Success is a function of focusing on the right market opportunities, building the right product for that market opportunity and building that product the right way.  In our experience, the area that fails to get the right attention most often is “building the right product”.  Companies very often do not seek the right inputs, perform the right analysis or have the right discussions to select the product and feature set with the greatest value to their users.  Very young companies tend to ping between several ideas of the day, resulting in lost opportunity as product initiatives are started and abandoned before completion.  Without product management, these ideas result in disjointed and loosely related features getting bundled into a product offering that is not well understood by the end user.  Oftentimes, especially in SaaS environments, feature enhancements such as scalability, availability and performance are abandoned without being evaluated for their impact to profitability and strategic fit when compared to feature enhancements. 

Our recommendation to help resolve some of these issues is for companies to introduce a process that forces critical thinking about the product feature set, allows for open discussion amongst the business and technology leaders and prioritizes opportunities based on costs, benefits and strategic fit.  The process that we recommend most is a process called the product council.  The product council should include the GM or P&L leader of the product/business in question, senior engineering executives for the product and the appropriate product manager and product management leadership.  The meeting should be held at least monthly, but your company’s release frequency and average time of development might suggest more frequent meetings.

The purpose of a product council is to ensure that the company is choosing the right product features to build given the following: the competitive landscape, customer needs and wants, the need for scale and availability, and company/product profitability.  To this end, the company should create a living list of all the features and product ideas that have been generated within the company and its extended community (shareholders, end users, and other stakeholders).  This list should be analyzed by the product council for strategic fit, financial benefit and risk. 

In analyzing strategic fit, the requests/features are evaluated in order to determine the degree to which they are aligned with the business objectives and strategic direction of the company.  A Maslow’s hierarchy approach to identifying strategic fit is a good way to help prioritize product requests:
• Which features are necessary to complete a base product offering?
• Which features add significant benefit but aren’t absolutely necessary?
• Which features are simply nice to have? 
Debate as to the strategic fit of each of the initiatives should happen within the product council meeting to help ensure that the product initiatives with the greatest fit are prioritized appropriately.

The activity is to perform a lightweight financial analysis.  The financial analysis might be as simple as determining rough cost to build and expected business benefit.  As the company matures it should consider maturation of this process into something that looks more like a probabilistic equation with percentages allocated to each possible financial outcome.  The intent here is to measure impact to profitability.  Product council should return to this analysis after launch to determine if the expected benefits were achieved.

Finally, we recommend evaluating risk as measured through customer impact, potential impact to availability or scalability, and the actions that competitors might take. A simple method of risk analysis can be accomplished by using the Failure Mode and Effects Analysis framework that we shared in a previous post. 

The result of the strategic, financial, and risk analysis should be a prioritized list of product initiatives.  We urge the inclusion of this well defined but easy to manage process as part of your product management practices.  Let us know if you use or prefer something else to ensure you are working on the right products. 

We work with many early stage startups in which the early and critical product phases including discovery, prioritization, specification and the later equally important product phases including product validation (am I getting the results I expected?) are either not performed well or sometimes not performed at all.

Sometimes the company feels that it doesn’t have the money necessary to fund a team of product professionals and attempts to limp along using the entrepreneur’s early vision with the help of some intrepid engineers. Sometimes the company feels that product professionals simply aren’t needed, even going so far as to cite agile methods as the reason (see later posts to explain why agile doesn’t eliminate the product manager position). Oftentimes the company just hasn’t had the opportunity to realize the benefit that a real product professional can offer to their product development lifecycle.

For those of you hoping for a quick and simple answer to the question above, we’ll give it to you right now: Yes – you need product management and you need to staff that team with product management professionals. Marty Cagan does a great job of describing what a product manager’s responsibility is here.

We are of the belief that building the right product is every bit as important as building the product the right way. The former is accomplished by having a disciplined product selection process that is informed by a professional product management team which in turn analyzes the customer needs, competitive landscape and strategic benefits of different options within the product portfolio. The latter (building it the right way) is an engineering responsibility informed but ideally not limited by the specifications that an professional product management team creates.

