Category Archives: Entrepreneurship

The secret to Apple’s success?

If there’s one company that is the envy of the high-tech community these days, it’s Apple.  Steve Jobs is hailed as a genius CEO and lauded for a string of hit products. Apple’s market capitalization is over $200 BILLION dollars currently, easily ranking it in the top 10 companies in the world by market cap, and just shy of Microsoft for biggest technology company.

Everyone wants to understand the secrets of Apple’s success and hopefully emulate them. The reasons given by people for Apple’s success are many. The following are a few of the arguments made:

1. Vertical integration – Apple owns most of, if not the entire, technology stack for its key products,  and thus gives it advantages over other less vertically integrated products.

NOTE: “Vertical integration” used to be called “being proprietary” and was given as the reason for Apple’s relative lack of success against Microsoft in the OS/PC battles of the 80s and 9os. But phenomenal success has a way of changing people’s minds.

2. Making markets vs.  addressing markets – Some claim that Apple doesn’t ask people what they need but gives them products they decide they want.

Does anyone NEED an iPhone or iPad? Not really, but a lot of people seem to want them.

3. The Cool Factor – Let’s face it, Apple does make “cool” products. Attention to design and detail – fit and finish as they say – really distinguishes Apple’s products from competitors.

4. Entering markets after they’ve developed — Contrary to #2 above, some people claim that Apple doesn’t make markets but enters existing markets once they’re growing and takes  advantage of latent demand.

The iPod was not the first digital music player and the iPhone was not the first smart phone, and the iPad is not the first portable computing device. In the case of the iPad, products like the Kindle and Netbooks actually paved the way for the market to accept  small computing devices, and Apple’s iPad is riding that wave.

5. Differentiated business models – whether it was iPod+iTunes or the iPhone+App Store, Apple innovates not just on technology, but on the business model. This makes it difficult for competitors to play catch up, let alone overtake Apple once it establishes itself in a dominant position.

6. People care about the experience not technology — Apple has always been about the user experience, but for a long time, the majority of the market didn’t care about that.

The majority of desktop computer users cared about “techs and specs”.  Now the tables have turned, and the majority don’t care about the specs, they care about the experience. The iPod, with it’s “1000 songs in your pocket” motto and iTunes which radically simplified purchasing music latched onto the experience wave, and Apple has been riding it ever since.

7. Simple product offerings – Apple has a very clear and simple set of products. It’s easy to understand the differences between their products, product families and the various configurations. This makes it easy to buy an Apple product if you want to.

A lot of companies complicate things unnecessarily. How many iPhone models are there? How many Blackberry models are there? How many Nokia smart phone models are there? See the difference between Apple, RIM and Nokia?

The same is true for the iMAc, the iPod and the iPad. Granted, there are actually a number of iPod models (Nano, Shuffle, Touch etc.) but they are very distinct amongst themselves. This can’t be said for digital music players from other companies.

I’m sure there are other reasons for Apple’s success, but it’s interesting to see how much debate is happening today on this topic. What it says to me is that there is no single reason for their success. And keep in mind that Apple has had failures as well.  Notice Apple doesn’t talk much about Apple TV. And remember the G4 Cube? The 20th Anniversary Mac?  Even the ultracool MacBook Air has had far from stellar success.

So, what do you think are the reasons for Apple’s incredible success over the last 10 years?

Saeed

Crowdsourcing ideas for Canada’s future

Yesterday, I posted Canada’s Innovation Gap (part 3) where I discussed some ideas for solving the lack of innovation that exists in Canada.

This weekend, the Liberal Party of Canada is hosting a conference in Montreal focusing on Canada’s future.  The conference is called Canada at 150: Rising to the Challenge. It’s a non-partisan conference bringing people from different industries,  political views and areas of Canada together to discuss 5 key challenges related to the nation. Those challenges are:

  • Jobs Today and Tomorrow: the Productive Society of 2017
  • Real life issues for Canadian families: How do we care?
  • Energy, Environment, economy: Growth and Responsibility in 2017
  • The Creative and Competitive economy
  • A strong presence in the world of 2017: Commerce, values, and relationships

What’s great about this is the relatively open process they’ve used to get the participation from all parts of the country. Clearly with an agenda like this, the topic of innovation was discussed.

