Product management
Focus on the customer need
Test to reduce risk
Plan from profit backwards
Create a decision making structure
Prioritise objectively and transparently
Continue collecting feedback
1) Focus on the customer need.
A product manager is a responsible for creating and maintaining a product which has a valuable role in its customer's life. This requires clarity over what that product’s role is and how the plan fulfils it in an ambitious and sustainable way. To establish a useful position starts with a process of discovering perceived value or pain. Products can fail before they’ve started because they were not needed in the first place. A common mistake is to focus on product features rather than customer benefits. To find these out, listen to peoples’ views on your plans objectively and empathetically. Or, even better, find as many ways as possible to put yourself in their position and justify the investment in product development.
2) Test to reduce risk.
Testing enables the further checks on the demand for the product. The aim is always to prove as much as possible with as little input as possible. This can be using techniques as simple as a questionnaire or a 'sign up' form to demonstrate interest. As the uncertainty of the customer need is reduced, product development can continue to solve specific needs more directly with high fidelity prototypes, or even useable ones. Amazon attempts to get in the shoes of the customer with a fake press release. Other options include an imaginary customer feedback letter. Customer usefulness and usability is clearly essential. Business value and revenue model assumptions are also important to verify. A problem may exist but it may not be big enough to build a sustainable business around. Concierge or mechanical turk tests are useful for replicating a full service and thereby finding out total value at a low cost. Tests represent a continual process which applies to innovation in all businesses and at all product stages.
3) Plan from profit backwards.
Business objectives must always be met if a product is to survive. Therefore ignoring profit, or at least sustainability, is ignoring an important part of product development. Indeed the business model is as much a part of the product as the features. A commission model creates different business outcomes to a subscription model. Both could work, but the impact on cash flow, customer relationships and strategy will be very different. For example, most video rental companies make the bulk of their revenue from the latest blockbusters. However these are the most expensive to stock and do not fit with a subscription model which Netflix wanted to prioritise. So they created a recommendation engine which suggested a blend of old and new in order to support this subscription model. To find out possible pricing models ask direct questions. Different pricing will suit different customers at different stages. These can then be bundled/unbundled later in the form of freemium to subscription models or ‘good, better, best’ options used by airlines.
4) Create a decision making structure.
Negotiation between stakeholders for and against certain directions will always exist. Therefore, it is important to depersonalise issues and looks at costs and benefits objectively. Indeed, collecting information from all sides and debating it rationally is the most likely path to a valuable product. An effective and equitable decision making is therefore crucial. A clear process is likely to result in a clear outcome. An objective structure will incentivise team members to provide objective information. A clear process can also help ensure appropriate collaboration at appropriate points. The beginning is usually a phase of information sharing and review. Increased engagement at this stage can be helpful as it increases information and ownership for key stakeholders such as the customers, their representatives in the company and investors. However, this does add complexity so changing this balance of inputs over time via a clear process can be helpful.
5) Prioritise objectively and transparently.
The time, money and skills available to you are limited. This will mean you will have to trade-off different interests. Ego is not helpful in these situations, ideas must be turned down with the same dispassion as they are chosen. Features are best prioritised in relation to each other and then ranked within the context of the vision. Be particularly wary of the sunk cost fallacy, the potential value of a feature has nothing to do with the previous investment in it. Also be wary of all or nothing decisions, decisions can be broken into sections and not now does not mean not ever. Always bear in mind there is no such thing as perfection, only excellence in a product’s suitability for business objectives. This process needs to be organic to find a balance between reliability and rigidity.
6) Continue collecting feedback.
Product management is a continuous process. Therefore it’s important to have systems in place to continuously monitor and distribute feedback. This feedback can be direct, such as a customer, or potential customer, telling you what they want. Although this can be flawed, for example, Equator, a zero alcohol zero calorie beer received huge interest during initial surveys. However, its sales were minimal. Timing can be as much of a problem as interest. So look for clear expressions of interest such as ‘when can I use this’. Or collect more observational data for example by watching product use. User analytics can be very helpful in this respect for flagging issues or opportunities. However, observational data doesn’t explain why users are doing something. To figure this out, it needs to be coupled with direct feedback. In either case it is important to be aware of and mitigate your own biases and those of your users, particularly confirmation bias. As you go through the product management process there are incentives to confirm your predicting beliefs. So continually ask specific, humble and open questions of yourself and your customers.
