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On Being a Pragmatic Marketing Instructor

This week, I was fortunate enough to receive a new opportunity within Pragmatic Marketing, and accepted a new role as Vice President of Products.  It’s a rare occasion that the stars align and you’re able to do work you love for a company you love with a team you love – but that’s exactly how I describe working at Pragmatic.  If you haven’t experienced that feeling, I sincerely hope that you will, and I’d like to share some thoughts on the best job in the world with you in the hopes that it piques your interest, and points you down a path of achieving success, however you define the term.

In 2010, I worked for Dell, and managed a small team who was responsible for portfolio management of several acquisitions that Dell had made over the years.  Prior to Dell, I worked for Cisco, a company Cisco had acquired called NetSolve, and a startup called NetStreams, amongst others.  All of these were good experiences in their own ways, but at a certain point I realized that I had the itch for something smaller, where I could see an immediate impact.  I had an idea for a startup of my own that I was trying to pursue but had come to a point that I needed to either quit and do it full time, or abandon the idea.

Key Learning: Why kind of person are you?  Do you prefer the stability and structure of big companies, or do you prefer the chaos of smaller?  Know your preference and use it to narrow your choices.

Around the Spring of 2010, Pragmatic Marketing opened a role for a new Instructor position.  While I had never considered it an option before, I found myself stepping back and asking “Why are you thinking about making a change?” “What do you really like?”  My self-realization was that I did love managing products, driving strategy, and beating the competition.  But what I liked even more was seeing the successes of my team.  I got energy from seeing people from my teams grow, seeing them nail a presentation to the executive team, and even seeing them quit and move on to bigger opportunities (although that’s always painful).  Their success was my success, and I loved it.

In a “normal” career, you might manage a few dozen products, you might touch a few hundred people directly.  But as an Instructor, I’d get to affect thousands of people.  It’s intimidating to move from a “doing” track to a “teaching” track, especially if you’ve climbed the ladder your whole career.  It wasn’t until I got into the role that I realized how good the fit could be.

Key Learning: What is your passion?  Do you love what you’ve done so far, or do you need to go in a different direction?

After going through an intensive hiring process, eventually I joined Pragmatic as an Instructor in August of 2010.  Immediately, I was paired with a mentor Instructor to learn the what and how of what we teach.

Most people come to three or four training days with Pragmatic, but it’s difficult to convey how much depth in our teaching is developed behind the scenes.  In any given class, we just scratch the surface – and the Instructors on the team all come from executive backgrounds and have loads of experience across industries and business models to fit any situation.  It feels like a Marketing MBA every time you step into the room with the Instructor team, because they are some of the smartest people in the world with regard to the application of market-driven techniques and strategies.

Key Learning: Where can you work with the smartest people?  When you work with A-players, and people smarter than yourself, it forces you to raise your game.

After completing the mentor/protege process and becoming certified to teach, I started to travel the world to deliver our training.  It’s no lie to say that teaching a marketing class can be intimidating:

  • You have to master topics ranging from pricing to competitive analysis to organizational alignment to roadmaps to business planning
  • You have to command the room and have the answers to everyone’s questions
  • You have to supply energy and keep some traditionally dry topics interesting and fun
  • You have to do all of this in front a room of smart, Type A people who are or will become executives

It’s a challenge, in a good way.  In the past six years I’ve delivered our trainings in 20+ states in the U.S., the UK, Paris, Sydney, Hong Kong, Singapore, and many others.  Training is a marathon; a few years ago I was on the road 47 weeks in a year teaching.  You can’t do that for something you don’t love.

Key Learning: Love and passion aren’t enough.  Do you have or can you develop the skills you need to thrive in your new role?

Today, when I step in front a room, my first step is always to observe the class.  Who are these people, and why are they here?  Some people are eager, excited, and ready to learn.  Others are here because their boss told them to be.  Others are evaluating switching roles from Engineering or Sales into Product Management or Marketing.  None of them quite know what to expect because their past experiences with other training classes have been so poor.  We have a chance to blow them all away with the best professional experience of their lifetime, and make an impact that lasts far beyond the time I’ll spend with them.

Within the first 15 minutes of class, everyone realizes that this class will be unlike any other class they’ve ever been to.  It’s not theoretical, it’s practical and actionable.  It’s enlightening and fun.  It embodies a philosophy of asking “What problem are we trying to solve for our market?” that will stick with them throughout their careers.

It’s not uncommon for students to approach me and other Instructors at the first break to say “Wow, I feel like I’ve already got my money’s worth and we’re not even through the morning session!  This is the best training I’ve ever attended!”  I often get emails from alumni of our classes years later, who tell me that I taught their class long ago, and they still use what they learned, and that they carry their tattered books around as reference manuals and clutch their Pragmatic Framework tight to their chest as a Rosetta Stone for their jobs.  That’s the feeling I got when I first attended a Pragmatic Marketing class as a student.  That’s the feeling I want to give to all of my students.

What we teach impacts students throughout their careers, affecting them, their peers, the products they work on, and the businesses they work in.

