Over the last few months I spent a lot of time looking at processes which impact my daily work. Between project management classes, site developing, job interviewing, reading news letters and pub conversations processes of all types were at the core of my life (which begs the question, what kind of life I’m leading??)
A common theme that comes up is how I personally take a general notion or idea and turn it into a more defined product concept. Everyone seems to have some kind of opinion on how this is to be done from educators to authors to CEOs to even the kid in the mail room who’s plotting his own self-made start-up. There are some common themes that seem to come up from each of these seemingly divergent ways of doing this which are actually the basis from which I derived my own “checklist.” I define it as a checklist because you can tick off the box for completion at any time and not necessarily go in order because starting points can actually be anywhere.
As anyone who worked with me knows, I usually ask first “What’s in it for (consumer type)?” and not, “How will this make money? or “What will this do?” My intuition tells me, if you solve for what a need is then the question of how to monetize it becomes easier than vice versa. There are plenty of white papers and thesi to defend this notion too.
Therefore, when I start plotting the course of a product concept, I begin first and foremost with the value proposition. Think of this in terms of the Maslow hierarchy of needs in concept. Don’t just solve for the basic need fulfillment search for the inherent gratification that the need fulfillment is attributed to. By tying it to an emotional value it will address the consumer need from the perspective of demand (I desire this because) rather than supply (You want this because).
The reason I usually circle around to begin here from a product standpoint is two-fold:
First, by starting with this high level-consumer concept to drive product development you are creating a common basis for all development and a benchmark for what should be developed. It makes it easier to trim the fat when the first question you ask is how would this new feature idea influence the underlying value proposition. It also makes it easier to define optimization strategy when optimizations are done from the question of how will changing this strengthen the adherence to the value proposition. If something doesn’t immediately impact the value proposition it doesn’t necessarily have to be discarded, but it definitely loses priority because it isn’t addressing the core.
Second, most good marketers use this concept in some way to help position the product in the marketplace. By adhering to this standard from the on-set there isn’t that inherent tension between marketing and product that can occur. There becomes a continuity between the consumer message and the consumer experience which impacts both how the company internally operates and the external expectation of the consumer. Basically, the promises marketing is making are actually delivered by the product because they are both flowing from the same underlying framework in this well defined value proposition.
There is an opportunity to even do your first round of testing at this point to see if the basic assumption you are making in your value proposition is even true. Don’t over-estimate the insights generated by testing, but it makes for at least a foundation justification for moving forward. If the need you assumed actually can be fulfilled by the concept you pitched in this most amorphic form you might be on to something.
There’s a little bit of the chicken or the egg going on. Sometimes in order to find the value you need to work through the use cases, sometimes the value itself will define the use cases for you. I’ve had it happen both ways and talked to many other PMs who encountered the same general scenario. In reality, the order matters not as long as you do both.
I usually start by working through all the different possible touch-points for the product. Just start jotting down every different way that someone could find it that you can image and then once they have how they would engage with it. It can be tedious and time consuming and a great many of the answers that come up may not even be necessary to address but it makes for a great brainstorm session and starting point. There are no wrong answers, just theories and ideas which will help guide at high level the next few steps. You’ll come back later to refine the results too.
Once you answer the value proposition, the inherent why of your product’s existence, you can then determine a true competitive set, since no product exists in a vacuum. Without the right why you won’t understand who you are really competing with and knowing what is really vying for your consumer’s attention you won’t be able to effectively build for a customer base (remember a consumer is any user, a customer is who is actually going to pay you for it).
Take for example, if you make some kind of digestible product and your value proposition is “to refresh the body and soul with a burst of youthful, all-natural energy.” You might be a water, or a juice, or a soda, or an energy drink, or a tea or coffee, and you might even be an alcohol. You might be a snack food, or a pill, or some kind of other food product. If you defined yourself purely by being, say, an enriched water, you’d miss how each of those has some competitor that actually speaks to the same value proposition. You’d incorrectly be trying to compete only with water.
