Book review: “Radical Focus”

Christina Wodtke’s latest book, “Radical Focus”, is probably the most valuable ‘business’ book which I’ve read thus far this year. The full title of the book reads “Radical Focus – Achieving Your Most Important Goals with Objectives and Key Results” and Wodtke provides a great story – literally – as well as useful tips about the importance of goal setting. The book starts with a fable about a Silicon Valley startup, and offers a good narrative about how (not) to use of objectives and key results (‘OKRs’). This fable, which felt very close to the reality of being in startups – sets the scene for the practical tips that Wodtke offers with respect to using OKRs effectively, irrespective of whether you work in a startup or at Amazon.

 

 

What are some of the most common reasons why key things don’t happen? Wodtke offers a number of insights here:

  1. No prioritisation or stack ranking of goals – Everything is deemed important and critical things don’t get done as a result.
  2. No obsessive and comprehensive communication of the goal – Wodtke suggests that for key goals to be achieved, it’s important to reiterate the goal daily and having regular commitment meetings, where the team talks about the key goal and commit to specific activities directly related to the goal.
  3. There’s no plan to get things done – Often, companies will have lofty goals but no plan or process to actually achieve these goals. Wodtke introduces a number of useful ceremonies which teams can use to keep goals relevant and top of mind: commitment meetings, check ins and celebrations.
  4. No or insufficient time carved for what really matters – Love how Wodtke refers to the “Eisenhower Box” which helps identify and prioritise those things that must be done (see Fig. 1 below).
  5. A tendency to give up instead of iterating – Business often give up at the first attempt, canning a goal if it isn’t achieved (fully) first time around. Instead, Wodtke urges, try to avoid a lack of followthrough by iterating constantly.

Fig. 1 – The Eisenhower – Taken from: https://jamesclear.com/eisenhower-box/eisenhower-box-2

As the book title clearly suggests, Wodtke advocates the use of OKRs to achieve focus and making sure that key goals are being realised:

  • Objectives are bold and qualitative – Set a bold, inspirational and qualitative Objective each quarter. Wodtke provides examples of both good and poor Objectives (see Fig. 2 below).
  • Key Results are tangible and quantitative – Each Objective will have three quantitative Results that let you know when you’ve hit your Objective (see Fig. 3 below). Wodtke stresses that Key Results are “hard goals, the kind where you only have a 50/50 shot of achieving.” These ‘stretch goals’ are hard to achieve but not impossible, and you indicate for each Key Result how confident you are of achieving it.
  • OKRs and health metrics – In the book, Wodtke makes a helpful distinction between OKRs and health metrics. OKRs are “the thing you want to push, the one thing you want to make better.” I’d add an emphasis on the word “one” here as I find working with a single business Objective to be most effective. In my experience, having multiple business Objectives starts muddying the water in terms of focus and prioritisation. Instead, start with setting one Objective for the company. Secondly, set OKRs for each team that ty back to the company goal. Health metrics are the key things to continue to watch, these metrics are more concerned with ‘hygiene’.
  • Set OKRs together, pick Key Results as a team – Identifying and agreeing on Objectives and Key Results is a collaborative process. Clearly articulating and sharing the business Objective is a critical first step. The different teams can then set those Key Results which they believe will contribute to the business Objective.
  • Progress monitoring – I particularly liked the 4×4 matrix that Wodtke suggests as a way of monitoring progress with respect to achieving your business and associated team OKRs (see Fig. 4 below). This matrix is a very simple but effective way of committing to (weekly) priorities and capturing progress.
  • Setting a rhythm of execution – Wodtke introduces a number of weekly ceremonies which you can use to keep OKRs relevant and to ensure that you keep to them (see Fig. 5 below). The risk with goal setting is that it remains a one off exercise and I believe that having weekly ‘commitment’ and ‘win’ sessions will help massively keeping OKRs front of mind.

Main learning point: In “Radical Focus”, Christina Wodtke does a great job of explaining the role and value of OKRs. Not only does she provide valuable tips on how to best define OKRs, Wodtke also offers useful methods of keeping track of progress against OKRs. If you feel that you and your business are doing too much of everything, or not achieving anything, then Radical Focus is a must read!

Fig. 2 – Examples of good and poor Objectives – Taken from: Christina Wodtke, Radical Focus, self-published, 2016, p. 110

Here are some good Objectives:

  • Own the direct-to-business coffee retail market in the South Bay.
  • Launch and awesome MVP.
  • Transform Palo Alto’s coupon using habits.
  • Close a round that lets us kill it next quarter.

and some poor Objectives:

  • Sales numbers up 30%.
  • Double users.
  • Raise a Series B of 5M.

Fig. 3 – Key Results – Taken from: Christina Wodtke, Radical Focus, self-published, 2016, pp. 111 – 112

Key Results can be based on anything you can measure, including:

  • Growth
  • Engagement
  • Revenue
  • Performance
  • Quality

For example, if your Objective is to “Launch an Awesome MVP” you could have the following Key Results:

  • 40% of users come back 2X in one week
  • Recommendation score of 8
  • 15% conversion

Fig. 4 – Example of Christina Wodtke’s 4×4 OKR matrix – Taken from: https://medium.com/@cwodtke/one-objective-to-rule-them-all-1058e973bfc5

Fig. 5 – Setting a rhythm of execution – Taken from: Christina Wodtke, Radical Focus, self-published, 2016, pp. 120 – 123

Monday Commitments

Each Monday, the team should meet to check in on progress against OKRs, and commit to the tasks that will help the company meet its Objective.

