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Living in an Agile World:
                                   N   G’S         the Strategic Role of
                          RK ETI                    Product Management when
                      A                              Development goes Agile
                TI CM
            A
P   R AGM
                                                       Practical Rules
                                                        for Product Management
                                                         (Part III)


                                                               When Creative
                                                               Is the Wrong Tool!
                                                                 The Ideative Process:
                                                                  a Better Tool for Our
                                                                   Constrained World


                                                                          The Economics
                                                                           of Software
                                                                            as a Service
                                                                             vs. Software
                                                                              as a Product




                                                                  R       Y
                                                           R   SA
                                              N IVE
                                R AN
                           Y EA                                           ught
                                                                               you
                                                                      bro
                                                                hat
                                                               ed In
                                                      ete  am t
                                                 m th
                                             Fro
                                                       T    un
Become a
Value-Driven
Product Leader




Automate Your Tactical Tasks and Focus on the Strategic With Telelogic Focal Point
Being a Product Manager can be overwhelming, but it doesn’t have to be. By automating your tactical tasks, you
can do what brings the greatest value to your organization: understanding your customers, your markets and
creating a successful strategy to win market share.

The Telelogic Focal Point™ solution makes product management easy, helping you move beyond “efficiency”
thinking with powerful strategic tools that help meet your goals by:

    Capturing and analyzing market inputs
    Adding value by selecting features that focus on your market, customers and strategy
    Building roadmaps that update as your development status changes
    Comparing your current/proposed products against your competition
    Developing business cases based on value and revenue potential




Get on the path to rapidly improving the value of your products with
Focal Point, the world-leading solution for Product Managers.

Visit Telelogic at www.telelogic.com/pragmatic.
The Pragmatic Marketer ™
             8910 E. Raintree Drive
             Scottsdale, AZ 85260
          Pragmatic Marketing, Inc.
                                                         15 Years Later…
                         CEO                                        How a simple phrase came
                       Craig Stull
                                                                    to define a global company
                        President
                       Phil Myers
                 Editor-in-Chief                              “Your opinion, although interesting, is irrelevant.”
              Kristyn Benmoussa
                      Editor
                  Linda Sowers                                             In December 1993, in a small meeting room
               –––––––––––––––––                                           in Herndon, VA, I unveiled to the world the
                                                                           Framework for successful product management.
    Interested in contributing an article?
                                                                           Okay, so there were only 12 product management
Visit www.PragmaticMarketing.com/submit                                    students in the room but those early adopters
                                                                           had the right idea because they knew how
No part of this publication may be reproduced,
stored in any retrieval system, or transmitted, in                         critical it was, even back then, to understand
any form or by any means, electronic, mechanical           that the strategic role of product manager was not based on
photocopying, recording or otherwise, without the
prior written permission of the publisher.
                                                           opinions but market facts. Fifteen years and nearly 50,000
The Pragmatic Marketer™ is available free
                                                           students later, Pragmatic Marketing has become the standard
of charge to qualified subscribers. To subscribe,          for defining roles and responsibilities for product management
visit pragmaticmarketing.com/subscribe                     and marketing at more than 4,000 technology companies
To be removed from the mailing list, visit                 around the world.
pragmaticmarketing.com/unsubscribe
For advertising rates, call (480) 515-1411.
Other product and/or company names mentioned               Since then, we have added more seminars and onsite workshops,
in this journal may be trademarks or registered            created a full-service consulting team, launched this magazine
trademarks of their respective companies and
are the sole property of their respective owners.
                                                           (now in its 6th year), wrote the best-selling book Tuned In:
The Pragmatic Marketer, a Pragmatic Marketing              Uncover the Extraordinary Opportunities That Lead to Business
publication, shall not be liable regardless of the         Breakthroughs and created an online community for 45,000
cause, for any errors, inaccuracies, omissions, or
other defects in, or untimeliness or unauthenticity        visitors per month. Recognizing this growth, Inc. magazine
of, the information contained within this magazine.        named Pragmatic Marketing one of America’s fastest growing
Pragmatic Marketing makes no representations,              private companies three times in the last eight years.
warranties, or guarantees as to the results obtained
from the use of this information and shall not be
liable for any third-party claims or losses of any
kind, including lost profits, and punitive damages.
                                                           Looking to the future, we have a number of new and exciting
The Pragmatic Marketer is a trademark of
                                                           initiatives planned and look forward to you helping us celebrate
Pragmatic Marketing, Inc.                                  our next 15 years.
Printed in the U.S.A.
All rights reserved.

