We’re running a business, not a technology company (part 2)

I want to continue with the this topic a bit. In the part 1, I made a few points:

• Product management must focus on optimizing for business success not simply technological leadership.
• This must be done by addressing market needs better than other competitors.
• A lot of what we deliver to customers may not be considered truly innovative, but is needed to address the way they need to use the product.
• Technology can change much faster than people’s ability to accept that change.

I want to spend a bit more time exploring this, as it does raise some points of discussion.

Last week when I was in California, I rented a Toyota Prius at the airport. It was my first time driving the Prius, and I will admit that, it took me a couple of minutes to figure out how to actually get the car in gear. First time I drove a car that had a power button in the dash.

Click image to enlarge

Once I figured that out, I drove the car for the duration of my trip and was amazed at how little gas it used. I’m pretty sure it averaged well over 50 mpg.

Now, the hybrid engine in the Prius is truly innovative. Toyota introduced the Prius 10 years ago (initially only in Japan). But the rest of the car is pretty standard: doors, windows, steering wheel, gas tank, mirrors, cup holders, radio etc. It’s not a perfect car, but it’s a pretty good 4 door sedan and it get excellent gas mileage. And given the price of gas these days (over $4 per gallon in California), it will likely have a great future.

Now compare the success of the Prius, with the the complete lack of success of a the Honda Insight. The Insight was actually the first hybrid car introduced in North America (1999). It preceded the Prius by about 6 months. It also had better gas mileage than the Prius, with an EPA rating of 70 mpg. But the Honda Insight sold only about 18,000 units total in the US. The Prius has sold over 1,000,000 units worldwide.

While there is no single reason for the lack of sales of the Insight, the styling of the Insight, the fact that it was only a 2 door hatchback (vs. a 4 door sedan for the Prius) are certainly a big factor. The Insight didn’t look like a “normal” car was something that was said of the vehicle.

The point here is that while one car, the Insight, was first to market and had what appeared to be technical superiority (much better gas mileage), the fact that it didn’t fit well with how people wanted to use the vehicle made it less successful than the Prius, which fit people’s vision of what they wanted in a car. It wasn’t simply the technological innovation of the hybrid engine (or high gas mileage) that was key, but all the other aspects of owning and driving a vehicle that they wanted.

Saeed

We’re running a business, not a technology company

One thing I always try to remind myself of, is that in the end, my job is to make the business successful. Product Management is a business optimization function. In short: get the most valuable products to market with a limited set of development resources to generate enough revenue to meet or exceed the business goals.

Now, given we work in technology, there is a lot of pressure to “innovate”, to create new technological differentiation against competitors, to develop the next “big thing”, or produce a new or novel offering that can be positioned uniquely in the market.

And, while there is nothing wrong with any of that, it is important to remember that although those things may be important, they are not paramount. The most important thing to do is address market needs more effectively than anyone else. This could mean doing the more mundane things like playing well in their existing environment, or providing platform support, or creating command line tools, or making sure the products are easy to use.

None of those things may seem all that exciting or novel, but they are important to customers who must use these products to meet their business objectives. There is no point creating a unique product showcasing great technology that few people want to buy.

Keep in mind that technology changes much faster than many people’s abilities to accept that change, and one of the best things you can do for customers is to actually help them mitigate that change where possible.

Case in point. Back in the early days of Java, I was product manager for a line of Java components. Java was growing and changing quickly and Sun was deprecating APIs regularly. One of the things we did was to provide consistent APIs to our customers so that as they moved from Java (1) to Java 2, they didn’t need worry about those changes from Sun. In short, we provided them a layer of insulation from the underlying technology changes. This was hugely valuable to customers and helped our business as well as our reputation as a company that delivered real value to them.

In the end, optimizing for the business success, and NOT simply technological leadership, should be the goal of every product manager.

Saeed

I have no voice, and I must speak.

A funny thing happened to me on the way to the conference. As I mentioned in a previous post, I’m speaking at the Software Marketing Perspectives conference in Santa Clara this week. So, the funny thing, or perhaps the ironic thing, is that I lost my voice this week.

While it was rough earlier in the week, as I recovered from the flu, it got progressively worse, and today, the day before I’m scheduled to speak, my voice is completely gone. I can whisper, and articulate a few words with a really hoarse, raspy voice, but if I try for more than 30 seconds, I’m done.

So, this puts me in an interesting position. How can I give my talk without the ability to speak? I have a plan B, but I won’t tell you what it is right now.

