Book review: “Good Strategy. Bad Strategy”

I came across a senior executive a few months ago, let’s call him “Bob”, who talked me through his startup’s strategy. In short, Bob showed me three ‘strategic pillars’ for the business. Each pillar contained a load of specific products and initiatives. When I asked Bob about the strategic challenges that his business was looking to tackle, I got a blank stare in return. My explaining the need for having clear business and product strategies unfortunately didn’t seem to resonate much with Bob …

This experience prompted me to read “Good Strategy. Bad Strategy” which was first published by Richard Rumelt in 2011. Two main questions drove me to pick up a copy of “Good Strategy. Bad Strategy”:

  • Is this going to be yet another strategy book, with lots of buzz words but little tangible content!?
  • How can I clearly articulate what constitutes a good strategy and what makes a bad one?

Ultimately, I want to improve the way in which I take people like Bob on a ‘strategic journey’, helping them to convert their goals into proper strategies. “Good Strategy. Bad Strategy” definitely delivered on this objective. Firstly, it paints a good picture of the problem space surrounding strategy. The first part of the book is all about common misconceptions about strategy and explaining ‘why’ there’s so much bad strategy around. Secondly, the book then outlines what is needed to create good strategies, explaining what goes into the “kernel” of good strategy.

Bad strategy

“Good Strategy. Bad Strategy” starts off listing some of the hallmarks of bad strategy:

  • Fluff – Fluff is a form of gibberish masquerading as strategic concepts or arguments. For example, I believe that terms like “seamless” or multi-channel have become so overused that they have lost a lot of meaning.
  • Failure to face the challenge – Bad strategy fails to recognise or define the challenge that a company is facing. Bob’s strategy was a good example in this regard. His strategy provided a number of solutions without the underlying strategic problems or challenges they were intended to resolve.
  • Mistaking goals for strategy – Many bad strategies are just statements of desires rather than plans for overcoming obstacles. For example, phrases such as “entering new markets” or “becoming the leading [fill in any sector of your choice here]” leave me wondering “why?”. These high level goals fail to highlighting specific strategic obstacles or opportunities a business is facing.
  • Bad strategic objectives – A strategic objective is set by a leader as a means to an end. As  Rumelt explains, “strategic objectives are “bad” when they fail to address critical issues or when they are impracticable.” For example, if the strategic objective is “to become a world leading furniture maker”, I’d argue that this is a vision statement and not a strategy. A related strategy would describe some of the key challenges to overcome in order to achieve the vision. Rumelt goes one step further by arguing that Google’s “vision mission strategy” template often misses the mark, as he feels it doesn’t cover true analysis of the challenges and opportunities ahead.

In short, in “Good Strategy. Bad Strategy” Rumelt makes the point that most strategies fail to acknowledge the key obstacles or problems companies need to overcome. I see an analogy with  the need to engage in a constant obstacle race, and businesses competing to overcome certain hurdles first.

Fig. 1 – Strategy as an ongoing obstacle race – Taken from: https://www.pledgesports.org/2017/02/down-dirty-the-rise-of-the-obstacle-course-racing-industry/

So why is “bad” strategy such a common theme across so many businesses!?

The primary reason, as Rumelt highlights, is that bad strategy trumps analysis, logic and choice, with people hoping that they can avoid these often gnarly fundamentals and any issues in overcoming them. Rumelt stresses that “good strategy is very hard work”. I agree with this sentiment completely, as I’ve seen first hand that it can feel easier – in the short term at least – to ignore what’s happening or what could happen. Similarly, making strategic choices and deciding on tradeoffs is often very tricky and painful.

Good strategy

Rumelt describes the structure that underlies a good strategy as a “kernel” (see Fig. 2 below). The kernel of a strategy contains three elements:

  • A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical.
  • A guiding policy for dealing with the challenge. This is an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
  • A set of coherent actions that are designed to carry out the guiding policy. These are steps that are coordinated with one another to work together in accomplishing the guiding policy.

In essence, the kernel forms the bare bones skeleton of a strategy. Aspects such as visions, hierarchies of goals and objectives or timeframes are typically left out of the kernel. These aspects are treated as support layers instead.

The diagnosis

Coming to a diagnosis is about, putting it simply, understanding what’s going on. For example, as soon as Bob and I started exploring the situation that his business was in, we came to the conclusion that it was operating in a market close to reaching saturation point. As Rumelt points out, “an explicit diagnosis permits one to evaluate the rest of the strategy.” In addition, by turning the diagnosis into critical part of the strategy, the rest of the strategy can be revisited as and when circumstances change.

The guiding policy

The guiding policy outlines an overall approach for overcoming the obstacles highlighted by the diagnosis. The guiding policy doesn’t commit to a specific set of actions. Instead, it rules out a number of actions and suggests an overarching method to deal with the situation as described in the diagnosis. For example, one’s guiding policy could be to focus on improving the lifetime value of existing customers as opposed to acquiring more new customers that conduct one-off transactions.

Coherent action 

Rumelt points out a common mistake people often tend to make by calling the guiding policy a “strategy” and subsequently stop there. Strategy is all about taking action to overcome obstacles or seize opportunities. This doesn’t mean that you need to outline every single proposed action in its finest detail, but at least provide sufficient clarity to help make certain concepts more realistic and tangible.