I’m an Instructor.  I don’t “train people.”  I change lives, and businesses for the better.  When people ask me: “Why did you stop doing Product Management to teach people like me?”  I tell them: “I never stopped doing Product Management.  I do it every single day – only now, my product is you.”

If you made it this far, and you can envision yourself as an Instructor, I’m looking for the next great member of our team.  Head over to our careers page, read the requirements, and let’s get to work changing the lives of students around the world.

Your survey data is flawed, and what to do about it

Science magazine just come out with a bombshell: senior researchers at SurveyMonkey have detected that as many as one in five surveys contain fraudulent data. And we’re not just talking about a handful of surveys, they analyzed over 1000 public data sets from multiple different surveys to reach this conclusion.

“…Among 1008 surveys, their test flagged 17% as likely to contain a significant portion of fabricated data. For surveys conducted in wealthy westernized nations, that figure drops to 5%, whereas for those done in the developing world it shoots up to 26%.”

This is a major problem.  The usage of quantitative data in product teams has exploded in the past 10 years, and if you can’t trust your data, then you can’t trust the decisions you are making that rely on that data.

Fortunately, the researchers, Michael Robbins and Noble Kuriakose, point to the likely culprit:

“The basis of the test is the likelihood, by chance alone, that two respondents will give highly similar answers to questions on a survey. How similar is too similar? After running a simulation of data fabrication scenarios, they settled on 85% as the cutoff. In a 100-question survey of 100 people, for example, fewer than five people would be expected to have identical answers on 85 of the questions.

…one of the inevitable problems, Robbins says, is “curbstoning” where an interviewer sits on the curb and invents survey responses—often duplicating answers—in order to avoid risk or save time.”

Essentially, some researchers tend to create data, especially when the survey population puts the researcher at personal risk.  It makes sense, and is also why you don’t see a ton of polling data or opinion surveys on ISIS, because very few researchers are going to go there (and very few people would be willing to pay for that).  There’s a fairly low likelihood that in a long-form research survey, that multiple survey responses will be identical or nearly identical.  If the dataset includes lots of identical data, it could be a flag for data falsification.  To be fair, Pew Research takes issue with Robbins and Kurikose’s research, and is pushing back publicly on their website.  This fight will continue for awhile, because the answer is not black and white, it’s a gradient.

So what is the impact to product teams?  Probably minimal, for most teams.  Most product teams are getting validation data from a variety of areas that are less susceptible to this type of manipulation, such as A/B testing and experimentation.  Even if you are performing surveys as  part of your data collection (and you should be), most product teams aren’t building products that target the developing world or high risk populations.  If you are, ensure that you work with a reputable research team or train your team on how to collect that data responsibly, and check the dataset against Robbins and Kuriakose’s test.

If you aren’t building products that target market segments with these problems, take this as a reminder that data is just data, and before we draw conclusions, there is a set of sanity checks we need to run against the data first.  One of those checks may include “is everyone answering the questions in the same way?”

It’s time to get your Ph.D. in Sales Comp

A few years ago, I was working for a large company here in Austin.  This company had recently acquired a series of software startups and was attempting to integrate them into their larger hardware portfolio.  The product team I managed was responsible for the integration, product management, and transition.  What I learned during this time about Sales behavior was a shock to my system – and may help you as well.

Imagine a Fortune 100 company: large, established, incumbent.  Also stale, bogged down in red tape, and struggling to innovate.  A typical move for a large company is to inject innovation through the acquisition of a smaller company.  Often, this makes great sense on paper – the bigger company gets access to technology and talent they don’t have, and the smaller company now has an opportunity to both cash in their hard work and take their products to a much larger audience via an established sales channel.  If you’ve worked in the industry for any length of time, you’ve been through this cycle from one side or the other.  Unfortunately, what looks good on paper can quickly go astray if you don’t understand Sales and the tools you are giving them.

In this case, my team had responsibility for four to five smaller acquisition company products and portfolios.  Luckily, the larger company had done a good job acquiring companies in the same area who had complimentary products, both to each other and to the larger company’s hardware devices.  Essentially, our new software portfolio provided ongoing systems management for the hardware that made up the mainstay of the larger company’s business.  If we could simply start to attach our software to the millions of dollars of hardware deals that were already happening, there was a great chance of success!

To make this picture even more attractive, the larger company’s hardware business was undertaking a long, slow decline both in revenue and profitability.  They were averaging single digit gross margins on hardware, whereas our software was achieving typical software margins in the 40-60% range and higher.  By all rights, it was going to be an easy win…until we starting training the larger company’s Sales teams.

The long, slow decline of established business

Our decline wasn’t this pronounced…but it was close!

The first time we trained one of our hundreds of new Sales teams, we knew we had an issue.  We did a “lunch-and-learn” where we fed the team pizza and spaghetti, while one of our product managers did a demo of the product and talked about how it was complimentary to the products they were already selling into their accounts.  The Sales team was polite and listened while they ate for about thirty minutes.  Then, everything went wrong.

