Turning Good Ideas into Great Products

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Taking Digital Products from Idea to Launch, including strategy, product development, customer development and distribution.

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  • Turning Good Ideas into Great Products

    1. 1. Zero to 60 Turning a Good Idea into a Successful Product
    2. 3. Agenda <ul><li>Ideas & Opportunities </li></ul><ul><li>Markets </li></ul><ul><li>Exercise </li></ul><ul><li>Business models </li></ul><ul><li>Features </li></ul><ul><li>More exercise </li></ul>
    3. 4. One Word: Plastics
    4. 5. Why the one word? <ul><li>Opportunity </li></ul><ul><li>Brand Completeness </li></ul><ul><li>Blocking competition </li></ul><ul><li>Raising money </li></ul><ul><li>Curiosity </li></ul>
    5. 6. Return on Investment <ul><li>All your CEO cares about … </li></ul><ul><ul><li>Returns (measurable changes) </li></ul></ul><ul><ul><li>Increased sales </li></ul></ul><ul><ul><li>Reduced costs </li></ul></ul><ul><ul><li>Achieving the mission (for a non-profit) </li></ul></ul><ul><ul><li>Investments (cost of making change happen) </li></ul></ul><ul><ul><li>Keeping headcount low </li></ul></ul><ul><ul><li>Using resources more effectively </li></ul></ul><ul><ul><li>Only bringing in consultants if necessary </li></ul></ul>
    6. 7. Types of Opportunities/Ideas Better Cheaper Niche New I can do it better I can do it cheaper I can do it for you You never knew you needed it
    7. 8. How big is the opportunity? Total Available Market (TAM) <ul><li>Total Available Market (TAM) </li></ul><ul><ul><li>• How many people would want/need </li></ul></ul><ul><ul><li>the product? </li></ul></ul><ul><ul><li>• How large is the market be </li></ul></ul><ul><ul><li>(in $’s) if they all bought? </li></ul></ul><ul><ul><li>• How many units would that be? </li></ul></ul><ul><li>How Do I Find Out? </li></ul><ul><ul><li>• Industry Analysts – Gartner, Forrester </li></ul></ul><ul><ul><li>• Wall Street Analysts – Goldman, Morgan </li></ul></ul>
    8. 9. How big is my slice? Total Available Market (TAM) <ul><li>Served Available Market (SAM) </li></ul><ul><ul><li>• How many people need or can use product? </li></ul></ul><ul><ul><li>• How many people have the money to </li></ul></ul><ul><ul><li>buy the product </li></ul></ul><ul><ul><li>• How large would the market be </li></ul></ul><ul><ul><li>(in $’s) if they all bought? </li></ul></ul><ul><ul><li>• How many units would that be? </li></ul></ul><ul><li>How Do I Find Out? </li></ul><ul><ul><li>• Talk to potential customers </li></ul></ul>Served Available Market (SAM)
    9. 10. Your idea is worthless alone Idea Execution Timing Dumb Luck
    10. 11. MARKETS <ul><li>What business will you be in? </li></ul>
    11. 12. Customer Development Customer Development Company Building Customer Discovery Customer Validation Customer Creation Steven Gary Blank, Four Steps to the Ephinany
    12. 13. <ul><li>How many of them are there? </li></ul><ul><li>Are they price sensitive? </li></ul><ul><li>How big is their problem? </li></ul><ul><li>How often do they have the problem? </li></ul><ul><li>How do they solve it today? </li></ul>Who are your customers?
