before you design your product, design your...

© 2008 DOTnet CONSULTING

™ David Taber &Associates, all lefts reservedGraphics courtesy PC Week

Before you design your product,design your customer.

– Somebody Brilliant™


Who is David Taber?

• 25 years in Information Technology

• Now a consultant to startupsProduct strategy, go-to-market, SFA best practices

• Virtually all experience in SoftwareFinance, Telecom, Manufacturing, & Defense industries

• MBA, BA from University of CaliforniaInstructor, UC Berkeley extension


The Newtonian Model of Product Development

• Product design is an inbound process• Product Marketing influences engineers

Engages prospective buyers Makes mid-course correctionsTweaks messages to fit product reality


Problems with the Newtonian Model

• Engineers design for themselves“Stupid customers”

• Marketers write requirement tomesNobody follows most of the Great IdeasDocumenting after the fact

• Customers don’t know what they needOften follow ideas put in their heads by your competitorSuffering from future shock (undigested shifts)They don’t care the way you do…

• Which customer are you designing for?


Infinite Loop / Simultaneous Equation

Needs

Features

Market SizeValue Prop& Messaging

PressStory

ChannelPitch

CustomerResponse

Segments


Breaking the Infinite Loop

• Don’t use the waterfall model anywhere

• Recognize that the Business Case is part of a large simultaneous equation

Who are we selling to?

Why will they buy?

What will they value?

What will they pay?

How many will we sell?

What’s the P&L?


The Iterative Cycle

Target Market

Target UserProduct Features

Value Proposition

BusinessThesis


Define the Target User

The User is the person who touches your product every day

• Not the purchaser, installer, or “business beneficiary”• You need to know their business card title, who they work for,

how they are measured, what other products they use• Age, sex, educational level, basic expectations, “cult”

expectations (e.g., Mac user)• You need to understand what they value and what their

perceived problems are• “A Day in the Life…”

Personas are different types of users• Such as power user vs secretary or architect vs coder• Personas may need to cover “operational” or “support” people

ProductThesis


Define the Target User

Roles• Goals, intentions, and activities of the Personas• Think roles through for details of access, occasions,

circumstances

Use cases & Stories• How would users work with the product?• What are the characteristics of the environment they use it in?• What other products / services would they use at the same

time?

Relationship to purchase decisions• How does the user evaluate this kind of product (e.g., trial)• How do they make their personal purchase decisions?• Whom else would they need to influence to get a purchase


In Thinking About the Target User…

• It’ll has to be (or become) “in your blood”Psyche, not just numbers

• Most of the time, forget about analystsExcept for questions of “alternatives” and “willingness to pay”

• Find and interview Domain expertsPeople who are gurus, practitioners, authorsTrend-setters at the root of a nascent fadConsultants who mentor and advise on best practicesBoutique / specialist implementers for your users


Designing the User First• What is it?

A pen radio• Who’s the customer?

A teenager?• What’s their need?

Needs to listen to radio while taking a test• What’s the product feature set?

One-color ink, one-channel FM radio

• What’s our message? Ummmmm… it’s just $6.95!

• What’s the media / influencer capable of transmitting? Ummmmm

• What’s the channel capable of selling? Pens on aisle 3, radios on aisle 12

• Telltale sign of problems: How come nobody shoplifts this thing?


It’s Not Just Pen-Radios…


Design the Target Market

Markets are defined by groups of customers, not vendorsCustomers are companies or organizations that buy things

• They are the business beneficiaries• They pay the bills

Markets are a collection of segments• A segment is a group of customers who have similar needs and

buy for similar reasons

Target Markets are the core of your product’s business feasibility


Defining Segments Along the Right Lines

• Knee-jerk: B2B: vertical industry, company size, geography…B2C: age, family status, wealth…

• More interesting: something about the buyer and their problems

B2B: Organization / role – CFOs needing SarBox complianceB2B: Technology base – BEA WebLogic usersB2B: Business process – Order-to-cash cycleB2B: Quality / Attribute – Industrial processes needing PPB purityB2C: Family roleB2C: Psychographics / self-image / perceived needs


McKenna’s Marketing Influence Pyramid

Vendors, Channels, Advertising

Industry Sources(Press, Partners, Associations, Government)

Trusted Neutral Sources(Gurus, Experts, Colleagues)

Customerand theirfriends


Describe the Target Market

What’s the target count?• Unit volumes key to quality, price functions

What’s the feasible price range?• Be brutally honest!• Watch out: customer’s don’t know what they’re willing to pay

What’s is the customers’ purchase / decision cycle• How long is the cycle?• How many steps / moving parts are involved?

