Creating a winning product strategy
Date: Saturday , June 28, 2008
In the last few issues, I have talked about social entrepreneurship as a theme. In this issue, I change the tack, and share my thoughts on how one builds or delivers great products - one which truly delights customers! As entrepreneurs, business leaders, and technology developers we are all confronted by the challenges of building a great product, one which will hit the market at the right time, with the right force, and will create a disruption in the way things are being done till now. So, what differentiates a winning product manager, designer, or an entrepreneur from some one who is yet to master this art? How one should approach product strategy and incorporate it in the business game plan? These are questions which are top-of-the-mind issues for not just CEOs, VCs, top executives but also for developers, product managers, and others who are responsible for “block-buster” performance. In my column today, I wanted to share some thoughts on this matter. We all want that the next “ipod”, the next “facebook”, the next “google”, or going back to my social entrepreneurship theme, the “next Grameen bank”, come out of this siliconindia community, how do we make it a reality, how should we shape our product strategy to enable that vision?
The world in the forward mirror, not rear view
Great product strategists look at the world in the forward mirror, not rear view. They sincerely attempt to understand the direction of the global industries, technology disruptions, evolution of consumer behavior, business lifecycles, and other key trends. This is critical in providing a context to our product strategy game plan, and all of us know that some entrepreneurs get better at it than others. What gave Steve Jobs the inspiration for “ipod”? Did he marry the evolution of mobile devices with a “trendy” consumer need to almost come up with a new fashion category? Or how did the Chairman and Founder of Starbucks, Howard Schultz, envision the emerging consumer need for “public privacy” and “place to meet” ahead of its time?
The devil is in the details
Both these leaders and great product strategists are maniacal about consumer experience, and understand the value of paying attention to every aspect of their customer need. The verbal needs, the non-verbal needs, the obvious needs, the subtle needs. Here is a brief email from Howard Schultz (Excerpt from: http://starbucksgossip.typepad.com /_/2007/02/starbucks_chair_2.html)
From: Howard Schultz
Sent: Wednesday, February 14, 2007 10:39 AM Pacific Standard Time
To: Jim Donald
Cc: Anne Saunders; Dave Pace; Dorothy Kim; Gerry Lopez; Jim Alling; Ken Lombard; Martin Coles; Michael Casey; Michelle Gass; Paula Boggs; Sandra Taylor
Subject: The Commoditization of the Starbucks Experience
“....we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. This specific decision became even more damaging when the height of the machines, which are now in thousands of stores, blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista.”
If the Chairman of a multi billion dollar company can worry about the height of their coffee machines, I am sure as we think of building the next great product experience we must certainly pay attention to finer nuances and details. Great products are outcomes of great details and an incessant desire to imagine and fulfill the entire “360 degree” need of one’s customers.
Talking about 360 degree need of customers
When I took over as chairman of Metricstream, the company was building great software, but I started asking some tough questions around this notion of “360 degree needs” of the customer? Are we addressing the whole need or are we fulfilling only a part ofit? Winning product strategies almost always delivers on the “whole” experience. Learning from the Starbucks example, Starbucks delivers: 1) Great coffee, 2) A meeting place, 3) An experience to engage with the Barista, 4) Experience the Aroma, 5) Get the warm feeling of a neighborhood store, etc. The entire “Consumer experience” is what differentiates Starbucks from the rest and that is the core of their winning product strategy. So, as the Chairman of Metricstream, our “software only” focus bothered me, because in the business of compliance, governance, and risk management, customers need software tools to manage government regulations, but they also need a way to understand what these regulations mean in the first place. After much deliberation and strategic thinking, we launched a web 2.0 portal called www.complianceonline.com, which fundamentally completed the “360 degree” value to our customers, by offering them rich community and content experience, while delivering great software. Yes, we still sell software, but we also deliver great community, content, and participation by the compliance professionals in the regulatory process. Not much different from Starbucks. Yes, Starbuck sells great coffee. But, what makes them special is the total consumer experience - the great Starbucks local community, the aroma, the engagement with the barista, and so on.
Great products, great brands
No matter how small you are as an enterprise, it is never too early to think about how you build your brand with your stakeholders. I am not talking about spending big bucks on brand marketing. I only allude to how one goes about creating a “special brand” within one’s market segment. Who Where? (one of my early entrepreneurial ventures) grew to be the #12 most recognized web site and brand on the Internet, with very little marketing spend. We were able to do it because branding was fully integrated with our overall product strategy. We built products that helped us distinguish our brand and presence in the market, while delivering the customers’ needs. Many technologists and developers ignore the role of integrated branding within their products. This goes beyond logos and mass media communications. How do you let consumers spread the word about you through viral marketing effects? How do you engage all the stakeholders, the long tail of stakeholders who rely upon you to make their livelihood? Good product strategists pay proactive attention to these issues.
Let me quote Howard Schultz again in the same email quoted earlier...”I (Howard Schultz) have said for 20 years that our success is not an entitlement and now it’s proving to be a reality. Let’s be smarter about how we are spending our time, money and resources. Let’s get back to the core. Push for innovation and do the things necessary to once again differentiate Starbucks from all others. We source and buy the highest quality coffee. We have built the most trusted brand in coffee in the world, and we have an enormous responsibility to both the people who have come before us and the 150,000 partners and their families who are relying on our stewardship.”
Strength of Starbucks brand within this long tail of 150,000 partners and suppliers is one of the secret causes behind their meteoric success. Successful products are designed to build successful ecosystems which in turn establish the brand of the product.
As I conclude, I want the siliconIndia community to take charge in transforming India from a pure services based economy to an IP (Intellectual property) based, product based economy. I want the world to know us for creation of some of the biggest product brands. Would Airtel, TCS, Apollo Hospitals, and Ranbaxy migrate to become great product brands or could it be one of the smaller VC backed or bootstrapped companies like Metricstream or SiliconIndia.com to take the lead and become global brands. Only time will tell.