Tomorrow, after the conference, I’ll let you know the plan and how it went down.

BTW, bragging rights go to the first person who can identify the obscure sci-fi reference in the title of this post.

Saeed

What’s the deal with Software Product Management?

OK…this one has been bubbling inside me for a while, and tonight I decided to lay it out and see what feedback comes in. I’ll put on the flame proof suit now.

In our little world, we (Product Managers) think we are all that. We view ourselves as a critical component of the software development process.

How would developers know what to do if we weren’t around to provide market and product requirements?

How would the “sales droids” make their quotas without the help of Product Managers on those big deals?

Who else could define a coherent product strategy that is both aggressive in the market but achievable with limited resources?

Who else has the ability to be as technical as the engineers, as sales-savvy as the sales team and as hip and aware as the marketing team?

We are so dynamic, we can think strategically when needed, but can switch into tactical mode as the inevitable fires need dousing.

Yup, we’re definitely cut from a special stone.

Perhaps we are what we think we are and have the impact that we think we have in companies.

If that is the case, then let’s look at ourselves honestly and ask:

• Why is it so hard to find a standard or generally agreed upon definition of what Software Product Management is across the industry?

• Why are there really no formalized education programs for Product Management?

• How can a 3 day training course even begin to prepare someone to be a product manager?

• Why are our blogs and books filled with an endless supply of “tips and tricks”, as if that is the route to success?

• Why do people think that a smart sales engineer will automatically make a good product manager?

• Why do so many senior managers think that hiring lots of engineers is more important than hiring a few more product managers?

• Why are so many PM consulting firms selling templates and spreadsheets that are both “comprehensive”, yet “fully-customizable” and that enable you to “increase your professionalism”? Really? Is that what will make us successful?
  

If we take a step back and look at our profession, there are many other questions like this that are left unanswered. I wrote a bit about this topic previously in Product Management Maturity and If we’re so smart.

Think I’m being hard or unreasonable? I don’t think so. I’ve been in Product Management for over 10 years and I’m not looking to jump ship yet. I want to see if we can accelerate the process of maturing this field and helping those who are looking to become product managers avoid the struggles we “veterans” have faced.

What have we done in the last 10 years to make our lot better? And I don’t just mean incrementally better. I mean significantly better.

Software Engineering has really evolved in the last decade. The latest greatest things right now seems to be Agile/Scrum methodologies and mature development management tools. Sales and marketing both have matured as well.

Certainly marketing has taken a big leap forward given the integration of the Web and. in particular, hard analytics into the marketing process. Branding, positioning and other traditional marketing activities are still important, but the potential sophistication of marketing today is an order of magnitude above where it was a decade ago.

Selling still retains a lot of it’s old characteristics. Certainly there is no electronic replacement for a good relationship with a buyer or prospect. But sales automation has improved and there are a lot of mature and time tested sales methodologies to choose from.

And then we come to product management. What have we done in the last 10 years to really improve our profession and define ourselves to those around us? Given that there still isn’t some well understood definition of what we do, I’d say we haven’t done enough.

Instead of getting all hot and heavy about the latest development methodology, let’s develop our own well defined, clearly beneficial and easily understood models for product management. No one else is going to do it for us.

And a few years from now, if I’m still writing this blog, I’d hate to have to look back at this post and say, gee, not much has changed has it.

Saeed

Agile/Scrum Software Development and Product Management

I think ours is the only Product Management blog in the entire blogosphere that has not yet had at least one post on Agile/Scrum software development. That is….until now.

I’m not so sure it was a conscious decision on any of our parts. There is so much other good and relevant stuff to write about, like iPhones and iPods for example.

But seriously, I don’t think we have written about Agile because, and I’ll speak for the 3 of us, it’s not that critical to product management. There I said it!

NOTE: where I use “Agile”, it implies a combination of Agile/Scrum

If you are not familiar with Agile or Scrum software development, you can read more in many locations on the web. A good starting point is, as expected, Wikipedia. Read up on both Agile and Scrum methodologies. While quite distinct in many ways, it’s important to understand both Agile and Scrum and how they are inter-related in practice. In fact, the first line of the Wikipedia entry on Scrum reads:

Scrum is an iterative incremental process of software development commonly used with Agile software development.

While not an absolute definition, and clearly some may argue, I view Agile as more of a culture or approach to software development, whereas Scrum is more truly a methodology, with specific roles, practices etc. that can be implemented. In many cases, when people say Agile, they imply Scrum as well.

