Posts Tagged ‘Product Management’

Social 2.0: The Next Wave of Social Applications

The year 2011 belonged to social applications. Several iPhone apps that enabled some kind of social activity were launched last year. There is still no abating of this trend but it is obvious that majority of such applications will die in the next 18 months. After all, how many social networks will you update after you had a good meal or watched a great movie? Many technology pundits are decreeing the death of social networking applications. I have an entirely different take on it. Just like Web 2.0 companies brought real business models and value to dotcoms, it is time for “Social 2.0”, a set of applications that will bring value out of gigantic social databases such as Facebook, Twitter and the likes to solve real problems.

Humans are social by nature and love to brag to their friends and society at large. The Social 1.0 services gave us ways to share our updates with our connections online. The clear winners are Facebook with a friends graph of 800M users and Twitter with loose ties of 150M+ people and between them they accumulate billions of updates everyday. In addition, some specialized networks such as Foursquare capture our other activities. However, the whitespace in this industry has shrunk considerably. There will certainly be a few innovative companies that will provide new ways to connect and share information but it is increasingly becoming difficult and expensive to capture mindshare away from Facebook and Twitter. However, it doesn’t mean that social is a done deal.

While the first wave of social companies was successful in gathering what’s on our mind, our pictures, likes, short updates and check-ins, the next wave of social companies will build value-added applications on these gigantic social databases. Under billions of Facebook and Twitter updates is buried a wealth of information that can help us make buying decisions, quickly find great deals, and help reduce inventory by aggregating demand in real time.  It is time to stop inundating people with multitudes of social networks to get their specific status and move on to mine information gathered by friends and followers graphs. The best of social is yet to come.

Welcome 2012: the year of Social 2.0!

Startup Mantra I – Solve Real Problem of Your Customers

How often do you hear a technology startup is a cool place to work because one can unleash her innovative brilliance without much questions asked?  Many successful technology companies, including Google have legitimized this work culture by giving employees a free reign to work on their ideas during office hours. However, I think Google manages their process much better than a regular startup on the street as many of their ideas survive to see a day on the internet. Albeit most fails! Why does innovation fail so often in startups?

A good friend and a budding entrepreneur Pete talked about some reason for it in his blog. He says that a startup is an organization working to deliver a service or product under conditions of extreme uncertainties. The uncertainty is not only in terms of the right solution but also the right problem for a startup’s customers. Pete had a point that many a times the problem itself is not very well defined, which makes the discovery process even more challenging. In my experience, most entrepreneurs can speak at length about their company’s solution but very rarely about the real customer problem they are solving. Why is it?

As a product manager, I am trained to uncover problems our clients face so that we build products that our customers will buy happily. Market research, client interviews and fact base creation are regular tasks for a product manager. The first lesson a product manager learns is to never ask a client about their desired solution but the problem they are facing. Mostly clients cannot articulate the solution but can talk at length about their problem. The question is how many startups go through this discovery route to find real problems of their [potential] customers?

Many of you might be aware of now popular Lean Startup methodology that encourages companies to unearth customer problem cheaply and quickly. Eric Reis, the inventor of Lean Startup term has been marketing his methodology aggressively and many entrepreneurs are embracing it. We also adopted it at our startup and decided to launch our first prototype for less than 1/3 the original cost. The idea is to test our hypothesis with a limited product and a controlled set of users to get an early feedback. These are still early days of our lean startup but we are already seeing the benefits of laser focused minimum viable product and longevity of our budget. We will know our fate soon [hopefully] but either way I will keep you all posted. Go lean budding entrepreneurs and solve your customers’ real problem!

Are You Ready to Think “BIG” Again in Technology

One man’s dream is another man’s reality. Yesterday, I saw it in real at the Salesforce conference held in NYC. It was amazing to see so many cool applications and technologies that I could only dream about a few years ago. Have you ever imagined creating a web application without programming in less than 10 minutes, publishing it on the web by click of a button, and scaling it up or down based on the number of users through your iPhone? I witnessed it done in less than 15 minutes! Five years ago, there was no iPhone, web applications were created by expert programmers, and specialist administrators used to spend hours hosting and managing such applications. Now one person can do it all in matter of minutes, maybe hours, but still 100x better than before. Maybe I was oblivious to innovation taking place in the software world but I can’t be so much out of touch. After all, my wife complains that I read, blog and surf technical stuff all the time. What did I miss?

