THE PRODUCT LINE

The iPad - It's Déjà Vu All Over Again

It's been impossible not to notice Apple's iPad announcement last week. Somehow this is an event worthy of front page stories and passionate emotions about breakthrough innovations. You have to give Steve Jobs credit for finding ways to get the world's attention.

On the other hand, where some people see a game-changing innovation, we see the continuation of a long evolution of markets and technologies. A process that certainly does not start or end with the iPad.

So how do you feel about the iPad? Revolution or evolution? A stroll through the dustbins of "pad" computers takes us through the GRiDPAD, Momenta and the AT&T EO (with the infamous GO operating system), not to mention our favorite flameout - MODA Systems. We were about to put together a brief history - but no need as it already exists at "The Long Fail: A Brief History of Unsuccessful Tablet Computers."

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Our point? Innovation for innovation's sake is a false idol. Most products that carry that label wear it as a badge of positioning and marketing, not as the result of invention. Products like this are taking advantage of being in the right place at the right time more than being the first to market with the newest technology. History tells us that being too early to market is more costly than being too late. Not that there's anything wrong with being first, but too many of us forget that exciting new products that capture marketplace success are built on a trail blazed by innovations of the past.

Consider the Escalator

Submitted for your consideration, the escalator - one of history's great products.

Nathan Ames, of Saugus, Massachusetts is generally credited as the first inventor of the escalator. Although he never actually built one, in 1859 he was issued U.S. patent #25076 for "revolving stairs." Working escalators of various designs were eventually developed and commercialized by the Otis Elevator Company. Until recently, some of those original escalators could still be found in the Boston subway system (how's that for a product life-cycle?).

In 2004, estimates suggest that there were over 30,000 escalators in use in the United States that are used more than 90 billion times per year. Clearly a successful and widely used product.

Essentially used to move foot traffic through public spaces - escalators can be found in department stores, shopping malls, airports, transit systems, convention centers, hotels and office buildings (a platform for many product variants across multiple market segments!).

Escalators efficiently move pedestrians (everyone goes the same direction on an escalator) and provide multiple benefits in each of the above segments all over the world. Some key features that differentiate the escalator from its primary competitor (the elevator) include:

• Escalators carry large numbers of people
• Escalators fit in the same spaces as stairways
• Escalators have no waiting

And of course - our favorite feature of the escalator, is that when it fails to operate for any reason - it simply becomes a staircase (becoming the product that it was intended to replace). How many products can do that? 

One more interesting anecdote about escalators: even though the word "escalate" has entered popular usage, the word "escalator" was actually invented and trademarked by Charles Seeberger in 1900, to mark the product launch at the Paris Exposition Universelle. How's that for branding?

A Recipe for Relevant Requirements

Most of us are all too familiar with this cartoon that captures the challenges of product development. To people unfamiliar with the process, the joke's just a silly picture, but if you're directly involved in any of the steps, you probably release an involuntary groan every time you see it. Really - what exactly is so hard about delivering what the customer wanted?

The statistics are pretty grim. Research shows that regardless of the business case, more than half of development projects fail. Why is that? The primary cause almost always points back to requirements. The requirements were too stringent, the requirements were too loose, the requirements didn't take into account the customer's environment, etc, etc. All of that is easy to say with the benefit of hindsight, but it still makes you wonder why it is so hard to get the requirements right when all you are really trying to do is build what the customer wants?  The problem is that figuring out what the customer wants and will pay for isn't as straightforward as you might think.

Defining requirements is the heart and soul of product development. Get it right and everything else will follow. You'll know what's important and what's just nice to have. Get it wrong and it doesn't matter how good your tools are, or whether or not you have traceability through an automated test process. You may end up with a product that's functional (according to the spec) but not one that will sell. If only managers could identify which initiatives are the faulty ones or how to see the warning signs so that a course correction can be taken to get back on track.

Here's a little known fact: if you are defining requirements before you have established adequate context, your requirements are unlikely to hit the mark.  In the product world, adequate context means that the product team has identified, captured and agreed upon key components of the product plan, including the business model, the target customer segments and the key competitive advantages that will be delivered BEFORE they get started. Only then can the HARD WORK of actually defining the requirements begin.

