- Sales[1] will lobby, as they should, for more features to be added more quickly, often predicting corporate doom if the features are not delivered.
- Engineering will lobby for supreme product quality.
What is the optimal path to a successful product? Before we answer that question, let us define the term successful product.
A: A successful product dominates its Product Category.
Sometimes, runners-up can also be successful, but more often than not, as the Product Category matures, a single product takes a significant lead over its competitors. Owning the leading product in a Product Category means that your investments are rewarded disproportionately well. This advantage allows you to do things your competitors cannot afford to do, like investing that extra profit and reputation in quality improvement, PR, advertising and other areas.
To get your product into the lead and keep it there requires that you balance the pressure to add product value with the pressure to increase product quality in the ratio appropriate to the current stage of the Product Category.
Read that last paragraph again. It is the reason I wrote this book.
What is product “Function”?
Product Function, for the purposes of this book, consists of all of the things in the product that “give something to the customer.” Examples of product Function are:
- A spell-checker in a word processor
- A cigarette-lighter in a car
- A rinse-only setting on a dishwasher
- A portfolio report in a money-managing package
Sales pressure is mostly about adding more Function to the product as quickly as possible.
Where the above meaning of Function is intended in this book, the word will be capitalized and bold.
What is “*Ability”?
The term “*Ability”, pronounced “star-ability”, refers to those product requirements that improve the product quality in ways that can’t be measured in terms of features. It includes more than “non-functional requirements” as coined by Karl E. Wiegers in his excellent book Software Requirements (ISBN: 0735618798). Each Product Category has its own set of *Ability characteristics. For example, Robustness might be a top priority in the Product Category five-year implanted pacemakers, but it may not even be on the *Ability list for the Product Category high-tar cigarettes.
Not in any particular order, examples of *Ability are:
- Performance
- Scalability
- Serviceability
- Robustness
- Usability
- Accuracy
- Consistency
- Ease-of-installation
- Interoperability
- Salability
You can think of more examples.
- All products within a Product Category have the same *Ability requirements.
If you have a solid engineering team, they will always want *Ability to be a high priority.
- Each product release should have a balance of Function and *Ability.
It is the job of the Product Manager to determine how much Function versus *Ability is added to each product release or model. Fixate on *Ability too early and prospects will be lost to competitors because your product does not yet solve enough problems, and without customers, you will never benefit from your quality investment. Too much focus on Function, without enough *Ability to support it, and the product will collapse for the want of a solid foundation to support all the features.
This book will help you keep your product in the right balance.
The ideal balance
For the purposes of knowing how to mix these two opposing forces, Function vs. *Ability, there are three significant stages in the life of a Product Category (also illustrated in Figure 13): Embryonic, Immature and Mature. Version numbers (v1.0, v2.0, v3.0, etc.) denote the product releases.
- Embryonic. The first companies are scrambling to get their first two or three initial product versions out the door.
- Immature. Competitors’ products are comparable, but many features still need to be added.
- Mature. Everyone knows what should and should not be in your product (and your competitors’) and how much it should cost.
Figure 13 – The *Ability Curve - the ideal balance for each stage
In the Embryonic Stage illustrated as “A” in Figure 13, the Product Manager is less concerned with product quality (but does not disregard it completely) and more concerned with getting valuable features into the product and in front of prospects and real customers. The Product Category is still but a twinkle in someone’s eye, and he needs to find out as soon as possible what feature set is most likely to take root in the long term. He needs to discover the degree to which his product road map is wrong before too much time and money are spent. With a little luck, though, he will create enough Function in the first couple of versions to allow the product to stay competitive enough. Most important are the many benefits gained from having a product in customers’ hands for a period of time. A business comes to life only on the day you begin to learn from your customers’ experience of your product.
After a few product releases, the Product Category should be entering the second stage, illustrated as “B” in Figure 13. No time to lose one’s nerve, it is still important to continue adding substantially to the product footprint. The Product Category is far from decided, however, and those who boldly stake out its perimeters stand the best chance to dominate it when it reaches maturity.
