Market Discovery vs. Product Discovery

In earlier articles I’ve written about the product discovery process – discovering a product that is valuable, usable and feasible. I’ve explained that this is the primary responsibility of the product manager, and that product discovery requires a collaboration between product management, user experience design, and engineering/architects.

I want to contrast product discovery with what others have termed “market discovery.” Market discovery is all about identifying opportunities worth pursuing. Sometimes the market is obvious and well established (think cell phones, MP3 players, and weight loss diets), and at other times the market is undiscovered, unrecognized, and/or untapped (think DVR, twitter).

I was recently at a conference (see www.gelconference.com) where the president of a very cool product company that’s not in the tech space, OXO (see www.oxo.com), talked about how they discover new markets. This company is fantastic at market discovery. For example, they have tapped into the aging baby boomer’s latent needs and have identified whole product lines of terrific products. For the most part, product discovery for them is fairly straightforward, once they’ve recognized the opportunity. They learn a great deal by watching consumers interact with everyday products, which has long been a favorite technique of mine as well.

I find that the market vs. product discovery lens is a useful way of looking at product companies. And it helps to dispel the myth that you can only win big by identifying new markets. For example, Apple rarely discovers new markets. Instead, their magic is in product discovery – coming up with great products to serve well-established but unmet needs. The iPod, iPhone, and Mac are all great examples. I would include Google search in this category as well. They were nowhere close to being the first to identify the search market, but they did a fantastic job on product discovery.

In contrast, I would argue that eBay, TiVo, and the Nintendo Wii all succeeded first with market discovery, and then they delivered on product discovery as well.

It’s worth noting that lots of companies succeed at market discovery and then fall short in product discovery. This is why the fast-follower strategy can be so effective, at least if your company is strong at product discovery. There’s nothing wrong with letting the big guys pay to develop a new market and then you come in with a product that actually delivers on the need.

I’ve got more coming on the differences between market discovery and product discovery, but I’m starting to frame discussions with these two concepts and finding that it can help make clear where the issues are and what’s required to improve an organization.

It also helps to make clear that since companies sell products, you must learn to succeed at product discovery. It doesn’t do you any good to come up with all these great opportunities and then not deliver products that meet the need.