Product Risk Taxonomy

Marty Cagan argues that any recognized product risk taxonomy beats having none, since teams that skip risk assessment often fail, especially with MVPs. He compares three common frameworks: the original value/usability/feasibility model, the four-risk model that splits value into customer value and business viability, and IDEO's desirability/viability/feasibility model. He explains why IDEO's version fits consumer products, where user and buyer coincide, but fits business products poorly, where users and buyers differ. He then states SVPG's preference for the four-risk taxonomy and notes that identifying risks is the first step in discovery, followed by testing ideas against them.

01Key takeaways

• Use a named product risk taxonomy consistently, since skipping risk assessment is linked to failed products and MVPs.
• Separate customer value from business viability so the business side of a product is not neglected.
• Choose the risk model that fits your context: desirability suits consumer products, while business products need a usability focus.
• In business products, look to the buyer for customer value and to the user for usability concerns.
• Assess risks first when discovering a solution, then test ideas quickly against each risk.

02Key sections

Why risk taxonomies matter

Cagan notes that teams not using any risk taxonomy are strongly associated with failed product efforts, particularly failed MVPs. A taxonomy simply classifies risks so teams can see and manage them.

Three popular taxonomies

He describes the original value/usability/feasibility model, which later expanded to four risks by separating customer value from business viability, and IDEO's desirability/viability/feasibility model.

Why value got split

Teams kept focusing on customer value and neglecting business value, a problem he links to the rise of the product-owner-as-product-manager anti-pattern in Agile.

Consumer versus business context

Desirability works for consumer products where user and buyer are the same, but in business products users and buyers differ and users care more about usability than desire.

SVPG's recommendation

SVPG recommends the four-risk taxonomy of value, usability, feasibility, and viability, while acknowledging any consistent taxonomy is better than none.

03From the post

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04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.