Fig. 2 – Maz Iqbal, Kernel of Strategy – Taken from: https://thecustomerblog.co.uk/2012/10/08/what-is-the-kernel-of-strategy-part-iv-coherent-action/

I felt that thinking about the kernel of strategy makes it easier to then figure out some of the strategy’s support layers:

  • Taking a strong position and creating options – Rumelt disagrees with strategic thinkers that feel that in uncertain and dynamic environments, companies do well to plan ahead as much as possible. In contrast, Rumelt argues, the more dynamic and uncertain the situation the more proximate a strategic objective should be. He cites President Kennedy announcing the US’ ambition to land a person on the moon by the end of the 1960s as a good example of a proximate goal. Despite not knowing exactly how or when the US could land a person on the moon, the US had done enough research and testing for President Kennedy to feel confident about taking a strong position (i.e. committing to the first moon landing) and to exploring various options to get there.
  • Hierarchies of objectives – In organisations of any size, high-level proximate objectives create goals for lower-level units, which, in turn, create their own proximate objectives, and so on and so forth. I really like Rumelt’s related point about proximate objectives cascading and adjusting over time, as it does justice to the uncertain and dynamic nature of most of today’s market environments.

Main learning point: “Good Strategy. Bad Strategy” is a great book for anyone slightly at loss where to begin when it comes to creating or evaluating a strategy. In the “kernel of strategy”, the book offers a very useful structure to underpin every (good) strategy.

Related links for further learning:

  1. http://www.stephenbungay.com/Strategy.ink
  2. http://panmore.com/google-vision-statement-mission-statement
  3. http://goodbadstrategy.com/
  4. https://www.youtube.com/watch?v=UZrTl16hZdk
  5. https://gbr.pepperdine.edu/2010/08/whats-the-problem/

App review: Toutiao

Fig. 1 – Screenshot of www.toutiao.com/ homepage 

When I first heard about Toutiaou I thought it might be just another news app, this coming one from China. I learned, however, very quickly that Toutiaou is much more than just a news app; at the time of writing, Toutiao has more than 700 million users in total, with ore than 78 million users reading over 1.3 billion articles on a daily basis.

Toutiao, known officially as Jinri Toutiao, which means “Today’s Headlines”, has a large part of its rapid rise to its ability to provide its users with a highly personalised news feed. Toutiao is a mobile platform that use machine learning algorithms to recommend content to its users, based on previous content accessed by users and their interaction with the content (see Fig. 2).

Fig. 2 – Screenshot of Toutiao iOS app

I identified a number of elements that contribute to Toutiao’s success:

  1. AI and machine learning – Toutiao’s flagship value proposition to its users, having its own dedicated AI Lab in order to constantly further the development of the AI technology that underpins its platform. Toutiao’s algorithms learn from the types of content its users interact with and the way(s) in which they interact with this content. Given that Toutiao users spend on average 76 minutes per day on the app, there’s a wealth of data for Toutiao’s algorithms to learn form and to base personalisations on.
  2. Variety of content types to choose from – Toutiao enables its users to upload short videos, and Toutiao’s algorithms of will recommend selected videos to appropriate users (see Fig. 3). Last year, Ivideos on Toutiao were played 1.5 billion times per day, making Toutiao China’s largest short video platform. Users can also upload pictures, similar to Instagram or Facebook, users can share their pictures, with other users being abel to like or comment on this content (see Fig. 4).
  3. Third party integrations – Toutiao has got strategic partnerships in place with the likes of WeChat, a highly popular messaging app (see Fig. 5), and jd.com, a local online marketplace. It’s easy to see how Toutiao is following an approach whereby they’re inserting their news feed into a user’s broader ecosystem.

Main learning point: I was amazed by the scale at which Toutiao operate and the levels at which its users interact with the app. We often talk about the likes of Netflix and Spotify when it comes to personalised recommendations, but with the amount of data that Toutiao gathers, I can they can create a highly tailored content experience for their users.

Fig. 3 – Screenshot of video section on Toutiao iOS app 

Fig. 4 – Screenshot of user generated content feed on Toutiao iOS app

IMG_4954

Fig. 5 – Screenshot of Toutiao and WeChat integration on Toutiao iOS app

Related links for further learning:

  1. https://www.toutiao.com/
  2. https://www.crunchbase.com/organization/toutiao#/entity
  3. http://technode.com/2017/06/05/podcast-analyse-asia-187-toutiao-with-matthew-brennan/
  4. https://www.technologyreview.com/s/603351/the-insanely-popular-chinese-news-app-that-youve-never-heard-of/
  5. https://www.forbes.com/sites/ywang/2017/05/26/jinri-toutiao-how-chinas-11-billion-news-aggregator-is-no-fake/#24d401d64d8a
  6. https://en.wikipedia.org/wiki/Toutiao
  7. http://lab.toutiao.com/
  8. https://www.liftigniter.com/toutiao-making-headlines-machine-learning/
  9. https://techcrunch.com/2017/02/01/chinese-news-reading-app-toutiao-acquires-flipagram/
  10. https://lotusruan.wordpress.com/2016/03/20/cant-beat-giant-companies-on-wechatweibo-try-toutiao/
  11. https://www.chinainternetwatch.com/tag/toutiao/

 

 

 

My product management toolkit (22): how to create a product culture?

