Introduction to Product Management

Introduction to
Product Management
Gaurav Sood
www.humanxpr.com
gaurav@humanxpr.com
1© 2020 Gaurav Sood, HumanXpr www.humanxpr.com

WWW.SLI.DO
#HXPR1
© 2020 Gaurav Sood, HumanXpr www.humanxpr.com 2

The aim of marketing is to know and understand
the customer so well the product or service fits
him and sells itself.
— Peter F. Drucker

Who is a Product
Manager?

Product Manager Challenges
1. Send email reminder to user prior to subscription?
2. What movie to show next?
3. How to grow user base?
4. Which leads to focus on?
5. How to increase customer engagement?
6. Which customers have a high churn probability?
7. What price to charge?
8. What to build next?
9. How to sunset a product?
10. What are the metrics, milestones, investment and forecast?

Risks, Returns
&
Trade-offs

The aim of marketing is to know and understand
the customer so well the product or service fits
him and sells itself.

Customer & Problem
Obsession

Customer Lifetime Value (CLV or LTV)
Retention Rate
(1 + Discount Rate – Retention Rate)
LTV = Gross Contribution x
CAC = Customer Acquisition Cost

Product Manager Role
© 2020 Gaurav Sood, HumanXpr www.humanxpr.com. 10
Value
Risk increases over time
as difference between
forecast vs actual market
outcome increases
Product Manager Objectives
1. Increase value by defining and
developing monetizable products
2. Plan investment and forecast return
3. Maximize up-side potential
4. Mitigate future downside risk
5. Manage and integrate into portfolio
Time
Horizon 3
Imagine
Horizon 2
Scale
Horizon 1
Build
© 2020 HumanXpr – www.humanxpr.com
Horizon 1 – Build
Build core functionality in a company
that has product-market fit.
Horizon 2 - Scale
Extend product into geography or offer
to new customers
Horizon 3 - Imagine
Bring a new product to new customers

Product Management
Customer Business
Product
Management
Technology

Product Management
Desirable Viable
Product
Management
Feasible

Product Management
Technology
(Feasibility)
Business
(Viability)
Design
Innovation
Human Values
(Desirability, Usability)
Technology
• Requirements Analysis
• Detailed Design
• Build, Buy, Partner
• Engineering
• Testing & Release Management
• Technology Management
• Support & Training
Human Values
• Demo/Ethnography
• Anthropology
• Psychology
• Sociology
• Cognitive Biases
Business
• Marketing Strategy
• Behavioral Economics
• Competitive Analysis
• Economic & Policy Analysis
• Risk Analysis
• Business Modelling
• Portfolio Management
• Funding & Investment Strategy
• Accounting & Finance
• Company Operations
• HR & Training
• Brand & PR
• Digital Marketing Strategy
• Sales Strategy

Product Management
Technology
(Feasibility)
Business
(Viability)
Human Values
(Desirability, Usability)
Technology
• Requirements Analysis
• Detailed Design
• Build, Buy, Partner
• Engineering
• Testing & Release Management
• Technology Management
• Support & Training
Human Values
• Demo/Ethnography
• Anthropology
• Psychology
• Sociology
• Cognitive Biases
Business
• Marketing Strategy
• Behavioral Economics
• Competitive Analysis
• Economic & Policy Analysis
• Risk Analysis
• Business Modelling
• Portfolio Management
• Funding & Investment Strategy
• Accounting & Finance
• Company Operations
• HR & Training
• Brand & PR
• Digital Marketing Strategy
• Sales Strategy
Service & Brand Design
• Team Values and Training
• Sales & Support Processes
• Service Design
• Localization
Development & Manufacture
• Quality Management & Compliance
• Supply Chain Management
• DevOps & Manufacturing
• Lean Testing
• Partnerships & IP
Design & Interactivity
• HCD / HCI
• Ergonomics
• Risk Management
• Personalization
• Metrics & Data
Design
Innovation

