Software executives and software product managers should focus first on putting the right products into their portfolios -- since the primary drivers of market success are identifying the right markets, segments and customer problems to solve.
(For Product Tank San Francisco)
2. • Veteran product manager / exec / strategist
• Business
models,
agile,
organizing
product
teams
• Six startups, including as CEO/CPO/founder
• “The Art of Product Management”
• Product Camp, unabashed
product management bigot
About Rich Mironov
2w w w . M I R O N O V . c o m
3. 1. Software profits are all about scale
• $M’s for first customer, $0 for next 1000 customers
2. No company ever has enough development capacity
• Demands ruthless prioritization at every level
3. You can’t outsource your strategy
• To spreadsheets or customers
4. Segmentation is strategic art of
choosing customers who want
same solution
Software Laws of Gravity
3w w w . M I R O N O V . c o m
4. There’s
nothing
more
wasteful
than
brilliantly
engineering
a
product
that
doesn’t
sell.
w w w . M I R O N O V . c o m 4
5.
6. • Users understand problems, but misdesign solutions
• Have we asked enough people / the right people?
• Watch for confirmation bias
• Prototypes and early versions
• …Before starting full-scale development
• $M burn rate creates its own momentum
Intellectually Honest Validation
(Lean Tools)
6w w w . M I R O N O V . c o m
7. • Validation and strategy (should)
precede development
• Organizational behavior shapes
strategic decision-making
• IMHO, lean principles easiest to
apply to features (or groups of
like items), not portfolios
What Does This Have To Do With
Product/Portfolio Strategy?
w w w . M I R O N O V . c o m 7
8. Commercial Software Failure Modes*
w w w . M I R O N O V . c o m 8
Undifferen?ated
or
poorly
posi?oned
15%
Marke?ng/Sales/
Channel
failures
25%
Late
Delivery
15%
Poor
Quality
10%
Wrong
problem,
wrong
solu?on
or
product
35%
*In
my
personal
experience
9. Most
of
the
success
/
failure
of
a
product
is
determined
before
we
pick
our
first
developer
or
fill
out
our
first
story
card
w w w . M I R O N O V . c o m 9
10. • Business value error bars >> engineering error bars
• Blending of
• Promises of future revenue
• Promises of future operational savings
• Promises of future development efficiencies (tech debt)
• Quality forced onto a linear scale
• Simplistic models of buyer behavior
• Politicking
• Allocating our scarcest, most valuable resource
• Someone (some team) must force-rank programs
• Can’t delegate to spreadsheets or WSJF
Business Value: Slightly Estimatable
10w w w . M I R O N O V . c o m
11. • Limited development resources = household budget
• Too many expenses: rent, food, repairs,
entertainment, college fund, property taxes, Girl
Scout cookies…
• Kids Execs don’t
remember what
we spent committed
to yesterday
Portfolio Planning
11
12. • Hard to attribute success / failure
• Sales teams paid to subvert
corporate goals
• Revenue estimates have huge error bars
• Executives don’t believe in mutually
exclusive development choices
• Shiny objects, confirmation bias, groupthink
• Politics and big swinging budgets
Organizational Challenges To
Product/Portfolio Thinking
12w w w . M I R O N O V . c o m
13. • Hard to rank-order unlike items
• Where does this bug go versus minor features?
• A one-off customization versus more DevOps work?
• Instead, group similar requests
• Which two features will we put into v6.5?
• P0, P1, P2, P3…
• We can fund one audacious, long-term program:
teleportation or synthetic petroleum
• Cross-bucket trade-offs reflect our biases
Prioritizing Within Buckets
13w w w . M I R O N O V . c o m
15. Typical Commercial Software
Company’s Development Budget*
w w w . M I R O N O V . c o m 15
Features
for
current
release
50%
Quality
(refactor,
test
automa?on)
15%
Engineering
overhead,
10%
Big
future
bet,
5%
Sales
one-‐offs,
non-‐roadmap
20%
*In my personal experience
16. Varies with Growth Stage
Current
release
50%Quality
20%
Eng
overhead
5%
Sales
one-offs
25%
Current
releases/
features
35%
Quality
35%
Future bet
(M&A)
5%
Eng overhead
15%
Sales one-
offs
10%
v1.0 Software startup
Mature software (post-innovation)
w w w . M I R O N O V . c o m 16
17. • This quarter, how should we spend our
precious feature-focused story points?
• 70% on deployability, 20% on cost reduction?
-or-
• 60% on scaling, 30% on hardware reliability?
• What was our actual spending
last quarter?
• What portion was “unplanned”
or sales interrupts?
Product-Level Strategy =
Forcing Hard Trade-offs
17w w w . M I R O N O V . c o m
18. Portfolio-Level Trade-Offs
18w w w . M I R O N O V . c o m
• How many fully funded products/projects?
• Major opportunity gets new BU?
• Investment horizons (H1/H2/H3)
• Platforms, cross-product
integration
• Corporate customers/
lifetime value
Yardstick: $1M/year/developer
19. • Can’t outsource product/portfolio strategy
• Bottom-up planning insufficient, esp. post-v1.0
• Validation before full development
• A month of good market input might save $2M in pivots
• Set product-level and portfolio-level
spending allocations
• One-off choices trend in same direction
• Deeply agile development is still critical
Takeaways
19w w w . M I R O N O V . c o m
20. Contact
Rich Mironov, CEO
Mironov Consulting
233 Franklin St, Suite #308
San Francisco, CA 94102
RichMironov
@RichMironov
Rich@Mironov.com
+1-‐650-‐315-‐7394