What can you do when you’ve joined a company that hasn’t (yet) got a proper product culture? Making it harder for you to do your job or get people’s buy-in. Unfortunately, this tends be harsh reality for a lot of product managers, who then become increasingly frustrated with a lack of progress or an unchanged mindset.

However, there’s no need to despair, as there are a number of techniques and tools to start instilling a product mindset and creating a product culture. In this piece, we’ll first define what product culture means and then explore ways in which you as a product manager can contribute to the creation of a product culture.

What is product culture?

Fig. 1 – Martin Eriksson, “What Is A Product Manager?” – Taken from: http://www.mindtheproduct.com/2011/10/what-exactly-is-a-product-manager/

If you look at the famous product management venn diagram by my friend Martin Eriksson it quickly becomes apparent how the three components of Martin’s diagram feed into my components of a strong product culture:

  • Customer understanding – We all know how easy it can be to pay lip service to ‘customer empathy’ or ‘understanding user needs’! However, a strong product culture begins and ends with your customers. In organisations with a strong product culture, all staff members interact with customers or are at least fully aware of their customer needs. Companies like Zappos and Amazon are well known for their focus on customer centricity factors (see Fig. 2 below). In my experience, signs of  non customer centric companies are those where only a small part of the business ‘owns’ the customer relationship or where the customer has become this imaginary persona for most staff members. Also, I encourage you to pose a healthy challenge to those people in the organisation who claim to “know what the customer wants” based on their experience.
  • Everything is geared towards creating great products – Throughout the company with a strong product culture one can find a strong sense of innovation, a desire to experiment in order to create great products. Etsy is a good example of a company that develops new products and services iteratively, constantly testing and improving on previous product releases. One of the telltale signs of a strong product culture is when employees possess what Marty Cagan refers to as a product mindset (see Fig. 3 below).
  • Value proposition and business model – A shared understanding of your business’ value proposition and business model is a clear sign of a good product culture. Alignment around the value you’re aiming to provide to your customers – combined with an awareness of who those customers are – is a critical part of a strong product culture, as it underpins the products and services that you put out there.
  • Curiosity and experimentation – You know that things could get challenging if you, as a product manager, turn out to be one of the few people in an organisation to ask ‘why’ and be curious. These are traits that can be learned and adopted, and the more innovative and customer centric businesses are those that aren’t afraid to be curious, learn and ‘fail well’. I heard a colleague of mine phrasing it quite well the other day when he spoke about “taking calculated risks”. In other words, taking risks in such way that you learn a lot – quickly and cheaply – about your riskiest assumptions, whilst any negative ramifications are limited or non-existent.

 

Fig. 2 – Steven MacDonald, How to Create a Customer Centric Strategy for your Business – Taken from: http://www.superoffice.com/blog/how-to-create-a-customer-centric-strategy/

 

Fig. 3 – Marty Cagan, Product Mindset vs IT Mindset – Taken from: http://svpg.com/product-vs-it-mindset/

  1. Purpose.  In an IT mindset organisation, the staff exists to service the perceived technology needs of “the business.”  In a technology-enabled product organisation, the staff exists to service the needs of your customers, within the constraints of the business.
  2. Passion.  In an IT mindset organisation, product and technology are mercenaries.  There is little to no product passion.  They are there to build whatever.  In a product organisation, product and tech are missionaries.  They have joined the organisation because they care about the mission and helping customers solve real problems.
  3. Requirements.  In an IT mindset organisation, requirements are “gathered” from stakeholders, prioritised in the form of roadmaps, and implemented.  In a product organisation, we must discover the necessary problem to solve or product to be built.
  4. Staffing.  The IT mindset shows up very visibly in the staff and the roles.  The lack of true product managers (especially strong product managers), the lack of true interaction designers, the prevalence of old-style project management, engineers unfamiliar with the demands of scale and performance, the existence of old-style business analysts, and heavy use of outsourcing, are all clear examples of this.  I would argue the most telling manifestation of the IT mindset problem is that the product managers in IT mindset companies are typically very weak, and at true product companies they are necessarily very strong.
  5. Funding.  In IT mindset companies you find them still funding projects (output) rather than product teams measured by business results (outcome).   There are many serious problems with this antiquated model, and it generates all kinds of bad behaviour in the organisation as they try to work around the constraints of this system, but most importantly, it results in very poor ROI for the company because of the very high cost of finding out which ideas work and which don’t.
  6. Process.  In IT mindset companies, you usually find very slow, heavy, Waterfall processes, even when the engineers consider themselves Agile.  The only part that would be considered Agile would be at the tail end of build, test and release.  Much of this stems from the Funding issue above, but deciding what areas to invest in, staffing a team, defining and designing the solution, and release planning are all typically very Waterfall.  Technology-enabled product organisations simply must move much faster, and work differently, in order to deliver the necessary solutions for our customers and our business.
  7. Silos.  In IT mindset companies, people align by function, creating silos between the different areas of the business, product, user experience design, engineering, QA and site operations.  In contrast, in a product organisation, we depend on true collaboration between product, user experience design, technology and the business units.  In a product organisation we optimise for product teams, not for the individual functions.
  8. Organisation.  In IT mindset companies, engineering is often under a CIO, and “product” (if it exists at all) is often under marketing or absorbed directly in the business units themselves.  In product organisations, there’s a big difference between the engineers that support “true IT” and those that work on the commercial products,  The True IT engineers usually report to the CIO, and the commercial product engineers report to a CTO.  Similarly, product is not a sub-function of marketing.  It is a top-level activity on par with marketing and technology.  It is not so much the org chart that matters here, as much as a recognition that the way we manage True IT work is very different than how we manage commercial product efforts.
  9. Accountability.  In IT mindset companies, accountability frankly is a farce.  The people actually working on a project typically have no real say in what they are building, and sometimes even in how it’s built, and even when it’s due.  In theory, the leadership team could try to hold the requesting stakeholders accountable for the results, but if they do they immediately hear complaints that they didn’t get what they actually wanted, and because of delays and costs, critical things had to get cut, and so it’s certainly not their fault.  So management writes it off as yet another failed technology initiative.  In contrast, in a product organisation, we are measured by results.
  10. Leadership.  As with so many things, much of this boils down to leadership.  In IT mindset companies, the technology is viewed as a necessary evil.  It is a source of fear more than a source of inspiration.  Leadership in IT mindset companies is always looking for a silver bullet when it comes to technology.  Maybe they should outsource the whole mess?  Or maybe they can acquire someone else that hopefully has a better track record than they do.   In contrast, in a product company, technology enables and powers the business.  It is embraced and valued.  The people that create the technology are respected as the key contributors they are.  Leadership in a commercial product company understands that it’s their job to create the culture and environment necessary to nurture continuous innovation.