This is an inflection point where more pressure will be brought to bear on the Product Manager from within the organization. Now that there is something to lose, namely, customers are responding well to what product management has delivered thus far, there is pressure to brush the organization’s risk-takers aside in favor of a more predictable path to high quality. However, there is a critical course correction still to be made, and you must be sure not to overcorrect. As the Product Category moves out of the Embryonic Stage, product management must begin to shift its emphasis: *Ability takes more priority, bringing it closer to within an equal balance with Function than during the Embryonic Stage.
…and makes us rather bear those ills we have
than fly to others that we know not of
- William Shakespeare
The change from Embryonic Stage to Immature Stage represents the chasm in Geoffrey Moore’s Crossing the Chasm. Organizations are either (a) unwilling to alter course or (b) overcorrect the course, when the Product Category is moving out of the Embryonic Stage and into the Immature Stage. The driving force in either case is fear: fear of losing what has been achieved already.
This critical inflection point is worth exploring.
Most organizations lose the plot right here. It is the reason why organizations other than those successful in the Embryonic Stage ultimately conquer so many Product Categories. The early bird might get the worm, but the second mouse gets the cheese, as they say.
Let us look at each of the two wayward paths one might take when faced with the first “bend in the road.”
Figure 14 – the two incorrect paths: Path Y and Path X
Some organizations take Path Y, or the “Style over Substance” path, illustrated in Figure 14, by simply staying on their “fill-the-product-with-features” trajectory. They believe that what worked in the Embryonic Stage will continue to work in the Immature Stage. They will follow that path for another few releases, and eventually, their feature-loaded, fragile product will collapse under its own weight.
Fly me to the moon
- Frank Sinatra
As an aircraft climbs higher, the rate and angle of climb decrease because the air is thinner. The pilot levels the aircraft in stages because to remain at the original take-off angle would stall the aircraft. To reach cruising altitude requires that the aircraft moderate its upward inclination to suit the thinning air that provides less and less lift for the same wing surface area.
Many products stall by remaining too long in their original, take-off angle. Just like the aircraft, recovering from a stall is difficult. However, a lot can be done before the stalling point is reached.
Other organizations take Path X as an understandable reaction to the pain experienced during the messy process of releasing and supporting the early models of their product. Upon embarking on Path X, the Cowboys are reigned in like so many rabid wild boars and the Professionals are given the reigns. Quality is the new mantra, and the organization is heading for Product Category domination with the promise of a bulletproof product some time soon. Things are looking good, and calm prevails. Peace in our time!
The problem is that customers will not pay for a bulletproof product that does not also do something special for them; in other words, *Ability investments need to be balanced with the appropriate level of Function.
Path X represents a fall into Geoffrey Moore’s chasm.
If the Product Manager has correctly readjusted the Function/*Ability mix for entry into the Immature Stage, his organization will gradually shift towards buttoning down processes, product and customer support issues that were put off during the earlier Embryonic Stage. This is a moderate shift of a few degrees, not a wholesale course change.
All goes well and a few product releases later, the Product Category shows signs of another “change of season”: it is approaching the Mature Stage.
When your Product Category enters the Mature Stage, your product is hopefully behaving itself appropriately; the marketing materials illustrating how your latest model has improved on your previous model identify more *Ability than Function. Once in the Mature Stage, a product must have, as soon as possible and as completely as possible, a product footprint closely matching the Product Category, like the one illustrated in Figure 6 on page 51.
What signs suggest that a Product Category is approaching the Mature Stage?
- Your product has real competitors.
- Your product and your competitors’ products have a similar price and pricing model.
- You and your competitors’ products’ functionality are similar.
- You spend less time trying to convince your prospect that they have a problem (sometimes called “selling the requirement”) and more time selling your product.
There will always be some Function to be added to every product release (or model), even when the Product Category is fully mature. In our example of the Toyota Camry, robust and “complete” as the previous version was, technologies and other new developments can make it possible to “improve on a good thing.” One of the characteristics of a Product Category reaching maturity is when the customer knows well what a product of that category should do and what is should cost.
