In the last couple of weeks, four different companies have brought up this subject to me. And they all have something in common: they built a good product for a targeted market, and their markets have grown and their product has grown to reach the new market. Engineering answered the call of sales who said "If only we had this feature, we could sell so much more." And now their products astound their customers.
Unfortunately the definition of astound is "to astonish and bewilder. "
Bewildered customers don't buy much. The trick here is using your product as a base, and building off simplified products which are targeted for a particular customer and use. Look no further than the car industry. What's the different between a VW Touareg and a Porsche Cayenne? A little sheetmetal, a nameplate and five thousand dollars.
At Novell and Zenith we did this all the time. I took solid desktop designs, combined them with solid server software, defeatured the product so it fit precisely for the market segment and sold $10M worth of product in 9 months. At Novell we stripped back the OS, layered in a JVM and shipped Intel based Internet servers which beat Sun Sparc on both price and performance.
There are two gotchas in doing this. The first requires you to do a lot of field work. Talk to IDC or good analysts in your field. Understand what you need to do. Then you need face to face time with your sales force and customers to ensure you get it right. After your prototype is ready, test market, test market, test market. Have real people use it and talk to them. Ask Apple what happened with the Newton.
The second is keeping engineering on the straight and narrow. As you are moving through development, you are getting feedback from the market. Be prepared to drop a lot a features which are no longer relevant. Engineering will be a lot more receptive to you if you drop 5 features and ask for 1 minor new one. And communicate across product management and engineering.
Let me repeat that. Communicate across product management and engineering. One company I worked had a great application which worked on Sun stations. We had worked for 6 months getting an audience with the correct group. So the CTO and I go to Sun to give a demonstration. Our product didn't run. Why? Well engineering revved the product for another platform and ended up breaking the Sun product. I cannot print the CTO's reaction.
So simplify your product and make it fit precisely with each intended market. Growth will happen.
Excellent points. As an old product manager (for both "real" products and packaged services) - I couldn't agree more. I was often caught between a rock and hard place (sales & engineering/operations). The sales input ("We could sell if only") - while very valuable - was only one piece of the puzzle (if you're in the trenches, being killed by tanks, your whole view of the war is tanks. That "trench" mentality needs to be factored in when considering sales feedback.) At the same time, the engineers loved to develop for development's sake (while working with a Japanese company, I was told "customer no understand" when talking about why we weren't selling more - and why we had 152 features (with development costs we were loading into the price, with 40% margin on top) when the customer really only needed/wanted and would pay for five. Astonish & Bewilder tends to make potential customers clutch their wallets protectivly and run...
Posted by: Mary Schmidt | 18 August 2005 at 08:24 AM