Product Management and Strategy

Module 1
Quick Reference Guide

  • What is a product?
    • A product is a solution
    • A product is something that accomplishes a job that needs doing
  • What is product management?
    • Planning, creation, and improvement of products
    • Oversight of the product lifecycle: Sense, Solve, Scale, Sustain
    • Creator or guardian of product vision
    • Interpreter and protector of the customer experience
    • Guide for the technical resources to create or improve the product
    • Prioritizer of the features and improvement roadmap
    • Role may vary during the course of the product lifecycle; they may be Responsible, Accountable, Informed, and/or Consulted depending on need
  • When talking about sustained competitive advantage, what are “flywheels?”
    • Incumbent companies are remarkably resilient
    • In a physical system, flywheels receive and store energy that can be tapped as needed per demand
    • In a business sense, the following can be thought of as flywheels:
      • Customer network
      • Cost efficiency
      • Product performance
      • Brand equity
      • Organization capability and culture
  • What is the definition of product strategy?
    • A dynamic formula for product rollout that considers competition, markets, resources, approaches, and how these aspects change over time
    • Example of typical, successful strategy:
      • Start with focused product for a high-need and high-willingness to pay customer
      • Use experience to refine plan for more mainstream model
      • Ride learning curve and scale to get lower price points
  • Some people say PMs are CEOs of products. But when are CEOs PMs?

Module 2
Quick Reference Guide

  • Innovation can result from push or pull
    • Pull: need for news footage -> aggregator app
    • Push: standing wheelchair -> Segway
  • Conditions for innovation to create substantial value
    • The need must be real, i.e., a significant number of customers must have a significant amount of pain
    • The solutions has to actually do the job
    • The organization must be able to deliver the solution at a cost significantly lower than the customer’s willingness to pay
  • Pull approach is a much more reliable and repeatable way of creating value through innovation
  • One of the key roles in product management is leading the creation of new products, often from nothing, sometimes called zero-to-one product development
    • Clarify the job to be done
    • Understand the needs of the customer
    • Create a great concept or solution
    • Specify the details with sufficient clarity
  • Agile Development Process
    • Plan
    • Design
      • Develop
      • Test
      • Deploy
      • Review
    • Launch
  • Triple Diamond Approach to Development
    • Job analysis – clarify job to be done
    • Understand customer needs
    • Create a great solution concept
  • What is design thinking?
    • Design of things we don’t normally think of as designed
    • Examples
      • How might we improve the process of getting ski gear on, transporting ourselves to the hill, looking at a map to determine a route down, and then finally skiing down the mountain?
      • How might we improve the patient experience in an emergency department at our hospital
      • How might we improve the convenience of using a bicycle for transporation?
      • How might we create a delightful food delivery service?
    • Designers:
      • Exhibit a bias for action
      • Tend to be optimists, exhibiting a culture of “yes”
      • Tend to use exploratory prototypes early in the problem-solving process
      • Tend to be skilled at visual expression
      • Tend to use empathic methods for udnerstanding customers
      • Use data-based approaches
    • Identify the first group of customers you want to target, and their persona
  • “Customers don’t want a quarter-inch drill. They want a quarter-inch hole.” –Theodore Levitt
  • An “insight” is a user need that is authentic, non-obvious, and significant, like a professional athlete’s need to tightly control the macronutrients they ingest (food delivery example)
  • Kano Diagram: Four Types of Needs
    • Horizontal axis: extent to which need is satisfied by the solution (need not met at all to need fully met)
    • Vertical axis: resulting change in customer satisfaction, perceived value (intense dissatisfaction to delighted)
    • Latent needs – if unaddressed are not missed but if addressed result in surprise and delight
    • Don’t care needs – irrelevant to customer
    • Linear needs – needs where customer satisfaction is directly proportional to extent to which solution addresses need, e.g. affordability
    • Must haves – needs that if fully addressed do not result in dramatic improvements and satisfaction, but if not addressed at all will result in extreme dissatisfaction
  • How to identify customer needs
    • Get out of the office and interact
    • Conduct 10 one-on-one interviews
    • Record
    • Interview the customers in use environment
      • “How do you currently do the job?”
      • “What would be your perfect X experience?”
      • “What annoys you most about x?”
    • Ask them to show, not tell
    • Create “open doors” and walk through them; try to identify pain points and needs

Module 3
Quick Reference Guide

  • What makes for a great solution concept?
    • A concept is a preliminary description, e.g. sketch, storyboard, UI mockup
    • Addresses needs of the customer
    • Cost-efficient
    • “Wow” factor (protectable, marketable)
    • Aesthetics and elegance
  • Digital goods
    • Gives less importance to cost effectives
    • Are often considered bundles of features rather than a single solution concept
    • Offer unlimited flexibility in approach and as such need a thorough exploration of the solution landscape
  • Concept Development – Basic Approach
    • Brainstorm (not easy, requires openness, iterative)
    • Narrow down
  • Techniques to stimulate thinking
    • Pull from insights
    • Apply the decomposition principle (focus on one element of the job to be done at a time)
    • Consider examples of distinctive approaches
    • Consider analagous problems
    • Set a numerical goal
  • Harnessing the power of individuals and groups
  • Selection Methods and Concept Selection Matrix
    • Fill each cell with minus, zero, or plus
    • Calculate net score of each alternative
    • You might realize that concepts can be combined

