As we look towards 2013 and the future of product management, I thought it would be a good moment to post an interview I participated in earlier in the year.  As you look towards 2013 and beyond, what product business models will prove out most successful?  What new product management trends do you expect to see?

Re-blogged from an interview earlier in the year on Openview Labs

Over the course of more than a decade in the Internet industry, Jeremy Horn has witnessed some pretty seismic shifts in the constantly evolving technology landscape.

One that he’s particularly happy to see is this emerging trend: Companies are no longer afraid to ask customers to pay for their products.

“That’s a pretty important change in perspective,” says Horn, a Senior Director of Digital Products at Viacom and the creator of The Product Guy blog and The Product Group, a New York City-based product meetup with more than 1,900 members. “Whether customers admit it or not, if they’re not paying for a product, they’re not married to it or invested in it. When they commit to it financially, however, it’s a different story.”

Slowly but surely, that shift in thinking has permeated Internet startups, Horn says, encouraging entrepreneurs to quickly demonstrate and deliver value to paying customers, rather than users who might just be kicking tires.

Horn sat down with OpenView for a brief Q&A to talk about why that change has made the concept of the minimum viable product more important than ever, and what advice he would give to startup founders who are trying to get their ideas airborne.

A lot of entrepreneurs spend months or years trying to develop a perfect product. Why do you think that approach and the search for perfection are counterintuitive?

I think building a software company is about three key things: Figuring out who your target customer is, deciding what you’re trying to deliver to them, and choosing how you’re going to get it in their hands. Those are the questions that tend to eat up a lot of an entrepreneur’s early days.

Once you’ve answered those questions, you shouldn’t waste any time building and delivering a minimum viable product. You might fail and you might be embarrassed by what early customers think about your product, but those are two very worthwhile side effects. By exposing your product to your target market, you’re able to test its usability, acquire feedback, and build something better.

The bottom line is that you shouldn’t be afraid of losing early customers because your product has bugs or because it isn’t yet perfect. Yes, you may lose customers because of some early bugs. But those lost customers will also allow you to gain critical knowledge about what the market wants, what features you should deliver, and where your product should be going. In a way, the value of that information is addition by subtraction.

Why isn’t the freemium model a successful means for accomplishing the same goals?

It’s simple, really. When customers aren’t paying for something, they don’t care as much when it doesn’t work. Ultimately, that means that you aren’t going to get good, real-time feedback that can help you build a better, more responsive product in the future.

Additionally, if you don’t charge for your product, what does that say about it? Unfortunately, customers associate free products with lower quality, viewing them as substitutes for higher quality, more valuable alternatives. So, when users finally decide that a free product isn’t doing the trick anymore, guess where they’re going to turn?

When you charge for your software, you’re assigning a value to it. You’re telling customers that your product’s value is justified by its capabilities — like unique features, fantastic customer support, groundbreaking technology, or superior user experience.

Why is it so critical for startups to establish key metrics and how does lean methodology factor into early stage product management?

The old adage “you can’t manage what you can’t measure” is applicable to virtually any online startup. I firmly believe that you can’t drive a product by gut feeling. You have to measure your progress, monitor your missteps, and mark your course, using all of that information to make relevant, meaningful improvements to your product strategy. If you’re not doing any of that, how can you be sure that the things you’re doing are driving the business in the right direction?

As for lean methodology, it ultimately helps businesses measure the value that they want to permeate throughout their companies. It’s a way to develop hypotheses, test them, iterate, and repeat until progress is made toward a key goal. Every company executes product management a little bit differently; some prefer lean methodology, while others might favor product sprints or Kanban. A startup founder or product manager’s goal should be to find the one that works for his or her team and make sure everyone adopts it.