How to Design the Perfect Product

Cagan: We have tried to create a way for companies to understand their target markets by identifying value opportunities. By really thinking about where the market is at and where you want to go, you can understand the opportunities -- and then you create product goals. That's how you help define product.

Vogel: We've gone from the concept of mass value, where you can have a huge, well-defined market, to a world where value is subdivided and defined in more discrete ways. People still have shared values at one level. But they also bring very discrete values that they want from a product. So a consumer who wants a Subaru Outback is much different from one who wants a Mercedes SUV -- even though they both want an all-weather, four-wheel-drive vehicle.

Cagan: Value is all about fulfilling fantasy. For engineers, their driving statement traditionally has been the concept that form follows function. For designers, it's usually the opposite. But you need both. Your goal is to create a great experience -- the fantasy -- for the customer.

Fantasy doesn't have to be exotic. You could be working in a warehouse in a parts-pick job. You're running around in sneakers on a rolling ladder and you're mad at the world and it's a terrible job. Wouldn't it be great if you had more control and more power? The Crown Wave is a great example of fulfilling that fantasy. It's small and fun to use. It empowers people. Although it's more expensive than a rolling ladder, workers become more efficient, and they stay in their jobs longer because they're happier.

Scaling the "Sheer Cliff of Value"

Design problem: Find the beauty in a potato peeler. Sam Farber, already a successful entrepreneur, sensed an opportunity in the housewares industry after watching his wife, an arthritis sufferer, struggle with existing kitchen tools. Farber's insight introduced utensils that weren't just comfortable to use, but that also set a new aesthetic standard.

Vogel: Here's a generic potato peeler, the same one people have used for a century. You have sheet metal wrapped around a form to give it a basic shape, with a center line running through it that both locks the handle together and integrates the blade into the handle. This is about the cheapest way to deliver on a form that has both a blade and a handle. It's dictated more by manufacturing than by the function of its use.

Now look at Farber's version, OXO's Good Grips Swivel Peeler. There's a broad Santoprene handle that makes it easy to grip. The flexible fins make the handle appear lighter and add comfort. And the curved blade shield echoes the shape of the handle. This potato peeler was built from the customer backward rather than from the manufacturer forward. Part of the fantasy here is, I have arthritis and I can't use a standard peeler, but I have an alternative with OXO's version.

Cagan: It also elevates potato peeling to an aesthetic statement of who we are. Now everyone can own a contemporary product that looks beautiful and has a sort of richness. It takes a mundane task and makes it more enjoyable. You can even hang it up. The upshot is, there's value in that fantasy. The OXO potato peeler costs about $7, which is five times the price of the generic version, but it doesn't cost that much more to make.

Vogel: We think of product design in terms of a two-by-two matrix: One axis is style, and the other is technology. The generic potato peeler falls into the lower left of the map. It's functional, but it has very little style or defining technology. Great, value-driven products such as the OXO peeler move into the upper right.

Cagan: You can't just throw an engineer and a designer together and say, Create something in the upper right. There has to be a commitment to do the proper research, and you have to understand the needs and desires of your target market. You have to understand what the opportunity gap is by scanning the social and technology factors and then understand what that gap means -- so that when you create a new product, you're bridging that gap. You have to do something significant to get into the upper right. That's why we call it the "sheer cliff of value."

Vogel: To scale that cliff, you also have to commit yourself to a comprehensive way of working. In the fuzzy front end, there is a lot of trial and error, and you have to be ready for the fact that there are going to be a lot of misses. You need to have people thinking across disciplines and thinking about innovation. What we've seen is that it takes a different sort of commitment to do that.

Now let's look at the Rotato Potato Peeler, which falls into the lower-right quadrant. It is a technically driven peeler, the latest incarnation of the frightening 19th-century mechanical peelers with exposed blades.