Highlights

  • Introduction The Productization Imperative (Location 97)
  • every business needs both fortifiers, who focus on growing the existing business, and explorers, who focus on creating new revenue streams.” (Location 103)
  • This book will detail how to develop and launch successful products as opposed to giving advice about which products to create. (Location 120)
  • What “Product” Means for Business Services Firms (Location 139)
  • What does it mean for a services organization to productize? Let’s start by clearly defining a product. Product refers to a scalable,3 often tech-enabled, tool or program that can be packaged and sold. Just like a tube of toothpaste that we might buy at a store, a product has a name, a predefined set of features and benefits, and a set price. (Location 140)
  • your firm’s revenue growth will be limited by the speed at which you can add and train staff. (Location 145)
  • The Different Flavors of Productization (Location 153)
  • As we move from Customized Services in the lower left to Products as a Service in the upper right, the use of technology tends to increase (the X-axis) as do the benefits (the Y-axis). Benefits include: improved gross margins, better revenue visibility, and increased company valuation. (Location 157)
  • Customized Services in the form of human-resource intensive, knowledge-led services. (Location 164)
  • Productized Services, still requires additional people, but it should require fewer resources than Customized Services to both sell and to deliver. Productized services are standardized so that all customers receive the same experience at the same price. (Location 167)
  • Products. Here, features are standardized and packaged for an ‘off-the-shelf’ buying experience. (Location 173)
  • At the top of the innovation ladder is Products as a Service. (Location 176)
  • The service is the ongoing, up-to-date supply of information to the customer, and the product is the standardized information itself. (Location 179)
  • Three Ingredients for All Products (Location 216)
  • Intellectual property forms the basis for the product, technology helps it scale, and services help the customer unlock the value. (Location 221)
  • Scale: Scalable products help to grow revenue at the same rate without having to add costs at the same rate. (Location 233)
  • However, well-designed and delivered products can help grow revenue at two to three times the current rate (if not more) because of the direct and indirect costs associated with hiring, training and ensuring quality across more people. (Location 236)
  • gross profit margins ranging from 60 to 90 percent, versus an industry standard of 40 percent for customized professional services. (Location 239)
  • Improved revenue visibility: (Location 243)
  • One example of a subscription-based product includes a customized training company that developed a learning experience platform that is sold via subscription as a “learning as a service” product. (Location 248)
  • Higher and easier valuations: (Location 251)
  • Accelerating digitization and use of technology: (Location 256)
  • Increased competition and disruption: (Location 261)
  • Consulting, for example, is still primarily based on hourly billing rather than value-based pricing. (Location 276)
  • business services firms with the following attributes are incredibly vulnerable to disruption, (Location 280)
  • Deriving their value from information asymmetry (i.e., knowing things that clients don’t—an edge that is harder to maintain in the Internet age and with the rise of expert networks like Coleman Research). (Location 283)
  • Changes in B2B Buying Behavior: (Location 294)
  • Retention of staff: (Location 302)
  • The traditional professional services model makes it hard to retain the best talent (the sell/deliver/sell/deliver model can be exhausting) and presents challenges in terms of planning for growth. (Location 303)
  • Action Steps (Location 314)
  • Plot your current products and services along the Innovation Ladder. Next, plot the new product and service ideas that you are considering. Which ideas have the most compelling benefits? How can you use technology to improve the benefits? (Location 315)
  • Chapter One Seven Deadly Productization Mistakes (Location 354)
  • Mistake No. 1 Focusing on Processes Before People (Location 369)
  • Rather than creating tailored solutions for each client (customized services), we move to the phase of creating products that meet 80 percent of the needs of a sizable market segment (scalable products). (Location 375)
  • Creating a Product-Friendly Culture includes: (Location 380)
  • leadership team first articulating a clear vision for the product strategy, such (Location 381)
  • an organizational structure that facilitates collaboration and agility must be developed. (Location 391)
  • Mistake No. 2 Starting Too Big or Too Perfectly (Location 392)
  • It can take many months, if not years, before any real market feedback on their ideas is gleaned. (Location 396)
  • Successful product innovators adopt a rapid, experimental approach to product development. (Location 397)
  • An MVP is defined as “the smallest experiment that either proves or disproves [our] assumptions about a business idea.”24 Ries calls it a “build, measure, learn loop.” “Build” a product we think customers want “Measure” if and how they use it “Learn” from what customers do and say about the product “Loop” back to the beginning to build again (Location 402)
  • “shipping is better than perfection.” (Location 413)
