5 Proven Ways to Reduce Time to Market
What is Time to Market (TTM)?
Time to market (also called TTM or time-to-market) is defined as the length of time from the conception of a product until it is released to the market. Another definition: it is the time between when the team starts work and when the first unit is sold. Since research has shown that new market entrants enjoy clear advantages in terms of market share, revenue and sales growth, time to market is one of the essential product development KPIs or metrics. Many product development strategies depend on being first to market.
How do you reduce Time to Market?
- Intensify the resource commitment
- Reduce scope / release an MVP (Minimum Viable Product)
- Follow a small “a” agile product development process
- Develop products and services with a dedicated team
- Create strategy to shape product portfolio for speed
Time to market is both quantitative and qualitative. There is a best time to release a product and that time is not always as soon as possible, although with more innovative offerings it usually is. Releasing at the right time requires adaptability, the ability to learn quickly, and resilience. These capabilities are at the forefront of time-based competition today.
Why is time to market important?
Most commonly, competitive pressures, dynamic information, and new technologies drive changes in markets. It is crucial that companies respond to these changes. It is often the first to field a new product that captures market share and profits.
Reasons Companies Want to Shorten Time to Market
- Competitive advantage
- Reduce R&D costs (and waste)
- Improve customer satisfaction
- Grow revenue
- Grow share
Customer’s insatiable desire for the newest features, meeting corporate growth objectives, shorter life cycles, and pressure from senior management also drive speed to market. For many consumers, the incredible rate of innovation in mobile handset devices has set the expectations for a continuous set of improved features on a yearly cadence.
Companies also lose financially when they don’t meet their time to market targets. In a classic study, McKinsey & Co found that a product that is six months late to market, earns 33% less profit over five years; if it is released on time, but is 50% over budget, that cuts into profits by only about 4%.
Some tech leaders focus on speed as the ultimate goal, such as Facebook’s declaration “Move fast and break things.” Others may focus on time to market because they face direct competition. Tech companies and mobile handset providers are driven by yearly shows and insatiable consumer expectations.
Technology companies, in the B2C software industry, often use and succeed with the concept of a Minimum Viable Product (MVP). Although this approach takes some risk with customer satisfaction, it also enables the team to move very quickly and reduce time to market by shipping a version with core features only.
Those that use time to market strategically demonstrate what they’re trying to create by shaping the product portfolio. Is it a platform that entails a long term investment or a quick spin? Is it innovative or a ‘me too’ offering?
Timing releases is a means to competitive differentiation. The ability to adapt and to learn quickly is the key capability for the strategic management of release timing and faster time to market. Product management consulting by an outside party can provide independent perspective on the value of speed to market for product differentiation.
The TTM advantage
The most important reason that time-to-market matters is that it fundamental to competitive advantage. You can take advantage of market opportunities by improving TTM to beat your direct competitors to market. By optimizing your development process and your marketing process to improve time to market you can gain market share (often called the “first mover advantage”). Because your company is first to market, the product launch has more impact, which again results in greater sales and profit margin compared to your slower competitors.
How do you measure time to market?
First, know what it is you are measuring and why. You can measure the length of time on the calendar (months or years) that it takes to bring a concept to market, the person hours involved, the cost, or any combination. Usually the product development TTM KPI is simply the period of time (in weeks or months) from team start to first customer ship.
Some firms start the clock when the team and budget are approved, but an informal team might do much work before this time, let’s say to do an initial product design (very high level). In other cases, the project is approved, but weeks might elapse before the team members are freed up to concentrate on the project in a dedicated manner. Define when the project begins and ends as specifically as you can.
Recommended Time to Market Measurements
- The ‘clock is started’ when the team is available and there is an initial definition (and major risks retired)
- The ‘clock is stopped’ when either a MVP or first version of the product is sold (or adopted), often after product launch
However, comparing TTM between teams or organizations requires some care to ensure an ‘apples to apples’ comparison. The biggest factor that can influence time-to-market is the scope of the project and how much risk it contains; the second biggest factor is how much product innovation is needed to differentiate the product from the competition. Time to market comparisons aren’t accurate unless you clearly understand when the stopwatch starts and stops and understand the scope/risk profile between two development projects.
