Recently we published a post here about the fatal flaws that led to several products’ untimely demises. Cautionary tales shared in hopes of preventing history from repeating itself if you will.
There are always two sides of a coin, so today we’re taking a look at a handful of wildly successful products, and key reasons behind their success. Of course, we cannot prescriptively write a formula for how to make every product succeed, but these successful products’ tales of success should provide some good fodder for thought.
1. Sriracha: Secrets to a Successful Sauce
The secret to success: Putting product before profit
Hoy Fong Foods, the company behind Sriracha hot sauce can attribute much of its success to some of its “less than conventional” business practices. From its humble beginnings in 1987, Sriracha has grown to become a multimillion-dollar company with a large base of diehard fans. They’ve managed to pull it off without ever spending a dime on advertising. These days, Sriracha is not only a staple ingredient in many Asian dishes but also a hip and trendy additive to spice up classic recipes with a modern twist. How did a small hot sauce company manage to not just survive but to thrive without spending any money on advertising?
A key reason is Hoy Fong Foods’ laser-sharp focus on producing a quality product. The hot sauce is produced using fresh chilis and has been done this way since the very beginning. The recipe for Sriracha has not been altered or modified to make production more affordable during times when the local chilis used were in short supply. Furthermore, David Tran, the company’s founder says he has kept the product’s wholesale price the same since day one despite inflation and increasing operational costs. Hoy Fong Foods decided to make a simple product, perfected their recipe, and learned how to scale profitably without compromising quality. It is their focus, consistency, and refusal to put profit before product that has made the makers of Sriracha so wildly successful.
How product managers can take notes from Hoy Fong Foods:
- Focus on the product first. At the end of the day, if your product fails to deliver, you can forget about profit. While all businesses ultimately need to make themselves profitable, we cannot allow ourselves to compromise the quality or functionality of our products as a means to drive more profit. If we want to create successful products that survive in the market long-term, we need to ensure that our products come before profit.
- Don’t fix what isn’t broken. The makers of Sriracha set out to do one thing, figured out how to do it right, and have successfully replicated the process for several decades now. While innovation is rarely frowned upon, we need to know that we’re doing it for the right reasons; to improve things and solve problems. If you cannot find a problem to solve, don’t change anything. There is something to be said about consistency.
2. Netflix: Predictors of a Streaming World
The secret to success: Seeing what the future held
Since its very beginnings, the founders of Netflix had their eyes on streaming media. However, when they first launched the market wasn’t quite ready for a streaming service to come in and take out traditional video shops. Rather than wait it out and risk missing the viable opportunity streaming media seemed to present, Netflix went ahead and made its initial launch with a mail-order model.
Thanks to smart timing, Netflix was able to grab a substantial foothold in the market quite rapidly and can take credit for the demise of many brick and mortar video rental stores. As time passed, the forward-thinking company continued to grow its customer base while simultaneously developing and perfecting its streaming media offerings. Its streaming service was launched in 2007 and customers were able to simply move their existing accounts from the mail-order model to the streaming one if they so desired.
Today, Netflix is available worldwide and carries more than 10,000 titles. The company has been producing its own original series since 2013 and at the moment is the most popular streaming service out there.
What product managers can learn from Netflix’s success:
- Be forward-thinking. When it comes to product management, the “now” will always matter, but not nearly as much as tomorrow does. The founders of Netflix knew that the high operating costs and paper-thin margins of brick and mortar video rental businesses were not conducive to long-term success and recognized that streaming would soon be the status quo for TV and movies. By thinking two steps ahead of everyone else in the industry, Netflix was able to make itself a major success. As product managers, we need to do our best to think more about not just tomorrow, but about next week, next year, and the next decade.
- Know your market (timing matters). Had Netflix initially launched as a streaming service, it’s highly unlikely that it would have been as successful as it is today. The market (and internet bandwidth) simply wasn’t where it needed to be at the time to go straight for streaming. The founders of Netflix knew their market well enough to know that a mail-order model had the potential to build traction at that moment, and they were right. Product managers, especially those of us who manage technical products, need to truly understand their markets and time things not according to them being “done” but according to what will succeed in the market. If not, we risk a product flop akin to that of Google Glass.
3. Bubble Wrap: A Billion Dollar Pivot
The secret to success: Transforming failure into success
Failure is the heart of innovation, and the makers of bubble wrap can surely attest to that fact. The makers of the popular packing material didn’t initially set out to invent a shipping product. In fact, Alfred W. Fielding and Marc Chavannes invented it on accident while trying to design a new type of wall-covering.
