Better Product Managers, and Product Management

This post is Part 3 in a series.  Read Part 1, Part 2.

You’ve got questions, answers, metrics.  You’ve picked the changes you’re going to make and defined how you will evaluate their success.  Your product management organization is excited and you’ve got executive buy-in for moving full speed ahead.

But wait – no one likes change.  The other teams in your company are going to have objections.  Existing users are going to complain.  You’ll be tempted to refine your vision under the radar for awhile, but that’s a recipe for failure. 

Your job as a fast-failing product manager is to frontload the “no’s”.

Here’s how you start:

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This post is Part 2 in a series.  Read Part 1.

You’ve seen the signs and know you need to change direction in order to have a successful product.  But how do you select the best possible next experiment?

There’s no sense in failing fast if you aren’t able to learn from your failed experiment.  And that’s another rathole that well-intentioned product managers fall into.  Everyone wants to learn “as much as possible” from a failed project; what they don’t do is follow a rigorous checklist designed to shine a light on the specific critical elements that stand in the way of success.  Postmortem meetings generate a lot of opinions.  Non-focused user surveys generate a lot of opinions.  Neither of these are likely to generate the right next step.

This is a checklist of questions to ask based on my experiences in product strategy changes.   Is this a lot of questions?  Yes!  And you should know the answer to all of them.  I can’t guarantee it’s complete, but it’s a good framework for documenting and challenging your assumptions.  As you answer these questions, it will become clearer what user and market research you need in order to map your next move.

Questions About Customers

• If you acquire 100% of your target customer base at your current monetization per user, would you have a profitable product?
• Are your current customers generating profits?  (If they are generating less revenue than it costs to support them, the answer is “no”.  If they are not generating revenues, the answer is “no”.)
• Have your customers paid for your product?  (If the answer is “no”, continue to the next, vastly less reliable question)
• Have your customers demonstrated willingness to pay for your product?
• Are your customers able to pay for your product?
• Is there room for your customers to “grow” into more committed, profitable customers by using more features or premium services?
• Have your customers demonstrated loyalty via low attrition rates, word of mouth recommendations, referrals?

Questions About Product

• Does your product solve a problem that your customers are motivated to solve (and have demonstrated this motivation through investing time or money)?
• Can you continue to offer your product with the people you have and the money you’re making?  (Or does “something” need to happen to convert people into profits?)
• If your customer base doubled/tripled/grew exponentially, would you be able to continue offering your product without fundamentally altering the features or pricing?
• Is your product winning more customers away from the alternatives? (Alternatives are not always other products – “live with the problem” and “do it manually/offline” are entirely valid alternatives)
• What percentage of people convert to customers? (Complete registration, purchase your product, begin using)
• What percentage of customers successfully complete a desirable “advanced” action? (For example, in a bill pay product, you want customers to complete the full process of adding a biller and making a payment.)
• Have you watched users successfully complete the key tasks in your product? (Analytics may show that users are completing an action successfully, even when watching them in a user testing situation reveals that it takes them too many clicks and they are getting progressively more frustrated.)

Questions About Pricing

• Do your customers have limitations which may affect the way in which they are able to pay for your product? (For example, paying in one lump sum may be desirable in order to zero out a specific budget line item; or paying monthly fees may eliminate the need to get management spending approvals)
• Is the amount you are charging adequate to cover sunk costs such as one-time deployments?
• Is the amount you are charging adequate to cover ongoing costs such as customer service?
• Do your customers have variable needs for services and/or features such that tiered pricing would make sense?
• Have customers expressed interest in a different pricing plan (subscription vs. one-time, base plus usage, etc.)
• If you are not directly charging customers, is your revenue dependent on a third-party factor? (For example, ad-supported models are dependent on ad CPMs)

Questions About Distribution

• How many customers have found out about your product?
• What is your acquisition cost per customer?
• What percentage of your customers have referred a customer, blogged or twittered about you, or invited friends?   (For a viral distribution strategy, each customer must share the product with > 1.0 people)
• What incentive do your customers have to talk about your product?
• Are there obstacles to people finding your product?  (For example, site downtime, required to register before any preview, open by invitation-only, hard-to-remember URL?)