The following panel discussion, along with Q&A is well worth watching. Some really frank and honest comments are made.

(click on the image or click here to go to the video. NOTE: The first minute or so is in French and then it moves into an English discussion. )

A great comment from the early part of the discussion came from panelist Roger Martin, Dean of the Rotman School of Management, University of Toronto.  He gives his definition of innovation and invention.

Innovation does not equal invention.  Invention is producer driven. Someone says, I want to have some kind of gadget. And they dream it up in their lab or basement or garage. And it may not be of interest to anyone else. That’s invention.

Innovation is driven from the user or the consumer side…it’s about improving the experience of the end user or consumer.

Note the point that innovation is driven from the user or consumer perspective. It doesn’t mean they drive the innovation, but that their needs must be central to the innovation process.

Later on, when answering a question about the role of taxpayers and the government in helping spur innovation, Martin says quite bluntly:

I made the distinction earlier about invention and innovation. The problem for Canada and it’s been this way for a long time is we don’t have an innovation policy in Canada. Unless you call benign neglect a policy. We have an invention policy and in fact all of our money goes for invention and that’s the gross error.

I love this statement as it’s so straight forward and unapologetic. We need more people like Martin to speak out this way.

I strongly recommend listening to the full discussion. They discuss value of design in new product development, the reasons for lack of commercial success for Canadian “invention”, the sad state of the VC industry in Canada and much more. It’s very honest and in many places quite astute, and I feel, long overdue.

Saeed

The Origins of Product Management (part 2)

NOTE: Part 1 can be found here.

The high technology industry, and in particular, the software industry is much younger than the Consumer Packaged Goods industry. And the role of brand or product management in high-tech and software is even younger still.

Certainly one of the earliest software companies to apply “brand management” principles to software products was Intuit. Intuit was founded in 1981 by Scott Cook, who was a former P&G “brand man” himself.

In developing Quicken, Intuit’s first product, Cook wanted to create finance software that home users who were NOT financial experts could use.  Cook knew he had to differentiate himself in the market. There were already a number of home finance/checkbook balancing software products available, but most of them were difficult to use for the average person.

Cook wanted someone like his wife, an intelligent woman but not necessarily a finance or computer expert, to be able to easily perform the calculations she needed. To do this, Intuit went so far as to emulate the look and layout of the traditional physical checkbook, within the limitations of the monochrome 80×25 character text screens of the time.

This type of innovation, and focus on customer needs, led Scott and his team to create one of the most successful and enduring consumer software packages of all time.

The book Inside Intuit, gives some great insights into the early days of the software company and describes many of the challenges they faced, but also many of the innovations they made. One unique innovation, at the time, was their “Follow me home” program.

In the 1980s, ease of use was not something you would associate with personal computers, particularly those running DOS or Windows. The technology was still relatively new and a lot of software vendors were simply focused on getting software out the door, let alone focusing on usability. But Intuit was not one of those companies.

They realized that the only way they could truly understand how their customers used their software, was to observe those customers in their actual usage environment. i.e. the home. So Intuit created the “Follow me home” program where they would get permission from Intuit customers to send a company representative to the customer’s home and watch the customer install and use the product on their home PC.

Note task 3.1 (field studies) in McElroy’s memo.

These field studies, called ethnography in the social sciences, are only now becoming common in technology companies. Intuit gleaned many insights from the Follow me Home  program which led them to continue to enhance their product and create what can only be described as an incredibly loyal customer base.

In fact, Intuit’s customer base was so loyal that when Microsoft tried to lure them away by offering free copies of its rival Money product, very few customers took that offer.