Tying it together
Executives
Engineering
Product
Managers
Markets &
Customers
Marketing
& Sales
Roadmap, Forecast,
Budget, Resource Plan
Budget, Staff
Targets
Context, Personas, Mission, Vision,
User Stories, Requirements, Regulatory
Compliance, Risks Controls, Validation Criteria,
Partners, Assets, Backlogs, Priorities
Input &
Feedback
Product Bit
Sellable User Stories, Features & Benefits,
Outcomes, Evidence, Competitive
Positioning, Pricing, Demos, …
Credit, Rich Mironov
1

Customer Lifetime Value
Retention Rate
LTV = Gross Contribution x
CAC = Customer Acquisition Cost
Product Value
Customer Success
Developer Experience
Community Support
Pricing & Payment Terms
Moats & Network Effects
Design, Brand, Price
Technology IP
Resource Cost
Manufacturing & Supply Chain
Existing Customers
Referral & Virality
Distribution Partners & Channels
Promotion Efficiency (MQL Cost)
Sales Efficiency (Lead to Close)

A Growth Mindset
Customer Business
Technology
Ethics
Marketing Strategy
Investment Nous
Sales Strategy
Challenge, Learn
& Lead
Industry History & Vision
Domain Expertise
Customer Research
Intuition & Awareness
Creativity
Product Design
Data Analytics
Technology Management

Org Structure
Understand customer,
competitor, pricing,
channel, packaging.
Develop GTM
CMO
Understand customer and
product insights,
collaborate on strategy,
design and launch
products.
CPO
Own technology
resources and
engineering organization.
Lead resource training,
evaluate technical
architecture and reduce
technical debt.
CTO
Drive sales and marketing
teams, manage
commissions and
incentives, conduct
territory mapping and
sales training.
CRO
Product Marketing
Marketing Directors
Customer Insights / UXR
Product Mangers
Designers
Data Analysts
Engineering
DevOps
Demand
Sales Leaders
CS & RevOps

SLI.DO @ #HXPR1

1. Free Trial End – Cancelation Email
Setup
• 1M monthly signups
• $100 Lifetime Value
• $2M annual call center cost
• 90% retention -> 85%
Questions
1. Cost of email ~=
2. Whose decision
3. Launch: YES or NO

2. Social Network – Growth Problem
Setup
• 20M monthly active user plateau
Questions
1. Solutions

2. Social Network – People You May Know
Setup
• 20M MAU plateau
Questions
1. Solutions – PYMK
2. Launch: YES or NO
The Untold Story of Facebook’s Most Controversial Growth Tool, Marker

Personalization vs Creepy

PRINT ONLINE
$72$125

ONLINE
$72
PRINT
$125
PRINT + ONLINE
$125
Inferior Purchase Options, Dan Ariely

UX Research

Customers don’t think what they feel,
say what they think, or do what they say.
— David Ogilvy

Cognitive Biases

AnchoringAnchoring
Don’t Just Listen To Mom
Social Desirability
Confirmation
Salience
Framing
Anchoring
Identify Biases

Technology alone does not solve problems.
Life is too short to build a product nobody
wants!

Talk to the user
User Sales PMMarketingSupport
User PM
High likelihood of bias and mis-information being gathered
Reduce bias through interview and observation techniques

Do UX Research ‘Right’ to remove bias & succeed
• Use hypothesis to drive research plan
• Understand cognitive biases, behaviors, needs and drivers
• Observe behavior and simulate proxy to real-world
• Don’t ask leading questions
• Incorporate multivariate analysis to group and understand
feature preferences for roles
• Use ongoing UX research to continue learning
Segment research is reflected in product design through to sales and marketing collateral. Core activity to organization. Do not skip.

Sell Money

Follow the Money

Customers don’t buy products – they buy the
benefits these products and their suppliers offer
them.