  • At Khan, the team prioritizes getting their online courses launched on their site over releasing the most perfect version of the courses. (Location 414)
  • “If you are not embarrassed by the first version of your product, you’ve launched too late.” (Location 417)
  • reframing our thinking to include the notion that we are building something good in order to (eventually) make it great. (Location 420)
  • Mistake No. 3 Favoring Existing Business Over New Products (Location 421)
  • More specifically, an aligned leadership team debates well, proactively supports each other, is laser focused on what is most important, and is committed to learning and improving.” (Location 424)
  • New product development done “off the side of the desk” of existing staff is rarely successful because client demands (and immediate revenue) are always a higher priority. (Location 436)
  • Successful organizations develop innovation-friendly metrics, such as: The number of new, viable product ideas generated per year The ability to launch new, road mapped products on schedule The number of new customers gained since product launch Overall product revenue and profitability (Location 457)
  • Mistake No. 4 Not Solving an Urgent and Expensive Problem (Location 463)
  • can happen when a company fixates on leveraging existing intellectual property they’ve already developed, forgetting to ask if customers really need or want it. (Location 466)
  • Sometimes a product team thinks they’ve identified an urgent and expensive customer problem, but it’s really only a frequently cited problem. (Location 468)
  • Sometimes an organization identifies an urgent and expensive problem, but it’s in relation to a market segment that is too small, too price-sensitive, and/or is not a good fit with their core services. (Location 475)
  • The Total Addressable Market (TAM)26 for this product was too small. (Location 480)
  • Mistake No. 5 Designing and Developing in a Vacuum (Location 486)
  • Mistake No. 6 Starving Products Due to Fear of Cannibalization of Higher-Priced Services (Location 505)
  • if we don’t risk disrupting our own services and products, someone else will. (Location 509)
  • For example, one market research firm realized that 60 percent of the custom analysis they were doing for clients could be automated because it consisted of simple data capture and reporting. They explored the possibility of creating a self-serve reporting dashboard for clients to use to access this data, rather than having staff generate reports. (Location 511)
  • Businesses willing to cannibalize their existing revenue streams are more likely to survive. (Location 516)
  • Mapping how customers may go from products to services and back to products is an important part of this work. (Location 524)
  • Mistake No. 7 Stopping at the MVP (Location 525)
  • MVP “learning loops” are only helpful if we commit to continuing to develop and evolve our product after we’ve launched it. (Location 527)
  • Fortunately, there is a blueprint for how to avoid each of these missteps. (Location 543)
  • Think Big, Start Small Follow Urgent, Expensive Customer Problems Be Fearless (Location 545)
  • Part One Think Big, Start Small (Location 574)
  • Chapter Two Mistake: Starting Too Big or Too Perfectly Solution: The Productize Pathway (Location 578)
  • We run small experiment after small experiment to gradually help us climb the ladder to define and launch our larger product vision. (Location 591)
  • Creating a Product-Friendly Culture. (Location 600)
  • Align (Location 602)
  • Define the Problem. (Location 606)
  • This is part stellar customer listening, part data analysis, and part strong associative thinking to spot patterns that no one else can see. This includes: Understanding customers’ urgent and expensive problems Knowing how these problems present by different segments or personas Understanding the competitive landscape (Location 607)
  • Co-Design and Develop (Location 612)
  • This includes: Developing and cataloging new ideas Developing preliminary business models and modeling the revenue and profit potential (Location 614)
  • Launch Boldly. (Location 622)
  • Here, we think about how new products will attract new customers and eventually lead them to consume existing, yet complementary, services. (Location 622)
  • Manage & Iterate. (Location 628)
  • Before diving in, I highly recommend determining your organization’s product innovation maturity by taking a quick assessment at: www.vecteris.com/diagnostic (Location 638)
  • Chapter Three (Location 671)
  • Mistake: Focusing on Processes Before People SOLUTION: Create a Product-Friendly Culture (Location 672)
  • I can’t emphasize this enough: it is hard to innovate and operate at the same time. (Location 679)
  • Most teams are already spending forty plus hours each week just doing their jobs, and the reality is that existing client work will always take priority. (Location 680)
  • A Strong, Well-articulated Vision and Behavior Change (Location 695)
  • Jennifer started by anchoring the process around the ambitious vision of impacting leadership effectiveness and equity in 500 organizations by 2022; (Location 709)
  • Jennifer made a list of twenty desirable behaviors for everyone in the organization to work toward adopting; each behavior reflected Linkage’s new, product-minded personality. The behaviors include qualities such as, “I ask questions and I bring ideas,” “I adopt new technology,” and “I seek out multiple perspectives.” (Location 715)
