The Real Cost of Building in the Wrong Direction: A Product Management Insight
Product management is full of decisions. Some are straightforward, while others can be complex, but all of them boil down to one essential question: Is this the right bet to make right now? As product managers, our job is to ensure that every decision we make aligns with the strategic goals of the company. However, there’s a critical flaw in how many of us approach this decision-making process, and it often leads us down the wrong path.
Understanding Opportunity Cost in Product Management
When we talk about opportunity cost in product management, we're typically thinking about what we’re giving up by choosing one option over another. For instance, if we choose to work on Feature A, we might be delaying Feature B. But this traditional view of opportunity cost misses a more significant point. The real opportunity cost isn’t just about choosing between two features; it’s about the cost of building something in the wrong direction entirely.
Imagine for a moment that your product releases aren’t just points in time—a feature here, an update there. Instead, think of them as train tracks. Each release is a continuation of the direction you’ve chosen. And once those tracks are laid, your team is committed to building further along that path. If you realize later that you’ve been laying tracks in the wrong direction, the cost of changing course can be enormous. It’s not just about the lost time and resources; it’s about the momentum you’ve built in the wrong direction.
The Hidden Costs of Going Off Track
One of the biggest mistakes product managers make is thinking of releases as isolated events. We celebrate launching a new feature or update, but we often fail to consider the long-term implications. Every release comes with sustainment costs—what we sometimes call "keeping the lights on." This includes ongoing support, maintenance, and the expectation from both your team and your customers that you will continue to build on that feature.
If you’re not careful, you might find yourself committed to a path that doesn’t align with your company’s long-term goals. And once the train has left the station, it’s incredibly difficult (and expensive) to reverse course. This is why it’s crucial to ensure that every release is not just a checkmark on a roadmap but a step in the right strategic direction.
Why "Keep them busy" is a Mistake
There’s a common belief among leaders that the best way to get value from a product team is to keep them constantly busy. The thinking goes that if your developers have any spare time, it’s time wasted. But this mindset can be dangerously shortsighted.
Overloading your team to maximize output can lead to burnout and diminish the quality of work. More importantly, it can cause you to miss the bigger picture. The real risk isn’t that your team is underutilized; it’s that they’re working hard on the wrong things. When you focus too much on efficiency—squeezing every last drop of productivity out of your team—you risk losing sight of whether those efforts are driving the company in the right direction.
The Real Cost of Building the Wrong Thing
If you have a team of software developers and a product manager, the cost of that team might be hundreds of thousands per year. That’s a significant investment, and as a CEO, you’re naturally concerned about making sure that money isn’t wasted.
But the biggest waste isn’t when your team is idle—it’s when they’re building something that leads the company away from its strategic goals. Imagine spending months (and hundreds of thousands of dollars) developing a feature, only to realize later that it doesn’t fit with your long-term vision. The cost of backtracking, both financially and in terms of lost opportunity, is immense.
How to Avoid the Wrong Path
So, how do you avoid going down the wrong path? It starts with understanding the full context in which your product exists. This means looking beyond your immediate priorities and considering the broader market, the competitive landscape, and your company’s unique strengths.
A good product manager doesn’t just focus on the next release; they think several steps ahead. They understand that each decision should be part of a cohesive strategy that aligns with the company’s long-term goals. This requires a deep understanding of the market, the competition, and the future direction of the industry.
Thinking Beyond MVPs
We talk a lot about how to scope a Minimum Viable Product (MVP) launch. The idea is to get something out quickly, test it, and iterate based on feedback. But while MVPs are a valuable tool, they’re not the end-all-be-all of product management. The real challenge is ensuring that even your MVPs are aligned with the right strategic direction.
Before you launch anything, ask yourself: Is this feature moving us closer to where we want to be as a company? If it’s not, then it might be better to delay the release or even scrap it altogether, rather than committing resources to something that could lead you astray.
The Importance of Strategic Vision
One of the most valuable skills a product manager can have is the ability to see the big picture. This means not just focusing on the details of each release but understanding how all the pieces fit together into a cohesive whole. It means knowing when to say no to a feature that might be popular but doesn’t align with the company’s long-term goals.
This strategic vision is what separates good product managers from great ones. It’s the difference between a product that’s a collection of features and one that’s a unified, purposeful offering that drives the company forward.
Avoiding the Scattergun Approach
Too often, roadmaps look like a scattergun approach—features and updates thrown out in the hope that they’ll add up to something valuable. But this approach rarely leads to success. Instead, it creates a product that lacks focus and coherence.
A better approach is to think of your product as a dish you’re cooking. Each feature is an ingredient, and you need to be deliberate about what you add and when. You wouldn’t just throw random spices into a dish and hope it tastes good. Similarly, you shouldn’t just release features and hope they add up to a successful product. Each release should build on the last, moving you closer to your strategic goals.
The Value of Reflection
In the rush to release new features, it’s easy to lose sight of the bigger picture. That’s why it’s essential to take the time to reflect on where you’re going. Are you moving in the right direction? Are your releases contributing to a coherent strategy? Or are you just adding features for the sake of it?
This reflection isn’t just about looking at what you’ve done; it’s about looking ahead. It’s about anticipating where the market is going, where your competitors are heading, and where your company needs to be in the future. Only by understanding these factors can you ensure that you’re not just building, but building the right things.
Conclusion
The biggest mistake you can make as a product manager isn’t releasing a feature that flops. It’s committing your team to a path that doesn’t align with your company’s long-term goals. The cost of building in the wrong direction is far greater than any short-term inefficiencies.
To avoid this, you need to think strategically about every decision you make. Understand the broader context, look several steps ahead, and ensure that every release is a step in the right direction. By doing so, you’ll not only avoid costly mistakes but also ensure that your product is driving your company toward its ultimate goals.
In product management, the stakes are high. But with the right approach, you can navigate the complexities of the job and make decisions that will lead to long-term success. Remember, it’s not just about what you build—it’s about building the right things, in the right direction.
