The Right Product at the Right Time
How to think through market timing when building new products
QR codes in the wild!
I first heard about QR codes in 2008. Way back then, my professor teaching Internet Marketing at the Kellogg School of Management excitedly proclaimed that QR codes would be a game changer for marketers. He was really bullish on it, and my classmates and I nodded along - our minds likely more focused on Friday’s TG than dwelling on the future of QR codes. For more than 10 years, it seemed like our inattention was well placed. QR codes were nowhere.
And then, the pandemic happened. It seemed like QR codes magically appeared everywhere overnight. Even restaurants that previously refused to take anything but cash were now putting QR codes in their windows so that you could pull up menus or even place your whole order online. Everyone - from teens to grandmas - learned, adjusted, and embraced QR codes as a means to keep up our pre-pandemic lifestyles. It turned out that my professor was right about QR codes, but it took much more time than he had expected for that vision to come to fruition.
Building the right product is important. You need to make sure that your product solves problems for your users better than other alternatives. But what’s equally as important? Introducing your product at the right time.
Early to Market
As this example with QR codes demonstrates, being too early is hard. If you’re early to the market, then the market may not exist. You are not just selling your product, but selling the category.
New technologies like Virtual Reality and Augmented Reality require almost a betting mentality.
For example, in Meta’s Q4 earnings announcement last week, the company shared that it had increased spending on research and development by 35% and lost $10 billion in 2021 from its Reality Labs business segment. Which is all fine and good if you have the deep pockets to fund R&D, but many startups or smaller companies do not. These massive investments in research and development may not result in a return if the metaverse fails to take off with consumers.
Sometimes it’s not a lack of interest in the product, but that your product is dependent on complementary technology that does not exist. Going back to the example of QR codes, QR codes were first invented in 1994 and they were slow to gain traction for many years until this period of mass adoption more than 20 years later. They found their moment when two factors aligned: a smartphone capable of reading QR codes sitting in every pocket and the pandemic creating a massive, compelling use case for QR codes.
Late to Market
On the other end of the spectrum, being late isn’t great either. If you’re late to the market, then users often have many choices. Even if you offer a superior product, it may not be significant enough to justify switching costs or dislodge brand loyalty. Users may feel that the alternatives are good enough.
When Snapchat first pioneered Stories in 2013, it was novel. A user could string together photos and videos into a story that was accessible to your followers for 24 hours before it automatically disappeared. This new product addressed a user’s need to share your experience in the moment, but not wanting the random photo of you eating pho on a rainy day to persist into perpetuity. Within a few years, every social network rolled out Stories - with Instagram Stories launching in 2016, Facebook Stories fast following in 2017, and even professional social network LinkedIn joining the fray in 2020.
LinkedIn was late to the party and faced a crowded market where users had many places to choose from when posting Stories. Users were already using Snapchat, Instagram, or Facebook for ephemeral sharing, and having the same functionality with the tweak of being targeted for their professional network was not a significant enough differentiator to warrant switching to LinkedIn. A year later, LinkedIn Stories was shut down.
Key Questions
When you consider your product strategy, you may want to ask yourself a few questions to diagnose how mature the market is and guide your thinking on how your product will be positioned.
Is there existing demand for this type of product?
What dependencies does the success of my product have on other products, services, or technologies?
What competitors, substitutes, and alternatives to my product exist? What differentiator do I offer?
Nailing the right timing is critical for your product’s success. If demand remains latent and dependencies are not ready, then it may be a long road before your product is primed to do well in the market. On the other hand, if demand exists but many competitors are going after the same user need, then spend time honing in on the unique value proposition that your solution provides.
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