 Sometimes I wonder if we are driving technology or technology is driving us? The Internet changed the scene in late 90s, but with dot-com burst we thought it had reached its pinnacle. However, not only was the Internet alive but also it came back with a vengeance with web 2.0 that unleashed the second wave of innovation in terms of collaboration and social networking. In a few years, almost 700 million people started facebooking, another 100 million started tweeting, and not to mention many millions who are talking through other social networks. While Facebook and Twitter are considered consumer networks, Salesforce and the likes are bringing social networking to the corporate world. I was stunned by how far human imagination can stretch, when Salesforce chatter service announced that now your employees, clients, partners, data, reports, and dashboard- all will start chattering.  It means when you “follow” a report like you “follow” a person on Twitter, the report will start tweeting information to you. Similarly you can follow data, documents, presentations and anything you can think of in your daily work for it to chatter back to you. Wait a second, weren’t we struggling to implement that large, monolithic ERP application a few weeks ago? 

I am convinced that human will and intellect can move mountains and make impossible possible. Add crowdsourcing to it and things start to move much faster. I believe the innovation I saw at the conference is not just one company’s achievement but a culmination of many discoveries by different companies across industries. The Internet is obviously the backbone of this ecosystem offering great improvements in speed, reliability and pervasiveness. Device manufacturers like Apple, Samsung, RIM and others pushed the ball forward to make the “always connected” dream possible. Finally, the software companies completed the picture by continuously innovating technologies such as visualization, search and social networks, and streamlining the development and management of web applications.  Suddenly the world is moving much faster due to interconnected innovations and economies of scale. I can’t think of the next big thing but I can sense that we are building an “Internet” kind of revolution again. I am excited about the future and ready to dream big. Are you?

How to Make Your Product “iPhone” of Your Market

I had an insightful conversation with a fellow product manager about how to increase a product’s value. While there were many good ideas from improving usability to building features for a broader client base, I was surprised to see resistance against opening the product for other application providers to build add-on modules. I wonder if in today’s software world, where freemium and open source are considered viable business models, there is a place for close-ended software?

The argument against open platform is simple – the competition will get a foothold in our install base by building products on our platform. It will reduce opportunities for upsell and services dollars. Agreed, on the face of it these concerns sound valid. How about the long-term sustainability of your platform? I am using product and platform interchangeably here but a product that is widely adopted in an industry behaves like a platform. Think of SAP ERP, which is a core product and almost essential software to run a business in many verticals. SAP can choose not to expose any integration capabilities for third-party providers to control that market. Is it the right strategy?

In one of my MBA classes, I learned about network externalities. The more companies build around your product the more valuable your product becomes. It is not rocket science; just think of iPhone. No doubt it is a wonderful device but majority of its value is derived from many entertainment and productivity applications built on it. Now think of switching cost of this device. Even though Android phones have similar or maybe more features and cost much less than iPhone, customers think about applications before switching!

At first the business model is not obvious, but any product that becomes a standard can offer huge value to clients, manufacturers and industry at large by becoming an open platform. Salesforce makes tons of money by selling its CRM solution, but it found a much bigger growth engine in app-exchange and force.com platform that enables small but innovative companies to build productivity applications on its CRM solution. Salesforce couldn’t have thought of and built all those applications on its own. With other companies building these apps not only they are increasing the value of Salesforce solution but they also are providing Salesforce a new revenue stream by giving it a cut on every sale. A win-win for everyone – clients get better products, partners get a platform to sell on, and providers make more money while keeping attrition rate down.

It happens rarely, but in this case I could convince my group members of the value proposition of network externalities. The next challenge is to build a business case and sell to the technology team. Who said life was easy for a product manager?

Politics@Workplace:Play The Game

Thirty thousand feet in the air sitting in an airplane, I am thinking of politics and power struggle in workplace. Why? I was talking to a close friend about his situation at work before boarding the flight. He had a call with his CTO and the CEO. He didn’t know the agenda as this was a last minute call but was surprised to hear the CTO complaining about sharing sensitive information with clients in a presentation that morning. My friend was astounded because both of them together created that presentation? He fretted for a while before calling the CTO to ask why he didn’t bring it up while working on the presentation.  The CTO explained that he was covering himself against things going off plan. I understood his CTO’s stance and appreciated his candor to bring it up with the CEO. However, my friend still thinks that CTO should have kept him in the loop. Is it politics?

