5 key ingredients for innovative product portfolios

At ustwo, we work on products at different levels of maturity — from early stage concepts such as the Co-operate community platform for Co-op to mature products with large user bases like The Body Coach. Many of our clients are established companies with existing product portfolios, trying to solve customers’ new problems with new digital products.

It’s a huge challenge, but we know the key ingredients for the best chance of success.


1. Plant a garden, don’t build a tree

Let’s say you see a beautiful tree in a neighbour’s garden and want one for yourself, so you set about crafting one out of wood. Your tree is not the same as your neighbour’s tree - it’s roughly the same shape, but isn’t a living organism that will continue to change and grow. You have tried to rush to an end result rather than starting small and growing something that is self-sustaining and unique.

This is something we see all the time in the software development industry; organisations with mature product portfolios are threatened by innovative new entrants, and they respond by specifying and trying to build a mature, ambitious product to compete. They are effectively trying to build a tree out of wood, rather than starting with something much smaller and helping it grow. These products typically take too long to build, and either stay stuck in development, or they launch so late that the market conditions have changed.

Rather than building a tree, the key is to plant lots of seeds when your business is thriving — a collection of small products that solve one problem for one group of people really well. Some trees will fail because they don’t solve the problem well enough; some won’t fail but they won’t grow up to be huge trees either. But if you create the right conditions for innovation, one or two of those new products can scale and may end up redefining your business.

2. Get your priorities right

When we’re creating a product at ustwo, we set our priorities based on:

  • Desirability: Is there a market need for our product? Is there a group of users who want it?
  • Feasibility: Can we build it with the tools we have available, in a cost effective way? If not, can we reasonably acquire the tools and skills?
  • Viability: Are we the right company to build this product? Do we have the right business model? Does this product work well with the rest of our portfolio? Will it be worth the investment?

The key here is that all three matter. A user-focused company might conceive of a really desirable product that can’t be built. A company too focused on the processes within its own walls might build something that people don’t actually want.

An early stage product might only have a sketch of a business model, a few loose user insights and a rough technical approach but, over time, those three elements can mature into something much more robust.

3. Create the right team

The best products are built by small teams with diverse skills, backgrounds and perspectives. Larger teams are harder to manage and could waste more time, so the key here is to assemble a team of around seven to twelve people for each product or product area, while ensuring they have all the cross-functional skills and knowledge needed.

It’s equally important to have diverse backgrounds and perspectives in your team. It’s the ethical thing to do, but diverse teams also have better ideas and design better products.

Typically, you need these skill sets to create a new product:

  • Product: The people who work with the product team to set the vision and broker decisions between disciplines.
  • User research: This keeps you connected to your users.
  • Design: They make your product desirable, useful, and usable.
  • Delivery: This discipline focuses on team dynamics and creates the right environment for successful software delivery.
  • Technology: This is where the rubber hits the road, so you really need all the right development skills, which might mean having more people in this team. Try to minimise their dependency on external teams.

4. Focus on outcomes, not features

Every product needs a good roadmap so that the team can plan for what’s coming, but the best products are built by teams that can quickly respond to new market insights. What you need is a common understanding of what you’re trying to achieve with a product so you can build and evolve your roadmap of features when things around it change. You should be comfortable delegating decision making authority to the team, provided you are aligned on the outcomes you’re trying to achieve.

Your outcomes centre around two key questions:

What does this do for our business?

Does it generate revenue, give us access to new users, protect our market position? Most new products don’t generate significant revenue, so try to find ways to measure other factors that contribute to your success as a business.

How do we know if the product is going to succeed?

Agree realistic measures of success with your team. Can you show you have an active community of users who are coming back to the product? If you’re able to show engagement, then focus on growth next: can you inspire users to engage with the product more often, or reach more users?

Most importantly, set up a cycle to review and adjust these success measures to see where the team is excelling, where they’re struggling and what they’ve learned along the way. Find out how we did this with The Body Coach.

5. Launch early and respond to the market

Many companies want to keep new products secret until they can launch with lots of fanfare. There are sometimes good reasons, such as a desire to protect your brand or a strong product concept that competitors may copy. However, the fear of protecting that brand or an idea can mean many of your products never see the light of day.

“Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats.”

— Howard H Aiken, physicist and computer scientist

Innovative companies keep a stable of early stage products in development and aren’t afraid to get them market exposure when they need it. These companies also work to cultivate a community of users who like interacting with their new products.

Most companies struggle with execution, not ideas. The key to successful innovation lies in establishing a culture where good ideas can be made real. Be bold, launch something small as early as possible and respond to feedback from the market quickly.

Market feedback is crucial. Customers like brands that listen to them, so using their insights is the only way to build a strong, mature product.

Recipe notes

Our five ingredients combine to create an innovation culture that leads to successful product development. Innovation cultures thrive when a company and its teams can learn by doing, and are empowered to experiment and make mistakes. Companies can learn from the market by engaging with users and competitors, but the most important learning is often your developing culture, how you work together and how you empower teams to try something new. This is a problem the digital product development industry is always solving. While no organisation ever finds a perfect solution, the ones that put time and effort into trying will gain a competitive edge.