22ndnd Class Class
- Continued Product Portfolio - Continued Product Portfolio StrategyStrategy
- Individual Product Strategy- Individual Product Strategy
Bus100: Building Software Bus100: Building Software Products:Products:From Strategy to SalesFrom Strategy to Sales
John GibbonJohn Gibbon
•DefineDefine•Design Design •Develop Develop •PartnerPartner•MarketMarket•Sell Sell
•DefineDefine• Classes 1 & 2• What Business?
• Product Portfolio Strategy
• Which Product?• Trade-offs and Business Cases
•Design and DevelopDesign and Develop• How Do We Build It? – Class 3
• Product Development and Requirements Best Practices
• How Do We Manage It? – Class 4• Product Management, Lifecycle, Discovery
• How Do We Make it Usable? – Class 5 • User Experience Design
•Design and DevelopDesign and Develop• What Tools Do We Use? – Class 6
• Web Technologies, QA
• What Organization Works? – Class 6• Teams
• How Do We Manage the Process? – Class 7 • Project Management
•Partner, Market, & SellPartner, Market, & Sell• How Should We Partner? – Class 7
• Business Partnerships Best Practices
• How Should We Tell The World? – Class 8• Product Marketing
• How Do We Sell It? – Class 9 • Sales Models; Web Based Advertising
• What Have We Done Right/Wrong - Class 10• Mistakes in Growing Your Business
Where should we go?Where should we go?
Why will we be Why will we be successful there?successful there?
How do we get How do we get there?there?
Company or Product Portfolio Company or Product Portfolio StrategyStrategy
Company or Product Portfolio Company or Product Portfolio StrategyStrategy
•Advisors / FindersAdvisors / Finders▫Mark Losh - Prevail Mark Losh - Prevail
VenturesVentures▫Jett Winter – Winter Jett Winter – Winter
ConsultingConsulting
•Venture CapitalistsVenture Capitalists
•Early Stage Early Stage CompaniesCompanies
Where should we go?Where should we go?
Why will we be Why will we be successful there?successful there?
How do we get How do we get there?there?
Company or Product Portfolio Company or Product Portfolio StrategyStrategy
•Problem?Problem?▫OpportunityOpportunity
•Solution?Solution?▫Unique offering or Unique offering or
breakthrough (IP)breakthrough (IP)▫Why you? Competition?Why you? Competition?
•Business ModelBusiness Model▫How make money?How make money?▫Money need?Money need?▫Team Team
Where Should We Where Should We Go?Go?
-Market Analysis-Market Analysis
-Financial Plan-Financial Plan
-Success Metrics-Success Metrics
Market and Market and Competitive AnalysisCompetitive Analysis
-Clients-Clients
-Industry Experts-Industry Experts
-Internet-Internet
-Published Sources-Published Sources
Market and Market and Competitive AnalysisCompetitive Analysis
-Clients-Clients
-Industry Experts-Industry Experts
-Internet-Internet
-Published Sources-Published Sources
Surveys, Client visits, Informal conversations
In your company, in your network, Trade associations, conferences, Industry periodicals, Identifying clients that are market influencers
Competitor websites, Competitor websites, Google, Company Google, Company listings (Hoovers, listings (Hoovers, Tradevibes), Annual Tradevibes), Annual reports, Newspaper reports, Newspaper articles, tradeshowsarticles, tradeshows
Why Market and Competitive Why Market and Competitive Analysis?Analysis?
• Product Strategy• Market trends • Market problems/needs • Product competition• Your product perception
• Sales Roadblocks and Workarounds
• Changes Effecting Market • Users / demographics trends• Industry / demographics trends
Market Segment AnalysisMarket Segment Analysis
Segment Needs How Satisfy
% Our Sales
% Industry Sales
Size/Growth
Rating (1-5)
Consumer
SMB
Large Enterprise
Linda Gorchels: “The Product Manager’s HandbookLinda Gorchels: “The Product Manager’s Handbook
Basic Competitive Analysis Basic Competitive Analysis
Description Strengths
Weaknesses
Price
Product A
Product B
Product C
Competitive Analysis Competitive Analysis Via Advertised PositioningVia Advertised Positioning
ERP Accounting Vendors
Lawson
MBS
Best SAP Oracle SSA
Understand SMB Needs X
Understand Biz Fundamentals X
Flexible, Adaptable X X X
Affordable X X X
Rapid Implementation X
Lawson Abinanti “Messages That Matter”
Assess key success factors in your industry and how others stack up
Competitive Analysis Competitive Analysis AlternativesAlternatives
Today Future Implications
Direct CompetitorsSubstituteBudgetOrganization
Linda Gorchels: “The Product Manager’s HandbookLinda Gorchels: “The Product Manager’s Handbook
Where Should We Where Should We Go?Go?