  • Jennifer’s vision also focused on increasing the number of clients impacted, as opposed to just thinking about revenue. (Location 729)
  • Asking questions and bringing ideas Practicing blameless problem solving Staying open to change (Location 734)
  • Hiring or Developing the Right Skills (Location 737)
  • “Product people have technical skills that we did not have in-house, but they also think differently. To change our organizational mindset away from customized services to scalable products, we needed outside help,” (Location 742)
  • What do we mean by “product” skills? These competencies include being able to: Identify breakthrough product opportunities based on data and pattern spotting (strategy/vision) Translate those breakthroughs into a great user experience (design) and financial plans (business) Guide product functionality (development) Define how the product shows up in the market and gains successful sales (marketing and commercial acumen) Analyze product usage data (analytics) (Location 745)
  • Ensure that customers, prospects, and staff are aware of, trained on, and engaged with the changing product (management) (Location 752)
  • Cleverly labeled as “Chaos Pilots,” these are people who can “create structure within chaos and take action.”32 (Location 755)
  • Leaders of organizations often attempt to turn an existing SME or great relationship builder into a Product Manager or the Head of Product, rather than bringing in an external hire who has product management experience: this is a mistake. (Location 757)
  • A Product Leader needs user experience, business model strategies, and analytics skills. (Location 763)
  • It’s also a mistake to put someone in a Product Leader role who has strong technical capabilities, but who is weaker in the areas of interpersonal skills and commercial acumen. A person with this profile often struggles to support sales, (Location 764)
  • Diversity of Experience and Thought (Location 772)
  • Leaders create psychological safety by welcoming diverse ideas and trying out new suggestions. (Location 784)
  • An Organizational Structure that Facilitates Collaboration and Agility (Location 787)
  • Company-Wide Technical Acumen (Location 805)
  • A Test-and-Learn Mindset (Location 815)
  • key point to remember is that an MVP shouldn’t be released without a vision that details the future plans of the product. (Location 824)
  • Clear and detailed testing plans for the first few releases are also necessary. (Location 827)
  • Additionally, a well-defined process for capturing data and for revisiting hypotheses will ensure a “learn and adapt as we go” approach. (Location 829)
  • It’s important that testing focuses on how customer needs can be better served and not just on how to improve the features of a product. This means that experiments should focus on things such as why the customer uses the product, how they use it, what they would do differently, etc., as well as questions about the ease of use and overall functionality. (Location 830)
  • “As we moved from pure service to more product-led tech-enabled services, (Location 850)
  • How will a scalable product and solutions strategy increase your organization’s impact on customers? (Location 854)
  • Chapter Four (Location 869)
  • Mistake: Favoring Core Businesses, Rather Than New Products Solution: Align to Support Innovation (Location 870)
  • leaving behind many superficially attractive opportunities was the key to victory on specific battlegrounds. (Location 878)
  • Each leadership team member was asked to independently produce a write-up that answered four questions: What type of business do we want to be? Why do we want to do this? What does success look like? What’s the one thing we want to be known for by our customers and investors? (Location 881)
  • In this chapter, I’ll explore other strategies for aligning productization strategy within your organization. (Location 889)
  • Aligning Shareholders and the Executive Team (Location 899)
  • You can’t sit in two chairs and pretend you are a service company with them, but be building products.” (Location 912)
  • Determining How Much to Invest (Location 919)
  • Many services businesses first fund products that they can sell to a single client as part of an engagement. While that is a tempting strategy, those products tend to fail because the primary focus is the needs of one client as opposed to the needs of the larger market. (Location 919)
  • To increase the chance of success in productizing services, product development typically needs to be funded out of profit. (Location 921)
  • Eventually, the product exploration budget should grow to include new product development, which typically ranges from 10 to 30 percent of revenue, depending on the types of products built. (Location 931)
  • no relationship between the size of the innovation budget and innovation success.38 What matters is how effectively the budget is managed. (Location 935)
  • Deciding How to Allocate Investments (Location 937)
  • Vision: What is the purpose behind the solution? What positive change should it bring about for the users and buyers? Target Group: Who are the target buyers and users? Customer Needs: What urgent and expensive customer problem does the solution solve? Solution: What are the primary features of the solution? What makes it stand out from alternative offerings? (Location 941)
  • Business Goals: What are the business goals (e.g., revenue, new customers, improved profitability, etc.)? (Location 947)
  • The leadership team will need to agree on what criteria to use to score and prioritize ideas. (Location 950)
