revenue projections, so there is incentive in keeping it high. This tendency is so widespread among presenters (seeking funding) that I have seen an almost cynical rejection from (investment) evaluators. The evaluators usually begin their analysis by ripping apart the TAM figures.
However, good product owners take it as an opportunity. If TAM calculations are done properly and logically, then it can be an instant trust-binder with the evaluator.
Professionally done TAM analysis is a great indicator of product owner’s diligence (in my opinion).
@k4dwin Great points Kim. I’ve seen it done, understood, and calculated so incorrectly so many times. There may not be ONE right way to make this projection, but as you point out, it is the analysis and logical thinking behind it that is more crucial.
@vinayvd Great to hear from you Vinay. You hit the bull’s eye with the comment about the rejection from the investors. So easy to get carried away with bloated numbers.
Importance of understanding user needs
The quote above by Henry Ford is used often in business and strategy discussions. But it can also be misinterpreted in the context of product innovation and […]
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Nice article. If we built IT, they will come — mantra has proven wrong for many startups, ideas and a fail. Lots of lost time, sunk costs, large expenses into making something ‘cool, shiny and new’ people ultimately won’t use. Have to think about processes and end goals (psyche, behavior, trends, research, target market, ideal customer, business model, etc.). Create things that solve a pain point, bring an opportunity – is something people would want to use and benefit them. Anytime you can make a process, situation easier, based off what can be done as a favorable outcome, can lead to success. We, as users of many things, don’t buy or use things without doing research, seeing how something meets our needs or makes our lives better (in personal and professional lives). (Most) People like efficiency, results, and more importantly, an engaging and customized user experience. This can happen with lead gen.
Right on Kim. Every now and then it is possible to get lucky with “Build it and they will come” and create something successful, but the odds are usually stacked against you. And JTBD is just another way to create a structured way to understand users at a deeper level.
JTBD is powerful in that it focuses on the user (the essence of user-centered design) rather than the capability of the seller. The user doesn’t know what will solve their problem and neither does the team trying to find a solution. There is value in solving pain-points for users rather than showing off the latest shiny-app that you created using a recently developed framework. JTBD can help discover these pain-points – which can act as input for brainstorming solutions.
Discovery is what most businesses and product innovators and managers tend to go light on. using intuition can feel so much faster and more fun at times. So any methodical way of really avoiding product innovation which is purely intuition-based just increases the odds of succeeding. And JTBD can certainly be one of those tools
Well written article Vipin. Completely agree with the benefits of JTBD framework.
Thanks, Pras. Look forward to hearing more thoughts if you apply it in more initiatives. It can be quite powerful if used with intent.
Can you think of any company or product that appeals to and serves the needs of EVERYONE?
A Ferrari doesn’t work as the car of choice for a suburban family of 6 and a rich celebrity will most likely not buy a […]
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Very well written article Vipin as usual. opens with a hook with facts & figures & proves the point of knowing the users is vital. Though you are covering needs & wants, ‘Jobs To Be Done’ could also have been included explicitly in the template. Best example of JTBD was in your prev blog post abut McD innovating on milkshakes based on JTBD.
@pras Great points. Needs discovery and articulation is a crucial topic that requires thorough treatment. I will be posting about a couple of frameworks (including JBTD) in the subsequent posts. Developing the user personas is almost a pre-requisite to get that right because each persona will have their own sets of different needs. Stay tuned!
This article comes at an interesting time, Vipin – especially when there is a new school of thought being floated in the UX community about the ineffectiveness of personas. The premise of that argument is that the ‘why’ behind creating a persona is not understood by stakeholders. It just becomes an exercise/compliance check to create a persona with oftentimes irrelevant information like ‘Hobbies’ and ‘Proficiency with computers’ (although these may be relevant for some use cases) – which people blindly use as its part of a template.
When we created personas for our Capstone project, the next day onwards, in all the project meetings we used to refer to the name of the persona to make our point – like “Jack would love this feature because it caters to his need for faster checkout” OR “Jane may find this helpful too considering her need for assistance during checkout”. As a team, we truly related to the persona and I found it helpful.