Today, aside from their successful products, Intuit is well known in the software industry for a very strong Product Management discipline. I’ve previously blogged about Bill Campbell’s (Intuit’s Chairman of the Board) views on Product Management. Certainly, Intuit had a pivotal role in the development of technology product management but others helped shape the profession as well. I’ll get into one other very influential person in part 3.

Saeed

Related Articles:

The Origins of Product Management (part 1)

One of the common problems when discussing the subject of technology Product Management is that there is no common definition of Product Management that all people agree on.

To better understand what Product Management is, it’s important to understand where it came from.

The origins of Product Management go back to the 1930s at Procter and Gamble. Back then, a manager at P&G named Neil McElroy wrote what is now referred to as the “McElroy Memo”.  P&G was famous for their culture of writing memos on important topics.

McElroy was the manager responsible for Camay soap — a lesser brand to the company’s leading Ivory soap brand. Camay was not selling well and he decided that a dedicated “brand man” (and supporting team) was needed to ensure that sales of the brand were being maximized.  Here’s an excerpt from that memo describing some of the issues that the “brand man” would need to address.

  1. Study carefully shipments of his brands by units.
  2. Where brand development is heavy and where it is progressive, examine carefully the combination of effort that seems to be clicking and try to apply this same treatment to other territories that are comparable.
  3. Where brand development is light:
    1. Keep whatever records are necessary, and make whatever field studies are necessary to determine whether the plan has produced the expected results.
    2. Study past advertising and promotional history of the brand: study the territory personality at first hand–both dealers and consumers–in order to find out the trouble.
    3. After uncovering our weakness, develop a plan that can be applied to this local sore spot. It is necessary, of course not simply to work out the plan but also to be sure that the amount of money proposed can be expected to produce results at a reasonable cost per case.
    4. Outline this plan in detail to the Division Manager under whose jurisdiction the weak territory is, Obtain his authority and support for the corrective action.
    5. Prepare sales help and all other necessary material for carrying out the plan. Pass it on to the districts. Work with salesmen while they are getting started. Follow through to the very finish to be sure that there is no letdown in sales operation of the plan.
  4. Take full responsibility, not simply for criticizing individual pieces of printed word copy, but also for the general printed word plans for his brands.
  5. Take full responsibility for all other advertising expenditures on his brands (author’s note – in-store displays and promotions).
  6. Experiment with and recommend wrapper (author’s note – packaging) revisions.
  7. See each District Manager a number of times a year to discuss with him any possible faults in our promotion plans for that territory.”

Putting aside the lack of gender neutral language (i.e. Study carefully shipments of his brands by units), here’s a summary of the 7 points:

  1. Understand the regions and volumes of product being shipped.
  2. For regions where sales are good or growing, understand why and try to apply those principles to other similar regions
  3. Where sales are light, investigate the situation to understand the problems. Devise a plan to address the problems and work with internal parties to ensure the plan is successful.
  4. Take charge for all messaging and advertising copy for the brands
  5. Oversee advertising and marketing expenditures for the brands
  6. Try new things, particularly with packaging of the brands
  7. Work with local sales managers to understand their perspective on what is and isn’t working in their region

It’s an interesting list. In essence, the “brand man” is responsible for the business success of the brand (product or product family).

The role of “brand man” or “brand team” was very successful at P&G and was emulated throughout the consumer packaged good industry.  And, after almost 80 years, Brand Management is well defined and is a pure marketing and business function within Consumer Packaged Goods (CPG) companies.

The story doesn’t end here, but it’s clear that the principles of brand management had a significant role to play in the formation of technology product management.

Saeed

Related articles:

What Origami can teach us about Product Requirements

Tom Grant has started an interesting series of posts entitled Against a Grand Theory of Product Management. The articles are interesting reading, but make sure you have your thinking cap on when you start, because Tom is discussing an important but rather abstract topic.

He pulls in references ranging from Middle Range Theory (something I’d never heard of before) to Darwin’s theories (something I think we’ve all heard of but probably don’t adequately understand) to help convey his points. I had to read the posts a couple of times each to better grasp the specifics of his arguments.

