Tag Archives: new product

How I Document My Product Vision

Over the last many years, I’ve been experimenting with applying Lean Startup andThe Lean Startup Customer Development concepts to product management. I first wrote about this here. Some time ago, I wrote about the challenges I and other product professionals have faced with the traditional approach of writing a business case.

One area where I had always struggled with was finding a simple and quick way to sketch out my product ideas. I used PowerPoint, Word, Google Docs, but they never really worked effectively. Often times my original notes would grow into a bloated morass of detailed thoughts about features, customers, marketing, partnerships, technologies, etc. There was no structure. Worst of all, if I wanted to share them with someone, I’d have to spend time figuring out how to translate them into something readable, since no one would be able to decipher my chicken scratch.

Before writing a requirements doc or business case, what I really wanted was a way to not only quickly capture a product idea in a structured manner, but also use the same format to share it with others to elicit feedback.

So you can imagine my delight when I came across Alex Osterwalder’s Business Model Canvas several years ago.

Business Model Canvas

What’s great about it is since it’s a single page, one can quickly jot down the basics of any business model, and it’s easy to share and more likely to get read than a PowerPoint deck or a Word doc. The single page also forces brevity: there isn’t a lot of space for a laundry list of features – you need to distil down your idea to its most essential building blocks.

Love at first sight, I started trying to use it for my products. But I ran into a few challenges. I found that while it does a good job capturing the key elements of a business, it’s not as customer focused as I would have liked because there was no place to capture the customer problems I was trying to solve or identify potential early adopters. There was also no place to capture my envisioned solution, and I often got confused between Channels and Customer Relationships.

That’s when I came across Ash Maurya’s Lean Canvas, an adaptation of the Business Model Canvas he created for his web startups.

Lean Canvas

Ash has correctly put the focus on customers and their problems. I also like that he calls out Unfair Advantage, which to me means competitive differentiation. This is especially true for a startup that may be fighting bigger, more established players.

So I started using his Lean Canvas, but ran into a new set of problems as a product manager:

Resources: Ash has left this out from Alex’s original version. I can understand this with respect to startups, but as a product manager working in an organization, it was important to me to identify which resources – platforms, systems, departments, vendors, etc. – I would need to make my product idea a reality.

Readability: When walking someone through a product or business idea, my inclination is always to start with the market opportunity, which means customers, their problems, and how we can solve them. I found neither of the above two canvases easily lend themselves to that flow. I’d have to start at the right-most column and then jump back left. This is non-intuitive to most English-speaking readers, and I found I’d quickly lose my audience as I criss-crossed columns.

Two other challenges I ran into as a product manager:

Stakeholders: Product Managers have to deal with internal stakeholders. The larger the org, the more. Often times a new product idea needs an executive sponsor. In my experience, I’ve found that the more I’m mindful of who are my key stakeholders, the greater the chance of internal support for my product.

Non-Revenue “Products”: Some products managers are responsible for initiatives that aren’t directly revenue generating, but do provide tangible business value, like improving CSAT, driving referrals, etc. I’ve lead several like that.

So I decided to create my own iteration that I felt was more suitable to me as a product manager, that I call the Product Canvas:

This version puts the customer and market on the left-hand side, which not only addresses the readability issue but also supports more intuitively how I think through a product opportunity. I can start with the customer and their problems on the left, and work my way toward the right to ultimately figure out how I’m going to deliver on the solution.

Here’s a brief description of each block and the order in which I typically approach them:

1. Customer Segment: Who is the target customer of our proposed product? This could be the company’s entire customer base, a segment, or a new market or vertical. Ash recommends using a separate Lean Canvas for each segment where one has multiple segments in mind, and I think that’s good advice as a starting point.

1a. Early Adopters: For any new product opportunity, it’s important to identify early adopters. There is already a ton written about this. While identifying early adopters is implied in the Lean Canvas, I wanted it called out explicitly, as I’ve found even in existing organizations there is a tendency to think any new product idea is applicable to all customers.

