Product Offering Order of Magnitude

Chris Sita and David Kim

Product Offering 1

Why Talk About This?

Don’t get lost in the details.

• Take a look at where your offering fits in

• Take a look at adjacent possibilities

• This is a companion presentation to Craft of Business

Product Offering 2

10x Analysis

Was popularized by Andy Grove of Intel – as ways of thinking about disruptive technology. Used by Pine and Gilmore in Experience Economy to illustrate the value of experience-based offerings.

Product Offering 3

Source: http://www.service-innovation.org/

Extract -> A commodity -> make it into -> A good -> customize it into -> A service/experience

10x: Apply to PM Fast Track

Example: Apply the analysis to PM Fast Track, an on-line and meetup community for product managers.

At each point, what creates the 10x steps?

Product Offering 4

10x: Quantity and Price To generate $1M in revenues Note that online channel magically solves a portion of the quantity relationship, if you have a repeatable product.

Product Offering 5

Offering Price Quantity Revenues

Meetup event (commodity) $ 10 100,000 $ 1,000,000

Day workshop (service) $ 100 10,000 $ 1,000,000

Conference (experience) $ 1,000 1,000 $ 1,000,000

Education (transform) $ 10,000 100 $ 1,000,000

Exercise: What Can You Offer?

Product Offering 6

• If you had to pick one thing you’d like to teach someone (or build for someone), what would it be? This is your product.

• Who would you first teach it to? Who would be your first customer?

• How much would he or she pay for your product?

Ideas a la Ramit

• Ramit has a cool 2x2 to chart possibilities

• It need not be an educational product

• But, low cost and high profit would be good

• Make sure it’s you, though – what can you do and for whom?

Product Offering 7

Source: www.iwillteachyoutoberich.com

Test Fast a la Tim Ferriss

• Watch this video of Tim Ferriss interviewing Noah Kagan.

• One (of many) key insight is you should give yourself a constraint of time. If you didn’t have a year to test your idea – if you had to validate it by tomorrow, by tonight, within the hour, what would you do???

• http://youtu.be/v47WEyeSMSA

Product Offering 8

Test Cheap a la Noah Kagan

• You don’t want to spend a lot of money, don’t worry about hiring designers or scaling. Just go out and see if there is a market.

• Noah Kagan talks about how he built the multi-million dollar AppSumo for $50:

• http://www.appsumo.com/how-appsumo-was-built-for-50/

Product Offering 9

Test Right a la Amy Hoy

• Amy Hoy, product guru, talks about going on a sales safari. The point is to get inside the head of the customer.

• Click the link to watch her video: • http://unicornfree.com/2013/video-sales-safari-in-action

Product Offering 10

Take a Long-Term View

• Remember the craft?

• Start small, dream big

• Time is your friend, not your enemy

Product Offering 11

Img source: Wikipedia

Chartres Cathedral – North Rose Window

How is Time Your Friend?

• It does not mean be slow (test fast, remember)?

• If you take a craft-based view, then there is an accelerating return on your investment, not diminishing returns.

• Beethoven’s music later in his life was far better than it was in his youth.

Product Offering 12

Img source: Wikimedia

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Product Offering 13

Chris Sita David Kim @findinbay dklounge.github.io