PRODUCT MANAGEMENT METHODS – FOR NEW AND YOUNG COMPANIEST.J. KUHNYWWW.LINKEDIN.COM/IN/TJKUHNY

OVERVIEW --PRODUCT ROADMAP DEVELOPMENT FOR THE EARLY-STAGE SOFTWARE COMPANY• Outline key principles around successful product management in a new or

young company• One view of a methodology to lead to a successful new product that

ultimately lead to developing a multi-stage product roadmap• Discuss Lean Startup Approach to Create a Viable Business Plan

• Document our hypotheses of 9 components of the business model canvas• Define the minimum viable product• Test the business model and value proposition by talking to prospects• Iterate based on feedback until a clearer vision comes into view

CHARACTERISTICS OF PRODUCT MANAGEMENT IN A NEW COMPANY• Focused on innovation that improves or disrupts the status quo• Often founder-driven and resource constrained• Constantly iterating to determine what customers want and will pay for• Trying to either re-segment an existing market, drive costs way down,

or create a new market• Small customer base not expanding rapidly (yet)• Not yet accepted as a market player

NEW COMPANY PRODUCT MANAGEMENT (CONT.)• Product Management is more hands on vs. larger companies• Product planning processes will be less formal or minimal• Product managers will have frequent face-to-face customer interaction• Daily involvement with the product team• Product Vision Roadmap will cover release 2 but not typically defined for multiple

releases• Objective is to define a viable business model and create a product that meets a

specific market need that can then be scaled quickly to rapidly grow the company

STEPS TO A SUCCESSFUL NEW PRODUCT• 1 Document and validate market problems• 2 Define product requirements• 3 Assess competitive landscape• 4 Positioning• 5 Business Case• 6 Roadmap definition• 7 Development and launch (NOT COVERED HERE)• 8 Review and plan for future (NOT COVERED HERE)

1 DOCUMENT AND VALIDATE MARKET PROBLEMS• Are the problems

• Urgent• Pervasive• Something that customers are willing to pay for

• By focusing on problems that meet these criteria, products will be customer-driven• Problems solved by speech analytics have been fairly well documented – will we address

additional problems, or improve on how others have solved today’s challenges?• Get feedback from customers, evaluators and prospects• SWOT analysis to determine company’s ability to deliver on the new product

opportunity

PERFORM NECESSARY INITIAL RESEARCH

• Product manager must be immersed in the organizations objectives• Review the business plan• Perform market research (size, segments,

trends, players, pricing, features)• Review customer list and successes and

failures• Review sales and marketing collateral• Product P&L to date• Existing roadmaps or visionary

documents

• Review competitive intelligence already in hand with sales and marketing teams• Review any other roadmap or

visionary materials that exist• Review analyst reports,

competitor websites, social media• Document the product strategy

as it exists today

DEVELOP A PRELIMINARY PLAN

• Sense the market’s direction and where this company is currently positioned• Define where we want to take

the product• Product Manger documents

initial thoughts for review with internal stakeholders

• Create a 1-3 year vision slide• Minimum viable product• Release 2• Longer term capabilities

• Test and refine the vision with key customers and prospects

ESTABLISHING A WINNING APPROACH TO THE MARKET• Internal Vision review with

company thought leaders• Needs to be directionally correct but

not exact as course corrections are possible

• Review vision and basis for strategic direction based on initial research

• Internal thought leaders should challenge the logic, refine the draft in live meetings

• External prospect and customer review• Present and test alignment on the

top 3 business challenges they are facing as we see them

• Walk through the vision• Determine level of engagement and

excitement and whether the vision addresses the challenges

• Refine the vision as necessary

2 DEFINE PRODUCT REQUIREMENTS

• Discover as many potential features as possible• Prioritize the list of features• Include the most critical features in the minimum viable

product for the first release

MOVING FROM VISION TO AN EXECUTABLE PRODUCT PLAN• Identify market needs in detail

• Gather inside-out requirements from internal visionaries and experts

• Gather and review outside-in requirements from customer interactions

• Include market research on competitive features

• Needs become epics and possibly lower level user stories (Agile)

• Create a feature priority list (also known as Product Development Matrix)• Creates a reasonably objective

means for deciding on product priorities vs. subjective voices

• Lays out logic clearly• Review with the cross-functional

team before priorities make it onto a roadmap

PRODUCT DEVELOPMENT MATRIX• Organizes product requirements input into a prioritized list for determining

what to include on the roadmap• Rating criteria include:

