At most companies, teams start with constraints like budgets, existing technical capabilities, and their current products and markets. Then they perform a S.W.O.T. analysis (Strengths, Weaknesses, Opportunities and Threats) asking: “How can we expand our revenue and products given these constraints?”
That’s a skills-forward approach — working forwards. At Amazon, we flipped this. We started with the customer and their problems, and we envisioned the ideal solutions, unconstrained by today’s limitations.
The concept is to start with the customer and their needs and work backwards from there.
We learned that the goal is not to come up with product ideas and make them fit a customer and a problem. It is to focus on the customer and their problems. It may require months to identify one that is big in terms of Total Addressable Market (TAM). Only once you have nailed this customer + problem definition should you move to figuring out the possible products and solutions that address the specific customer problem.
Vaguely defining these elements means you will build a vague solution, which helps no one.
Working backwards is also an iterative process. It starts with you and your team refining the problem statement and proposed solution multiple times, and then it requires further iterations with expanding circles of stakeholders who will recognize flaws and opportunities, prompting changes to the idea.
The final version of your product idea should be rich with data, describe exactly how the customer will interact with the product, address all dependencies within your company, and include a timeline for launch.
All of this grounds the idea in reality and increases the likelihood that you are able to build it to completion. The initial work you did in defining the problem and the customer will increase the likelihood that the product is successful, but nothing you do can ever guarantee this.
The working backwards process is about maximizing upside. Rather than taking shots worth one point or even three, Amazon tries for 1,000-point shots. But only after they have deeply analyzed the shot to minimize risk and increase the surface area for opportunity, and when done properly, it has a higher chance of producing a successful product than any other process I have seen.
We have a course specifically about this process coming soon.
Visit our website and sign up to be notified when it comes out: https://lnkd.in/gYSnerCD