  • Intention for the week – What are the 3-4 most important things you must get done this week toward the Objective? Discuss if these priorities will get you closer to the OKRs.
  • Forecast for the month – What should your team know is coming up that they can help with or prepare for?
  • Status toward OKRs – If you set a confidence of five out of ten, has that moved up or down? Have a discussion about why.
  • Health metrics – Pick two things you want to protect as you strive toward greatness. What can you not afford to eff-up? Key relationships with customers? Code stability? Team well-being? Now mark when things start to go sideways, and discuss it.

Fig. 6 – OKR Fundamentals – Taken from: Christina Wodtke, Radical Focus, self-published, 2016, pp. 109 – 112

Your Objective is a single sentence that is:

Qualitative and Inspirational

The objective is designed to get people jumping out of bed in the morning with excitement. And while CEOs and VCs may jump out of bed in the morning with joy over a 3% gain in conversion, most mere mortals get excited by a sense of meaning and progress. Use the language of your team.

Time Bound

For example, doable in a month, a quarter. You want it to be a clear sprint toward a goal. If it takes a year, your Objective maybe a strategy or even a mission.

Actionable by the Team Independently

This is less of a problem for startups, but bigger companies often struggle because of interdependence. Your Objective has to be truly yours, and you can’t have the excuse of “Marketing didn’t market it.”

An Objective is like a mission statement, only for a shorter period of time. A great objective inspires the team, is hard (but not impossible) to do in a set time frame, and can be done by the person or people who have set it, independently.

Fig. 7 – Quick tips on OKRS use – Taken from: Christina Wodtke, Radical Focus, self-published, 2016, p. 153

  • Set only one OKR for the company, unless you have multiple business lines. It’s about focus.
  • Give yourself three months for an OKR. How bold is it if you can do it in a week?
  • Keep the metrics out of the Objective. The Objective is inspirational.
  • In the weekly check in, open with company OKR, then do groups. Don’t do every individual; that’s better in private 1:1s.
  • OKRs cascade; set company OKRs, then group’s/role’s, and then individual’s.
  • OKRs are not the only thing you do; they are the one thing you must do. Trust people to keep the ship running, and don’t jam every task into OKRs.
  • The Monday OKR check in is a conversation. Be sure to discuss change in confidence, health metrics and priorities.
  • Encourage employees to suggest company OKRs. OKRs are great bottom up, not just top down.
  • Make OKRs available publicly. Google has them on their intranet.
  • Friday celebrations is an antidote to Monday’s grim business. Keep it upbeat!

 

Related links for further learning:

  1. http://eleganthack.com/the-art-of-the-okr/
  2. https://medium.com/@cwodtke/one-objective-to-rule-them-all-1058e973bfc5
  3. https://www.youtube.com/watch?v=8aW5gdRRn_U
  4. http://fortune.com/2018/05/21/john-doerr-measure-what-matters-okr/

My product management toolkit (29): analysing competitors

Don’t believe anyone who claims that they don’t look at what their competition is doing. Agreed, there’s a fine line between doing a healthy amount of competitor analysis and being completely obsessed by what the competition is doing but I believe it’s important to understand how your product differentiates from similar products.

Competition is good. Product isn’t a zero sum game and it’s important to understand the competitive landscape that you operate in and to figure out your product ‘niche’. I try to do a competitor analysis of some form or other on an ongoing basis, as your competitive landscape is bound to evolve.

Before delving into ways of analysing competitors, let’s first look at the ‘what’ and ‘why’ of competitor analysis:

  • Understand where your product fits – Reviewing competitors helps to understand where your product sits within the market, analysing and comparing on aspects such as features, price, perceived benefits, etc.
  • No need to look at ALL competitors – Realistically speaking, it’s impossible to keep up with all of your – direct and indirect – competitors, all the time. When you narrow things down, you’re likely to find that a small percentage of companies in the market either scoop up most revenue or are direct competition in your specific market segment.
  • Treat competitor analysis for what it is; valuable guidance – Instead of getting obsessed with your competitor(s), get obsessed with your customer! I can only refer to a quote from the wise Sun Tzu in “The Art of War”: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” I find it very helpful to understand the competitive landscape and the position of my product or service in it, without becoming completely distracted by the features a competitive product does or doesn’t offer. You don’t want your competitors to dictate which features (not) to include, and cause ‘featuritis’ as a result!
  • Find the perfect niche for your product – The likelihood is that your product will be targeting the same customers that other companies and their products are already serving. Your product needs to be exceptional and differentiated enough for customers to consider switching. Look at the market and ask yourself: “are we solving the same problem, but differently?” or “are we tackling a different customer problem altogether?”