  • Metrics such as the revenue potential (near-term and longer-term), the payback period, and the ability to attract new customers might be some factors considered. (Location 951)
  • For organizations that are just getting started, a straightforward framework for evaluating ideas is recommended. Many organizations look at Revenue, Confidence, and Effort which is a variation of the RICE method39 (Location 954)
  • Revenue: an estimate of sales with assumptions around price and volume. Confidence level: how sure are you that the idea will yield the estimated revenue? (High = 100 percent, Medium = 75 percent, Low = 50 percent) Effort: how much time, money, and other resources will it take to create and sell the product? A simplified way of looking at this is how many “person-months” will be involved? (Use whole numbers and a minimum of half a month.) (Location 958)
  • To get the score, multiply Revenue by Confidence and then divide that number by the Effort. Once every idea is scored, results can be tabulated and prioritized: Product Revenue Confidence Effort Score Idea 1 12,000 80 12 80,000 Idea 2 600 100 3 20,000 Idea 3 5,000 80 6 66,667 (Location 963)
  • Ideas with low business value and high complexity are deprioritized. Ideas with high value and low complexity are immediately pursued, as are longer-term payoff ideas with high value, but also higher complexity. (Location 994)
  • three innovation pipelines: Endemic, Independent, and Leveraged. (Location 1000)
  • Endemic products can be folded into work with existing clients. (Location 1000)
  • Independent products are adjacent to existing services and are run as separate brands (Location 1000)
  • Leveraged products are completely outside the core business, but still leverage the skills of existing employees (Location 1001)
  • Establishing a regular cadence of reviewing the progress of different ideas and reallocating funds based on new information is recommended. (Location 1009)
  • At this stage, it’s also common to choose an axis of growth. In other words, which market segmentation scheme best supports a scalable product? Is it anchored by geography? By industry? By function? Whatever segmentation scheme we select, the TAM of each market segment will need to be large enough to support the development and maintenance of a scalable product. (Location 1012)
  • Freeing Up Resources (Location 1024)
  • Another often overlooked way to free up resources for new product investment is to reduce the amount of customization in existing work. (Location 1027)
  • Customization is often promised by well-meaning sales or account management teams that don’t fully understand the value of a more scalable product strategy. (Location 1031)
  • Knowing that they could not flip a switch and completely stop custom work for clients, they created a way for the sales and account management team to request an exception on behalf of a client. This came in the form of a “customization ticket” that was first reviewed by the product team and ultimately decided upon by the Head of Sales and the CEO (if necessary). When completing this customized work request ticket, the submitter had to outline a simple business case: (Location 1039)
  • The big help, especially for the sales team engagement, was that it wasn’t the product development team saying “no”—it was the leadership team, including the Head of Sales, saying “no.” (Location 1053)
  • He explains that one of the hardest things to do in moving to scalable products is figuring out how to “disentangle the claws of time and materials billing.” (Location 1061)
  • Salespeople received a 3 percent commission on consulting engagements and 6 percent on subscription product sales. (Location 1069)
  • Part Two Follow Urgent, Expensive Problems (Location 1096)
  • Chapter Five Mistake: Developing Products That Don’t Solve an Urgent & Expensive Problem Solution: Define the Right Problem (Location 1101)
  • The best products start with a clear understanding of the market. This includes: Understanding our customers’ urgent and expensive problems Knowing how these problems present by different segments or personas Understanding the competitive landscape (Location 1107)
  • Too many companies waste time developing a new product that no customer wants or needs. (Location 1112)
  • All too often, a product is developed to address a common problem, but not an urgent and expensive customer problem. (Location 1122)
  • However, finding a “job-to-be-done” is not enough. I encourage clients to find an urgent and expensive job-to-be-done. (Location 1126)
  • Organizations also fail when they develop a product that addresses a symptom of a problem, not a root cause. (Location 1131)
  • Another mistake is confusing the current solution with the problem. (Location 1136)
  • A potential customer needs a hole in their wall to hang a painting. The current solution to that problem is a drill. We might be tempted to create a better drill, but if we take a step back to reconsider the problem (a hole is needed in a wall) we could design an entirely new way to create better holes in walls. As Levitt puts it, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” (Location 1137)
  • The customer issue was mobility, not slow horses. Car companies are facing a similar market disruption to that felt by the horse and buggy companies. The urgent and expensive problem that cars solve is getting from point A to point B. Enter Uber and Lyft, two companies that innovatively solve that problem while leaving car manufacturers out of the loop. (Location 1142)
