Product management in an era of disruptive innovation
[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.
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Product management in an era of disruptive innovation
- 1. Product Management in the era of Disruptive Innovation Krishnan & Nag at SP Jain, Aug „12
- 2. The product manager is the product‟s CEO Executives Product Sales (+ Marketing) R&D Management Markets + Customers
- 3. The product manager is the product‟s CEO Executives budgets strategy staff forecasts targets commitments competitive intelligence MRD, roadmap, market feedback priorities, personas Product Sales (+ Marketing) R&D Management Markets + Customers product segmentation, messages pricing, roadmap, demos Source: Rich Mironov
- 4. Once upon a time in Product Management land…
- 5. Product Management („70s-‟00s) Build product Big-Bang Develop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 years 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
- 6. Cautionary tale Source: Steve Blank
- 7. 1998: Bankrupt 1987: 1990: Spun Iridium out of founded Motorola 1997: Launch $5.2b investment 15 rockets 72 satellites
- 8. Viable price: $0.5/min Actual users: 30,000 1998: Target price: $7/min Bankrupt Target users: 42million 1987: 1990: Spun Iridium out of founded Motorola 1997: Launch $5.2b investment 15 rockets 72 satellites
- 9. “Big Up Front Design” Build product Big-Bang Develop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 years Unbridled False sense of Rude Resetting Predictable enthusiasm security awakening expectations disaster
- 10. Disruptive change is becoming commonplace
- 12. Dramatic change of fortunes
- 13. Source: Innosight – “Creative destruction whips through Corporate America”
- 14. Source: Innosight – “Creative destruction whips through Corporate America”
- 16. Launched: 2007 Founded: 1975 $22b / qtr $17b / qtr
- 17. Reasons for increasing pace of disruptive change
- 18. The old ways of Product Management aren‟t working 90-95% of new ventures fail to meet projections
- 19. Adaptive Product Management Limited planning, more experimentation and exploration
- 20. BUFD Build product Big-Bang Develop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 years Front-end planning & design Back-end execution
- 21. When does BUFD work? product Existing market New market New Lowest success rate Existing product Highest success rate
- 22. BUFD is unlikely to work for… Start-up companies New products in established companies Major new features/markets for established products
- 23. Visionaries Steve Blank Martin Fowler Customer Development Agile Methods
- 24. 2 stages of Customer Development Search Scale Focus on Focus on Experimentation Execution Source: Steve Blank
- 25. Iterative model – with checkpoints Search Scale Customer Customer Customer Business discovery validation creation expansion Pivot / Course correct Source: Steve Blank
- 26. Search Principle # 1: Business Model Canvas KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS PROPOSITION KEY RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS Source: “Business Model Generation”, Osterwalder & Pigneur
- 28. Search Principle #2: Minimum Viable Product
- 29. Minimum + Viable Fertile area for new products • Demonstrate value • Gather feedback Minimu Viable m Too-basic products Incumbent no one wants products Source: Start-up Chronicles
- 30. If you‟re building an Excel competitor, what‟s the MVP?
- 31. Minimum Viable ?
- 32. Minimum Viable ?
- 33. Minimum Viable Product for Google Docs Value prop
- 34. Search Principle #3: Focus on exploration Ideas Learn Build Minimise the total time through the loop Data Offering Measure
- 35. How it all fits together Agile software development
- 36. Predictive (BUFD) | Adaptive
- 37. If da Vinci was an adaptive painter… Source: A Series of Tubes
Notas do Editor
- This deck is a tool for facilitating a discovery conversation between a ThoughtWorker and a prospect.The idea is to draw the prospect into conversation as soon as possible, and get them to share their challenges. This means the ThoughtWorker should spend a good deal of the time asking questions and listening to the answers, i.e. “Does this sound familiar to you?”, “How is your Agile adoption going?”, “Are you doing weekly/monthly releases?”, “How is experience design incorporated into your process?”, etc.The goal is to discover whether or not there is a basis for a potential future relationship (cultural compatibility, good overlap between their needs and our capabilities, etc.) and identify the next steps.
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