Strategic Marketing
Strategic Marketing

Strategic Marketing
Customer Competition ContextCompany Collaborators
Segmentation Targeting Positioning
Product Packaging Pricing Placement Promotion People Process Proof
Personalization

Segmentation, Targeting, Positioning
Which is the value of customer
segments to us?
Should we serve this
segment?
Targeting
How do we position ourselves
in an attractive way compared
to competing products?
Positioning
What are the buyer segments
of the market?
What are their needs and
behaviors?
How well are they served?
Segmentation

Why Segment? Get the right Persona.

Choose segment based on your competitive intensity, competitive
advantage, company ‘fit’, customer ‘fit’ and opportunity size,
$X
Growth Rate

Position product based on your segment – Vertically
Luxury
Premium
Bottom
Needs, Age, Features, Aspiration
Gucci, Tom Ford
Persol, Ray Ban
Warby Parker, Bailey Nelson
Service Station, Cheap Sport Brand …
Mid

Position product based on your segment – Horizontally
Luxury
Premium
Bottom
Needs, Age, Features, Aspiration
Oakley
Mid
RipCurl Warby Parker Maui Jim

vs

Quality
Volume
Branded Consumer

Build Ad-Platform?
Build Original Content?

Video Workflow
Shooting Post-Production Hosting Distribution Monetization

Video Workflow
Shooting Post-Production Hosting Distribution Monetization
Multi-Channel Streaming & Analytics

The ‘P’s of Marketing – 1
What are the features and
benefits of the product?
Product
What is the experience of the
physical product?
What are the features by
product tier?
Packaging
What is the business model?
What is the pricing strategy?
How do you charge?
Pricing

Pricing
1. Pricing is flexible based on customer, period,
location, services, features
2. Competitive pricing and customer WTP should
be discovered in Targeting stage of strategic
research to pick most valuable segment.
However, how you price is strategic and
tailored to your GTM approach (e.g. strategy,
channel, cross-subsidization, cost advantage,
roadmap)
3. Pricing is strategic driver for business and
should be current and proactively managed
4. Price level (band) should have different
discount ranges, service levels, sales
processes and collateral that tie into product
and go-to-market
5. Price should incorporate incentives of sales
team or distributors to reflect real cost of sale
High
Mid
Low
RevenueProjection
Price
Target Selected Segment
Basic Professional
SegmentSOM
Discount Range
Enterprise

Design Packaging to increases Volume and Revenue
Volume
Price
Volume
Price
Standard Standard
Premium
Luxury
Economy
Basic
Differentiated PricingOne-Size Fits All
Willingness to pay not
exploited
Customers not reached
Utilizes
• Packaging
• Price Levels & Model
• Payment Terms
• Segment
Leaving Money on the Table Designed per micro-segment

Australia Singapore

Compare package sorting order
37.1%24.3%42.4%33.3% 45.0% 17.9%
Credit: Trevisan: “The irrational consumer”, Simon-Kucher & Partners
Expensive FristCheap Frist

Where is your physical or
digital product sold?
Where is it placed in store?
What partners and channels
are used?
What digital channels work
best for you?
Placement
How do you build the brand
and awareness?
What communities, activities,
leaders and partners increase
credibility?
What copy, content, case
studies, evidence, and
material is used?
Promotion
How are your support,
marketing, sale team
involved?
How does training, education,
remuneration, and hiring
practices reflect the culture,
strategy and mission?
People

What are the marketing tactics
and sales process? How do
you qualify and nurture leads?
How do you serve customers
through Customer Success?
How do you fulfil the product
delivery, updates, returns?
Process
What does your brand,
website, product, store look
like to the public?
What are the customers
saying about you?
What are the reviews of your
product?
Proof
How do you improve the
experience of the product to
match the user?
Personalization

Service Design & CX
Design the Organization to
Map Customer Demands

Business

Culture eats Strategy for Breakfast.
— Peter Drucker

Mission, Vision, Values
• What problem are you solving and for whom?
• How will that impact the world?
• How do you operate as a company, culture, team?
What problem do you want to solve? Why does it matter? Who are you? What do you believe?

Strategy
• Porters 5 Forces
• SWOT
• PESTLE
• Clinical Strategy
• Reimbursement Strategy
• Capabilities
• IP Strategy
• Differentiation & Disruption
• R&D
Where do you want to play? Who do you want to serve? How will you win?