ISSN 1938-9752 (Print)
ISSN 1938-9760 (Online)

About Pragmatic Marketing®
Pragmatic Marketing provides training seminars,
onsite workshops, consulting services and an
online community for product managers, marketers
and business leaders at thousands of technology                                              Craig Stull
companies around the world.                                                                  CEO
50,000 product management and marketing                                                      Pragmatic Marketing
professionals have learned the Pragmatic Marketing
Framework, a common sense approach to finding
unresolved problems, creating breakthrough
experiences, and launching market resonators.
Over 90% of alumni rate the training as essential
or very useful to their careers.
Our Consulting Services provide technology
companies with implementation support and
custom services designed to enhance the training
received at Pragmatic Marketing’s seminars or
onsite workshops.
The online community at PragmaticMarketing.com
is the first-choice destination for technology product
management and marketing professionals. With
45,000 visitors per month, this dynamic resource
center contains hundreds of articles, a job board,
book reviews, instructional webinars, links
to social networking groups and much more.
Visit www.PragmaticMarketing.com to learn more.                                The Pragmatic Marketer   •   Volume 6, Issue 5, 2008   •   3
By Steve Johnson and Luke Hohmann

                                                               While software development teams have been moving toward
                                                               agile methods for years, many product managers are only now
                                                               becoming aware of it. An agile approach applies collaborative
                                                               and continuous improvement concepts to software development.
                                                               It emphasizes close collaboration between development teams
                                                               and customers; frequent delivery of deployable code (in sprints);
                                                               face-to-face communication with customers; tight, self-organizing
                                                               teams; managing backlogs of user stories to reduce requirements
                                                               churn; and identification of self-improvement opportunities.

                                                               There is no single, definitive “agile method.” Agile teams tune
                                                               practices and processes for themselves to create a method
                                                               that is unique to their environment. Broadly, agile methods
                                                               function as both an organizational philosophy and a set of
                                                               development methodologies.

                                                               When you adopt agile development methods, you encounter
                                                               new concepts, new artifacts, new planning methods, and new
                                                               roles and relationships. It seems that agile teams do everything
                                                               in a new way. And, as you attempt to integrate agile into your
                                                               existing systems, you’ll also attempt to map these new concepts
                                                               to your old, familiar concepts. Requirements are now stories;
                                                               iterations are now sprints.

                                                               And a product manager is now called a Product Owner… right?

                                                               Wrong!

                                                               Companies adopting agile methods know that product teams
                                                               need a voice representing the customer. Developers need
                                                               personas, market problems, and most of all, a prioritized
                                                               list of requirements. Agile methods advocate a role called
                                                               product owner to support the product team with customer
                                                               and market information. Since the closest equivalent to product
                                                               owner in most companies is the product manager, it seems
                                                               natural to equate the two.

                                                               But product owner and product manager are not the same.
                                                               In fact, a product owner’s responsibilities are just a small
                                                               subset of product management.

4   •   The Pragmatic Marketer   •   Volume 6, Issue 5, 2008
What is a product owner?                  1. The top determinant of a                    Every release must have at least
                                             product’s revenue success is                one feature (story, improvement)
The product owner is a new role,             whether it meets real customer              requested by each major
created and defined by the Scrum             needs. Regardless of what the               stakeholder group. Figuring
Alliance (www.scrumalliance.org).            development team builds, a product          out the features for a release
Product owners live full-time with           without interested customers is             is an organizational challenge,
development teams—elaborating                a failure. It’s the agile product           not a technical challenge. The
users’ stories, managing sprint-level        manager’s primary job to meet               market-driven product manager
backlogs, expanding specifications,          existing customers and potential            should determine what goes
and interpreting product vision.             prospects face-to-face and deeply           into the final product; a product
                                             understand what they want.                  owner cannot.
Most product companies already
have staff members with similar                                                       3. Real revenue is driven by
                                             Throughout the development
skills, such as a requirements                                                           pricing and packaging. Product
                                             process, the product manager
analyst or business analyst (titles                                                      managers typically own pricing;
                                             represents customers against
and job descriptions have shifted                                                        product owners rarely do. And
                                             short-term trade-offs. If there is
over time, but product companies                                                         unless you have a seasoned
                                             a product owner, he or she needs
have always needed to provide                                                            product manager driving software
                                             to channel the product manager
developers with detailed, feature-                                                       pricing and packaging, you’ be
                                             throughout the day, avoiding
level information and UI guidance;                                                       leaving revenue on the table.
                                             short-term thinking that can come
someone with intimate customer
                                             from living with Development             4. Creating successful benefits and
experience is always necessary

