product management in an era of disruptive innovation
DESCRIPTION
[Made at SP Jain, Mumbai. Aug 2012] We live in an era of massive disruptive innovation. More than at any other time in history of industry, we are witness to the massive upheaval of established incumbents – and their replacement by aggressive upstarts. Depending on your point of view this sea change provides massive opportunity – or a terrifying existential threat. This new reality places substantial burdens on managers. Historical tools of product management are obsolete – and there is an attendant critical need for new practices. Product management doctrine was based on a core principle best described as “Big up-front design”. The assumption was of a predictable future that could be analyzed – and planned for. Emphasis in this paradigm was on executing according to the plan. However, an analysis of the historical success rates for new business innovation has demonstrated that this process has been, at best, an abysmal failure. New practices have emerged to enable product managers to adjust to a world of uncertainty. These are based on the premise of fast response to change rather than big up-front planning. They are predicated on documenting business models and conducting focused experiments to validate key assumptions. New practices and concepts have emerged: Customer Development, Business Model Canvas, Lean Startup, and Minimum Viable Product. In this presentation, we introduce these new concepts – and describe how they can be integrated into new practices of product management that are effective in dynamic and disruptive environments. We provide an overview of the structure and application of these practices and their associated tools.TRANSCRIPT
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Product Managementin the era of
Disruptive Innovation
Krishnan & Nag at SP Jain, Aug ‘12
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The product manager is the product’s CEO
ProductManagementR&D
Sales (+ Marketing)Markets + Customers
Executives
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The product manager is the product’s CEO
ProductManagementR&D
Sales (+ Marketing)Markets + Customers
Executives
budgets staff
targets
strategy forecastscommitmentscompetitive intelligence
segmentation, messagespricing, roadmap, demos
market feedback
product
MRD, roadmap, priorities, personas
Source: Rich Mironov
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Once upon a time in Product Management land…
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Product Management (‘70s-’00s)
Develop conceptGet funding
Build product Alpha / beta test
Customer Shipment
Write business plan
Build the product Test / fix Ship / fix
Planning / collateral PR / plan launch Launch / Demand gen.
Initial sales rep Build sales team / selling
Build product and offering
Alpha testMarket test
Big-BangLaunch after
3-5 years
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Cautionary tale
Source: Steve Blank
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1987: Iridium founded
1990: Spun out
of Motorola
1997:Launch
1998:Bankrupt
$5.2b investment15 rockets
72 satellites
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1987: Iridium founded
1990: Spun out
of Motorola
1997:Launch
1998:Bankrupt
$5.2b investment15 rockets
72 satellites
Target price: $7/minTarget users: 42million
Viable price: $0.5/minActual users: 30,000
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Develop conceptGet funding
Build product Alpha / beta test
Customer Shipment
Build product and offering
Alpha testMarket test
Unbridled enthusiasm
Rude awakening
False sense of security
Resettingexpectations
Predictable disaster
“Big Up Front Design”
Big-BangLaunch after
3-5 years
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Disruptive change is becoming commonplace
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Dramatic change of fortunes
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Source: Innosight – “Creative destruction whips through Corporate America”
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Source: Innosight – “Creative destruction whips through Corporate America”
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Agony and Ecstasy
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Launched: 2007$22b / qtr
Founded: 1975$17b / qtr
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Reasons for increasing pace of disruptive change
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90-95% of new ventures fail to meet projections
The old ways of Product Management aren’t working
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Adaptive Product Management
Limited planning, more experimentation and exploration
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Develop conceptGet funding
Build product Alpha / beta test
Customer Shipment
Build product and offering
Alpha testMarket test
BUFD
Front-end planning & design
Back-end execution
Big-BangLaunch after
3-5 years
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Existing market New marketE
xist
ing
p
rod
uct
New
p
rod
uct
Highest success rate
Lowest success rate
When does BUFD work?
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BUFD is unlikely to work for…
Start-up companies
New products in established companies
Major new features/markets for established products
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Visionaries
Steve BlankCustomer Development
Martin FowlerAgile Methods
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2 stages of Customer Development
Search Scale
Source: Steve Blank
Focus on Experimentation
Focus on Execution
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Iterative model – with checkpoints
Customer
discovery
Customer
validation
Customer
creation
Business
expansion
Pivot / Course correct
Search Scale
Source: Steve Blank
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Search Principle # 1: Business Model Canvas
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Source: “Business Model Generation”, Osterwalder & Pigneur
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iTunes market place
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Search Principle #2: Minimum Viable Product
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Minimum
Viable
Too-basic products no one wants
Incumbentproducts
Minimum + ViableFertile area for new
products
Source: Start-up Chronicles
• Demonstrate value• Gather feedback
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If you’re building an Excel competitor, what’s the MVP?
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Minimum Viable ?
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Minimum Viable ?
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Minimum Viable Product for Google Docs
Value prop
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Learn
Ideas
Build
OfferingMeasure
Data
Minimise the total time through the
loop
Search Principle #3: Focus on exploration
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How it all fits together
Agile software development
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Predictive (BUFD) | Adaptive
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If da Vinci was an adaptive painter…
Source: A Series of Tubes
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