Where to start?

As daunting it may sound, starting to create a product culture doesn’t have to be overly complicated or onerous. As always, my advice is to smart small. Kick things off with some simple but targeted initiatives:

  • A visioning workshop to create a shared product vision – A product culture starts with a shared vision of what the product is (not), and what we’re trying to achieve with it for our customers and our business. Lack of a shared vision usually manifests itself in a product that wants to be too many things to too many people. As a product manager you can drive both the creation and the shared understanding of a product vision, starting with the facilitation of a visioning workshop.
  • Agree on a mission statement (and make sure it’s omnipresent) – Whereas a product vision is typically more aspirational and future oriented, a mission statement is all about the problems your business is aiming to solve right now (see Fig. 4-5 below).
  • Live and breathe clear values that underpin your (product) culture – Naturally, every organisation will have its own unique values – both explicit and implicit. However, there are a number of values that I believe underpin most product cultures: curious (see above under “what is product culture?”), courageous, innovative, open, trying and learning. Formulating and agreeing on such values is the easy part; truly embodying them on a daily basis tends to be much harder. For example, within my current product team, we’ve got a ‘team manifesto’ which encapsulates our core values and principles, and we use this as a living reference point, asking ourselves regularly whether we’re actually living up to our principles.
  • 5 simple ways to become more customer centric – Especially if you find yourself in a business with an IT mindset (see Fig. 3), bringing the customer into the picture can be difficult. However, I’ve discovered and applied five simple techniques that have helped me in making organisations and colleagues to think more about the customer and their needs (see Fig. 6).
  • Hire and fire for the right behaviours and values – A successful product culture depends heavily on the people within the organisation. This means that when you’re hiring product people, you’ll be looking for some of the key values that underpin your product culture. For instance, when I recruit new product people, I always try to filter out any ‘product janitors’ as quickly as I can, simply because it doesn’t fit with the values that I’m trying to instil into my product teams. Equally, this also implies that you sometimes need to make tough decisions and fire those employees who might be great people but don’t form a good fit with your product culture and its underlying values (see above).
  • Clear goals, celebrate success and failure – Outcomes over outputs. I understand people’s obsession with certain features or ideas, but I believe that businesses benefit from a continuous focus on goals and problems instead of of fretting over features. I’ve found a goal-oriented roadmap to be a great tool in terms of driving an understanding of common goals.
  • Continuous learning – In my experience, the ‘learning’ aspect comes from continuously exploring different ways to tackle a problem, celebrating success as well as reflecting on the ‘failures’. The more you can share these learnings with the wider organisation, the better. This helps in creating a culture where there’s full transparency with regard to both achieved results as well as those things that didn’t go according to plan. In turn, this breeds a culture of experimentation, taking calculated risks, experimenting and being open about the outcomes, whatever they are.

