Archive for the ‘product management’ Category

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RB @Evan William’s How to Evaluate a New Product Idea

Sunday, April 11th, 2010

Note: This is another gem of a post from Evan Williams; dated, but still pertinent even as of today. I’m “re-blogging” it here, for safekeeping!

I’ve been thinking about a number of new product ideas lately. In doing so, I’ve been trying to come up with a more structured way of evaluating them. Here’s a first attempt at defining that. It’s not as clear as I’d like it to be. But perhaps you’ll find it useful.

Tractability

Question: How difficult will it be to launch a worthwhile version 1.0?

Blogger was highly tractable. Twitter was tractable, but sightly less-so because of the SMS component. Google web search had quite low tractability when they launched it. Vista?: About as low as you can get.

Tractability is partially about technical difficulty and much about timing and competition—i.e., How advanced are the other solutions? Building a new blogging tool today is less-tractable, because the bar is higher. Building the very first web search engine was probably pretty easy. Conversely, building the very first airplane was difficult, even though there wasn’t any competition.

In general, if you’re tiny and have few resources, tractability is key, because it means you can build momentum quickly—and momentum is everything for a startup. However, tractability often goes hand and hand with being early in a market, which has its own drawbacks (e.g., obviousness, as we’ll discuss below).

If you’re big and/or have a lot of resources—or not very good at spotting new opportunities, but great at executing—a less-tractable idea may be for you. It may take longer to launch something worthwhile, but once you crack the nut, you have something clearly valuable.
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Marissa Mayer on product development

Monday, February 23rd, 2009

Launch early and launch often! Nuff said .. from Google’s wonder girl.

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Case study: Bell Atlantic and AT&T’s vendor lock-in battle

Wednesday, August 13th, 2008

One of the reasons I really hesitated in getting the eyePhone is because among other things, I truly dreaded the 2-year mandatory contract. I hated the idea of guaranteeing someone a consistent revenue stream and possibly be locked-in to their demands should they raise their prices.

Case study: Bell Atlantic and AT&T vendor lock-in battle.

In the 80′s, Bell Atlantic spent $3 Bil on AT&T 5ESS switches for Bell’s telephone network. AT&T’s switches were much more superior to Northern Telecom and Siemens at that time.

However, Bell didn’t properly size the vendor lock-in.

The 5ESS switches ran an operating system proprietary to AT&T, so whenever Bell wanted upgrades or new features, it was pretty much at the mercy of AT&T’s pricing weather.

Case in point: Bell Atlantic wanted its systems the ability to identify toll-free “1-800″ calls. AT&T didn’t provide (of course they didn’t!) any documentation or API for Bell to develop this feature themselves, and quoted Bell $8 Mil for a software upgrade just to do that. Bell had no choice and bent over. Voice dialing? $10 Mil! (really)

This extortion was a fat consistent revenue stream for AT&T, and made up 30-40% of AT&T’s switch revenues. AT&T’s position was further solidified by using its proprietary OS to prevent others from developing compatible equipment that may cannibalize sales from AT&T’s product line.

Bell Atlantic could not just throw AT&T out because (1) the switches had a lifespan of over a decade (2) removing and installing was expensive (3) the used switches had low re-sale value, because nobody not already locked-in would want to be locked-in ;)

In other words, the switching costs were astronomous, and Bell was hurting real bad in the wallet. It sued AT&T in 1995 for monopoly.

Shifting gears. To draw a parallel, in many ways, traditional on-premise software vendors use such tactics to .. well, play their hand.

With SaaS, this problem goes away. The customer can switch vendors on a dime; without the safety net of a perpetual licensing scheme, vendors have to constantly prove themselves by continuously delivering innovation and value to their customers — or risk losing them to the competition.

A flat world combined with fierce competition to innovate can only mean more and better options to the consumer :)

Unlike traditional on-premise vendors, SaaS vendors can’t rely on their own product development “baggage” to milk a drying revenue stream.

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Posted in business, cloud computing, paas, product management, saas, web 2.0 | No Comments »

A laundry list of business problems (opportunity)

Sunday, July 20th, 2008

“Every problem is an opportunity, and the bigger the problem, the bigger the opportunity. No one will pay you to solve a non-problem.”
– Vinod Khosla, on big problems and big opportunities.

The one thing I’ve come to admire about Paul Graham (using “Paul Graham” as a synonym for Y Combinator itself), is that he’s turned into quite a force to be reckoned with – aligning, match-making problems with teams and solutions, cranking up accomplishment cycles. Seems to me that these days, he has access to all sorts of real-world business problems, and conveniently enough he also practically has an army of technology entrepreneurs ready to take a bite out of any gauntlet that he throws down.

I love that quote from Vinod Khosla above, and I’m always on the look for problems, because I see them as unmet needs, and I love disruption – David vs. Goliath style take-on-the-incumbent fights. PG has recently written up on ideas for startups that he’d like to fund, so reading this list was definitely a must for opportunity-seekers, and you know what .. even if it’s not a problem that you can see yourself solving, it’s good to be aware of the problems out there in your adjacent industry.