When a manufacturer adds significant Function to such a product, they take several risks:
- They have difficulty charging for the extra Function; customers already know how much a product in the category should cost.
- Disappointment: When a customer sees “non-Category Function” in a product, they may deduce, even if it is not true, that they will have to pay for that unexpected extra Function and may postpone the purchase as a result.
Once a Product Category begins to mature, the Product Manager should be thinking about introducing all the great, unused product ideas into another Product Category, perhaps in the form of a new product. The important point here is that the original Product Category responds very differently now that it is mature. He cannot continue to add features at the rate he did during the Embryonic and Immature Stages, while the perimeters of the Product Category were less well known. Remaining successful and competitive in a mature Product Category is an exercise in product maintenance and business process, not an exercise in creativity.
There are exceptions, of course, but if you take your product on a significantly different path, you should understand why.
Signs that you might be on the right trajectory during the evolution of a Product Category are when sales folks are a little frustrated, but not demoralized, and engineers are a little peeved, but not to the point where there is an exodus.
Sadly, most products fail to stay on track. They either stay on an aggressive “Fill the product with features” track or embark on a “Let’s build the best product on earth” track. You might describe the two tracks as belonging to “sales” and “engineering” oriented cultures, respectively. In either extreme case, product management is broken, non-existent or significantly disempowered.
Happily, every one of your competitors’ products that fails in this way offers you the opportunity to exploit the Product Category.
Beauty is a short-lived tyranny.
- George Bernard Shaw
When Function is not supported by *Ability
Figure 15 – Quality is ignored in favor of Function
The chart in Figure 15 illustrates a product path that is heavily oriented towards features at considerable cost to product quality. Revenues might still be good, but there are warning signs.
Signs that the chart in Figure 15 reflects your reality are:
(a) A high turnover of engineering staff, where a common complaint is that their voices are not being heard.
(b) Skyrocketing costs of customer support.
(c) Increasingly, customers are expressing frustration with product quality.
The one upside to this situation is that you have many customers, won by the valuable features added to the product more quickly than the competition added to theirs; the customers were scooped up early while the competition was focused on perfection.
The downside is, it is a disaster waiting to happen.
When *Ability is not exploited by Function
Figure 16 - *Ability is not exploited by Function
Figure 15 illustrates what happens when too much attention was paid to “engineering needs.” Signs that your product has slipped into the *Ability track:
- Customers, staff and third-party vendors are filling the vacuum with custom work.
- Your engineering staff is “comfortable” and there is low engineering staff turnover.
- You have difficulty answering the question: Can you name three exciting things you added to the product in the last three years?
- New customer acquisition is showing signs of fatigue.
- You are losing deals to competitors who, only a few years ago, were non-threatening or non-existent.
If the chart in Figure 15 accurately reflects the current position and direction of your product, you have a problem. The temptation is, of course, to blame engineering management or staff. They, after all, added all of that annoying *Ability to the product. In an automatic reaction, management often goes on an engineering witch-hunt. In fact, you have the problem because product management let it happen, wittingly or otherwise. Engineering did what it was trained to do: produce the best quality they were permitted to produce. Years and years of schooling in producing top quality work is difficult to undo. In fact, you want your engineering team to push hard for quality--just as hard, in fact as sales-aligned staff should push for additional features. That tension, Function pulling towards the Y-axis and *Ability pulling towards the X-axis, properly balanced, will allow you to produce a winning product.
Looking at the trend at a high level, the change in amount of *Ability you add throughout the life of the Product Category should be consistent. It may get more expensive to add *Ability over time, but the resulting increase in *Ability should be consistent. True, many product model releases are measured in years - a product might take a significant leap every several years with a plateau between major product models - but the long-term trend should be more or less constant.
- Too much investment in quality too early is a waste of investment
Case in point: Four automobile models
Many automobile manufacturers update their car models every five to seven years. Performance being a key *Ability element in many products, particularly in automobiles, it is important for car manufacturers to keep a close eye on how performance improves over the life of the Product Category. The BMW 5 Series and the Acura TL models are two highly successful automobile models in the
Figure 17 – Growth in horsepower with significant update of model
I predict that when Acura releases the 2009 TL, it will have approximately 325 hp.