Now, let’s look at some common tools you can use to analyse your competition:

 

SWOT analysis

Fig. 1 – SWOT analysis – Taken from: https://research-methodology.net/theory/strategy/swot-analysis/

The SWOT analysis is probably one of the more traditional ways of studying and comparing competitors. It might be an older method, but SWOT still holds true and is a tried and tested way of understanding your competitors:

  • Strengths – Specific characteristics and attributes which give a company competitive advantage. For example, one could argue that design, brand, a loyal customer base and innovation are key strengths of Apple.
  • Weaknesses – Specific characteristics and attributes which reduce the competitive strength of a business. For example, major debts and inadequate online presence hinder lots of today’s retailers to compete effectively with Amazon.
  • Opportunities – Advantageous situations or circumstances that can create new competitive power for businesses. Think, for example, of entering new geographic markets, new customer segments or new product opportunities.
  • Threat – Disadvantageous situations or circumstances which can hamper companies in their ability to compete. For instance, I expect ‘Brexit’ to hinder UK companies in attracting talented new recruits or operate globally.

 

Kano analysis

Fig. 2 – Kano analysis – Taken from: https://en.wikipedia.org/wiki/Kano_model

I’ve written previously about conducting a Kano analysis as I find this method very helpful when looking at the competition from a customer point of view. Understanding what the “basic needs” and “delighters” are in your market, will help  understand:

  • The position of your product – Understanding where a product sits vis a vis customer expectations.
  • Which battles (not) to pick – Where do you want to play and what will you playing for? Are you happy to just focus on so-called ‘hygiene’ factors or do you want to focus on more unchartered territory?
  • Potential product opportunities – Where are the opportunities for improved or totally new products, and why?

 

Lean Canvas

Fig. 3 – Ash Maurya’s “Lean Canvas” – Taken from: https://blog.leanstack.com/business-models-vs-business-plans-4a802e15c51d

Plenty of companies use Ash Maurya’s “Lean Canvas” to better understand your product and market, which is great. In addition, you can also use the Lean Canvas framework to compare and contrast competitors. For example, what’s the dominant channel of companies X and Y, and how does their path to customers compare to yours?

 

Direct customer feedback

My favourite way of analysing competitors is to hear directly from customers. For example, when I worked at a digital music service, I ran sessions simply observing people using the likes of Spotify, Rdio (which died a few years ago) and Soundcloud. This way, my colleagues and I could learn first hand about how people felt about our product in comparison to the competition.

With digital products and services, it’s harder to do a traditional “bind product test” but you can still observe and listen to people testing different products which are all trying to solve a similar problem. People will tell you why they think product A is better than product B, especially when you make it clear that you don’t have an allegiance with any of the tested products!

Fig. 4 – Blind product testing – Taken from: http://www.bloncampus.com/columns/fundamental/why-blind-testing-is-important-in-product-research/article7976927.ece

 

5 Forces of Competition

Fig. 5 – Michael Porter’s “Five Forces of Competition” – Taken from: https://www.pocketbook.co.uk/blog/2017/02/14/michael-porter-competitive-strategy/

I can imagine that you might have come across Porter’s “5 Forces” before. Like the SWOT analysis, the 5 Forces approach is a longstanding one which helps companies understand their sources of competitive rivalry and which factors they need to concentrate on in order to gain the upper hand.

Main learning point: Don’t shut your eyes and avert looking at the competition! Equally, don’t get freaked out by competitive products or services. Instead, analyse the competition to get a better feel for whether and how your product differentiates. You can then use these insights to focus more on delivering customer value and creating strong points of differentiation.

 

Related links:

  1. http://edwardlowe.org/how-to-conduct-and-prepare-a-competitive-analysis/
  2. https://www.quora.com/How-do-Product-managers-perform-competitive-analysis-for-enterprise-products
  3. https://medium.com/pminsider/real-competitive-analysis-is-about-learning-to-love-your-competitor-15e45b9ef10a
  4. https://marcabraham.com/2015/09/13/what-is-psychographic-segmentation/
  5. https://marcabraham.com/2016/06/17/my-product-management-toolkit-11-assessing-the-market/
  6. https://news.greylock.com/the-only-metric-that-matters-now-with-fancy-slides-232474cf414c
  7. https://blog.leanstack.com/business-models-vs-business-plans-4a802e15c51d
  8. https://www.pocketbook.co.uk/blog/2017/02/14/michael-porter-competitive-strategy/

What’s so special about SenseTime!?

Question: What do the following products have in common?

Product 1 — Smart glasses worn by Chinese police officers

https://techcrunch.com/2018/02/08/chinese-police-are-getting-smart-glasses/

These smart glasses connect to a feed which taps into China’s state database to detect out potential criminals using facial recognition. Officers can identify suspects in a crowd by snapping their photo and matching it to their internal database.