    13. 14. New Product Conundrum <ul><li>New Product Introductions sometimes work, yet sometimes fail </li></ul><ul><ul><li>Why? </li></ul></ul><ul><ul><li>Is it the people that are different? </li></ul></ul><ul><ul><li>Is it the product that are different? </li></ul></ul><ul><li>Perhaps there are different “types” of ventures? </li></ul>
    14. 15. Three Types of Markets <ul><li>Who Cares? </li></ul><ul><li>Type of Market changes EVERYTHING </li></ul><ul><li>Sales, marketing and business development differ radically by market type </li></ul>Existing Market Resegmented Market New Market
    15. 16. Existing: founded 1938
    16. 17. Competitor founded 1972
    17. 18. Competing in an Existing Market <ul><li>Faster/Better </li></ul><ul><li>High end </li></ul><ul><li>Somewhere else </li></ul>
    18. 19. Resegmented
    19. 20. Gap’s new entry
    20. 21. Competing by resegmenting <ul><li>Niche = marketing/branding driven </li></ul><ul><li>Cheaper = low end </li></ul>
    21. 22. New Market?
    22. 23. New New Existing Resegmented
    23. 24. New Market <ul><li>Cheaper/good enough can create a new class of product/customer </li></ul><ul><li>Innovative/never existed before </li></ul>
    24. 26. John Gourville,  Eager Sellers and Stony Buyers  (2006)
    25. 27. Deadpool
    26. 28. Type of Market Changes Everything <ul><li>Market </li></ul><ul><ul><li>Market Size </li></ul></ul><ul><ul><li>Cost of Entry </li></ul></ul><ul><ul><li>Launch Type </li></ul></ul><ul><ul><li>Competitive Barriers </li></ul></ul><ul><ul><li>Positioning </li></ul></ul><ul><li>Sales </li></ul><ul><ul><li>Sales Model </li></ul></ul><ul><ul><li>Margins </li></ul></ul><ul><ul><li>Sales Cycle </li></ul></ul><ul><ul><li>Chasm Width </li></ul></ul><ul><li>Finance </li></ul><ul><ul><li>Ongoing Capital </li></ul></ul><ul><ul><li>Time to Profitability </li></ul></ul><ul><li>Customers </li></ul><ul><ul><li>Needs </li></ul></ul><ul><ul><li>Adoption </li></ul></ul>Existing Market Resegmented Market New Market
    27. 29. Choose your idea From Guy Kawasaki, Art of the Start Ability to provide unique product or service Value to customer compete on price stupid bankrupt The holy grail
    28. 30. WHAT IS YOUR IDEA? <ul><li>Exercise </li></ul>Who are your customers? What is your market? How big is the opportunity?
    29. 31. BUSINESS MODELS <ul><li>How do we make money? </li></ul>
    30. 33. WHAT DO YOU USERS HAVE TO DO? <ul><li>Who are you users? </li></ul>
    31. 34. Marketplace Model Advertising Model Affiliate Model Community Model Subscription Model
    32. 35. I have always been a woman who arranges things, for the pleasure–and the profit–it derives. I have always been a woman who arranges things, like furniture and daffodils and lives. Marketplaces bring buyers and sellers together and facilitate transactions. They can play a role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a marketplace charges a fee or commission for each transaction it enables.
    33. 37. I’ll go where the buyers are I want to find things! I want the best price! Can I trust this seller? Users must find products, evaluate seller, and make a purchase
    34. 38. Advertising Model The web advertising model is an update of the one we’re familiar with from broadcast TV. The web “broadcaster” provides content and services (like email, IM, blogs) mixed with advertising messages. The advertising model works best when the volume of viewer traffic is large or highly specialized.
