What is prioritization?
Before we dive into the subject, we should mention here that specialists use “product feature prioritization” and “startup feature prioritization” to refer to the same concept that we will describe in the following lines.
When it comes to startups, prioritization is choosing the right features that should be developed, at the right moment and in the right timeframe to successfully grow those startups. Productschool.com says it’s finding a balance between the importance and complexity of the features and the end value they will deliver. Briefly explained, it’s maximizing the business results with the available resources.
Continuing with the same perspective, but on a different level, Lenny Rachitsky – who spent 7 years working at the disruptive tech platform Airbnb, starting in 2012 as a product manager before working up to product lead for supply growth – mentions in his newsletter that prioritization for larger companies is more about accelerating something that’s already working versus creating something new. He explains that as a result, there is going to be more room for error.
As the same Lenny Rachitsky said, “bad prioritization is an excellent way to kill your startup”. And given the fact that most startups are not successful, according to embroker.com, there are many chances to kill your startup because of the lack of rigorous features prioritization.
Prioritizing features: key to a startup's growth and success
Prioritization is important because for a startup there are limited resources of time, money, and energy, while there are many feature options to choose from. Figuring out which features would work for your startup and at what point in your schedule is necessary to prevent delays and a poorly executed product. Having in mind that feature prioritization is planning out the order of features your team works on, based on your product roadmap, it is important to say that the feature prioritization approach should fit the goals and business strategy of the startup.
When prioritization methods don’t make sense
Just listing all the desired features and applying a prioritization method will not lead to success. Before using a framework, it is important that the mission and objectives of the product are clearly defined. This requires a thorough initial research phase to understand the target clients and their needs. Integrating user research at every stage of product development can lead to better decision making.
A good practice: Story Mapping
Story mapping is a well known method used in many tech startups. It requires you to make an outline of the user’s interaction with your product and evaluate which features should be prioritized based on the benefit it provides the user.
The common way to phrase each feature is through the user story format:
“As a [type of user], I want to [action] so that [benefit].”
Story mapping can be considered a user-focused feature prioritization framework. We recommend it as a good practice in defining the features, that will automatically help to keep your decisions customer-centric. Any of the methods below can be used together with this approach.
Why is prioritization difficult? Pitfalls and outcomes if done wrong
Prioritization can make or break your product so the high stakes, and the many factors & unknown variables make it also very difficult. It is best to be aware of the possible pitfalls and assess them one by one for your product to avoid making bad decisions. The limited resources, the high probability to be biased, not having enough data, the lack of alignment, and the absence of a Product Strategy are just a few reasons why it is not easy to do it.
Limited Resources in Prioritization
Due to limited resources, startups need to focus on the most important features that will help them grow. This is especially relevant in the MVP (Minimum Viable Product) phase.
The product or service they offer must be the answer to certain user needs in such a way that they can scale it. If startups don’t do this, they’ll run out of money before they even get around to defining the end product. And the fewer the financial resources, the fewer mistakes they can afford to make.
Influence of biased opinions
Sometimes, product prioritization can be influenced by biased opinions, not having the important features at the top of the list because startup founders don’t have a larger perspective, they got opinions from people without enough experience or they let themselves be carried away, thinking about the surface aspects of the product.
Lack of strategy
Another problem arises when startups put more emphasis on building on what the competition is already doing, instead of paying attention to the needs of their customers. Or other times, because there is no strategic development plan, in the medium and long term, features will solve the problems that are burning now, without considering the strategic objectives in the longer term. This results from several deficiencies: no clear objectives were set and how they will be met, tasks are not solved according to priority, those involved in the projects were not trained, and so on.
Prioritizing with a purpose
Furthermore, trying to please everyone is another pitfall. People need to understand what the purpose of their actions is and what the common goal is. This way they will come to understand that they can agree to disagree with those who make decisions because they have tried it before, because they want to take certain risks or because they have more expertise. On the opposite pole, ignoring your own or your team member’s values is not a good idea because you won’t be able to truly engage in what you’re doing, you’ll feel overwhelmed and quit sooner than if those projects were aligned with what you’re passionate about.
A consistent process
The lack of a routine to check what those involved in the project are doing, the desire for everything to turn out perfectly, the lack of awareness of the limits, and the frequent interruptions represent the pitfalls that can affect companies at the beginning of the road in the prioritization process, even if they refer rather to the psychological dimension of those involved.