Product 2 — Wrong360, a peer-to-peer lending app

               https://technode.com/2013/06/24/rong360-online-financial-product-search-platform/

Wrong360 is a Chinese peer-to-peer lending app which aims to make obtaining a loan as simple as possible. When users of the Wrong360 app enter the amount of loan, period, and purpose, the platform will automatically do the match and output a list of banks or credit agencies corresponding to the users’ requests. On the list, users can find the institution names, products, interests rate, gross interests, monthly payment, and the available periods, etc. Applying for a loan can done fully online, and the app uses facial recognition as part of the loan application process.

Product 3 — Security camera

Security cameras in public places to help police officers and shopkeepers by improved ways of face matching. Traditionally, face matching is based on trait description of someone’s facial features and the special distance between these features. Now, by extracting the geometric descriptions of the parts of the eyes, nose, mouth, chin, etc. and the structural relationship between them, search matching is performed with the feature templates stored in the database. When the similarity exceeds the set threshold, the matching results are shared.

                                                         http://www.sohu.com/a/163629793_99963310

 

Product 4 — Oppo mobile phone

                                      https://www.notey.com/blogs/device-SLASH-accessories?page=4

 

Oppo specalise mobile photography and uses artificial technology to enable features such as portrait photo-taking, bi-camera photo-taking, and face grouping.

Question: What do the following products have in common?

Answer: They’re all powered by SenseTime artificial technology.

Whether it’s “SenseTotem” — which is being used for surveillance purposes — or “SensePhoto” — which uses facial recognition technology for messaging apps and mobile cameras — it all comes from the same company: SenseTime.

The company has made a lot of progress in a relatively short space of time with respect to artificial intelligence based (facial) recognition. The Chinese government has been investing heavily in creating an ecosystem for AI startups, with Megvii as another well known exponent of China’s AI drive.

A project with the code name “Viper” is the latest in the range of products that SenseTime is involved. I’m intrigued and slightly scared by this project which is said to focus on processing thousands of live camera feeds (from CCTV, to traffic cameras to ATM cameras), processing and tagging people and objects. SenseTime is rumoured to want to sell the Viper surveillance service internationally, but I can imagine that local regulations and data protection rules might prevent this kind of ‘big brother is watching you’ approach to be rolled out anytime soon.

Main learning point: It seems that SenseTime is very advanced with respect to facial recognition, using artificial intelligence to combine thousands of (live) data sources. You could argue that SenseTime isn’t the only company building this kind of technology, but their rapid growth and technological as well as financial firepower makes them a force to be reckoned with. That, in my mind, makes SenseTime very special indeed.

Related links for further learning:

  1. The billion-dollar, Alibaba-backed AI company that’s quietly watching everyone in China
    Most Chinese consumers have likely never heard of SenseTime. But depending on where they live, it might be looking at…qz.com
  2. This Chinese Facial Recognition Surveillance Company Is Now the World’s Most Valuable AI Startup
    SenseTime raised $600 million from Alibaba and others at a valuation of over $3 billion, becoming the world’s most…fortune.com
  3. China Now Has the Most Valuable AI Startup in the World
    has raised $600 million from and other investors at a valuation of more than $3 billion, becoming the world’s most…www.bloomberg.com
  4. China’s SenseTime, the world’s highest valued AI startup, raises $600M
    The future of artificial intelligence (AI), the technology that is seen as potentially impacting almost every industry…techcrunch.com
  5. Chinese police are using smart glasses to identify potential suspects
    China already operates the world’s largest surveillance state with some 170 million CCTV cameras at work, but its line…techcrunch.com
  6. Facial Recognition in China with SenseTime – Nanalyze
    If you’ve spent any meaningful amount of time in a managerial role, you probably understand the importance of having a…www.nanalyze.com
  7. Rong360: Online Financial Product Search Platform · TechNode
    Launched in 2011, Rong360 operates an online financial product search platform providing loan recommendations for small…technode.com
  8. OPPO and SenseTime Jointly Build an AR Developer Platform
    OPPO and SenseTime Jointly Build an AR Developer Platform (Yicai Global) March 19 — Chinese handset maker Guangdong…www.yicaiglobal.com
  9. About Us – OPPO Global
    OPPO is a global electronics and technology service provider that delivers the latest and most exquisite mobile…www.oppo.com
  10. Megvii, Chinese facial recognition startup with access to government database, raises $460 million
    Megvii Inc., a facial recognition development startup also known as Face++, raised about $460 million from the…www.fastcompany.com

Book review: “Inspired: How To Create Tech Products Customers Love”

About four years ago I read and reviewed Inspired: How To Create Products Customers Love by Marty Cagan, who I regard almost as the ‘founder’ of modern tech product management – along with Steve Jobs of course 🙂 Cagan has now released a second edition of “Inspired” in which he captures two aspects he’s uncovered since writing the first edition.

The first aspect is a critical need to focus on the specific job of the product manager, aiming to clarify which elements constitute the role of a product manager in a tech company. The second aspect is the importance of creating the right product culture for success, and understanding the range of product discovery and delivery techniques available to solve customer and business problems.

Whilst the book contains a wealth of valuable content about product management and how to create great products; in this review I’ll primarily focus on Cagan’s recommendations with respect to product discovery and delivery. Before I do that, it’s important to first look at Cagan’s take on the “root causes of failed product efforts” (Fig. 1).