Somewhere in Germany, the product team responsible for the BMW 5 Series has a deep understanding of, and discipline around, this rule of *Ability growth, and the chaps in charge of the Dodge Dakota use something akin to throwing darts at a dartboard to determine how the Dodge Dakota changes release by release.
Of course, I could be dead wrong.
- The increase in *Ability model over model should become more predictable as the Product Category evolves.
Horsepower, because it can be measured objectively, is one of the more manageable *Ability elements a car manufacturer can control. Scalability can be measured in terms of, to use a software product example, how many payment transactions can be held in the database, or how many users can be logged on simultaneously. Other *Ability elements are murkier. How do you measure “robustness” from version to version? “Mean time to service call” might be a way to measure robustness. Usually, a Product Manager can at least define a *Ability element figure for the organization to aim for, and measure against, during product development.
Thus, good *Ability measurements of existing and earlier versions make a meaningful foundation for deciding success metrics for future versions.
Consider a fictitious example of a software program written for the insurance industry. It uses some new technology developments that emerged recently; in fact, the entire software company has really only been possible in the last few years because of the new technologies. The software program manages premiums online, allowing agents, 3rd parties and insurance companies to share and exploit the same data. Let us look at a set of *Ability measures that the Product Manager could be targeting in the next version of their software. Product Robustness might be measured, among other ways, in terms of mean time to service call, and product Usability might be measured by the number of hours spent training insurance agents in how to use the software for every million dollars of software license generated.
The point is, the Product Manager can come up with ways to measure *Ability and extrapolate from those figures to produce a measurable target for future versions.
That is the theory at least. In reality, things are messier and more difficult to control. However messy it gets, though, it is always beneficial to understand your current predicament accurately, which requires your team to agree on a list of measurable *Ability elements specific to your product.
| Factor | Previous | Current | Next | Change per version |
| Customer capacity | 10,000 | 15,000 | 22,500 | +50% |
| Mean time to service call per user (minutes) | 45 | 180 | 720 | +300% |
| Maximum simultaneous users online | 100 | 1,000 | 10,000 | +1,000% |
| Mean time to problem resolution (hours) | 4 | 3.5 | 2.3 | -12.5% |
| Training hours per revenue $m | 18 | 12 | 8 | -33% |
| Etc. | | | | |
| Etc. | | | | |
Figure 18 – A theoretical example of *Ability factors for an “enterprise software product”
Trajectories of well known products
Figure 19 – Examples of known products[3]
You might deduce from the products charted in Figure 19 that it a steeper curve (leaning towards the Y-axis) appears preferable to a flatter curve (leaning towards the X-axis) early in the evolution of a Product Category. The pattern of a successful product is:
a) An early balance between Function and *Ability, with some favoring of Function over *Ability, and
b) As the Product Category matures, a diminishing focus on Function.
Increases in Function begin to level out as the Product Category approaches maturity because your product’s footprint[4] is already close to the perimeters of its Product Category. As long as the Product Category is immature, a strong player can, to a degree at least, define those Product Category perimeters. A player can be an industry analyst, a product reviewer, a customer or a product supplier (your company, you hope). Mostly, though, the mass of customers define the perimeters.
It is like a game of musical chairs in which, once the Product Category matures (the music stops), you had better have a product that mostly covers the Product Category (your rear end should be over an available chair).
By the time a Product Category enters the Mature Stage, a “Leader” or “Owner” of that Product Category has usually been recognized. Tests proved that Pepsi tasted better than Coca Cola, but consumers had already decided that Coca Cola was the leading product in that Product Category. In the mid-1990s, the Netscape Corporation quickly achieved great success and their product, Netscape Navigator, grew to be the browser of choice for consumers.
In terms of *Ability, the earlier versions of Internet Explorer were weak. In their all-hands-on-deck rush to overwhelm the competition with features,
- When you are up against an entrenched competitor, you need a steep curve.
Remember though that competing for customers from a different Product Category is an altogether different kind of challenge.
