Practitioner’s Guide to Product Strategy

Building products that help customers achieve the outcomes that they desire over the long term is hard. Jeff Bezos has a great quote on basing your strategy on things that do not change. This quote captures the essence of strategy and long term planning.

Here are few elements that product teams should consider while building products:

Product_Strategy - Pandith Jantakahalli

What to build? is determined by three critical elements — outcomes that customers want to achieve, other alternatives that help customers achieve the same outcome, and your point of view.

Customer outcomes: It is best to define customer outcomes using a vocabulary that a customer would use. While it is typical to place emphasis on functional outcomes, it is crucial to identify emotional, and social outcomes. Functional outcomes can be defined by understanding the customer’s context, situation and constraints. Emotional and social outcomes can be defined by understanding motivations, where and how much energy the customer is expending to achieve the desired outcomes today, and “skill” level of the customer. Ask what will make the customer successful, before asking what will make your business successful. (Note: It is important to ask the latter question as well)

Alternatives for achieving the same outcome: In order to understand what to focus on while building your product, it helps to understand how the customer is achieving the outcome today. Pay attention to what they are dissatisfied with, and if the dissatisfaction is on an important attribute. You may observe that the customer is using multiple products to achieve the desired outcome, or that the alternative is not in the same “product category”.

Point of view: is crucial to the success of your product as it determines the scope of your product and your approach to helping the customer reach an outcome. For example, you may decide that project management is all about enabling better communication among all stakeholders. Thus focusing your efforts on enabling frequent and timely communication, rather than including support for Gantt charts.

It is useful to define every interaction with your product as “the product”. User guides, support interactions, blog posts, interaction on community forums constitute the product. Prioritizing each of these interactions for focus and attention will immensely impact success of your product.

Building what you decide: is especially hard with a steady stream of distractions that are typical in any business. A really “big” customer will sign-up if we build this feature now, lets build this really small/cool feature — it will take only a few hours. Product principles and sequencing decisions help rein in these distractions.

Product principles: While goals and metrics help communicate what to focus on and measure progress, they are weak in communicating what actions need to be taken at an operational level. This is where product principles are helpful. They help with alignment and cohesion of activities across different stakeholders by providing guidelines for action. Product principles must be anchored around customer outcomes and your point of view. Good principles includes how the user should feel before/while/after using the product. They enable faster decision making while ensuring alignment. Instagram has very clear principles — make every picture beautiful, make it super fast to upload a photo, and make it super easy to share photo across different platforms.

Sequencing: When to build a functionality/feature is as important as what to build, as it critically impacts the pace at which business outcomes are achieved. Good sequencing decisions take into account —limiters/enablers, impact, effort required, and any compounding benefits. Evaluating trade-offs in sequencing decisions is crucial — what is the impact of doing multiple small features vs. one large feature, should we focus on projects that drive more traffic when activation rates are low?

While customer acquisition is usually considered to be part of market strategy, I’m including this to highlight how product strategy informs customer acquisition and how feedback from customer acquisition informs product strategy.

Acquiring customers is greatly dependent on positioning, power of emotion in the customer’s decision making process, and your company’s strategy in tackling objections against using/buying your product.

Positioning: Position based on your point of view, and attributes that are important to customer (but poorly served by alternatives) for maximum impact. Good positioning evokes strong emotions and motivates the customer to take action. Positioning greatly impact pricing of your product. iPad’s positioning and anchoring around netbooks is a great example of effective positioning.

Power of emotion in decision making: A rational approach (based on utility and logic) to selling your product has a limited appeal among prospective customers. People find it extremely difficult to take action in the absence of emotion. Tapping into the motivations and true emotions of the customer are crucial for acquiring new customers.

Tackling objections: Customers do not just buy your product, but they switch to it from an alternative. Hence, it is important to make this switch as easy and painless as possible. For example, if you are building a ticketing system, make it is easy to import tickets from their current system. Leverage existing behaviors instead of asking prospective customers to create new ones. For example, Google Sheets retained formulas on Microsoft Excel and focused on improving the collaboration features. It is also important to focus on eliminating/reducing negative emotions like anxiety. Free 30-day trial, no questions asked returns policy can help reduce such emotions.

Measuring if customer outcomes are being delivered: Feature usage is a key indicator in determining if customer outcomes are being met. Feature usage consists of two important parts — reach (how many users are using a feature) and frequency (how often a feature is being used by a user).

