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June - 2008 - issue > Management
Building-Great-Products-Art-and-Science-of-Product-Management
Gunjan Sinha
Saturday, May 31, 2008
Many startups fail because of missing the mark on their products, despite the founders and CEOs often having the right vision and strategy, or are even focusing on the right markets. Sales and marketing organizations are also in place in many well-funded startups. Yet, most startups fail to make it to their promised success. The real challenge for many of these startups is how well they deliver on the products. How well does the company build and manage its products? Do they understand how to manage products, which are supposed to be innovative? How well does the startup understand the art and science of managing products and the portfolio of products? These are critical areas of attention for all entrepreneurs.

Customer Requirements versus Product Requirements

Product Management is responsible for defining and building the right product. While customer requirements are important, it is important for innovators to think beyond these requirements and innovate on what could possibly be done to delight and even positively surprise the customer. Customers often don’t know what is possible through new technologies and new UI capabilities. They are often busy with their own needs and requirements. They are not scanning for what is possible in the industry or cross-industry. It is the job of startup product managers and engineering teams to envision the future and design products that fulfill the market and customer needs. At the very least, one needs to prototype and show the customer how the future may unfold, and then take feedbacks from the customer. Iterative feedbacks from your early customers or prospects can then help you develop a product, which truly delivers to the market needs.

Adding Features versus Delivering Product Value

Many product teams get too focused on competitors and market dynamics to keep adding features and functions. Often times, these lead to a ‘me too’ product offerings and fail to offer true product value. But, the winning product teams focus more of their energy on delivering product value. Innovations and features are merely means to deliver these product values. For example, at Apple, which has built a great ‘iPhone’ product, the focus has been a lot more on enhancing the product value of cell phones, by way of bringing music, videos, and voice communication into a single device with great UI. All the features and innovations are geared to support that purpose. It is also extremely important not to overload the products with too many features and capabilities, and in the process loosing the true value of the intended product.


Good Products Incorporate Good Business Models

Good products often incorporate winning business models to help support the company and its business. They also help companies benefit from the products and achieve superior business models. It is not good enough to build a product which is just good for users; instead, good products help create superior business models for the entire ecosystem in a given industry. For example, Google Adsense has been a great product, as it has helped improve the business model for Google as well as smaller publishers who are part of their ecosystem. Experienced product management teams genuinely innovate around the business models and they question the obvious models that exist in their industry.

Good Product Teams Ask Lots of Questions

Good product teams ask a lot of questions about their products, their customers, their users, and the markets they serve. These teams spend time trying to proactively understand the trends in their markets, and take advantage of new developments. Many winning product teams are ‘paranoid’ and constantly evaluate how best they are approaching the market and customer needs. Such intensity of questioning leads to improved product decisions and a better product strategy, which ultimately lead to a successful product offering. Product teams, which don’t question the ‘current art’ enough are unable to break away from the current frame of the market, and hence are easily commoditized by other competing options for their customers. Learning from the market, learning from mistakes made by others, learning from your sales force, customer interviews, all play a pivotal role in helping you set your product on the right strategy.

*Am I deploying my product resources optimally?
*Will this product succeed against today's competition and that which will be in the market when we ship? How do I build sustained competitive advantage?
*Do I know the customers who will buy? Have I personally talked to many of these customers?
*Am I truly differentiated? Can I explain the differentiation to someone in 30 seconds?
*Are the product’s strengths consistent with what's important to customers? Are we marketing these strengths aggressively?
*How well am I leveraging open source community to help me build my product?
*Are we getting a 10x improvement in our marketplace due to our product? If not, how do we become more innovative and creative to attain 10x improvements. Marginal improvements don’t matter in startups; you need 10x improvements from prior art.
*How well do I understand the market and technology trends? Am I leveraging them to my advantage in my products? If not, how can we creatively do so within my constrained resources?

Good Product Teams Deliver Complete and Sellable Products

Many startups deliver products that are truly not complete solutions for their customers. These products eventually become hard to sell, as customers have to still figure out how to fulfill their complete needs. Is your product strategy giving your customers a complete product? Or, are you merely giving them a piece of what they need? Even the more sophisticated consumer gets confused and lost in the complexity of incomplete products, and ultimately it leads to startup failures. Blackberry RIMM figured out that access to corporate email was critical for its business customers, so it delivered the complete product by providing tight integration with Microsoft Outlook email. Until Apple iPhone delivers this true seamless integration with MS Outlook, it is hard for them to gain confidence with business users. Apple iPhone, while being a great consumer product today, is an incomplete business product for most busy business professionals.


Responsibility for Product Success Despite Resource Constraints

Many times, you hear from product managers and product teams that they do not have enough resources, and hence they are ‘incomplete’ in addressing customer and market needs. If only they had more resources, they would have delivered the perfect solution. While there may be some validity in this argument, winning product teams think differently. They work within the existing resource constraints, and yet take responsibility for the product success. They focus on doing their homework – tightly defining PRDs (Product Requirement Documents), prioritizing what is critical versus nice to have. They study the implications of their choices on company revenues and customer satisfaction. But, ultimately they are able to deliver their products despite all the constraints. Their product strategies indeed allow them to deliver despite the constraints. You will seldom see them complain about how short they are on resources.


The bottom line is that winning product teams are creative and they constantly question the obvious and raise the bar on their deliverables. They are able to deliver ‘awesome’ products with limited budgets and with superior quality, and are able to deliver so on time. Yes, that sounds like climbing Mount Everest. But, that is what makes startups successful.

The author is the chairman of SiliconIndia.com and MetricStream. An Internet pioneer, he was the co-founder and president of WhoWhere? Inc., an Internet directory services company acquired by Lycos in 1998 as well as eGain, an online customer service company. Sinha can be reached at gunjan@metricstream.com

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