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The Pragmatic Marketer Magazine: Volume 6, Issue 5

  • 1. Living in an Agile World: N G’S the Strategic Role of RK ETI Product Management when A Development goes Agile TI CM A P R AGM Practical Rules for Product Management (Part III) When Creative Is the Wrong Tool! The Ideative Process: a Better Tool for Our Constrained World The Economics of Software as a Service vs. Software as a Product R Y R SA N IVE R AN Y EA ught you bro hat ed In ete am t m th Fro T un
  • 2. Become a Value-Driven Product Leader Automate Your Tactical Tasks and Focus on the Strategic With Telelogic Focal Point Being a Product Manager can be overwhelming, but it doesn’t have to be. By automating your tactical tasks, you can do what brings the greatest value to your organization: understanding your customers, your markets and creating a successful strategy to win market share. The Telelogic Focal Point™ solution makes product management easy, helping you move beyond “efficiency” thinking with powerful strategic tools that help meet your goals by: Capturing and analyzing market inputs Adding value by selecting features that focus on your market, customers and strategy Building roadmaps that update as your development status changes Comparing your current/proposed products against your competition Developing business cases based on value and revenue potential Get on the path to rapidly improving the value of your products with Focal Point, the world-leading solution for Product Managers. Visit Telelogic at www.telelogic.com/pragmatic.
  • 3. The Pragmatic Marketer ™ 8910 E. Raintree Drive Scottsdale, AZ 85260 Pragmatic Marketing, Inc. 15 Years Later… CEO How a simple phrase came Craig Stull to define a global company President Phil Myers Editor-in-Chief “Your opinion, although interesting, is irrelevant.” Kristyn Benmoussa Editor Linda Sowers In December 1993, in a small meeting room ––––––––––––––––– in Herndon, VA, I unveiled to the world the Framework for successful product management. Interested in contributing an article? Okay, so there were only 12 product management Visit www.PragmaticMarketing.com/submit students in the room but those early adopters had the right idea because they knew how No part of this publication may be reproduced, stored in any retrieval system, or transmitted, in critical it was, even back then, to understand any form or by any means, electronic, mechanical that the strategic role of product manager was not based on photocopying, recording or otherwise, without the prior written permission of the publisher. opinions but market facts. Fifteen years and nearly 50,000 The Pragmatic Marketer™ is available free students later, Pragmatic Marketing has become the standard of charge to qualified subscribers. To subscribe, for defining roles and responsibilities for product management visit pragmaticmarketing.com/subscribe and marketing at more than 4,000 technology companies To be removed from the mailing list, visit around the world. pragmaticmarketing.com/unsubscribe For advertising rates, call (480) 515-1411. Other product and/or company names mentioned Since then, we have added more seminars and onsite workshops, in this journal may be trademarks or registered created a full-service consulting team, launched this magazine trademarks of their respective companies and are the sole property of their respective owners. (now in its 6th year), wrote the best-selling book Tuned In: The Pragmatic Marketer, a Pragmatic Marketing Uncover the Extraordinary Opportunities That Lead to Business publication, shall not be liable regardless of the Breakthroughs and created an online community for 45,000 cause, for any errors, inaccuracies, omissions, or other defects in, or untimeliness or unauthenticity visitors per month. Recognizing this growth, Inc. magazine of, the information contained within this magazine. named Pragmatic Marketing one of America’s fastest growing Pragmatic Marketing makes no representations, private companies three times in the last eight years. warranties, or guarantees as to the results obtained from the use of this information and shall not be liable for any third-party claims or losses of any kind, including lost profits, and punitive damages. Looking to the future, we have a number of new and exciting The Pragmatic Marketer is a trademark of initiatives planned and look forward to you helping us celebrate Pragmatic Marketing, Inc. our next 15 years. Printed in the U.S.A. All rights reserved. ISSN 1938-9752 (Print) ISSN 1938-9760 (Online) About Pragmatic Marketing® Pragmatic Marketing provides training seminars, onsite workshops, consulting services and an online community for product managers, marketers and business leaders at thousands of technology Craig Stull companies