When developing a new product, product teams typically have many ideas regarding its features. Often there are more feature ideas than available resources. It is also not uncommon to see product teams work on secondary features before implementing elementary ones. In other cases, teams fixate on nonessential details too early in the product development process. As a result, the development process slows considerably, or the project budget is used up before the product's first version can be completed.
Therefore, it is vital to prioritize features before developing a product. Prioritization helps development teams make the best use of limited resources by first developing the most important features and not wasting time and money on less important ones.
“A lack of time is a lack of priorities.”
– Timothy Ferris, entrepreneur, investor, and author
Commonly, features simply get prioritized by the value they generate for the business and its customers. While this approach is certainly superior to no prioritization, it doesn’t consider the complexity level involved in implementing each feature and the limited resources of a company. Therefore, a prioritization method is required to contrast the value of features with their complexity.
The Value-Complexity Matrix
When we start working on a new product with clients at Voa Labs, they typically approach us with an extensive catalog of ideal features and requirements. After we’ve done our research, we add our own feature ideas, making the list of potential features to implement even longer.
To prioritize features and ultimately increase the likelihood of a product’s success, we often use the Value-Complexity Matrix. Mapping product features with the Value-Complexity Matrix helps to identify and prioritize features that offer the highest value with the least amount of effort/complexity.
When using the Value-Complexity Matrix, the product team will conduct two distinct evaluations for each feature:
1. The anticipated value of a feature
2. The estimated complexity/effort for the implementation of a feature
Based on these evaluations, the features are plotted in a matrix with two axes:
Value: The y-axis evaluates the benefit for the user or the business. Value for users includes, for example, the extent to which a feature will alleviate a pain point or enhance their efficiency. You might also take into consideration the size of the user group that benefits from a feature. A feature, for example, with a high value for a small number of users might have a lower priority than a feature with a medium value but benefits all users. Examples of business values a feature can create include gaining new customers, retaining existing customers, or upselling opportunities.
Complexity/Effort: The x-axis evaluates each feature according to how complex or effortful it is to implement.
Setting priorities – Three steps to success
The Value-Complexity Matrix can be applied to almost every project. Let’s walk through how we leverage it to prioritize product features in our projects.
Step 1: Note down all feature ideas
In the first step, our team gathers all potential product features. The list includes both the client’s desired features and our researched ideas. At this stage, we write down all feature ideas on Post-its, regardless of how relevant or not an idea appears. A feature may not seem significant now, but could be an essential feature to implement at a later stage of the product roadmap. Or, in the process of prioritization, its importance suddenly becomes recognizable.
Step 2: Determine the positioning of each feature within the matrix
In collaboration with the client, we evaluate each feature on the list created in Step 1 according to two criteria: value and complexity/effort.
When assessing the value of a feature, there are at least two types to consider:
Customer value focuses on the needs of customers: Is the feature demanded by the market? Does the feature increase customer efficiency? Do all customers benefit from the feature, or only a small proportion?
Business value evaluates the feature’s business value to a company, such as how large the expected increase in sales is through the introduction of a new feature, or how many potential new customers can be acquired because the product includes a certain feature.
Criteria for assessing complexity are typically the resources required, such as development hours or operating costs, but the risks must also be included.
Typically, not everyone agrees with the evaluation of each feature. So, the task is to find the best possible compromise, often by listening to the opinion of the most experienced person in the room regarding a specific topic.
Step 3: Decide which features to develop first and which to archive
Once all Post-Its are allocated on the Value-Complexity Matrix, the final step is to define the priority of each feature. The good thing? The priorities can be easily read from the matrix. Let’s walk through the four levels of priority.
High Priority: High business value, low complexity (upper-left)
These features are the low-hanging fruits. They have the highest priority because they deliver high value while requiring low effort.
If you are working on an existing product, finding features in this quadrant is relatively rare, as these features are typically already implemented.
Secondary Priority: High business value, high complexity (upper-right)
These features also have high priority and should be implemented right after the features from the first category. However, some features may be extremely complex and, therefore, time and cost intensive. As such, they may have to be postponed. For example, when developing a new car, fully automated driving where zero human attention or interaction is required would undoubtedly be classified as highly valuable. However, its implementation is highly complex and, therefore, makes it not the highest priority.
Low Priority: Low business value, low implementation complexity (lower-left)
Typically, these features are set aside in the beginning. However, if a development team has free capacities and there are sufficient resources, these features are worth implementing. Although these features add only a small amount of value, they might include some gems: sometimes, they are useful small features, bug fixes, or similar. Therefore, such gems should be included in the product roadmap, especially because they do not require much work.
No Priority: Low business value, high complexity (lower right)
There is no good reason to develop a feature that adds little value and is very complex to develop. However, these feature ideas should be kept somewhere. Even if they are rejected at this stage, they may become important in the future: For example, a feature may offer massively more added value at a later stage, or its implementation may be significantly simplified because new technology becomes available on the market or a skilled person joins the team.
The Value-Complexity Matrix facilitates a systematic prioritization of product features. Prioritization is important so as not to lose focus during product development. At Voa Labs, we often use the Value-Complexity Matrix to prioritize features. The matrix allows us to rank all possible features during product development according to their value and complexity/effort. In this way, limited resources can be allocated optimally.
Marc Bölsterli is a Digital Communications Intern at Voa Labs. He manages all social media channels, writes blog articles and newsletters, and collaborates on client projects as a communication specialist.
Previously, Marc worked in various gastronomy and hospitality businesses, where he gained his passion for teamwork and customer-centricity.
Marc holds a Bachelor of Business Administration with a focus on marketing from the University of St. Gallen (HSG) and is currently enrolled in the Master in Marketing Management also at the University of St. Gallen (HSG).