It is important to establish baseline metrics for reach and frequency (for each feature), and run projects to improve these metrics on a continuous basis. If a feature does meet the expected metric or is not being adopted, the 5-whys technique is helpful for understanding the reasons and taking corrective action.

Reach/Adoption: Feature adoption can be improved by measures like building awareness, educating users on how it can help them, and suggesting the feature at an appropriate time. If feature adoption continues to remain low and is not helping customers achieve the outcomes that they desire, it is best to kill the feature. Killing features, simplifies the product and provides a great deal of flexibility in making decisions in the future.

Frequency: Frequency of feature usage can be increased either by resolving issues that prevent usage or by extending/modifying the scope of the feature. Nir Eyal’s hook canvas is a great framework for improving frequency of feature usage.

Staying relevant: A product can stay relevant by helping users become successful at what they are trying to accomplish and tracking any changes to customer outcomes and important attributes over time.

Badass users: Enable users to become experts at what they are trying to accomplish by growing their skills, and providing the necessary motivation. Design your product so that cognitive resources of the user is expended on what they are trying to accomplish, and not in using your product.

Tracking changes to important attributes and customer outcomes: As time passes it becomes increasingly important to track any changes to customer outcomes, and any changes to attributes that are important to the customer (It is possible that entirely new attributes become important to the customer). As building these enhancements are crucial, it is important to say no to items like “short term wins” (or distractions), establishing parity with a competitor’s feature set.

Summary: Product strategy should be guided by the goal of helping users become successful by achieving the outcomes that they desire, and focusing on important attributes that do not change.

Essay has been posted on www.jpppandith.in

 

Product Management Principles across industries are the same” – Pandith Jantakahalli, Sr. Product Manager – iPublishCentral. #PNHangout

#PNHangout is an ongoing series where we talk to Product Managers from various companies to understand what drives them, the products they work on and the role they play in defining the products success.

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We recently had a chance to talk to Pandith Jantakahalli –Senior Product Manager at Impelsys, about his experiences as a Product Manager and his take on the role of a Product Manager. Pandith is an MBA from The Indian Institute of Management Bangalore and is also a “Bangalore boy” having grown up in this city. Here is what he had to share with us:

The path to Product Management

My career has had three distinct phases. The first phase was in Engineering where I started as a software engineer at Sasken as part of a seed team which developed ADSL modems and then moved to increasing levels of responsibilities as an engineering manager. The second phase can be broadly classified as a business strategy role where I worked for Mergers and Acquisitions. Here I was an integration manager for a company that we had acquired while I was at Sasken and I also worked in business roles where I helped the executive team make decisions by analysing different situations and suggesting how they need to be done. The third phase is that of a Product Manager.

imagesWhat interested me in Product Management, after having done multiple roles both on the business and the engineering side, was a desire to understand the big picture and play a pivotal role in deciding the success of a product and it has been my passion and interest ever since.

Within this third phase I have had three stints. The first was for a product that I had initially developed which dealt with licensing ADSL technology. In 2002, when I took over as the Product manager, the licensing business model had died out. So the challenge here was to find a new business model for this product. In my second stint I worked at Mindtree where we developed a suite of video surveillance products. This product had been in development for over a year so the challenge here was to get initial customers. Currently I am the Product Manager for a product called iPublishCentral which is a platform for delivering e-books. This product already had a large customer-base so the challenge here was to scale revenues and increase profitability.  So I have been fortunate to see different products at different stages of evolution.

Gauging the pulse of iPublishCentral’s customers.

Fortunately for us, at iPublishCentral, we are strong in three segments: the society publishers, the stem publishers and the children’s publishers and what has worked well for us is our focus and referrals from our existing customers. It is a small world and we are increasingly realising that the sales hinge on referrals. Consequently most of our customers go back to existing customers for references to understand how we fare on various parameters. So even though we have a sales force in different geographies, the key for us has always been good references from existing customers which converts a prospective customer.

We have 4 to 5 different inputs for developing our roadmap for iPublishCentral. First is the feedback we receive from existing customers and prospective customers that we work with or we intend to work with. The second is through customer support that we provide for our publishers. This way we are able to interact with a publisher’s end customers and understand some of the pain points of our customer’s customers.