Try this simple idea. Have the product team draw an actual picture (yes, a picture) of the intended customer as part of the requirements definition process. Be sure to include that picture in the documentation and keep it front and center throughout the development process. If the customer is constantly looking back at the process, the team is more likely to stay on the right track and deliver what's really wanted. It doesn't make it easy, just more likely to produce a successful product!

What is a Product?

Sometimes the simplest questions can lead you into very complex territory. We often start our projects by asking a client for their list of products. Sounds simple enough, but getting a tight definition on what is a product seems to be getting more and more difficult, especially when services are involved. Consulting the dictionary isn't much help. Most definitions of "product" have mathematical roots - a product is the result of multiplying 2 or more numbers, or a thing that is made from a combination of other things. A business oriented definition is "something that is marketed or sold as a commodity" (the "as a commodity" part being an important condition indicating that the "something" is sold in the same form more than once).

Why do we ask this question? As products get more and more abstract, simple management questions such as creating a list of products become agonizing efforts. This ambiguity is often a root cause of many product management challenges. How can there be a coherent product plan or road map when there is no agreement on what is and isn't part of the product? How can product managers know what they are responsible for if there is no schematic of where a product starts and stops? For our purposes we define a product as "the thing that a customer buys." Therefore, the "bill of materials" for a product includes all of the labor, processes and raw goods needed to deliver that which a customer is willing to pay for. A single missing ingredient, like a shipping container, can make the entire product useless (if it can't be delivered for example).

Lately, we've been spending a lot of time in the financial services sector, an industry where products are often services based on abstract concepts. It's also a place where the discipline of product management is still evolving - especially when compared with industries with more tangible products. Consider a product that seems simple - a checking account. Is that a product? It certainly has value and is something that customers use. Like most products, there are many features and functions to consider (interest rates, balance minimums, online checking, auto bill pay, overdraft protection, custom checks, etc). Do you think there should be a product manager for "checking accounts?" How would you measure the revenue for that product? What are the costs and margins for that product? Some banks consider their online banking website to be a product since that's what the customer sees. Should there be a separate product manager for that website? What about a product manager for the ATM network? If so, is the website a part of the product called "checking account?" Or is checking a part of the website offering? In fact, there are no obvious answers. But there is a compelling need for clarity and consistency in how "products" are defined.

Interested in learning more about products in financial services? Catch up on MIDIOR's recent research on product management practices in this industry by participating in our upcoming webinar

One Thing, Well Done

We often hear ourselves telling people that the key to growth and profitability comes from doing the same thing over and over. It could be a repeatable process, a perfect design, or a recipe for managing acquisitions. The point is to know what that "one thing" is and figure out how to do more of it, rather than re-inventing your top sellers and looking for new lines of business. That doesn't mean we're opposed to innovation, we just think that creativity without purpose is not the same as progress.

For In-N-Out Burger that "one thing" is the menu, which hasn't changed in 60 years (except for the prices). Their primary innovation over the years has been to add indoor and outdoor seating areas (previously there were only drive-through and walk-up windows). No microwaves, no freezers, no chicken, no salad - just a great product with a long track record of growth.

Not only does this make us hungry for a "double-double animal style," it reinforces our observation that most companies are trying to develop too many new products. The problem with too many is that you end up with a bunch of mediocre ones - as opposed to a couple of winners.

WD-40 Is A Perfect 10!

Today we have another example of a great product with a great story. Originally developed as a protective coating to prevent rust on the outer surface of the Atlas Missile in 1953, WD-40 is now found in more than 80% of American households. It's not surprising to find WD-40 in the toolbox, in the car, AND in the kitchen. It lubricates, it cleans, it protects and new uses are still being discovered after more than 50 years in the market.

Here is our top ten list of signs that this product was destined for greatness. How well does your product stack up against these indicators of success?