2. Problem: A brief description of the top problems we’re addressing. I try to limit this to at most 3.

2a. Existing Alternatives: How is the customer solving this problem today? This may not be just direct competitors. For example, in the early days, Quicken’s competition was not only other accounting software, but also checkbooks, and pen and paper.

3. Unique Value Proposition: How are we uniquely going to solve our customers’ problem(s)? This is the elevator pitch: the one sentence that clearly states the value we’re providing to our target customers.

4. Solution: What are the most essential features of our solution that will deliver on our UVP? This is not an exhaustive feature list. I try to limit it to the top 3 elements of my proposed solution.

5. Channels: How will we get (acquire), keep (retain), and grow (sell more to existing) customers? What is the marketing and sales strategy?

6. Revenue Streams/Business Value: How will we make money? What’s our pricing strategy? If this is not a revenue generating product, what other business value is it providing? Improving customer satisfaction? Customer lifetime value? Market positioning? Competitive differentiation? Operational efficiencies?

7. Key Metrics or Success Factors: What are the most important metrics that will tell us that we’re successful? Signups? Conversions? Referrals? CSAT? NPS? These are the metrics that are driving #6 above.

8. Key Resources: What are the most critical internal resources we need? These could be platforms, systems, business processes, departments. Are there external partners we need to rely on?

9. Cost Structure: What are the key cost drivers? Software/IT development? Customer acquisition? Account management? Hiring and talent development? This is also a good place to capture a back-of-the-envelope break-even calculation.

10. Unfair Advantage: This is the distinctive competence or advantage that your product has over other solutions in the marketplace. It’s something your product does better than any other, something that can’t be easily copied. It could be intimate knowledge of an industry, personal authority or brand, a business process or competence, a patent, or some other intellectual property.

After experimenting with using this Product Canvas as a product manager, I started sharing it with folks, asking them to use it, and the feedback has been very encouraging.

Feel free to download it here.

The Case Against The Business Case

Note: This is part of 1 of a two-part series. Read part 2 here.

I have a confession to share.

I don’t like business cases.

At least, I don’t like the traditional way I’ve been taught to prepare a business case.

The conventional approach to pursuing a new product idea in an organization is to first prepare a business case. This is what we’ve always been told.

It’s what we’re taught in business school.

There are even competitions organized around it.

And it’s been reinforced every time we need IT and implementation resources for a new idea — the only way I could get those resources was by having a business case.

And this usually meant writing a big document, preparing a multi-slided presentation, or filling out some cumbersome form.

Now, I’ve written many business cases in my career. Some good, some excellent, many bad ones. Over the years, I’ve gotten pretty good at it.

But every time I did it, I hated it.

Here are just three reasons:

1. I always felt it was a time consuming exercise in guesswork.

For example, I’d be asked to estimate (guestimate?) market size and put multi-year financial projections. This is an exercise in future prediction. Something we’re not good at. No one is. I’m certainly not.

2. No one reads it.

People are busy. They don’t have time. Most want the elevator pitch.

I can’t count how many pitches I’ve been in where the execs flip to the end or simply ask you for the bottom line: what’s the opportunity, how much do you need, why do you need it, when do we see return. 60 seconds. Go.

This means a business case is nothing more than a 20, 50, or 100-page paperweight. Steven Blank famously called a business plan “a document investors make you write that they don’t read.” The same could be said for the traditional business case:

“A business case is a document executives make you write that they don’t read.”

3. Selling the business case is hard.

This is especially true in larger organizations. Lots of opinions. Lots of approvals. Competing agendas.

So ensuring internal stakeholder alignment and support is a big challenge. Lack of stakeholder support can be the biggest impediment to your product idea.

It’s important to capture and address stakeholder concerns as early as possible to ensure continued buy-in, and that everyone is on the same page. This is time consuming.

Part of that has to do with the realities of coordinating schedules. But also I’ve found this experience to be very ad hoc and messy. There has to be a better way.