    35. 40. <ul><li>Users must: </li></ul><ul><li>Notice advertising </li></ul><ul><li>Interact with ad </li></ul><ul><li>Preconditions: User must visit advertising location </li></ul><ul><li>Share their demographic information </li></ul><ul><li>Types: </li></ul><ul><li>CPM </li></ul><ul><li>CPC </li></ul><ul><li>CPA </li></ul>
    36. 41. Community Model The viability of the community model is based on user loyalty. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking. Open Source Red Hat , OpenX Open Content Wikipedia , Freebase
    37. 43. <ul><li>Users need to </li></ul><ul><li>Create an identity </li></ul><ul><li>Connect with other users </li></ul><ul><li>Build a reputation </li></ul><ul><li>Create and share content/work/etc </li></ul><ul><li>Users must care </li></ul>
    38. 44. Subscription Model Users are charged a periodic—daily, monthly or annual—fee to subscribe to a service. It is not uncommon for sites to combine free content with “premium” (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined . Content Services Software as a Service Internet Services Providers
    39. 46. <ul><li>User must: </li></ul><ul><li>Able to evaluate the offering </li></ul><ul><li>Subscribe and unsubscribe to offering </li></ul><ul><li>Realize value offered </li></ul>
    40. 47. Combos Advertising Community
    41. 48. Combos Advertising Community Subscription
    42. 49. Combos Marketplace Community Affiliate
    43. 50. Prioritize and Sequence <ul><li>Pattern: </li></ul><ul><li>User gets value </li></ul><ul><li>User returns, gets more value </li></ul><ul><li>User reciprocates </li></ul><ul><ul><li>User adds content </li></ul></ul><ul><ul><li>User contributes money </li></ul></ul><ul><li>Wikipedia: </li></ul><ul><li>Looks up content </li></ul><ul><li>Keeps finding more content </li></ul><ul><li>Sees error, corrects </li></ul><ul><li>User donates </li></ul>1, 2, 3
    44. 51. HOW DO YOU MAKE MONEY? <ul><li>Exercise </li></ul>Marketplace Model Advertising Model Affiliate Model Community Model Subscription Model
    45. 52. FEATURES <ul><li>And now let’s do less </li></ul>
    46. 53. The AOF Method <ul><li>Defining your Activity </li></ul><ul><li>Identifying your Social Objects </li></ul><ul><li>Choosing your Features </li></ul>Courtesy of Joshua Porter. Check out bokardo.com!
    47. 55. <ul><li>Business Model Questions </li></ul><ul><li>Who are your users? </li></ul><ul><li>What will they pay for? </li></ul><ul><li>What do you need them to do? </li></ul><ul><li>Feature Questions </li></ul><ul><li>What are your users doing? </li></ul><ul><ul><ul><li>What do people have to do to make you successful? </li></ul></ul></ul><ul><ul><ul><li>What are you making people better at? </li></ul></ul></ul><ul><ul><ul><li>What are your users passionate about? </li></ul></ul></ul>
    48. 57. 2. Identifying your Social Objects
    49. 59. What are Social Objects? <ul><li>Social objects can be ideas, people, or physical objects. </li></ul><ul><li>By interacting through/with social objects, people meet others they might not otherwise know. </li></ul><ul><li>Social objects can be the reason why people have an interaction or form a relationship. </li></ul><ul><li>Joshua Porter (bokardo.com) </li></ul>
    50. 60. 3. Choosing your Features
    51. 62. LET THE CUSTOMERS CHOOSE <ul><li>The roadmap </li></ul>
    52. 63. Customer Development Customer Development Company Building Customer Discovery Customer Validation Customer Creation Steven Gary Blank, Four Steps to the Ephinany
