1. Mitigating Risks in New Businesses and Product Development

Introduction: Understanding the Key Risks


When developing a new product, feature, or business, one of the most important processes is product discovery. During this phase, we need to quickly distinguish between good and bad ideas for both the user and the business. At the same time, we must ensure that our solutions minimize risks.

In his book Inspired, Marty Cagan outlines four key risks that every product faces. These are:

  1. Value Risk
  2. Usability Risk
  3. Feasibility Risk
  4. Business Risk

In this document, we will explore these risks and how to mitigate them using guiding questions to help you through your discovery process.

1. Value Risk


This is the most critical risk and the first that needs addressing. Value risk refers to whether users will choose your product and whether it will bring a return for the business. This risk focuses on whether your product or feature is worth developing and if it solves a real market pain point.

Key Questions to Ask:

By asking these questions early, you can determine whether your product idea is something worth pursuing before spending resources on development.

2. Usability Risk


Even if your product solves a real pain point and customers are willing to pay for it, it will fail if it isn’t usable. Usability risk deals with whether your users can interact with and use your product effectively. This is about reducing friction and ensuring that users can complete key tasks without difficulty.

Key Questions to Ask:

By focusing on usability, you ensure that your product delivers value without frustrating users with poor design or complicated workflows.

3. Feasibility Risk


Feasibility risk addresses the question of whether the solution is technically and operationally viable. Can you build the product with the resources you have? Do you have the technical architecture or infrastructure to support it? This is a straightforward, but crucial, risk to evaluate early in the process.

Key Questions to Ask:

Mitigating feasibility risk ensures that your team can actually deliver the product on time and within the constraints of your existing resources.

4. Business Risk


Lastly, business risk involves ensuring that the product aligns with the overall business strategy and model. You need to evaluate whether this product will generate revenue, fit the company's strategy, and not introduce legal or operational risks.

Key Questions to Ask:

Mitigating business risk means ensuring that the product fits within the broader context of the company and its long-term strategy.

Using the Lean Canvas to Mitigate Risks


One of the most useful tools for mitigating product risks is the Lean Canvas, which helps structure your thinking around three key areas: product, user, and market.

1. Product Risks

Product-related risks can be mitigated by focusing on the following sections of the Lean Canvas:

2. User Risks

User-related risks can be addressed by focusing on:

3. Market Risks

To mitigate market risks, consider:

By using the Lean Canvas, you can systematically address risks in each area of the business before moving forward with development.

Conclusion: Strategies for Mitigating Risks in Product Development


Mitigating risks is a continuous process that spans from product discovery through to development and beyond. Whether dealing with value risk, usability risk, feasibility risk, or business risk, the goal is to minimize uncertainties and ensure that the product will be successful both for users and the business.

Use frameworks like the Lean Canvas and guiding questions to assess potential risks early on. By addressing these risks head-on, you increase your chances of building a product that delivers real value and aligns with both user needs and business goals.

This understanding sets the foundation for your next steps in product discovery, where you will learn about methodologies and tools to validate and refine your product ideas.

Keep evolving, keep testing, and mitigate risks at every stage!