@rsridhar You raise a very important point. Using it superficially will only result in feeling good about doing the exercise, but may not prove valuable for the goals of the product or business. The same can also apply to almost any method/framework approach. They are available to enforce a deeper, more structured way of innovating and it all begins with understanding the customers(or potential customers) as much as possible. The other big issue with personas is the disconnect between the product management teams and marketing/sales teams. Personas can truly help in the creation of a compelling competitive product strategy.
Very helpful article! Recently I came across some personas definition very narrowed down and more oriented to be built as a real person rather than focusing on the interesting habits of interest for the purpose of the product development or improvement.
More often I hear talking about a specific category of personas, “buyers” personas, mainly developed by marketing people. Is there an actual difference or just another way to name personas?
@rosanna As briefly mentioned in the post, personas can and should be used by marketing teams to identify the profile of people the product should be marketed to (just like product teams create them to create the profile of people who will be using the product). Buyers personas can be different from product/user personas if the buyers are different from the actual users. For example, you may develop an office product that will be used by employees, but the buying decision is made by the executives at the company.
Vipin Makhija wrote a new post, How to Use Quantitative Research for Product Innovation 5 months ago
If you don’t know what problem you’re trying to solve and for whom, all solutions will look good.
If you’re a product innovator or a marketer, especially in a new space, you need to have a passionate and […]
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Perhaps you can try a focus group, small roundtable of agents. Ask a few targeted questions and offer a gift card or giveaway or something.
@k4dwin Using small focus groups, as you state is definitely a good method for qualitative interviews.
When the need is to project to and test with a large audience (potentially 100s) and geography (say across the country), a quantifiable online survey (as part of the quantitative research) is the recommended approach. What other methods do you think can be used for testing out a product concept with 100s of users?
Sorry, just now seeing this. While having a license to sell real estate in all states and the requirements are different, each individual has to go through professional development to keep up their credentials annually. Perhaps you can reach out to RE course providers that offer professional development (this is just something I googled as an example https://www.kapre.com/real-estate-courses/new-york) and tell them that you are working on a project and ask if they have a weekly or monthly newsletter or email they sent out to their mailing list, subscribers and ask if you can write a blurb with the survey link to get exposure and generate interest. Can also check with the state entity responsible for upkeep of licensing renewals and fees and ask to write a blurb with a survey link to get exposure and generate interest to their subscribers or on their website. You can also start posting on RE bloggers sites comments and eventually share the link on occasion. Same as I mentioned with agents on Twitter. Create A Landing Page using WP as well sharing something about the project with a CTA to start collecting emails of agents. All the best!
Nice thoughts on quant survey. Just wanted to know how it should be used in product research if it is not the sole determinant
@varuns None of the research approaches should be used as the only method or criteria for product innovation. Even if the research points towards a good product market fit, feasibility, commerical viability are all important factors that need to be considered. Research however should absolutely aid decision making.
If you’re starting out to build your first survey – then my recommendation will be to test it with a few people to see the ‘quality’ of your questions. The responses to your survey questions will force you to rethink your questions to get the data you need. Qualtrics provides a tool that allows you to insert dummy data into your form which can help you do a quick analysis of your questions.
What I’ve also found is that it’s easy to blur the lines between wanting qualitative information from a quantitative survey – the point of the survey is to see ‘how many people said X instead of Y’ and not to get individual subjective comments from all survey respondents.
I’ve also found it useful to build multiple hypotheses based on the qualitative research that you want to validate in the survey.
Good points overall and well-structured @vipinmakhijaipin. The link to test statistical significance was really cool. Thanks!
Great points @rsridhar. Especially around doing a “test run” of the survey in the process of refining it.
I haven’t personally used Qualtrics for analysis but will take a look at its capabilities.
The definition of a quantitive research gave me an important learning point: defining questions that allow to collect additional insight or trends rather than validate the data and information available with the market research already available.
I am willing to see how to actually handle with the data received, how to cross them with the other data available for the following step of the process
@rosanna That’s true. That’s why it is so important to have a clearly defined research intent and strategy upfront. That enables constructing the questions so the most important aspects are surfaced when the results are available.
95% of 30,000 consumer products launched each year fail. https://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing
Let’s imagine you have an idea for a new product or service innovation. If you want to […]
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Interesting stuff. Yes, the if you build it, will they come — waste.
Let’s bring on surveys. It’s also good to get another round of qualitative, check research for any current happenings if necessary to continue to narrow the scope if needed. So curious to see where this will go.
