The Two Quotes

Quote #1

“The business and marketing functions of a startup should be considered as important as engineering and development, so they deserve an equally rigorous methodology to guide them”

Steve Blank(1)

Quote #2

“So why so many organizations hire expensive and highly qualified engineers for developing software and then invest in a few-hours, general marketing courses for their marketing/business people?”

Donato Mangialardo (2)

(1) Blank has spent over thirty years within the high technology industry. He has founded or worked within eight startup companies, four of which have gone public. Blank is recognized for developing the Customer Development methodology, which launched the Lean Startup movement. Blank teaches and writes about Customer Development and is a consulting associate professor of entrepreneurship at Stanford.He currently lectures at the Haas School of Business, University of California Berkeley, Columbia University and the California Institute of Technology (Caltech). @sgblank

(2) Donato Mangialardo is an unknown follower of Steve Blank. He helps  organizations to define, validate, build and market products for sustainable commercial success.  He has spent 10 years of his career in Silicon Valley where he learned how to learn. With focus on Product Marketing/Management. He is still learning a lot. He believes that there is nothing like “seeing the light in your customer’s eyes”. And he does see that from time to time. @donatomm

Annunci

The end of Freemium: start with the customers, not your product

“The return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.” by @rags

Rags Srinivasan has written a very interesting article.

Let me quote the first few paragraph:

  • “We are now seeing the end of the freemium model — signing up users for free and trying to upsell,” said Christian Vanek, CEO of the Boulder-based SurveyGizmo, in a recent phone conversation.
  • “6.5 million unique users is not all that it’s cracked up to be. I don’t want hits. I want revenue. I want a real business,” said Matt Wensing, founder and CEO of Stormpulse, in an interview with Mixergy.
  • “Make a product people want to pay for,” said Marco Arment, founder of Instapaper, in a Planet Money interview.

Three easily available examples do not make indisputable evidence against freemium. Just like Dropbox, Evernote and RememberTheMilk do not make a case for freemium. But these three quotes reflect a return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.
Full article at http://bit.ly/QpLKiE

 

 

 

The product is NOT the PRODUCT !

The product is NOT a great piece of software, or hardware for that matter.
Your product is actually the “Business Model”
“A business model describes the rationale of how an organization creates, delivers & captures value”.  Alexander Osterwalder
As an example, here are a few things that are worth considering in a Product Business:
  • What market problem do you solve?
  • For whom? What are the customer segments? (Buyer Personas)
  • Unique Value Proposition. What is the primary reason why buyers will buy your solution? Is it unique?
  • Solution (Usually, but mistakenly, referred to as “Product”): what ie the minimal feature set that can support (together with the other points) your value proposition?
  • How the solution will be purchased by buyers?
  • How to measure progress? What key activity do you plan to measure? Es. how subscribers respond to the solution over time, by using time based cohorts.
  • Cost structure
  • Pricing and Revenue model.  How do you make money?
  • Business Sustainability: how hard to emulate is your Unique Value Proposition? It can be a technology platform, a powerful established channel, a level of awarensss in a segment etc.
  • Customer retention and support strategy: once buyers become customers, how do you make them happy and loyal? How can you turn them into net promoters?

Anything  missing? Anyway, this is closer to “the Product”. Depending on business, there are main factors that describe how an organization creates, delivers & captures value.

Today’s BIG thing

It is great to see that most of the principles and the techniques I use to inspire and drive my customers’ businesses were “Just a crazy idea two years ago, but [they are ] now teached at Stanford, Berkeley, Columbia, Caltech, Princeton and for the National Science Foundation at the University of Michigan and Georgia” Tech” http://bit.ly/QS8551

Many, many thanks to the authors of the Next Startup Weekend http://bit.ly/QS7Ff1 for helping new businesses to suceed.  The other good news is that well established businesses can really take advantage of these principles and techniques. They match the problems I see everyday at my customers’. Even if the many things are still perceived as “crazy” in Italy today, things are changing rapidly. I do love my job.

What I hear often in product companies

Here is what I often hear in product companies. Guess which is the most common one?

