Welcome to our Second Class
Bus100: Building Software Products:
From Strategy to Sales
John Gibbon
•Define
•Design
•Develop
•Partner
•Market
•Sell
•Define
• Classes 1 & 2
• What Business?
• Product Portfolio Strategy
• Which Product?
• Trade-offs and Business Cases
•Design and Develop
• How Do We Build It? – Class 3
• Product Development and Requirements Best
Practices
• How Do We Manage It? – Class 4
• Product Management, Lifecycle, Discovery
• How Do We Make it Usable? – Class 5
• User Experience Design
•Design and Develop
• What Tools Do We Use? – Class 6
• Web Technologies, QA
• What Organization Works? – Class 6
• Teams
• How Do We Manage the Process? – Class 7
• Project Management
•Partner, Market, & Sell
• How Should We Partner? – Class 7
• Business Partnerships Best Practices
• How Should We Tell The World? – Class 8
• Product Marketing
• How Do We Sell It? – Class 9
• Sales Models; Web Based Advertising
• What Have We Done Right/Wrong - Class 10
• Mistakes in Growing Your Business
Company or Product Portfolio Strategy
Where should we go?
Why will we be
successful there?
How do we get there?
Company or Product Portfolio Strategy
• Advisors / Finders
▫ Mark Losh - Prevail
Ventures
▫ Jett Winter – Winter
Consulting
• Venture Capitalists
• Early Stage Companies
Company or Product Portfolio Strategy
• Problem?
▫ Opportunity
• Solution?
▫ Unique offering or
breakthrough (IP)
▫ Why you? Competition?
Where should we go?
Why will we be
successful there?
• Business Model
▫ How make money?
▫ Money need?
▫ Team
How do we get there?
Where Should We Go?
-Market Analysis
-Financial Plan
-Success Metrics
Market and
Competitive Analysis
-Clients
-Industry Experts
-Internet
-Published Sources
Surveys, Client visits,
Informal conversations
In your company, in your
network, Trade
associations, conferences,
Industry periodicals,
Identifying clients that are
market influencers
Competitor websites,
Google, Company listings
(Hoovers, Tradevibes),
Annual reports, Newspaper
articles, tradeshows
Market and
Competitive Analysis
-Clients
-Industry Experts
-Internet
-Published Sources
Why Market and Competitive Analysis?
• Product Strategy
• Market trends
• Market problems/needs
• Product competition
• Your product perception
• Sales Roadblocks and Workarounds
• Changes Effecting Market
• Users / demographics trends
• Industry / demographics trends
Market Segment Analysis
Segment
Needs
How
Satisfy
% Our
Sales
%
Industry
Sales
Consumer
SMB
Large
Enterprise
Linda Gorchels: “The Product Manager’s Handbook
Size/Gr
owth
Rating
(1-5)
Basic Competitive Analysis
Description
Product A
Product B
Product C
Strengths
Weaknesses
Price
Competitive Analysis
Via Advertised Positioning
Assess key success factors in your industry and how others stack up
ERP Accounting
Vendors
Lawson MBS Best
Understand SMB
Needs
Oracle
X
Understand Biz
Fundamentals
X
Flexible, Adaptable
Affordable
SAP
X X
X
X
Lawson Abinanti “Messages That Matter”
X
X
SSA
Competitive Analysis Alternatives
Today
Future
Direct Competitors
Substitute
Budget
Organization
Linda Gorchels: “The Product Manager’s Handbook
Implications
Where Should We Go?
-Market Analysis
-Financial Plan
-Success Metrics
Porter’s Five Forces:
Market Competitiveness
How to Create Uncontested Market Space and Make
Competition Irrelevant – Kim and Mauborgne
Red Ocean
Strategy
Blue Ocean
Strategy
Compete in
existing
market space
Create
uncontested
market space
Beat the
competition
Make the
competition
irrelevant
Exploit existing Create and
demand
capture new
demand
Where Should We Go?
