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Remember Phase 2: Ensuring great products become great businesses
 

Remember Phase 2: Ensuring great products become great businesses

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Andrew Malcolm, Skype ...

Andrew Malcolm, Skype

Why do great products make for bad business? Conversely, why do bad products sometimes result in good businesses? Systems for effective decision making are key to ensuring you know your phase 2 and how to get there.

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    Remember Phase 2: Ensuring great products become great businesses Remember Phase 2: Ensuring great products become great businesses Presentation Transcript

    • Remember  Phase  2: Ensuring  great  products  become  great  businesses Andrew  Malcolm VP  Mobile  Product  Marke5ng,  HP Sunday, November 3, 13
    • Defini5on  of  a  Product What’s  the  product? 2 Sunday, November 3, 13
    • Defini5on  of  a  Product What’s  the  product? As  a  user,  does  it  maFer? 2 Sunday, November 3, 13
    • Defini5on  of  a  Product What’s  the  product? 3 Sunday, November 3, 13
    • Defini5on  of  a  Product What’s  the  product? This  probably  maFers  …  a  lot 3 Sunday, November 3, 13
    • When  great  products  become  bad   businesses Some  of  the  greatest  products  in  recent  memory  did  not  translate  to  financial  value Nintendo Sony Callaway  Golf 186M   “Walkmans”   cumula5vely   shipped Titanium   drivers   penetrate   market Titanium   drivers   reach  460cc   maximum   size Wii  sells  11M   units  in  2008   to  surpass   XBox 4 Sunday, November 3, 13
    • Some  bad  products  are  good  businesses While  less  inven5ve  “products”  have  created  great  wealth Nintendo Sony Comcast Visa Callaway  Golf eBay  buys  PayPal   California  bans   for  $1.5B smoking  within  20`   of  entrance  to   public  place DirecTV  signs  NFL   deal Philip   Morris 5 Sunday, November 3, 13
    • Why  does  one  product  win? The  story  is  especially  true  now  that  distribu5on  is  not  a  barrier  to  entry  and  network   effects  are  less  sustainable First  to  Market Dominant  Player VS VS VS 6 Sunday, November 3, 13
    • Who  wins? All  business  need  to  know  what  Phase  2  is hFp://www.southparkstudios.com/clips/151040/the-­‐underpants-­‐business 7 Sunday, November 3, 13
    • RECAP:  Defini5on  of  a  Product What  is  Skype’s  product? Is  it  the  plaform  Mac,   Win,  Droid? Is  it  the  payment   structure:  Premium,  Sub,   PAYG? Is  it  the  Mode  of   communica5on:  video,   chat,  PSTN? 8 Sunday, November 3, 13
    • RECAP:  Defini5on  of  a  Product What  is  Skype’s  product? Is  it  the  plaform  Mac,   Win,  Droid? Is  it  the  payment   structure:  Premium,  Sub,   PAYG? Is  it  the  Mode  of   communica5on:  video,   chat,  PSTN? As  an  organiza5on,  does  it  maFer? 8 Sunday, November 3, 13
    • Who  wins? Which  of  the  following  VoIP  products  is  beFer? Features Unlimited  group   communica5on US  Domes5c   Free Calling  Price  per   Minute eMail  contacts  added Sign-­‐up  Experience Web  based Group  Video  with  premium   subscrip5on 3.0¢ Contacts  added  individually Downloadable  so`ware Plaform 9 Sunday, November 3, 13
    • So  who  wins? Why  does  the  “lesser”  product  have  4X  the  monthly  users? Features Unlimited  group   communica5on US  Domes5c   Free Calling  Price  per   Minute eMail  contacts  added Sign-­‐up  Experience Group  Video  with  premium   subscrip5on 3.0¢ Contacts  added  individually Web  based Downloadable  so`ware ~100M ~400M Plaform Monthly  Users hFp://marke5ngland.com/if-­‐googles-­‐really-­‐proud-­‐of-­‐google-­‐it-­‐should-­‐share-­‐some-­‐real-­‐user-­‐figures-­‐9796 Sunday, November 3, 13 10
    • Is  Skype  a  great  product?   Skype  is  the  largest  Telco  in  the  world Interna5onal  Phone  Traffic • More  than  30%  of   Interna5onal  Minutes  are   on  Skype • More  than  2B  minutes   every  day • More  than  1B  downloads   and  ~30-­‐40%  penetra5on   of  all  broadband  devices 11 Sunday, November 3, 13
    • Is  Skype  a  great  product?   Skype  is  the  largest  Telco  in  the  world Interna5onal  Phone  Traffic • More  than  30%  of   Interna5onal  Minutes  are   on  Skype • More  than  2B  minutes   every  day • More  than  1B  downloads   and  ~30-­‐40%  penetra5on   of  all  broadband  devices Undeniably,  Skype  disrupted  the  telco  market 11 Sunday, November 3, 13
    • Is  Skype  a  great  business?   Skype  destroyed  a  lot  of  value  for  telcos;  what  amount  of  value  did  it  capture? Minute  Growth:  Skype  vs.  Telcos •How does Skype make money? • Who  is  Skype’s  largest   compe5tor? •What happens when more and more people are on Skype? 12 Sunday, November 3, 13
    • Is  Skype  a  great  business?   Skype  destroyed  a  lot  of  value  for  telcos;  what  amount  of  value  did  it  capture? Minute  Growth:  Skype  vs.  Telcos •How does Skype make money? • Who  is  Skype’s  largest   compe5tor? •What happens when more and more people are on Skype? It’s  easy  to  cri5cize,  what  could  Skype  have  done? 12 Sunday, November 3, 13
    • Skype  could  have  … Become  an  exchange  for  “e-­‐services,”  a  plaform  for  communica5on  applica5ons,  or  a   global  wallet  for  remote  services 13 Sunday, November 3, 13
    • Ensuring  you  know  Phase  2 Great  businesses  are  a  system  of  decisions,  not  a  product  or  features Customer Selection Customer Priorities Stated Silent Future Value Proposition What high value customer opportunity am I serving? What problem will I solve for them? Organizational Architecture What does my organization have to execute better than anyone else? Business Design Environment Traditional Emerging What will I do to protect my customer relationship and profit stream? Strategic Control How will I earn a profit from serving this customer? Profit Model 14 Sunday, November 3, 13
    • Geong  to  Phase  2 As  I  was  leaving,  Ballmer  said  “great  technology  leaders  don’t  have  to  be  great   technologists;  they  have  to  have  insights.”  I  believe  insights  start  with  the  customer. 15 Sunday, November 3, 13