Do you ever want to scream when working with Sales? It doesn’t have to be that way if you know how they’re motivated.

At the end of the presentation, the Director of the Sales team stood up.  He looked straight at my product manager and said:

“John1, I want to thank you for that great presentation.  I think we all now have a clear understanding of your product, its pricing and competitive positioning, and how it can help the company.  I understand that the CEO has identified this as a strategic product.  And you know what?  We are never going to sell it.”

Needless to say, that was not the reaction for which we were hoping.

John tried to recover by asking the Director why he felt that way, and the Sales Director responded by saying:

“To your credit, this does seem like a really good product.  But, it doesn’t match up with how my team is rewarded.  Right now, software sales represent 10% of our quota, and hardware is 90%.  If one of my guys blows up his software number and misses his hardware number, he is fired.  If he blows up his hardware number and sells zero software, nobody cares.”

Very quickly you can start to see the problem – even though the company had spent millions of dollars on this acquisition, they had not put the tools and behavior modification in place with their existing teams to make it a success.

At this point, we needed to get educated (quickly) on how Sales at this company was motivated.  Our next stop was Finance.  We scheduled a meeting with someone that Finance identified as the “Genie of Sales Compensation.”  When we sat down with the Genie we asked her to show us how Sales was motivated, quota’d, and bonused.  That was when she opened her manila folder, and took out a taped-together 3×3 matrix of legal sized paper, upon which was printed in 6-point font an Excel spreadsheet containing approximately three dozen rows representing the different sales teams, and about fifty columns representing various ways the Sales teams were measured.  Some Sales teams had thirty or more variables to determine their quota attainment.2  In short, you needed a Ph.D. in Sales compensation to understand this system.

Yes, it was almost this big.

Many people refer to Sales as “coin operated,” by which they mean that Sales operates in whatever way will help them get the most coins.  This is exactly how you want Sales to act, but it reinforces that if you aren’t very clearly part of their compensation, they won’t spend time worrying about you, regardless of how strategic or important to the business you think your product should be.

In the end, we found that adjusting the Sales teams compensation models to account for our products was so fraught with politics and peril that it was doomed to failure.   Prioritizing our products in terms of comp meant deprioritizing someone else’s products, and every Sales comp line had an advocate in the form of a powerful executive for some other product.  That is when we realized that we needed to sidestep the issue by creating our own overlay Sales team that was only measured on our products.  This worked, but only after a lot of pain and suffering.

This month, Pragmatic Marketing’s bloggers are going to be writing a lot about various Sales tools and ways we can enable Sales teams.  Remember however that the number one most powerful Sales tool in the Product Team’s bucket is the compensation model.  If you get this wrong, or your product is not represented in it, it will not matter how slick your competitive training is, or how good your positioning is, the strength of your competitive analysis, or how well you priced your product.  As the CEO of your product, you must understand how your team is motivated – and take corrective action where required.

What other challenges have you run into with Sales, and how did you overcome them?  Weigh in below in the comments section.

1 Name changed to protect the innocent
2 This is when I realized that I prefer smaller companies to larger ones

It’s That Time Again! Submit for the Third Annual “You Might be a Product Manager If…” List!

After you’ve taken a few minutes to fill out the 11th annual Product Management and Marketing Survey, you might be feeling a little feisty.  Well, you’re in luck!  I am officially moving the annual “You Might Be a Product Manager If…” list to be in conjunction with the survey so you can get everything off your chest at once!  I’ll release the full list on this blog in January, and need your participation!  If you’d like inspiration, you can read the past lists.  Some of my personal favorites include:

You might be a product manager if…

  • You do a SWOT analysis before making any major purchase
  • Your wedding included a powerpoint presentation.
  • You spend more time with your development counterpart than your spouse.

Submit your best ideas in the comments below, or @ reply me on Twitter!  Best submission might even get something cool…

ProductCamp Wrap-up, and Introducing ProductPotluck!

Another ProductCamp Austin has come and gone – Austin’s third.  If you haven’t participated in, or planned a ProductCamp in your city, there really are no excuses left.  ProductCamp has proven itself to be the ultimate grassroots gathering for Product Management, Product Marketing, and Marketing pros anywhere.  Austin’s third edition had a some valuable highlights:

