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.
About the speaker
Ziad Ismail is the Chief Product Officer of Convoy, responsible for data science, design, growth and product teams. Before joining Convoy, Ziad was the Chief Product Officer of Marchex, Chief Executive Officer of CitiKey, and served in other product leadership roles at Microsoft. Prior to that, he spent two winters at the Arctic Circle in the Swedish military. Ziad earned an MSc in Computer Science from the Royal Institute of Technology in Sweden and an MBA from Harvard Business School.
About the host
Anne Retterer is the Founder and CEO of Mindspand - an online community that enables organizations to list course offerings and provide access to services for local customers. Prior to starting Mindspand, Anne managed the product portfolio at Expedia and established an investment fund for tech companies in Chile with Hambrecht & Quest (now JPMorgan Chase & Co.). Anne holds an MBA from UC Davis and currently lives in Seattle.