Rogers, America’s cowboy humorist, was once quoted as saying
“It’s not what you know, it’s what you know that just ain’t
so.” When it comes to
Product Management, one could make the same claim. The greatest
problems faced by product managers are often self-inflicted, and are
a result of their unflinching willingness to accept as facts some
things that “just ain’t so.”
might be helpful to come to a common understanding of what is meant
by the term Product Management.
Unfortunately, we find ourselves in a situation reminiscent
of Supreme Court Justice Potter Stewart. Stewart,
when faced with
a case involving obscenity, but finding himself unable to define it,
said "I'll know it when I see it."
while each of us might have a different canonical definition of the
role of a product manager, we would likely agree that “we’d know
one when we see one.” And
in that spirit, we’ll blithely skip past the debate over whether a
product manager is defined by title, or by role, or by
avoid the argument as to whether a service can be a “product”,
or whether one does or does not need to be technical to be a product
manager. We’ll make
the dangerous but pragmatic assumption that the reader will know
whether the following applies to the job they perform, and segue
right into a discussion of the Top 5 Myths of Product Management.
#1: Customers will buy our product because it is technically
it is somewhat comforting to believe that the old adage “build a
better mousetrap, and the world will beat a path to your door”
still holds true, the reality is far different.
The dust bin of product history is littered with technically
superior products that failed, and failed spectacularly.
Some failed due to a missing set of capabilities, others
failed because they were ahead of their time.
Some failed due to poor sales or marketing execution, and
many failed because, while technically superior, they simply did not
solve a problem that the customer was willing to pay to have solved.
To put it bluntly, most customers do not wake up in the
morning and say to themselves “Today I need to buy me some more
buy products that solve their real problems.
They buy products because they have made an implicit or
explicit analysis that they need your product (and technology) more
than they need their money. While
your product may impress reviewers, wow your competitors, and be
worthy of a dozen different patent awards, if it doesn’t solve a
big problem, it won’t sell.
#2: Distributors are desperate to stock and service our product
are literally hundreds of thousands of software and hardware
products in the marketplace today.
Some are sold directly to customers, while others are sold
indirectly, through what is know as distribution.
While in theory it makes sense for you to offload the hassles
of sales onto someone else (i.e. a distributor), it usually makes no
sense for them to stock, sell or service it.
As a reminder, revenue is a function of price and volume.
And profit is simply revenue minus cost.
For someone else to want to stock/sell your product, they
have to be able to sell enough of it, at a reasonable price, and at
a low enough cost, to make enough of a profit to make it worth their
while. Of course, the
easiest way to reduce their cost is to pay you very little.
Not a good thing. And few, very few, products will sell enough volume to
generate enough profit to make it worthwhile for anyone involved. If you find this hard to believe, walk into your local
computer superstore. Ask
them how many products they carry.
The answer is likely to be “I don’t know, hundreds I’d
guess.” That is
“hundreds”, out of the hundreds of thousands of products out
there. Then ask them if
they carry a specific product in the same general category as your
product (e.g. a desktop utility, a database, an educational game).
The odds are that they will point to a large wire mesh bin,
in the corner, and tell you to look in there.
In other words, you have one chance in a thousand of actually
being able to sell into distribution, and even if you are that lucky
a good chance of ending up in the bin, where customers will paw
through boxes on the off chance that your product is there.
Yes, I know, your product is different.
Trust me, it isn’t. And
by the way, this holds true for productized services as well.
AOL, the phone company or your local cable provider do not
wake up in the morning with a burning desire to take on your sales
#3: We will develop the product on time and on budget
experienced product managers will tell you that there are 3
variables that effect the delivery of a product.
Some will even draw a lovely diagram, showing them as the
vertices of a triangle: Time,
Features and Budget. Some
will substitute People for “Budget”, but it is all pretty much
the same thing. One
could actually add 2 other variables to the list, though it makes
for a messier diagram: Quality and Effort.
Basically, the idea is to hold some of the variables
constant, and adjust the others.
So, for example, you could say “Our product must ship at
the end of Q2, and on Budget.”
In that case, you would have to vary Quality (ship on time,
but with some bugs), or vary Features (drop some things off the
must-have list), or vary Effort (work harder).
Unfortunately, while this works well in theory, the world we
live in is rarely so accommodating.
Shipping a lower quality product is a recipe for disaster,
especially for a startup. Yes,
Microsoft can get away with quality problems.
However, you are not Microsoft.
Dropping features is an attractive option, but don’t lose
sight of the fact that the features are the reason the customer will
want to buy the product. And
if the features you are removing aren’t really necessary, then why
where they in there in the first place? Adding people will not only
blow your budget out of the water, but is also likely to add time to
your schedule. Finally, having your existing resources work harder
sounds like a great idea, but the fact is that real productivity
tends to drop after 50+ hours per week.
All that said, remember one simple rule:
the earlier you know you have a problem, the easier it is to
fix it. Product
Development, like Product Management, is not an exact science.
So when planning a product release, don’t assume that you
know enough to be able to predict “on time and on budget” with
any reasonable degree of accuracy.
You don’t. So
don’t wait until too late to recognize, and admit, that you are
running late and over budget.
#4: We will build a great team by only hiring great people
is an old aphorism that “A players hire other A players, and B
players hire C players.” It
is a laudable goal to want to only hire great people.
Unfortunately, you are not the only one out there with that
goal. It is probably
safe to assume that there are very few companies out there with the
goal of hiring the most mediocre people they can find.
That said, clearly some companies are better at hiring great
people than are others. What
is their secret? People
want to work for a company that has a reasonable chance of
succeeding in their market, want to work with other good people, and
want to learn from the people for whom they work.
It is difficult to attract good people if they don’t
believe in what your company is doing. If you are losing good people
to other companies, it is often because you aren’t effectively
selling your product and market vision, or because your vision
isn’t compelling. Clearly,
either or both can be fixed, if sufficient attention is paid to it.
However, it is not a good idea to ignore the problem, and
just hire whoever you can get to accept your offer.
If the idea can’t be sold to a potential employee, what
makes you think it will be sellable to a customer? As
for whether you are perceived as an A player yourself, that is also
a critical question, but
would require a longer and more difficult discussion that is outside
#5: Competitors will respond predictably
as individuals will often do things that are unpredictable (as
evidenced by any number of drivers on the Beltway each day),
competitors will often behave in a manner contrary to your
expectations. In some
cases, the competitor may be behaving in a way other than you might
have predicted, but which is still quite rational.
For example, a large competitor may gladly sell their product
at a loss, under the
quite reasonable assumption that their deeper pockets will allow
them to survive a price war longer than you can.
Or a competitor may give away the competitive product, or
bundle it with another of their offerings, all in an attempt to deny
you revenue. In other
cases, a competitor will actually increase the price, but bundle it
with value-add services that your company is too small to offer
(e.g. management consulting). While
companies are constrained by the law, there is no law that says a
company can’t willingly lose money on
a product, or alternately, raise their prices and change the
most dangerous risk that a product manager will ever face is
unchallenged assumptions. Perhaps
the best use of your time, on an ongoing basis, is to ask yourself
“What assumptions am I making about my product, or my business?”
Write them down. Read
them over. And don’t be afraid that admit that some of your
assumptions may no longer be valid, and act accordingly.
Remember, a spectacular failure is still a failure.