Top 3 Early-Stage Product Design Mistakes Startups Make: Not Understanding Market Requirements

TL;DR

Building a brand-new product is hard. You have to understand the lives, workflows, and requirements of the target customer you are building for. Not understanding market requirements is one of the most common product design mistakes startups make. By having a solid understanding of the market requirements, you can build your product faster and get it to the customers faster, too.

Preamble

Ackcio is over seven years old now, and the products we sell have matured and hardened over time, thanks to the feedback we received from our clients in over 45 countries. We currently mass-produce our devices in batches of 1,000s. However, it took us a long time to get to that stage due to several mistakes we made when we first designed and built our products at the beginning of our journey.

In this series of blog posts, I will walk you through the journey of building a brand-new product and explain how to avoid some mistakes in the process. This will also allow you to go to market in a shorter timeframe. You can find the other posts of this series through the links below:

Episode #1: Not understanding market requirements (this post)
Episode #2: Over-reacting to market feedback
Episode #3: Building services instead of products

Episode 1 - Not Understanding Market Requirements

Context

As I explained in the first blog, Ackcio came to life under the Entrepreneurship First (EF) accelerator programme. EF classifies every founder into one of three buckets:

Technical Edge founders: founders with some deep technical expertise in a specific technology (e.g., PhDs/MSc. in a particular field, technical work experience with a technology like AI, etc.)
Domain Edge founders: founders that have deep expertise in a specific domain due to their work experience (e.g., many years of work experience in a particular industry or field)
Product Edge founders: founders that are generalists at building solid products (e.g., software engineers)

According to EF's historical data, their best-performing companies were founded by founders with a mix of the above three edges. For example, consider a company founded by a dentist and an AI specialist to solve a problem in dentistry. The dentist has a domain edge, and the AI specialist has a technical edge. So, they know how to solve the problem when they get together.

When it came to Ackcio, we didn't have the advantage of having a mix of edges. My co-founder, Mobashir, and I fall into the technical edge category. So, neither of us had a clue about the industry for which we were building our products.

This is both good and bad. As non-insiders, we can see problems with a different and fresh lens. It is also bad because we have never been in the shoes of our target customer, making it difficult to understand their day-to-day lives and pains. Understanding the customer is the most important thing a startup must do, especially at the beginning.

So, lacking any domain knowledge about geotechnical monitoring, which is the industry that Ackcio would serve, we turned to the next best option. We onboarded two companies in Singapore as advisors and got them to 'teach' us about the industry. This worked for us at the beginning. We engaged them closely, and they shared their expertise with us lovingly. Based on this newfound industry wisdom, Mobashir and I got down to work.

Early Product Designs

This was sometime in late 2017. The team comprised Mobashir, three engineers we hired, and me. We all got to the office early one day and asked ourselves the million-dollar question. What are we going to build first?

By this time, we had a working prototype device capable of wirelessly transmitting readings from a tilt sensor used in construction projects. So, we thought of first releasing an Analogue Node that can help companies monitor all sorts of Analogue sensors.

Our two advisory companies gave us a few tilt meters they typically use. We looked at their spec sheets, and they were pretty simple. The sensors required a 12V input power supply and an output voltage from 0 to 5V, depending on the tilt angle they measured.

It took us a few days to design the electronics needed to power and read the sensor and then pass on the sensor reading to our system on a chip (SOC) that handled the wireless transmission. We prototyped the solution, and then we designed the end-to-end product.

In a matter of weeks, our first Ackcio product was ready to launch. We beamed with pride, high-fived each other in the team, and went for a team lunch to celebrate. Just like that, we gave birth to our first baby—the Ackcio Analogue Node, which was meant to be compatible with ALL analogue sensors.

Eary stage startup product design mistakes — Very first Ackcio Analogue Node we launched

Getting Surprised

With the Ackcio Analgoue Node under our belt, we decided to meet some potential clients to sell this product.

That's when we got our first surprise.

These new clients we met, had totally different analogue sensors. Some of those required a -12V power supply. Some of them had a -5V to 5V output. Our Analogue Node couldn't support both such inputs or outputs. And without that support, we realised that we were not going to be able to sell many of our Analogue Nodes.

We went back to the office, got the team together, and discussed about how we can tweak what we have to support these newly discovered sensors. It didn't take us long to figure it out. We had luckily used a design that allowed us to change the parameters to suit these new sensors. We took a few weeks to make those changes, and with a spring in our step, we went to meet the clients and proudly showed them our new and upgraded Analogue Node.

Those clients liked what they saw. They got too exited and started rummaging through their storeroom to find different sensors to test with our new Analogue Node.

That's when we got our second surprise.

Out of nowhere, they pulled out a tilt sensor that had a totally different operating principle. That sensor needed 24V of input power and the sensor's output was a current loop ranging from 0 to 24mA. Their storeroom had plenty of those sensors. They said we have to support them.

We knew we were screwed. There was no way to tweak our existing design to support those sensors. We supported only voltage-output sensors, not current loop-output sensors. So back to the office we went with our hopes and dreams crushed and burnt to ashes. The dollar signs I had in my eyes before the meeting were replaced with tears. Nevertheless, we held our heads high and decided to find a way to solve this problem.

Rapid Iterations and Creative Problem Solving

Changing hardware product designs is expensive. It takes a lot of time to redo the electronics design, test it in simulators, make prototypes, test them, and then mass produce them. Given that we had already mass produced a small batch of our Analogue Nodes, we didn't want to throw them away. So we needed to figure out a way to support 4-20mA sensors with the existing devices.

Our team came up with a smart idea. We made a pluggable adapter that could support 4-20mA sensors with our existing devices. It didn't look great, but it got the job done. So whenever clients needed to support for 4-20mA sensors, we provided these adapters to support them.

Like this, we went through many rounds of discoveries that helped us identify shortcomings of our products. Being nimble and receptive of feedback, we iterated quickly and improved our product capabilities.

Iterating Products is Important

Iterating products based on client feedback is a key winning criteria for startups. It is important to provide a basic version of the product for clients to test, get their feedback, and then improve the product.

However, the challenge for us was that we didn't know well-enough what the product should do due to the lack of knowledge about market requirements. Our advisors were super helpful, but their advice and feedback were limited to their project scopes and experience. That's why we got surprised when we met other companies from the industry.

If we had known about all the types of sensors used in the industry, we could have designed our first version product to cover all the sensors in one go. With the absence of that knowledge, we spent a lot of time making incremental discoveries of market requirements that required us to keep making changes to the product, which delayed our go-to-market speed.

So it definitely helps to have a domain expert in the team. We surely could have used one.

Mistakes Made

Building a product with no industry knowledge and expertise and instead relying solely on advisors' feedback to obtain critical information needed for product design.
Not doing our own market research into the industry when information is readily available online.
Not speaking with more potential clients at the beginning to obtain feedback.

Lessons Learned

Have domain experts in the team that have lived and experienced the customers' pains, and their workflows.
If you can't get domain experts to join you, onboard as many early adopters as possible and get their help during the product design phase.
Arrange joint feedback meetings with early adopters so that you get unbiased advice, which prevents you from fine tuning product to meet the needs of any particular customer.

So, there you have it. This is one of the biggest mistakes we made at Ackcio. Hopefully, you will learn from this and get your products to meet market requirements as much as possible right out of the gate.

Conclusion

Having a solid understanding of your customer, their problem and requirements are mandatory to prevent costly product design mistakes at the beginning of your startup journey. With this knowledge, you can build your products faster and iterate on them quicker, which will allow you to have a polished product that is ready for broad market adoption in a lesser amount of time.

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Onwards and upwards...