Maximizing product value by effective feature prioritization

With more and more web products hitting the market everyday, the importance of delivering value to end users through your product has become paramount.

If you are building a product from scratch, prioritization of features becomes the most critical task and this can determine success or failure for your product. Most of us product managers love to add features – customizable user interfaces, changing password, RSS feeds etc. Faced with such a situation, here are questions that I usually like to ask myself

• Is your feature solving a particular problem of your user segment ?
• Is the feature adding value to the way your end users solve their problem ?
• Is feature increasing usability or improving the user experience in the product?
• Is the feature cracking a technology problem which others have failed to solve ?

Prioritizing features can be quite a daunting task for your entire product team – from product managers to technical architects keeping in mind that you still need to build a great v1.0 and hit the market within time and budget.

Many product companies, especially startups have failed because of this critical reason. 37signals’ Getting real is a great read to understand the dynamics involved in building web products.

So is there any best way to solve the prioritization problem ? Well, there’s a technique that I have been using, some parts inspired from here.

It’s a simple four quandrant technique with two axeses

• Difficulty of implementation on the X axis – This indicates the time, effort, cost and technology complexity of implementation a particular feature. This ranges from low to high
• Business Value on the Y axis – This indicates the business value of the feature in terms of revenue, greater user adopting, cost savings etc.

Get your entire product team involved in this exercise, first starting out with a list of all possible features which you can build into the product. Then get the product management/business team to evaluate all the proposed features on their business value. Get the technical team to evaluate the difficulty of implementing each of the features.

Then map the features into the four quadrants as shown above.

• High business value, Low difficulty level- These are what I call the “Cash cows”. These are features that you would definitely include in your product as they bring maximum value with least effort. No brainer!
• High business value, High difficulty level – This is the tricky part. These might be your niche features, or features which separate your product from the rest in the segment. These features are strategic investments that you might need to make for the success of your product. Rethink about each of these features and how they can potentially be simplified to move them to the left. Also evaluate features from this category which you want in V1 and push some for V2.
• Low business value, low difficulty level – These features are straightforward abilities which are present in most of your competing products. Make sure that you don’t add all these features into your product to avoid feature bloat. Think about how you can potentially make simple changes and move them up the value chain. Think about whether these can be monetized in any way and check if you can change the way these features have been implemented by your competitors.
• Low business value, high difficulty level – These are features that you want to stay away from as they provide very less value.

So, what do you think about the effectiveness of this method ? Let me know the techniques that you have for prioritizing features.

Update: A great read from the Silicon Valley Product Group (SVPG) blog on the similar topic and tips for product mangers : Great Products by Design