In 1957 the pair attempted to seal together two shower curtains to create a new spin on existing wallpapers on the market. Their plasticky creation was far less than successful, but they didn’t give up on their project. It wasn’t long before they realized they’d created an extremely useful packaging material that had the potential to help the world ship things more sustainably and safely while saving space and fuel. Today, Sealed Air, the company that owns the patents to bubble wrap, boasts annual revenue in the billions of dollars as corporations and individuals continue to make bubble wrap their shipping material of choice.
What product managers can learn from the success of bubble wrap:
- Finding the right solution to the wrong problem doesn’t mean you’ve failed. Your first try at something may not always be successful, but if you give up as soon as things don’t go the way you’d hoped they would, you won’t get very far. In this specific example, we’ve seen how a failed decorative product was repurposed into a revolutionary shipping product with some creative thinking. Think about this next time you create something that doesn’t go exactly as planned. Can it be useful in a way that’s different than what you originally thought? If not, the very least you can do is take time to understand why your project didn’t work and learn from your mistakes.
4. Dropbox: Testing the Waters with a Lean Product
The secret to success: Thinking lean
Dropbox first launched in 2007 and in a few short years the company managed to climb to the top of the very crowded cloud storage space. Today the file storage and sharing company has hundreds of millions of users and is valued at well over 10 billion dollars after its IPO earlier this year. There are many reasons for Dropbox’s success, but what helped it get a leg up on the competition right out the gates were its smart guerilla marketing moves, and its decision to take a customer-centric approach to develop the product from day one.
Rather than building a “market-ready” product and pushing it out into the wild, the founders of Dropbox decided to get a prototype of their product in front of as many potential customers as possible, collect their feedback, and iterate on the prototype until they had something real customers would use. The company’s first website was a simple landing page that included a video of their prototype. Leveraging sites like Digg, Reddit, and HackerNews, Dropbox was able to attract attention and start a list of potential customers whom they could get valuable product development feedback from.
This “lean” strategy helped Dropbox build a massive list of potential clients before they even launched the product. It also helped them tailor every part of their product toward the needs of the people most likely to become customers. Later, Dropbox’s referral program helped incentivize rapid growth in their userbase, which was another win for the company.
Dropbox’s success can teach us about product management:
- Start simple, stay lean. Your best resource for informing a successful product is customer feedback. Dropbox didn’t need to build a product to validate demand and start oiling the gears of its sales engine. Taking notes from Eric Ries’ Lean Startup methodology, the team launched an effective Minimum Viable Product to gauge interest and get feedback before building the real thing. Doing this gave them the flexibility to quickly and easily adapt to what real customers would want with minimal risk. You too, can take a lean approach to product management by adopting a process of continuous validation as you build, launch, and refine your product.
5. Uber: A Perfect Storm for Disruptive Success
The secret to success: Changing the status quo
Travis Kalanick and Garrett Camp came up with the idea for Uber in 2008. The pair were in Paris on a cold, snowy December night struggling to catch a cab. The experience made them realize that the taxi industry as it existed was outdated, inconvenient, and overly-complicated. They set out to change the status quo by leveraging technology to simplify the process of hailing a cab. By 2009, UberCab launched in San Francisco. Just under 10 years after its initial launch, Uber is available worldwide and is now the most valuable venture-backed company in the world, boasting 7.4 billion dollars in net revenue last year.
Multiple factors amalgamated into the perfect storm that enabled Uber’s massive success. But most significantly, the founders discovered a problem that was truly worth fixing and solved the problem in a way that made it more accessible, affordable, safer, and efficient. By streamlining and simplifying the process of ordering and taking a cab, Uber was able to disrupt an entire industry.
What we can learn from Uber’s success:
- Profit from pain. The more painful a problem you can solve, the more opportunity you have for success. Before the likes of Uber, taking a cab was an extremely outdated and cumbersome process with an annoying number of steps and precautions involved. Uber was able to take the most painful parts away from the experience (hailing a cab, predicting when the cab would arrive, making sure the driver takes you to the right place, having a record of who your driver was for safety purposes, and transparency in pricing and payments). Where there is a pain, there is potential. When you’re considering what to build or validating an idea for a new successful product, think about pain. More pain = more to gain.
We could easily go on for days analyzing successful products and the factors that helped them get there. For example, Amazon’s ability to continuously reinvent itself, Google AdWords’ disruptive (and very profitable) form of advertising, and brands like Roomba, Post-It, and Velcro who have all managed to develop successful products so memorable that they’ve become household names. We’d love to hear from you about your favorite or most inspiring product success story. Tell us about it in the comments below!