Equally important is the need for a product discovery phase. This phase is often ignored within many product development lifecycles and includes determining whether there is a product that can succeed within your target market as well as exploration on the topic of what that product might need to do to properly capitalize on the market opportunity.

Ensuring consistent vision through a single organizational owner of the product is yet another benefit to having a professional product management group early. Continuity helps ensure that lessons are both recognized and hopefully retained through organizational muscle memory. Evaluation of product results as measured within the business metrics creates a continuous process improvement feedback loop that helps grow those organizational muscles over time.

Finally, creating a sufficient backlog of product specs within an organization separate from engineering helps to ensure that engineers stay focused on creating shareholder value through implementation rather than specification.

So yes, you should have a product organization and yes they are a team separate from your engineering team. Build one now and help your company grow!

Obviously Youtube and other video sharing sites have changed the way we entertain ourselves. Who doesn’t like silly monkey videos or people getting hit in various parts of their anatomy, or even the way we educate ourselves such as studying philology from Ms. Hotforwords?

How as software developers can we take advantage of this? Well, the folks at 37Signals who brought us Ruby on Rails and some very cool products like Highrise, use video to promote their new versions of software. We think this is a pretty clever idea that goes so far past the standard release notes that it really sets a new standard for other software shops. Besides being a way to promote the new features to existing customers it also serves as a marketing message for new customers. Another example of how video is changing our world comes from Johnny Lee at TED who has had his Youtube video seen over 4 million times in six months resulting in 500,000 downloads of his open source software.

Yet another example of high potential online media is a product called Goldmail.

Are you using video to promote yourself, your product, or your ideas? If so let us hear about them.

From the “C”-suite offices to the product manager’s desk, everyone seems to be frustrated with time to market as measured from the initial idea to the launch of the product. At one level, the frustration is understandable as nearly every organization has something they can do to improve time to market.

That said, unrealistic expectations stemming from a frustration over why things can’t happen overnight is an all too common problem that can be damaging to an organization. Unrealistic expectations can cause low morale and frustrations that ultimately lead to employee turnover, delays in product schedules and lost opportunities.

In our experience the problem behind unrealistic expectations often stems from a limited understanding of the product development process, and the misguided notion that the combined phases of product discovery, product engineering and product release should somehow take less time than the time it took to generate the initial idea: “I explained my idea three weeks ago. Where is the product and when do we launch?” This notion often isn’t stated out loud and if discussed in a group it even sounds ludicrous, but it exists nonetheless in the minds of many C level executives.

Good ideas are extremely valuable, and yours might be so brilliant that it creates significant strategic differentiation; creating barriers to entry for competitors and prohibitive switching costs for customers thinking of moving from your products. Your idea may be the result of endless hours of analysis and insight – but you must recognize that your idea and the desire to implement it is a form of demand generation for services from your product and engineering teams.

This “demand” generation is akin to deciding that you want to build a house with certain amenities. While we all understand that it takes time to build a house when considering the discovery phase (is our house feasible on the plot of land and with the local regulations, and is there a builder who can build it to our expectations?), architectural phase (a combination of designing the house and planning for the construction) and building phase (the engineering or construction of the house), we somehow have a hard time understanding that these concepts apply to your products and services as well.

None of this is meant as an excuse to have low standards, or a reason to not hold your team to an aggressive schedule of shareholder wealth creation. In fact, we argue for just the opposite. But understanding that even the most brilliant of ideas costs much less in time and money to “ideate” than to explore, specify, implement and deploy in systems and software is a good step towards creating aggressive yet realistic targets.

Ask for detailed plans and question the details until you are comfortable. Drive to the earliest possible date, but create that date from good analysis and good planning, and drive and challenge your team to create the best possible date from good data. Remember – if your idea can be implemented overnight, it can probably be copied in 2 nights by your competitors. True value creation can take time.