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Bubblespherepresentation 13548932015886-phpapp01-121207091437-phpapp02
Dec 17, 2014
Presentation materials from course I taught with Elena at Agile Conference
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Transcript
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Next three slides enact “entering the bubblesphere.” You start with the opera=onal team view (short term, one project), broaden to the PMO view (annual and for all projects), and then jump to the porHolio view (prospec=ve and strategic over life of project).
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X axis shows days, and opera=onal teams are rightly focused on hiLng full scope each itera=on.
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X axis s=ll shows days, but program managers are rightly focused on how the overall set of projects are performing, and when they will be done.
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You’re in the bubblesphere! Y axis indicates probability of success (0-‐1). X axis indicates net present value of each project. Size of dot indicates overall likely income from project over its life=me.
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Note this porHolio has no “low risk, high return items,” and one high risk, high return item. They’re avoiding high risk/low return except for one large-‐ish project. I wouldn’t want this porHolio. Kill high risk, low return projects in favor of a combina=on of high and low risk projects with some returns, preferably large ones. Other dimensions you might want to bubble chart: costs, =me, return on investments towards different balanced score card values, so long as they are quan=ta=ve, regulatory compliance, opera=onal cost, etc. You can use bubble charts for any combina=on of three dimensions on your porHolio.
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FantasTapps was incorporated by CEO William Gallstone in 2010 with a low-‐interest loan of $1.5M (from his dad). The loan was based on a promising mobile phone applica=on, CoffeeRadar, designed by William. The app was launched mid-‐February, 2010, to immediate acclaim, and although the code quality was quite low, and showed the team's lack of experience, and maintenance costs on CoffeeRadar were high, it s=ll showed a good return on investment by the end of 2010, with net profits of $390,000 for the year. Based on the success of this app, which was supported on Android, Apple, and Blackberry plaHorms, Gallstone's team used most of the remaining loan to develop three addi=onal applica=ons in the second half of 2010, and launched them during the winter holiday season, because what says "Happy Holidays" like a new coffee-‐related phone app? The FantasTapps team addi=onally designed a fimh applica=on which was unlike anything they had developed before, being tea-‐oriented, with the plan to launch some=me in 2011. Based on the returns of CoffeeRadar, FantasTapps expects to get a 3 for 1 return on investment once TeaRadar launches.
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Looks really good! Upper right = CoffeeFinder, their anchor app. They expect 2011 returns to be on par with 2010. Meanwhile, they hope great things for TeaFinder, lower right. And to keep things moving along, they have avoided high risk, low return projects in favor of low risk, low return projects for now, that s=ll look to be genera=ng income for years to come.
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Looks good! They won’t quite pay off William’s dad, but this looks to be an excellent year-‐on-‐year return.
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Although CaffeineTester, LaqeSwirlDesigner, and VirtualCreamSnimer all went live as planned in Q1, sales on VirtualCreamSnimer have been unexpectedly low. Boris assures William that things are about to get beqer. Meanwhile, CoffeeRadar 2.0 did not go live in Q1 as planned because the development group, frustrated with low quality, has decided to adhere to CMM level 5 standards, and although product management has signed off on 2.0 as ready to ship, IT won’t do it un=l all documenta=on is brought up to spec. Although the virtual stand-‐s=ll in new feature development led to lower than expected maintenance costs in Q2, sales on CoffeeRadar have been dropping as compe=tors come out with their own applica=ons for finding coffee in the wild. The TeaRadar team is ready to ship a free version of their app in Q3, but they require another $200K investment to get the paid version of the app into the various app stores by the end of the year. Based on what he sees now, William’s dad feels that William going to lose money this year, and go down to only $22K in cash reserves. All the same, he strongly feels William and the board should s=ck to the original budget, and just make the teams work harder in H2, to cover the shorHall.
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CaffeineTester: despite the complete lack of compe=tors at the start of 2010, two new ones sprang up in Q32011. A maintenance only strategy causes the demand to drop to 0. An investment strategy extends the product’s lead and causes a 5-‐fold return on investment. LaqeSwirlDesigner: OMG, they opened the China market. Maintain-‐only = Q2 -‐ $20K + $1M. Investment brings 5-‐fold return on investment over and above this amount. VirtualCreamSnimer: Boris went completely off the rails charging things to the company credit card. The applica=on tanked, and your resource costs, adver=sing, and travel budget is sinking any profits you had made. You have been completely taken over by compe=tors and the your lead developer has lem the company. Income is zero, plus subtract whatever you invested, and another $200K to cover Boris’s crazy expenses. CoffeeRadar: you can’t solve this problem just by throwing money at it. Maintain: Q2 Revenue -‐ 40% = $60,000. Also subtract $170,000.00 as you had to bring on contractors to just maintain the product as your internal employees are now working on the update = -‐110K Invest -‐ Take what you invested and mul=ply by 3, then subtract from -‐110K, because throwing money at the problem only made it worse. IT hired a slew of tech writers who all had to be brought up to speed, addi=onal
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CaffeineTester: Maintenance-‐only leads to a 10% decrease in profits. An investment strategy extends the product’s lead and causes a 2-‐fold return on investment. LaqeSwirlDesigner: Maintain-‐only = Q3 – 20%. Investment brings 2-‐fold return on investment over and above Q3 returns. VirtualCreamSnimer: Not even an op=on. Dead as a duck. CoffeeRadar: you s=ll can’t solve this problem just by throwing money at it. Maintain: Q3 Revenue -‐ 40% = $36,000. Also subtract $170,000.00 as you had to bring on contractors to just maintain the product as your internal employees are now working on the update = -‐134K Invest -‐ Take what you invested and mul=ply by 3, then subtract from -‐134K, because throwing money at the problem only made it worse. IT hired a slew of tech writers who all had to be brought up to speed, addi=onal hardware was purchased, etc. TeaRadar. If you invested, you get $1.5M. It totally took off, especially now that you have a foothold in China. If you didn’t, you don’t get anything.
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PorHolio strategies to correct “the plan” include: • Less op=misim about VirtualCreamSnimer • Factor in poten=al China market for LaqeSwirlDesigner • Update compe==ve informa=on about CaffeineDetector PorHolio strategies to beat “the plan” include: To really win, though, you need a new governance model for the plaHorm app which allows for quicker go-‐live.
• Invest in CoffeeSwirlDesigner and/or LaqeSwirlDesigner • Kill VirtualCreamSnimer
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Likely findings: -‐ Throwing money at a process problem doesn’t help -‐ You have to spend money to make money -‐ Changing course based on coalface knowledge leads to a beqer overall result, if
the team is sensible.
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Likely findings: -‐ You have to spend money to make money -‐ Changing course based on coalface knowledge leads to a beqer overall result, if
the team is sensible.
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