The Why of Product Management


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Product Management is a relatively new organizational phenomenon arising in the marketplace.  For years, responsibilities for “ownership” of a product were split between the technology side of things (Product Development, for example) and the business side of things (Marketing, for example).  Each would handle its own vertical responsibilities and pass the ball off to the next group in the org chart.

This approach is reminiscent to the assembly line approach of product management – an outdated concept in today’s technical age.  In the past, a company would conceive of a product that could be created – they would then sell the idea to investors (or management) and work on production.  Marketing and sales efforts would take over, and by launch date there would be a completely new item in the marketplace, with Madison Avenue already having created a demand for that product, (reasonably) assured of its marketability in a world when new innovations occurred every decade.

Of course there are many exceptions – products which did complete the gauntlet of justifications and oversight only to fail miserably in the marketplace for one of many reasons, such as competition, pricing or poor engineering.  But the process itself, and the tools available behind the processes, kept innovation slow.  I’m constantly reminded of the typewriter, and the QWERTY keyboard the majority of English writers are stuck with. 

<The current layout of computer keyboards is among the most absurd legacies in modern times.  The layout of the letters on the keyboard had only two purposes.  The first, somewhat amusing, purpose was that so the original typewriter salesmen could quickly type the word “typewriter”, amazing prospective customers with the marvelous interface for this new, untested tool.  The second, much less amusing, purpose behind the layout was actually to slow down the typist, to avoid the keys getting tangled up with one another.  (For youngsters, typewriters had actual keys attached by long arms to the typewriter keyboard.  As you punched a letter, a long arm would reach towards the paper, stamping it over a ribbon of ink.  If you typed too irregularly, too fast, the long arms would catch in each other and you would have to reach in to dislodge the offending keys before you could proceed.)>

It just doesn’t make sense for computer users today to be slaves to the intentionally slow QWERTY keyboard (let’s not even get started on what we have to do on our cell phones) when alternatives such as the Dvorak Keyboard exist.  It also does not make sense for businesses to be using equally outdated product management models.

In the Internet age, marketing itself has undergone a dramatic shift.  Although television and print ads still do exist for a majority of products, almost every industry in the world also has a Web presence, which both simplifies and complicates the job of a marketing manager.  In many of these industries, the job of a product developer has also changed drastically.  While computers and robots do the bulk of building most physical products, the explosive market trend is in purely digital products.

The digital product might be a million dollar a year research database marketed to multinational conglomerates, or it might be cell phone app designed and created by some guy in his basement, selling for 99 cents on the Android platform.  As many service industries now create their own SAAS tools (and charge a pretty premium for in-person service anymore), and almost all business support companies are providing various digital resources (from the ubiquitous Oracle or Microsoft Office to the advertisement based freeware and shareware out there). 

With the digital marketplace growing as fast as it is, technological developments rocket past the companies – everything, anything is possible now.  Businesses are not limited so much by “what their engineers can do”, because those engineers have a million ideas of what they could do next.  Sales and marketing departments also have a million ideas of what the business should do next, thanks in large part to the available technology allowing instantaneous access to every thought, whim or desire of their constituent marketplace.  This is good, this isn’t, I want this, I don’t want that.  Market Research departments are spending more time trying to prioritize the information they do have than actually in soliciting feedback.

In the end, companies are left with few options.  Pressure to launch quickly is immense – a delay of a week could mean that the competition is already embedded in the market, in some fields.  Companies put out the most basic of models, launch them, and then debug and improve post-launch.  Marketing managers meanwhile have to scramble to “get the word out”, which puts more pressure on the developers because there is already (hopefully) an expectation building in the marketplace.   Of course, a really bad launch could devastate a company – just think how long it took Microsoft to get back into the cell phone game.  Often it is not the monetary investment required to build the product, so much as it is the opportunity to gain critical market share at the right time.

And that’s what it has all become about – with many of these digital products, success can come so quickly and unexpectedly that it is the sole determiner of product enhancements.  Decades ago, the inventors of the Pet Rock, the Hula Hoop and the Lava Lamp all had to go somewhere, convince someone to make and market their stupid product.  For each of these, there might have been a million “flops” – ideas turned down by Whammo because they couldn’t imagine the product selling profitably.  But in the digital age, those products don’t get turned down – at least in two out of three situations.  So in many situations, an individual or company can make money on products which were not possible to market just twenty years ago.  Let’s look at some of these.

