A set of slides that I had used to describe what Product Management in general is and how to utilize Business Model Canvas (BMC) to help organizations / startups in finding their product-market fit.

1. Product Management Class #1
Mulyadi Oey
Jul 6, 2015

2. Who are Product Managers?
• Many moved from Engineering to Product
Management.
– And, also popular, from general business
(MBA, management consulting) and social
sciences (psychology, linguistics).
• People who “manage” product(s) or product
portfolio.
– Decide how the product looks and feels like
today, and in the future.
– Mini-CEO
• But, really, what do they do?

3. What do Product Managers do?

4. Innovation Cycle: A Learning Process
Synthesis
(How?)
Abstract
Conceptualization
Concrete
Experience
TRANS-
FORMING
Insight
Generation
Customer
Empathy
Idea Generation /
Combining and
Refining Ideas
Experimentation
and Learning
Analysis
(Why?)

5. What do Product Managers do?
• Sensing:
– Understand strategic environment
– Evaluate business model
– Assess customer and user needs
• Seizing:
– Create new business models
– Plan & manage product portfolio
– Manage product life cycle
– Set pricing strategy

6. What do Product Managers do?
• Transforming:
– Test options
– Lead product teams
– Negotiate strategically and influence

7. Do I Need a Product Manager?
• Who is (or, are) “owning” the product(s) in
your company?
• After a product / iteration release, who is
closely monitoring whether it satisfies your
users’ or customers’ needs?
• Who is leading the process to improve your
product(s)?
• What stage is your company currently in?
• Hiring: “What are my job descriptions?”

8. Product Management 4 Summary Points
1. You’re not managing a product. You’re
managing the problem it solves.
2. Your product is only as good as a user’s
perspective of it.
3. Product Managers are neither designers nor
engineers.
– Expert on whether the design & functionality
meet the user needs.
4. It’s not about being a star. It’s about
managing a universe.

9. What Product Management is:
• Being the heart, mind, and voice of users.
• Facilitating cross-functional teamwork.
• Making product trade-offs.
• Meeting an end-goal with fixed time and
resources.
• Leading people along a product journey.

10. What Product Management is *not*:
• Being the most important voice.
• Being the only idea-generator.
• Being a designer.
• Being a programmer.
• Managing QA.
• Optimizing websites.

11. Product Management: Another View

12. 7 Traits of Successful Product Managers
1. Communication skills.
2. Leading without authority.
3. Learning skills.
4. Business acumen.
5. Love for products.
6. Eye for details.
7. “Routine” product management skills.
– MRDs & PRDs, competitive analysis, product
roadmaps, defining user experience, etc.

13. Business Model Language
http://asburyandasbury.typepad.com/blog/2011/03/1000-words-paint-a-picture.html
A business model describes the
rationale of how an organization
creates, delivers, and captures value
(economic, social, or other forms of value)

14. A tool that helps teams describe, challenge,
design and invent business models more
visually and systematically.
Business Model Canvas

16. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

17. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

18. Business Model Canvas: The 9 building blocks

19. Customer Segments (CS)

20. 1. Customer Segments
• Might be grouped into segments.
• Hopefully, profitable customers.
• Choice of number of segments depends
upon: competition, heterogeneity of
customer needs, technology.
– Mass market, niche market, micro market,
mass customization.

21. Value Propositions (VP)

22. 2. Value Propositions
• The reason why customers turn to one
company over another.
• Solves a customer problem or satisfies a
customer need.
• A bundle of products and/or services that
caters to a specific customer needs.

23. Channels (CH)

24. 3. Channels
• Customer touch points.
• Serve important functions such as:
– Raise awareness about a company’s products
and/or services.
– Help customers to evaluate a company’s
value propositions.
– Allow customers to make a purchase.
– Deliver a value proposition to customers.
• E.g. direct (sales force, web sales), indirect
(partner stores, wholesaler).

25. Customer Relationships (CR)

26. 4. Customer Relationships
• Describes the type of relationships with
specific Customer Segments.
• Driven by 3 motivations (might occur at
different period:
– Customer acquisition
– Customer retention
– Boosting sales (upselling)
• E.g. personal assistance, self-service,
communities, co-creation.

27. Revenue Stream (R$)

28. 5. Revenue Stream (R$)
• Cash that a company generates from each
Customer Segment.
• “For what value is the customer willing to
pay?”
• E.g. asset sale, usage fee, subscription fee,
lending / renting / leasing, licensing.