What are typical TTMs across companies?
Time to market varies widely by what is sold: product type, complexity, and industry. A typical time to market for a pharmaceutical is ten years, while a consumer social app could be conceptualized, researched, designed, prototyped, and launched in less than a year. Fundamentally, TTM varies based on product and regulatory complexity.
There is considerable variation in time to market even within the same industry due to the complexity and architectures of various products. A completely novel platform with untested technology obviously takes longer to create than a major improvement (derivative) on an existing offering, or an incremental improvement.
Consider the research from the automotive industry. Research from 2017-18 found the following spread for time to market in that industry. The study showed that 71% of products in the sample went from concept to launch in less than two years. The automotive products in the study are divided into the following buckets with respect to time to market. Note that the longer times were most likely for major clean sheet platforms and major variants (derivatives).
Despite the wide variance in time to market even for products in the same industry, KPMG research (2015) found the following typical ranges for time to market by industry.
How Can Time To Market be Used Strategically?
Time to market is an important facet of product development strategy. Generally, speed is balanced against other factors such as features, innovation, or quality. The interactions between these factors spell success or failure due to the nature of the product and the market.
Semiconductor example: pattern of alternating major and minor releases (‘tick/tock’)
One important way to drive TTM speed and predictability is to break your release cycles into major and minor releases. Semiconductor firms like Intel and AMD typically have a ‘tick tock’ release cycle, meaning one major release (‘tick’) followed by one minor release (‘tock’). This approach gives a project for a major release a two year path to market, mitigating the risks for these innovative products.
In the case of mobile handsets, makers like Apple have supercycles every three years. With each year between the major releases dedicated to “themes” such as bug fixes (year one) and performance enhancements (year two).
However if you are not in the ‘platform’ business like Apple and Intel, it makes sense to speed products with moderate levels of quality to market if their life cycles are short, or if the competitive offerings are generally weak. However, for some products, for example in the healthcare space, where low quality might have dire consequences, delaying a launch to improve quality might make a better tradeoff.
Even when the product in question is not a matter of life or death, a quick release of a product that does not meet customer expectations sometimes opens the door for a lagging competitor to compete on quality and win despite being late to market. Rushing a product to market might fail, but if you delay too long, waiting to develop a more fully baked product, you might miss the window of opportunity.
In other cases, where the feature set and level of quality have some flexibility, organizations are best served by determining the minimum viable product (MVP) required by the earliest possible release date. The MVP is defined as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
Although a MVP can be as simple as a slide deck or a description of a product, as usually understood, it is a version of the product with a limited feature set or functionality that is used for test purposes or even as an initial release. Developers then iteratively improve the MVP using customer input.
Since only customers can define the perfect product, the minimum viable product strategy allows innovations to gain market share and revenue growth, while developers glean customer insight and reiterate the product. The delays incurred by making the perfect the enemy of the good, often inhibit business goals, such as revenue and customer satisfaction.
The most successful tech leaders rely on both getting to market early and also iterating, and rapidly improving products, using customer feedback, to grow market share.
How do you reduce Time to Market?
Although there is no secret formula for improving time-to-market, the following practices are proven tactics for speeding products to market.
Intensify the resource commitment
A short-term solution for speeding a product to market is to intensify the resource commitment to a project in order to get that last percentage out the door as quickly as possible. By putting further funds, bodies, testing capability, etc. on a project a company can win a one-off race to the finish line. Having development partners that can shoulder part of the load can also help.
However, follow your instincts. If adding people will slow down the project, don’t add them. Do what you can to deflect non-critical tasks from the committed resources. This is probably the single most effective way to improving time-to-market.
Trade off against features/quality (reduce scope)
If appearing first in the market is imperative and at risk, then trading off features or quality to reduce cycle time is a last resort. Generally, last minute changes are risky, but if time is the key factor in the success of the project, then trading off on features or quality might be the right decision. You can also look at your competition to examine what features may be more important than others, so you can focus on what makes a difference.