In Part 2 of his series, Tom asks:

If someone can figure out why even the most meticulously written and reviewed requirements don’t stop some tech companies from making products that their users don’t like or can’t understand, that’s a big contribution to our little field of study. Best to have more middle-range theory before even thinking about the GToE [Grand Theory of Everything].

This is a great question. But before I answer it, I want you to watch the following video. It is from a TED Conference talk given in February 2008 by Robert Lang. Not only is this a fascinating video, but as you’re watching it, keep Tom’s question in mind. Don’t read on though until you watch the video. 🙂

[BTW, if you are impatient and read ahead, the important stuff starts at about 2:30 in the video.]

Lang talks about the evolution of origami, that took it from a traditional Japanese art form that most of us associate with creating things like this:

and turned it into an art (and science)  form that allows people to create things like this:

And what caused that evolution? In Lang’s words, the answer is “mathematics”, or more specifically, the creation and utilization of a set of rules that provide a language for defining what can and can’t be done in origami.

The rules define the crease patterns — the lines along which folds are made — in the paper. And there are 4 rules:

  • 2-colorability — any valid crease pattern can always be coloured with only 2 colours and will not have the same colour in two adjacent areas.
  • modulus (M-V) = +2 or -2 — at any interior vertex, the number of mountain folds and the number of valley folds will always differ by 2
  • For any vertex, the sum of alternate angles around that vertex will always be 180 degrees. e.g. a1+a3+a5 … = 180 degrees  & a2+a4+a6… = 180 degrees.
  • No self-intersection at overlaps – a sheet when folded cannot penetrate itself

[Note: if you don’t understand these rules, watch the video. 🙂 ]

Now these 4 rules define the properties of valid crease patterns, but there’s still something missing. How can those rules be applied to create sophisticated origami? In short, what goes in the box? (see 4:40 of the video)

Lang discusses that as well, and provides this diagram:

In short, the physical subject is reduced to a tree figure defining the key components (“flaps” in Lang’s terminology) of the subject. In this case, those are the legs, antennae, horns etc. of the beetle. That’s fairly easy.

Then some process must be used to take that tree-figure and create a base form for the final origami. He calls that the hard step.

And finally the base form can be refined to create the finished model. That’s fairly straight forward.

The “hard step” is accomplished using the rules defined above and the language for applying those rules. Given those rules are mathematical in nature, they can be written precisely and unambiguously and then executed to create the final model.

What does this have to do with product requirements and Tom’s question?

When looking at product requirements, there are analogies to Subject-Tree-Base-Model example given above.

  • Product Managers investigate  real world problems, needs, scenarios etc. (Subject).
  • They then take their learnings and create abstracted representations of them (requirements) using artifacts such as problem statements, personas, use cases and user stories (Tree)
  • These artifacts are then used by engineering teams to create prototypes and mockups etc. to ensure that the requirements were understood and addressed in the product. (Base)
  • The final product is built, tested, tweeked etc. with the appropriate “fit and finish” before being released. (Model).

Sounds pretty good so far right?

But herein lie the problems.

  • There currently is no language for requirements like the one defined for origami, that can precisely and unambiguously convey what is needed and define that in a way that ensures it can be built.
  • Requirements should be implementation neutral, but as we all know in technology, the ability to fulfill a requirement can often be limited by technology choices and decisions that were made well before the requirement existed.
  • Other constraints such as time, resources, knowledge, legalities, finances etc. all factor into how well a requirement can be met, or perhaps if it can be met or not.
  • In many cases requirements contain unknowns or ambiguities that are filled in by assumptions during the development process. This is a reality of developing products in a business environment.  In the origami situation, this is would never happen. A model (like the stag beetle) can only be built when the full crease pattern is defined.
  • There is no concept of people “liking” or “understanding” the origami in Robert Lang’s rules. i.e. Tom Grant asks about why companies build product their customers don’t like or understand.