1. During initial development, employees were surreptitiously taking home samples because they thought it was so useful.

2. The only significant complaints about the product have to do with the little red straw which can fall off the nozzle and sometimes gets lost (addressed in 2005 with a can design that has a permanent straw)

3. The product has a fan club with over 100,000 members.

4. Originally called Rocket Chemical Company, the company name was changed to WD-40 Company in 1969 and went public in 1973.

5. The original formula has not changed over time, only the packaging and delivery methods (aerosol cans, precision pens, non-aerosol sprays) have changed.

6. The product has over 2,000 documented uses; ranging from anti-corrosion, to lubrication, to cleaning crayon marks. Our favorite: "keeps snake and reptile skins pliable in taxidermy"

7. The product has inspired its own book, The WD-40 Book

8. The formula for WD-40 has never been patented (it's not that hard to reproduce, but the strength of the brand is just too good).

9. The product has never been produced under private label or any other name (not even for Sears or Walmart).

10. It took 40 attempts to get the original formula right - hence the name WD-40 (Water Displacement - perfected after 40 attempts). Good thing they didn't stop after 39 failures.

What About Ambition?

Have you heard about the Hoover Dam Bypass Project? The beautiful pictures can give you a small sense of what it's all about. The magnitude of this effort and the engineering challenges are clearly visible. Construction of the Colorado River Bridge (at left) is an inspirational view of what can be accomplished with the combination of vision and planning.

The Hoover Dam Bypass project is a 3.5 mile corridor connecting Arizona and Nevada with a new 4 lane roadway (U.S. Highway 93) that will span the Colorado River. Currently, the only way for traffic to cross the river is via the top of Hoover Dam - a winding route that was never intended to carry heavy traffic or large scale trucking. Over the past 50 years, this tourist route has become an increasingly critical north-south connection for commercial traffic and was even designated official status as a North American Free Trade Agreement (NAFTA) Route. The project to upgrade the river crossing with a true highway started in 2001 is just now reaching it's final stages.

This all just makes us wonder about the team that had the vision, the ambition, the gall to say, "let's just build a new bridge, in the middle of the desert, 1,000 feet above the Colordao River. It will take 10 years and there will be many bureaucratic hurdles, but we should still do it." Most of the people and organizations we work with struggle to think about long term plans and shy away from the risks inherent in taking on anything that seems impossible at first blush.

What's happened to our ambition? Great products often come from solutions that tackle a problem head on, rather than those that tinker around the edges without taking any big risks. Let this image of a seemingly insane solution remind us to be ambitious and think big about what's really possible.

Power Law Statistics for Products

A recent column by Steven Strogatz in the New York Times titled "Math and the City" has rekindled interest and debate about the surprising applications of Zipf's Law. Zipf's Law, named for the Harvard Linguist, George Kingsley Zipf, was originally derived as an explanation of the frequency of occurrence of words in the English language. Zipf observed that the most common word (the) is used twice as much as the second most common word (of), three times as often as the third (and), and so on. Interestingly, this pattern holds true for words in all human languages. In mathematical terminology this is called a power-law statistic, and the most surprising thing is that this pattern has been found to hold true for many different natural and social phenomena. For example, seemingly random statistics like cities ranked by population, individuals ranked by wealth, earthquakes by strength, web sites by popularity, books by online sales, all fit the pattern identified by Zipf.

Fascinating. But what's that got to do with product management? Here's the notion: maybe Zipf's Law can also be applied to the relative success of products in the marketplace - for example, how market share is bound to be distributed. The most popular product has twice the share of the next most popular, three times the share of the third, etc. And maybe that's a factor that should be taken into account during product planning. As in, if you already have twice the share of your closest competitor, can you realistically expect to gain any additional share? Or, if you are third in the market, does it constrain where you need to set your goals in terms of realigning the entire market (vs. just thinking about your own revenue growth)?

Another way to think about applying Zipf's Law may be to the allocation of development resources. We know that this is one of the more challenging problems in product development: with a given pool of resources - what is the best way to allocate people and funding across multiple initiatives? Since there is no proven method for optimizing the mix, why not let Zipf show the way? The most important (largest opportunity) should get twice the resources of the second most important, and three times the allocation of the third. Why? Because it's the law.

