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PM Essentials: Roles, Pricing and Roadmaps
 

PM Essentials: Roles, Pricing and Roadmaps

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Talk for Prof Sarangee's NPD Marketing class at Santa Clara Univ's business school. Quick overview of what a product manager is (does), thinking about software pricing, and roadmapping essentials.

Talk for Prof Sarangee's NPD Marketing class at Santa Clara Univ's business school. Quick overview of what a product manager is (does), thinking about software pricing, and roadmapping essentials.

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  • 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
  • Be honest and humble. Most startups breathe their own smoke.

PM Essentials: Roles, Pricing and Roadmaps PM Essentials: Roles, Pricing and Roadmaps Presentation Transcript

  • Tech Product Management Essentials: Roles, Pricing & RoadmapsRich Mironovrich@mironov.com7 Jan 2010 for Prof. Sarangee, Marketing 572
  • An Unapologetic Product Guy
    Agile product management consultant
    Business models, pricing, roadmaps
    Customer needs and market analysis
    Interim executive
    Repeat offender at product mgmt/marketing
    Tandem, Sybase, four software startups
    “The Art of Product Management”
    Chaired Agile 2009 PM/PO track
    Founded P-Camp
  • Agenda
    What does a product manager do?
    Basics of pricing software
    Roadmapping: process vs. artifact
    Take-Aways
  • Product
    Management
    Executives
    Development
    What Does Product Management Do?
    strategy, forecasts, commitments, roadmaps,competitive intelligence
    budgets, staff,
    targets
    market information, priorities,
    requirements, roadmaps, MRDs,
    personas, user stories…
    Field input,
    Market feedback
    Mktg & Sales
    Markets & Customers
    software
    Segmentation, messages, benefits/features, pricing, qualification, demos…
  • Product Mgmt Planning Horizons
    many years
    Exec
    Strategy
    years
    Portfolio
    many mons
    PM
    Product
    2-9 mon
    Release
    Dev
    Team
    Sprint
    2 wk
    Daily
  • Pragmatic Marketing® Framework
    Less Technical
    BusinessPlan
    MarketingPlan
    Positioning
    Pricing
    Market Problems
    Customer Acquisition
    BuyingProcess
    Market Definition
    Buy, Build or Partner
    Win/Loss Analysis
    Customer Retention
    Buyer Personas
    Distribution Strategy
    Product Profitability
    Distinctive Competence
    Program Effectiveness
    UserPersonas
    Product Portfolio
    Tactical
    Strategic
    Business
    Market
    Programs
    Planning
    Strategy
    Support
    Readiness
    Business
    Market
    Programs
    Planning
    Strategy
    Support
    Readiness
    Innovation
    Competitive Landscape
    LaunchPlan
    Require- ments
    Product Roadmap
    Presentations & Demos
    SalesProcess
    Technology Assessment
    Thought Leadership
    UseScenarios
    “Special”Calls
    Collateral
    Lead Generation
    Status Dashboard
    EventSupport
    SalesTools
    Referrals & References
    ChannelSupport
    Channel Training
    More Technical
    © 1993-2009 Pragmatic Marketing, Inc. All rights reserved
  • Pragmatic Marketing® Framework
    Dir, Prod Strategy
    Prod Mktg Mgr
    Tech Prod Mgr
    BusinessPlan
    MarketingPlan
    Positioning
    Pricing
    Market Problems
    Customer Acquisition
    BuyingProcess
    Market Definition
    Buy, Build or Partner
    Win/Loss Analysis
    Customer Retention
    Buyer Personas
    Distribution Strategy
    Product Profitability
    Distinctive Competence
    Program Effectiveness
    UserPersonas
    Product Portfolio
    Business
    Market
    Programs
    Planning
    Strategy
    Support
    Readiness
    Business
    Market
    Programs
    Planning
    Strategy
    Support
    Readiness
    Innovation
    Competitive Landscape
    LaunchPlan
    Require- ments
    Product Roadmap
    Presentations & Demos
    SalesProcess
    Technology Assessment
    Thought Leadership
    UseScenarios
    “Special”Calls
    Collateral
    Lead Generation
    Status Dashboard
    EventSupport
    SalesTools
    Referrals & References
    ChannelSupport
    Channel Training
    © 1993-2009 Pragmatic Marketing, Inc. All rights reserved
  • Nature of PM Role
    No natural sequence for PM
    Must work all aspects in parallel
    Planning onion as simultaneous equation
    Bottoms-Up shapes Top-Down
    Top-Down shapes Bottoms-Up
    Product Management provides strategy, judgment and integration as well as execution
    Owning market success is an unbounded problem
  • Product As Simultaneous Equation
    Market Needs
    Roadmap
    Customers with
    real needs
    Truly differentiated
    products
    Product /
    solution
    Economic valueto capture
    Business Plan
    • Most product concepts fail.
    • Most products fail to thrive.
  • Start With a Bill of Materials
    What non-product elements do I need?
    Which group is responsible for each?
    Where have other products gotten into trouble?
    SKUs, packaging, shipping
    Installation
    Support, help, registration
    Upgrades and end-of-life
  • Agenda
    What does a product manager do?
    Basics of pricing software
    Roadmapping: process vs. artifact
    Take-Aways
  • “Pricing is almost neverabout the number. It’s about the model.”