  • There are things we can do to avoid solving the wrong problem. Adopting a simple, hypothesis-based research approach to understanding both customer needs and how competitors are already addressing those needs is recommended. Step One: Develop hypotheses to test Step Two: Understand the competitive landscape Step Three: Test hypotheses using tools such as: Customer and prospect interviews Surveys Customer advisory boards Online data Existing product data (Location 1148)
  • Step One: Develop Hypotheses to Test (Location 1156)
  • Start by outlining: Hypotheses about customers’ urgent and expensive problems Types of customer segments experiencing these problems How customers are currently solving those problems (Location 1157)
  • What is the main problem? What is the root of the problem? Are customers satisfied with current solutions? Which customer segments or personas have this problem? How much value do customers receive in solving that problem? Can our product idea solve that problem? (Location 1162)
  • A testable hypothesis should state the problem and what we expect the solution to achieve. For example: I believe [target market] will [do this action/use this solution] for [this reason]. (Location 1167)
  • strategy. If a segment is too small to yield a strong return with a product developed specifically for them, it’s worth exploring the idea of serving that smaller segment with a more generic product and different marketing messaging. For example, it may not make economic sense to create an industry-specific version of a product designed for corporate finance departments, but industry-specific marketing messaging for the product could be developed. (Location 1182)
  • Step Two: Understanding the Competitive Landscape (Location 1197)
  • “The question is not who our competition is but what it is. And the answer is this: Our competition is any and every obstacle our customers encounter along their journeys to solving the human, high level problems our company exists to solve.”43 (Location 1200)
  • Here are some key questions to answer: Are our competitors efficiently solving our customers’ most urgent and expensive problems? Where is the white space to solve customer problems not currently being addressed by our competitors, or by do-it-yourself alternatives? (Location 1220)
  • What is each competitor’s value proposition and positioning? What products or services do they sell? Features? Benefits? What is each competitor’s profile (number of employees, revenue, public/private, etc.)? What is each competitor’s market share? Who is each competitor’s target market/audience/user? How do they market their products or services? What are their strengths and weaknesses? What potential threats do our competitors pose? How do they plan to grow in the future? How do they package and price their products? What potential opportunities do they make available (where is the white space)? (Location 1224)
  • Refresh your competitor analysis quarterly, and consider tracking metrics that speak to: (Location 1236)
  • Company health, i.e., changes in company size (revenue and employees), changes in primary investors, new patents, etc. Key product performance metrics from the customer perspective (price, quality, delivery, ease of use) New product launches Marketing strategies, i.e., content channels and content quality (Location 1237)
  • Step Three: Test Customer Problem Hypotheses (Location 1248)
  • My favorite approaches for B2B products are: Customer and prospect interviews Customer advisory boards Surveys Online data analysis Existing product usage data analysis (Location 1250)
  • Although interviews can be time-consuming, they yield the deepest insights. And if you do them well, you don’t need to do that many. (Location 1269)
  • lean on segments and personas in order to interview a mix of people. (Location 1272)
  • consider if there will be differences in needs between the end user and buyers. (Location 1275)
  • Interview Questions (Location 1283)
  • You are looking to learn: What pain does this customer have that we can alleviate? What makes the problem urgent? Expensive? What is the root cause of the problem? What kinds of solutions are customers using to alleviate or get rid of the pain? How well are their solutions working? (Location 1286)
  • Where are you now and where would you like to be in the future? What’s challenging about meeting your goals? What would you sacrifice in order to solve a problem? How does X problem affect you? How often do you experience problem X? Can you tell me about the last time you experienced the problem? When did you last look for a solution to this problem? (Location 1294)
  • When we have very little time for research, a survey can do the job of customer interviews. (Location 1333)
  • If the responses to a particular question won’t have any immediate actionability, the question likely isn’t a must have. (Location 1352)
  • How do most clients implement the ideas or maintain the improvements? (Location 1393)
  • Action Steps List the problems that you think your target market is trying to solve. Note why you think each is a problem. Did a customer mention it? Did you read it somewhere? Is a competitor doing something related to it? Note who you could ask to verify your list. Try to select a mix of current customers, prospects, and lapsed customers, as well as industry experts. Go talk to them. (Location 1396)
  • Chapter Six Mistake: Designing & Developing in a Vacuum Solution: Co-Design and Develop (Location 1408)