Fig. 1 – “Root Causes of Failed Product Efforts” by Marty Cagan  – Taken from: https://www.mihneadb.net/notes-on-craft-conf-2015/

Cagan sees a very sequential, “Waterfall” type approach as the underlying reason why many products fail. This approaches comes down to companies using a ‘feature heavy’ and preplanned roadmaps, as well as and using regular planning sessions to negotiate and prioritise the roadmap. Cagan shares some home truths to explain why this approach is now obsolete (Fig. 2).

 

Fig. 2 – 10 problems that companies using a Waterfall type approach suffer – Adapted from: Marty Cagan, Inspired: How To Create Tech Products Customers Love, pp. 17-21

  1. Stakeholder-driven products: It’s a top down approach which leads to stakeholder-driven products and teams that don’t feel empowered
  2. Business cases are mostly fictitious: I couldn’t agree more with Cagan when he argues that the two main business case inputs – how much money we’ll make and how much it will cost – are complete unknowns. We can’t know how much money we’ll make because that depends entirely on how good the solution turns out to be. In contrast, a lot of products end up making no money whatsoever! One of the most critical lessons in product, Cagan explains, is “knowing what we can’t know.”
  3. Product roadmaps –  There are two problems with traditional, feature led product roadmaps. Firstly, the reality is that half of our product ideas are simply not going to work. I always cringe when I see product roadmaps that contain detailed features prioritised prioritised for an entire year … In my experience, until you start discovering, implementing and launching product ideas, you’re not going to know whether your product is actually going to work. Secondly, even when ideas do prove to have potential they’re likely to need several iterations to reach the point where they deliver tangible business value. Cagan introduces the term “time to money” to refer this evolutionary process.
  4. It’s not about gathering requirements for engineers to implement – I recently came across an organisation where they employed an entire team of project managers and business analysts whose main job it was to gather stakeholder requirements, and document them for designers and engineers to implement. Cagan rightly makes the point that “this is 180 degrees away from the reality of modern tech product management.”
  5. UX designers are getting involved way too late – Don’t involve designers only once the requirements have been gathered, it’s simply too late as the designer won’t be able to add much value add this stage.
  6. Engineers are getting involved way too late – If you’re just using your engineers to code, you’re only getting about half their value. I love the ‘little secret’ that Cagan shares with us: “engineers are typically the best single source of innovation.” He’s totally right!
  7. Agile for delivery only – Cagan talks about “Agile for delivery”, whereby product development teams work in an Agile fashion, but the rest of the organisation isn’t.
  8. Project-centric processes – The company usually funds projects, pushes projects through the organisation, and finally launches projects. Unfortunately, projects are output and product is all about outcome. I’d add that most projects are one-off pieces of works whereas products have a continuous lifecycle, until the product is being discontinued.
  9. Customer validation happens way too late – Cagan points out the biggest shortcoming of the old waterfall process, which is that all the risk is concentrated right at the end and that customer validation happens way too late. Instead, customer validation or discovery should be continuous and needs to happen early and often.

 

Cagan offers three overarching principles which help overcome the aforementioned root causes of failed product efforts:

  1. Risks are tackled upfront, instead of at the end
  2. Products are defined and designed collaboratively, rather than sequentially
  3. Finally, it’s all about solving problems, not implementing features

“Continuous Discovery and Delivery” is a great way to translate these three principles into a process and mindset for people to adhere too (Fig. 3). You can see how Cagan has taken the eight steps involved in the traditional waterfall approach (Fig. 1) and condensed them into to three, continuous stages: Objectives – Discovery – Delivery (Fig. 3).

 

Fig. 3 – Continuous Discovery and Delivery – Taken from: Marty Cagan, Process vs Model, https://svpg.com/process-vs-model/, 7 August 2017

 

Ultimately, this process enables you to to get answers to four critical questions:

  1. Will the user buy this (or choose to use this)?
  2. Can the user figure out how to use this?
  3. Can our engineer build this?
  4. Can our stakeholders support this?

Apart from these four critical questions, I like the emphasis Cagan puts on business context over a traditional product roadmap. In the book, Cagan covers two main components that provide this business context:

  1. The product vision and strategy
  2. The business objectives

The “risk” aspect feels like a crucial one to me, and thinking about ways to identify and mitigate risks early and often. For example, I’ve found the pre-mortem technique to be a great  way to unearth key risks right at the outset. Cagan describes some common risks to consider:

  • Financial risk – Can we afford this solution?
  • Business development risk – Does this solution work for our partners?
  • Marketing risk – Is this solution consistent with our brand?
  • Sales risk – Is this solution something our sales staff is equipped to sell?
  • Legal risk – Is this something we can do from a legal or compliance perspective?
  • Ethical risk – Is this solution something we should do?

Cagan then goes on to describe three of his favourite discovery framing techniques:

1. Opportunity Assessment

The idea is to answer four key questions about the discovery work you’re about to undertake:

  1. Objective – What business objective is this work intended to address?
  2. Key results – How will you know if you’ve succeeded?
  3. Customer problem – What problem will this solve for our customers?
  4. Target market – What type of customer are we focused on?