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Now, maybe the way I’ve gone about creating and selling my business cases has been wrong. Maybe my situation is unique. Maybe others don’t find this process so wasteful. Maybe they’re more brilliant than I am in creating awesome business cases that always get approved. Maybe they work in organizations that have streamlined the process to pursue a new product idea.

Maybe I could test that hypothesis.

So I did.

I set about to find out what other product management folks’ experiences have been with the traditional business case process.

Over a three week period, I spoke with over 24 product professionals in companies across a range of industries, from small 50-person companies to Fortune 100 organizations.

All had experienced preparing and selling a business case for a new product idea. They had an average of 7 years PM experience, and had titles ranging from Product Manager to VP of Product Management.

Business Case Interview Map

Here’s what I found out.

Getting buy-in was rated as the #1 problem by every person except one. And that person rated it as a very close #2.

75% of them validated that maintaining stakeholder support and alignment is important, but a real challenge. Only 3 out of 8 pursed doing this in any kind of systematic manner. Most agreed it was pretty ad hoc.

Furthermore, creating the business case was acknowledged as time consuming, and a “necessary evil”.

Necessary evil? Whoa.

When I probed deeper into their feelings about the actual act of preparing a business case, I uncovered an outpouring of vitriolic frustration.

Here’s what some of them had to say:

  • “It’s a necessary evil. But it’s a wasteful process.”
  • “It’s a joke.”
  • “It’s just a lifeless Powerpoint deck.”
  • “It’s a manager fighting with an Excel spreadsheet for a month.”
  • “I’m forced to project revenues out of thin air. Putting revenue projections is a nonsensical exercise.”
  • “Financial analysis – it’s really just pretend.”

“Lifeless”. “Nonsensical.” “Pretend.” “A joke.”.

“Evil.”

Ouch.

And my favorite comment:

“You are describing my life!”

Yikes.

I feel safe to say this feedback clearly validated my entire hypothesis.

So what’s the solution?

This is not so easy to answer.

It seems to me we need a different way to pursue new product opportunities within our organizations.

One that will provide a systematic process to create validated business cases.

And one that provides us with tools and resources needed to obtain that validation.

One that will enable us to more systematically build and maintain critical internal support.

And one that allows us to spend more time with customers testing and developing product ideas than writing paperweights, while also providing an effective means to communicate progress internally for continued engagement, feedback and buy-in.

What has your experience been with business cases? How have you pursued a new product idea in your organization? Please share your frustrations or joys in the comments below!

Read part 2 here.

How I Sold A $1M Business Case For A Non-Revenue Product

biz-proposal-2Pitching a business case for any new product idea is a challenge. Pitching one for a non-revenue generating idea is even harder. A few years ago, I did exactly that, involving the small matter of an ask a little south of $1 million.

At the time, the product was being positioned as a customer benefit and a strategic differentiator for the company. Although the potential for driving revenue was there in the long-term existed, the immediate ROI was operational efficiency. The problem was it was going to cost a lot to do right. (Yes, we were waterfall, but that’s another matter.)

I still remember the day we pitched the business case. Up until the day before, I was crazy nervous. I mean, who approves close to a $1 million funding request for something that has no promise of revenue? Sounds crazy! We had 30 mins to present our case. I must have practiced my presentation a hundred times in the days prior to the meeting with the executive committee.

In the end, our ask was approved within two hours of our presentation. It was amazing. Several folks who had been at the company for many years told me they had never heard of any proposal – even one with revenue attached – being approved so quickly. I don’t know if that’s actually true, but I’ll admit – it felt real good!

As I reflected on the reasons for the success of that business proposal pitch, the lessons learned from that experience are captured in a famous Sun Tzu quote:

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

I learned that in order to sell any proposal there are a number of pieces that need to be in an advantageous position prior to your actual pitch. The business case itself is, of course, a key asset. But it’s just as important to consider the market, company culture and human factors that can have a decisive effect on the success of any proposal. Here are the pieces I put into place to increase my odds of success:

A robust business case. Of course, it starts with this. Although, at the time, I wasn’t aware of tools like the Business Model Canvas or Lean Canvas, I did make sure my proposal contained all the necessary components. This can be a blog post in itself, but briefly: clear articulation of the customer problems, business challenge and proposed solution; fit with existing corporate strategy; critical resources needed; a financial analysis showing historical spending and benefits derived thus far (which, by the way, was not much), the investment ask and ROI; and the impact of pursuing the investment vs. not doing so.

