Managing Risk in High Tech Product Design

Design a successful high-tech product and you are made for life. Billions of dollars of venture capitalists' money is available right now if you have the right idea. But, just like the forty-niners who trekked to Sutter's Mill, most high-tech products fail.

The truth is that no one can consistently pick the winners. It's a gamble. And because there is so much to lose, the gamble is more akin to Russian Roulette than the lottery. This makes success as much about minimising risk as about hitting the jackpot. If this product is going to fail, let me know early so I can invest elsewhere.

The Golden Triangle

During 1999, we were commissioned by a number of high-tech companies working in the golden triangle of computing, telecommunications and digital television (such as Hewlett-Packard, Motorola and Telewest). Our work focused on minimising risk through a design process we characterise as user-centred.

We manage the client's risk by providing an in-depth analysis of the context of use. The context of use tells us who is going to use the product, what they are going to do with it, and under what circumstances. One obstacle we often encounter at this stage is the complaint from clients that "There are just too many customers". Developers in particular want to design a product that does everything for everyone. But "something for everyone" results in a blurred vision of customers and their tasks.

So at this stage our role is an educational one where we show that a product with something for everyone has everything for no one. This idea builds on Geoffrey Moore's work on "crossing the chasm". The idea of the chasm is a simple one. It says that whenever truly innovative high-tech products are first brought to market, they will initially enjoy a warm welcome in an early market made up of technology enthusiasts and visionaries but then will fall into a chasm, during which sales will falter and often plummet. To cross the chasm, high-tech products must first be adopted by niche customers who find the product a total solution to their specific needs.

Reducing risk

In this first phase we reduce the client's risk by understanding the different segments of the customer base. We interview potential customers and use these data to draw up profiles of the customer groups. These customer descriptions are bolstered with pictures, artefacts and quotations to make the customers real for the developers and product designers. We even make videos where we get actors to play the roles of stereotypical customers in 2-minute interviews.

In addition to the clearer focus on customer types, we also need to understand customers' goals, needs and values. Customers have lots of needs, and some of them are more important (and more profitable to serve) than others. In this stage of the work, we identify what people want to do with the product. Sometimes we ask customers outright, but often customers have been blinkered by the confusing product offerings they have seen in the past and find it difficult to articulate their needs. Under those circumstances we watch them doing similar tasks now and try to spot product opportunities.

Back with the client, we now review a prioritised list of customer tasks and ask developers to provide measures of the implementation difficulty for each task. We then used staged delivery to deliver products that offer high value to customers in the very first release. The first release of the product will support critical tasks that were easy to implement. Later releases support less critical tasks, or important tasks that take more time to implement.

The end result

The end result? We can't make customers take what they don't want, and products will still fail. But what we can do is identify failures much earlier in the design phase-often while they still exist as ideas on paper. We then use human-centred design techniques either to get the product back on track-or we suggest shelving the product to reduce the client's risk.

Think of it as sending out a scout to the Sierra Nevada before you load up the donkey and wave goodbye to the family.
-- 3 Jan 2000

For more information contact Tom Stewart.