  1. I want the confidence that my product goes where we want it to go. I don’have it today.
  2. The product does not sell! What’s wrong? How to fix that?
  3. The product sells but not enough in this segment
  4. Going up (or down)market: what the product should be like? How much it will cost me?
  5. Going global: what the product should be like? How much it will cost me?
  6. Need guidance for the next generation of products. We have a new vision to achieve. We need help
  7. How do I make sure that what we are building is right? We have invested a lot!
  8. Is there a way to tell whether my requirements will deliver against the expected product?
  9. Is there a solid, simple way that is able to tell my company “you are following the right direction” (or  at least the one you have decided to set)
  10. How to build roadmaps that serve business goals? (vs. good-looking, time-consuming slideware with unrealistic, wishful milestones ?)
  11. Marketing people produce tons of sales tools, brochures and presentations. But my sales people say “they are useless” and don’t use them. What’s wrong?
  12. I want that my sales people sell what we must sell, not what it is easiest for them to sell, and I need marketing to support that.
  13. There are a lot of ideas, inputs from sales and pressures from individuals about “top, critical priorities”. Or… “we won’t sell without this or that”. I want to make sure we do the right product for the business. I want clarity.
  14. We spend a lot of time debating features with development. Often it sounds like a war between opinions and I am not able to help much. I want to make sure we have someone driving our offering for measurable benefits for my business. I do not want fights!
  15. We spend way too much energy toward several directions without getting the expected results, our competition is killing us. Time for change. but.. change what? Where do I start from?
  16. Every decision we make is an ordeal. Not to mention fights, politics and internal wars.  I want my line managers to be more aligned, efficient, with clear, shared goals in mind (the same ones).  A sort of “autofocus” mechanism that points to my business’ priorities
  17. I need a methodology that allows me to make informed, intelligent decisions that do not take into account personal agendas and internal politics

What are the ones that are more familiar to YOU?

Lean, Agile, Nimble and ready to rock. Or to fail? Part1

READY TO ROCK

Our business is creating software products. We know that “Value” means “providing Benefits to the customers”.

By Product we simply intend “any source of value for customers”.

Now, we are at a time where everybody here at tecnotec13897 is extremely excited for the following reasons

  • We got a new, great idea, a vision for a new product that we believe it will be a groundbreaking innovation
  • We are proud of what we plan to release to the world. It will improve many things
  • We have got a solid strategy in place
  • Our team is composed of very smart people who work very well together in a self-directed manner
  • We are thankful for being able to count on an inspiring, principle-centered, strong management team
  • We know that success depends on the ability to learn how to make repeatable what we have done so far
  • We have put great infrastructure in place to open the road for scaling up when it’s time
  • We have a robust yet very feasible and crystal-clear business plan that has been happily signed off by all stakeholders
  • We have a very well working and well-managed Agile methodology in place, since 2003 and we are now using Lean Agile

We have built our product.

We have tweaked it, fixed some issues, added a few features and shipped again

The conclusion we have to draw is always the same

Our intended customers don’t like our product

They simply won’t buy it

– o –

Using Eric Ries’ words,

we have

successfully

faithfully

rigorously

executed a plan to achieve failure

WHY?

Because we did not know what our customers wanted

Or, worse, what they actually needed

We did not know who our customers were supposed to be

How are they rewarded in their job, what’s their environment like. What are their top-of-mind issues.

What problem they have. How critical that is. How urgent is for them to solve it. How pervasive is that problem in the market of customers we intended to sell our product into

How are they rewarded in their job, what’s their environment like. What are their top of mind issues. What problem they have. How critical that is. How urgent is for them to solve it. How pervasive is that problem in the market of customers we intended to sell our product into

We did not know about them. What they love, what they hate, what is a perfect day for them, what they are afraid of.

We did not know how they buy, when they research what, how do they get the information they seek about the problems they want to solve

Instead of focusing to the landing field, we were piloting a plane focusing to ourselves or to other non-landing related targets.

Have you ever been there? Please share your story

This will be the topic of my talk at Better Software 2012

http://www.bettersoftware.it/2012/programma

 

Success?

Your organization builds products.

A product is, simply stated, any source of value for your customers. It can be a service, a phone, a candy, a Cloud Platform for B2B apps.

Value means providing benefits to your customers

Your organization has the following :

A new great idea, a vision for a new Product
A solid strategy in place
Ridicolously smart people
An inspiring, principle-centered, strong management team
A great infrastructure in place
An hard-working, dedicated team
A robust yet very feasible plan
A very welll working and well managed Agile methodology, since 2003

Then you ship the product.

Your customers don’t like it. They don’t buy it.

