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New Product Development and Stage Gates


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Shared experiences of delivering new software products from start-ups to well established companies -- from no process to very formal stage gates.

Presented to University of San Diego Business class.

Published in: Software, Business, Technology
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New Product Development and Stage Gates

  1. 1. New  Product  Development   Experiences  and  Stage  Gates   Guest  Speaker   April  3,  2014   Rick  Berzle  |  President  |GoToMarket  LLC  
  2. 2. Agenda   •   Background/Experience   •   Company  Maturity  and  Product  Planning   •   Formal  New  Product  Planning  Processes   •   Limited/No  New  Product  Planning   •   Considering  GoToMarket  Alignment   •   ParKng  Thoughts  
  3. 3. Speaker  Background   •   BS  Computer  Science/MBA  MarkeKng   •   8  years  in  SoNware  Development   •   10  years  in  SoNware  Product  Management   •   15+  years  in  VP-­‐level  MarkeKng  PosiKons   •   12  MarkeKng/Business  Consultant       2  
  4. 4. My  Story/Career  TransiBons     •  Math  major  -­‐>  1st  job  Engineer’s  Aid   •  Back  to  school  for  Computer  Science   •  Honeywell  (LA)  -­‐>  Digital  (Boston)   •  Development  -­‐>  Product  Management   –  Graduated  to  Product  Line  Management   •  To  Apple  -­‐>  Taligent   •  Taligent  -­‐>  Start-­‐ups  -­‐>  GoToMarket   •  To  Peregrine  -­‐>  GoToMarket   •  Lots  of  early/mid-­‐stage  soNware   companies   3   70’s       80’s       90’s     20’s       Today  
  5. 5. Product  Planning  Processes   Factors  that  influence  product  planning:   •  Company  size/maturity   •  Financial  stability/shareholder  expectaKon   •  Leadership   •  Market  dynamics   •  Time-­‐to-­‐market   •  Category  (soN  vs  hard)   •  Capability  (experKse)   4  
  6. 6. Size/Maturity:  Product  Focus   • Sales leadership • Product suites • Revenue growth • Brand awareness • Integrated sales/mkting • Technical leadership • One Product Company • Reference Accounts • Sales & Sales Support • Minimal Marketing Start-up $0-5M Early-Stage $5-20M Mid-Stage $20-50M Growth $50-100M • Financial leadership • Product lines • Predictable revenues • Brand value • Market/Product Strategy Mature 100+M Product Planning MaturityInformal Formal
  7. 7. Maturity/Size:  GoToMarket  Focus   Start-up $0-5M Early-Stage $5-20M Mid-Stage $20-50M Growth $50-100M Mature 100+M • Focus is account acquisition • Product defined by engineering • Marketing is describing what was built • Product Management is non-existent • Focus is market expansion • Product Management/Marketing blended role • Product strategy and roadmap fundamental • Marketing is about awareness and value proposition • Product and Product line strategy • Specific marketing disciplines exist • Product management is fundamental • Well-defined marketing/sales boundaries
  8. 8. Digital  Equipment  Corp   •  Formed  in  late  50’s   •  Leading  suppler  of  mini-­‐computers   •  Grew  to  be  a  complete  systems  provider  –   desktop  to  servers   •  $14B  in  sales;  $1B  in  soNware   •  Squeezed  out  of  the  market   –  IBM,  Dell,  Compaq  at  the  low-­‐end   –  IBM  at  the  high-­‐end   •  Acquired  by  Compaq  (98),  merged  with  HP  (02)   7  
  9. 9. Phase  Review  Process   •  Product  Lifecycle  Model  and  Process   •  Spans  all  corporate  funcKons   •  Owned  by  Product  Management   •  Planning  and  ExecuKon  of  all  phases  and   phase  transiKons  of  the  product  lifecycle   •  Specific  EXIT  criteria  for  each  phase   •  Public  Exit  Phase  Reviews   8  
  10. 10. 6  Phases  to  the  Lifecycle   •  Phase  0  –  Strategy  and  Requirements   •  Phase  1  –  Planning  &  Feasibility   •  Phase  2  –  ImplementaKon   •  Phase  3  –  QualificaKon   •  Phase  4  –  ProducKon  and  Support   •  Phase  5  –  ReKrement   9  
  11. 11. Phase  0  –  Strategy  &  Requirements   •  IdenKfy  a  market   problem  or   opportunity     •  Propose  a  product   soluKon   •  Consistent  with   Corporate  Product   Strategy   •  Primary  deliverable  is   the  Business  Plan   10  
  12. 12. Phase  1  –  Planning   •  FuncKonal  specificaKon   and  engineering  plan   •  Preliminary  product   design   •  Integrated   implementaKon  Plan   •  Company  fully  commits   at  Phase  1  Exit   11  
  13. 13. Phase  2  –  ImplementaBon   •  Design  complete   •  Prototypes  built   •  Product  meets  phase  0   requirements   •  Full  funcKonality  is   tested   •  Product  launch  plan   developed   12  
  14. 14. Phase  3  –  QualificaBon   •  Qualify  producKon-­‐ level  copies  of  the   product   •  IniKate  field  tests   •  Demonstrate  product   meets  requirements   of  Phase  0  and   specificaKons  of   Phase  1  and  2   13  