-Market Analysis-Market Analysis
-Financial Plan-Financial Plan
-Success Metrics-Success Metrics
Porter’s Five Forces: Porter’s Five Forces: Market CompetitivenessMarket Competitiveness
Red Ocean Red Ocean StrategyStrategy
Blue Blue Ocean Ocean
StrategyStrategyCompete in Compete in existing existing market market spacespace
Create Create uncontested uncontested market market spacespace
Beat the Beat the competitioncompetition
Make the Make the competition competition irrelevantirrelevant
Exploit Exploit existing existing demanddemand
Create and Create and capture new capture new demanddemand
How to Create Uncontested Market Space and How to Create Uncontested Market Space and Make Competition Irrelevant – Kim and Make Competition Irrelevant – Kim and
Mauborgne Mauborgne
Financial PlanFinancial Plan
-Costs-Costs
-Benefits -Benefits
Basic Financial PlanBasic Financial Plan• Assumptions 2009 2010
2011• # Customers / Unique Visitors• # Employees
• Revenue• Subscription / License• Advertising / Partnership • Professional Services
• Cost of Goods (Sales/Service)• Gross Profit (Rev – COG)
• Operating Expenses • Product Development• Marketing • General and Administration
• EBITDA (Gross Profit – Expenses) (basic P&L)• Cash Needs
Success MetricsSuccess Metrics
-Revenue-Revenue
-Market Share-Market Share
-New Users-New Users
-Increase Usage-Increase Usage
-Increased Customer -Increased Customer Satisfaction: NPSSatisfaction: NPS
-Other?-Other?
SpicyMayonnaise
Why will we be Why will we be successful there? successful there?
-Core Competencies / -Core Competencies / DifferentiationDifferentiation
-Mission-Mission
-Competitive Analysis-Competitive Analysis
eBay’s MissioneBay’s Mission• Older: eBay's mission is to provide a global trading Older: eBay's mission is to provide a global trading
platform where practically anyone can trade platform where practically anyone can trade practically anything.practically anything.
• Now: eBay Inc. pioneers communities built on Now: eBay Inc. pioneers communities built on commerce, sustained by trust, and inspired by commerce, sustained by trust, and inspired by opportunity. eBay brings together millions of opportunity. eBay brings together millions of people every day on a local, national and people every day on a local, national and international basis through an array of websites international basis through an array of websites that focus on commerce, payments and that focus on commerce, payments and communications.communications.
• Skype is the world’s fastest-growing Internet Skype is the world’s fastest-growing Internet communication offering, allowing people communication offering, allowing people everywhere to make unlimited voice and video everywhere to make unlimited voice and video communication for free between the users of Skype communication for free between the users of Skype software.software.
Apple’s MissionApple’s Mission• 1997: Apple will be a leader in providing simple, powerful, high-quality 1997: Apple will be a leader in providing simple, powerful, high-quality
information products and services for people who learn, communicate, and information products and services for people who learn, communicate, and create.create.
• Apple ignited the personal computer revolution in the 1970s with the Apple Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.through its innovative hardware, software and Internet offerings.
• eApple ignited the personal computer revolution in the 1970s with the Apple eApple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music revolution with its iPod portable music players and iTunes online music store.store.
• Current: Apple ignited the personal computer revolution in the 1970s with Current: Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.entered the mobile phone market with its revolutionary iPhone.
Why will we be Why will we be successful there? successful there?
-Core Competencies / -Core Competencies / DifferentiationDifferentiation
-Mission-Mission
-Competitive Analysis-Competitive Analysis
How do we get there? How do we get there?
-Financial / Dev Plan-Financial / Dev Plan
-Tech Strategy-Tech Strategy
-Partnering Strategy-Partnering Strategy
But rarely do we play on green But rarely do we play on green fields fields
The Boston Consulting Group’s The Boston Consulting Group’s Growth-Share MatrixGrowth-Share Matrix
20%-18%-16%-14%-12%-10%- 8%- 6%- 4%- 2%- 0M
arke
t Gro
wth
Rat
e
10x 4x 2x 1.5x 1x Relative Market Share
.5x .4x .3x .2x .1x
Dogs 87
3 ?Question marks? ?
21
Cash cows
6
Stars
5
4
Accelerate a Few Divest Most
Liquidate
Harvest
Invest
Ansoff Matrix: Ansoff Matrix: Product StrategyProduct Strategy
Current Products
Future Products
Current Markets
Future Markets
Market Penetratio
n
Product Developme
nt
Market Development
Diversification
•New Product vs. Mature ProductNew Product vs. Mature Product
•New Market vs. Existing MarketNew Market vs. Existing Market
•Short Term vs. Long Term RevenueShort Term vs. Long Term Revenue
•Usage vs. RevenueUsage vs. Revenue
•Client A vs. Client B Client A vs. Client B
•Research vs. DevelopmentResearch vs. Development
•High Risk vs. Low RiskHigh Risk vs. Low Risk
Trade-OffsTrade-Offs
Your Value PropositionYour Value Proposition
Ansoff Matrix: Ansoff Matrix: Product StrategyProduct Strategy
Current Products
Future Products
Current Markets
Future Markets
Market Penetration
Product Development
Market DevelopmentDiversification
•New Product vs. Mature ProductNew Product vs. Mature Product•New Market vs. Existing MarketNew Market vs. Existing Market•Short Term vs. Long Term RevenueShort Term vs. Long Term Revenue•Usage vs. Revenue; Client A vs. Client Usage vs. Revenue; Client A vs. Client B B •Research vs. Dev; High Risk vs. Low Research vs. Dev; High Risk vs. Low RiskRisk
Porter’s Five Forces: Porter’s Five Forces: Market Market
CompetitivenessCompetitiveness