As mentioned earlier, Scrum defines a set of roles. One of the key roles in Scrum is the Product Owner. That role is defined as:

The Product Owner represents the voice of the customer. They ensure that the Scrum Team works with the right things from a business perspective. The Product Owner writes User Stories, prioritizes them, then places them in the Product Backlog.

Now, this would most likely map to the Product Manager in most software companies. While true at a high level, another key element of Scrum is the daily scrum meeting where every member of the team, including the Product Owner attends.

Now, imagine if you as a Product Manager had to attend a development meeting every day. When would you get out of the office? When would you meet with customers, partners, prospects etc.?

One big mistake a lot of people make is assuming that the Product Owner has to be the Product Manager. While conceptually that may be true, the Product Manager cannot, and in my opinion, should not attend these daily scrum meetings. I’ve worked in PM role in two previous companies that used Agile/Scrum development methodologies, and I think I attended one Scrum meeting. We still had regular communication with the development teams and regular product reviews etc. but we weren’t embedded into the development process the way some people might think we should be.

Other roles such as Product Designer need to be defined to take that day to day decision making role and act as the Product Owner, or at minimum, be the proxy for the Product Owner (if that is the PM) so that the PM doesn’t get bogged down by daily scrum meetings.

Keep in mind, Agile/Scrum is a DEVELOPMENT methodology. It is a great model for developers and engineers and other R&D team members to work and communicate more efficiently. There are very clear benefits to this model. It provides greater visibility into current work status, work remaining, can identify development hurdles earlier and can communicate them outward more easily.

But, in the end, it is still a development methodology. It should have minimal impact on Product Management’s job as a cross-functional leader marshalling the product from development through marketing, sales etc.

Here’s an analogy. Sales teams invariably follow some kind of sales methodology. It could be strategic selling, solution selling, or conceptual selling. It could be some other model, or even none at all. If the sales team decides to adopt or change their sales methodology, do other related teams like Marketing or Product Management have to change how they work?

The answer is NO. So, then why should those changes happen to Product Management if the development team adopts Agile/Scrum? Our job remains the same. Understand the market, customers, competitors, merge that in with business objectives etc. define what needs to be built and move that through all the stages of development/launch/post launch to enable product success.

If in a few years, some better development methodology comes along, and is adopted by the engineering teams, will that change what Product Management does?

NO.

Development methodologies should be a grey box for Product Management. We should have an understanding of them, but we don’t need to become an “embedded” part of their implementation. It’s all about loose coupling and clear lines of communication. We have our objectives, and Development has theirs, and when we need to interface, we do so in an efficient and mutually convenient manner.

Let me put it this way, and pardon the analogy if it is a bit inappropriate. Product Management and Development don’t need to be married to each other to be efficient. The relationship needs to be more like a “friends with benefits” arrangement. i.e. the two hook up on a regular or as needed basis.

Saeed

I’m speaking at Software Marketing Perspectives

Just wanted to do a bit of self-promotion and let you know, I’ve been chosen as one of the keynote speakers at the Software Marketing Perspectives conference, next month in Santa Clara.

My topic — on Friday May 9th — is called:

Information Supply Chain: Aligning Diverse Teams to Minimize Time-to-Revenue for High-Tech Products

I actually spoke on this topic last year at the SMP conference in Boston, but had a terrible time slot. Last session on the last day. On the bright side, I know that the people who came to my talk really wanted to be at the talk!

I guess they liked the topic and asked that I present it again as a keynote. I’ve blogged about this topic a bit in this series of articles, but the topic really deserves a lot more focus and detail and in fact, over the past year, as I’ve thought more about it, I’ve realized that this is something that could help solve a big problem I’ve observed in growing companies.

When companies are small — from startup to about 50 people — information flows very well. People can stay synchronized with each other simply because they work closely together and there are tight working relationships between groups. Also teams are very small, so the personal relationships of individuals help strengthen the communication flow all around.

But, as companies grow, say from 50 to 150 people (and beyond), problems start creeping in. Everyone no longer knows everyone else. Team sizes start to grow. The personal relationships across teams get weaker. Hierarchy and bureaucracy starts setting in. Roles and duties get redefined and gaps start appearing in the information flow.

What worked with 50 people doesn’t work with 150 people. The company is growing but processes cannot be put in place to keep communication flowing properly. If you’ve worked in such a growing company, I’m sure you’ve heard someone say something like this:

How come we seemed to get so much more done in less time when we were smaller?

