An Insider’s View on Product Management

July 30, 2009

The importance of being first to market

Or is it? In the wake of the excess of the late ‘90s where in the name of market shares acquisition colossal amount of money were spent, one can seriously doubt it. What happened to the like of pets.com, eToys.com and the infamous Webvan?

As always the truth is not as simple. Being first usually confer a serious advantage to companies but also brings its share of problems. The whole intent to be the first mover in a new market segment is to capitalize on the lack of competition to capture mind shares and market shares.

Position your brand in customers’ minds

From a marketing point of view, this is a unique opportunity to establish your brand as the dominating player in a new field. Who has the best cola? Coca-cola. Who has the best car rental services? Hertz. And so on. By building customer loyalty early on with great customer service and establishing a superb reputation, a savvy product manager has the opportunity to strengthen his brand and create a formidable barrier to entry for potential competition.

However there are risks as well in being a pioneer. The market may not be established yet, and prospects may reject your value proposition because it does not match conventional assumptions. Therefore a lot of the marketing budget will go into educating the prospects and having a few –not too formidable- competitors can help you create the market place. Other typical issues include having miscalculated the target audience or the pricing might be incorrect. Finally distribution channels might be inexistent and will need to be created from the ground up.

Establish product leadership

From a product point of view you get a chance to set the standard and be seen as the market reference and thoughts leader. By setting the bar high enough and emphasizing your unique approach and technology, product manager can slow down competition and force them to play catch up with you.

Similarly, being first market mover and first to come with a product induce risks. Competition can capitalize on your customers’ feedback and mistake to improve your product. By the time they start developing their solution they typically have a much better understanding of the problems and needs in the market . Furthermore developing new technologies is expensive and a lot of trial and errors go in the process. By observing your attempts, mistakes and success, competition can innovate in a must cheaper and most effective way. They might even hire some of your experienced staff away or reverse engineer your solution to benefit from your inventions.

Apple’s Newton, a market failure

Apple with the Newton is a perfect example of a first market mover that was not able to capitalize on their ground breaking device. Apple was able to capture public imagination with the first version of “PDA” and basically invented a new market segment. However the product was not technically fit, too bulky, and was targeted to the wrong audience with a price tag too high. Apple had a chance to fix all this, but they were too slow in the process and the quality issues start catching up with them. A few years later, PALM that benefited from Apple mistakes and experience – and their own experience building the Zoomer with Casio- revolutionized the PDA with a cheaper, smaller and simpler solution appealing to a broader set of users.

Weigh pros and cons

Thus, product managers should carefully weigh the pros and cons in being the first mover in new markets. This is a strategy that with proper management and marketing can result into long terms advantages but that also involves a fair amount of risks.

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July 6, 2009

Short term success is not a strategy

Filed under: Business Strategy,Product Management — Gregory @ 11:11 am
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In today business environment, executives are nervous. Sales are plummeting, prospects are uncertain and deals get delayed. Regardless of the unpredictable nature of the business cycle, shareholders, investors and owners make the management team accountable for any slowdown in business. The executives are under enormous pressure to deliver quarter after quarter and some of the pressure is often relayed to the product team.

Don’t succumb to external pressure

However despite external pressures, short term focus is not a business strategy. Good product managers know that valuable and successful products don’t get built in one day; it takes time. A few setbacks or bad quarters along the way are immaterial as long as the product is getting closer to the final vision.

Microsoft is the archetype for long term strategy and planning. When entering new markets they willingly accept to be simple contenders and recognize that short term opportunities are poor. However as long as their strategy is solid and the opportunity real, they will keep investing. They have been very successful with this approach during their corporate history. It all started with Windows.

A short history of Windows
Originally, Microsoft announced Windows in 1983 but the development was delayed multiple times. When Windows 1.0 was finally released in 1985, the industry was laughing. The product was poorly designed as a pure extension of MS-DOS and particularly. Even if some of the underlying concepts had a lot of merits nobody seemed to notice – running multiple applications concurrently and use a mouse device to control the interface.

Windows 1.02 years later, Windows 2.0 was launched and added some innovations that are now common in modern OS: windows overlay and resizing, keyboard shortcuts for navigation, etc… But adoption was still poor. Finally in 1990, 7 years after the first announcement for Windows, Microsoft revealed Windows 3.0 … and the industry stopped laughing. The product was a complete overhaul of the previous versions, with advanced graphics and better usability. The product proved a huge commercial success with 10 millions licenses sold and established one of the most dominant franchises in the computers history.

Obviously Microsoft did not pick the easiest road and most companies could not have afforded to throw money for so long to unsuccessful projects. However you have to admire the conviction and discipline of Bill Gates who kept investing for 7 years in his long term vision despite so many setbacks.