 

Fig. 4 – Elements of a mission statement:

For (target customer)

Who (statement of the need or opportunity)

The (product name) is (product category)

That (key benefit, compelling reason to buy)

Unlike (primary competitive alternative)

Our product (statement of primary differentiation)

 

Fig. 5 – Mission statement examples from Patagonia and Cradles to Crayons – Taken from: https://blog.hubspot.com/marketing/inspiring-company-mission-statements

 

Fig. 6 – How do we become more customer centric – Five simple ways to get there:

  1. 5 customers every fortnight – User research and usability testing don’t have to part of massive projects, getting input from thousands of customers. In contrast, engaging with 5 (target) customers every two weeks goes a long way in my experience. It gives you an opportunity to learn continuously, in tandem with your development work and product / feature releases.
  2. Team based user research – I learned from UX expert Erika Hall about the importance of collaborative or team based research. The key point here is that user research isn’t a one person job. People across the business will benefit from learning from and about their customers.
  3. Exposure hours – Similar to team based user research, the idea behind so-called exposure hours is to share customer learnings directly with team members and stakeholders, by them sitting in on a user interview for example and being directly exposed to customers.
  4. Feeling what users feel – In my previous company, Notonthehighstreet, we had a programme called “In Your Shoes” which meant that all employees had to spend one day at a customer and be part of their businesses and lives for a day. It was a great to experience first hand the problems and needs customers have, and understand their contexts better.
  5. Product retrospectives – Finally, I’ve found product retrospectives to be a great way of instilling a more customer focused mindset. Regular product retrospectives are a great opportunity for a team and the wider business to reflect on its products or services. How are our products performing? What did we release last month and how is that release doing? What are our customers saying, thinking and feeling? Product retrospectives are explicitly not about the team or process improvements. Instead it’s all about the product and its users.

Main learning point: Creating a product culture is by no means easy but as a product manager there are number of tools and techniques one can use to instil a product mindset and a more customer-centric approach.

Related links for further learning:

  1. https://www.slideshare.net/abrahammarc1/how-to-create-a-product-culture
  2. http://svpg.com/establishing-a-true-product-culture/
  3. https://www.slideshare.net/reed2001/culture-1798664
  4. https://medium.com/we-are-yammer/onboarding-as-a-product-manager-cc7ad1d618c9
  5. https://www.quora.com/What-companies-have-a-strong-product-management-culture-and-how-do-they-achieve-it
  6. http://www.walkingthetalk.com/zappos-customer-centric-culture/
  7. http://www.superoffice.com/blog/how-to-create-a-customer-centric-strategy/
  8. https://leanstartup.co/heres-how-5-companies-create-remarkably-innovative-cultures/
  9. https://apptimize.com/blog/2014/01/etsy-continuous-innovation-ab-testing/
  10. http://www.svpg.com/the-product-manager-contribution/
  11. https://blog.hubspot.com/marketing/inspiring-company-mission-statements
  12. https://articles.uie.com/user_exposure_hours/
  13. http://www.tommyandlottie.com/in-your-shoes
  14. https://hbr.org/2012/11/its-not-just-semantics-managing-outcomes
  15. https://www.playbookhq.co/blog/lean-product-development-positive-economics-of-failing-fast
  16. http://www.cleverpm.com/2015/08/25/fail-fast-fail-cheap-and-fail-often/
  17. https://techcrunch.com/gallery/internet-trends-2017/

How PSD2 is set to change banking up as we know it …

Fig. 1 – A prophetic vision by Bill Gates!? – Taken from: https://www.slideshare.net/patrickpijl/how-square-is-disrupting-banks/6-Bill_GatesBANKING_ISNECESSARYBANKS_ARENOT

“Banking is necessary.  Banks are not.”  Yep. Bill Gates said it. Back in 1994. And 28 years later, it’s it’s set to become reality. From the 1st January 2018, banking will no longer be the exclusive domain of banking institutions because PSD2 is going to drastically alter the way in which we bank.

The biggest consequence is that more than 4,000 European banks will need to open their legacy (mainframe) data stores to Third Party Players (‘TPPs’) and allow them to retrieve account information (‘AIS’) or initiate payments (‘PIS’). Both capabilities will be facilitated through APIs. I wrote about the scope and ramifications of PSD2 a few months ago, and I’ve been thinking ever since about the implications for existing banks and whether they’ve got reason to be scared.

It would be surprising if some of the traditional banks weren’t nervous about the extent to which they’ll have to open their kimonos under PSD2. And even if the Facebooks, Googles or Amazons of this world don’t become banks overnight, I expect the traditional, lifelong bank-customer relationship to slowly evaporate as a result of PSD2 (and subsequent versions of PSD).

Fig. 2 – PwC: PSD2 providing third party access to data and payments via APIs – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

Facebook could easily decide to become an AISP (Account Information Service Provider – see Fig. 2 above), which would enable them to offer an aggregated view of a user’s bank accounts. As a result, they would be able to analyse spending behaviour, understand their users’ financial profiles and personalise a user’s banking experience. This isn’t that revolutionary, as virtual assistants like Cleo and Treefin have already starting offering this functionality, and I believe it’s highly likely that we’ll see it roll out across Facebook Messenger or WeChat in the near future. If you need more convincing, Facebook made their first move two years ago by appointing David Marcus, former CEO of PayPal, to head up Facebook Messenger, so watch this space. Similarly, US bank Capital One integrated with Amazon’s virtual assistant Alexa last year. This integration enables Capital One customers to pay their credit card bills and check their balances, by talking to their Alexa devices.

Fig. 3 – PwC: Six API-powered banking business models – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

In addition, any remaining doubters about the power of APIs are likely to be converted as a result of PSD2. In the current Fintech landscape, there already are large number of banks that are either using APIs to hook into existing banking infrastructures (e.g. Varo Money) or offer additional services (e.g. N26). PwC recently conducted a study into the strategic implications of PSD2 for European banks and they listed no less than six API-powered banking business models (see Fig. 3 above).

