Accelerating Innovation with the Product Innovation Quadrant

One of the hardest things to do in today's uber-competitive environment is to innovate fast enough to stay ahead in the marketplace. Every business wants to succeed by having some type of advantage over the competition. But when it comes to competitive advantage, you need to be clear as to which one you want - there are actually two types. The first type is an advantage occurring with valuable resources in limited supply. The De Beers Family of companies is an excellent example of this type of competitive advantage. Though diamonds themselves are not necessarily a rare resource, the supply of them on the open market is tightly controlled by this corporate entity. The other type of competitive advantage is the one that most of us know about and it refers to an advantage that exists during the period of time between the introduction of an innovation and its subsequent imitation and commoditization. The key to successful business strategy is to have a culture and a process that accelerates product innovation.

There is never a shortage of innovative ideas. The separation between market leaders, followers, and stragglers is not always about who can come up with the best ideas. Rather, the separation is based upon who can execute the best both in terms of time to market and customer appeal. At one of the companies where I worked, I lead the creation of the Product Innovation Quadrant, a new product management framework for accelerating product innovation that was quite successful in helping us to get our arms around the literally hundreds of new product ideas and assign appropriate priorities to them. I'd like to share this framework with you.

When planning out your product roadmap, its good to look at each of your product enhancement candidates along three dimensions: (1) time to market, (2) revenue potential, and (3) customer appeal. This latter point is something that our company president liked to talk about in terms of "Steak vs. Sizzle". "Steak" refers to the roll-up-your-sleeves, in-the-weeds, non-glamorous capabilities that comprise the lifeblood of the product. Without the "steak", there is no product, or the product is so anemic that it doesn't help the buyer achieve any advantage using it. "Sizzle" is what gets our attention. It's the sound of the steak searing on the barbecue and the its aroma that gets us excited in the first place. Sometimes a product feature needs to be implemented purely for the purposes of sizzle - getting people's attention, capturing the imagination, and building excitement about it. Products lacking sizzle are perceived as boring in the marketplace - regardless of how capable the product is. A healthy product roadmap needs to include a balance between steak and sizzle.

So here's how the Product Innovation Quadrant works: as you plan out your product roadmap, create quadrants in two dimensions with time horizon and customer appeal as the two axis. Then, draw a circle for each of your innovative ideas, placing it in whichever quadrant best describes the interplay between the two measurements. Make the size of your circle based upon your estimated revenue potential. Just to keep things simple, I recommend three sizes: small, medium, and large. As you map out each of your enhancement candidates, you will begin to get a good idea how they all fall out. Then you can decide which enhancements to accept for your roadmap, which ones to defer, and which ones to reject.


If a product manager at a typical company were to plot its existing product roadmap on the Product Innovation Quadrant he might be surprised (or not surprised) to see that almost all of the roadmap is clustered in the upper right hand quadrant.


Companies - typically technology-driven companies - tend to focus their attention on swinging for the home run each and every time at bat. While this tends to be the most common approach, this practice is risky because it places all of the company's fortunes in long-term projects leaving themselves vulnerable to competitors who can innovate faster than they can - not to mention the risk of finding out too late after all the time and money that they've given birth to a total dud.

In the example below, feature candidates A and B should absolutely be accepted for the product roadmap. Feature candidate C should also be accepted for the product roadmap because without it, the company does not have any long-term development projects and may be at risk of mortgaging the future for the sake of the present. I would also recommend that feature candidate A be prioritized ahead of feature candidate C even though it represents a lesser revenue potential. Why? Because it represents an earlier recognition of revenue. Feature candidate D should not be accepted to the product roadmap because its small revenue potential does not justify the long-term commitment of resources to implement a feature that is just there for sizzle and doesn't make that much of a difference in terms of the overall product's capabilities.


Now if you're working at a software company that implements the Agile software development methodology, then you have a distinct advantage over those that don't. You have the unique ability to accelerate the introduction of long-term product features by slicing it up into smaller iterations that Agile facilitates.