Long term strategy is not a luxury

Some will argue that short-term results have become a matter of survival for many companies and long term planning is a luxury they can’t afford. However this reasoning is flawed. If a company is so ill, this is typically because a lot of bad decisions were made. Why bad decisions were made? Because management was only focused on short term prospects and gains not on long term strategy. If you are already in a hole, you need to stop digging. For example the big box electronics retailer Circuit City filed for bankruptcy protection in November 2008. One year before the company was already in a lot of trouble and a long term strategy to compete against Best Buy and Walmart was badly needed. Despite those obvious problems, management decided instead to focus on short term issues and laid off 3400 of its most highly paid and experienced employees. This certainly offered a short term relieve to their finance but eventually backfired and only accelerated their demise.

Keep your end goal in mind

The same than when running a marathon, you don’t plan your race as a succession of sprints, a product strategy should be focusing on long term vision and commitment. This is the duty of product managers to maintain a steady direction for the product and avoid getting distracted by short term opportunities and issues.

June 28, 2009

Is your software respectful of users?

Filed under: Product Design,Product Management — Gregory @ 8:50 am
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The software industry stopped long ago counting how many horrific design interactions and incomprehensible user interfaces have been released. To some, it may seem that there is some black magic involved in releasing quality software – you never know what you are going to get. After all engineering claims it is working and marketing got all the features they asked for: “What’s the problem boss? It has all the features you requested. You can’t find out how to save a file? Check out page 734 line 24 of the manual.”

No wonder people get frustrated in using computers and software. They get discouraged, they get angry and sometimes they even get violent. This poor guy cannot take it anymore.

Why bad software?

Nobody is intentionally writing software that sucks, but designing good software is difficult. There are a lot of different of reasons and it could be the subject of an entire book, here are a few:

  • Engineers are often left in charge, but they are developers not designers. Coding is hard enough and is taking all their attention
  • Unreasonable deadlines. Can you guess what is sacrificed first: user experience or features?
  • Not understanding the audience. Who are they? How much complexity can they handle? What do they need?

Fortunately, there are a few principles a product manager can follow to make products more pleasant and less alienating. A good starting point is to show some respect to users. Would you hang out with people that don’t respect you? Probably not. Similarly, people expect software to be helpful, friendly and gentle. They don’t want to be abused by them.

Show some respect

Put yourself in users shoes. He is going to judge the software the same way he would for his friends:

  1. Are you doing something without telling me? What are all those icons on my desktop and this new search bar in the navigator? I haven’t asked for those …
  2. Don’t tell me about your problems. I don’t care why you crashed or how bad your code is. Either you work or you don’t, don’t expect me to fix you, I am not a doctor.
  3. Why are you so confusing? You never do things the same way and use all those weird languages.How am I supposed to tell you what I want?
  4. Why so much information? Just get to the point. I don’t need to know most of what you are telling me. Can I turn off all this noise?
  5. Are you inciting me to make mistake? Why do you put this delete button next to the create button? Do you want to check how accurate my clicks are?
  6. Do you think I am stupid? Why do you always ask for confirmation? I don’t want to repeat myself.
  7. Why are you making everything so difficult? I simply want to upload this picture and share it with my friends. I don’t want to compress it, change the format, modify the colors, etc… you can take care of that for me.
  8. Why can’t I change my mind? Yes I know I told you to delete that file, but I want it back now. So what?
  9. Don’t you know me better by now? Why do you keep asking the same things? We have been working together for the last 6 months but you still don’t seem to know a thing about me.
  10. Why are you so bad looking? This UI is so ugly, it is embarrassing. Do I need to keep looking at it every day?
  11. You are not alone. Are you sucking all resources for yourself? You must learn how to coexist with others.

***
Don’t make your customers feel frustrated and angry. Ship software that is respectful of them.

May 2, 2009

Should you listen to your customers?

Filed under: Business Strategy,Product Management — Gregory @ 8:18 pm
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Ford Model T There is a trend in today’s business to get closer to customers and let them directly influence product roadmap and features. Indeed, with the democratization of open communication and the internet, customer feedback programs are growing in popularity. Those programs are sometimes referred to as crowdsourcing and are adopted by high profile companies such as Dell IdeaStorm , Starbucks MyStarbucksIdeas and SalesForce IdeasExchange. Consequently, customers’ wishes, hopes and desires are getting added into products roadmaps with less and less scrutiny. After all, users should be the best judges for product enhancements. Without a doubt, incorporating customer suggestions into existing products is a proven approach to bring in incremental improvements and ensure customers retention. In fact, within the software industry, agile development methodologies have became all the rage in recent years and rely on the promise of constant customer feedbacks and iterative enhancements.

However companies should resist the temptation of taking this idea too far. Product managers must be careful not to confuse customer suggestions and feedback with the underlying bigger problem they are trying to solve. As Henry Ford famously put it: “If I had asked people what they wanted, they would have said a faster horse”. Similarly, did anyone asked for the light bulb before Thomas Edison invented it? What about Sony’s Walkman? Keeping ahead of the competition and bringing to market the next relevant product take imagination and creativity. By solely focusing on present customers’ issues and existing solutions, companies unconsciously hinder their capacity to innovate, pay less attention to external industry trends and become more vulnerable to competition.

For companies, the key to a sustainable business strategy is not only to understand what customers want today and enhance existing product lines, but also to realize the limitations of this approach and encourage investments in longer term innovations.

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