Customer validation. We knew our chief problem was a poor user experience. But we had to make the case that it was beyond just “fixing a few broken links and prettying up the fonts”. To do that, we conducted a usability study to test three key customer hypotheses around validating the premise of our solution, the user experience, and the business model. For each hypothesis, we defined our success criteria to validate our assumptions. As we had predicted, while customers validated the premise of our solution, they overwhelmingly trashed the UX and completely invalidated our business model hypothesis.

We had video taped the entire study. So I cut a 90-second video montage to play to the execs that ended with what I called the Money Quote: “If this is the experience, then next time I see it offered to someone, I’m going to warn them, ‘Don’t buy it, because it sucks!'”

Fit with the corporate business strategy. I’ve talked about the importance of Opportunity/Company Fit for a product idea here.

A coalition of the willing. I knew there were others in the organization who felt my pain, and some who were more interested in trashing the product. I wanted to convert sympathizers into supporters and either minimize the detractors or at least be in a position to address their concerns. The goal here was to make sure that by the time I approached the execs, they knew there was organizational support behind the product. I also wanted them to know I had done the legwork to capture and address any concerns from those who remained unsupportive (especially the vocal ones).

“Earlyvangelists”. As early as possible, I began to meet with key members of senior and executive management to try to get their buy-in and early feedback. This allowed me to gather early insights into potential challenges, the things the C-suite in particular care about, any political concerns to ensure support from these stakeholders, and gain internal “earlyvangelists”. This word was coined by Steve Blank to define “a special breed of customers willing to take a risk on your startup’s products or service because they can actually envision its potential to solve a critical and immediate problem.” In my case, I was looking for those internal folks who could envision my proposal helping to solve a critical problem they were facing in their own agendas.

Influence Map

From MindTools.com: “Uncovering where the power lies in your projects”

Empowering others to pre-sell for me. Those early conversations helped me identify an “influence map” that depicted how organizational relationships worked top-down. For each member of the executive committee I identified the folks whose opinions he or she valued the most. If I had a direct relationship with this person, great. If not, I’d go down to the next degree. I then presented my proposal to these folks to get them on my side, tailoring my presentation to my audience. Once done, I’d ask the person for feedback on how to get the executive’s buy-in. This would empower them to pre-sell my idea to the exec in conversations that I would not be a part of.

A scorecard of who’s in vs. who’s not yet. I converted my influence map into a scorecard where I tracked who was on board vs. who wasn’t, and for the latter, what their concerns were and my next steps to address them.

A presentation that fit with the culture. How the presentation is prepared is just as important as the business case itself. I’ve worked at a company that had little appetite for decks: the rule was never more than 5 slides. I worked at another company where meetings would not be able to take place without a Powerpoint deck: 20-page, even 60-page, presentations were the norm.

Iterate the business case. As I gained feedback and insights from the above activities, I followed a Build-Measure-Learn cycle for creating the proposal itself, continually tweaking and re-testing it before it was show time ready.

Great mentors/advisors. This can also be a blog post by itself. Having solid mentors and advisors are so essential. I made sure to look beyond my immediate manager and his manager. For example, I built a relationship with a senior manager in Finance to get his feedback on my financial analysis. He had nothing to do with my proposal or product, but his feedback helped strengthen my financial model, and since he was closer to some of the senior executives who were close to the CFO, I gained insights into the the things important to them.

All this is not to say you can’t sell a business case or proposal on the strength of the content alone and (if you’re so lucky) personal charm. Certainly, there are situations where that’s all you have to rely on. But when possible, it’s important to spend the time upfront planning, strategizing and creating coalitions  If you do so, odds are you’ll be pleasantly surprised at how swimmingly the actual pitch goes. In other words, win the battle before it’s actually fought.