  • This phase includes: Step 1: Cataloging existing assets Step 2: Developing new product ideas Step 3: Quickly testing product concepts with customers and prospects Step 4: Developing preliminary business models Step 5: Translating market requirements into product requirements that designers and developers can use to develop an MVP Step 6: Working with designers to create and test prototypes Step 7: Working with developers to build a functioning front-end and back-end Step 8: Continuously soliciting user feedback (Location 1416)
  • Step 1: Cataloging existing assets (Location 1425)
  • Where is our unique intellectual property? (Location 1428)
  • What data have we collected as part of our existing services? What processes have we documented as part of our existing services? Where can we codify our approach? (Location 1429)
  • emphasize the critical value a unique framework has in creating new products. (Location 1436)
  • Indeed, for a new product to win out against consulting revenue, it has to be compelling enough that clients prefer sustained access to a product in preference to a one-time consulting solution. (Location 1436)
  • To summarize, a good revenue culture framework: Helps users assess their current state (e.g., revenue weakness in the RevJen example, or ads that are missing the mark, as in the Collage Group example.) Articulates the ideal end state (e.g., strong revenue foundation in the case of RevJen, or a strong connection with a diverse audience for Collage Group clients.) Provides a roadmap for how users can get from the current state to the ideal end state. (Location 1453)
  • Step 2: Developing new product ideas (Location 1459)
  • looking for potential opportunities to automate, looking for service adjacencies, and gathering inspiration from other solutions. (Location 1462)
  • Look for Opportunities to Automate—find solutions by looking at existing processes (Location 1463)
  • what kind of technology could make delivery or use of your services easier? (Location 1467)
  • Look for Service Adjacencies—find solutions by looking for products that enhance services (Location 1474)
  • What do our customers need in order to consume more of our services? What are customers consuming along with our services? How do our customers manage improvements or maintenance? (Location 1483)
  • Gather Inspiration from Other Solutions (Location 1489)
  • S – Substitute (What can I substitute to make this product better?) C – Combine (What ideas, features, processes, people, products, or components can I combine?) A – Adapt (Which ideas could I adapt, copy, or borrow from other people’s products?) M – Modify (What can I tone down or delete?) P – Put to another use (What else can it be used for?) E – Eliminate (What would happen if I removed a component or part of it?) R – Reverse (What would I do if part of the problem, product, or process worked in reverse?) (Location 1519)
  • Step 3: Quickly testing concepts with customers and prospects (Location 1528)
  • Trying to assess how much a buyer is willing to pay can be difficult. Cindy Alvarez, author of Lean Customer Development, offers this advice: “Whatever amount people say they will pay for a product that solves their problem is wrong, so don’t ask. Instead, ask what they pay for something they already use that provides a similar amount of value or use with the same frequency.” (Location 1544)
  • Co-Creation Charter Advisory Board Model 1: Co-Fund the Development (Location 1578)
  • In this model, customers agree to help direct and fund product development in exchange for a beta customer license for the first year and favorable pricing thereafter. (Location 1579)
  • Co-Creation Charter Advisory Board Model 2: Advise, Then Buy (Location 1590)
  • customers and prospects in this model are invited to join a select advisory group, to advise on product design with the opportunity to purchase a beta license (or receive a free beta license) and then purchase post beta. (Location 1591)
  • Charter Customer Advisory Board Toolkit (Location 1628)
  • In particular, three types of pre-development MVPs are recommended: Sell-then-build, Wizard of Oz, and Concierge Testing. (Location 1636)
  • Wizard of Oz Testing (Location 1654)
  • Wizard of Oz prototyping is similar in that it gives the impression that a product idea is fully-functioning and automated when in actuality, it’s under development. There is work being done in the background, but customers don’t need to know that it’s happening. (Location 1657)
  • it’s a manual simulation of what a real product could look like and do. (Location 1659)
  • The Concierge Test (Location 1668)
  • The Concierge Test is similar to Wizard of Oz prototyping in that the work is still done manually, but in this case, customers know it’s happening. Concierge testing lets us try out our product idea by first providing it to a small group in beta form. (Location 1668)
  • Step 4: Developing preliminary business models and modeling revenue and profit potential to make a Go/No-Go decision (Location 1681)
  • Buy via an acquisition that requires the most up-front investment, but also reduces development risk (and if already in-market, the risk of not having product-market fit.) (Location 1694)
  • Partner with a co-creator for development, as Jim Price at Empower did when he partnered with ad tech startup Martin to build the ClearTrade programmatic media platform. (Location 1696)