One last note on Microsoft Internet Explorer: perhaps Microsoft does not care too much anymore, but a product that remains on a steep curve in a Product Category in the Mature Stage is vulnerable. I predict Microsoft will lose its grip of that Product Category, free online browsers, to a competitor that matches their Function, but has also made appropriate investments in *Ability.
If you focus too early on *Ability, the product is vulnerable to competition that has a greater apparent footprint within the Product Category.
If you focus early on Function at the expense of *Ability, you will have serious, expensive quality challenges as the Product Category matures.
If you must choose between Function and *Ability, however, it is usually better to have more Function than *Ability.
- If you must choose one over the other, more Function is usually better than more *Ability.
Even if you have overdone Function, at least you have a customer base to work with, to drive revenue and keep the company alive while you address *Ability issues. You still have a serious problem, though; a reputation for poor product quality and/or skyrocketing support costs can destroy a product just as effectively as very few customers can. Consider the example of the Isuzu Trooper in the 1990s. Consumer Reports discovered a dangerous flaw in the automobile: it had a tendency to roll over during a common swerve/correction maneuver. A car’s ability to avoid a rollover is a good example of a *Ability characteristic. Overnight, sales of the Isuzu Trooper collapsed, never to recover. For Isuzu, and to a degree Acura with its re-badged SL version of the Trooper, it was a disaster. To distance itself from the problem, Acura began development of its own mid-sized near-luxury SUV, and dropped the SL model entirely a few years later, replacing it with the Acura MDX. This single event was instrumental in Acura, the first foreign auto manufacturer to launch a luxury “sister brand[5]” in the
A good thing to remember is that the perceived size of a product’s footprint can often be increased at minimal cost by polishing up what you already have. Be careful not to overdo it, though; a product can quickly gain the reputation for looking better than it actually is. At least make your product look as good as you know it is.
In terms of Function, getting out ahead of competitors in an immature Product Category can force competitors to follow your lead. Getting too far out ahead means you may deliver something that the customer is not ready to use or buy.
Figure 20 – An alternating Function / *Ability release schedule
Figure 20 illustrates a variation on the Function/*Ability model in balance. In certain types of products, such as in high-tech, risk can be significantly reduced by limiting a single product release focus to either Function or *Ability. Work on both might be in progress at the same time, but most of what is included in a single product release, in the “alternating” model shown in Figure 5, is either Function oriented or *Ability oriented. This variation of the model offers the chance to:
- Limit product release risk by limiting project scope.
- Increase the chance that marketing oriented releases ship simultaneously with outbound marketing efforts.
- Sustain release momentum, energy, resources and morale with more frequent and successful releases.
There is always a risk that the product release schedule will get “stuck” in one track or the other. A binary engineering culture where it is “not cool” to work on “Function” and more cool to work on “real engineering” can develop as the best engineers shift to *Ability work, Function work is increasingly “sand-bagged” or “soft-staffed,” and Voilà, you are de facto stuck in a *Ability trajectory.
The Ford Motor Company misses a turn
An election is coming. Universal peace is declared and the foxes have a sincere interest in prolonging the lives of the poultry.
- T. S. Eliot
Call me cynical, but when someone tells me something positive about themselves, like “Hey, Liam, I have very high self-esteem,” I understand it to be a sincere aspiration and not how things actually are. When a company advertises that “Quality is Job 1,” I think they might have a quality problem.
I grew up in a “Ford” household. I think my parents must have owned six or seven Ford motor cars in a row over the decades. There was a belief in the household air that Ford was, for the money, good solid value, Japanese cars were shoddy, and that German cars were out of reach, for the Scanlans at least.
It was true to a degree, if you look at how each company’s products performed over the last few decades. Ford produced straightforward, value-for-money cars that were reliable for that era. Japanese vehicles were cheap rust-buckets loaded with exciting features like cigarette lighters and cloth upholstery. In 1970, the Mercedes 280SE was a fine car for its time, but on a government salary and with seven children to feed, my father wasn’t driving one home any time soon. It was in a different Product Category from the Ford Escort and the Toyota Corolla, so let’s forget about the Mercedes for the moment.
