Category Archives: Sales

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

Product Management Metrics (part 2a)

My  conference call on PM Metrics with Tom Grant went quite well yesterday. It was a round table discussion with good points made by several participants.

While we did talk about a number of topics, the metrics discussion dominated the first 1/2 of the call.

One of the questions  — What metrics should be used to measure the effectiveness of Product Managers? — got me thinking a bit.

My answer on the call was that first the focus should be on metrics for the Product Management organization, and then a breakdown from there on metrics for individuals based on objectives and tasks that support the goals of the organization.

To me that seems like a logical approach, because all other organizations in a company, includes sales, marketing, technical support etc. have metrics defined and measured that way.

So what’s the problem?

So why is it so hard to come up with metrics for the Product Management organization? Well,  it goes to the heart of the major issue with hi-tech Product Management today.

And that is that most companies don’t look at Product Management as a holistic function within the company, but rather as a set of individuals or small teams working on a variety of product related tasks.

Look around and see how the focus of Product Management is different in different companies.

Look at how widely the reporting and organizational structures are for Product Management. It is part of Marketing in some companies, part of Engineering in others, a standalone department in others.

Look at the ongoing debates related to when Product Management roles should be defined and introduced in a company.

If you’ve worked in or have been exposed to Product Management in different companies, compare and contrast the tool sets (or lack of them) used by Product Management organizations versus the tools used by other departments to do their jobs.

And if people don’t look at Product Management and it’s objectives in any holistic and standard way, how can they set about defining and measuring key metrics for the Product Management organization?

Metrics should focus on measuring intended outcomes

For Sales organizations, the key metrics  (product sales/bookings etc.) are directly tied to the intended outcome of the function: generating sales and revenue.  There are numerous secondary metrics that are tracked such as  sales breakdown by product/product family, by deal size, by geography, by new vs. existing customer etc.

And don’t forget all the sales funnel metrics that are used to track progress and success, such as average time to close, win/loss ratio etc. The important metrics are clearly tied to the intended outcomes of the activity of the sales organization.

For marketers it’s a bit more complicated because there are different roles in marketing and different intended outcomes. The two primary outcomes that can be applied to marketing are related to lead generation and market/industry awareness.

And from there numerous metrics can be identified related to number of leads, cost per lead, lead quality, lead to prospect conversion ratio etc.

Metrics for awareness are numerous, but basic metrics focus on “mentions” by press, analysts and other influencers in publications, reports, blogs, and via social media such as Facebook and Twitter.

And what of Product Management?

What is the primary objective of Product Management? In a previous article on this blog entitled Product Management Metrics (part 1), I defined the mandate of Product Management as:

To optimize the business at a product, product line or product portfolio level over the product lifecycle.

Don Vendetti of Product Arts, wrote a series of guest posts, entitled Measuring Product Management. In part 3 of his series, he provided his definition of the Product Management mandate:

To deliver measurable business results through product solutions that meet both market needs and company goals.

I like Don’s definition.  Both definitions share the same spirit about business focus,  but Don’s phrasing is clearer and more explicit than mine. But I do think that mention of the product lifecycle is needed because that has a huge impact on the objectives and the required focus of Product Management.

Don’s use of the words “measurable business results” is crucial to this discussion.

So what are those business results? Well it depends on the business and the company goals. 🙂

Those goals depend on the many things. Some companies care about revenue. Others care about market share. Others care about profitability. Others only care about getting acquired. And those goals can change with time.

Some choose to be technology focused, while others are sales, marketing or market focused. Some companies have a single product, while others have portfolios of products.

Depending on the company’s goals, size and level of maturity, the market conditions, it’s financial status and it’s overall strategy, Product Management’s objectives will change and so the metrics to measure Product Management will also change.

I’ll stop here, but I’ll pick up this discussion in an upcoming, and long overdue post that will be entitled Product Management Metrics (part 3).