A third source is the various stakeholders within the company itself i.e. the sales team which talks to existing and prospective customers, the executive team, the product managers including me all regularly have weekly and fortnightly calls with our keys customers. You also have market and competition and you have an understanding of where the market is heading and what the competition is doing and we also have our own sense of what we feel is going to happen in the market and what changes and disruptions are taking place.

Based on these inputs we have our business goals, revenue goals, customer acquisition goals, customer satisfaction goals and we prioritize each of them. We then identify maybe five or ten things that need to be done to achieve each of these goals and these are then broken down into themes. Once these themes are prioritized we start working on individual features based on impact and that is how we broadly layout the roadmap saying these are the goals, this is where the market is going and this is the time horizon in which we want to get things done.

Product Management Mantras:

From a product management perspective, one of the core principles is to help a company achieve its goals by understanding why the customers are using or hiring your product. You have to be able to understand what job the customer is trying to do and you should have a solution that will solve that problem or help the customer accomplish that job in return for money, attention, etc. anything that the company can monetise. Most product managers do not have the luxury of infinite amounts of money to devise a way to monetize the product later. Very few companies are in that position. So the core job of a product manager is to understand how the company can make money by providing a solution that the customer is seeking and not only should you be delivering that solution, you should be delighting that customer because only when you delight the customer are they going to talk about you and you will have more customers coming in through word of mouth, etc.

Having worked in different industries, from the domain’s nature and the competitive nature of the environment – the business environment itself they are all going to be very different for different industries but from a core product management perspective these principles are nearly the same.

Constant Communication

One of the core challenges that I have seen across all my three roles in Product Management is having everyone in the team on the same page i.e. constant communication across different functions within a company in terms of what the priorities are and what needs to be done now in order to keep everyone aligned and have clarity on the goals. This is a challenge all Product Managers have to confront. This, however, also depends on the culture of each company and how they tackle this communication conundrum. Some companies prefer a written document which becomes the basis for all discussions which then gets continuously updated. The other way is to have regular stand-up meetings where all the outstanding items are discussed and only the key decisions are stored in a central place which all team members have access to. So there are various techniques and tools to keep everyone on the same page and depending on how things have evolved within the product you create specific ways of overcoming these challenges that work for everyone.

A + B + C combined makes a Product Manager

The key skills required for Product Management I would say are being able to communicate the vision of the product and ensure everyone on the team has clarity and vision of what the goals are, written and verbal communication skills, analytic skills, design appreciation, capability to get into the mind of a user and think on her behalf to deduce what would make the user happy and delight them. I am also becoming increasingly convinced that a background in psychology really helps because you have to be able to understand the motivations and biases of people and understand people, customers and your stakeholders really well. Saying no to things is another crucial skill to have because you will always have limited resources and a lot of things to do. In addition, being able to ship the product; you can keep trying to work on something, trying to get it perfect and not release it. As a Product Manager, you have to have the guts to take whatever you have developed to the market, get feedback, iterate and improve it. So it’s a lot of skills that are required but the core ones are more on the softer side.

Now Product Managers by nature are very curious people so they would try out multiple products. If you look at their tablets, it would have a lot of apps installed on it so they can understand what the product is about and they will be able to sniff out details which you think are really not important. If you ask them what their favourite product or service is, they will be able to exactly tell you why they like the product, 20 things they would do to improve it, constantly have ideas and above all they have a good attitude in terms of getting things done and getting along with people as they are very good at understanding people. People who do well understand the user, so people with a psychology background or a design background have an edge over those who think a little more analytically or logically. I believe a person with a lot of diversity or a person who has done a lot of roles would definitely do well in a PM role.

Any tips for aspiring Product Managers?

I am a believer in theory and reading books does help but actually doing the role of a PM is the best way to go about understanding this role. A Product Manager will always have a ton of work on their hands so the easiest thing to do is to talk to your own Product Manager to ask him how you can potentially help. Actually doing bits and pieces of a Product Manager’s role would give u a good feel of what a Product Manger does and you are, in turn, contributing to improving the product. Of course you will have to convince the Product Manager that you are capable of handling the role but a good PM would be able to arm out some piece of work which is both interesting to you and useful to him.

If you have any feedback or questions that you would like answered in this series feel free to email me at appy(dot)sg@gmail(dot)com. 

