Installment 2: Our 2011 Workshop Series
This is the second article in a series with excerpts from this year’s workshop titled, “How to Eat an Elephant – Developing a Real-World Product SaaS Product Roadmap.” Each of these articles will cover one part of core subjects in our Cloud Product Roadmap. If you are just joining us – you can return to the first article in the series and find out more about the workshop background and other articles in the series.
Cloud Product Roadmap – Product Strategy
Excerpt: Lean Product Development and the Customer Development Process
The Product Strategy section of our Workshop covers the Lean Product Development approach and how it leverages the Customer Development Process. One of the opening slides mentions this quote, “Product strategy is like a roadmap, and like a roadmap it’s only useful when you know where you are and where you want to go.” (McGrath 2001)
This is the core idea behind our Product Strategy presentation and our Cloud Product Roadmap – helping companies considering SaaS and Cloud products to find where they want and need to go.
Lean Product Development rests on a basic premise: The product features that customers will value are unknowns. In the case of a software, regardless of how it is delivered, that means the features and services the application will offer are simply a hypothesis until they have been actually evaluated by users in their own context and use. By using Agile development and practices and evaluation by key customers, product management seeks a minimum feature set that will provide the greatest value while reaching the widest customer coverage. The Agile development approach provides a system of relatively short development cycles or iterations that produce features that users can evaluate immediately.
The Customer Development Process provides the basis for customer involvement, particularly during early product development. The founding team seeks clients who can understand the product vision. These clients will become early adopters and customer development partners during application development. The Agile development iterations are used to test the feature hypotheses with the customer development partners to validate that the features developed provide real value and will drive sales. The point is to find a product that reliably produces value for enough customers to sustain a business model that can be scaled.
Based on Customer Validation, the process continues into creating market demand and scaling sales to reach positive cash flow. The product development doesn’t end however, it continues throughout the lifecycle of the application as the customer pool grows, continually feeding discovery and learning. At the same time, the company itself manages a process of transition from being a product development organization to an operational machine that can continue to execute and serve customers as sales scale.
The key starting point for this process of product and company building is finding the Minimum Viable Product (MVP). This is a product version with the minimum features needed to solve the core problem of the target market. In most cases, it is a lot less product than is necessary for a market release. This is an important difference from the traditional product development process where the aim is to bring together as robust and complete a feature set as possible that will fend off possible competitors and produce an apparently over-whelming feature advantage. This is possible because traditional product development processes depend on the assumption that the market is known and the needs of users are fully understood. It works well when the product line has a solid history of success and the product management team has been participating in the market for some time.
Internet-based applications and services, however, have the possibility of reaching new markets and customer segments that were out of reach in the locally-installed, licensed model – even for ISVs in the market with products. While a SaaS or Cloud product developed with traditional product development methodology could capture its existing customers, it could easily miss newly available market segments with unexplored problems.
To address this gap, Lean Product Development and the MVP approach are aimed at testing the value hypothesis and allowing the visionary early adopters to “fill in the gaps” when it is validated that the MVP is solving a real problem. If the MVP isn’t solving the core problem, the cost of re-evaluating and approaching the opportunity from a different direction is small and early adopters can aid in defining the issues contextually. In this approach, the risk of wasted effort and time are minimized, and the opportunity for clarity in solving the real problem is greatly improved. Once the MVP is proven, the vision can continue to be achieved in small increments without the waste of producing a laundry list of features that in the end no one will pay enough for to realize a profit.
The advantages of Lean Product Development:
- Reduces the risk in bringing a new product to market
- Reduces investment prior to positive cash flow
- Accelerates time to market with a viable product
- Aligns product features with proven customer needs
- Provides a rapid, dynamic feedback loop from the customer that drives product design, product packaging, price structure, and competitive positioning
The competitive positioning issue is one that is worth a few extra words. The Customer Development Process engages customers and creates a shared sense of product destiny. In turn this increases customer satisfaction, loyalty and retention. These are critical to success for online services like SaaS and Cloud Products. It produces a product that fits a client base tightly and is a barrier to competition. It has been shown that products with a Replace Strategy need to be perceived to be nine times better than the product they replace to gain market traction. The longer a customer is retained in a Lean Product Development model, the greater the barrier the competition will have to overcome.
<Read the previous article in the series – Third Article in the Series>
This is just one of many critical subjects we cover in our workshop.
This series will be covering more in the days leading up to the event. But reading these excerpts will not give you all the material and is no substitute for attending and joining in the discussion.
How To Eat An Elephant
Developing a Real-World SaaS Product Roadmap
28th April 2011
from 8:30 am to 1:30 pm (including breaks)
The Venue
Embassy Suites – Southeast
7525 East Hampden Avenue
Denver, Colorado
Prices
- How to Eat an Elephant Workshop – Standard price – $499
- Register By April 1st for our Denver Workshop and take advantage of our Early Bird Pricing
Agenda
- The Business Case for the Cloud - Assess if the Cloud is for you by identifying the business opportunity, investment needs, risks, etc.
- SaaS/Cloud Product Strategy – Define the competitive and positioning strategy for your product within your context and your market.
- Your Cloud Business Model - Define how your product will make money and what is needed to make it happen. Developing your SaaS/Cloud Product Roadmap – Develop a tactical roadmap to align funding, development and marketing objectives.
- Key Technical & Functional Requirements of a SaaS/Cloud Product – Understand the architecture and functional elements required to deliver your service smoothly and profitably
- Cloud Readiness Checklist – Identify key requirements of SaaS and Cloud operations, customer support, legal, financial considerations, sales and marketing that you will need to prepare for to make your product successful.
You can take the workshop by itself or in conjunction with
SaaS University
THE Industry’s Most Comprehensive Cloud Application Conference
At the Embassy Suites, Southeast – Denver, Colorado – April 26th to 28th 2011
Prices
- SaaS University Package – Regular Admission – $999
- SaaS University Early Birds – $799 (Registrations by April 1st, 2011)
Get an additional discount from Scio – Regardless of when you register
- Because we are participating in this event, you can get an additional $100 off your registration.
- Just enter the Scio’s Discount Code: SCIOsave100 when registering for SaaS University.
Go to SaaS University Denver Registration Page
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