During the industrial age, we saw manufacturing innovations like the ‘car assembly line’ by Ford Motors or ‘Just in time’ & ‘Kanban’ by Toyota. Now in the information age, where the world economy is driven by software, technology-driven organizations are innovating newer ways to deliver software more efficiently.
A couple of such outstanding evaluations are moving from -
1. Waterfall to Agile methodology, and,
2. Project management to Product management.
Organizations that are able to leverage these two techniques (Agile & Product Management) have managed to experience strong growth and competitive advantages over their competition. These companies have successfully been able to implement agile software development in product development to deliver software that customers love and have led to the massive growth of these tech organizations. In turn, they have done wonders for their owners, investors, stakeholders, and customers.
So the question is how these companies have managed to crack the formula of success and left the traditional company far behind in the race? How do they develop software that customers love? Why do some companies manage to build brands while others struggle to find customers? The answer to these questions lies in how these companies manage to satisfy their customers’ needs through the software they build using principles of product management and agile.
Today, the world’s top 5 tech companies, Google, Apple, Facebook, Amazon, and Microsoft (commonly called GAFAM), each one has a market value more than the GDP of most countries of the world. These companies keep customers at the center of product development. What has led to the growth of these companies is the culture of product mindset. The product mindset has led to the discovery and development of products that have made them extremely successful. They are able to blend technology innovation, agile and, a product mindset that has fuelled their growth.
For instance, within five years from 2017 to 2022, Microsoft, Amazon, and Apple have
seen their market cap multiply 5 times and Google and Facebook's market cap has grown 3 times. And per-minute revenue by the first quarter of 2021 is in hundred thousand USD.
If we leave the top four economies of the world (USA, China, Japan, and Germany) and stack the market value of GAFAM companies against the GDP of the other countries of the world we would understand the financial powerhouse these companies have become and the influence they could make on the world political, social and financial affairs. More than 90% of the world's countries have a GDP less than the GAFAM. Have a look at the below chart -
Product and Product Mindset
It is important to understand what is a product and how the product mindset plays a critical role in the success of the product. Having a product mindset is the first and most critical step in developing the products that customers love. A product is a packaged solution that caters to the needs & wants of the end customers. Some examples of products are specified below. We can classify these into two separate classifications - Tech and non-tech products. However, there is no difference in the product goal between tech and non-tech products which is to provide solutions to the customer's needs and wants.
Some of the examples of products are -
Social networking platforms like Twitter, LinkedIn, and Facebook.
Saas enterprise products like Workday, Zoho, and Salesforce.
End-user Software applications like Paytm, and Byju.
Services Integration products like Ola, Urban Company.
FMCG products like Nestle Maggi, and Colgate.
Automobile products like Tesla Model S, and Suzuki Swift.
Electronic products like Apple iPhone, and Amazon Alexa.
The product mindset also involves generating value than reducing cost. The most important goal of the product is to generate value for the customer. Companies generating higher value for the customer have a competitive advantage over their competitors. The product mindset is to compete on value and not on the cost.
Product vs Project
We confuse product management with project management. However, these are way different. Product management has proved to be more efficient to deliver software that customers love. Product management is the mindset shift to an iterative software development where the end customers validate the product at every iterative increment. Whereas project management is managing a project from point A to point B. The mindset shift is to be agile and embrace change as per the customers' needs rather than resisting change. It is the mindset shift where the solution to the problem product is solving is fuzzy and customers drive the product towards its end state. The mindset is to solve customer problems by developing products that customers love.
Let's understand in the below table how product management differs from project management -
It has a product vision and requirements evolve as per customer feedback.
Requirements & scope are defined first.
It has a customer's needs centric view.
It has a project-scope centric view,
Risks are tackled upfront by getting concept tested through MVP (Minimum viable product).
Risk is managed towards the project release.
It a collaboration between the development team, product manager, and customer.
Work is sequential in nature where completion of requirements forms a release.
Team has problem-solving mindset.
Team has functionality-building mindset.
The product management mindset is also to make customers realize what their needs and wants are. It involves understanding customers' latent needs, behavior, and psychology rather than just satisfying customers’ basic core needs.
Needs that are present in customers' minds.
Unrealized needs in the customers' minds
It can be easily expressed and can be understood with customer interviews and surveys.
It is difficult to express and cannot be understood with customer interviews and surveys.
We can get correct answers to the direct questions.
Cannot get direct answers to direct questions. These need to be determined using advanced marketing techniques.
Low risk and low rewards to implement it.
High risk and high rewards to implement it.
Let's take the example of the Core and Latent needs of customers for two different customer products - Mobile phones and Automobiles. Core needs are highlighted in Blue and latent needs are highlighted in Green.
How Products are managed?
The success of the tech product companies is the outcome of discovering the customer needs, innovating cutting-edge technology, and managing their products. These companies arrange their team in product models that focus on discovering customer needs through iteratively developing the product. The first stage of the product is generally called MVP which helps in testing the product with the customer. One of the main principles of the product model is initial feedback from the customer which is achieved by developing MVP. We will take about MVP a little later and let's understand about product manager role. Product management is managing the product life cycle from ideation, product discovery, development, marketing, sale, and support.
Product management is a dynamic workstream with a lot of moving parts that need to be managed for the product to succeed. A person performing this role is called a product manager. They are often called as CEO of the product. The product manager is an organizational function that deals with managing the product lifecycle, drafting product vision, strategy and roadmap, discovering customers requirements, user experience, product launch, product pricing, creating financial models and projections, coordinating with product development and product marketing teams, maintaining the product backlog, etc. A product manager has to be good at managing all three aspects of the product - Technology, Customer User Experience (UX), and business growth.
The product manager aims to maximize the value of the product and drive the product towards its vision.
Following are some of the responsibilities of product managers -
What is not product management?
Product management could me mislead and there are common mistakes that product management can make while implementing product management for product discovery.
Product Manager != Product Manager + BA — A lot of organizations incorrectly consider a Product Manager role as a combinate of Business Analyst (BA) plus Project Manager responsibilities. BA is a requirement gathering role and drafting them for the development team. A Project Manager manages the project that has a defined scope and a plan to take a project from point A to Point B. Whereas a Product Manager has broader responsibilities that range from defining the product vision, understanding customers' needs, wants, and behaviours, defining the product roadmap, product marketing and defining financial projections and product KPIs.
Saying 'yes' to every feature request — Adding features may not make a product successful. It is art of saying no to feature requests that are potentially lower priority and focusing on features that would add more value to the customer. Making the product better value preposition increase the chances of product being accepted by the customers. Take example of Apple, it designs it products with minimalist approach towards product design and product development. Apple’s minimalistic approach is beautifully explained in the book Insanely Simple: The Obsession That Drives Apple’s Success.
Product management is a niche and diverse skill. It is the process of discovering customers' needs and identifying the opportunity that comes with providing solutions to customers' problems. Also, customers' needs change and at times even customers are not aware of what they want adding to the challenge of the product managers. Product managers also have to steer the product development and take the product to the market. Traditional project management has failed to develop products that can compete in the market. Hence companies are adopting product management over project management to develop successful products for their customers.
Wait for my next post on the product life-cycle and product strategy. Follow me to get a notification as soon as I publish it.