This last point is key and deserves a little more discussion. What people like and understand is complex and is not static. In general, what people like is based on overall experience and emotion. It is not something that (currently) can be defined in a set of requirements.

i.e. users of this product must feel giddy with excitement the first time they use this software

So, can origami teach us something about product requirements?

Absolutely. The origami path from Subject->Tree->Base->Model forms series of transformations that is akin to the requirements gathering, communication and development process used when creating products.

Once a set of clear foundational rules for origami were defined and understood, not only did they open up new possibilities for forms never thought possible, but those rules formed the grammar for a language that makes precise and unambiguous communication also possible.

There is almost certainly a set of rules and language for precise definition and communication of requirements, but it has not yet been clearly formalized. That is likely a necessary stepping stone in the maturity cycle of product development.

But even with that requirements language, changing market landscapes, customer preferences and needs, technological, resource and time constraints will all work together to make product success a “grey box”, where those with great vision, insight and execution are likely to succeed but never guaranteed that success.

Saeed

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Guest Post: Measuring Product Management (part 3)

This is part 3 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

——-

In part 1 and part 2 respectively, I discussed the answers I received from company executives on the following questions.

  1. What is the value that product management brings to your company?
  2. How would you measure success for the group and individuals? i.e. on what metrics would you reward them?

In this part, I’ll look at the following question.

Question #3:  Is Product Management Effective, in Your Experience?

The dominant answer here was a resounding SOMETIMES.    I’ll let some comments speak for themselves.

(VP Eng) “Never adequately. It’s a tall order and they are often placed in the organization where they cannot succeed or with unenlightened leadership. If they are in sales they become too deal / feature / near term focused. If they are in engineering they become too development / feature / development focused. If they are in marketing they become too abstract and disconnected. Ideally they are in line of business management reporting directly to an SBU Manager or GM. Where they have done best it was where the corporate imperatives were obvious, and they were well connected and led.”

(VP Ops) “Currently, our model defines product management in terms of marketing activities, so the value is less than optimal.”

(GM) “Yes, the good ones. As always, if their direction is good, and they have goals that make sense, and they are managed, they can usually meet or exceed their goals.”

(VP Eng) “Both successful & unsuccessful.   Needs to have an environment for success – expectations, aligned groups, business goals.  PM needs to stay outwardly focused.   Needs to bring customer into the company.”

(Program Mgmt/Former VP Mkt) “For Agile shops, the product owner role is critical and delivers great value to the business and to dev teams — the product cannot be built without one.  For more waterfall oriented shops, it can be tricky.  I find that product managers that seek to translate market requirements (from marketing/ customer facing teams) into product specs for engineering program managers will often deliver dubious value.  It is best if the product manager is closer to either the customer (e.g. product marketing manager), or to the developers (e.g. program manager) to avoid being an odd-man out. “

Summary

Let’s compare where we ended up as the primary value of Product Management with the Mandate previously posted on this site:

The Product Management Mandate These Results
To optimize the business at a product, product line or product portfolio level over the product lifecycle. To deliver measurable business results through product solutions that meet both market needs and company goals.

They are both in the same ballpark with regards to business and products, but there is definitely a divergence beyond that, with the Mandate missing the key element of MARKET NEEDS.

It is a primary expectation of company executives that product management is a bridge between the internal functions and understanding the market needs and this got lost in the Mandate.

Where we still don’t have clear guidelines are the actual measurements to use, but we do have a general direction in which we need to head.   It is imperative for product management to be able to tie their activities to measurable business results to be perceived as adding value for executives.

These do not have to be tied directly to revenue or profit, but there is ideally some way to tie to leading indicators of them – usage, penetration, retention, quality, cost, etc.

If the feature sets you’re prioritizing or the activities you’re doing do not somehow support an improvement in these indicators, it’s time to rethink what you’re doing… pronto.   It also important that you communicate where you’re impacting business level results so that the execs are aware of it.

I have also personally found that the “intangibles” carry a much higher weight than emerged from these exec comments.   Be assured that even if there is no formal process for measuring how you are perceived in the organization, you are constantly being assessed for leadership skills and ability to collaborate and facilitate internally and externally.   These will ultimately steer your career progression.