Yes, it is. I learned in my “Power and Politics” class in MBA that wherever there is more than one person, there is politics. Our distinguished professor also taught us that politics is all about making friends but there are no permanent friends in politics, only permanent interests. Contrary to the common belief, I don’t consider politics as a bad thing. Everyone has an agenda and a right to further that agenda, especially in a work place. Don’t you have an ambition to rise through the corporate hierarchy or build your business against competition? So do others! I am not suggesting to unethically further your interests but to be conscious that there are always conflicting interests and only you are responsible for your own good. One of my “thinking” friends once said –“It doesn’t make sense to play politics once in a while.  If you are in then you are in for good”.  I think it makes lots of sense. Either people know you as a straight shooter or as a politically savvy person. You set the rules of engagement and play by them.

In my friend’s case, I realized that CTO was protecting his interests by not over promising while my friend was working on his interests by sharing more information with clients to satisfy them. The CTO did the right thing to work with my friend on his goals and at the same time raising it to the CEO highlighting that things can go wrong. One cannot rise to the top without mastering the political act because this path is full of conflict of interests and personalities. I understand the CTO’s response and respect him for his savvy political skills.  At the same time, I wish my friend is clear on rules of engagement and ready to play by it. Are you?

Product Manager’s Dilemma #69: Re-write or Package?

Recently I found myself in re-write vs package quagmire for one of our products. It is our market leading product that was written twenty years ago and grew big and complex over time. Hundreds of clients are happily using it and love it for its functionality and stability. However, the product failed to keep pace with technical innovation on usability side with limited ability to integrate with new age applications. Many users are asking for modern web based user interface, industry standard technology platform and an API for integration. After some deliberations we came up with two options – rewrite the product or shrink wrap the core under modern technology. For sure, I was not the first Product Manager facing this situation.

The meeting with technology and business teams was tense with different sides having conflicting agendas. Technology team wanted to rewrite as it gave them better control on the code and a clean slate to begin. Their typical reasons were no different for any other technical team:

  • Existing code is spaghetti and difficult to manage. It is our chance to fix it forever.
  • Repackage means we will be building on a weak foundation.
  • Why not start with a clean slate?

Having come from technology side, I could empathize with their situation and understood their rationale. However, my businesses alter ego and rest of the business team questioned this strategy. The business heads were thinking pricing, balance sheets and revenue goals. No wonder teams are important in business! Some key business concerns were:

  • Why will clients wait all these years to get same functionality in a different package? More so when there is a backlog of pending enhancements.
  • What is the business case for this gigantic investment? M&S alone can’t justify it. Will clients pay substantially more for old wine in new bottle?
  • How sanctimonious is this multi-year timeline when R&D struggles to deliver even regular releases on time?
  • How long will it take us to stabilize the new product to match the robustness of the current solution?

Like many situations in business, this one was also not black or white. While the rewrite option had above issues the repackage option was also marred with concerns of long term viability of the technology and client adoption. Despite a lack of clear answer the odds were clearly stacked against rewrite. Even some industry veterans have also vouched against it. We decided to go for a hybrid approach of encapsulating the core around new technology architecture and building new features using modern interfaces. The goal is to chip away at the core over a period of time. Not only it helps us meet client requirements but also continue to strengthen the product with new enhancements. So far clients have positively responded to this strategy and I am glad that sanity prevailed.

RIP re-write!

KIS Pricing – A Perfect Valentine’s Day Gift for Business

No matter how complex your pricing is, it is always transparent to clients. In the last three years, I have worked with many Fortune 500 and not so “Fortune” companies on their pricing practices. It spans products and services, differentiated and commodity offerings, and monopoly and competitive situations. Most recently, I was involved with setting prices for a market-leading enterprise software company. The first thing I observed was the complexity of their pricing model. They tried to skin the onion in every possible way by capturing all conceivable usage metrics in their pricing model. It was so complex that even the pricing team couldn’t tell the price without spending laborious hours on an intricate excel model.  But why should one care if it maximizes the revenue, right?

Wrong. A client will always take the time required to understand pricing irrespective of the value of the product and complexity of the pricing model. Generally enterprise software companies are notorious for their long sales cycles. Moreover, in this case, the sales team was spending a great deal of time on explaining and negotiating prices. The complex pricing model stood naked in a meeting room full of client executives. Why make it so complex when clients will eventually see through it? A company can follow any pricing strategy – premium, commodity, value-based, or cost plus – that aligns with the business strategy, but the key is to keep it simple. It saves effort for sales, marketing and product management to explain arcane pricing and hence the cost of sales. Moreover, it saves angst on the client side. I am glad that the management team learned and acted on it timely. The team recently rolled out a revenue-neutral but simple and transparent pricing, which both clients and internal staff loved. The business got a KIS [keep it simple] pricing on Valentine’s day!

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