The vicious circle of modern IT product management

I’ll admit it – I have a serious issue with the way most of the tech industry goes about discovering their users’ needs. The fact that I clearly understand why PMs everywhere keep on stepping on the same rake hitting themselves in the face time and time again doesn’t make it any better.

The script would be very familiar to anyone who’s been a PM or worked with one:

  • Identify a handful of key large accounts;
  • Ask key people there what they want you to develop;
  • Develop all the things!!
  • Try to figure out how to make the rest of your potential customer base buy what you’ve developed (a.k.a., “get busy hammering square pegs into round holes”).

I’ve seen this play out time and time again, and every time I see it, it makes me want to cry. If it’s not self-obvious (in which case this post probably doesn’t have too many surprises for you), here’s why:

  1. Your large customers’ needs are very likely to be unique to “the way they do things there”. The bigger they are, the more likely this to be true. So what you’ll develop for them will be not very, um, widely applicable.
  2. Often the key people you’ll talk to at these key customers will be the ones with very, very strong opinions about how the things should work, which is closely related to, and reinforces, the #1 above. So it will likely mean that you will have limited flexibility in deciding what your product will do, or how.
  3. Unless you have some serious pre-existing incumbency (which you’ve built while your large customer wasn’t as large), they will likely ditch your product the moment they figure out how to do it cheaper without you, and they usually have pretty strong motivation to do just so.
  4. Typically, the bigger they are, the lower your profit margin is on what you sell them.

So, to summarise: they force you into developing a product that likely won’t have a good fit to the overwhelming majority of your potential market (“the meaty middle”), that otherwise would be source of the fatter part of your profit margin; and will walk away the first chance they have.

If that’s so, and is this obvious, why don’t we break the spell and do it differently? I think there are a few (good!) reasons for that.

  • Your typical PM is constantly under pressure, and if they haven’t been exposed to better / more scalable ways of dealing with user need discovery, they simply won’t have physical means of learning and trying something different.
  • “The meaty middle” is large, and is much harder to “talk to”; at least using traditional discovery methods (focus groups, customer advisory boards, etc). They also are silent. Or vewwy, vewwy quiet. Cos’ they’re busy working, not clouderating on Twitterz.
  • Since those traditional methods don’t scale, the risk of getting poor input (and the resulting “I don’t have enough info to make dev priority calls” agony) is much higher.
  • There’s no likely fat purchase order at the end of the development cycle – these guys are fairly small, and buy small, too.
  • For many, many companies in “the meaty middle” IT is as far from core activity as it gets, and chance of finding someone there who had a chance to stop and think things through to the level where they can verbalise it for you in sufficient detail is diminishingly small.
  • Very few of those mid-market companies have names / brands that are known well enough to be used as “signature” or “logo” accounts to help attract attention from other potential buyers.

Is there a better way? I’m convinced there are; I wrote about one a couple years back – Innovator’s guide to “purple cow” breeding, in two parts. (Follow link at the end of the Part 1 to the Part 2. And yes, I never wrote the Part 3; guilty as charged).

Even if there is a better way, does it really matter? I think it does. I think that most companies today continue to exist (and in some cases appear to flourish) not because they are doing a good job, but because all their competitors are doing an equally bad one. Very, very few have laser focus on customers’ needs. (Before you go and point out Rackspace, please note that there’s difference between “needs” and “customer service”, and later doesn’t automatically mean former).

The two companies I can call out as an example of such true focus are Amazon and Apple. I don’t think either one uses the ODI; but it’s not the method that matters, it’s the result that does. And, in case of these two, results are quite self-evident.

(Small anecdote: at one of Apple’s competitors’ offices, walls in lifts are plastered with calls to their staff to “Think differently”. So much for denying attempts to copy).

If you care about the longer term prosperity of your company, please consider the way you go about understanding what matters to people who are willing to pay their hard-earned cast to those who help them be more successful. We as a collective industry are so ready for somebody to come and just take it all. Be the taker, not the taken.

Think of it in the same way you think about your health – it’s not urgent, but it sure is important. Think long term, not end of quarter.

Sideshow Bob and the sea of rakes

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About Dmitri Kalintsev

Some dude with a blog and opinions ;) View all posts by Dmitri Kalintsev

3 responses to “The vicious circle of modern IT product management

  • EtherealMind

    It might be worth pointing out that the Customer Advisory Boards, Focus Groups and Sales Reviews all told Cisco executives that SDN was not interesting and lead, in major part, to Cisco’s late entry to the SDN market. Today, they are still catching up with competitors.

    That’s a practical example of where “listening to customers” is the wrong approach. For a large part of the time, you should also be leading them through creation of ideas, products and strategy.

    Which is what I think you are talking about here. Too many product managers are simply “taking feedback” from customers – people who only understand their own narrow problems, their own business needs and without vision or drivers to consider the wider market.

    Product managers should be visionary and strategic while listening to customers. But implementing what they customers ask for is like fast food, – unhealthy in the long run.

    • Dmitri Kalintsev

      > leading them through creation of ideas, products and strategy

      I don’t think this approach would work too well in the described situation (attempting to build for largely silent mid-market). If you have time, read the two posts I linked to (first one has link to the second one). They cover are a few more details on a method that seems to work very well.

  • fsmontenegro

    IMHO the direction should come from having a deep expertise in the domain of your product and then SHOW your customers how you plan to handle the common problems in that space.
    Sure, validate with them as a sanity check or as a way of getting buy in, but remember Ford’s warning (apocryphal?) that if he’d asked what people wanted, they would have said faster horses…

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