At the beginning,
Ford, on the other hand, stayed on the hitherto successful track of spending the same amount on *Ability that they always did. Why change a good thing! They did not increase their investment in *Ability when they should have. A 2006 Ford Focus would be considered premium quality had it been released in 1990, but in 2006, it trails the quality of a Toyota Corolla or other vehicles within the same Product Category. That’s a time bomb for Ford.
Figure 21 – Ford sedan vs.
Some might argue that Function can be added indefinitely at the same rate as *Ability.
Not so.
Look at the chart illustrated in Figure 21, an illustration of the performance of the respective products in my mind’s eye. At a certain point, the requirement for *Ability over Function increases disproportionately for several reasons, but mainly because of the increasing depth of complexity required to deliver that extra bit of Function when the Product Category is in the Mature Stage. Customers are clued-in--they know the difference between adequate electric windows and quality electric windows--so they begin to notice those small *Ability issues never addressed; a fine difference that would have been wasted on them a few decades ago.
Most of the Product Categories to which vehicles sold by the Ford Motor Company belong are at a similar stage in evolution -- sedans, pickup trucks, SUVs; not all of them, but most of them -- they are somewhere in the Mature Stage.
I have watched Ford and
What would I do if I were in charge of the Ford Motor Company today? I would immediately focus on building quality down to the last weld and leather seam, and I would start with those models in the Product Categories with the greatest public profile. *Ability in a Ford Focus might be different than *Ability in a Ford F150 pickup truck.
The Range Rover loses traction
The original Series I Land Rover came out in 1948. If you ask me, it was following in the footsteps of the Jeep Willis made by Uncle Sam as a World War II workhorse. Still, the Land Rover carved out its own place in the world as one of the world’s most popular, if eccentric, automobiles. A few years ago I saw an ad for the Land Rover Defender, the supposed “Series IV” of the original Land Rover. The caption below the vehicle read “The only car 40% of the world has ever seen.” Clearly, the Land Rover had an incredibly strong brand.
Figure 22 – Land Rover – Powerful brand recognition
The original Range Rover was launched in 1970. In
Bringing with it a high Function-to-*Ability ratio with its first release, it was a bulls-eye Version One by the Rover Company. (This auspicious beginning is represented in Figure 23 by the relatively high Y-axis value of the Range Rover graph). So young was the Product Category in 1970, now known as luxury SUVs, it did not yet have a name. That Product Category is well into the Mature Stage, but the Range Rover has only a tiny fraction of the annual sales of luxury SUVs today. Despite being born with brand recognition to-die-for, the Range Rover was not able to hold on to what could have remained a lion’s share of its Product Category. Why? Poor *Ability for the stage the Product Category is at.
Figure 23 – the Range Rover compared to its followers
Even an incredibly strong brand like Land Rover can lead for only a certain length of time. It was no surprise to me this summer to see Consumer Reports rate the Range Rover’s reliability as “Poor”; a bad omen for a product in a Product Category at the Mature Stage. It was never famous for being a reliable motor vehicle, but that was not a problem during the Embryonic or even Immature Stage. Lack of reliability is usually a problem in the Mature Stage.
Many a “first arrival” product to an embryonic Product Category ends up with the same trajectory as the Range Rover: a bold, visionary beginning stalls and is overtaken by latecomers who keep Function and *Ability in good balance. One of the reasons this happens often is that the latecomer has had the opportunity to examine the work of the First Arrival before embarking on the journey. They also don’t have to spend a dime until the First Arrival has proven that there are customers for such a product.
How iUniverse lost the plot
Perhaps since books first came into being, if you wanted a book published and distributed, you had to know the right people. The two sets of gatekeepers were the book publishers and the bookstores. If you could not find a way past these two gatekeepers, no matter how brilliant your book was, it would never make its way to a shelf in a bookstore.
Amazon.com set the stage for all that to change. Suddenly, the big retail bookstores were no longer in a position to anoint the winners and the losers in the book market. If your book got past the publishers, you could sell it online. Once Amazon.com proved the model, Barnes & Noble followed in Amazon.com’s footsteps, at least as far as books were concerned, by opening bn.com, a comically similar online bookstore to Amazon.com’s.