Module 4
Quick Reference Guide

  • Focusing on the sizzle for product success
    • Elmer Wheeler “The sizzle has sold more steaks than the cow ever has. Although the cow is, of course, mighty important.”
  • Products that have “sizzle:”
    • Red Bull
    • Pilot G2
    • Apple products
    • Beats by Dre
    • Nintendo Switch
  • Disambiguating design
    • In the context of product management, design means:
      • Solution concepts
      • UI/UX
      • Mechanical, electrical
      • Form and function
      • Product/brand identity
      • Service architecture
    • UI/UX Oversigiht Strategies
      • Don’t mess with long established convention; often not worth educating user (e.g. minimize, maximize, exit buttons in corner of operating system windows)
      • If deviating from norms is worth it, even after educating user, then commit (is value proposition of deviation high enough?)
      • Accomodate multiple modes (especially in response to user feedback)
      • Informed intuition by experienced designers gets you 90% of the way there; other 10% comes from data
  • Product vision and PR FAQ
    • A key role of the product manager is to communicate the product vision
    • Template from Radhika Dutt:
  • PR FAQ = press release/public relations frequently asked questions
  • Branding and Naming
    • Pick a name that has it’s domain name available without hyphens or interruptions
    • Communicates what the product does and wat the benefits are
      • Caution: name evoking too a specific benefit proposition limits flexibility for future adaptations
    • Evoke associated attributes
    • Select easy-to-pronounce names
    • Avoid spelling ambiguity
    • Memorable
    • Keep it short
  • The naming process
    • Hire a consultant
    • Run a naming tournament
    • Once you have a shortlist, do some testing
  • Industrial Design (for Hardware)
    • The design activity associated with the aesthetic and human elements of physical goods
    • Ulrich’s Lessonls Learned from Industrial Design
      • High quality industrial design work is critical to consumer product success
      • Long term cost of excellent industrial design is modest
      • Some element of wow in the solution concept is an added advantage to design success
      • Creating a beautiful product involves endless efforts and refinement of details

Module 5: Agile
Quick Reference Guide

  • As a product leader, you should know costs and benefits of different approaches to development
  • Introduction to Agile
    • Agile Essentials
    • Waterfall Process/Phase Gate Process
      • Product Requirements (customers needs, target specs)
      • System Level Design (concept and overall approach to solution)
      • Detailed Design (resolves all designed details)
      • Testing (internal and external)
  • The Agile Process
    • Scrum
      • Overall job to be done is broken up into user stories
      • All that matters is that the user able to achieve a goal
      • PM is responsible for story prioritization and time estimates for each
      • Story backlog/parking lot -> 2 week sprints over the year
      • Sprint retrospective and iterative improvement
      • Big tasks that take more than 1 sprint need to be broken down more
  • Agile Story Points vs Hours: How to Calculate for Software Development
  • Agile Estimation with the Bucket System

Module 6: Commercialization
Quick Reference Guide

Target costing

  • Achieving financial sustainability: gross profit must exceed ongoing business operating costs
  • Q(p – c) > F
    • Q = quantity sold per unit time
    • p = price per unit
    • c = cost per unit
    • F = fixed costs of operating the business per unit time
  • Setting prices should be a deliberate exercise coordinated between the:
    • business manager
    • marketing and sales manager
    • product manager
  • Supply chain considerations for retailers
    • Working backward from what customer pays:
      • Retailer sells at 50% profit
      • We target 25% gross profit when selling to retailer
      • Gross margin = (price – cost) / price
      • Gross margin calculated from perspective of the seller of product
      • Factors that affect gross margin for retailers: volume, price, differentiation, distribution costs

Customer lifetime value (LTV) and customer acquisition cost (CAC)

  • Calculating LTV: total gross margin you expect to earn from a customer over time, discounted appropriately to reflect your cost of capital and the time value of money
  • Calculating CAC: amount spent on marketing over a period of time divided by customers acquired in that time (usually not precise, average does fully convey cost to acquire more expensive/marginal customers)

Key performance indicators (KPIs) and dashboards

  • What are we trying to do here?
  • How can we measure how well we’re doing?
  • Acquisition
  • Product quality
  • Customer satisfaction
  • What are the goals? How do you measure them?
  • Good KPIs are worth spending time deliberating

Growth

  • Awareness
  • Trial
  • Repeat

Product Improvement

  • Generate candidate improvements from user feedback
  • Deduplicate, cluster, rationalize opportunities
  • Estimate resource requirement
  • Prioritize
  • Implement using agile process