Having said what I said — give me the opportunity to have a meaningful one-on-one conversation with a valid prospect, and I’ll certainly trade a quick demo for it — I’m a bit surprised that I recently attended a small summit and tradeshow (200 attendees), and in two days, had a number of conversations with a number of individuals at our small “demopod”, and never once did I show running software.
A few key Powerpoint slides and references to the product brochures and data sheets were all that was needed to explain what we did, answer questions and scan their badges.
So, on one level, I admit that Steve (and those who agreed with him) had a point about tradeshow conversations. But on another level, I must also say that the small size of the show was a factor. Many of the people were more interested in the iPod we were giving away versus the software we had to sell.
So, perhaps the attendees read Steve’s article and agreed with him that they didn’t need a demo, or perhaps they were simply preoccupied with the end of the quarter, or maybe they wanted a demo, but because we never offered one, they didn’t muster the courage to ask. Or, maybe there was another reason, but in the end, I noted, somewhat surprisingly that after two days, no demo was presented. A first in my experience.
A few months ago, to much fanfare and (possibly well deserved) hype, Apple released the iPhone.
People oohed and ahhed.
And a small number (1, 2, 3) OK…lots of people bought them.
Then Apple did something really interesting. Within a few months of the iPhone release, they dropped the price of the iPhone, by 33% (from $599 -> $399), and almost simultaneously released the iPod Touch.
The price drop really annoyed existing iPhone owners, and the new iPod Touch once again made people ooh and ahh.
The iPod Touch, is essentially an iPhone, without the phone, camera and a number of other features. The Touch is only 15 grams (1/2 ounce) lighter and 3 mm thinner than an iPhone. They have the same sized screen and function almost identically.
Why is this at all interesting?
First, people paid a premium price for the iPhone even though it was clearly quite expensive, AND it had a poor cell phone carrier plan. With the price drop, a customer revolt ensued, but Apple seems to have handled it well with a $100 Apple credit for any of the original iPhone purchasers.
Second, that the difference in price between an 8GB iPhone and an 8GB iPod Touch is only $100. $399 for the phone. $299 for the Touch. Makes you wonder. Is the phone portion such a commodity or are Apple’s margins really good on the Touch?
Third, and most important IMHO, Apple now has two different products that fundamentally share the same technology. And while this can be viewed as line extension (iPod, iPod nano, iPod shuffle etc.), in many ways this is really a big step forward for the iPod. It now becomes a mobile, wireless device, and not simply a portable music/video player. And the rumours are that the multi-touch pointing technology is next headed for the laptop.
So from a Product Management perspective, what can be learned?
Always keep innovating.The iPhone may be as great as all the hype, maybe not, but it truly is different in many ways when compared to other high end mobile phones. But note that in all the hype about the iPhone, was there any mention that this was Apple’s second kick at the telecom can? Anyone remember the ROKR? OK, it was a Motorola phone, but Apple was certainly involved in it’s development. Can anyone say boooring?
Communicate those innovations in intelligent and articulate ways to your market/customers in advance of the launch. By giving people 3 months notice of the launch of the iPhone, Apple ensured that word would spread and demand would grow. Many software companies wait until the ship date to communicate to the market and customers. This is a guaranteed way to delay revenue.
Leverage your technology investments and deliver multiple solutions to different market segments.It’s always great to create a completely new product with new technology and new functionality. But, what’s even better is to get multiple returns on a single technology investment by being able to repackage, reposition, and resell different slices of the same technology to address problems for different users and use cases. If you are in the BUSINESS of technology, and not simply the technology business, this is something you really need to focus on.
So, the CrankyPM’s blog is back up after disolving into the ether(net) for a couple of weeks. So, on some level, things have returned to normal for her, though personally, I really had hoped she’d return as the Cranky CEO. Now that would have been really interesting!
There is an overlap between entrepreneurship and product management; sizing markets and opportunities is probably the most important. Start-ups aren’t the only companies that fall into the trap of the “mythical million market” – established companies do it too.
I recently finished a series of articles on being a Great Product Manager. I want to switch gears a bit and spend some time talking about the function of Product Management in software companies.
As we know, product managers and product management are not isolated to software companies, but the role of product management in software companies is different from the role of product (or brand) management in other domains, such as the financial sector or Consumer Packaged Goods (CPG) firms.
How many new “features” does a “release” of a new shampoo have?
How much time does the brand manager spend with the chemists working on that new shampoo formulation during the “release cycle”?
How much discussion is needed on how the consumer will actually use the shampoo?
Are whitepapers and product demos that important for shampoo?
This is not to belittle brand management in CPG, but simply to give a few examples of how issues in CPG product management may be different than those in software product management.
One nice thing about CPG Product Management is that it is fairly well defined. For CPG, Product Management is, without question, a marketing function. CPG Product Managers need to be business focused and have a keen understanding of media and web marketing, demographics, finance and analytics. They need to be able to grasp the differences in various global markets, and be able to market global brands locally, as well as create local brands and products as needed in specific markets.
The 4 P’s (product, place, price, promotion) are fundamental to them. And, with the web growing ever omnipresent in our lives, and the emergence of new technologies allowing customers and companies to communicate more intimately with each other, terms like interaction, interruption and mass-customization are heard quite frequently.
Now compare this to Product Management in most software companies. Honestly, how many software product managers could list the 4 P’s, let alone talk confidently about the dynamics of international markets and how they impact their software products?
Full disclosure: I always list “Position” as one of the P’s (product, position, price, promotion), even though it is not. I really think it should be! Also, while I have been the PM of products that have had world-wide distribution including full localization into languages such as Japanese, French and Korean, I really had little insight into the dynamics of those markets. For the most part, beyond the specific localization, those markets received exactly the same functionality as every other geography, and it was up to local partners and distributors to market the product in the ways they saw fit.
The reality is that software product management is still an immature function. Most software companies define and staff product management in a reactionary manner. Typically a product manager is hired once the founder or CTO or chief architect or other corporate thought leader reaches the limit of their abilities in defining the product, or things become so messed up in the company with a product or technology strategy, a member of the Board of Directors tells the CEO to get a Product Manager.
VCs and Product Management
It really shocks me that VC’s don’t make it a funding requirement, at minimum in the series B and above rounds, that a startup must have an experienced Product Management executive on board. Think about it? These folks are in the business of investing in technology companies. Their objective is to maximize the likelihood of success for their investments. As such, why would they not view Product Management as a critical role, on the same level as Sales, Marketing and Engineering?
I recently asked a couple of VCs this question. The answers really surprised me.
One said, quite candidly, that he really didn’t understand the role of product management very well, but that he had recently learned a lot more about it via interaction with one of his portfolio companies. OK, thanks for the honest answer, but not very reassuring from my perspective.
Another said his expectation was that the founders would fill in for the PM function until such a time as it made sense to bring dedicated product management into the company. I asked the latter VC why he didn’t view product management as a critical role to fill right at the start? He said that when he makes investments, it’s fundamentally the management team, and particularly the founders that he’s investing in. Pulling in a PM who isn’t a close associate of the founders in the early stages can be disruptive to the management team.
OK, certainly a better answer, but it says a lot about software product management when those who make their living investing in software companies cannot see enough benefit in the function to have it outweigh any concerns they have about personalities and fit in the management team.
In the next post, I’ll dig deeper into the software product management function and discuss some ways to improve both the status and discipline of the role.