In the diagram above, we have feature candidate C that is accepted for our product roadmap because it represents a good revenue potential and it's a good balance of long-term and "steak" for our product mix. We then break up the implementation of this feature into a series of three iterations as shown below.
The first iteration is purely a short-term, sizzle implementation of the feature. The purpose is to minimize our risk by getting the product into the marketplace as quick as possible. Real market feedback trumps focus groups, market research, and "gut feelings" every time. You then have a second iteration scheduled which works on more of the "steak" features and incorporates the market feedback you've gotten from that first iteration. The third iteration is intended to be The Full Monty. This is the one where the fullness of the product is realized. In real life, it could actually be more than three. I've introduced product features to the marketplace that took ten iterations.

Remember: we're dealing with product innovation here. So this means that you have a little bit of a head start over your competitors when you introduce your first iteration. They key is that you have already scheduled the subsequent iterations so that you maintain your lead over your competitors.

The Product Innovation Quadrant I've introduced here is a suggested framework for evaluating all candidates for product enhancements. It's value is that it doesn't take weeks of analysis. It's a quick tool to get a sense of how things stack up. I hope it helps you as it has helped me. Do you have other frameworks that you've successfully followed? I'd like to hear from you.

Genachowski Dreams Big for 21st Century Mobile Broadband

I still like Julius Genachowski. There I said it. From everything that he's said since becoming chairman of the Federal Communications Commission, it appears to me that He Gets It and his policies are good for the long term growth of the mobile marketing industry. His most recent speech at the New America Foundation in Washington continues to illustrate his grasp of what needs to be done to move an infrastructure so mired in the days of vacuum tube radios and black and white TVs into the new century of mobile smartphones, video on demand, and location-based services.

You can read the entire text of his speech here in Giselle Tsirulnik's column of the Mobile Marketer, and you can quickly browse some of the points that I especially like below.

I like how he starts out his speech with a simple sound bite to serve as the rallying cry, "we are lagging behind when it comes to broadband." When I was in business school, I learned that the key to initiating organizational change - especially in times of laissez-faire status quo - is to clearly articulate a crisis that everyone can relate to. In this case, Genachowski's opening remarks appeals to the competitive nature and the drive to succeed that historically compels our national psyche.

All eyes will be on the FCC next month whey they are scheduled to announce their National Broadband Plan to Congress. Genachowski gives a five-point summary of this plan:

1. Accelerate mobile broadband deployment by recovering and reallocating spectrum
2. Revise outdated policies to reflect 21st century technologies and opportunities
3. Remove barriers to broadband buildout
4. Lower the cost of deployment
5. Promote competition

While each of these points have merit in themselves, the devil, they say, is in the details. I clearly see government's role in helping to recover and reallocate unused spectrum, and to revise outdated policies. But call me a cynic: putting government in the same sentence with removing barriers, lowering costs and promoting competition strikes me as an oxymoron.

The answer to growth for the mobile ecosystem is "more bandwidth". We can all agree to that. But the problem is, unlike vegetables, you can't grow spectrum. The spectrum is what it is - it is a finite resource, and the problem is that somebody somewhere already owns the spectrum that mobile broadband needs to grow.

Says Genachowski,

"One of the best ways for us to achieve the right balance in the supply and demand of spectrum is to establish market-based mechanisms that enable spectrum intended for the commercial marketplace to flow to the uses the market values most.

The Broadband Plan will recommend one such mechanism. It will propose a "Mobile Future Auction" -- an auction permitting existing spectrum licensees, such as television broadcasters in spectrum-starved markets, to voluntarily relinquish spectrum in exchange for a share of auction proceeds, and allow spectrum sharing and other spectrum efficiency measures.

Now, I’ve mentioned broadcast spectrum – so let me be clear: the recommendation is for a voluntary program."

Yeah right...

I can just see all the television network executives choking with laughter when they heard that idealistic statement of hubris and wishful thinking.