How do you sell to them?• Direct / high-touch sales cycles?• Distributor / dealer networks?• eCommerce / web / viral?


Case Study: Fahrvergnugen?


Case Study: VW Phaeton

• 5400 pounds, 12 cylinders, $110,000Subject to both the Gas-Guzzler and Luxury tax

• Telltale sign: ad agency is lost• Results: <1000 cars sold, CEO bounced


What’s a Value Proposition?

The statement of what value your product brings to customers

This is what the customer actually pays forA logical hierarchyThat’s pretty consistent for all customersThat drives engineering, marketing, sales, and YOU

The Value that YOUR CHOSEN MARKET will perceiveValue propositions are often confused with

MessagingMarket PositioningCompetitive DifferentiationTagline…but a customer never pays you for those things


Forming a Value Proposition

Customer PerspectivePurchaserUserOn-looker

Competitive PerspectiveGet the competitions’ product and play with itTalk to users about itKnow what’s real, what’s rubbish

Think through your outbound positioningIterative, has a short lifeTry to keep the foundation stable for 18 monthsTweak the words every six monthsThe message has to be realistic, but show vision


A Value Proposition Is…

• Just a supposition unless you can prove it with real customer data and references

• Powerless unless it is:“Unique”Relevant to the target audienceCredible SubstantiableAchievable by mortals


Product Features

Focus on this LASTDevelop Iteratively

Think Agile Development / eXtreme ProgrammingTalk with prospects, but don’t take them literally

Do not focus on feature lists / competitive parityIf you chase the bad guys on their own terms, you will always be behind

Do not focus on the “how”Better to focus on the “what”Even better to focus on the “who, when…”Best to focus on the “why”


Product Features

Instead, develop a coherent thesisThe core: your theory about what the customer values most

• “Our product is best in the world at doing X for users who need to do Y inside customer Z.”

Use your thesis to keep scope focusedDo a few things exquisitely well

Version 1.0 will inevitably be incomplete, but it must not be fragmentary

Does enough of the job to show valueIt can never be too easy to use


Look Beyond Product Features

Product boundaryWill the customer think of your 5 line-items as one product? Will they think of your one product as 3 things bundled?Will customers need other stuff to make your product usable?Product boundary determines the scope of competitors & substitutes

Pricing and licensingPricing (and licensing) modelPrice pointsDiscounts, bundles, and allowances

Packaging and OOBEHow is the product delivered and installed?What is the initial user experience?


The Best MRD…

• Write a 2-page press release for the product before the team begins

What’s the opening gambit?Who gets quoted and what do they say?Who is the channel selling to?What are the visible benefits, and for whom?What’s the pricing, packaging, and distribution?

• And have a Wiki for a dynamic view of the product details


Pulling It All Together

Target Market

Target UserProduct Features

Value Proposition

BusinessThesis

• P&L ModelMarket size, scope & segmentsEngineering, Marketing and Sales budgetSchedule

• Impact on Company identityMessage and brand


Your Take-Aways

• Design your customer first, feature-list lastMicro: personas, roles, use cases, storiesMacro: awareness model, decision model, influence model, purchase model, consumption model

• Develop a “whole product” thesisHow customers get it and use itScope of market and size of forecastYou value prop and positioning / messagingWhat you’re building

• Develop/engage a (gated?) communityWhether design partners or just enthusiasts

• Iterate on product & customer design“Fail faster, succeed sooner.” -- David Kelley


Thank You!

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