  • Participation continues to grow by leaps and bounds.  The first PCA, we had 90 show up.  The second, 160.  The third – over 300!  In just over a year, we’ve experienced over 300%+ growth.  Many businesses would be envious of that kind of growth.
  • We’ve managed to maintain the spirit and character of the event as we grow it.  We do a post-camp survey after each event, and for the third consecutive time, our “customer sat” metrics were off the charts great.  98% of our participants would recommend ProductCamp to a peer.  For the third PCA in a row, we scored a perfect 100% on the question “Would you come to ProductCamp again?”  That is a testament to the team we’ve grown around this event.
  • Sponsorship is increasing.  We run ProductCamp on a shoestring budget – less than $10,000 not included donations such as venue.  In the beginning, we had a big sales job to get national level sponsors like AIPMM and Pragmatic Marketing interested.  Now, all of the major national product management sponsors are involved: Pragmatic, ZigZag, and Sequent Learning.  Local companies such as SolarWinds and AustinVentures are also taking notice.  SolarWinds used ProductCamp as a recruiting tool – it makes sense, since only the most motivated, passionate people are going to give up a Saturday to geek on on Product Management topics with their peers.
  • We’ve (re)validated Austin’s corner of the world.  Austin’s tech community has always perplexed me.  There are so many of us here, and we are so disconnected.  Austin doesn’t have the pulse that Silicon Valley has, and we definitely don’t have the density.  We do have passion and strong leaders in spades.  This third PCA proved that we can drive huge turnout here, and outside of the Valley can claim to put on the biggest ‘Camp.
  • ProductCamp is spawning leaders and building a critical mass.  We’ve built a great core team: people like Colleen Heubaum, Mark Suchanek, Bertrand Hazard, John Peltier, John Milburn, Roger Cauvin, and Scott Sehlhorst (and many others) have all contributed to the planning and execution of multiple ProductCamps.  This team makes me believe that we have established momentum.  It will be exciting to see the next generation of leaders step up, and the established team can work with them and mentor them to keep ProductCamp fresh and exciting.

Gaining critical mass has been a huge undertaking for ProductCamp Austin.  Setting up and tearing down the leadership for each event, twice per year, is a massive undertaking in manpower and logistics.  One consitent piece of feedback that we’ve heard from the ProductCamp participants is that they would like to continue the ProductCamp experience between the semi-annual ‘Camps.  In Austin, we don’t have a strong central Product Management and Marketing networking group like in other areas of the country.  That does not mean that we have to settle!

To fill the gaps between ProductCamps, the team that brought you ProductCamp Austin is introducing a new flavor of the ProductCamp experience: ProductPotluck Austin.  ProductPotluck is a mini-version of ProductCamp: instead of an all day event, it will be a happy hour plus a one hour session.  Instead of many topic areas and dozens of potential presentations, ProductPotluck will have 2 topic areas of focus, and a handful of potential presentations (or roundtables, panel discussions, or workshops).  Just like ProductCamp, ProductPotluck is by and for the participants – we will still have participants voting on which sessions make “the cut,” and the majority of sessions will be offered by the participants themselves (we’re leaving a little wiggle room to bring in distinguished guests, too).  We’ll cap the whole thing off by providing more time for drinking and networking, which is always popular.  As always, ProductPotluck is FREE; your only cost is your participation.

Austin’s first ProductPotluck will be October 21st, at the AT&T Conference Center near the University of Texas campus.

Happy Hour will be in Gabriel’s Cafe, which is located in the lower lobby (Level LL), to the north inside the University Avenue entrance.

ProductPotluck Sessions will be held in Classrooms 101 and 103.

Parking is available in the AT&T Center underground parking lot.  Pay for parking in Gabriel’s Café during Happy Hour and receive the $7 discounted rate.

1900 University Avenue
Austin, TX 78705
(512) 404-1900
www.meetattexas.com

Agenda:

5:30-6:30pm  Sign-in, Networking Happy Hour, Final Sessions Voting – Gabriel’s Café

6:45-8:00pm Marketing and Product Strategy Presentations – Classrooms 101 & 103

8:00pm -?? Networking Happy Hour – Gabriel’s Café

The two topics we will focus on this month are: Marketing and Product Strategy.

In true ProductCamp spirit, the participants determine which sessions are ultimately presented. Here’s how it will work: five Sessions have been submitted for voting consideration.  See the PPA wiki for detailed descriptions of each Session.

Marketing

  • Applying buyer personas to marketing strategy – Mike Boudreaux
  • Top 10 Ways to Use Facebook to Promote your Business – Christopher Sherrod
  • Error 404: The Panel You Are Looking For Does Not Exist – Jonathan Gesinger, Alex Jones, Amanda McGuckin Hager, Jason Sugawa

Product Strategy

  • Help! I work for an engineer who knows nothing about Product Strategy – Jeffrey Eversmann
  • From customer centric design to customer centric marketing to customer centric companies (Enterprise 2.5?) – Andreas Voss

At the PPA October 21 meeting, the five sessions will “face off” during the 5:30-6:30pm networking Happy Hour in Gabriel’s Café.  Each participant will be given one vote to place on the session of their choice.  The top session in each category will be announced and will run in parallel in Classrooms 101 and 103.

To get all of the details, please go to the ProductPotluck wiki.  We’re looking forward to seeing you on the 21st!

ProductCamp Austin Summer 2009

ProductCamp Austin Summer 2009

ProductCamp, the free unconference for marketing and product management, is teaming with the McCombs School of Business to return to Austin for its Summer edition!  ProductCamp is a must-go event for marketing and product management professionals.  ProductCamp is a free, collaborative,  gathering for interesting, smart people to network and learn from one another.  ProductCamps have been held in Silicon Valley, Austin, Boston, New York City, Toronto, Atlanta, with more in the planning stages.  This is Austin’s third ProductCamp, and will be one of the largest in the country.  If you are in Austin, or can get here, ProductCamp will be well worth your time.