If an Information Supply Chain is defined for those critical cross-team junction points, a lot of the communication problems can be eliminated. Everyone doesn’t have to know everyone else to be successful, they just need to who depends on them and what information is needed when.

That structure, of mapping and addressing dependencies can scale, regardless of who is on each team or even where they are located. I’ll leave it there for now, and I’ll report back once I return from the conference.

Hope to see some of you there.

Saeed

Why is innovation hard for large organizations?

I came across an interesting post on this topic, and I have to say, that I really agree with what the author, Kareem wrote. In it he mentions three key reasons for the general failure of large companies to innovate:

1. They must protect their current business
2. Too much bureaucracy or too many stakeholders in the process
3. They don’t provide the proper financial incentives for innovation.

I’m sure most of us who have worked in larger companies have experienced the first two. I’ve also seen a lot written about the first two points related to big company culture, management practices etc. People today cite Apple as a great example of a company that has figured out how to deal with those two points.

I want to spend the rest of this post talking about point 3, which I think is critically important and of which I have not seen as much writing.

In any general cross-section of employees, there will be a small subset who can be deemed as truly entrepreneurial and innovative. A lot of them probably come from the Product Management and Engineering teams! And most of those people are smart enough to understand the value they can bring to a company as well as to themselves if they can deliver a successful product to market.

The problem is, in a typical large company, the ROI proposition for bringing an idea to market is completely skewed in favour of the company. Kareem says it really well in his article:

People are incredibly quick to learn which behavior is rewarded in any system. If you want to innovate, there are two options: remain in a system that pays out an annual salary and a relatively meager bonus for your awesome product. Or, strike out on your own, and build a product that might have a significant pay off, while living off savings or investment.

Now imagine a large technology company that has set aside a large pool of money for acquisitions. That number could be in the hundreds of millions of dollars or even higher. The company wants to make acquisitions that help bolster it’s current market position as well as take it into new (likely adjacent) markets.

There are probably lots of innovative startups out there, working on new products that are potential acquisition targets. Now as the company is out there evaluating the market and potential targets, and then spending big bucks to acquire those companies (likely making the founders of those companies wealthy), what are the innovators inside that company thinking?

They are thinking:

“Hey, how do I get me some of that?”

Now imagine if the company took, say, 5%-10% of that acquisition pool and used it to create a fund that would invest AND if successful reward new innovative products by employees. The structure of how this would be done would have to be worked out carefully so as to ensure transparency in the process of who got funded, and clarity in how success was measured and rewarded, but in theory it is possible.

I can think of at least one model, where an quasi-independent group would review the ideas and decide how to provide an internal equivalent to angel/seed funding to get the project to a stage where it could be evaluated in detail. This model would be no different than what one would face if they took their idea to an Angel or VC for funding.

Regardless of how it is done, there could be significant advantages for the parent company by doing this.

• It sends a very clear message that existing employees can see significant upside if they are major contributors to success in the company
• It significantly reduces the potential for “brain-drain” in the company, by stopping some of the best innovators from leaving to form new companies outside
• It provides a lower cost option for the company to “acquire” new innovative products than going out to market and paying a premium for “hot” acquisitions.

The return for the employees who go this route would be lower than what they might get if they were to strike out on their own, but then again, the risks they would face would also be lower. They could leverage many of the large company’s resources as well as the large customer base of the company. While some hardcore innovators may not like this situation, I’m pretty sure many others would.

Imagine an incubator, funded by the large company (and possibly by other external investors as well) that would provide the environment for these ventures to develop, grow and ideally graduate and become successful. If the venture is one that the large company wants to acquire, they can do so relatively easily given their stake in the company. If they don’t want to acquire the company, the market can decide the value of the company and like any other VC, they can regain their investment (and much more) by some kind of liquidity event.

What do you think of this? Is it possible for large companies to develop incubators for their own employee’s to create innovative products and companies? Or are there other issues and complexities that would make this concept more likely to fail than succeed?

Saeed

Partnering for Strategic Breakthroughs

I thought I’d give this one a dry title - it’s really about the iPhone again. But I thought people would be pretty tired of iPhone posts by now.

So, for those of you who don’t follow the iPhone (both of you perhaps), Apple released the iPhone SDK. But they did something else that will end up driving many more iPhone sales than allowing you to download games - they added ENTERPRISE support. Yes, ENTERPRISE. It’s just that important. (I’m sure you know by now that your products are nothing if they’re not ready for the ENTERPRISE.)