 

Role of a Product Manager

Ensure that the right things gets done in the right sequence

A product manager helps a company to achieve its goals by helping customers get their jobs done in an unique and delightful way, and getting customers to payin some form (money, attention, information).

Let me elaborate on the key responsibilities encapsulated in the above definition.

Getting jobs done: A parent purchases your app to keep her six year old daughter entertained over a three hour train ride. The parent did not purchase the app because it uses the latest technology or she liked how your app is designed/looks. A product manager must understand what “jobs” or outcomes a prospective customer is trying to accomplish. This can also be seen from the lens of solving problems. But I prefer the “jobs approach” as it provides a richer understanding of the context in which a product/feature will be used, why are they using it, what outcomes they are hoping to achieve, and what they need to stop using to begin using your product. A product manager must ensure that the team builds something compelling enough for customers to switch away from an existing solution that they are currently using. This framework is especially helpful in understanding your real competitors or alternatives that the prospective customer has to get a job done.

Lens of solving problems -“real problems”: A product manager must ensure she focuses the team’s effort on solving real problems that will help the company achieve its goals. “Problems” that are ignored are usually not worth working on. The pain killer vs vitamin framework is a useful for assessing the intensity of the pain/problem. Des Traynor’s perspective on“Making things people want”

Making things people want involves understanding a long standing human or business need and then using technology to:

take out steps

make it possible for more people

make it possible in more situations

Flawless execution cannot save a company/product/feature that chooses to focus on jobs/problems that nobody cares about.

Unique: Prospective customers will have an array of options to get their jobs done. The product manager must pick a customer segment and a dimension (like Amazon’s delivery of ordered items within 30 minutes) that is aligned with the most important outcomes/jobs that the customer wishes to accomplish. This decision is critical in ensuring prospective customers consider your product when they want to hire a product in a specific situation.

Trying to be everything for everyone or “unique” for the sake of uniqueness is usually a recipe for disaster. Choosing a dimension that is important the customer and has very little competition helps build a defensible business.

Delightful: While thorough and thoughtful attention to detail helps, Kathy Sierra’s talk on Minimum Badass User provides sage advice. Focus on improving the user’s life and/or skills. What “badass” powers does the user get by using your product?

“People don’t use your app because they like the app or they like you, they are using it because they like themselves, and they tell their friends because they like their friends!” – Kathy Sierra

Establishing reference customers is critical for scaling any business, and you will have reference-able customers only if you have delighted them while getting their jobs done, using your product.

Pay: In a business context, the product must generate enough revenues to grow and sustain the business over the long term. The product manager must be adept at picking a business model that captures enough value for the business to thrive and remain viable.

Another critical responsibility of a product manager is validating that the solution (product) that is built is actually helping the customer get their jobs done and delighting them in the process. Some product management frameworks mandate that the product manager must focus only the “problem space”. I strongly disagree with this specific recommendation. Validation of the solution/product that has been built is as important as specifying what to build. I am not advocating the product manager specifies how to build. Does that mean the product manager does not validate other critical decisions like validating intensity of a problem? No. I am specifically calling out this aspect as a product manager plays a crucial role in deciding whether to ship a product/feature based on this validation.

Summary: Prioritizing which jobs/problems to work on, which customer segments to target, which dimensions to compete and excel on, how to access customers, how to capture value, determining what will delight users, how to scale the business, and validating what is built are key responsibilities of a product manager.

Two other perspectives on the role of product management that I like are one by Marty Cagan

Discovering a product/feature that is valuable, usable, and feasible

and the other by Satya Patel

“Product management isn’t a role or a function, it’s a set of skills. Those skills help remove obstacles and grease the wheels so that the functional experts can do their jobs best. Product management also balances the needs of users, the business and the team and makes the difficult tradeoffs needed to keep pressing ahead. In that way, Product Managers are very similar to CEOs. Very few would argue that a company doesn’t need a CEO. Product managers are simply CEOs of their products. No organization should be without someone who has ‘product management skills’ and works to make everyone else’s lives easier.”

Note: Every interaction that a prospective customer or customer has with a company is viewed as the “product”. It is not just the physical product or the service that is provided. Examples: looking for information about the product on the website, reading the user manual to understand different options/modes supported by a specific feature, sending an email query to the support address.

Next Post: Based on this role definition I will cover skills that a product manager needs to posses to be successful.

Guest Post Contributed by Pandith Jantakahalli, Sr. Product Manager at Impelsys