Main learning point: It will be interesting to see what the actual impact of PSD2 will be, but if I were a traditional European bank, I’d be working as hard as I could to open up my APIs from today and start working on the creation of strong alliances with 3rd parties and their developers. As Nas once rapped on “N.Y. State Of Mind”, “I never sleep cause sleep is the cousin of the death.” If I were a traditional bank I’d follow Nas’ advice and give up on sleep completely …

Nas, lyric on “N.Y. State of Mind (Illmatic, 1994) – Taken from: https://uk.pinterest.com/MrConceptz/hiphop-101/

 

Related links for further learning:

  1. https://www.finextra.com/blogposting/14101/psd2-is-fast-approaching-dont-bury-your-head-in-the-sand
  2. https://www.finextra.com/videoarticle/1469/data-is-a-key-legal-issue-for-open-banking
  3. https://techcrunch.com/2017/01/12/what-facebooks-european-payment-license-could-mean-for-banks/
  4. http://www.ibtimes.co.uk/apple-facebook-amazon-primed-psd2-demolition-card-networks-1606188
  5. https://www.siliconrepublic.com/enterprise/fintech-banking-psd2
  6. http://www.bankingtech.com/675841/psd2-and-the-future-of-payments/
  7. https://www.evry.com/en/news/articles/psd2-the-directive-that-will-change-banking-as-we-know-it/
  8. http://www.sepaforcorporates.com/single-euro-payments-area/5-things-need-know-psd2-payment-services-directive/
  9. https://techcrunch.com/2015/07/12/the-future-of-finance-is-in-real-time/
  10. https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf
  11. http://www.pymnts.com/news/b2b-payments/2015/task-force-launches-eu-instant-payment-plan/.VYpo1rnhBTI
  12. https://venturebeat.com/2016/06/05/say-hello-to-messenger-banking/
  13. https://www.finextra.com/newsarticle/28602/capital-one-integrates-with-amazon-alexa-for-voice-powered-payments

 

App review: Grip

 

Grip is a London based startup that specialises in “smart event networking software”. That sounds like a relevant problem to solve, because don’t we all have a (secret) love-hate relationship with ‘networking’ at events!?

Yes, I’d love to meet with interesting people at events but I hate approaching people randomly.

Let’s have a closer look at how Grip is looking to solve this problem:

My quick summary of Grip (before using it) – I expect an app that uses clever algorithms to suggest relevant people to meet during events.

How does Grip explain itself in the first minute? – The Grip homepage describes the tedium involved in networking at events, with attendees often failing to make the connections they’d hoped for. Grip’s value proposition is to remove this tedium by unlocking “valuable connections at your event, saving attendees time and hard work. We use advanced algorithms to recommend the right people and present them in an easy swiping interface that your attendees will love.”

Getting started, what’s the process like? – Grip uses natural language processing to connect event attendees based on interest, needs and other things they’ve got in common. I liked Grip’s ability to tell an attendee not just who, but also why they should meet someone, in the form of Reasons To Meet.

Grip users will be able to tailor the real-time recommendations they get by setting their own matchmaking rules. I like the element of Grip not totally relying on machine learning, but also giving users the opportunity to feed their preferences into category rules into the Grip dashboard. This will influence the matchmaking engine in real-time and improve the future recommendations for event exhibitors, delegates and sponsors.

I can imagine that the data around users’ acceptance or rejection of Grip’s suggested matches, will help in further refining the app’s recommendations. This reminded me about the review that I did of THEO recently. THEO acts a ‘robo-advisor’ and uses machine learning to provide its users tailored investment advice.

Integrating the Grip API – Apart from the app, Grip have also got their own API, which makes it easier for companies to incorporate event matchmaking capability into their website or apps.

Main learning point: Grip is taking a significant problem for event attendees and exhibitors, and is using machine learning to solve this problem in a real-time and personalised fashion.

Related links for further learning:

  1. https://grip.events/handsake-event-networking/
  2. https://www.eventbrite.co.uk/blog/event-tech-adoption-at-events-ds00/
  3. https://grip.events/ai-event-matchmaking/
  4. https://grip.events/7-secrets-game-changing-event-networking/
  5. http://event-profs.com/world-first-artificially-intelligent-event-technology/
  6. https://marcabraham.com/2017/04/19/app-review-theo/
  7. https://www.eventbrite.co.uk/blog/event-tech-startups-2017-ds00/

 

Lessons learned from Uri Levine, Co-Founder of Waze

Last Friday, I attended a talk by Uri Levine, Co-Founder of Waze, a community-based traffic and navigation app that was sold to Google for $1.1 billion. In a two-hour session, Uri shared some of his key learnings from the Waze startup journey; from starting from scratch to a successful exit. I felt that his talk was packed with valuable insights, and I’ve selected some key ones to share:

Focus on the problem – I loved how Uri concentrated on the problem that you’re looking to solve. He talked about problem solving being a key driver for him and the different startups that he’s (been) involved in. For example, Waze originated from Uri’s frustration with traffic jams … Uri then talked us through the “Adjusted Startup Curve” to illustrate the typical journey of a startup, starting with a problem to solve (see Fig. 1).