Lastly, it’s clear from the final comments that product management success is strongly correlated to a supportive organization with clearly defined roles, objectives and mission.   If you find yourself in a company without these, it’s time to exercise some leadership to help create them or to perhaps move on to greener pastures.    It’s really not that much fun to continue to struggle where personal success is unlikely.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)

Guest Post: Measuring Product Management (part 2)

This is part 2 of a series of guest posts by Don Vendetti. Don is the founder of Product Arts, a product management consulting company in Seattle.

NOTE: If you’d like to write a guest post, contact us and let us know about your idea.

——

In part 1, I described my conversations with some industry executives on the question:

What is Product Management’s overall value to your company?

The answers were quite interesting. In this part, I’ll look at the following question:

Question #2:  How would you measure success for the group and individuals?

This question generated a few different discussions and in many instances I got the response “they SHOULD be measured on…”, which indicated their expectations and reality are different.

That being said, most respondents were strongly on the side of tying rewards to business results.    These included:

  • (#1 by a wide margin) Meeting product business plans and forecasts for revenue and profitability
  • Achieving key business objectives for the specific period, including meeting delivery milestones for releases and launches
  • Achieving key market metrics – adoption and usage, penetration and market share, customer satisfaction and retention

Only a few mentioned the difficulty of looking at current business results only, such as revenue, while needing the product manager to be focused on producing future business results.

One also recognized there may be multiple product managers on a large product, with revenue difficult to associate to each.

These advocated a more blended set of measurements that included specific assigned metrics or deliverables within a specific period.

Product quality was mentioned a few times, and included measurements such as returned product, trouble tickets submitted, major bugs found and SLA performance.

There were also some who raised the need to include some “intangibles”, specifically around how well the individuals were perceived in the organization.

This included satisfaction ratings of internal stakeholders based on timely and effective support of other functional groups, how well they performed at driving product delivery and resolution of issues, how well they collaborated with others, and in providing general leadership.

To capture the intangibles, a few companies performed peer reviews or 360 degree reviews on a regular basis.

A few highlighted that the metrics used for a B2B company versus a B2C were somewhat different.

In the B2B company, responsiveness and effectiveness in supporting a direct sales team for major accounts was a key need.

In a B2C company, there may be less on-demand support of the sales channel, and a higher emphasis on marketing and usage metrics.   (As with everything else, this is probably highly variable from company to company, but may be worth a whole separate article.)

Specific comments included:

(CEO) “I am sure every company is different, but revenue, customer retention, customer satisfaction, net promoter score, and market share (are the measures of success).”

(VP Biz Dev/PM) “We measure and reward based on a combination of product performance in market and other metrics related to on-time delivery for new products, quality metrics, and other qualitative measures based on the PM’s role in providing timely and effective support to marketing, sales, and other functions.”

(CEO) “The success metric has to be on net contribution.  Given the lifecycle stage of the product, it may even be managing losses during the formative stages, but ultimately, the only goal of any product is to make money.  The market is the best indicator of success. If quality is down, sales will be off or returns high. If the product doesn’t meet needs, there will be no sales.  If the product is a poor value against the competition… you get the idea.”

Take-Away

The key take-away from this section is the expectation level of the senior executives on product management being measured against business results.  These other executives are heavily dependent on product management for making the right product choices to ensure business success, and they believe product managers should be tied to company results, just as the execs are.

With business results emerging as the top priority, I would reorder and rework my previous value list to be:

  • Delivers measurable business results through product solutions that meet both market needs and company goals.
  • This is accomplished through:
    • Creating a shared awareness of the customer and market needs to the internal functions
    • Shaping the product solution and delivery plan
    • Facilitating and supporting cross-functional and external activities required to achieve the planned objectives

So how well does Product Management do at meeting expectations? I’ll get to that in part 3.

Don

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Related Posts

Measuring Product Management (part 1)
Measuring Product Management (part 2)
Measuring Product Management (part 3)