ProductCamp Overview

If you’ve never been to a ProductCamp before, you’ll need to wrap your brain around a few new concepts.  First, ProductCamp is an unconference, meaning that everyone participates in some way.  For some people, that means offering a traditional lecture style 1-hour session on a relevant topic.  For others, it might mean being on a discussion panel, facilitating a roundtable, participating in a workshop, helping with planning, volunteering for venue setup, doing marketing activities, or managing the budget.  At ProductCamp, there are no attendees, only participants. Second, there is no direct monetary cost for ProductCamp to the participants.  The only cost is your investment in time and effort.  Third, the trappings of a traditional conference are gone.  There is no keynote speech, no thinly veiled sales pitches, and very little B.S.  As a peer-to-peer event, ProductCampers bring their very best stuff – and we keep each other on our toes.  ProductCamp is sponsored by corporations who enjoy supporting the marketing and product management communities, and often offer sessions of their own.

How ProductCamp Works

The first thing you do is register.  You’ll fill out a form asking you how you want to participate and what topic areas are the most interesting to you.  Next, check out the ProductCamp Austin website, and list of sessions offered by people like you.  Based on what you marked, you’ll be contacted by one of the ProductCamp Austin planning team leads to get your help.  For people interested in Marketing, you’ll post about ProductCamp Austin to your blog, or retweet @PCAustin‘s tweets.  You’ll receive several emails over the next few weeks from the PCA Planning Team, and on the day of, you’ll stumble out of bed early on a Saturday to come to the McCombs School of Business at the University of Texas for your first ProductCamp experience.

When you walk up for registration, you’ll receive a badge, some goodies, and three small stickers.  A volunteer will take you to a wall where all of the sessions being offered by your peers are listed; there may be dozens of them.  You’ll be asked to “vote” by placing your three stickers under the three sessions that interest you the most.  This helps the PCA Planning Team understand the interests of the group and assemble the schedule.  When you’re done, you can grab a coffee and head into the auditorium for the Intro session.

In the intro, I will explain to you what ProductCamp is all about, and we’ll play some icebreakers to set the tone for the day.  Soon, the schedule will be done and posted on the website and on the walls, and you’ll go to sessions throughout the day, stopping just to grab one of the box lunches we provide.

At 3PM, everyone gets back together for a quick closing session.  Then we head to the bar to burn through any extra budget we might have!

During the day, expect to network with a ton of people.  You’ll meet product managers, product marketers, social media experts, marketing greybeards, executives, startup junkies, big company people, developers, agile experts, finance and ops people, and everyone in between.  You may leave with a stack of business cards, and should bring a stack of your own to give away!

ProductCamp Austin Details

When: Saturday, August 15, 2009

Where: The University Teaching Center (UTC) at the McCombs School of Business at the University of Texas at Austin (map)

Who: Anyone willing to participate!

How: Register Now! (space is limited)

Cost: FREE!

To learn more: ProductCamp Austin, Follow ProductCamp Austin on Twitter, ProductCamp Austin on Facebook

We’re looking forward to seeing you there!

Have we Entered the Post-Product Management Economy?

Seth Godin recently made a post about Why Be Good?  Godin states that the worst thing for a Marketer is to be given a “good” product to market.  He’d much rather have a “bad” product.  Godin is a marketer, not a product manager, so his view doesn’t surprise me at all.  Ethan at On Product Management reacts strongly to Godin’s thoughts and turns Godin’s examples around, stating that the opposite is actually true – it’s better to have the best product, because that is what customers will buy.

This is a great interaction because it illustrates the rift between marketing and product management.  First, I suspect that Godin isn’t really saying that for any given company it is better to have an inferior product.  He’s saying that for a marketer it is better.  I’ll go a step further – for a great marketer (which Godin is) it is better.  The first question I always get from Marketing is “what are this product’s differentiating features?”  Lazy marketers love to have the leading product in a market because they just need to maintain the status quo.  A great marketer likes the challenge of winning with a product that doesn’t necessarily win on all of the features.  It was a painful lesson the first time I learned that it is not enough to have the best product on the market, you must also have great marketing to let people know about it and get people excited about buying.

Have you and your competitors reached near parity?  Do you differentiate using price?  Does sales laugh when you point out differentiating features of your product because those features don’t really matter?  Do you wordsmith new “features” just to have something the other guy doesn’t on your product slicks?

We’ve had “winning product solve customer problems” beaten into our heads as product managers.  In every market there is a set of features that solves the customer’s problem that everyone’s product has, e.g. the “baseline” feature set.  This is the barrier to entry that any new competitor must meet to play in your market.  You use features above that baseline to differentiate your product.