  • Start with Customer View
    Customers buy most products to make money or save money
    How do they describe value?
    Quantify it for them
    They won’t spend time to fully analyze your product
    Assume you can capture a fraction of value
    B2B: often 5% to 15%
    Consumers often driven by fashion, not analytics
  • Hard Cost Savings Example
    “By using our tech support knowledge automator, you can reduce your support time per call by 30%.”
  • Pricing Your Start-Up
    Why will customers buy?
    Tell a story in customer’s own language
    What’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
  • Business Model Framework
    Customer Value Analysis
    Identifies Value
    Licensing
    Terms and Conditions of Use
    Type of Value Exchange
    The way you make money
    Pricing
    How much money you make
    Profit Engine
    Causes More Money Making Events
    Enforcement
    Protection of Rights
    Customer ROI Model
    Quantifies Return
    A framework of interrelated choices that help you create offerings that provide maximum value.
    ® 2009 Enthiosys
  • Software Value Exchange Models
    Time-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/savings
    Data-driven insights
    Charity?
  • Support the Business Model
    Pricing drives customer behavior
    What do you want core customers to do?
    • No-brainer renewals (small monthly fees)
    • Big up-front license (lock up marketplace)
    • Lust for upgrades (cool features are extra)
    • Freemium model (1% upsold into paid services)
    • Install latest version (free updates, increasing service fees)
  • Customer Commitments
    “by the drink”
    “by the month”
    No commitmentHigh variable costs
    Lower volume
    Uncertain usage
    Optional
    Actively manage costs
    NEED CONTINUOUS MARKETING
    Big commitmentLow/no variable costs
    Higher volume
    Predictable usage
    Required (cost of business)
    Low cost control effort
    HARD INITIAL SELL
  • Workshop Exercise: Teleportation
    Founders: Stanford physicists with local VC
    Software plus expensive custom hardware
    Some arbitrary product limitations
    Inanimate objects only (no people)
    Under 40 pounds, under 18” diam
    2000 mile limit, arrival +/- 3 inches
    High power requirement (15 kW)
    15 second recharge time
    Non-military, non-government
  • Not Yet a Product or Service…
    No target application or audience
    No go-to-market strategy
    No pricing model (how we will make money)
    No infrastructure/operations/support plan
    No marketing or sales staff
    Lots of blue sky discussions
  • 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 enforcement
    Who are the cheaters?
    How much are we willing to spend?
    Diminishing returns
    Easier to exploit complex pricing models
  • Agenda
    What does a product manager do?
    Basics of pricing software
    Roadmapping: process vs. artifact
    Take-Aways
  • Class Roadmapping Experience
    Who has a roadmap?
    What timeframe does it cover?
    Successes, failures?
  • Benefits of a Solid Roadmap
    Identify/clarify tactical and strategic intent
    Internally
    Becomes a filter for prioritization
    Ensures “ship is headed in the right direction”
    Avoids the “last/loudest” priority problem
    Externally
    Near-term commitments and long term view for customers
    Binds best customers to your company
  • Roadmaps are Scary
    Articulate when things should arrive
    Describes what you are not going to build
    Forces open discussion among functions
    Makes you commit to an uncertain future
    Dirty secret: most companies do not have a workable roadmap process
    Jump right from vision/portfolio to release
  • Typical Roadmap Failures
    No visible logic
    Created unilaterally
    Lack of buy-in
    Poor technical and market inputs
    Static
    No plan for internal or external sharing
  • Successful Roadmap Creation…
    Active participation of key constituents
    Engineering (architects), perhaps Marketing, next-level product strategists or Support
    Extended in-person meetings
    Time to research issues
    Reviews every 1-2 quarters
    Clear (written) distribution plan
    Easy to say, hard to do
  • Creating the Strategic Roadmap
    Market Map
    Market Events & Rhythms
    Feature/BenefitMap
    Release Map
    Tarchitecture
    Map
  • 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?
  • Build Strategically, Iteratively
    Time Horizon -- Quarters work well…
    Small Office
    Market Map
    Biometric
    Id
    Managed Service
    Feature/Benefit Map
    What technology should we use?
    Linux
    Tarchitecture
    Roadmap
    Market Events
    / Rhythms
    The Real
    Schedule
  • Low-Tech Speeds Collaboration
    Formal results transcribed into high-tech tools
    (Visio…)
  • Agenda
    What does a product manager do?
    Basics of pricing software
    Roadmapping: process vs. artifact
    Take-Aways
  • Take-Aways
    Tech product management is critically important but loosely defined
    Pricing is strategic, creative and behavior-focused
    Roadmapping is a process, not just a deliverable
    Someone must beresponsible every day for long-term thinking
  • Q & A
    rich@mironov.com
    http://www.mironov.com/articles/
    http://www.linkedin.com/in/richmironov
    @RichMironov