pillars of product management
TRANSCRIPT
A verifiable, metric driven analysis process
Market assessment
Pro Forma financial analysis
Concept development and demonstration
Stage gate process
Enabling technologies
Boot strapping
Technology roadmap
Product planning
Partnering
IP management strategy
Implementation roadmap
Integrated product team
You have to have clear metrics to know where you are going
◦ Strategic financial and growth goals
Clearly articulated market needs
◦ Meet the potential customer - use the “Tuned In” process with a quantitative
assessment1
Pro forma financial estimate for potential opportunities
Resource needs for early stage product realization
Identify partners to co-invest for later stage go-to-market push
A solid means of protecting the position once gained (e.g. IP, specialized
facilities, trade secret processes or other barriers to entry)
1”Tuned In: Uncover Extraordinary Opportunities That Lead To Business Breakthrough”; Wiley 2008
Get eyeball-to-eyeball with potential customers as soon and as much
as possible
Carefully ask the right questions (qualitative and quantitative):
◦ What are the jobs the customer is trying to get done?
◦ Is the problem “urgent” and why/how so?
◦ Is the problem “pervasive”, does it cross multiple user personas?
◦ What is the impact of your solution relative to your nearest competitors?
Provides key insight into value pricing
◦ What is the key message to form strong bonds with potential customers?
Draft the Business Plan based on the available information
Estimate costs for R&D, transition to production, marketing, distribution and sustainment
Estimate revenue from sales and service
Determine Net Present Value (NPV) per year to determine breakeven point (time horizon)
◦ Business volume may come up slowly, but profitability needs to be there from the beginning or else there is a cost structure versus pricing mismatch
Conduct sensitivity study to determine robustness of the assumptions
Concept Development
◦ Small R&D investments to explore technology feasibility – “make failure survivable”
Concept Demonstration
◦ Reduction to practice to secure basic IP rights
Prototype Demonstration
◦ Demonstration of a prototype that early adopters can use is huge
◦ Capturing feedback is also very important, and used to adjust the market assessment and development plan
Stage gates based on progressively achieving the metrics as described: ◦ Stage 1:
Gaps and buyer pain points identified, obtain funding for possible enabling technology or prototype, articulated path to market
◦ Stage 2: Demonstrated Enabling Technology, IP or other barriers to entry in place, Partner
companies identified and being engaged on product planning and market assessment, R&D funding used to continue toward a specific product or mature the Enabling Technology, has draft Business Plan, draft Product Plan for possible up grades in the technology
◦ Stage 3: Demonstrated Product in mature prototype form, Partner companies are co-investing
or sole-investing to bring product to the market, beta-testing of the product in the market has occurred, certifications (if required) have occurred, transition to production is occurring, Product Plan is matured
◦ Stage 4:
Product is in full rate production, spiral upgrades are articulated in the Product Plan but constantly updated by market assessment and user feedback
Don’t get disrupted by ignoring adjacent markets and small competitors (Innovator’s Dilemma)
These are key technologies, sub-systems or capabilities that can be used in multiple product offerings
A few examples of Enabling Technologies:
◦ Advanced materials – corrosion resistance, drug delivery, membrane technology
◦ Sustainable systems – energy harvesting, low power signal analytics and actuation
◦ Data analytics – smart systems, IoT, self-diagnostic products, predictive maintenance
◦ Advanced prototyping and validation processes – reduced product development cost/time
◦ Software operating system – integration of product functionality, data collection and response
These are key focal points that:
◦ Broaden market opportunities
◦ Increase fields of use of IP and infrastructure investments
◦ Increases your value to partners
◦ Spreads investment risk across several products
…or “make it work with what you’ve got”
◦ There is only so much risk capital to go around
Near term technology or capability demo to jump start a market
assessment with early adopters
Provides early feedback on market conditions, product
requirements, cost structure and profitability
Drives changes to product plan and stage gate structure
A visual aid to communicate high-level plans regarding anticipated/suggested technology changes to address changing requirements
Identify the main sub-systems and components
Map the anticipated changes in critical technologies across time and product upgrades’
System Sub-system
or key components
Changes in requirements/markets
Typical Themes:
Increase energy efficiency
Decrease in production cost
Increase in functionality
Increase in reliability
Product planning is foremost driven by market needs and company financial goals
The Product Plan will need to answer these questions: ◦ What product development projects will be undertaken? ◦ What mix of new products, spiral upgrades and enabling technologies should we
pursue immediately and every year thereafter? ◦ How do the various products relate to each other? ◦ What will be the timing and sequence of each product?
The answers to these questions should be driven primarily from: ◦ The comparison of the respective pro forma for each product ◦ Their combined pro forma rolled together ◦ Enabling technology availability and projections
Product Upgrades
and Generations
Changes in markets/financial goals
Typical Upgrade Themes: Changed customer demand
Enhanced enabling technology
Typical Generation Themes: Competitive landscape
Cost structure Adjacent market strategy
Often companies need to share the risks of new growth product development
Partnering can be a great way to multiply your capital and dilute risk
◦ Upside: you can get more brains, money and muscle on the problem
◦ Downside: divides the pie; relationship management is critical
Partnering can take many forms:
◦ Co-investment (co-funding)
◦ Value-sharing (providing supporting materials or components)
◦ Joint efforts (self-paying team)
Partners can provide critical insight into the market assessment, as well as
development, production, distribution, sales, and service for the product
High priority partners should be sought who may be interested in teaming on
multiple products
Partner relationships must be carefully constructed, assessed and maintained
◦ Leverage: holding key IP is an important safeguard in partnering
◦ “At the end of the day, you have to do business with people you trust”
IP should be:
◦ Considered like any other property (sell, buy, rent, trade, protect, etc)
◦ Organized in an inventory that clears shows the protection status and action items of the individual IP
The income from IP needs to be worth the cost of litigation to protect it
When considering licensing note that it normally provides (at best) only 10% of the value of the product
◦ At least 90% of the value is realized by the product producer
◦ How does the 10% value realized compare to the NPV of the R&D, marketing and IP investments to achieve it?
If you do not have Product Management discipline in place today:
First – Figure out where you are
◦ Identify products and enabling technologies that are currently in process
◦ Establish their status in the stage gates
◦ Implement the IPT for those that are the most mature or time sensitive first
Develop pro forma
Identify key internal and external stakeholders
Establish product plan
Second – Project where you want to go
◦ Technical – Identify gaps and unmet needs in the market
◦ Business – Benefit to community, BV and profit growth
Third – Develop the Product Plan to reach these goals
◦ Needs to be a feedback loop between the Product Plan, plans for individual products, and the goals
Then start product development process to identify new candidate enabling technologies and planning
Products developed in a vacuum will fail
To ensure that the product lifecycle is successful stakeholders must be brought together on integrated product teams
Normally will involve nearly every part of the business
◦ Technical development
◦ Business development
◦ Supply chain
◦ Finance
◦ Business strategy
Product Manager is responsible for meeting the metrics of the pipeline: founding product vision, financial goals, ownership of stage gate process, development of product plan, product value positioning and partner relationships