Product Management Basics (for SCU MBA program)
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The document outlines essential aspects of tech product management, including the roles of product managers, pricing strategies, and roadmapping processes. It highlights the complexity of the product manager's role, the necessity for a solid roadmap, and the significance of understanding customer value in pricing decisions. Key takeaways emphasize the importance of active participation in roadmap creation and the strategic nature of pricing and product management.
Product Management Basics (for SCU MBA program)
- 1. Tech Product Management Essentials: Roles, Pricing & RoadmapsRich Mironovrich@mironov.com12 Oct 2010 for Prof. Sarangee, Marketing 572
- 2. An Unapologetic Product GuyCurrently CEO of stealth start-upAgile product management consultantInterim executiveBusiness models, pricing, whole productsRepeat offender at product mgmt/marketingTandem, Sybase, four software startups“The Art of Product Management”Chaired Agile ‘09/’10 PM/PO tracksFounded ProductCamp
- 3. AgendaWhat does a product manager do?Basics of pricing softwareRoadmapping: process vs. artifactTake-Aways
- 4. ProductManagementExecutivesDevelopmentWhat Does Product Management Do?strategy, forecasts, commitments, roadmaps,competitive intelligencebudgets, staff,targetsmarket information, priorities,requirements, roadmaps, MRDs,personas, user stories…Field input,Market feedbackMktg & SalesMarkets & CustomerssoftwareSegmentation, messages, benefits/features, pricing, qualification, demos…
- 5. Product Mgmt Planning Horizonsmany yearsExecStrategyyearsPortfoliomany monsPMProduct2-9 monReleaseDevTeamSprint2 wkDaily
- 6. Pragmatic Marketing® FrameworkLess TechnicalBusinessPlanMarketingPlanPositioningPricingMarket ProblemsCustomer AcquisitionBuyingProcessMarket DefinitionBuy, Build or PartnerWin/Loss AnalysisCustomer RetentionBuyer PersonasDistribution StrategyProduct ProfitabilityDistinctive CompetenceProgram EffectivenessUserPersonasProduct PortfolioTacticalStrategicBusinessMarketProgramsPlanningStrategySupportReadinessBusinessMarketProgramsPlanningStrategySupportReadinessInnovationCompetitive LandscapeLaunchPlanRequire- mentsProduct RoadmapPresentations & DemosSalesProcessTechnology AssessmentThought LeadershipUseScenarios“Special”CallsCollateralLead GenerationStatus DashboardEventSupportSalesToolsReferrals & ReferencesChannelSupportChannel TrainingMore Technical© 1993-2009 Pragmatic Marketing, Inc. All rights reserved
- 7. Pragmatic Marketing® FrameworkDir, Prod StrategyProd Mktg MgrTech Prod MgrBusinessPlanMarketingPlanPositioningPricingMarket ProblemsCustomer AcquisitionBuyingProcessMarket DefinitionBuy, Build or PartnerWin/Loss AnalysisCustomer RetentionBuyer PersonasDistribution StrategyProduct ProfitabilityDistinctive CompetenceProgram EffectivenessUserPersonasProduct PortfolioBusinessMarketProgramsPlanningStrategySupportReadinessBusinessMarketProgramsPlanningStrategySupportReadinessInnovationCompetitive LandscapeLaunchPlanRequire- mentsProduct RoadmapPresentations & DemosSalesProcessTechnology AssessmentThought LeadershipUseScenarios“Special”CallsCollateralLead GenerationStatus DashboardEventSupportSalesToolsReferrals & ReferencesChannelSupportChannel Training© 1993-2009 Pragmatic Marketing, Inc. All rights reserved
- 8. Nature of PM RoleNo natural sequence for PMMust work all aspects in parallelPlanning onion as simultaneous equationBottoms-up shapes top-downTop-down shapes bottoms-upProduct Management provides strategy, judgment and integration as well as executionOwning market success is an unbounded problem
- 9. Product As Simultaneous EquationMarket NeedsRoadmapCustomers with real needsTruly differentiatedproductsProduct /solutionEconomic valueto captureBusiness Plan Most product concepts fail
- 10. Most products fail to thriveAgendaWhat does a product manager do?Basics of pricing softwareRoadmapping: process vs. artifactTake-Aways
- 11. “Pricing is almost neverabout the number. It’s about the model.”
- 12. Start with Customer ViewCustomers buy most products to make money or save moneyHow do they describe value?Quantify it for themThey won’t spend time to fully analyze your productAssume you can capture a fraction of valueB2B: often 5% to 15%Consumers often driven by fashion, not analytics
- 13. Hard Cost Savings Example“By using our tech support knowledge automator, you can reduce your support time per call by 30%.”