-Market Analysis
-Financial Plan
-Success Metrics
Financial Plan
-Costs
-Benefits
Basic Financial Plan
• Assumptions
• # Customers / Unique Visitors
• # Employees
2009 2010 2011
• Revenue
• Subscription / License
• Advertising / Partnership
• Professional Services
• Cost of Goods (Sales/Service)
• Gross Profit (Rev – COG)
• Operating Expenses
• Product Development
• Marketing
• General and Administration
• EBITDA (Gross Profit – Expenses)
• Cash Needs
(basic P&L)
Success Metrics
-Revenue
-Market Share
-New Users
-Increase Usage
-Increased Customer
Satisfaction: NPS
-Other?
Company or Product Portfolio Strategy
Where should we go?
Why will we be
successful there?
How do we get there?
Why will we be
successful there?
-Core Competencies /
Differentiation
-Mission
-Competitive Analysis
Spicy
eBay’s Mission
• Older: eBay's mission is to provide a global trading
platform where practically anyone can trade practically
anything.
• Now: eBay Inc. pioneers communities built on
commerce, sustained by trust, and inspired by
opportunity. eBay brings together millions of people
every day on a local, national and international basis
through an array of websites that focus on commerce,
payments and communications.
• Skype is the world’s fastest-growing Internet
communication offering, allowing people everywhere to
make unlimited voice and video communication for free
between the users of Skype software.
Apple’s Mission
• 1997: Apple will be a leader in providing simple, powerful, high-quality information
products and services for people who learn, communicate, and create.
• Apple ignited the personal computer revolution in the 1970s with the Apple II and
reinvented the personal computer in the 1980s with the Macintosh. Apple is
committed to bringing the best personal computing experience to students,
educators, creative professionals and consumers around the world through its
innovative hardware, software and Internet offerings.
• eApple ignited the personal computer revolution in the 1970s with the Apple II and
reinvented the personal computer in the 1980s with the Macintosh. Today, Apple
continues to lead the industry in innovation with its award-winning desktop and
notebook computers, OS X operating system, and iLife and professional applications.
Apple is also spearheading the digital music revolution with its iPod portable music
players and iTunes online music store.
• Current: Apple ignited the personal computer revolution in the 1970s with the Apple
II and reinvented the personal computer in the 1980s with the Macintosh. Today,
Apple continues to lead the industry in innovation with its award-winning
computers, OS X operating system and iLife and professional applications. Apple is
also spearheading the digital media revolution with its iPod portable music and video
players and iTunes online store, and has entered the mobile phone market with its
revolutionary iPhone.
Why will we be
successful there?
-Core Competencies /
Differentiation
-Mission
-Competitive Analysis
How do we get there?
-Financial / Dev Plan
-Tech Strategy
-Partnering Strategy
But rarely do we play on green fields
Market Growth Rate
The Boston Consulting Group’s
Growth-Share Matrix
20%Stars
18%4
16%14%5 Invest
12%10%Cash cows
8%6%- Harvest
4%6
2%0
10x 4x 2x 1.5x 1x
Question marks
3
?2
?
Accelerate a Few
1
Divest Most
Dogs
8
7
Liquidate
.5x .4x .3x .2x .1x
Relative Market Share
Ansoff Matrix:
Product Strategy
Current
Products
Future
Products
Current
Markets
Market
Penetration
Product
Development
Future
Markets
Market
Developmen
t
Diversification
Trade-Offs
•New Product vs. Mature Product
•New Market vs. Existing Market
•Short Term vs. Long Term Revenue
•Usage vs. Revenue
•Client A vs. Client B
•Research vs. Development
•High Risk vs. Low Risk
Strategic
Balance
Trade
Offs
Your Value Proposition
For
Target Customer
Who
Problem / Pain ( “must have” not “nice to
have”)
The
Product Name / Product Category
That
Solution / Key Problem Solving Capability
Unlike
Our
Product
Competitors / Alternatives
Key Differentiators / Product Features
Strategic
Balance
Trade
Offs
Ansoff Matrix:
Product Strategy
Current
Products
Current
Markets
Future
Products
Market
Product
Penetration Development
•New Product vs. Mature Product
Market
•New Market vs. Existing Market
Future
Diversification
Development
Markets
•Short Term vs. Long Term Revenue
•Usage vs. Revenue; Client A vs. Client B
•Research vs. Dev; High Risk vs. Low Risk
Porter’s Five Forces:
Market Competitiveness