Take, for instance, the Cell Phone App Model.  Picture a guy sitting in his basement.  He might work for a large corporation, or he might be some computer geek.  He could be 50, he could be 15.  He could be a woman in Indiana or a man in Indonesia.  The point is, this person handily builds some digital widget or doodad – some program that helps some person out in the marketplace in some way.  Maybe it’s a cell phone app for recipe sharing, maybe it’s a cartoon of a cat that purrs when you stroke its virtual belly – whatever the actual product, it is something that would not have made it through the oversight of committees when a real P&L had to be attached to the product.  It cost almost nothing to create – the decision is whether or not to market the product, to invest money to make more money.

In this model, the product management team has many options – market it for free, for example.  Let the word-of-mouth viral concept take over, hoping to get future revenue once demand has increased.  Google set the bar here, but many good companies are putting out content for free, and this can bring in revenue in several ways.  Of course advertising is the leading hope for many of these companies, but others leave the free content as a hook to draw you into the premium (paid) content.  Hulu is a good example here.  Other companies hope to start out free, and charge people once they rely on the (free) product.  These companies often limit the features for the free product – think WinZip – making the “free” version of the product almost unusable. 

Another way to make money off of inexpensive innovations is to sell them really cheap.  Just look at all of those 99 cent e-books (mine included), or browse through the applications available for your cell phone, and you will see the new model many other product managers are hoping for.  Put your product out there – if it sells, great, and if not, well not too much has been lost in the investment.  For the products which do sell, the manager might hope that the quantity more than makes up for the low price point, and in some cases this is alone to make the product profitable.

But as with the case of the free products, “dirt cheap” products also help build a reputation for a company/product line/programmer/etc, and that’s what the real goal of these approaches is.  A “one-hit wonder” might make enough money to be fairly comfortable, but without something new, something now, most of these fly-by-night inventors will not be able to rest on their laurels for too long.  But “the creator of the Virtua-Pet” can leverage his brand onto that next hot app.

In both of those instances, we are looking at something which is practically free to design and implement.  But while companies and individuals now dream of striking e-gold, there is still a place for a large-investment approach to building product in the digital age.  Building anything larger than a small widget requires time, know-how, and resources, and this all adds up to money, capital, investment.  Larger is not necessarily better, but when larger is truly necessary, someone will pay for the quality, complex work which can only be done by a larger corporation.  They must, because the corporation cannot rely on enough “pet rocks” to sustain their long-term business growth.

So in this new age of Brand, senior management is finally seeing the way to create Product Management or Strategy departments.  (Or Brand Management or Product Line Strategy, or some such.)  Focused entirely on the product, these Product Managers sit as a bridge between the technology people and business people, between the company and the marketplace, to steer the product (or product line or brand) in the right direction.

An ideal product manager is analytic in nature, someone who makes logical decisions based on weighted judgments derived from as many relevant data sources as reasonable/possible.  A strong product manager loves having “ownership” over the product, the necessary relationships with programming, sales, finance, marketing, training and everyone else to ensure the product does not hit any proverbial bumps in the road.   A good product manager keeps both hands on the wheel at all times, but also listens carefully to the traffic reports, ready to exit at a moment’s notice.  Alert eyes are always on the road, but constantly watching the mirrors for danger all around.  Quick glances to the dashboard help ensure the product manager doesn’t overheat the engine (a breakdown at this speed could be very dangerous, or at least costly to fix) but there are no speed limits on this road so the product manager must be ready to floor the accelerator and get the engines revving when he sees an opening.  Backseat drivers WILL kibbitz along the way, second-guessing every move, and the clock is always ticking down to another milestone.

There are many approaches to Product Management, but I personally like the Pragmatic Marketing chart shown below.  It outlines all of the responsibilities necessary to bring a product to launch, and beyond.  These functions may be split up amongst various departments in any given organization, but the reality is that all of these functions somehow need to be incorporated by any Product Manager who wants keep his or her car on the road.

Pragmatic Marketing framework

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