Fig. 1 – Knife Capital’s “Adjusted Startup Curve” – Taken from: http://ventureburn.com/2013/07/the-startup-curve-south-africa-wiggles-of-realism/

Don’t be afraid to fail – I always find it incredibly refreshing when other people speak openly about failures and not being afraid to fail. As Uri rightly pointed out, the fear to fail (and therefore not trying) is a failure in itself (see Fig. 2). He was also keen to stress that creating and managing a startup is never a linear, upward journey. By contrast, you effectively go from failure to failure, but you might win in the end – if you’re lucky that is (see Fig. 3).

Fig. 2 – Michael Jordan quote about failure – Taken from: http://www.quotezine.com/michael-jordan-quotes/

Fig. 3 – “Journey of Failures” by Douglas Karr – Taken from: https://twitter.com/douglaskarr/status/333027896241299457/photo/1

Passion for change – Uri’s points about entrepreneurs and their passion for change really resonated with me. I’m not an entrepreneur, but I feel that I’ve got some innate restlessness which is usually fed by change, learning and trying new things. It was interesting hearing Uri talk about how this passion usually doesn’t sit with well with fear of failure or loss. “Move fast and break things” was one of Uri’s mantras in this regard.

Honest validation of your ideas – As an entrepreneur, Uri explained, you need to fall in love with your idea. However, he also highlighted the importance of being able to critically assess your own idea. He suggested asking yourself “who will be out of business if I succeed?” If you don’t know the answer to this question, Uri explained, your idea probably isn’t big enough.

Iterate based on user feedback – Uri reminded me of the mighty David Cancel as David is also very focused on solving customer problems and listening to customer feedback (see Fig. 4). Like David, Uri didn’t get overly zealous about Agile or lean development methods. Instead, Uri talked about constantly iterating a product or service based on customer feedback.

Fig. 4 – David Cancel at Mind the Product conference, London 2016 – Taken from: http://www.mindtheproduct.com/2016/12/importance-listening-customers-david-cancel/

Main learning point: I found Uri Levine’s talk hugely inspiring; he was honest about the challenges involved in creating or working at a startup whilst at the same encouraging us to solve problems and try things.

Related links for further learning:

  1. http://www.tellseries.com/events/uri-levine/
  2. http://uk.businessinsider.com/how-waze-co-founder-spends-his-money-2015-8
  3. https://www.ft.com/content/49857280-8eaf-11e5-8be4-3506bf20cc2b
  4. https://www.crunchbase.com/person/uri-levine#/entity
  5. https://www.theguardian.com/media-network/2015/may/28/waze-uri-levine-tips-startup-google

My product management toolkit (21): Assessing opportunities

Earlier this year I wrote about the tools and techniques to use when exploring market viability. I believe that the ability to properly assess specific opportunities is closely linked. I’ve found that, especially at the early startup stage, there are plenty of opportunities to potentially go for, as they’ll all bring in revenue and offer growth potential.

However, I believe that this can be a blessing and a curse. I’ve seen companies that went for all business / market opportunities and ended up with heaps of technical debt, operational cost or bespoke solutions that couldn’t be reused. Hence why I believe it’s critical for us product managers to be able to assess opportunities and make tough tradeoff decisions.

Let’s look at some of the tools and techniques you can use to assess and decide on opportunities:

1. Business Case

 

Fig. 1 – Sample business case format – Taken from: https://www.slideshare.net/projectingit/the-prince2-business-case

I’m pretty sure that we’ve all seen a business case template like the one in Fig. 1 before. The biggest risk I see with most business cases is that people spend an awful lot of time drafting them, for the business case to become obsolete as soon as the product has been built or launched.

Pros:

  • A familiar format for most stakeholders
  • Detailed breakdown of revenue & cost projections

Cons:

  • Often based on lots of assumptions, which are then treated as gospel
  • Often out of date as soon we start building or launching a product

2. Opportunity Assessment

1. Exactly what problem will this solve? (value proposition)
2. For whom do we solve that problem? (target market)
3. How big is the opportunity? (market size)
4. What alternatives are out there? (competitive landscape)
5. Why are we best suited to pursue this? (our differentiator)
6. Why now? (market window)
7. How will we get this product to market? (go-to-market strategy)
8. How will we measure success/make money from this product? (metrics/revenue strategy)
9. What factors are critical to success? (solution requirements)
10. Given the above, what’s the recommendation? (go or no-go)

By Marty Cagan – Taken from: http://svpg.com/assessing-product-opportunities/

In my toolkit blog post no. 6 I wrote about Marty Cagan’s opportunity assessment, and how you can compare product opportunities or ideas in a very objective and like-for-like manner.

Pros:

  • Less time consuming than business cases
  • More market, customer and problem centric, easy to translate into testable hypotheses
  • Outcome focused, establishing clear success factors early on

Cons:

  • Unfamiliar format for some stakeholders
  • Less numbers centric than a business case

3. Auftragsklärung (Alignment Framework)

Fig. 3 – Auftragsklärung template – Taken from: http://produktfuehrung.de/framework-no-9-auftragsklarung/

The product guys at Germany-based Xing have a created a very useful tool called “Auftragsklärung” or Alignment Framework, which helps assessing opportunities at the earliest stage possible.