Book publishers still held a disproportionate amount of power over what would get published and who would not.
Xlibris was founded in 1997, iUniverse in 1999, both with the promise to enable every author on earth to publish their work and make it available through Amazon.com, bn.com, other online retailers and bricks-and-mortar bookstores. iUniverse and Xlibris have a similar business model. You could say that each company built their business “from the inside out”. In other words, they took an established book-publishing model, with all its required contacts in the industry and everything that makes it work, and slapped an internet shopfront on top of it.
Along came lulu.com, who built their business “from the outside in”. They took a fresh look at the author’s and buyer’s requirements and built an entirely different book publishing model that was independent of existing book publishers, printers, distributors and sellers. A would-be author uploads their Microsoft Word document, makes a few simple selections and decides upon a price for their book. Later that day, any visiting customer can buy the author’s book.
Lulu.com is the ultimate in just-in-time manufacturing. They make each book when it is ordered. They have removed all of the barriers an author was up against in the past: time, money and arbitrary standards. Of course, a book can be rubbish and an author can still get it into print, but the good news is there is now no arbitrary barrier to entry for any author that has a computer and an internet connection.
There are dozens of differences with the Lulu.com model that exploit available internet technologies and that make it more attractive to their customers, both authors and buyers. Lulu used internet technologies to leapfrog their two leading competitors, iUniverse and Xlibris. They have attacked the existing Product Category online book publishing from a different Product Category: zero-cost-of-entry instant materials publishing. For Lulu, it is not about books, just as it was not about books for Amazon.com. It is difficult for the two existing players, and others like them, to respond because they are in a different Product Category and will be unwillingly to compete head-to-head with Lulu.com—they will want to protect their investment in online book publishing—until it is too late. Lulu has adopted a clever, time-honored strategy, a defensible one. Defensibility is covered in detail later.
Salability: Make what you can sell
One *Ability product requirement that is of great interest to me is Salability.
Salability, according to my dictionary, means “subject to or suitable for sale; readily sold.” Salability covers a lot. Let us say you make nails--the ones for hammering into wood. You would like a national chain of home improvement stores to retail the nails for you, so your product must fit on their shelf space; if your packaging will not sit securely on standard retail shelf railing, or FedEx’s standard truck shelf, you have a Salability issue. You thought your product would fly off the shelves; instead, it fell off the shelves. To increase salability, you might package your product so that it fits on their shelves optimally, using established standards of successful products. Of no direct value to the customer, and with no impact on manufacturing, a Salability problem can stop you in your tracks.
Some salability issues are more subtle than others are. The Coca Cola Company came out with their “Coke adds life” slogan, which translates into Chinese as “Coke brings your dead relatives to life”. It flopped.
At this stage of my career, when someone comes to me with a product idea, the first few questions I ask myself are:
- What problem does it solve?
- Is it salable?
- Is it defensible?
Is it salable? I try to draw a path in my mind that will lead me to a customer handing over money for this product. Along that path, there are countless obstacles. I might task a Product Manager with drawing up a Salability Path.
A brainstorming session to establish your product’s Salability with every release is a very good exercise for the product team.
- A Product Manager must draw a product salability path for all to see.
The guts of the product in my first start-up, Reportech Inc, centered on a clever feature I came up with: a way to embed Microsoft Excel formulas inside Microsoft Excel PivotTables. At least, I thought it was clever at the time.
A significant subset of
- Make what you can sell, not what you can make
- Never be a fix to another vendor’s product
Defensibility: Sell what you can defend
You might create a product that is demonstrably better than your competitor’s product. Of what use is that if your competitor is one hundred times your size and responds quickly and vigorously to the threat? Wouldn’t it be nice if your competitor were naturally deterred from competing with you, perhaps by something inherent in the value proposition of your product? Such a deterrent is the defensibility of your product. Enough of it can allow you to compete effectively with a competitor many times your size.