Questions About Brand

• Can your customers spell and pronounce your product name?
• Are you free from trademark issues so that you can market under that product name?
• Does your product name “match” your intended customer audience? (This isn’t always a blocker, but having a “fun-sounding” name when you’re selling to enterprise customers can be another obstacle to overcome.)
• Does your product look-and-feel “match” your intended customer audience?  (Hard-core computer gamers don’t trust a white-background website with calm blue accents; investors shopping for a new brokerage don’t trust a black-background website with red text.)
• Are your customers able to articulate your value proposition?  If you ask them why to use your product, does their answer match your pitch?
• Do the associations that people (customers and non-customers) have with your brand name and look-and-feel match the “feel” that you want the product to convey?

This post is Part 2 in a series.  Read Part 1. (Stay tuned for Part 3 next week!)

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Instead of defending a “rule”, ask why it has to be that way.

This morning on Twitter, @cheeky_geeky complained that it was too much hassle to reset the password on his Washington Post account.  @washingtonpost ‘s reply was basically a defensive, You have to log in on other sites too, why are you picking on us?

Is that productive?  No.

The truth is, they need logged-in users because having some demographic data makes you a more valuable audience member to sell ads to.  I think most users are okay with that – we know you have to sell ads.

So the question might be, how else could we get information about this user?  Maybe, instead of logging in, you ask the user to answer 3 quick demographic questions.  Voila! Now you know something about them, your advertisers know something about them, and they can proceed to read your content without a lot of hassle.

@washingtonpost could propose a solution like this over Twitter, and get real user validation within minutes.  It would take time to put this into action, but it would be a step in the right direction.

It might even go further: what if their loyal users were willing to share more demographic data about themselves?  Faced with the very real threat that their favorite publications will go away entirely, at least some visitors will be willing to share their zip code and profession.  Is it enough? Who knows?  But no one will know unless someone starts asking.

Related articles:

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If you didn’t read the Wired article about the rise of the netbook, you ought to.  Because it’s the story of the netbook, and yet it isn’t – it’s the story of an evolution in how we use technology.

Product management is always faced with the question: how can we beat our competitors? And usually, the answer boils down to “more stuff”.  There’s a reason for this.  When consumers are faced with a choice between “cleans your teeth” vs. “cleans your teeth, freshens your breath, zingy-vanilla-mint flavored, and provides your USRDA daily allowance of calcium”, we choose the latter.   But:

When Asustek launched the Eee PC in fall 2007, it sold out the entire 350,000-unit inventory in a few months. Eee PCs weren’t bought by people in poor countries but by middle-class consumers in western Europe and the US, people who wanted a second laptop to carry in a handbag for peeking at YouTube or Facebook wherever they were.

Technology products have a learning curve. Those extra features have a cost, whether it’s financial or time spent learning, and consumers are starting to understand that cost.

It used to be that when you went to an electronics store to buy a computer, you picked the most powerful one you could afford. Because, who knew? … But here’s the catch: Most of the time, we do almost nothing. Our most common tasks – email, Web surfing, watching streamed videos – require very little processing power.  Netbooks are evidence that we now know what personal computers are for.

This doesn’t surprise me too much.  In my years of conducting usability studies, most users’ feedback has started with “just”: I just need an easy way to X.  I just wish it was faster to Y.  I just want to come in and do Z and get out.

I wasn’t able to turn that knowledge into smaller products in the past, though.  There was always the what-if: What if these test subjects were outliers? What if they didn’t represent our target market?  What if they’re not being honest? — all of which sum up to What if we build it and they want to do something else?

It used to be that coders were forced to produce bloatware with endless features because they had to guess what customers might want to do. But if you design a piece of software that lives in the cloud, you know what your customers are doing – you can watch them in real time.

The combination of more people using technology, more people using technology in an atmosphere that is easily quantifiable (online), and development processes moving faster means we’re able to build simple.  It’ll be a big new challenge for business plans and revenue models.  But it’ll be a big breath of relief from consumers who just want to get on with their lives.

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