2. Customer Letter

Cagan refers to Amazon and their working backward process, where you start the product effort with a fictitious press release.

3. Startup Canvas

The “Startup Canvas” is particularly useful when you work at an early stage startup and are staring from scratch, both with the business and your product or service. There are lots of these canvases around for you to have a closer look at; I’d suggest having a look at the Business Model Canvas (by Alex Osterwalder) and the Lean Canvas (by Ash Maurya; Fig. 4).

Fig. 4 – Ash Maurya’s “Lean Canvas” – Taken from Ash Maurya, “Running Lean”: 

Cagan explains how you can use a canvas for any product change, no matter the size, but you would likely quickly find a risk of duplication once you’ve got an existing business and product. I agree that the law of diminishing returns kicks in once you’ve already established your business and products, since you’ll have already figured out things like your cost structure or distribution strategy.

Finally, Cagan explains about “testing value” as a key thing to consider when planning your customer discovery. The main thing here, Cagan stresses, is to learn whether customers perceive your product to be substantially better than the competition. So many companies and product teams think all they need to do is match the features of the competitive alternatives. This idea of “feature parity” being enough to woo customers has proven to be a false one. The reality is that for customers to switch from an existing product, they need to  perceive the new product as a much better alternative.

For example, sometimes it’s not clear whether customer want what it is that we’re going to build and it can be very risky to simply think “we’ll build it and customers will come.” In the book, Cagan talks about how you can quickly and cheaply test whether there’s demand for instance through launching just a landing page. On the landing page, we describe the new offering exactly as we would if we were really launching the service. The difference is that if the user clicks the call to action, rather than getting the expected outcome, the users sees a message that explains that you’re thinking of launching the new service and that you’d love to get initial input from the user. It all falls under the mantra “Do Things that Don’t Scale”, first introduced by Y Combinator Founder Paul Graham. A good example is this one from Buffer:

Fig. 5 – Buffer example of a ‘smoke and mirrors’ landing page – Taken from: Christopher Bank, 15 ways to test your minimum viable product, https://thenextweb.com/dd/2014/11/12/15-ways-test-minimum-viable-product/, 12 November 2014

Main learning point: Marty Cagan has written a great followup to his first edition of “Inspired”. In this edition, he offers valuable tips and examples in relation to important themes as product discovery and delivery. Whether you’re new to product management or have got some good product management experience under your belt, “Inspired: How To Create Tech Products Customers Love” is a great and valuable read.

Book review: “Product Roadmaps Relaunched”

Over the last few years, I’ve noticed how people can cling on to product roadmaps. Some people seem to derive the same sense of certainty and predictability from a roadmap which they used to get from a Gantt Chart. One could argue that a detailed roadmap is a remnant of the traditional Waterfall approach to product management, an approach which favours detailed documentation upfront.

As a result, a lot of roadmaps tend to be very detailed; filled with specific features and timings, with product managers getting hung out to dry if they fail to deliver on features promised in their roadmaps. The hard everyday reality is that both business environments and product development are too unpredictable and volatile to be able to plan an entire roadmap upfront. This is one of the reasons why great product people like Marty Cagan and Brad Murphy argue that OKRs are a viable alternative to (traditional) roadmaps. Instead of focusing on outputs, product teams should be given the autonomy to focus on critical business outcomes instead.

Product Roadmaps Relaunched, a book published in 2017 by C. Todd Lombardo, Bruce McCarthy, Evan Ryan and Michael Connors, aims to achieve a bit of a reset of flawed perceptions of what a roadmap is and isn’t. Lombardo et al. start “Product Roadmaps Relaunched” with the following statement:

“A good roadmap is not so much a project plan as a strategic communication tool, a statement of intent and direction.”

And the authors subsequently set out requirements for Roadmap Relaunch — A product roadmap should:

  • Put the organisation’s plans in a strategic context
  • Focus on delivering value to customers and the organisation
  • Embrace learning as part of a successful product development process
  • Rally the organisation a single set of priorities
  • Get customers excited about the product’s direction

A product roadmap should not:

  • Make promises product teams aren’t confident they will deliver on
  • Require a wasteful process of up-front design and estimation
  • Be conflated with a project plan or a release plan

I found it very refreshing seeing a roadmap as a two-way communication device, steering your company to delivering on a company strategy to achieve an overarching vision.

In the book, the authors distinguish between primary and secondary components of the roadmap. The primary components are necessary for an effective roadmap (see also Fig. 1 below):

  • Product vision — This is the overarching vision that guides the product roadmap.
  • Business objectives — Having well defined goals on the roadmap, will help you and your organisation to measure progress.
  • Broad timeframes — Broad timeframes like calendar quarters or Now, Next and Later offer guidance about timings without committing to very specific deadlines.
  • Themes — I like the authors’ suggestion to ask the question “What would need to be true for our product to realise its vision and attain its business activities?” Themes can be defined as customer needs or problems for the product to address.
  • Disclaimer—Roadmaps can have a caveat just to make it very clear to any stakeholders, other team, etc. that anything in the roadmap is subject to change and evolve.