  15. 15. Phase  4  –  ProducBon/Support   •  Achieve  and  maintain   steady-­‐state  volume   producKon,  sales  and   service   •  Phase  4A  –  Ramp-­‐up   •  Phase  4B  –  Steady-­‐ state   •  Monitor/adjust  to   meet  product  and   market  performance   targets   14  
  16. 16. Phase  5  –  ReBrement   •  Implement  Product   Phase  Down  Plan   •  Fulfilling  internal  and   external  commitments   •  Require  the  same  level   of  complexity  as  new   product  development   15  
  17. 17. Challenges  for  Tech  Products   Point  of  Sale   Sold  direct  to  customer  by  sales/channel   Capability/ROI   Emphasized,  demonstrated  ROI   Pre-­‐Sale  EvaluaKon   Demos,  Pilots  (months)   Post-­‐sale  support   DocumentaKon,  training,  service,  support   Purchasing  risk   High  (many  products  don’t  meet  their  hype)   Intangible  factors   Trust,  reputaKon,  references,  financial  stability   Product/Technology  Roadmap   Lifecycle  and  extendibility   Must consider go-to-market cost/risk in the Tech Market
  18. 18. Formal  New  Product  Planning   Digital  Equipment  CorporaBon  examples:   •  Low-­‐end  Laser  Printer  (opportunity)   •  WorkstaKon  Publishing  (make  vs  buy)   •  2D/3D  graphics  (industry  standard)   •  OperaKng  Systems  (strategic)     17  
  19. 19. Informal/No  Product  Planning   Early-­‐stage/High-­‐growth  examples:   •  Peregrine   – Rapid  expansion  of  product  porlolio   – Mergers/AcquisiKons   – Infrastructure  Management   •  IT,  Telecom,  FaciliKes,  Vehicles,  ..   •  ServiceNow  (soNware-­‐as-­‐a-­‐service)   •  Customer-­‐first  soluKons  (producKzed)   18  
  20. 20. A  few  final   thoughts  on     go-­‐to-­‐market   consideraBons     19
  21. 21. Go-­‐To-­‐Market  Alignment   Market Opportunity Revenue Attainment Target  Market   Customer   Buyer/Influencer   Need/Pain   CompeBtors   MarkeBng  Strategy   Who?  (customer)   Requirements   Use  Cases   Service/Support   PosiBoning/Branding   Value  ProposiBon   Pricing/Packaging   What?  (soluBon)   Demand  GeneraBon   Sales  Model/Channel   OpBmizaBon   Team  OpBmizaBon   Sales  ExecuBon   Measurement/Metrics      How?  (execute)   ü  Poor  alignment  results  in  missed  market  and  revenue  opportuniKes   ü  Good  alignment  requires  organizaKonal  cooperaKon  and  collaboraKon   ü  Agreed  set  of  strategic/tacKcal  goals  and  a  sharp  focus  
  22. 22. PosiBoning  Template   “FOR  (who  is  the  target  customer)   WHO  (what  is  their  need  or  opportunity)   YOUR  PRODUCT  or  SERVICE  NAME   IS  A  (product  category)   THAT  (key  benefits  –  the  compelling  reason  to  buy)   UNLIKE  (primary  compeKKve  alternaKve)   OUR  OFFERING  (statement  of  primary   differenKaKon)”   21  
  23. 23. GoToMarket  Example   For  soNware  vendors  who  develop,  market  and  sell  soluKons/services  to  an  enterprise  customer  and   deploy  on-­‐site  or  as  a  service  (SaaS)     Who  are  focused  on  aligning  their  go-­‐to-­‐market  strategies  and  tacKcs  to  consistently  meet  market   penetraKon  and  revenue  aqainment  goals     GoToMarket  is  a  markeKng/sales  consultancy  and  interim  execuKve  management  company     That  provides  unique  execuKve-­‐level  operaKonal  experience  to  idenKfy  the  go-­‐to-­‐market  gaps  that   affect  the  vendor’s  ability  to  predict  and  meet  revenue/market  aqainment  goals  in  a  sustainable   fashion.     Unlike  other  consulKng  firms,  GoToMarket  provides  highly  successful  and  experienced  professionals   with  deep  soNware  markeKng  and  sales  operaKonal  experience  that  can  idenKfy  go-­‐to-­‐market   revenue  chain  gaps/issues  and  provide  the  operaKonal  leadership  to  implement  needed  changes       Our  Offering  takes  a  pragmaKc  approach  to  the  strategic  and  tacKcal  elements  of  the  go-­‐to-­‐market   revenue  chain  that  rapidly  determines  both  the  internal  barriers  to  sales  success  and  the  associated   remedies  to  align  markeKng  and  sales  for  opKmal  producKvity  -­‐-­‐  expanding  the  opportunity  pipeline,   improving  customer  acquisiKon  and  retenKon,  lowering  the  cost  of  sales  and  ulKmately  ensuring   reasonable  revenue  aqainment  targets  are  achieved.    
  24. 24. Recommended  Reading   •  “Crossing  the  Chasm:  MarkeKng  and  Selling   DisrupKve  Products  to  Mainstream   Customers”  by  Geoffrey  Moore   •  “Inside  the  Tornado:  Strategies  for  Developing,   Leveraging,  and  Surviving  Hypergrowth   Markets”  by  Geoffrey  Moore   •  “Rules  For  Revolu7onaries:  The  Capitalist   Manifesto  for  CreaKng  and  MarkeKng  New   Products  and  Services”  by  Guy  Kawasaki     24  
  25. 25. Thank  You.   I  hope  this   was  helpful.