29. Key Resources (KR)

30. 6. Key Resources
• The most important assets to make a
business work.
• Depends on the type of business.
• E.g. physical, intellectual, human, financial.

31. Key Activities (KA)

32. 7. Key Activities
• The most important things to do to make a
business work.
• Depends on the type of business.
• E.g. production, problem solving, platform /
network.

33. Key Partners (KP)

34. 8. Key Partnerships
• The network of suppliers / partners to make
a business work.
• 4 different types:
– Between non-competitors.
– Between competitors (coopetition).
– Joint ventures to build new businesses.
– Buyer-supplier relationship.
• E.g. optimization & economy of scale,
reduction of risk, resource acquisition.

35. Cost Structure (C$)

36. 9. Cost Structure
• Describes the most important costs incurred
to operate a business.
• 2 broad classes: cost-driven vs. value-driven.
• Might fall into these 4 characteristics:
– Fixed costs
– Variable costs
– Economies of scale
– Economies of scope

37. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

38. BMC: Freemium Pattern
Infrastructure
development
&
maintenance
Platform
Fixed cost
Cost of
service for
free users
Free basic
service
Free users
(large base)
Cost of
service for
*premium*
users
Premium
service
*Premium*
users (small
base)
Free basic services
Paid *premium* services

39. BMC: Skype
Software
development
Software
development
Free internet
& video
calling
Global
Internet
users
Cheap calls
to phones
(SkypeOut)
People who
want to call
phones
Free
SkypeOut pre-paid / subscription
Software
Software
developers
Complaint
management
Payment
providers
Distribution
partners
Skype.com
Self service

40. BMC: Bait & Hook Pattern
Production
and/or
service
delivery
Patents
brand
Production &
services
Subsidizing
of “bait”
product
“Bait”
product
Customer
segment
“Hook”
product /
service
1x purchase of “bait”
Repeat purchases of “hook”

41. BMC: Multi-Sided Platform Pattern
Platform
Platform
management
&
development
Subsidizing
of “bait”
product
Value
proposition
#1
Value
proposition
#2
Revenue flow #1
Revenue flow #2
Service
provisioning
Platform
management
Customer
segment #1
Customer
segment #2
Value
proposition
#3
Customer
segment #3
Revenue flow #3

42. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

43. Exercise: build your own BMC
• Divide into 2 groups:
– Group 1: People who is currently working
together in a same company / organization
(max. 3 people).
– Group 2: Not currently in a same company
(max. 2 people):
• Have a business idea.
• Don’t have a business idea. It’s OK!
• “Coaches” are welcome.

45. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

46. Exercise discussions
• Group 1: Did your peers have the same
understanding about the business?
• Group 2: Did you discover more clarity about
your business? Can you explain / pitch
better?
• Use colors to represent segments.

47. BMC Example: Wireless service provider
Hi-volume
data users
Phone only
users
Engineer-
ing
Retail
stores
Ease of
integration
and support
Low cost,
always works,
phone service
Other phone
operators
Applica-tion
providers
Engineers
Salespeopl
Customer
service reps
Engineer-ing
Bundled
monthly fee Prepaid
Direct
Salesforce
24/7 support
Sales,
customer
service
Phone
vendors

48. Tell me about this business (strategy) #1

49. Tell me about this business (strategy) #2

50. Tell me about this business (strategy) #3

51. Tell me about this business (strategy) #4

52. Business Model Canvas: Agenda
• 9 blocks of Business Model Canvas – 20m
• Explore examples of BMC – 10m
• Exercise: build your own BMC – 20m
• Exercise discussions – 10m
• What’s next? – 10m

53. The value of using BMC
• Understand the essence
– Visual language, capturing the big picture,
seeing relationships.
• Enhance dialogue
– Collective reference point, shared language,
joint understanding.
• Explore ideas
– Idea trigger, play.
• Improve communication
– Create company-wide understanding, selling
internally / externally.

54. What’s next?
• Share your BMC.
– Depending on your situation, you might want
to “re-package” your BMC.
• Success stories? E.g. Provisi Education
(Indonesia)

55. Share your BMC
Share your business model canvases with your peers / colleagues
Identify issues, opportunities, gaps in knowledge
Fix colors as you share, if needed

56. Thank You!
• Connect on LinkedIn:
– https://www.linkedin.com/in/oeymulyadi
– Write a recommendation, for Indonesia
Product Management Consortium.
• Fill out the 3-minute feedback form / survey.
• Spread the words, share what you’d learnt
today.