Pros:

  • Helps to ‘take a step back’, honing in on fundamental questions
  • Facilities strategic thinking
  • Ongoing reference point for bigger opportunities 
  • Outcome and metric focused

Cons:

  • Unfamiliar format for some stakeholders
  • Risk of being too high level to base trade-off decisions on

4. Scoring

Fig. 4 – Scoring against a number of assessment factors – Taken from: https://www.slideshare.net/JasonBrett/the-60-second-business-case

What I like about this “scoring” method as created by Jason Brett is the idea of quantifying one’s assessment, using comparative scores. At the same time, however, my worry is that people can score subjectively to achieve a desired result.

Pros:

  • Encourages thinking about key considerations e.g. customer experience and operational necessity
  • Quantifiable and comparable results

Cons:

  • Risk of people making up numbers to meet the criteria 🙂
  • Finger in the air and subjective
  • Harder if some of the weighting factors have not been fully defined

5. Change Types

Fig. 5 – Doblin Ten Types of Innovation – Taken from: http://blog.hypeinnovation.com/using-the-ten-types-of-innovation-framework

With Doblin’s Ten Types of Innovation, the focus isn’t just on the product that you’re looking to develop. The model encourages us as product manager to carefully consider aspects such as the underlying business model and the experience around your product or service.

Pros:

  • Encourages thinking about business and customer impact
  • Easy to translate and communicate from a dual track roadmap point of view
  • Thinking beyond just the product or service

Cons:

  • High level, harder to base trade-off decisions on
  • Open to subjective views on nature of change

6. Minimum Viable Product (‘MVP’)

Fig. 6 – Definition of an MVP – Taken from: https://www.quora.com/Where-is-the-line-for-MVPs-minimum-viable-products-What-are-your-principals-guidelines-for-defining-your-MVP-in-particular-where-to-stop-building-too-much

Readers of my blog will undoubtedly know how much of a fan I am of MVPs, but only in the truest sense of the word. For example, when I developed my own MVP a few years ago, I tried to be as strict as possible with the minimum number of feature that could deliver maximum value to my users and maximum learning to me.

Pros:

  • Delivering value early
  • Early customer validation
  • Bringing riskiest assumptions forward
  • Increase speed to market

Cons:

  • Misunderstanding of what an MVP is / isn’t
  • Open to abuse; misinterpreting “minimum” and “viable”
  • “When are you going to do everything else!?”

7. Calculating Cost of Delay

Fig. 7 – Cost of Delay; Weighted Shortest Job First  (taken from: http://scalingsoftwareagilityblog.com/prioritizing-features/)

Fig. 8 – Cost of Delay Divided by Duration – Taken from: http://blackswanfarming.com/cost-of-delay-divided-by-duration/

When assessing opportunities or making tradeoff decisions it’s important to look at the cost of not doing something (now). I often see people either deciding to everything at one – I don’t consider that prioritisation 🙂 –  or not take into account cost of delay when making assessments.

8. Calculating Return on Investment (‘ROI’)

Fig. 9 – ROI formula – Taken from: https://www.poweredbysearch.com/blog/ppc-advertising-roi-calculator/

Similar to creating business creating business cases, the risk with calculating ROI at the very beginning of the product lifecycle or project is that you pluck figures out of the air. Often this simply occurs because you don’t yet have any actual figures to apply – especially with true greenfield opportunities.

However, having  initial ROI calculations based on the numbers available can serve as a very useful ongoing reference point to compare as soon as the product enters its lifecycle. This way you can start comparing and contrasting actual vs planned ROI and act based upon your insights gained.

Main learning point: Whichever tool or approach you use to assess opportunities I don’t care, as long as you find a way to ‘take a step back before going straight into decision and/or build mode!

Related links for further learning:

  1. https://www.prince2.com/uk/prince2-business-case
  2. http://svpg.com/assessing-product-opportunities/
  3. http://produktfuehrung.de/framework-no-9-auftragsklarung/
  4. https://en.wikipedia.org/wiki/Outcome-Driven_Innovation
  5. https://hbr.org/2002/01/turn-customer-input-into-innovation
  6. http://johnpeltier.com/blog/2014/01/06/opportunity-assessment/
  7. https://www.slideshare.net/JasonBrett/the-60-second-business-case
  8. http://blog.hypeinnovation.com/using-the-ten-types-of-innovation-framework
  9. http://blackswanfarming.com/four-steps-to-quantifying-cost-of-delay/
  10. https://marcabraham.wordpress.com/2014/04/07/my-learnings-from-lean-day-london-14/
  11. http://blackswanfarming.com/wp-content/uploads/2014/03/BlackSwanFarming-Canvas.pdf
  12. http://blackswanfarming.com/cost-of-delay-divided-by-duration/
  13. http://www.marketingmo.com/campaigns-execution/how-to-calculate-roi-return-on-investment/
  14. http://www.investopedia.com/articles/basics/10/guide-to-calculating-roi.asp
  15. http://www.tracead.net/161/roi-return-on-investment-how-to-calculate-roi
  16. http://transformcustomers.com/minimum-viable-product-how-it-helps-time-to-market/
  17. https://www.quora.com/Where-is-the-line-for-MVPs-minimum-viable-products-What-are-your-principals-guidelines-for-defining-your-MVP-in-particular-where-to-stop-building-too-much