In commoditized markets, the size and relevance of the features above the baseline shrinks to near zero.  The importance of marketing increases as differentiation shrinks.  Eventually the barriers to entry become so low that nearly anyone can enter, at which point operational efficiency becomes the most important aspect for success, and marketing becomes primarily packaging and pricing.

One of my mentors used to work as a brand manager in consumer goods for P&G.  He told me a story about laundry detergent that is a great metaphor for where we are heading in technology.  The laundry detergent market is highly commoditized.  There are dozens of companies selling everything from luxury to economy detergents and everything in between.  P&G sold several different brands under different names, aimed at different customer segments.  The ability to segment and target customers in consumer goods is astounding – they have it down to a fine science.  “College educated Caucasian mothers under 40 with 3 kids living in a major metro area with a household income of >$125,000” is an example of the level of their segmentation.  If you go to the grocery and turn the detergent boxes on their side and read the ingredients, they are all nearly identical.  The major differences are pricing, and packaging.  It turns out that the mother above just doesn’t feel comfortable buying the “economy” brand, and will instead opt to pay more for Tide to basically buy a prettier box.  That much is obvious; the really interesting piece was the product differentiation.

People buy the pretty box but they aren’t dumb.  They open the box and see the white powder, the same stuff in the economy box, and they resent paying more.  P&G experimented with lots of options, and ended up adding green crystals to the Tide powder.  What did these crystals do?  NOTHING.  People assumed that they got their clothes cleaner or smelled better.  They were there to make you feel better about buying a nicer box with “power crystals.”

Over time, if you take several companies competing for the same market, they will commoditize it even without product management.  You don’t need product management to copy your competitor.  Lots of companies that have identified operational efficiency as their core competency are happy to let other companies take the first mover risk and be the second mover into a market.  If all of those companies have good product managers, they’ll be talking to the same kinds of customers and potentials, hearing similar problems, and developing similar products and features.  Price will become the differentiator and the market will commoditize.

I see a lot of green crystals in technology today.  There are lots of products where the baseline has risen to “good enough” and the differentiating features either aren’t compelling enough to justify paying for them, or customers just don’t care.  On the cost side, we’re squeezed by free and open source products.  What role does the product manager play in a commodity product?  I hypothesize that the markets where companies need product managers will shrink at roughly the rate that those markets commoditize.

What do you think – are we entering the post-Product Management economy?

ProductCamp Austin Winter 2009

I’m proud to announce that we are bringing ProductCamp back to Austin for an encore!  The first ProductCamp Austin had amazing participation from the Austin and Central Texas area, with over 130 people signing up and about 90 participate back in June.  ProductCamp Austin Winter will have more people, more sessions, and be better in every way – if are are in Product Management, Marketing, or Product Development and can get to Austin on Jan 24th, this is the event you want to participate in – and it is free.

What is ProductCamp?

ProductCamp is an unconference.  An unconference takes the old, stogy idea of a conference and turns it on its side.  Instead of corporations paying for boring keynote speakers talking and waving their hands, you have the participants in the conference leading all discussion sessions.  ProductCamp is a meritocracy, or perhaps a participatocracy – anyone can lead a session on any topic relevant to product management or marketing.

At the first ProductCamp, we had sessions ranging from career advancement for product managers, to intellectual property discussions, to working with Agile development organizations, to working effectively with Sales and Executives, to user interface design.  ProductCamp attracts a broad and diverse crowd of smart people who “get it,” so the networking is really good and the discussions are rich and rewarding.

Describe the ProductCamp Experience…

It’s Saturday January 24, 2009 and you wake up way to early for a weekend and head down to the UT campus.  You park and walk up to the College of Communications and follow the signs to ProductCamp.  As you ride the elevator up to the 4th floor, there are three other people with you looking confused.  “Are you here for ProductCamp?” “Yeah, this should be interesting…”

You exit the elevator and see a registration table with people milling around it.  As you make your way to the front, you recognize a few familiar faces from other companies.  You give your name to the PCA volunteer at the table and he hands you a badge and a goodie bag with a PCA shirt in your size.  You make a beeline to the coffee.

As you get your coffee, you notice that ProductCamp has attracted all types – managers, developers and engineers, academics, startup junkies, and everything in between – and these people are talking to one another.  Someone is rambling about their startup, and other person is educating a small group about Twitter: “ProductCamp has its own Twitter ID, here’s how you follow it…”

After chatting for a few more minutes, a PCA volunteer calls everyone into one of the rooms.  The studios at UT are huge, with 40 foot ceilings and have seen much use and abuse over the years.  As you walk in, a volunteer hands you three post-it notes and you wonder “why just three?”  The room has a projector showing a “Welcome to ProductCamp” slide.  Someone gets up and introduces themself as a ProductCamp planner and thanks the sponsor for breakfast.  Next, someone gets up and gives a short minute intro on the open grid scheduling process.  You listen as you’re told to put vote with your sticky notes under the three sessions you’d most like to attend, which are listed on the back wall.