Oh oh the places you’ll go – Dr. Seuss ;p.
@k4dwin RIght on Kim. It’s never either only one type research. Qualitative, quantitative, industry research all go hand in hand in fulfilling the overall research objective.
This is a challenging phase of product discovery. One thing I learnt from our discussion Vipin, was that you always need to keep the research goals at the forefront when mining the data for insights. We can’t be solving each and every user problem/pain-point. The empathy map was a useful tool to structure this analysis.
It’ll be interesting to see how the quant survey goes – should either reinforce what we’ve learnt from qual interviews OR force us to critically think about pivoting; and if it’s the latter – where do we pivot?
@rsridhar It’s easy to get carried away sometimes isn’t it, especially in qualitative interviews and user discussions. Having a vision set up upfront around the key objectives of the research, are immensely helpful in being effective.
This 7 steps is such a helpful guide! Synthesizing user interviews is really challenging, especially when you get insights that are contrary to your initial hypothesis or assumptions. The empathy map was also useful in guiding me in making my synthesis.
Looking forward to how we’ll process key findings from interviews and our next steps.
@aougarcia It is a lot of science and a little bit of art. There’s no such thing as perfect research, but user interviews almost always throw a few (useful) surprises.
Very useful and helpful guide. Analyzing the interviews let you reflect on other potential direction to explore for the product innovation and that is however related to opportunity hypothesis.
What I am finding more challenging is linking and relating the industry research data and information, more at higher level, to the narrowed down specific experience of the users interview.
What I was wondering is if the qualitative phase should have a large group of users interviewed to have more experience to compare but also including the insight emerged from the round 1.
@rosanna To your point about having a large group of users for comparison, yes absolutely, however, there comes a point, when it doesn’t add further value, and synthesis of user interviews (especially 1-1) is a very time-consuming exercise. In my experience, a general rule of thumb is to try to go for 6-8 interviews in a particular segment.
The 7 C’s approach is very well drafted considering the failures and success of product launches . Considering our Real Estate project, once done with the industry and user research we need to focus on what job of realtors for getting quality lead are we trying to do? Are we focusing on the pain points like lack of trust, less knowledge of real estate buying as a buyer, financial barriers or are we focusing on emotional needs like choice of location, friendly neighborhood, infrastructure.
Also, I agree with @rosanna that number of users are less for synthesis so, following the 7 C’s approach recursively will give more concrete results after increasing user interviews in a phased way.
@ronitmhatre Good points Ronit. The goal and objectives of the research will determine the expected outcome.
The actual creation of solution is a subsequent step and requires its own sequence of stages and analysis.
The 7cs seem like a methodical way of doing qualitative analysis. During my individual analysis, I realized I heard some of the pain-points during parts of the conversation when the agent was not really answering a specific interview question but was sharing a recent experience. It would be interesting to see if the quantitative survey would align or misalign with the qualitative analysis.
@Runa Very true. Some of the most insightful findings can come when the user shares their own experience freely. And that’s exactly where followup rounds or a quantitative survey can help validate findings with a larger set of respondents.
I loved the HBS article Vipin. So true.
We need to think of RE Agents’ Jobs to Do & how are we making that easier & efficient.
On the blog post itself I am thinking should ‘Consider’ be the 2nd step. After ‘Consder’ you can ‘classify’ answers & insights. That will complete classification process. Also ‘consider’ itself is a lighter word & not truly reflective of the tasks in that step. We are trying to come up with motivations & insights. Just my 2 cents.
Though you are trying to differentiate between step 4 & 5, I think there is lot of repetition between them.
For ex – ‘create actionable intelligence and recommendations’ should be part of ‘conclude’. How can we conclude with any of the above ?
Steps 6 & 7 should be sub steps of ‘Conclude’ ( which should be the last step in my opinion).
Hope this helps ! Appreciate your effort in blogs & that stir up thoughts !
@pras Interesting points Pras. In the end remember we are parsing, analyzing, and eventually synthesizing free-flowing , natural language (including understanding some unsaid things). So any method that creates an approach to truly empathize with the users and enables the researchers to avoid assumptions and biases can be embraced. As long as there is a conscious formal exercise to try and convert the answers from the users into intelligence that can be actionable.
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