    53. 65. Voice of the customer Interview <ul><li>What we are doing </li></ul><ul><li>A lot about you </li></ul><ul><li>What we’ve heard/Problem statement </li></ul><ul><li>Solution Overview </li></ul><ul><li>Demo (clickable mocks!) </li></ul><ul><li>Limitations </li></ul><ul><li>Potential roadmap </li></ul><ul><li>Justifications </li></ul><ul><li>Procurement </li></ul><ul><ul><li>Who’s our competitor </li></ul></ul><ul><ul><li>Who’s not here to decide? </li></ul></ul><ul><li>How would you describe this to a colleague? </li></ul><ul><li>Homerun/strikeout? </li></ul>SyncDev http://www.productdevelopment.com/
    54. 66. Potential Roadmap <ul><li>Collaboration space </li></ul><ul><li>Speaker features/video </li></ul>Capability Soon Later Much Later What would you move? <ul><li>Reporting and advanced Admin </li></ul><ul><li>Community features </li></ul><ul><li>E(mail) to attendees </li></ul><ul><li>Version 1.0 </li></ul><ul><li>Un/Official events list </li></ul><ul><li>Network notifications </li></ul><ul><li>Basic Admin </li></ul>
    55. 67. Pricing <ul><li>Part of the business model </li></ul><ul><ul><li>How do we make money? How much? </li></ul></ul><ul><ul><li>Revenue/profit/shipment forecasts </li></ul></ul><ul><li>Supports core value proposition </li></ul><ul><ul><li>“ Our product/service saves you $$$$… </li></ul></ul><ul><ul><li>… and we want 15% of the savings.” </li></ul></ul><ul><li>Often an obstacle to buying </li></ul><ul><ul><li>Too complex </li></ul></ul><ul><ul><li>Much too high (sticker shock) or too low (desperate) </li></ul></ul><ul><ul><li>Free (no reason to trade up) </li></ul></ul>
    56. 68. Designing pricing <ul><li>What’s the natural unit of exchange? </li></ul><ul><ul><li>How do they derive value? </li></ul></ul><ul><ul><li>What does the competition do? </li></ul></ul><ul><ul><li>Can you split off a profitable segment? </li></ul></ul><ul><li>How much of customer value can you capture? </li></ul><ul><li>Test, trial-close, get your hands dirty </li></ul>
    57. 69. Software Pricing Models <ul><li>Time-based access (e.g. unlimited/month) </li></ul><ul><li>Transaction (stock trade) </li></ul><ul><li>Metered (seats, CPUs, named users) </li></ul><ul><li>Hardware (appliances, dongles) </li></ul><ul><li>Service (virus updates, support) </li></ul><ul><li>Percentage of incremental revenue/savings </li></ul><ul><li>Data-driven insights </li></ul>
    58. 70. Pricing drives customer behavior <ul><li>What do you want core customers to do? </li></ul><ul><ul><li>No-brainer renewals (small monthly fees) </li></ul></ul><ul><ul><li>Big up-front license (lock up marketplace) </li></ul></ul><ul><ul><li>Lust for upgrades (cool features are extra) </li></ul></ul><ul><ul><li>Freemium model (1% upsold into paid services) </li></ul></ul><ul><ul><li>Install latest version (free updates, increasing service </li></ul></ul><ul><ul><li>fees) </li></ul></ul>
    59. 71. WHERE ARE THE USERS? <ul><li>Distribution </li></ul>
    60. 72. Why <ul><li>If you build it… they don’t come </li></ul>
    61. 73. Charter Clients
    62. 74. SEO & SEM
    63. 75. SEO SEM
    64. 76. Private Betas <ul><li>Works if you know cool people </li></ul><ul><li>Classic influence concept of Scarcity </li></ul><ul><li>Good for user feedback </li></ul>
    65. 77. <ul><li>Think about how you will pull people in… </li></ul><ul><li>How do people share? </li></ul><ul><li>With whom do they share? </li></ul><ul><li>Where and how many of those tools do you place? </li></ul>Distribution Exercise
