Happy New Year! Product Management in 2012

2012Happy New Year! The last year has seen many changes in the world of product management. Yet, with all these changes, we can all expect ever more exciting trends, processes, and, especially, products in 2012!

A Look Back

In 2011, many of the prevailing trends we experienced were…

  • Increased focus on process for innovation and ideation
  • API’s, relationships, modular innovation, integration. You are not a true product unless you have an API.
  • Decreasing use of the free service / product business model. Growing on free is no longer the best policy. You can actually create a viable, sustainable business by charging customers money. (omg)
  • The new form factor — the tablet. While it has been around for sometime, the tablet (specifically, the iPad) has had a profound affect on not just tablet design, but all product design and product-consumer expectations of interaction — more intuitive, more touchy.

The Coming Year

It’s always fun to attempt to predict the future. Based on my interactions with the product management community, the following are my predictions for the big trends of 2012.

  • Offline. There will be a broad-based movement back to enabling the offline application, powered by HTML5, from document management to media consumption.
  • Death of XML. XML is on the wane, and JSON’s time has come. With all of the frameworks that have been developed to extract, transform, and transport XML, there will be great entrepreneurial opportunities in 2012 tooling-up JSON.
  • The number of product management roles will continue to grow. However, they will be filled by more and more junior people. These positions will also focus much more on the tactical side of product management (vs. the strategic).
  • In demand skills of the product manager of 2012 (and beyond)…
    • Tech / programming. There will be increasing need for technical experience or programming skills for product manager roles (even UX centric ones).
    • Statistics. Establishing and gathering metrics will become increasingly central to what it means to be a product manager. You need to demonstrate your value and make smarter decisions. (One of the key drivers has been the growth of Lean Methodology.)
  • Customer driven roadmapping will gain increasing momentum. And, mirroring that trend, but inward facing, more company-wide integrated product management will be taking shape.

What’s next?

What are your predictions and expected trends for product management in 2012?

Enjoy & thanks to everyone who followed, read, and participated in The Product Guy blog and The Product Group, new and old, in 2011! We are going to have a supremely awesome 2012!!! See you there!

Jeremy Horn
The Product Guy

About these ads

Why Startups are Agile and Opportunistic – Pivoting the Business Model

steve_blank Guest post by Steve Blank, of Steve Blank dot com.

Startups are the search to find order in chaos.
Steve Blank

At a board meeting last week I watched as the young startup CEO delivered bad news. “Our current plan isn’t working. We can’t scale the company. Each sale requires us to handhold the customer and takes way too long to close.  But I think I know how to fix it.” He took a deep breath, looked around the boardroom table and then proceeded to outline a radical reconfiguration of the product line (repackaging the products rather than reengineering them) and a change in sales strategy, focusing on a different customer segment. Some of the junior investors blew a gasket. “We invested in the plan you sold us on.” A few investors suggested he add new product features, others suggested firing the VP of Sales. I noticed that through all of this, the lead VC just sat back and listened.

Finally, when everyone else had their turn, the grey-haired VC turned to the founder and said, “If you do what we tell you to do and fail, we’ll fire you. And if you do what you think is right and you fail, we may also fire you. But at least you’d be executing your plan not ours. Go with your gut and do what you think the market is telling you.  That’s why we invested in you.”  He turned to the other VC’s and added, “That’s why we write the checks and entrepreneurs run the company.”

The Search for the Business Model

A startup is an organization formed to search for a repeatable and scalable business model.

Investors bet on a startup CEO to find the repeatable and scalable business model.

Unlike the stories in the popular press, entrepreneurs who build successful companies don’t get it right the first time. (That only happens after the fact when they tell the story.) The real world is much, much messier.  And a lot more interesting. Here’s what really happens.

Observe, Orient, Decide and Act

Whether they’re using a formal process to search for a business model likeCustomer Development or just trial and error, startup founders are intuitively goal-seeking to optimize their business model. They may draw their business modelformally or they may keep the pieces in their head. In either case founders who succeed observe that something isn’t working in their current business model, orientthemselves to the new facts, decide what part of their business model needs to change and then act decisively.

(A U.S. Air Force strategist, Colonel John Boyd, first described this iterative Observe, Orient, Decide and Act (OODA) loop. The Customer Development model that I write and teach about is the entrepreneur’s version of Boyds’ OODA loop.)

Pivoting the Business Model

What happens when the startup’s leader recognizes that the original business model model is not working as planned? In traditional startups this is when the VP of Sales or Marketing gets fired and the finger-pointing starts. In contrast, in a startup following the Customer Development process, this is when the founders realize that something is wrong with the business model (because revenue is not scaling.) They decide what to change and then take action to reconfigure some part(s) of their model.

