What do successful companies know about creating new products?
When you study successful products, there is one thing that is common. Successful products create value to customers.
Value can be delivered in many ways. Henry Ford did not invent the car nor did he invent the assembly line. But he combined them to drive down the cost of a new car and passed on that savings to customers - that revolutionized an industry.
In every industry, there are several ways to create value to customers. For example, in case of phones: Graham Bell invented the phone, but Motorola added value to it by making it mobile. Nokia further changed the customer value by making cell phones fashionable. Blackberry converted phones into secure office communication device. Apple made the cell phone personal and interactive. Note that all through the cell phone evolution, the cost of cell phone did not really go down - but customer found value in different ways. Providing value to customers is not just about adding new features or reducing prices.
To customers, the value is the difference between what they perceive and what they pay for the product. In the world of technology - be it Phones, Computers or software, the customer value is not in lowering prices or by reducing costs, the real customer value is done by adding features that make customers feel they are getting more with each version of the product.
Too often, I see companies focus too much on the costs - that they neglect the most important goal: determining why someone would want to buy their product. For example, Nokia fought a long & losing battle by releasing cheaper touch screen phones - but totally forgot the user experience. BY the time, Nokia released a really good touch screen phone, Nokia had ignored the Apps.
Today doing a new product that's cheaper simply doesn't cut it. Microsoft HyperV is free with Windows Server, but customers still prefer VMWare!
For developing successful products, you have to concentrated on growing value for customers. Leaders in successful product companies know their customers' economic expectations and have the skills to deliver it to customers.