A careful monitoring of market changes, and product lifecycle management, can help your team make time saving tradeoffs.
Follow a small ‘a’ agile development process
Have a light weight, but consistent product development process and use it for speed. Measure teams on its use to drive inefficiency out of your system. Reassess and improve customer input, design and prototyping processes periodically. You can use many tools to help you automate development tracking to shrink time to market (for example Jira). This gives you real-time insight into your workflow, so you can spot bottlenecks.
Many successful organizations have an agile process that relies on strong input from customers and frequent iterations that respond to customer feedback. They have integrated agile and waterfall processes by applying the principles of agile to all of the functions that touch the team while preserving a few major milestones. They also bridge agile and waterfall by nesting sprints within the phases of the process.
Also remember to improve project management/scrum master roles. Having a good process does not mean that there is good project/process management. Skilled, experienced project managers matter. Strong processes, with skilled project management, lead to faster results. Automation can be your friend – not only with Jira tracking but Asana and Trello can be useful tools for Agile.
Develop products with dedicated cross-functional teams
Effective work within a dedicated team is a pillar of innovation and speed. Daily meetings of the team create accountability and momentum, while having the right set of functions and skills on the team – when and where needed as soon as they are needed – helps reduce non-value added time. Cross-functional teamwork is a long established best practice for fast time to market. You can find information on different functions in a team by researching LinkedIn. You can use Upwork to help your company with outsourcing critical skill gaps, too.
But beyond these tactics, there is a strategic approach. Strategy can help drive time to market by using speed as a compass – as a North Star. It might be developing platforms that serve as springboards for families of products. It might mean having fewer variations, and focusing scarce resources on critical, must-have products. Or it might be focusing on specific market opportunities.
Having a productive platform that spawns generations of derivatives means that a company has the capacity to make excellent product selection decisions. Making good product portfolio management decisions depends on three things:
- A clear new product development strategy
- Senior management involvement
- A consistent process for vetting product concepts
Having a reliable system for the front end of development, that is 1) tied to overall corporate strategy and 2) enables the day-to-day decisions required to shepherd early stage ideas to the full-funding level, is a key to turning out a stream of new products quickly and reliably.
Reducing time to market as a corporate capability means supporting new product concepts with the right governance, the right funding, and a consistent process for selecting competing product concepts.
How does Agile improve Time To Market?
Agility and time-based competition are closely related. The Scrum approach breaks down the wall between the market (consumer) and the product concept (demos). The concepts created by the team are accelerated into real conditions of use as soon as possible. The team then incorporates this feedback from customers into products as quickly as possible. Versions are then tested with real customers again and again. Agile methodologies complement a formal escalation process, too.
We have seen a small ‘a’ agile approach have the best impact on time to market – empowering teams while ensuring regular contact with customers. Some fully blown Agile implementations are so process heavy that teams get bogged down. A small ‘a’ agile approach compresses TTM by moving the market into the lab or workspace, by reducing engineer burnout, and by increasing efficiency because engineers work on more code that actually ships.
Agile is not a rigid formula and its basic principles are applicable in all types of organizations. What’s most useful in the agile mind-set that will compress TTM today is its emphasis on customer feedback, adaptability (the ability to learn quickly), and organizational resilience.
How can Product Development Strategy cut Time to Market
How big of an innovator do you want to be? Many leaders want to be innovative and to respond quickly to market demands. But in the past there was a false dichotomy between innovation and speed.
It is now possible to get to market quickly with a big, innovative idea, but it’s wise to know the tradeoffs and to be clear about what you’re creating.
Are you creating an MVP, that might be as spare as a slide deck, or a fully-fledged product? Are you creating a next generation platform? Are you able to make intelligent tradeoffs in your product portfolio in keeping with your overall strategy and tolerance for risk?
Products, projects, and companies appear and disappear very rapidly. A fast response to changes in any of these spheres augurs success in a rapidly changing environment.
Product development strategy determines the right time to release a product. Honing your capabilities reduces time to market to its minimum. But the name of the game for speed, is adaptability, fast learning, and resilience.