You can now connect your iPhone directly to Exchange and get all your corporate email in one sleek, beautiful Apple-branded package. All the cool of Apple and all the IT-approvability of the Blackberry. And how did Apple do it? Did they hire dozens of developers to copy RIM’s BES gateway technology? Nope. They licensed ActiveSync. The trouble is that, as anyone who has ever owned a Windows Mobile device can attest, ActiveSync stinks. It just doesn’t work reliably. But you know what - no one cares. In one fell swoop Apple just did more damage to RIM then a dozen NTP lawsuits.

When you’re looking to take your product to the next level and add in the “killer” functionality that every single prospect asks for during demos you need to look long and hard at how you can buy or license that technology instead of building it yourself. RIM had nothing to license when the Blackberry first came out - ActiveSync was even worse back then anyway - so they had to do it themselves. But Apple went to the source and did in just a few months what RIM has spent millions of dollars building. So Apple knows what to do. What technology have you licensed for your product lately?

The Benefits of Focus

Most products do a lot. It’s tempting to try to sell all that functionality at once. But a lot of products benefit from having less as opposed to more. Yesterday I ran into a problem: I bought a new car. OK, that wasn’t the problem. My new car has a roof mounted antenna, one that goes back at 45 degrees. Driving into my garage is no problem but backing out again results in the antenna snagging against the bottom of the garage door. My fix was to unscrew the antenna. The unfortunate side effect was the we lost radio reception a lot sooner than normal as we drove out of town.

I figured there must be someone out there that has a solution to this problem. I mean, a shorter antenna isn’t exactly rocket science. I eventually found a site that had a solution so compelling I bought is right away - something very unusual for me, who normally spends an hour of research per dollar (yes, it takes me 2.99 hours to buy a loaf of bread). The miracle site? http://www.stubbyantenna.com/

Never have I found a more focused site. I mean, if you want a stubby antenna, this is the place. There’s selection and nothing to distract me from my task of finding a short - sorry, stubby - antenna.

I know that your product is a lot more amazing than a stubby antenna, but I doubt you could close a sale in five minutes. What could you remove - from your marketing material, if not your product - that would at least cut your sales cycle in half?

Little features and a lesson for Product Management

Today, while working on a different blog posting (to be posted soon), my browser, Firefox, froze. I use FireFox almost exclusively these days, mostly because it works well, and I really like the tabbed browser-window interface. I do a lot of multi-tasking via the web browser, and the tabbed interface makes it very easy to jump back and forth between contexts as I multi-task. Try that with the other dominant browser.

Yes, I know there is some toolbar or something for IE 6 that will do this and that IE 7 has it built-in, but FireFox has had tabs for a lonnnnng time, so I prefer it. And while the tabbing feature is great, that’s not the only little feature I want to discuss.

Firefox has another new feature, not sure when they added it, that will restore the full prior state of Firefox on the next launch, if it had shutdown unexpectedly.

(click to see the whole dialog)

How awesome is that? Well, let me tell you…earlier this evening I was working on a blog posting, typing right inside the WordPress editor, when, as I often do, I switched to another tab to look for some info. I clicked a link on that other page, and then the browser froze. And I mean froze. After waiting a minute and still not having a responsive browser, I had to kill the process in the Task Manager.

Somewhat annoyed at not having saved my brilliant blog posting, I reminded myself that I needed to regularly save my work.

But, when I relaunched Firefox and clicked the Restore Session button, to my amazement, there was the entire post in the WordPress editor, exactly as I had left it. It was not saved in WordPress, but Firefox had brought it back. Awesome. Saved me a bunch of time and yet another reason to continue using Firefox.

So, what’s the lesson for Product Managers?

Keep the user’s experience front and center!

I’m sure the tabbed interface and the Restore Session features were fairly easy to implement relative to other tasks such as accurate rendering of markup, script execution, addressing security issues, dealing with plug-ins etc. And while those are important things to work on, they are expected “buying features” for users. But the unexpected, particularly the ruthless efficiency of something like Restore Session, is what will clinch the deal with many users.

Yet, these kinds of features are often traded off when negotiating with development.

Do you want the security problems fixed or do you want the restore? We can’t do both.

Granted, an open source product like Firefox doesn’t necessarily have to make those trade offs, but for business software, that is not the case. Get your engineers to understand the value of having the product outperform expectations, and task them to help identify little gems of functionality that can be implemented to make users rave about your products.

Saeed — Raving Firefox fan, starting today.