• Source of input – directly from customers vs. internal sources • Alignment with product vision and company objectives

• Alignment with product vision/strategy• Enables market leadership• Required for regulatory compliance• Anticipated revenue impact• Margin• Cost to develop

• Efficient use of resources – will this benefit multiple products or initiatives

• Create a rating across these criteria as an initial way to rank feature requests

3 ASSESS COMPETITIVE FEATURES

• Compare features with competitors to identify differentiation • Take analysis of competing products• Review top competitor feature lists and identify key areas of

strength and differentiation for our product

4 DEFINE MARKET POSITIONING AND SEGMENTATION• What market segments can be defined• Which segments can we dominate• Create a positioning statement to describe our target

customer, primary benefit, and why should they buy from us

5 DEFINE PRELIMINARY BUSINESS CASE

• Consolidates market research• Quantifies risks and rewards, costs and benefits• Should be conservatively stated• Should not be used to staff for growth immediately until initial success is

proven with the product• Estimate costs, break even, profitability and gross margin %• Create a go/no go analysis document (the product development charter)

6 CREATE INITIAL PRODUCT ROADMAP

• Guide product development• Provide needed information to marketing• Communicate product strategy to customers and prospects• Contains the inevitable requests for scope creep

DEVELOP AN INTERNAL AND EXTERNAL ROADMAP• Internal roadmap

• Coordinates Cross-functional internal development activities and thus contains more detail

• Manages expectations of internal stakeholders (executives and cross functional teams)

• Measures team productivity• More aggressive than the external

view

• External roadmap• Used to manage customer expectations• Used in the sales process with key

clients• Sets expectations that are achievable

so customers are not disappointed

• Rankings on Product Development Matrix are key to deciding what constitutes each release

ROADMAP CONTENTS

• More than just a list of product features – can be seen as a blueprint for the upcoming releases and how they will be successful

• Estimated revenues per market segment• Describes Target customers for the release and their needs• Product features to be included (internal and external commitments will differ)• Technology requirements to develop and deliver the product• Marketplace trends that are impacting the roadmap• High-level development schedule (planning, design, development, testing, training, launch

activities)• External roadmaps are simpler and more focused on product features and overall timeline• 2-3 releases initially laid out in a roadmap

ESTABLISH A PRODUCT DEVELOPMENT BUDGET• Ensure resources are properly allocated• Logically organize cost categories so nothing is missed and there are

no surprises• Loaded personnel costs for Product Management, Project

Management, Development, Test, Documentation, Training, Sales education, Product Marketing, Professional Services development of new skills• Technology resources

CUSTOMER DEVELOPMENT PROCESS

CUSTOMER DEVELOPMENT AND “LEAN STARTUP” PRINCIPLES• This is an approach that can be used in conjunction with the previously outline approach

that would lead to a roadmap• Create or document the current hypotheses for the 9 major areas of the business model

• Value proposition and Product features, Market segmentation, Channels to market, Customer relationship requirements, Partners, Resources, Activities, Pricing and Revenue, Costs to develop and sustain

• Test the hypotheses with external parties (customers, prospects, partners) to more fully ensure you are on target before investing a lot in development, marketing and sales

• Modify the hypotheses until a firm business model comes into shape that has early adopters excited and willing to pay for the solution

• Create a Minimum Viable Product• First define through low cost sales collateral (presentations and mockups), define and demonstrate the

product’s value• Second in an actual product, to get actual sales to early adopters who are in need of the solution

EXAMPLE OF BUSINESS MODEL CANVAS

• An example of a business model canvas, which portrays the highlights of the 9 major parts of the business model, is on the next slide.• A 1-2 page write-up of each hypothesis would appear in a separate document• This model would be initially defined and then tested with customers and

prospects as quickly as possible to make sure the value proposition is on track• This approach is widely adopted for startups and has been documented in

various formats.• Leads to greater likelihood of success prior to major investment

REFERENCE MATERIAL

REFERENCES

• Blank, Steve and Dorf, Bob; The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company; K&S Ranch Press; 2012.• “Launching Market-Driven New Products and Services”; Demand Metric

Resarch Corporation; https://www.demandmetric.com/content/product-development-strategy-methodology; 2011• Geracie, Greg and Eppinger, Steven D. (ed); The Guide to the Product

Management and Marketing Body of Knowledge; Association of International Product Marketin and Management; 2013.