Outcome:

Your dream organization  has been successfully, faithfully rigorously executing a plan to achieve failure (Eric Reis, The Lean Startup)

This is why I spend every day of my week helping organizations to make sure they know their customers, their buyers, the problems they have and that we can help with our current and future products.

Vision, Strategy and Bad Strategy: 5 tips

Too many organizational leaders say they have a strategy when they do not. Instead, they espouse what I call “bad strategy.” Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to his teammates is “let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values. Each of these elements is, of course, an important part of human life. But, by themselves, they are not substitutes for the hard work of strategy.

Richard Rumel, McKinsey Quarterly, The perils of bad strategy

Common Dilemmas around Vision and Strategy

Carla the CEO says: “I know I need a vision but I can’t seem to understand what a vision actually is.”

“I have read a lot of terms like mission, purpose, values, strategic intent, but no one has never given me a satisfactory, clear explanation of what a vision is and what actionable directions it gives me” adds Josh the VP od Sales

On the other hand, Gina, the marketing communication specialist, knows very well what her company vision is. “It’s on my cubicle wall. But how does it actually guide my work?” she says puzzled.

The very assertive Frank the CEO complains: “I do have a Great Vision, but they don’t get it. I’ve given them a memo with all the details. What’s wrong with them?”

Alvin, the sales engineer who travels all week-long, goes: “What? Vision? Again with that BS? You had another of those fancy marketing books for breakfast this morning, didn’t you?  Leave me alone, please. I’ve got work to do, at least I do!”

Vision and Strategy at work

What is a “vision” then?

It is a destination. A desirable business end-state for an organization. It’s about knowing where you want to go. And, where you don’t want to go.

It’s NOT what you want to “do”.

It’s not the “how

It’s the “where

And,  what’s a Strategy then?

It’s the path to get to that destination. How you will get there.

In other words:

  • Strategy: Sounds great! But… to go where? …“I have a map but I don’t know where to go”
  • Vision: We have one! But… how do we get there?   …”I know my destination, now I need a map!”

“If a company does not have a vision of where it wants to go, then any product strategy is likely to take it somewhere. But will they be happy with somewhere when it gets there?”

Michael McGrath

“I can always plan to operate in full market-driven mode, tuning my offering for an army of buyers that want my product or service, using the latest social media and content marketing strategies. But, how can I do that without a Company Vision and a Strategy that oversees the business and guides me there?”

Donato Mangialardo, Director of Product Strategy

5 Tips – Using Vision and Strategy for guiding everything you do

Tip#1 – You need to have both. They need to be fully aligned to provide guidance and focus. As a Top Manager, you want to make sure they are always, consistently aligned.

Tip#2 – The Vision must be extremely clear. It needs to provide focus. What is in scope, what is NOT. What is success like. Ambiguity brings individual interpretations.

Tip#3 – Strategy means what do we intend to do in order to achieve the goals expressed by the Vision. What should we NOT do.  Again, conciseness  and clarity are  a must. Everybody needs to remember it and apply it.

Tip #4 – Establish a Strategy by looking at your distinctive competences, but also acknowledge the challenges your organization faces, including inconvenient truths. Provide an approach to overcoming them.

Tip #5 – Put together Vision, Strategy and Why your organization believes it can be successful in a coherent, 3-sections statement that fits in a page.  It is a difficult exercise, but it works like a charm if well done.

(I see these more as Rules than Tips actually)

Conclusion: Align your business and your teams to understand what is and how to reach your business destination, the Vision you have set for your organization.  What’s the Strategy. This will provide focus, facilitating decisions and avoiding debates of opinions. As a byproduct, it will increase motivation and engagement in your teams.

Then, if you ask yourself …

  • “Right, but… do we have an actionable vision?”
  • “How do we get there?”
  • “Do we have a clear strategy?”
  • “Will we be able to follow that strategy?
  • “What changes will be required?”
  • “Is my company ready?”
  • “How do I know if I have set the right Vision and the right Strategy for my business?”
  • “How do I actually align them?”
  • “How do I know whether I have factored-in all the variables?”

…Then (note, this is a Self-Promoting paragraph) you want to consider investing in this  effective exercise that will direct your business to repeatable wins and eventually success.This is one of the things I like to do the most in my profession at crystal-ize.com, with a solid, proven methodology drawn from a specific experience in International, US-based and Italian companies of various business models and size.

I am sure you may have questions: please leave your comment. I will surely reply and assist your cause.