Product Risk

After briefly defining both management risk and market risk this week I am turning to the topic of product risk.

Product risk is commonly referred to as technology risk.  It is the likelihood that a startup will fail to produce the product it sets out to create.  Or put another way, can the product be built? 

Are you trying to send a rover to the moon or making a simple web app?  A highly complex software application that involves things such as applied cryptography, artificial intelligence, cognitive computing, machine learning, natural language processing, or semantics involves a much higher degree of product risk than a simple based web app like Twitter.

If your potential product is a highly complex
piece of software that has not yet been developed it carries a great deal of product risk.  This risk can be reduced by assembling a team that has built a like product in the past and getting them going down the road of building it.  A prototype has less risk than a concept.  An alpha less risk than a prototype.  A beta less risk than an alpha.

Build the product to reduce product risk.

December 18, 2007  |  Comments  |  Tweet  |  Posted in Startups