around the world. CEO 50,000 product management and marketing Pragmatic Marketing professionals have learned the Pragmatic Marketing Framework, a common sense approach to finding unresolved problems, creating breakthrough experiences, and launching market resonators. Over 90% of alumni rate the training as essential or very useful to their careers. Our Consulting Services provide technology companies with implementation support and custom services designed to enhance the training received at Pragmatic Marketing’s seminars or onsite workshops. The online community at PragmaticMarketing.com is the first-choice destination for technology product management and marketing professionals. With 45,000 visitors per month, this dynamic resource center contains hundreds of articles, a job board, book reviews, instructional webinars, links to social networking groups and much more. Visit www.PragmaticMarketing.com to learn more. The Pragmatic Marketer • Volume 6, Issue 5, 2008 • 3
  • 4. By Steve Johnson and Luke Hohmann While software development teams have been moving toward agile methods for years, many product managers are only now becoming aware of it. An agile approach applies collaborative and continuous improvement concepts to software development. It emphasizes close collaboration between development teams and customers; frequent delivery of deployable code (in sprints); face-to-face communication with customers; tight, self-organizing teams; managing backlogs of user stories to reduce requirements churn; and identification of self-improvement opportunities. There is no single, definitive “agile method.” Agile teams tune practices and processes for themselves to create a method that is unique to their environment. Broadly, agile methods function as both an organizational philosophy and a set of development methodologies. When you adopt agile development methods, you encounter new concepts, new artifacts, new planning methods, and new roles and relationships. It seems that agile teams do everything in a new way. And, as you attempt to integrate agile into your existing systems, you’ll also attempt to map these new concepts to your old, familiar concepts. Requirements are now stories; iterations are now sprints. And a product manager is now called a Product Owner… right? Wrong! Companies adopting agile methods know that product teams need a voice representing the customer. Developers need personas, market problems, and most of all, a prioritized list of requirements. Agile methods advocate a role called product owner to support the product team with customer and market information. Since the closest equivalent to product owner in most companies is the product manager, it seems natural to equate the two. But product owner and product manager are not the same. In fact, a product owner’s responsibilities are just a small subset of product management. 4 • The Pragmatic Marketer • Volume 6, Issue 5, 2008
  • 5. What is a product owner? 1. The top determinant of a Every release must have at least product’s revenue success is one feature (story, improvement) The product owner is a new role, whether it meets real customer requested by each major created and defined by the Scrum needs. Regardless of what the stakeholder group. Figuring Alliance (www.scrumalliance.org). development team builds, a product out the features for a release Product owners live full-time with without interested customers is is an organizational challenge, development teams—elaborating a failure. It’s the agile product not a technical challenge. The users’ stories, managing sprint-level manager’s primary job to meet market-driven product manager backlogs, expanding specifications, existing customers and potential should determine what goes and interpreting product vision. prospects face-to-face and deeply into the final product; a product understand what they want. owner cannot. Most product companies already have staff members with similar 3. Real revenue is driven by Throughout the development skills, such as a requirements pricing and packaging. Product process, the product manager analyst or business analyst (titles managers typically own pricing; represents customers against and job descriptions have shifted product owners rarely do. And short-term trade-offs. If there is over time, but product companies unless you have a seasoned a product owner, he or she needs have always needed to provide product manager driving software to channel the product manager developers with detailed, feature- pricing and packaging, you’ be throughout the day, avoiding level information and UI guidance; leaving revenue on the table. short-term thinking that can come someone with intimate customer from living with Development 4. Creating successful benefits and experience is always necessary