If you owned vast tracks of open undeveloped land and you learned that within ten years an entire city will be built on your land - the land that you solely own - would you voluntarily give it up in exchange for a share of the auction proceeds?

Uh huh...

The reality is that TV networks are on a downward trajectory as viewing audiences are moving to other forms of video entertainment. The fact that bland reality-based shows have replaced high-production quality dramas underscores the cost-cutting wave that is sweeping an industry disparately grasping for new ideas to grow.

Spectrum - unused as it may be - is one of the last golden egg assets that these networks own. The day that the FCC can convince even one of the networks to voluntarily give up its spectrum license, is the day that I'm looking out for flying bacon.

But don't get me wrong. I truly agree with Genachowski. In order to grow, the mobile ecosystem absolutely needs more spectrum - spectrum that unfortunately is firmly held in the grasps of the TV networks. It may just boil down to an Obama-esque "stimulus program" courtesy of your taxes and mine to get them to give it up.

Blockbusters Versus Bombs: Storyboards and The Pilot

(I continue my temporary digression from my usual posting about the mobile industry to blog about a topic near and dear to my heart: Product Management.)

Product Managers at technology-driven companies are challenged to evangelize their exciting new product ideas. Effective product managers need to paint the big picture first and foremost - whether to management or to their peers. To this point, there are some amazing parallels between the making of a blockbuster movie and the making of a blockbuster product. I'd like to draw your attention to three of these points: (1) The Pitch, (2) The Storyboard, and (3) The Pilot.

My previous blog post was about The Pitch. This blog post finishes with a discussion on the final two items: The Storyboard, and the Pilot.

All movies - be they animated or be they live action - all start with a storyboard. It's during storyboarding that writers and directors work out the plot, the flow, and the structure of the movie. The structure of the movie includes things like lighting, and camera angels.

In the world of software application development, storyboarding is akin to requirements gathering and feature definition. The concept of storyboarding fits nicely with the Agile software development methodology in which requirements are defined in terms of "user stories." If you're not familiar with the Agile methodology (or others like it), user stories are small and atomic feature implementations that when strung together, make up the full product, or product feature functionality. If you've ever seen Agile development at work, you'll see a remarkable similarity between the user story cards pasted on a wall and the individual scene drawings of a movie story board. Just as scenes of the story board cards are quick hand-drawn sketches, user stories are quick definitions of a specific feature capability.

In my opinion, all software development processes should include storyboarding. This enables all stakeholders including Product Management, Developers, Executive Sponsors, Sales and Marketing, and Technical Support, to map out the framework of a product or product feature long before a single line of code is written. Unlike traditional full blown requirements documents that can take weeks or even months to write up, storyboards are fluid, dynamic, and easily modified.

Television series for both comedies and dramas always have a pilot. No television executive would dream of providing full financial backing without the pilot. The purpose of the pilot is to test the concept of the series in real life. Feedback from the pilot is crucial. Projects many times never make it past the pilot. Other times, modifications are made to the cast of characters, to the story concept, and even to the title. (Quick Quiz: for those of you alive during the '90s, what was the original title of the "Seinfeld" comedy series? Who were the original characters and actors?)

Once again, the Agile software methodology fits well with the concept of The Pilot. Basic functionality is quickly introduced to the marketplace. Though not the full-blown product, the initial releases are used to gain valuable market feedback. Is the market need for the product still viable, or has it changed to something different? Better to know quickly before sinking time and money down a black hole.

The art and science of developing toward the first product release is so much like the television serial pilot. The pilot does not go into any depth and detail of character development, or of where the series will be going. It's only purpose is to see if the audience (a.k.a. the marketplace) will accept the concept. In like manner, the first iterations of a product should not be the full solution - but yet they should be complete enough to effectively tell the story of the product roadmap to the marketplace.

Here's also where people used to traditional software development are uncomfortable with the Agile process. They are more comfortable selling a complete solution; they are more comfortable supporting a fully end-to-end developed solution. Frankly put, these people need to "get with the times." Waiting around for a full solution before unveiling it is very risky. Market needs move at light speed because competition is fierce. If you take too long to move, someone else will. Believe it.

