For Prof. Kumar Sarangee's MBA class at Santa Clara/Leavey. Basics of tech product management: role, pricing, roadmapping, and "how it is in the real world." Energetic class participation

1. Tech Product Management Essentials: Roles, Pricing & RoadmapsRich Mironovrich@mironov.com12 Oct 2010 for Prof. Sarangee, Marketing 572

2. An Unapologetic Product Guy Currently CEO of stealth start-up Agile product management consultant Interim executive Business models, pricing, whole products Repeat offender at product mgmt/marketing Tandem, Sybase, four software startups “The Art of Product Management” Chaired Agile ‘09/’10 PM/PO tracks Founded ProductCamp

3. Agenda What does a product manager do? Basics of pricing software Roadmapping: process vs. artifact Take-Aways

4. Product Management Executives Development What Does Product Management Do? strategy, forecasts, commitments, roadmaps,competitive intelligence budgets, staff, targets market information, priorities, requirements, roadmaps, MRDs, personas, user stories… Field input, Market feedback Mktg & Sales Markets & Customers software Segmentation, messages, benefits/features, pricing, qualification, demos…

5. Product Mgmt Planning Horizons many years Exec Strategy years Portfolio many mons PM Product 2-9 mon Release Dev Team Sprint 2 wk Daily

6. Pragmatic Marketing® Framework Less Technical BusinessPlan MarketingPlan Positioning Pricing Market Problems Customer Acquisition BuyingProcess Market Definition Buy, Build or Partner Win/Loss Analysis Customer Retention Buyer Personas Distribution Strategy Product Profitability Distinctive Competence Program Effectiveness UserPersonas Product Portfolio Tactical Strategic Business Market Programs Planning Strategy Support Readiness Business Market Programs Planning Strategy Support Readiness Innovation Competitive Landscape LaunchPlan Require- ments Product Roadmap Presentations & Demos SalesProcess Technology Assessment Thought Leadership UseScenarios “Special”Calls Collateral Lead Generation Status Dashboard EventSupport SalesTools Referrals & References ChannelSupport Channel Training More Technical © 1993-2009 Pragmatic Marketing, Inc. All rights reserved

7. Pragmatic Marketing® Framework Dir, Prod Strategy Prod Mktg Mgr Tech Prod Mgr BusinessPlan MarketingPlan Positioning Pricing Market Problems Customer Acquisition BuyingProcess Market Definition Buy, Build or Partner Win/Loss Analysis Customer Retention Buyer Personas Distribution Strategy Product Profitability Distinctive Competence Program Effectiveness UserPersonas Product Portfolio Business Market Programs Planning Strategy Support Readiness Business Market Programs Planning Strategy Support Readiness Innovation Competitive Landscape LaunchPlan Require- ments Product Roadmap Presentations & Demos SalesProcess Technology Assessment Thought Leadership UseScenarios “Special”Calls Collateral Lead Generation Status Dashboard EventSupport SalesTools Referrals & References ChannelSupport Channel Training © 1993-2009 Pragmatic Marketing, Inc. All rights reserved

8. Nature of PM Role No natural sequence for PM Must work all aspects in parallel Planning onion as simultaneous equation Bottoms-up shapes top-down Top-down shapes bottoms-up Product Management provides strategy, judgment and integration as well as execution Owning market success is an unbounded problem

11. “Pricing is almost neverabout the number. It’s about the model.”

12. Start with Customer View Customers buy most products to make money or save money How do they describe value? Quantify it for them They won’t spend time to fully analyze your product Assume you can capture a fraction of value B2B: often 5% to 15% Consumers often driven by fashion, not analytics

13. Hard Cost Savings Example “By using our tech support knowledge automator, you can reduce your support time per call by 30%.”

14. Pricing Your Start-Up Why will customers buy? Tell a story in customer’s own language What’s the natural unit of exchange? How do they derive value? What does the competition do? Can you split off a profitable segment? How much of customer value can you capture? Test, trial-close, get your hands dirty

15. Software Value Exchange Models Time-based access (e.g. unlimited/month) Transaction (stock trade) Metered (seats, CPUs, named users) Hardware (appliances, dongles) Service (virus updates, support) Percentage of incremental revenue/savings Data-driven insights Charity…? From Luke Hohmann’s “Beyond Software Architecture”

17. Big up-front license (lock up marketplace)

18. Lust for upgrades (cool features are extra)

19. Freemium model (1% upsold into paid services)

21. Workshop Exercise: Teleportation Founders: Stanford physicists with local VC Software plus expensive custom hardware Some arbitrary product limitations such as… Inanimate objects only (no people) Under 40 pounds, under 18” diam 2000 mile limit, arrival +/- 3 inches Non-military, non-government Result: every group jumps to price, skips use case (value)

22. How Will People Cheat? If I want to rip you off, how could I do it? Licensed software… Per-seat SaaS… Hardware token… Licensing versus enforcement Who are the cheaters? How much are we willing to spend? Diminishing returns Easier to exploit complex pricing models

23. Agenda What does a product manager do? Basics of pricing software Roadmapping: process vs. artifact Take-Aways

24. Class Roadmapping Experience Who has a roadmap? What timeframe does it cover? Successes, failures?

25. Benefits of a Solid Roadmap Identify/clarify tactical and strategic intent Internally Becomes a filter for prioritization Ensures “ship is headed in the right direction” Avoids the “last/loudest” priority problem Externally Near-term commitments and long term view for customers Binds best customers to your company

26. Roadmaps are Scary Articulate when things should arrive Describes what you are not going to build Forces open discussion among functions Makes you commit to an uncertain future Dirty secret: most companies do not have a workable roadmap process They jump from vision/portfolio to release

27. Typical Roadmap Failures No visible logic Created unilaterally Lack of buy-in Poor technical and market inputs Static No plan for internal or external sharing

28. Successful Roadmap Creation… Active participation of key constituents Engineering (architects), perhaps Marketing, next-level product strategists or Support Extended in-person meetings Time to research issues Reviews every 1-2 quarters Clear (written) distribution plan Easy to say, hard to do

29. Build Strategically, Iteratively Time Horizon -- Quarters work well… Small Office Market Map Biometric Id Managed Service Feature/Benefit Map What technology should we use? Linux Tarchitecture Roadmap Market Events / Rhythms The Real Schedule

30. Key Questions Who are my desirable markets/market segments? What do they care about? When / how often should I serve them? What technologies can I leverage? How must my current product change? What are the external factors that I must address to deal with these issues? What external events drive my timing?

31. Low-Tech Speeds Collaboration Formal results transcribed into high-tech tools (Visio…)

32. Agenda What does a product manager do? Basics of pricing software Roadmapping: process vs. artifact Take-Aways

33. Take-Aways Tech product management is critically important but loosely defined Pricing is strategic, creative and behavior-focused Roadmapping is a process, not just a deliverable Someone must be responsible every day for long-term thinking

34. Q&A / Contact Information +1-650-315-7394 rich@mironov.com www.mironov.com/articles/ feeds.feedburner.com/RichMironovProductBytes @RichMironov www.linkedin.com/in/richmironov