Secondary components:

  • Features — Personally, I’m not a big fan of having lots of features on a roadmap, mostly because it will limit you and your team to come up with solutions, with people expecting whatever is on the roadmap to get delivered. The book explains that “features and solutions are the specific deliverables that will fulfil the needs and solve the problems identified in the roadmap themes.
  • Stage of development — By including labels such as “discovery”, “design”, or “prototyping” on a roadmap, stakeholders and other people not close to day-to-day product development — should be able to see at a glance where the product is at.
  • Confidence — Indicating the level of confidence you have in your availability to address each item or theme on the roadmap in the next release is a great way to help offset the sentiment that once it’s on paper, it’s a promise.
  • Target customers — Highlighting which customer segment(s) your product is looking to address, really helps with the ‘communication’ aspect of your product roadmap. Instead of just seeing a bunch, you can now tell more of a story about upcoming themes and impact on specific customers.
  • Product areas — A large and complex product — or a new product where basic functionality is still being laid down in many areas — many benefit from a roadmap where themes or features are annotated per specific area of the product.

Fig. 1 — A roadmap helps manage outcomes, underpinned by primary components — Taken from: “Product Roadmaps Relaunched”, p. 25

It’s worth highlighting the book’s chapter on ‘Themes’, which I’ve written about previously. Themes are described as “an organisational construct for defining what’s important to your customers at the present time.”

The difference between themes and subthemes is granularity, or level of detail:

Theme: a high level customer need; “content access across devices” for example

Subtheme: a more specific need; “visibility of which device is in use” for example

One can link specific features to these themes and subthemes on the roadmap, but it’s worth considering first whether features should be added to the roadmap in the first place. The book contains a number of useful questions to consider in this respect:

  • Do we have enough understanding of the need and possible solutions to feel confident in a particular solution?
  • Do we have any validated solutions from previous release plans that did not get completed and need to be carried over?
  • Do we have any validated infrastructure needs?
  • Do we have any mandates from decision-making stakeholders that must be addressed?
  • What is the likelihood that this solution will be changed, postponed, or dropped from the schedule (i.e. what is your confidence)?

In the light of the roadmap acting as a two-way communication tool, the authors make some valuable point about the different stakeholders, and how they benefit from and contribute to roadmaps. For example:

Customers — benefit: Get excited about how they will benefit in the future

Customers — contribute: Provide feedback on value and priorities

Executives — benefit: Understand how resources are being used and potential ROI

Executives — contribute: Provide strategic context for product direction and priorities

These stakeholders are likely to work with what the authors call the “Product Core”. This is a small group consisting of those who work directly on the product: product manager or product owner, designers, and engineers. The book introduces the “Shuttle Diplomacy Canvas”, as a practical way to plan and conducting “shuttle diplomacy”, tracking stakeholder meetings and moving one toward to final roadmap buy-in and alignment.

Main learning point: I’d highly recommend Product Roadmaps Relaunched  to anyone keen to learn more about how to best communicate product vision, business objectives and associated themes. Lombardo, McCarthy, Ryan and Connors offer some useful insights and practical pointers if you’re looking to relaunch your product roadmap!

My product management toolkit (28): testing price sensitivity

Normally when I talk to other product managers about product pricing, I get slightly frightened looks in return. “Does that mean I need to set the price!?” or “am I now responsible for the commercial side of things too!?” are just some of the questions I’ve had thrown at me in the past.

“No” is the answer. I strongly believe that as product managers we run the risk of being all things to all people — see my previous post about “Product Janitors” — and I therefore believe that product people shouldn’t set prices. However, I do believe it’s critical for product people to think about pricing right from the beginning:

  • Do people want the product?
  • Why do they want it?
  • How much are they willing pay for it?

Answers to these questions will not only affect what product is built and how it’s built, but also how it will be launched and positioned within the market. I’ve made the mistake before of not getting involved in pricing at all or too late. As a result, I felt that I was playing catchup to fully understand the product’s value proposition and customers’ appetite for it.

Fortunately, there are two tools I’ve come across which I’ve found very helpful in terms of my comprehending the value a product is looking to achieve — both from a business and customer perspective: the Van Westendorp Pricing Sensitivity Meter and the Conjoint Analysis respectively.

The Van Westendorp Pricing Sensitivity Meter has helped me to learn about the kinds of pricing-relating customers to ask (target) customers:

  • At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
  • At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
  • At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
  • At what price would you consider the product to be a bargain — a great buy for the money? (Cheap/Good Value)

The aforementioned Van Westendorp questions are a good example of a so-called “direct pricing technique”, where the pricing research is underpinned by the assumption that people have a basic understanding of what a product is worth. In essence, this line of questioning comes down to asking “how much would you pay for this (product or service)?” Whilst this isn’t necessarily the best question to ask in a customer interview, it’s a nice and direct way to learn about how customers feel about pricing.

Example customer responses to the Van Westdorp questions — Taken from: http://www.5circles.com/van-westendorp-pricing-the-price-sensitivity-meter/

The insights from applying these direct questions will help in better understanding price points. The Van Westendorp method identifies four different price definitions:

Point of marginal cheapness (‘PMC’) — At the point of marginal cheapness, more sales volume would be lost than gained due to customers perceiving the product as a bargain and doubting its quality.

