Product Planning Series: Requirements

This is the sixth post in my Product Planning Series.

The mere word “requirements” can make a lot of startup people wince. It conjures up the bad old days where folks spend months developing an MRD, PRD and a Functional Specification. It brings up images of Stage-Gate and classic Waterfall processes.

There are situations where big long planning documents make sense.   For example, if you are developing a medical device that needs to go through the 5(10)k process, you really have very little choice.  You have to go by the medical devices handbook which pretty much stipulates that you need to write all those documents and place them under a document control process.

However, in a startup situation, where you really don’t know if your problem, solution, and business model will jive with customers and users, overinvesting in planning documents just leads to lost time and productivity.  It also sends the wrong message to the team: instead of being open minded and work closely with customers to define the product and the business model, you are making up too much of it in the office. By the time the big MRD is written the world has already changed and the requirements could be obsolete.

I am against over-investing in requirements documents. However I am even more against not writing anything down and relying on tribal knowledge to implement a solution. That works if there are, like, 2 people in a startup. When you have more than 3 or 4 people working on the same thing, communications becomes very important. Working in a fast paced startup where new data comes in constantly is not an excuse to punt on basic common sense.  Good team communications practice begats good project execution, which will increase the probability that your product will do what you want it to do in the marketplace.  By the way, this goes for hardware AND software.  Even an agile process needs a holistic view of the end goal.

Here are some requirements do’s and don’ts in a startup setting.

DO

• Write SOMETHING down
• Get buy-in from ALL STAKEHOLDERS.
• Be practical and specific. Leave it loose at your own risk.
• Build a top level project plan that identifies key tasks, milestones and interdependencies
• Develop a lightweight 2 year roadmap

DON’T

• Start building anything without buy-in
• Write a 100 Page MRD
• Overspecify details on each feature in classic Waterfall fashion
• Build a 5 year product roadmap with a great deal of detail

At the end of the day, for a development team to be productive, they really don’t need big long documents to describe everything. They just need a few slides on a few topics.  Here are the topics that I find useful to write down for the team. A lot of this stuff should be available for free, from the business case and who/what/why/when discussions.  Some of it is technical – like a lightweight description of the MVP.

• Clear description of the market problem that is being solved
• “Elevator pitch” of the solution (preferably with images)
• Description / analysis of first target segment
• Buyer and User Personas
• Detailed storyboards on top 1-3 typical workflows
• Specific examples for details encountered in each workflow
• Considerations for human factors / human cognition
• Top level design directions to be followed by product design team
• Lightweight functional description of minimum viable product (MVP)
• Quick and dirty 2 year product roadmap
• Any external business drivers (e.g. trade shows, funding runway, etc.)

The most important thing is to do the thinking and research that will support the materials presented in these types of documents. The second most important thing is not to overthink things when you write them down.  Use the minimum possible number of pages to convey the information – don’t overinvest.  That way you will not feel too badly if customer development tells you something new and you have to trash some of these documents and write them over.

Stage-Gate and software don’t mix

I recently read this interesting article from Nielsen Wire on new product development for consumer packaged goods (CPG).  This article talks about how to realize the most revenue from new product development in the CPG space. Key takeaways:

• Manage ideas loosely (have an innovation team live far, far away from headquarters with low involvement from senior staff)
• Manage the process precisely (a formal Stage-Gate process is recommended)

I found myself scratching my head over how to translate these astounding insights to high tech new product development in a software startup or small business environment.  My take: they don’t translate.

I agree in principle with managing ideas loosely – no blue sky work can occur if every new idea is shot down by someone who is too concerned with the here and now.  But is it prudent to have a completely separate blue sky process in a startup when the entire startup needs to all march to the same tune?  This structure seems advisable only for corporations with a strong established business, which generates the revenue to fund the innovation process.  For pre-revenue or early revenue-bearing businesses, there is no separation between new product development and the business itself – they are one and the same.  A company like that hasn’t earned the right to send a team off to another city and go blue-sky on everybody else.

The second point made in the article, regarding tight management of process, is even less transferable.    Let’s take the application of Stage-Gate for an example.  Imagine managing web software development with a 2 week release cycle, where each release must go through the 5 typical gates:

• Gate 1: initial screen (to decide whether the idea is worth pursuing)
• Gate 2: approval to proceed to building a business case
• Gate 3: approval to proceed to development
• Gate 4: review outcome of development before going into QA
• Gate 5: review outcome of QA, decide whether to release

“Absurd” is the only word that comes to mind.

I believe in only as much process as it takes to maximize efficiency and guarantee a high quality of output. (That is a whole lot more process than most entrepreneurs I work with are used to.  I can’t help it – if I am to execute I have to set up an efficient environment.)  I also believe in tailoring processes to suit the industry and nature of programs.  Different processes are established for different things.  You can’t apply a consumer electronics hardware development process naively to shrinkwrap software development, and you cannot apply shrinkwrap software development processes naively to web application development.

Stage-Gate can work for CPG and hardware development programs with a long turnaround time, but is completely inappropriate for fast turnaround programs and most software programs.   It behooves senior management to understand enough of the principles of Stage-Gate versus Agile or Mini-Waterfall so they can apply an appropriate level of oversight without bogging everybody down with inapplicable processes.