- 14. Pricing Your Start-UpWhy will customers buy?Tell a story in customer’s own languageWhat’s the natural unit of exchange?How do they derive value? What does the competition do?Can you split off a profitable segment?How much of customer value can you capture?Test, trial-close, get your hands dirty
- 15. Software Value Exchange ModelsTime-based access (e.g. unlimited/month)Transaction (stock trade)Metered (seats, CPUs, named users)Hardware (appliances, dongles)Service (virus updates, support)Percentage of incremental revenue/savingsData-driven insightsCharity…?From Luke Hohmann’s “Beyond Software Architecture”
- 16. Support the Business ModelPricing drives customer behaviorWhat do you want core customers to do?No-brainer renewals (small monthly fees)
- 17. Big up-front license (lock up marketplace)
- 18. Lust for upgrades (cool features are extra)
- 19. Freemium model (1% upsold into paid services)
- 20. Install latest version (free updates, increasing service fees)Customer Commitments“by the drink”“by the month”No commitmentHigh variable costsLower volumeUncertain usageOptionalActively manage costsNEED CONTINUOUS MARKETINGBig commitmentLow/no variable costsHigher volumePredictable usageRequired (cost of business)Low cost control effortHARD INITIAL SELL
- 21. Workshop Exercise: TeleportationFounders: Stanford physicists with local VCSoftware plus expensive custom hardwareSome arbitrary product limitations such as…Inanimate objects only (no people)Under 40 pounds, under 18” diam2000 mile limit, arrival +/- 3 inchesNon-military, non-governmentResult: every group jumps to price, skips use case (value)
- 22. How Will People Cheat?If I want to rip you off, how could I do it?Licensed software…Per-seat SaaS…Hardware token…Licensing versus enforcementWho are the cheaters?How much are we willing to spend? Diminishing returnsEasier to exploit complex pricing models
- 23. AgendaWhat does a product manager do?Basics of pricing softwareRoadmapping: process vs. artifactTake-Aways
- 24. Class Roadmapping ExperienceWho has a roadmap?What timeframe does it cover?Successes, failures?
- 25. Benefits of a Solid RoadmapIdentify/clarify tactical and strategic intentInternallyBecomes a filter for prioritizationEnsures “ship is headed in the right direction”Avoids the “last/loudest” priority problemExternallyNear-term commitments and long term view for customersBinds best customers to your company
- 26. Roadmaps are ScaryArticulate when things should arrive Describes what you are not going to buildForces open discussion among functionsMakes you commit to an uncertain futureDirty secret: most companies do not have a workable roadmap processThey jump from vision/portfolio to release
- 27. Typical Roadmap FailuresNo visible logicCreated unilaterallyLack of buy-inPoor technical and market inputsStaticNo plan for internal or external sharing
- 28. Successful Roadmap Creation…Active participation of key constituentsEngineering (architects), perhaps Marketing, next-level product strategists or SupportExtended in-person meetingsTime to research issuesReviews every 1-2 quartersClear (written) distribution planEasy to say, hard to do
- 29. Build Strategically, IterativelyTime Horizon -- Quarters work well…Small OfficeMarket MapBiometricIdManaged ServiceFeature/Benefit MapWhat technology should we use?LinuxTarchitectureRoadmapMarket Events / RhythmsThe RealSchedule
- 30. Key Questions Who are my desirable markets/market segments? What do they care about?When / how often should I serve them?What technologies can I leverage?How must my current product change?What are the external factors that I must address to deal with these issues?What external events drive my timing?
- 31. Low-Tech Speeds CollaborationFormal results transcribed into high-tech tools(Visio…)
- 32. AgendaWhat does a product manager do?Basics of pricing softwareRoadmapping: process vs. artifactTake-Aways
- 33. Take-AwaysTech product management is critically important but loosely definedPricing is strategic, creative and behavior-focusedRoadmapping is a process, not just a deliverableSomeone must be responsible every day for long-term thinking
- 34. Q&A / Contact Information+1-650-315-7394rich@mironov.comwww.mironov.com/articles/feeds.feedburner.com/RichMironovProductBytes@RichMironovwww.linkedin.com/in/richmironov
Editor's Notes
- #9: No natural sequence for PMMust work all aspects in parallelPlanning onion as simultaneous equationBottoms-Up Shapes Top-DownCustomer visits inform market viewCompetitive price points drive business modelFeature complexity shapes release planTop-Down Shapes Bottoms-UpMarket segmentation determines customer selection and benefitsProduct strategy drives backlogProduct Management provides strategy, judgment and integration as well as executionOwning market success is an unbounded problem
- #15: Be honest and humble. Most startups breathe their own smoke.
- #32: © Rich Mironov, Mironov Consulting, 2010. All rights reserved. Portions © Enthiosys, Pragmatic Marketing.