Homework and Requirements Management

By day we work on product management issues - helping companies develop better products, by night - we help kids with homework. Usually those are two different worlds, but sometimes they overlap in surprising ways.

Enter Noodle Tools ,a California company founded by a mother and son team with an exciting product called "NoodleBib." NoodleBib is described as "the leading bibliography software on the Internet" and its original intent appears to have been to support the automation of complete, conformant and accurate bibliographic citations. It has become a popular tool for helping students implement a process for writing research papers. In this vein - it is described as "powerful note-taking software that promotes critical thinking and creativity." And it truly is a great product for getting students to capture information from a variety of references, while at the same time keeping track of all the ideas, snippets, and relationships back to original sources. The online tool, based on a notecard metaphor, allows scraps of information to be arranged, and rearranged as the students ideas evolve into a coherent form.

Hmmmmmm. I wonder if anyone's noticed that this sounds like exactly what's needed by product development teams as they elicit, refine and create structured documentation for product requirements: A tool for organizing and keeping track of random bits of information that may originate from a variety of sources. Even the notecard metaphor lines up nicely with the concepts used in "Agile storyboards". We haven't thought of it before, but maybe writing research papers (with detailed footnotes and bibliographies) is a relevant training ground for up and coming product managers. So for all the students out there - you just may be getting some practical skills out of those homework assignments that have been keeping you up all night. And hopefully that's a thought that will put a smile on the face of many an English teacher.

Why Can't a Robot Move Like a Caterpillar?

You never know where great ideas are going to come from, and last month's meeting of Northeastern University's Entretech Forum provided a great example. Amongst presentations about various conventional robots (is that a new oxymoron - "conventional robots?") from firms like Hocoma, Foster-Miller and others, a voice comes along with an entirely different point of view. Barry A. Trimmer, Ph.D. and Professor of Biology at Tufts University - asks a very simple question, "why can't a robot move like a caterpillar?" Many of the challenges for robots in their ability to move around corners, up and down stairs, and generally over and around obstacles stem from the fact that they have been designed to move like people or cars, using legs or wheels. But with the clarity that's only available to someone with a little bit of distance from the problem, and expertise in an entirely different subject matter, Professor Trimmer points out that the majority of our knowledge about movement is based on creatures that walk, fly or swim using rigid articulated bones and exoskeletons. And those systems of rigid structures and joints present limitations in terms of three-dimensional movement, especially in confined or irregular spaces. With a soft-body, joints do not restrict movements. Such animals can crumple, compress and rotate body parts with virtually unlimited freedom. As a biologist, Professor Trimmer studies these creatures, and the neural systems that allow them to control movement - a subject he calls, "neural processes that organize sensory and motor information."

The interesting inspiration however, was to apply this field of biology to the engineering challenges inherent to robotics - and create the multi-disciplinary field of neuromechanics, and to launch a new research group now called the The Tufts Biomimetic Devices Laboratory. The lab's overall goal is to develop devices based on the highly adaptive mechanisms of animal movement, through interdisciplinary projects combining faculty from Biology, Biomedical Engineering, Computer Science/Electrical Engineering, Mechanical Engineering, Civil and Environmental Engineering, Psychology and Math. Now that's a cross-functional team!

There's a lesson in here that's not just about robots, but applies to product development, innovation and the search for creative solutions. Our conventional instincts are to dig deeper and deeper into a subject to acquire "domain expertise", consulting experts with deep, but narrow fields of vision. Sometimes, the best thing you can do is go outside your obvious frame of reference. Get a new perspective through consultation and interaction with an entirely different group of people. Are you searching for creative solutions and fresh ideas? Have you tried hiring smart people from different industries? Do you only read about new ideas and technologies from within your own industry? Sometimes the worst thing you can do is to spend your time locked in a single point of view - with trade journals and analyst reports that all reinforce a common set of assumptions. There's an old joke about scientists who study a single problem, learning more and more about less and less until they know everything about nothing. Is that happening to you?