In looking at the full competitive set from this point of view from the product standpoint you see better how the features themselves create both similarity and differentiation at the same time. The market opportunities and threats become more defined though this, which will help define what features to focus on in diving further into how to solve for the underlying value proposition. Since, chances are, a good marketing department should be doing this kind of evaluation to determine their strategy incorporating the concept phase again helps unify that divide between what is being built and what is being messaged. Everyone understands how the product concept fits into the marketplace from the same point of view and therefor is working toward the same goal in fulfilling the value.
It is very possible that ongoing competitive analysis might produce a new use case or a value proposition idea that actually begins the process. Many times a thorough competitive analysis provides insights into the market that otherwise wouldn’t be considered, so don’t feel obligated to only do this step after the value proposition is defined, just remember to continue to revisit the competitive set against the value proposition so you aren’t missing competitors.
Just because I personally don’t start with “how do we make money off of this?” doesn’t mean that I don’t respect that it needs to be asked. Like I mentioned before, once you know why something is going to be used the rest should more easily flow from it. The competitive set provides insight into when people might consume it and how much it might be worth to them if they do. So, now there’s a benchmark for taking a real, honest look at if there is a justification for monitization.
I start by a revisit of the use-case list and identifying all the touch-points and then imagining all the different possible ways to attach monization to them. Don’t worry about anything other than enumerating all the scenarios at this point and remember, no idea is too crazy, yet.
Narrowing the list down comes in stages, but don’t throw out any idea completely even if it doesn’t make the cut at a specific state, it may be justifiable at a later time in the life cycle. I prefer to start with contrasting the monitization idea against the value proposition. Some ideas will run dead against fulfilling the value proposition and should be put aside immediately. Some will be neutral or will require actual user testing to understand their impact. A few might even support the value proposition and should be embraced.
Next, look at the competitors and contrast how your monitization strategy stacks up to what you’ve defined as theirs. I suggest doing the self-analysis first because it should allow for the gestation of unique ideas rather than adhering to the status quo in the market place. You will better identify differentiation and redundancy through self-examination first. Ask yourself: Are there apparent strengths or opportunities in yours? Do you see weaknesses or threats? Did you miss anything you should be considering? You will approach these questions much different if you are conceiving a monitization strategy synchronizes solely with competition than if you answer them independently and then overlay both.
Now that there is a clearer understanding of the concept it is time to examine for existing synergies and possible efficiencies. It is possible to begin from here, say, in the case of trying to develop line extensions based on ongoing competitive analysis too, as inherently there is always an ongoing question of if the resources are actually available to do this in the first place.
Synergies can come from anywhere, from existing infrastructure to human capital to brand good will, so strive to thoroughly understand how to leverage the entirety of the company when considering the move forward. A missed internal efficiency can do more than just add time or money to a project, it may affect worker productivity or consumer good will as just two more examples. For example, by not looping in engineering into this process you might miss that there is an existing platform that is currently under-used and could fulfill the value proposition and when other methods are used instead it makes the developer feel as if their previous work wasn’t appreciated and reduces their buy-in and therefor effort on making the new platform work, thus creating layers of inefficiency in lost opportunity and disenfranchised workers.
Just because something offers a consumer value and can be monitized doesn’t make it a good return on one’s investment.
Defining the return is as much engrained in some companies cultures as it is anything else. It may not be worth doing if you don’t believe you can be the market leader (and if you’ve ever read the book Good to Great, that definition of return runs through every successful company’s analysis of ROI) or it might mean being able to generate a specific ongoing profit margin regardless of overall piece of market or mind-share, or perhaps the product itself is a component of brand good will and not for pure financial gain so that a high adoption rate and best share-of-mind over everything else thus is the necessary return.
ROI is usually calculated with profits in relation to capital invested creating cost ratios that seek to explain how much it costs to earn this much. This is why it is imperative to understand how you are defining what makes a successful return because the inputs define the outputs, like with all statistics. Different ROI models create different variations of success and since no calculation is ever made in pure isolation and to be all encompassing it is imperative to consider defining success before blindly plugging numbers into an equation, no matter how tempting that might be.