Make sure you read Part 1 and Part 2. 🙂

Saeed

Feedback from Sales

A comment left over at the Inside Sales Experts Blog provides a rebuttal to the common view of sales people by Product Managers:

Son, we live in the world of software , and that software needs to be sold. Who’s gonna do it? You? You, Mr. Product Manger? I have a greater responsibility than you can possibly fathom. You weep for your product and you curse the sales people. You have that luxury. You have the luxury of not knowing what I know: over zealous sales practices , while tragic, probably saved jobs. And my existence, while grotesque and incomprehensible to you, creates YOUR job. You don’t want the truth because, deep down in places you don’t talk about at parties, you want me in sales, you need me sales.
We use words phrases like cold calling, lead generation and closing. We use these words as the backbone of a life spent selling something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under a blanket of the very revenue I produce and then questions the manner in which I produce it. I would rather you just said “thank you” and went on your way. Otherwise I suggest you pick up a telephone and make a sale. Either way, I don’t give a damn what you think you are entitled to.”

The Power of Differentiation

Have you ever walked by a hot dog vendor on the street and wondered how they compete with other similar vendors?

If you haven’t, that’s understandable. If you have, you’re likely an overworked Product Manager.

Do they try to differentiate on price, location, variety of condiments, selection of drinks, cleanliness? Do you think they even think about differentiation?

They probably don’t think about it much unless a competitor co-locates very close to them.

Regardless, have you ever seen a hot dog vendor with line ups an hour long? Do you think major international media outlets would take turns interviewing one particular vendor in a major city?

Well, this is exactly what happened to one specific street vendor during the recent Winter Olympics in Vancouver.

The vendor is known as Japadog, and serves a unique variation on the frankfurter. Japadog can most simply be described as a Japanese take on hot dogs.

Most of the meat in the buns is either beef sausage or bratwurst, although they do offer fish sausage and promise a Kobe beef sausage  in the future.

Toppings include items such as seaweed, bonito flakes, mashed potatoes, cabbage, teriyaki sauce and Japanese mayo. Here’s the menu from one of their cart locations.

(click image to enlarge)

While this may sound strange to hot dog traditionalists, it’s incredibly popular with Vancouverites and visitors to the city.

The media attention received by Japadog, particularly during the recent Olympics, made it so popular that expansion plans to other cities are in the works.

The lesson here is simply a reminder of something we all know, but often forget. Differentiation is your friend. Find a unique way to position and offer your product to the market, particularly when the market is commoditized (as is the case with many hot dog vendors), and you create the opportunity to rise above those competitors and attract both market share and recognition.

Look at virtually any market leading product and you can usually clearly identify how it’s makers created compelling differentiation  from it’s competitors.

And for those of you who want to learn more about Japadog, here’s a short video.

Saeed

Questions for Product Managers

It started with an interview on Red Canary, talking to Product Management leaders in Toronto, including Alan Armstrong, Stephen Pollack, Lee Garrison and Roy Pereira.

Interestingly enough, I know all of these people personally. I have worked with  Lee & Alan, worked for Stephen, and know Roy through very close common contacts.

In the interview, they each answered the following six questions:

  1. Tell us about the best product you’ve ever encountered? Why do you like it?
  2. How do you know a great product manager when you meet one?
  3. What’s your favorite interview question?
  4. When is the best time for a start-up to hire a product manager?
  5. What has been the defining moment in your career?
  6. Mistakes. What was your biggest?

Steve Johnson took up the challenge and posted his answers to those questions on his blog, and most recently Scott Sehlhorst did the same.

I thought it was time to join the discussion myself.  So here are my answers to those same six questions.

Tell us about the best product you’ve ever encountered? Why do you like it?

I’m a big fan of any product that “just works” or surprises/delights me in some way. I don’t have a “best” product, but here are a few that I really like and use regularly.