Point of marginal expensiveness (‘PME’) — This is a price point above which the product is deemed too expensive for the perceived value customers get from it.

Optimum price point (‘OPP’) — The price point at which the number of potential customers who view the product as either too expensive or too cheap is at a minimum. At this point, the number of persons who would possibly consider purchasing the product is at a maximum.

Indifference price point (‘IPP’) —Point at which the same percentage of customers feel that the product is getting too expensive as those who feel it is at a bargain price. This is the point at which most customers are indifferent to the price of a product.

Range of acceptable pricing (‘RAI’) — This range sits between the aforementioned points of marginal cheapness and marginal expensiveness. In other words, consumers are considered likely to pay a price within this range.

Van Westendorp price sensitivity meter (example) — Taken from: https://www.qualtrics.com/uk/market-research/pricing-research/

 

In addition to the Van Westendorp Price Sensitivity Meter, I’ve also used Conjoint Analysis to understand more about pricing. Unlike the Van Westendorp approach, the conjoint analysis is an indirect pricing technique which means that price is combined with other attributes such as size or brand. Consumers’ price sensitivity is then derived from the results of the analysis.

Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/
Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/

 

When designing a conjoint analysis study, the first step is take a product and break it down into its individual parts. For example, we could take a car and create combinations of its different parts to learn about combinations that customers prefer. For example:

Which of these cars would you prefer?

Option: 1

Brand: Volvo

Seats: 5

Price: £65,000

Option: 2

Brand: SsangYyong

Seats: 5

Price: £20,000

Option: 3

Brand: Toyota

Seats: 7

Price: £45,000

This is an overly simplified and totally fictitious example, but hopefully gives you a better idea of how a conjoint analysis takes into account multiple factors and will give you insight into how much consumers are willing to pay for a certain combination of features.

Main learning point: I personally don’t expect product managers to set prices for their products or design price research. However, I do think we as product managers benefits from a better understanding of the pricing model for our products and a better understanding of what constitutes ‘value for money’ for our customers. The Van Westendorp Price Sensitivity Meter and the Conjoint Analysis are just two ways of testing price sensitivity, but are in my view to good places to get started if you wish to get a better handle on pricing.

Related links for further learning:

  1. Van Westendorp pricing (the Price Sensitivity Meter) – 5 Circles Research
  2. Conjoint analysis – Wikipedia
  3. Why You Should (Almost) Never Use the van Westendorp Pricing Model
  4. Van Westendorp’s Price Sensitivity Meter – Wikipedia
  5. Pricing research: A new take on the Van Westendorp model | Articles | Quirks.com
  6. Easy Guide: How To Run a Van Westendorp Pricing Analysis – Dimitry Apollonsky
  7. Van Westendorp Price Sensitivity Meter
  8. Conjoint Analysis – introduction and principles

 

App review: StatusToday

Artificial Intelligence (‘AI’) has rapidly become yet another buzzword in the tech space and I’m therefore always on the lookout for AI based applications which add actual customer value. StatusToday could that kind of app:

My quick summary of StatusToday before using it – I think Status Today provides software to help manage teams of employees, I suspect this product is geared towards HR people.

How does StatusToday explain itself in the first minute – “Understand your employees” is the strapline that catches my eye. Whilst not being entirely clear on the tangible benefits Status Today delivers on, I do get that it offers employee data. I presume that customers will have access to a data portal and can generate reports.

What does StatusToday do (1)? – StatusToday analyses human behaviour and generates a digital fingerprint for individual employees. The company originally started out with a sole focus on using AI for cyber security, applying designated algorithms to analyse internal online comms, detecting behavioural patterns in comms activity and quickly spotting any abnormal activity or negligence. For example, ‘abnormal file exploration’ and ‘access from unusual locations’ are two behaviours that StatusToday will be tracking for its clients.

What does StatusToday do (2)? -StatusToday has since started offering more generic employee insights services. By plugging into a various online tools companies may use, Google and Microsoft for example, StatusToday will start collecting employee activity data. This will help companies in getting better visibility of employee behaviour as well as making the processes around data access and usage more efficient.

It makes me wonder to what extent there’s a “big brother is watching you element” to StatusToday’s products and services. For example, will the data accessible through StatusToday’s “Live Dashboard” (eventually) make it easier for companies to punish employees if they’re spending too much time on Facebook!?

Main learning point: I can see how StatusToday takes the (manual) pain out of monitoring suspicious online activity and helps companies to preempt data breaches and other ‘anomalies’.

 

Related links for further learning:

  1. https://techcrunch.com/2018/02/20/statustoday/
  2. https://www.youtube.com/watch?v=KhIkx8ZvA-Q
  3. https://techcrunch.com/2015/09/09/ef4/
  4. https://blog.statustoday.com/1nature-is-not-your-friend-but-ai-is-d94aaa13fd2e
  5. https://blog.statustoday.com/1your-small-business-could-be-in-big-trouble-7a34574ab42c