    66. 78. 10 Questions <ul><li>Exactly what problem will this solve? (value proposition) </li></ul><ul><li>For whom do we solve that problem? (target market) </li></ul><ul><li>How big is the opportunity? (market size) </li></ul><ul><li>What alternatives are out there? (competitive landscape) </li></ul><ul><li>Why are we best suited to pursue this? (our differentiator) </li></ul><ul><li>Why now? (market window) </li></ul><ul><li>How will we get this product to market? (go-to-market strategy) </li></ul><ul><li>How will we measure success/make money from this product? (metrics/revenue strategy) </li></ul><ul><li>What factors are critical to success? (solution requirements) </li></ul><ul><li>Given the above, what’s the recommendation? (go or no-go) </li></ul>Marty Cagen http://www.svpg.com/blog/files/assessing_product_opportunities.html
    67. 79. Questions? @cwodtke [email_address]
    68. 80. appendix
    69. 81. Return on Investment <ul><li>All your CEO cares about … </li></ul><ul><ul><li>Returns (measurable changes) </li></ul></ul><ul><ul><li>Increased sales </li></ul></ul><ul><ul><li>Reduced costs </li></ul></ul><ul><ul><li>Achieving the mission (for a non-profit) </li></ul></ul><ul><ul><li>Investments (cost of making change happen) </li></ul></ul><ul><ul><li>Keeping headcount low </li></ul></ul><ul><ul><li>Using resources more effectively </li></ul></ul><ul><ul><li>Only bringing in consultants if necessary </li></ul></ul><ul><li>“ ROI” is just a fancy estimate accountants use to make decisions </li></ul>
    70. 82. About Business Things you should know to have a conversation
    71. 83. Profit and Loss
    72. 84. Investment vs. expense Location Location Location
    73. 85. The Fish Market Stock Location Advertising Differentiation Diversifying Pricing
    74. 86. Got Metrics? Do you know what matters?
    75. 87. Web Experience Metrics <ul><li>Development: Reduce Costs </li></ul><ul><li>Development Costs </li></ul><ul><li>Development Time </li></ul><ul><li>Maintenance Costs </li></ul><ul><li>Redesign Costs </li></ul><ul><li>Sales: Increase Revenue </li></ul><ul><li>Transactions/ purchases </li></ul><ul><li>Product sales </li></ul><ul><li>Traffic, audience size </li></ul><ul><li>Customer retention </li></ul><ul><li>Appeal </li></ul><ul><li>Market Share </li></ul><ul><li>Use: Improve Effectiveness </li></ul><ul><li>Success rate/user error </li></ul><ul><li>Efficiency/productivity </li></ul><ul><li>User Satisfaction </li></ul><ul><li>Job Satisfaction </li></ul><ul><li>Ease of use </li></ul><ul><li>Ease of learning </li></ul><ul><li>Trust </li></ul><ul><li>Support costs </li></ul><ul><li>Training/documentation </li></ul>Return on Investment for Usable User-Interface Design , Aaron Marcus
    76. 88. User Experience Also Influences… <ul><li>Web Metrics </li></ul><ul><li>Total page views </li></ul><ul><li>Page views per session </li></ul><ul><li>Click paths </li></ul><ul><li>Unique visitors </li></ul><ul><li>Return visitors </li></ul><ul><li>Conversion rate (sales, reservations, applications, etc.) </li></ul><ul><li>Business Metrics </li></ul><ul><li>Leads </li></ul><ul><li>Sales </li></ul><ul><li>Retention </li></ul><ul><li>Length of sales cycle </li></ul><ul><li>Productivity </li></ul><ul><li>Development costs </li></ul><ul><li>Customer Satisfaction </li></ul>
    77. 89. What market are you in? <ul><li>Media </li></ul><ul><li>Advertising </li></ul><ul><li>Subscription </li></ul><ul><li>Single purchase </li></ul><ul><li>Commerce </li></ul><ul><li>Profit margin </li></ul><ul><li>Customer retention </li></ul><ul><li>Broker </li></ul><ul><li>Transactions </li></ul><ul><li>Users </li></ul><ul><li>Liquidity </li></ul>
    78. 90. Why the one word? <ul><li>Opportunity </li></ul><ul><li>Brand Completeness </li></ul><ul><li>Blocking competition </li></ul><ul><li>Raising money </li></ul><ul><li>Curiosity </li></ul>
    79. 93. Business creates value for which they receive money Money allows them the resources to provide value
    80. 95. Everything You Need to Know About ROI (in one slide) ROI Return Investment

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