The Customer Development process assumed that many of the initial assumptions about your business model would probably be wrong, so it built in a iteration loop to fix them. Eric Ries coined this business model iteration loop – the Pivot.

(One of the Pivot’s positive consequences for the startup team is realizing that a lack of scalable revenue is not the fault of Sales or Marketing or Engineering departments – and the solution is not to fire executives – it’s recognizing that there’s a problem with the assumptions in the initial business model.)

Types of Pivots

“Pivoting” is when you change a fundamental part of the business model. It can be as simple as recognizing that your product was priced incorrectly. It can be more complex if you find the your target customer or users need to change or the feature set is wrong or you need to “repackage” a monolithic product into a family of products or you chose the wrong sales channel or your customer acquisition programs were ineffective.

If you draw your business model, figuring out how to Pivot is simpler as you can diagram the options of what to change. There are lots of books to help you figure out how to get to “Plan B,” but great entrepreneurs (and their boards) recognize that this process needs to occur rapidly and continuously.

Operating in Chaos + Speed + Pivots = Success

Unlike a large profitable company, startups are constrained by their available cash. If a startup does not find a profitable and scalable business model, it will go out of business (or worse end up in the “land of the living dead” eking out breakeven revenue.)  This means CEO’s of startups are continually looking to see if they need to make a Pivot to find a better model. If they believe one is necessary, they do not hesitate to make the change. The search for a profitable and scalable business model might require a startup is make multiple pivots – some small adjustments and others major changes.

As a founder, you need to prepare yourself to think creatively and independently because more often than not, conditions on the ground will change so rapidly that your original well-thought-out business model will quickly become irrelevant.

Summary

Startups are inherently chaotic. The rapid shifts in the business model is what differentiates a startup from an established company. Pivots are the essence of entrepreneurship and the key to startup success. If you can’t pivot or pivot quickly, chances are you will fail.

Pivot.

Lessons Learned

  • A startup is an organization formed to search for a repeatable and scalable business model.
  • Most startup business models are initially wrong.
  • The process of iteration in search of the successful business model is called the Pivot.
  • Pivots need to happen quickly, rapidly and often.
  • At the seed stage, microcap funds/ superangels understand that companies are still searching for a business model – they get Pivots.
  • Most of the time when startups go out for Series A or B round, the VC assumption is that a scalable business model has already been found.
  • Pivots are why startups must be agile and opportunistic and why their cultures are different from large companies.

Steve Blank currently teaches entrepreneurship at U.C. Berkeley Haas Business School and at the Stanford University Graduate School of Engineering. Over the last 25 years, he has been part of, or co-founded eight Silicon Valley startups (MIPS, Zilog, Rocket Science, SuperMac, Convergent Technologies, Ardent, ESL, and E.piphany). Steve teaches a methodology of starting and managing marketing, sales and business development in high technology startups that you can read more about on his blog self-titled blog, Steve Blank.

Interested in being a Guest Blogger on The Product Guy? Contact me.

From Fabulous Freemium to Destroying Facebook with Salmon

Every week I read thousands of blog posts. Here, for your weekend enjoyment, are some highlights from my recent reading, for you.  Have a great weekend!

01_freemium

On Starting Up…

http://gigaom.com/2010/03/26/case-studies-in-freemium-pandora-dropbox-evernote-automattic-and-mailchimp/
Case studies in the freemium business model.

 
 

On Design & Product Experience…

http://webdesignledger.com/tools/10-excellent-tools-for-creating-web-design-wireframes
Survey the many tools used in crafting web design wireframes.

02_wireframing
03_salmon

On Modular Innovation…

http://www.readwriteweb.com/archives/cross-network_commenting_protocol_could_crack_face.php
Destroying Facebook with Modular Innovation … Salmon.

 

What are you reading this weekend?

Jeremy Horn
The Product Guy

The Product Guy’s Weekend Reading (September 18, 2009)

Every week I read thousands of blog posts. Here, for your weekend enjoyment, are some highlights from my recent reading, for you.

01_social_business

On Starting Up…

http://blog.opensocial.org/2009/09/business-of-social-applications.html
An introductory look at the business models of social applications.

 
 

On Design & Product Experience…

http://buildinternet.com/2009/09/principles-of-effective-web-navigation/
A thorough walkthrough of many guiding principles of web navigation.

02_web-nav
03_google-dlf

On Modular Innovation…

http://www.webpronews.com/topnews/2009/09/14/google-wants-you-to-be-able-to-leave-if-you-want
Support of increased Modular Innovation from Google’s Data Liberation Front.

 

Have a great weekend!

Jeremy Horn
The Product Guy

Add to Social Bookmarks: Stumbleupon Del.ico.us Furl Reddit Google Add to Mixx!