Keys to Successful Product Definition

In my last post, I discussed some of the key questions around market definition and suggested that in most situations, answers to these questions are needed before going into product or service definition. My rationale is simple

• There are many possible product or service definitions possible for a single market.
• I believe that optimal product definition is a collaborative process.
• Product definition needs to be iterative.

The first point should be obvious. There are build, buy, partner options. Leveraging different technology and orginizational capabilities lead to different product definitions. Etc.

Collaborating on product definition is critical and often misunderstood. It's not just about interviewing customers, stakeholders, and subject matter experts, or reviewing competitive intelligence. These are inputs. Product definition is performed best when one or more problems are well defined, a small cross functional team is brought together to consider scenarios, weigh options and make recommendations. The best Product Managers and Product Owners understand this and become facilitators of this process leading a team to codevelop a solution and own the result. The best product owners are adept at defining the problem, finding the best team to brainstorm and facilitating the discussion. They also recognize when a team is disconnected and whether to regroup with different members or escalate to management.

Finally, the best product owners know that time is limited. In defining a product, one must choose what problems to work on in what priority. They also understand that knowledge is obtained over time and through various learning engagements. So product definition is iterative by definition, and the most important problems are worked on until a 'good enough' solution is defined.

So why market definition before product? Because defining the market sets the boundaries and scope for product definition and helps the Product Owner engage his team on a collaborative, iterative process.

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Dear Product Manager, Think Markets Before Product Definition!

My last post introduced the transformation from a product to a market and platform organization and from a projects to programs. The rationale behind these transformations is to get to a more agile, nimble product and technology organization that can support a larger number of development initiatives, both new and enhancement.


Key Questions to ask on Market Definition

Let's start with some basic questions one should ask when asked to work on an opportunity:

• Who are the customers?
• What are their objectives?
• How do they do it today?
• What are their pain points?
• What are their options to improve their pain points and what are the concerns or issues exercising them?
• What value, and ideally economic value is there to them in solving these pain points?
• Where are these customer needs alike, where do they differ, what drives this difference, and can we estimate the number of customers along these dimensions?

These are some of my key questions around Markets - which I define as a

Markets - an economically significant group of customers (or potential customers) that share common objective, have similar pain points, and have an economic interest to improve the pain points in the short term. 

Friends I have no idea if this is anywhere close to an industry standard definition or a best practice. Surely it is grossly simplified, but that's partially why it works. With these simple questions, I know that if I can develop something that addresses the pain points better than the alternative options, then it might be worth some effort conceptualizing and planning an offering.

You'll notice I've highlighted some subjective words; "economically significant", "short term", and "better". These are all measures relative to your Market. So to take an extreme example, I suspect Virgin Galactic only needs a small number of customers paying a high price point, short term might be 3-10 years, and "better" might just be having the product available and safe.

Why is this important?  

You'll notice that none of these questions have an expression of product or service. One could conceptualize lots of products that address a Market defined this way. I suspect Virgin Galactic would be looking for wealthy, thrill/risk seeking individuals in good health that want bragging rights around a unique experience.

Many (but not all) Product Managers that I have worked with fall into the trap of defining a Product before defining the Market. On the other hand, product or service definition needs to be a collaborative process based on Market needs, but also based on organizational capability. I'll pick this up in my next post.

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Shifting to a Market, Program, and Platform Organization

As technologists, product developers, and marketers, we all love to work on the brand new idea. It might be a simple enhancement or a whole new application to a new audience, we are all motivated by creating something new and the prospect of success.

I spent the first half of my career working in startups where the thrill of building something new was easily attainable. Or was it? The truth is, startups have the first year or two at most to get technology platform, operations, and product development optimized. After that they end up with their own legacy issues and unlike enterprises, probably don't have the same access to capital to buy a legacy transformation. By way of example, the startup I worked on in 1996 had a DEC Tru64 C++ platform that was state of the art at the time but by 1999 we were already prioritizing efforts to move this to Sun/java.

Now, as CIO at a larger corporation I can tell you that long term agility only comes through the ongoing investment in people, process, and technology. This may come off as cliche, but the key word here is "ongoing". What are the main issues?

Project, and project based financials which force the ramp up and ramp down of resources against a desired business outcome.

Product development, when it implies that one is investing in technologies, partnerships, and development tied to a single product.

What does it mean when we transform from "projects" to "programs" and from "product development" to both "market" and "platform" development? There are specific behavioral differences that are key to Market, Program, and Platform agility implied:

• Market agility implies that the organization has cleanly identifies a customer segment with specific needs that it can can offer, monetize, and grow. A product, is a means to that end but not the only option for serving a market. Also, describing the market to the organization is far more specific, but also gives room for debating options and innovating.
  
• Programs allow you to shift priorities and resources, rather than ramping up or down funding or resources. Programs imply continuous improvement, feedback, and prioritization.
  
• Platforms signify reuse of functionality and technology, mechanisms for interfacing with partners and suppliers, and operations that scale based on performance needs.

My next posts will elaborate on these concepts and on shifting to this model.

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