  • a revenue share agreement is formed which lowers the lifetime value of the investment, but it also reduces the amount of up-front capital required and lowers the risk of mismanagement if we do not have the capabilities up front. (Location 1697)
  • Step 5: Translating market requirements into stories and product requirements (Location 1722)
  • You’ll also need to outline the desired product features, the customer problem each feature solves, and the priority for the feature (i.e., include in the first iteration, next iteration, longer-term iteration). Note that the list of features is a flexible list that will evolve over time. (Location 1731)
  • Product Strategy Template for Developers (Location 1734)
  • Step 6: Working with developers to build a functioning front-end and back-end (Location 1736)
  • Can I see what you’re doing on my project on a daily or weekly basis? (Location 1744)
  • Can I adjust my feature set and specifications as we go? (Location 1745)
  • Invite developers to co-create the design (not just execute it) by letting them know what customer problem the potential new feature is supposed to solve and asking if they have a better feature idea for that problem. (Location 1759)
  • Step 7: Continuously soliciting user feedback (Location 1766)
  • Part Three Be Fearless (Location 1824)
  • The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; (Location 1826)
  • Chapter Seven Mistake: Fear of Cannibalization Hinders Sales and Marketing Solution: Launch Boldly (Location 1832)
  • There are five parts to Launching Boldly: Address our biggest fear: cannibalization Develop pricing strategies and packages Create messaging to articulate the value proposition to target different segments Create a multi-channel marketing plan Develop a sales strategy and win the hearts and minds of the sales team (Location 1840)
  • Customers: Successful products all start with clear customer needs and target customer segments. (Location 1854)
  • start by clearly defining the customers using your current services or products. (Location 1856)
  • Which customers will be interested in this new product? What are the characteristics or personas of each target customer segment? What problems will this new product solve for each segment? (Location 1861)
  • one way to avoid cannibalization is to focus on developing complementary innovations around our current services. (Location 1874)
  • Christensen: As in Clay Christensen and the pattern of disruption described in his classic book The Innovator’s Dilemma. (Location 1881)
  • “Disruptive Innovation describes a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.” (Location 1884)
  • Developing Pricing Strategies and Packages to Target Different Segments (Location 1903)
  • I encourage clients to use a multi-tiered pricing strategy such as Good, Better, Best, or Bronze, Silver, Gold (or some variation of those levels). (Location 1905)
  • Messaging that Articulates the Value Proposition (Location 1941)
  • The most effective messaging focuses on the product of the product’s product. (Location 1941)
  • The most effective ad campaigns market an item that is two or three steps removed from the actual product. (Location 1942)
  • Imagine that you want to sell perfume or cologne . . . The product is a fragrant, yellow liquid, but why does anyone want a fragrant, yellow liquid? People enjoy smelling nice, that’s why. So, the end goal of the product (or the product’s product) is secondary to the perfume itself. But why does someone want to smell nice? The answer is because they want to feel attractive in the eyes of others, making that state of being the product of the product’s product. (Location 1943)
  • Once you’ve uncovered the essence of a product, messaging needs to be developed to market it. That messaging should include: A lead message for the product that embodies its essence. In other words, describe what it does and the benefit(s) of it (e.g., “we help you innovate more effectively to scale services and generate recurring, high-margin revenue”). Secondary messages for each persona that speak to their unique needs (e.g., “for large teams, we help you develop a common innovation process and playbook”). Urgency drivers for purchasing the product. Why should customers buy this now versus waiting a year? (e.g., “Most consulting firms are facing significant disruption from digital-first competitors who have better data and are lower cost.”) Differentiators for the product. What makes our product more effective than existing solutions? (e.g., “Unlike other solutions providers, we have deep expertise in helping professional services firms innovate to create more scalable, tech-enabled products and services.”) (Location 1951)
  • In his book Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, Geoffrey Moore (Location 1961)
  • He suggests outlining an elevator pitch for a product idea: For (target customers) Who are dissatisfied with (the current market alternative) Our product is a (new product category) That provides (key problem-solving capability and benefits—this is where we mention the product’s product’s product) Unlike . . . (insert product alternative), our product . . . (insert key product features). (Location 1962)
  • “When you want to motivate, persuade, or be remembered, start with a story of human struggle and eventual triumph. It will capture people’s hearts—by first attracting their brains.” (Location 1974)
  • Positioning Statement (aka “Elevator Pitch”) Template (Location 1976)
  • Creating a Multi-Channel Marketing Plan Once you have your messaging, you need to share that message wherever your customers are spending time—for example, business press, email, conferences, LinkedIn, search engines, etc. (Location 1979)
