Any good product team wants to solve the big problems their customers face, and they can get quite excited when they spot one.
But how do you know you’re on the right ones? How can you avoid spending years and millions only to reach a dead-end?
Here are three steps I’ve used with decent success to select the opportunities coming at you based on your core competencies:
#1 – Understand what’s critical to your customers
Get out there, talk to real customers, and let them express their stories. You’ll soon identify what matters to them. As you progress, start associating these insights with the required competencies.
For instance, if a customer values smaller form factors for their earbuds, the associated competence will be in design miniaturization and component integration.
#2 – Assess your core competencies
Assemble a group of key stakeholders who know your business well. Don’t limit it to your team. Include partners (distributors, resellers), outsiders (analysts), other groups, board members.
Get at least a dozen perspectives on the perceived competencies. Ask them what they consider you’re doing well and why based on what they know.
#3 – Compare both and study competition
Once you have narrowed down the competencies required by your customers and your self-assessment, compare both and build a shortlist of the shared ones.
Review the shortlist. Assess which existing competitors might already have such competencies or how difficult – expertise, investment – it is for a competitor to replicate.
When no one else has a particular competence that is hard to replicate, you have spotted a CORE competence.
From there, nurture it to maintain and grow your competitive advantage. Also, regularly check if no disruptive forces occur that would make your core irrelevant.
And if you come to a point where you feel stuck, let The Sherpa be your guide!