You head to the back wall and read the session names, offered by people just like you.  You recognize a friend-of-a-friend’s name who is giving a session about “Connecting with Customers.”  That sounds good – you use one post-it note.  You see another session about “Agile Product Management.”  Your engineering team is moving to Agile so that might be a good session to attend, and use your second note.  As you step back to consider your third note, you see a dozen other people doing the same thing, and people feel geniuely torn about what to vote for – there are so many good sessions to choose from!  Finally, you put your last sticky on a session called “Career Building in Product Management and Marketing.”

You walk back to your seat and see the PCA volunteers start to rapidly count the votes.  Someone gets up and explains that they are determing which sessions are most in-demand so that they don’t overlap on the schedule.  While the volunteers assemble the schedule, a ProductCamp planner gets up to talk about what ProductCamp is and why everyone is here.  He says things like “ProductCamp is for starting conversations, not finishing them – it’s OK if these discussions spill out onto email, blogs, forums, twitter, or facebook.” “Learn from each other’s collective experiences, but challenge each other – speak up if you hear something that you agree or disagree with.”  You think “wow, this is definitely not a normal conference.”

The planners announce that the schedule has been set, and the crowd huddles around the posted schedule to see which sessoins they are going to attend.  You notice that your favorite sessions are at 10-11, 1-2, and 2-3, and you fill your schedule with other sessions you think sound interesting, including a roundtable discussion.  You refill your coffee and head to the first session in Studio 4E…

As you walk in, you see 20 other people looking at each other and wondering how this is going to work.  The session leader is welcoming everyone and making introductions, and you see her slide projected with the session title “Roundtable: Working with Sales.”  The session leader gives a quick facilitation of 1-2 slides and kicks off the discussion by talking about a recent scenario where she introduced a new product to Sales and was immediately met with hostility from the Sales team.  The questions fly quickly “was the pricing right?” “how is your relationship with them normally?” “How did you explain the value of the product?” “Does that product solve a customer problem?” “Did you just repackage one of your existing solutions?” “Is sales compensated correctly on your product?”  The Q&A continues and the facilitator guides the discussion into new areas: how to be effective with your sales leadership, how to get sales buy-in for new product launches, how to end-of-life a product with sales, and so on.  Through the discussion you furiously type notes out on your laptop as you try to capture some of the great ideas that the team is generating.

The hour-long session feels like it is over as soon as it begins.  You wish it could continue, but you only have a few minutes to get to your next session.  You quickly introduce yourself to the facilitator and a few other people you were impressed with and exchange business cards.  You notice that they have their Twitter ID’s on their badges and quickly follow them on Twitter.

You go through two more sessions before lunch and meet several impressive people.  You think “I need to keep these people on file because they might be good if I’m hiring or looking for a job.”  You grab a plate of catered lunch and sit down with some of your new friends and talk about the sessions they attended so you can get the scoop on what you missed.

After lunch, you hit 4 more sessions.  By the end of the day, you are spent, physically and mentally.  As everyone filters out, people are already talking about the next ProductCamp and what sessions they plan to offer, and you think that maybe this isn’t so hard, and you’ll offer a session next time, too!  A group breaks off to do an official ProductCamp happy hour, and you join in few a few drinks.  The week after ProductCamp, you email some of your new connections to grab lunch – it’s great to keep the network fresh.

I hope that this gives you a taste of what to expect at ProductCamp.  After running one, I was very excited to lead another, and have high hopes for ProductCamp Austin Winter 2009.  I look forward to meeting you at ProductCamp!

Go Register for ProductCamp!

Apple’s App Store: The Rise of Transitionware?

The iPhone 3G product launch has had the kind of hype (and reality) that businesses dream about. To date, there are well over 1M phones sold and over 10M downloads from the iTunes app store. Apple’s newest creation opens the door to new revenue streams, but also strikes a new balance of power between the application developer, the channel, and the user. Some of Apple’s curious design choices may also be carving out a new pricing strategy: apps that start free, then later move to a paid model – “Transitionware.”

If you have iTunes and an iPhone or iPod Touch, you can access the app store. There are thousands of applications across many different categories like productivity, games, and finance. Apple segments the offers into “Paid,” and “Free.” Paid apps can range from $0.99 to $999, set by the developer, and Apple takes a cut of the revenue. Every app has a 1-5 star rating, voted on by the users, and an open commenting system. Anyone can review or rate any application, even if they haven’t purchased the app they are reviewing.

During the first month of the app store, there was a proliferation of simple free apps: flashlight (turns your iPhone screen white for use in the dark), to do lists, lightsaber, etc. The reviewers tended to cut (some) slack to the free applications. For example, some reviews of the free game iGolf:

Good Game
(5/5 stars) by: Rubayath

Great game, it reminds me of my gf’s Wii, and hte best thing is, it’s FREE.

It’s Decent
(4/5 stars) by: The ace of hats

Amusing game for free. Increainly [sic] unrealistic. My high score is 520 yards. Hold on tight to the phone.