  • Multi-Channel Marketing Campaign Planning Template (Location 1993)
  • Developing a Sales Strategy and Winning the Hearts and Minds of the Sales Team (Location 1996)
  • This is a challenging situation because the divide between selling a custom solution and selling a scalable product is a large one. (Location 1999)
  • the skills for selling consulting services do not automatically transfer into skills for selling standardized products.” (Location 2004)
  • The economics of a product sale are different (typically lower price point, but higher margin) (Location 2005)
  • First and foremost, make sure the salesforce knows what they are selling and why it is valuable to customers. (Location 2011)
  • The main points to keep in mind: Clearly communicate the product roadmap to the sales team so they know which new features are coming, and when. (Location 2017)
  • When developing marketing collateral, it’s common to think about the client and forget that marketing collateral also gives the sales team the confidence that investing in all levels of the product launch brings. (Location 2024)
  • give your salespeople an arsenal of tools to make their job easy. This includes things like a thirty-second elevator pitch, a sales deck, an FAQ document, a product demo (video or live with a script), objection handling talking points, an overview of how the product is different from what competitors offer, and anything else that someone learning about the new product needs to know, or that you want them to know. (Location 2027)
  • Last but not least, align sales incentives to encourage selling of the new product. (Location 2033)
  • Go-to-Market Checklist and Templates (Location 2047)
  • Chapter Eight Mistake: Stopping at the MVP Solution: Manage and Iterate (Location 2066)
  • four areas to help manage products: (Location 2071)
  • Developing a customer onboarding, customer success, and measurement strategy Monitoring and understanding the root causes of product performance Regular product performance reviews and roadmap updates Regular discussion on how the overall portfolio of products is performing (Location 2071)
    1. Did we make something useful? 2) What are the best and worst parts of our product? 3) What shall we improve next? (Location 2076)
  • A good onboarding and customer success process will achieve the following: Identify the key value drivers/product features that will ensure a great customer experience (Location 2081)
  • Develop and illustrate a clear implementation and use process Deliver early value (Location 2083)
  • Customer onboarding typically includes three phases: Orientation and product training Ongoing product usage monitoring and usage stimulation Appropriate touchpoints to renew or upsell the product (Location 2090)
  • Buyer kick-off in the first week to understand goals, organizational structure, and to set expectations and gain approval for the customer success plan which will support implementation and engagement. User kick-off and training in the first month with direct support, guides, training videos, etc. Quarterly check-in with the buyer. Check-ins include discussing product updates, asking for recommendations on activity and engagement, recruiting new users, gathering recommendations for upselling, and building the case for renewal. Consider monthly check-ins for customers who fall below target usage levels. Engagement with users as needed, using marketing support, such as: Immediate access to a demo video and welcome email Optional welcome video call within the first two weeks Monthly email check-in (Location 2097)
  • Since product use is a leading indicator that a customer will continue to buy and/or promote the product, defining the ideal level of usage serves as an early indicator of customer success. (Location 2108)
  • many companies find it useful to home in on “One Metric that Matters” (OMTM). The OMTM concept comes from Ben Yoskovitz’s book, Lean Analytics, and it’s the idea that even when tracking multiple metrics, there’s one metric that we care about above all else. For (Location 2110)
  • A classic example of an OMTM is Facebook’s “7 friends in 10 days” metric. (Location 2113)
  • Understanding the Drivers Behind Product Performance (Location 2115)
  • ideas helps to avoid cognitive biases such as recency bias (e.g., “I put an idea on a roadmap because the last customer I talked to mentioned this”). (Location 2154)
  • Enhancements that score high can be placed on the roadmap, but enhancements that score low can go into the product backlog. (Location 2156)
  • building two versions of the roadmap. One version is internal and lists the new enhancements planned for each quarter, but also has product goals for each quarter (Location 2159)
  • The other version will be external-facing so that it can be shared with customers. The external version will be less detailed and have vague time horizons such as Now—Next—Later (NNL). (Location 2161)
  • Product SWOT Analysis Instructions Product Feature Scoring Template Product Roadmap Templates (Location 2168)
  • Hypothesize the “One Metric that Matters” for a new product or service that you have recently launched or are considering. (Location 2200)
  • What’s the one signal that reveals that you are headed in the right direction? (Location 2201)
  • At the very least, just keep in mind the three product innovation principles: Think Big, Start Small Follow Urgent, Expensive Customer Problems Be Fearless (Location 2215)