Roadmap Development Process
1. Understand problem areas
2. Ideate on solutions and develop solution hypothesis
3. Evaluate hypothesis holistically
4. Prioritize hypothesis
5. Select success metrics
6. Define budgets and resources

Hypothesis List
For X user with Y problem
provide Solution S that provides Benefit B
given Assumptions A…
that can be tested with Experiment X
Make initiatives measurable using the right leading metrics

Strategy, Metrics, Tactics
Strategy
(Objective)
Metric
(Key Result)
Tactics
(Initiative, Theme)
Measure Target
Value Creation Hypothesis

Roadmap
Strategy
(Objective)
Initiative A Initiative B Initiative C
Now Next Later
Features:
1. Disclaimer
2. Timelines are not firm
3. Prioritization is done with stakeholders

Balanced Score Card
• Business Strategy
• Customer Impact
• Product Development
• Org Change and Culture
• Major Transformation Programs
“Revenue is an output”
Integrate Key Strategic Pillars of Business together to drive strategic plan. Provide independence and governance on execution.

Balancedscorecard.com

Executive Meetings
• Agile Budgeting versus Locked-in
• Communicate Strategy Transparently
• Customer Advisory Boards & Governance
• Quarterly Product Reviews (QPR)
• Product Demos
Cross-functional and executive engagement to align product strategy with market and sales situation is essential to navigate forward collaboratively.

Financial Management
1. Subscription accrual accounting
2. Total cost of ownership (internal & external)
3. Resource cost, location, training
4. Build, Buy (Acquire), Partner (License)
5. Capital Budgeting
1. NPV
2. IRR
3. Payback Period
4. Profitability Index
Set clear milestones to validate key metrics of success. Costs can be influenced. Revenues depend on real validation.

Go-To-Market

Distribution is
King

Virality is a
weapon

Mouse or Whale – Design your Sales & Marketing Process
Five Years Later: Five Ways to Build a $100M SaaS Business, Christoph Janz

The Classic Sales Funnel
Awareness
Interest
Consideration
Intent
Evaluation
Purchase
Awareness
Lead
Marketing Qualified
Sales Qualified
Customer
Align metrics at each stage are key to drive sales throughput

Channel choice and tactics should fit customer
PR Trade Shows
Traditional
Sponsorships Events
Trade Press
Word of Mouth
Inside Sales
Digital
Tele-Sales
PR SEOWebsite
Email Lists Blog AdWords
LinkedIn Case StudiesPartnerships
Awareness
Lead
Tech & CRM
Pick channels and strategies that reduce CAC. Not all are relevant to each company. Go cheapest first e.g. WoM, Referrals.

What comes after sales is even more important.
Sales Velocity
Retention Rate
Expansion + Up/Cross Sales -
Downgrades
Referral
Customer Success
Account Management
Revenue Operations

Total Customer Lifetime Value
LTV = Gross Contribution x x Referral Factor
Retention Rate

Reduce Churn. Increase Expansion, Up-Sales and Cross-Sales
Unlocking the path to Negative Churn, ForEntreprenurs

Align to Investor and Management Incentives
What leading metrics drive customer acquisition, engagement, and revenue?
∝Revenue Growth
Rate
Valuation

In God we trust, all others must bring
data.
— W. Edward Deming

Technology

Agile Management
≠
Product Management

Use Agile & Lean to Learn Fast,
Test Hypotheses
&
Pivot

Navigation – On-time & Budget
Asteroid belt
Supernova
Spaceship A
Spaceship B
Mission

Navigation – Risks & Pivots
Mission
Market Forces
Competition
Sales & Team
Regulatory & IP

Balance & Optimization
Time
QualityCost
SCOPE
More scope or quality increases cost and time. It’s not possible to sacrifice on
one without affecting others.

Stakeholders

More features …
Less time …
Smaller budgets …

Say “No” without saying “No”
How are we going
to do that?