Consider these two examples of defensibility in action:
1. Google takes on Microsoft by providing email, spreadsheets, documents, calendaring and other features for free. All you need is to tolerate a few unobtrusive ads here and there and you get to use their software. Microsoft, on the other hand, has been raking in mountains of money for years by selling licenses to its software. The notion of supporting a “free software” model is simply too difficult for Microsoft to digest. They will continue to sit on the sidelines, it appears, and watch Google steal the market from right under Microsoft’s nose.
The character of Google’s value proposition is a superb example of defensibility in action. It might already be too late in Microsoft’s case, but the player who is reluctant to compete (Microsoft) usually waits long enough for the newcomer (Google) to get established and become a real threat before they (Microsoft) take meaningful action. The reluctant player has a conflict of interests inside their own business that resists their very efforts to deal effectively with the new threat.
2. On a much smaller scale, Bocada began its own journey with a similar defensible offering. BackupReport, its flagship product, was multi-vendor. That is, it provided value relating to more than one vendor’s product. The multi-vendor character of the product was the daily drumbeat to which all development was focused. We believed the individual vendors themselves (IBM, Verital, Legato, CA, etc.) would each be reluctant to develop a multi-vendor solution because it would mean supporting each other’s platforms. Thus, Bocada’s competitors’ strategic interests were in conflict with their own tactical competitive needs.
It is tempting indeed for Bocada to invest in the single vendor space, just as it is tempting for any newcomer to step outside of its original defensible ground.
The answer is written in the physics
Some time in 2001, my colleagues and I visited the venture capital company Voyager Capital in
If there is One Big Thing I did not believe thirty years ago that I believe now, it is this: any problem can be solved. I used to believe that everything had, more or less, already been worked out. After all, humans have lived for millions of years and there are over six billion of us alive today—many much smarter than I am—how could I possibly solve a problem that no one else solved! My answer is, I do not know, other than the fact that I have always found a solution whenever I kept searching. The answer emerged right after it seemed like it never would. If there is one single thing that would convince me there is a God in the sense we westerners like to believe, it is because the universe is built with so many answers written into the physics of it.
- Any reasonable problem has a solution
The illusion of patent security
I used to get uptight about patents, saying to anyone who cared to listen, protect yourself with patents.
A corollary of there is always a solution might be there is always a dozen solutions.
Particularly with tough problems we have been working on for a long time, once we find a solution, we humans often stop thinking about the problem entirely, never to revisit it with the vigor and hunger we had when we first ached for a solution. Certainly, you need to protect the product you have designed by making it very hard for others to copy your work, but it will rarely stop them from finding a novel way that doesn’t infringe on your patents to solve your customer’s problem.
- Any reasonable problem has probably a dozen solutions
To my mind, a patent is like having an alarm on your house; it might not be a premium system, but you are more likely to be burgled if you do not have any.
Chapter Exercise
- Define “successful product”: ___________________________________
___________________________________
___________________________________ - Is the Product Category to which your product belongs in the Embryonic, Immature or Mature Stage? ______ ______ ______ ______ ______
- Using the example in Figure 24, use Figure 25 to draw the path you believe your product has taken thus far.
Figure 24 - Example
Figure 25 – Draw your path here
[1] Sales pressure will come not just from the sales department. It will come from anyone in the organization, even folks outside of day-to-day operations, such as board members. And if the PM has an exclusively sales background, without a Product Management discipline, he may err on the side of adding too many features too quickly.
[2] I took the horsepower figure of the model with the most horsepower in the year of product release. For example, for the BMW
[3] I have estimated the trajectory of products that I have used as a customer, for example, Windows, AOL and Expedia, or that I have studied in the marketplace.
[4] Product Footprint: the complete set of working features included in your product.
[5] Luxury sister brands: Lexus/Toyota, Acura/Honda, Infinity/Nissan, Cadillac/GM, Audi/VW, etc.
[6] Some will claim that the Jeep Wagoneer, launched in 1963, was the first luxury SUV, but I have never seen a prince drive one. My money is on the Range Rover.
[7] Pitch: a presentation made by company owners to potential investors in the hopes the investors will make an investment.
No comments:
Post a Comment