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LESSONS LEARNED
Mark Calkinsvp product development
bluehost
LESSON ONE:
THE BUSINESS MODEL
Business Models
alex osterwalder
Business Model Canvas
Customer Segments
Key Activities
Value Proposition
Customer Relationships
Key Partners
Key Resources
Channels
Cost Structure Revenue Streams
from businessmodelgeneration.com/canvas
Identify Who are your target users?
What value do you deliver to your customer?
What activities are necessary to delivery your value prop?
What key resources does your value prop require?
Who are your key partners?
Customer Segments
Key Activities
Value Proposition
Customer Relationships
Key Partners
Key Resources
Channels
Cost Structure Revenue Streams
Identify What type of relationship is required to deliver
your value to your customer?
What channels will be used to deliver your solution?
What costs will be incurred to deliver your value prop?
What value are your customers willing to pay for?
Customer Segments
Key Activities
Value Proposition
Customer Relationships
Key Partners
Key Resources
Channels
Cost Structure Revenue Streams
B2B ‒ Complex Systems Model Target user: enterprise customers
Channel: direct sales force
Product includes: enterprise software + professional services consulting
Product integrates into a larger system Must accommodate existing legacy systems
Examples Financial systems Enterprise HR application Manufacturing requirements planning applications
B2C ‒ Volume Operations Model Target user: end user, consumer
Channel: website, mobile phone, etc.
Product complexity: simple & easy-to-use
No integration, no legacy: offer works by itself
Examples Online movie ticket purchasing Game console Mobile game Web hosting
Scaling These Two Business Models
B2B Problem is painful &
complex Solutions are
expensive & valuable Customers pay a
premium Barriers to exit high 1000 customers
spending $1M/year = $1B business
B2C Usage is at discretion
of end user Popularity establishes
the premium Often a convenience Barriers to exit are low 10M customers
spending $8/mo = $1B business
Growth Strategies (based on your Business Model)
New Product
Existing Product
Existing Market
New Market
Growth Strategies
New Product
Existing Product
Existing Market
New Market
Example: Novell
New Product
Existing Product
Existing Market
New Market
NOVELLProduct: Server OS + networking (NetWare)
Channel: network resellers + ISVs
OEM & system integrator channel
Example: Novell Acquisition
New Product
Existing Product
Existing Market
New Market
NOVELLProduct: Server OS + networking (NetWare)
Channel: network resellers + ISVs + OEMs
SuSE LINUXProduct: open source server & desktop OS
Channel: system integrators
Example: Novell Acquisition
New Product
Existing Product
Existing Market
New Market
NOVELLProduct: Server OS + networking (NetWare)
Channel: network resellers + ISVs + OEMs
WORDPERFECTProduct: desktop word processing app
Channel: computer retail stores
Example: Oculus Rift Acquisition
New Product
Existing Product
Existing Market
New Market
LESSON TWO:
MARKETING STRATEGY
Getting Mass Market Adoption
Build a better mousetrap and the
world will beat a path to your door.
“You may find an audience with innovators and early adopters, but the mainstream market, where the profit resides, will reject your product unless marketed correctly.”
—Geoffrey Moore
Technology Adoption Life Cycle
“The Chasm”
Crossing the Chasm
Product-Centric Fastest product Easiest to use Elegant architecture Product price Unique functionality
Market-Centric Largest installed
base Most third party
supporters Defacto standard Cost of ownership Quality of support
The Innovators and Early Adopters love this stuff…
but mass market adoption ONLY comes here!
Positioning Is a noun – an attribute associated with your
company or product
Is the single largest influencer on the buying decision
Exists in people’s heads
Is about making products easier to buy, not easier to sell
“best buy for this situation”
Positioning Format
For target customer
who statement of need or opportunity,
our product
is a product category.
Unlike primary competitive alternative,
our product is statement of primary differentiation.
Positioning Format
For home owners who want an easier way to manage their home temperature, NEST is a learning thermostat. Unlike timed thermostats, NEST helps you save money by programming itself based on your schedule.
LESSON THREE:
BEING TUNED IN
YOUR OBJECTIVE
The goal of a product manager
is to create products that
sell themselves
Great products (Resonators) don’t need lots of advertising nor an
expensive sales force
Be Tuned In Identify your target user
Listen to the target user Learn everything you can about the user Create personas and “day in the life of” stories
Suzy Socialite
Nate NetGen
Adam Athlete
Returning Rhonda
Isha Int’l
Paul Postgrad
Tom Technology
Be Tuned In Provide solutions to the users’ major pain
points “Nice to have” generally won’t sell Is the problem urgent? Is it pervasive? Are buyers willing to pay for it?
Urgent
Pervasive
Urgent
Not Pervasiv
e
Not Urgent
Pervasive
Not Urgent
Not Pervasive
Problem Matrix
Be Tuned In Define markets in terms of
customer value What value will the customer
derive from your solution?
How can you offer more value?
Identify alternative perspectives for delivering value
Be Tuned In Develop solutions in the context of the total
customer experience Buying experience
Packaging
Using the product
Receiving customer service
Availability of other required resources
Generic
Product
Buying Experien
ce
Packaging
Using the
Product
Customer Service
LESSONS LEARNED Business model drives strategy
Marketing strategy is as important as the product
Be incredibly tuned in to your market
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