Feature prioritization frameworks: 3 classic methods explained
Even though it is a difficult process, there are different feature prioritization frameworks. What remains for the Product Owner to do is to ensure that the chosen option meets exactly the needs of his startup. Here are 3 of the most common feature prioritization frameworks.
1. RICE
RICE is a method that includes four elements, measured in a percentage from 0 to 100%.
- Research – the potential number of customers affected by the new feature or improvement.
- Impact – estimation of the potential effect on the target metric. The data can be quantitative (ex: number of new conversions) or qualitative (ex: moderate satisfaction factor).
- Confidence – refers to the level of confidence you have that the previous metrics are accurate.
- Effort – estimating the required resources.
By multiplying the numbers, you will get the RICE score for each feature and will be able to prioritize them accordingly.
This method is most efficient for those startups with an extensive backlog to keep their priorities grounded in data instead of opinions. Here is a free template in case you want to give it a try.
Pros:
- it works very well for those focused on data;
- the strongest voice is eliminated due to the confidence parameter;
- it helps if the startup wants to test several products.
Cons:
- if the team is more creative or if they are visual thinkers, these data may not be the best approach;
- it is not very convenient if you have many possible features for complex products to test because the material becomes difficult to navigate.
2. Impact-Effort matrix
Impact-Effort matrix is a method that shows the value (impact) of a feature to the user vs the complexity of development, otherwise known as the effort.
Impact – the benefit your customers get with your feature. It’s your core value that solves a problem or improves their lives in some way.
Effort – the work you put into it to deliver the feature. The feature should not only work for you but also satisfy the end-user’s needs. Can you afford to build it? The objective here is to get more value with less effort. This should be your priority feature.
The ideas that attract the highest value and the lowest effort will create the feature prioritization roadmap. This approach is most efficient for those startups with small development teams that have limited time and budget resources.
The features are placed into the following categories according to their priorities:
- Quick wins – Low effort and high impact are the features or ideas that will bring growth.
- Major projects – High effort and high impact. These have the potential to make a big difference but they must be well-planned. If these choices fail, everything will transform into a waste of development and resources.
- Fill-ins – Low value and also low effort. Fill-ins might take little time and they can only be justified if other more important tasks were completed.
- Possible waste of money – Low value and high effort. These are the features that can kill a startup if time is wasted on them.
Pros:
- it is useful for quick prioritization because it works well for a small number of features;
- it is ideal for design-led companies and for those teams that work well with a visual approach;
- changes can be made on the way.
Cons:
- it is not that useful when you have a lot of features, ideas, and items to discuss;
- it is difficult to prioritize two different features that are in the same category;
- it can take much more time and resources than expected and because of that, it can create a loss of focus.
If you would like to try this method, here is a free template.
3. MoSCoW analysis
MoSCoW analysis is a method that provides insight into 4 categories:
- Must-have – without these, the user will not be able to use the product or get value from it because they are the reason why users pay for the startup’s product.
- Should have – these are the second priorities. They are important, but not urgent.
- Could have – these are nice to have, but it is not critical if you don’t have them yet.
- Wish/Won’t have – these are not priorities this time.
Both parts, the startup team and the clients can help with input on what is most important at the specific moment. This analysis is most efficient for those teams who prefer to discuss verbally in meetings. An extensive presentation of this method can be found on productplan.com.
Pros:
- it is ideal for the less technical members of the company;
- each team participant has the freedom to bring a unique perspective to the table;
- useful if the startup is looking for a way to involve stakeholders.
Cons:
- it is difficult to set the right number of must-have features and if they are too many, the development team may feel under pressure.
Here is a free online MoSCoW Method Template that can be filled out if you choose to use this approach.
Concluding thoughts on product prioritization
First of all, it is normal that not all methods work equally well for everyone.
Of course, over time some more elaborate methods have appeared, which combine quantitative and qualitative data and which may be a more suitable option for certain types of products, startups, and teams that want to achieve certain goals. If you’ve already tried these and they didn’t work, you can choose to go with some less classic methods, such as Weighted Scoring Prioritization, Opportunity Analysis, Walking Skeleton, and many others.
It is also possible in many cases that a mixture of methods works best. Product strategy meetings with stakeholders could use the MoSCoW framework to define the longer term priorities, while the development team can apply the RICE method for example to prioritize the backlog and decide what to include in each sprint.
