As many as half of product development sprints are wasted due to avoidable mistakes about customer needs and market opportunities, according to product development experts. By doing a better job of discovery and vetting projects, most companies can significantly cut product waste.

Product management guru Rich Mironov has written extensively on this issue. Inspired by his analysis, here’s a calculator that estimates the benefits you can get from cutting product waste. Fill in the following information:

  • Annual cost of a squad member. This is the fully loaded cost your company pays per year for an average squad member, including benefits, office space, and taxes. Typically in Silicon Valley that’s $200,000 – $250,000. (By “squad” we mean the group of people who conduct a sprint. Your terminology may vary.)
  • Number of people in a typical squad.
  • Length of a sprint, in weeks.
  • Number of squads in your product development organization.
  • Percent of projects that fail or underperform, including:
    • Projects that significantly underperform on goals
    • Projects that must be reworked after release due to usability and market fit issues
    • Features that do not appeal beyond a miniscule number of customers
    • First versions abandoned without followup.
      (The typical rate of product waste is 35% to 70%, according to Mironov. “Unless we’re at the rarest of organizations, anything under 35% is probably sugarcoating or self-deception or fear of reprisal.” — Rich Mironov)
  • Your goal for reducing the failure rate by doing better discovery and vetting before you start full development. According to Mironov, typical goals range from 20% to 33%.

When you’ve filled in this information, click See Benefits.

You don’t have to enter your email address or register to use the calculator. This is a free service.