Convoy CPO on Product Development (Part 2)
After using experiments to create impact, you need to evaluate costs associated with your product development process. There’s a tendency to skip this step and not fully understand the cost of launching products. For example, a common quote that I hear is “the effect is small, but we should still ship it since we already built it and customers asked for it.”
This is a classic example of the sunk cost fallacy.
In other words, any past cost that you have paid for is unrecoverable. However, this isn’t the biggest problem that affects product development. Instead, we get another issue – and that is the unsunk cost fallacy. This involves the inability to consider future costs to decisions made in the present.
There’s a tendency to think that all your work is complete once you’re ready to ship. In reality, the work is just beginning and there are many costs to consider after you launch a product. Furthermore, the decision to launch must factor in the future costs that can impact your product’s success.
Some features do not carry any future costs. For example, color changes on a website do not require any long-term maintenance. However, adding a new engagement platform to your website does carry long-term implications. You have to consider the benefits of these changes alongside the effort implications for engineering, design and product.
In summary, every decision you make requires an upfront investment and carries long-term expenses down the road. As product managers, It’s critical to evaluate the cost-benefit of your development process to maximize product impact.