  • The Blackberry – It does what it promises,efficiently and in a very compact form factor. It’s not perfect, but it’s really good, and it can take a beating like no other device I’ve seen. I’ve dropped my Blackberry many times and it is no worse for wear. To quote an old advertising phrase — “it takes a licking and keeps on ticking”.
  • Dyson vacuum cleaner — I’ve blogged about Dyson previously, but after 3 years, the thing still sucks more than any other vacuum and leaves it’s competition in the dust. Sorry couldn’t resist. 🙂 What really amazes me about it is that their customer service is also really great. A small part broke on the bottom of the machine. I called the toll-free number clearly visible on the cleaner itself. The person on the phone quickly confirmed which part was broken and they shipped me a replacement free of charge a couple of days later. The cleaner was clearly designed for this kind of diagnosis and service. Awesome.
  • The Honda Civic — We’re a Honda family so I don’t have experience with other brands of cars, but then why would I need to? I love the Civic because it just works. I’m terrible when it comes to maintenance and oil changes etc. but even with minimal attention it gets me where I need to go.  It’s both totally reliable and easily affordable. That’s what I want in a car.

How do you know a great product manager when you meet one?

If a product manager adheres to all of these rules, then they must be great! 🙂  Certainly product managers need to be smart, analytic, understand technology and markets, and be great communicators and leaders.

But if there is one thing that I think really defines a great product manager, it’s the ability to “connect the dots” in seemingly unrelated or conflicting contexts.  Perhaps another way to say this is product managers need a strong mixture of creativity, curiosity and intuition.

Steve Johnson answered this question with the line:

A great product manager sees patterns.

Scott wrote:

Great product managers are polymaths, with several areas of deep expertise and skill.

While written differently, these are similar answers and tie in well with the ability to connect dots.

A lot of times product managers need to find solutions to problems that are highly constrained — usually WRT budgets, resources or time. Finding solutions that satisfy business, technical and market requirements, and being able to sell those solutions to executives or other doubting Thomases are hallmarks of a great product manager.

What’s your favorite interview question?

The one I like to ask potential product managers is:

What one word best describes Product Management?

I’ve asked that question on the blog. Here are the results.

It’s always interesting to observe interviewees struggle with the question as it usually catches them off guard. And of course, once they come with an answer, the obvious follow up question is “Why?”

When is the best time for a start-up to hire a product manager?

This is a great question and core to how our industry understands and values Product Management.  I’m clearly biased here, but I have to agree with Stephen Pollack’s response:

Thirty days before you start the company.

This answer also lines up perfectly with what Bill Campbell of Intuit said about Product Management.

Too many people don’t actually realize the full scope of the Product Management role. It’s not just about product requirements, even at the very earliest stages of a company. I’ve seen too many founders of companies create offerings (I won’t call them products), that didn’t completely address market problems, that weren’t differentiated from competitors, or  that didn’t target specific market segments and problem domains.

And what happened then? They brought in “a product manager” to help address the issues. Sorry, way too late. Why spend another year and potentially millions of dollars to fix problems that you could have addressed right at the start?

What has been the defining moment in your career?

I’d say it was leading the Product Management efforts of the flagship product of a public company in Silicon Valley. The release was described by the CTO as “the biggest, most ambitious release in company history.”

That effort consumed my focus  for almost 2 years, and I learned so much during that period. I’ve shared some of it publicly.

I ran a large beta program during that release and used that experience to write this article on betas.

I gained a greater understanding of how to optimize cross-team communication.

I also gained some insights into leadership, particularly when dealing with people across departments, geographies and areas of focus.

Mistakes. What was your biggest?

I’ve certainly made my share.  My biggest was probably not understanding (for far too long) the impact personal motivations and politics played in Product Management. I’ve written that for product managers,  “Every activity is part of a sale.

Virtually everything we do in Product Management relates to influencing others to support our goals. In most companies, Engineering won’t simply do what the PM asks.  Darn. 🙂  And certainly in larger organizations, with significant constraints, misaligned objectives and even compensation conflicts, people will focus on what is of benefit to them. They will optimize locally (i.e. what’s best for them or their team).

A lot of what Product Management is about to get teams to optimize globally (i.e. what’s best for the product or the business), sometimes at the cost of local optimization. This is where selling becomes important. The sale is in getting other teams to agree to do what you need, and to get that, you have to understand their motivations, drivers, goals and objectives. Once I understood that, life became much easier for me as a product manager.

Saeed

P.S. I’d love to see the Cranky PM’s answers to these questions.

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

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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

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