I find #6 interesting:

More variants of CRM. This is a form of enterprise software, but I’m mentioning it explicitly because it seems like this area has such potential. CRM (“Customer Relationship Management”) means all sorts of different things, but a lot of the current embodiments don’t seem much more than mailing list managers. It should be possible to make interactions with customers much higher-res.

When I think CRM, I think of Salesforce.com, simply because well, who doesn’t associate CRM with Salesforce? ;) What I really like about Salesforce.com is how they have opened up their platform for 3rd party developers via AppExchange. Why is this such an important strategic move?

They realize that now that they are a huge company serving a huge customer base, there’s bound to be a subset of their customers whose needs are either over-served or under-served, and thus these customers will be ripe to be poached by smaller and more agile startups. Thus, the bigger Salesforce gets, it’s only a matter of time before their core market gets nibbled from say, the low end, .. which would force Salesforce.com to then shift focus on the higher end of the spectrum (and keep going higher) until the nibblers now become this real threat of displacing the incumbent.

Thus, by opening up their platform to innovation, they can capture the “long-tail” of features needed by their customer base and actually meet them. Imagine you are running some obscure business in a very niche vertical. You need CRM, but you also need this 1 extra feature very specific to your business. You now have the option to installing the “addon” to meet your needs. Other (most) companies who don’t care about this addon don’t need to install it.

What Salesforce.com has also effectively done here is allowed their SaaS bread-and-butter be customized specifically to each customer! This is powerful, because most people think that SaaS is just a web app, and because it’s served from the same web server to all customers, customization is difficult.

Software customization/personalization is also way to segment your market and extract more value from the different segments. And all of this, for free to Salesforce.com because they don’t even need to hire developers to build stuff — the platform is open to any 3rd developer. In short, AppExchange is one of Salesforce.com’s competitive advantage that builds network effects over time (like eBay), further solidifying their dominance on the market.

The iPhone too, has a developer app market place. And this too, will be a powerful force to be reckoned with by iPhone competitors over time.

Back to what PG was saying, “It should be possible to make interactions with customers much higher-res.” I wonder what he means by that exactly, but then again he did say that this list was intentionally vague. I can at the very minimum at least conclude that he sees an opportunity for innovation in CRM, which I do too :)

Paul Graham’s list of problems: http://ycombinator.com/ideas.html

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Posted in entrepreneurship, problem-opportunity, product management, silicon valley, startup, things to ponder about, web 2.0 | 1 Comment »

iPhone 3G MS Exchange sync pricing strategy

Sunday, July 13th, 2008

Unless someone knocked you out in a hockey fight last Friday and your consciousness has just returned, chances are that you have heard of this thing called the iPhone 3G launch. I’ve been going back and forth on my decision on whether to get it or not. There are 2 things that are holding me back from getting an iPhone 3G:

  1. MS Exchange synchronization pricing
  2. No tethering option

It’s a classic pricing strategy–their (AT&T’s) attempt to extract more value from the wireless consumer segment that well .. has more money to dispose. Not only have they hiked the price of the unlimited data plan by $10/month from $20 to $30, but they charge you an additional $15/mo if you want to synchronize with an Exchange Server.

I’m a price-sensitive customer *and* I’m a techie at heart, thus I simply balk at having to guarantee AT&T’s revenue for 2 whopping years merely to transfer a sequence of low and high electrical signals to some proprietary email server, as opposed to any other email server, or as opposed to just casually serving the web.

The techie in me knows that they’re simply charging more by discriminating against MS Exchange data from casual web surfing, or any non-Exchange email data.

From Wikipedia’s entry on Net Neutrality: Neutrality proponents also claim that telecom companies seek to impose the tiered service model more for the purpose of profiting from their control of the pipeline rather than for any demand for their content or services.

The entrepreneur in me knows that they are just playing it by the pricing strategy books. To that end, I say, all the more power to them. Maybe I won’t buy the phone, but seeing that they are so savvy and nickel and diming the segment I am in (the “tough” crowd), I’m considering buying their stock instead.

My second gripe is the inability to tether the iPhone 3G to a laptop (without hacking it). This point is important to me because when I travel with my laptop, and if I’m in a spot where I don’t have wifi access, I just need that option to tether my laptop to my mobile phone.

Maybe AT&T is worried about people starting to use the iPhone as a modem and thus cannibalizing revenues from their existing wifi hotspot sales. To that end, I feel like if I’m already putting up with the hike in price for monthly unlimited data, putting up with the extra monthly charge for their discriminating against MS Exchange data, it’s just simply un-polite to ding me again by forcing me to cough up even more for a separate wifi hotspot plan. Come on.

And I quote Bruce Scheier:

Anyone with wireless capability who can see my network can use it to access the internet. To me, it’s basic politeness. Providing internet access to guests is kind of like providing heat and electricity, or a hot cup of tea.

I can see how they might have justified this impoliteness though. Corporate users probably have their companies paying for the bills anyway, and corporations have much deeper pockets and can easily justify such a cost as a business expensive. However, this pricing model obviously neglects the average work-for-a-corporation-joe-but-this-is-an-out-of-pocket-expense.

All said, here’s a message from a randomly-selected passionate early-adopting techie from the price-sensitive “tough crowd” segment, to whoever green-lighted this pricing strategy. You guys suck, and I hope you enjoy this video.


How to Get Broke by Buying an iPhone

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