Paid apps got no such treatment. Some samples from the game iFish:

This is worse than just bad
(1/5 stars) by S.S.S. Truck Driver

This is worse than just bad. It seems to be unplayable. Dose [sic] nothing at all that I can see. And no instructions at all…Dont [sic] get it even if it were free.

This should be free
(1/5 stars) by chr1s60

Extremely boring and pointless. The game is too difficult and the graphics and display are plain and boring. The sound is ok, but aside form that there is nothing even slightly positive about this game.

If you review more of the comments, you’ll find many from people posting opinions about the applications who haven’t even tried them! It’s no surprise that people like free better than they like to pay. The average rating for the across the top 25 free apps is 3.96, for paid it is 3.70. If you are a business, how can you take advantage of the goodwill of reviewers who like free, and still turn a profit?

Avatron has a different strategy for their Air Sharing application. For the first two weeks, they are offering their app for free, before the price transitions to the normal $6.99. The result has been amazing – highly rated reviews, and they are the #1 listed app under their category in the app store.

Lots of companies have used try-before-you-buy strategies in the past, usually in the form of demoware or low-cost student licensing. Jott recently transitioned out of beta (“free”) and into production (“paid”). The difference is that Air Sharing is a fully functional app, and users who got in during the free period will retain their functionality.

In the app store, buyers are making impulse purchases based largely on the advice of other iTunes users. Because of Apple’s walled garden, the first place that most users see an app is in iTunes. If the app is rated low, it’s done before it begins, so the ratings of the first few reviewers count more than ratings of later reviewers. The average rating on the Internet is 4 out of 5, so anything less than 4 is a death sentence.

Avatron’s strategy is brilliant because it captures lots of positive feedback from users who are happy to get a “deal” on a free app and reward them with a 4 or 5 star rating (currently 4.5 stars). It builds hype because those users feel like they are part of the in-crowd who got in on a special deal early, and the ticking clock drives media coverage (“get in now before it’s too late!”) that you need for a launch.

The coolest part about this method is that it taps into OPT – Other People’s Time. One of the key takeaways from David Meerman Scott’s writing is that you are what you publish. Good advice, but I’ll take it a step further and say “You are what others publish about you.” You can never have as much street cred online as reviewers of your product have. Reviews have become so ubiquitous, it’s startling to go buy a product and not see reviews – you get suspicious. BazaarVoice has built a company around it.

I predict that many more companies will adopt the “transitionware” approach to launching software in iTunes. The power of the crowd demands our respect!

Using New Media for Product Marketing

Last week, I had the opportunity to participate in a Marketing roundtable hosted by Austin Ventures. Marketing leaders from several AV portfolio companies came together to talk about prescient topics. The topic was “What’s Working in New Media” (paraphrased). It was almost like a mini-ProductCamp, because everyone brought a single slide to talk about their online strategies and what was or was not working well.

Sam Decker, CMO of Bazaarvoice gave an interesting talk about how they are using their blog Bazaarblog to as both a new form of communications, and relationship marketing. It was refreshing to see a company actually have a blog strategy more defined than “let’s give the CEO a TypePad account.” Bazaarvoice targets specific bloggers in their space and treats them like royalty, and does smart things like proactively linking to them and farming their sites for content to create multi-blog conversations. They get it.

Online, everyone looks equal. I can go out and buy a URL and put up a WordPress blog, and in less than an hour have a turnkey site that looks just as good if not better than yours. At first glance, how is a potential customer ever going to know a credible from a non-credible source? You can’t control the blogs (so don’t try). As a Product Marketer, you can increase positive coverage through good relationships and demonstrating that you’re responsive to complaints over time. See The New Rules of Marketing and PR for a good book about this general topic.

One of the initiatives I’ve spearheaded at NetStreams is building a community site for our dealers, who are notoriously fickle. Sometimes they complain publicly on our forums and get other dealers riled up, which then spreads to our sales team, the VP of Sales, and the CEO. When we started the forums, I had all of the above people come to me the first time we had a negative thread demanding that we “take down that negative feedback.” That’s one of the worst actions you can take!

Marcomm looks at negative feedback from customers as they would a poor review in a magazine. It’s meant to be depositioned, explained away, and spun. Look at it from the customer’s perspective: they are telling you that you aren’t solving their problem, and worse, you’re not listening to them. Marcomm and PR speak…but don’t listen (unless they’re paying an analyst and then they have to pretend to listen). I love negative feedback, because those are the best opportunities to both get great product feedback and to demonstrate your responsiveness as a company.

When a negative thread or blog post shows up, acknowledge it. Reply to the post stating that:

  • They’re right; this is a problem, and we recognize that
  • We’re sorry that they had this problem and that we caused it (even if you didn’t cause it)
  • That we’re going to do everything we can to make it right

Doing just those 3 things will turn around 99% of problem customers. In my case, just the basic acknowledgment of their problem was like finding as oasis in the desert to these customers, because we had done a poor job of responding to issues in the past.

Is your company doing anything new and interesting with blogs or other new media to influence your product plans or change your marketing strategies? Reply in comments.