Evaluate Trade-offs, Collaboratively Problem-Solve
Time
QualityCost
SCOPE
More scope or quality increases cost and time. It’s not possible to sacrifice on
one without affecting others.

Prioritization

Prioritize – Validated Differentiation
Must HaveAccessory
Innovation or
Differentiator
SHOULD
Expected
Basic Needs
MUST
High Risk
WON’T
+Surprise Delight
-Low ROI Bloat
COULD
Unvalidated Idea
(High Risk)
Validated Need
(High Confidence)
Differentiator
Core Feature
Variation
Standard Feature
1
23
4
© HumanXpr

Prioritization
User Story /
Feature
Impact
(A)
Confidence
(B)
Ease
(C)
Effort (D)
Rank Factor
(A.B.C) / D
User
Priority
Frequency MoSCoW Release
A 10 6 3 40 4.5 High Daily MUST MVP
B 8 6 2 40 3.2 Medium Hourly MUST MVP
C Medium Weekly SHOULD Release 1
D Medium Monthly SHOULD Release 2
E 5 3 8 30 4 Low Monthly WON’T -
User research and product strategy to guide feature prioritization at start of project.
96
Other Factors:
1. Regulatory, Industry and Competitive Timelines: Dependencies of business strategy on industry
factors have strong influence. Not all 1st movers win, however, competitive bid processes can influence
timelines for development of functionality.
2. Pre-Existing Platform Requirements: dependencies between platforms determine priority to lay
groundwork for product.
3. Technological or Clinical Risks: Proven vs new technologies need to be weighted up to reflect risk.
Risk offsetting initiatives have higher priority over risky initatives
4. User Adoption and Workflow Integration: Disruption to workflow and existing behavior can derail
adoption. Initiating behavior change through smaller triggers to test early adopter response can reduce
risk.
5. Stakeholder, Investor Objectives: Business milestones should correspond with investors and
stakeholder objectives. These are based shared understanding of dependencies. Priority of roadmap
items should correspond to objectives. Later variations are to be discussed with supporting evidence
that help reprioritize roadmap and objectives.
Quantitative
§ Impact – Scaled factor for revenue and strategic impact e.g. obtain market
share, increase ACV.
§ Confidence – customer validation and adoption confidence, equal to
probability of success
§ Ease – existing knowledge, data, platform and channel means higher ease of
development and roll-out
§ Effort – Estimated effort in story points (or 1-10 scale) to help weigh work
effort
Qualitative
User feedback helps assess quantitative estimations that are stack-ranked.
Priority and Frequency are used during user story workflow prioritization These
can also be converted to numerical factors (e.g. Daily = 20, Weekly = 5, Hourly =
160).
Deprioritized due to low user priority
based on Qualitative Feedback
Core Features (Basic Needs) have
high priority despite low rank factor
© 2020 Gaurav Sood, HumanXpr www.humanxpr.com
Low Validation Score
© HumanXpr

Cohort Analytics
Wk1 Wk2 Wk3 Wk4 Wk5 Wk6 Wk7
T-6 80% 70% 50% 45% 41% 34% 30%
T-5 80% 72% 47% 45% 37% 33%
T-4 83% 71% 45% 49% 40%
T-3 84% 72% 47% 44%
T-2 85% 75% 48%
T-1 95% 88%
T0 95%
Cohort (Action) User Group
Release
Week
14 Day
Retention
30 Day
Retention
Complete Profile Doctor 2 70% 50%
Set Reminder Patient 2 90% 80%
Add Friend Patient 5 80% 70%
Write Journal Patient 5 80% 70%
Improvement in retention tracked
against in-app behaviors (actions
taken).
User Retention (or Target Behavior)Track product features and protocols against target outcome (e.g. retention, task completion) after
product launch using in-app analytics, customer support, revenue operations and bug tracking.

Feedback:
https://bit.ly/hxpr1-review

Bringing ideas to light that improve human experience
www.humanxpr.com
gaurav@humanxpr.com

Introduction to Product Management

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