So, in conclusion, how do you increase the likelihood of a Product Blockbuster versus a Product Bomb? Take a lesson from Hollywood. Adopt the concepts of The Pitch, Storyboarding, and The Pilot into your product management process.

Blockbusters Versus Bombs: Perfecting the Product Pitch

(I temporarily digress from my usual posting about the mobile industry to blog about a topic near and dear to my heart: Product Management.)

Product Managers at technology-driven companies are challenged to evangelize their exciting new product ideas. Effective product managers need to paint the big picture first and foremost - whether to management or to their peers. To this point, there are some amazing parallels between the making of a blockbuster movie and the making of a blockbuster product. I'd like to draw your attention to three of these points: (1) The Pitch, (2) The Storyboard, and (3) The Pilot.

This blog post is all about The Pitch. Future posts will expound upon the other two.

Technology products are ... well ... technical. Technical products require technical explanations. Or maybe not. Psychologists tell us that the human mind needs context before it can grasp detail. To be an effective product manager, you must be a Master Storyteller.

Imagine that you're sitting in the Brown Derby making your pitch to a movie studio exec. You only have ten minutes - fifteen at the most - to get him interested enough in your idea to give the go ahead and proceed to the next step. Are you going to start talking about camera angles and special effects details and who is going to play what part? Of course not. What are you going to do? You're going to tell the big picture story, a summary, an overview. But not just any overview. You're need to present a summary that is so compelling that in fifteen minutes or less, the exec is willing to commit millions of dollars to making it happen. Can't be done? Dude. It's Hollywood. It happens all the time.

How do you tell your story? Movie plots always have three elements: (1) the hero, (2) the villian, (3) the resolution. Here's an example of a movie plot overview. See if you can spot the hero, the villian, and the resolution:

A Mumbai teen who grew up in the slums, becomes a contestant on the Indian version of "Who Wants To Be A Millionaire?" He is arrested under suspicion of cheating, and while being interrogated, events from his life history are shown which explain why he knows the answers.

Recognize the story line? It's Slumdog Millionaire, this year's Academy Awards Best Picture winner.

As a Product Manager, you are the evangelist for new product ideas. Work the three elements of the story plot into your pitch. Naturally, your idea is the hero. What's the villian? Is it an unserved need? Is it a rival company? What's the resolution? What's so gosh-darned exciting about your idea that makes it the perfect solution? It is absolutely essential that you perfect your story in three sentences or less. If people don't get it, or they aren't as excited as you are, then keep working at it.

Can't be done you say? Your products are too technical to get people excited in three sentences or less? Au contraire. Which of these two product descriptions gets you the more excited:

A new portable MP3 player combining a small 5GB hard drive, a FireWire port, and a standard 3.5-mm headphone jack in an ultrasleek white and stainless steel case with a 2-inch white backlit LCD display and an estimated 10 hour battery life.

or,

A thousand songs in your pocket.

Anyone who attended Macworld when Steve Jobs unveiled the iPod will recall that single memorable sentense that brought the house down.

The Pitch is absolutely essential in order to establish crystal clear product vision within your company. Above all, the perfect pitch minimizes scope creep and scope dilution. It helps keeps everyone focused with a clear understanding of WHAT they are all working towards, and WHY they are doing it. There's an old saying, "Without vision, the people wander aimlessly". Likewise, without The Pitch establishing the clear product vision, the product wanders aimlessly in development, in marketing, in sales, and in the marketplace.

Finally, every good product just like any good movie needs a memorable tagline.

"A long, long time ago in a galaxy far, far away." - Star Wars

"Just when you thought it was safe to go back in the water..." - Jaws 2

"The Last Man On Earth Is Not Alone" - I Am Legend

"A Thousand Songs in Your Pocket" - iPod

"The World's Thinnest Notebook" - MacBook Air

"Can You Hear Me Now?" - Verizon

What's the tagline to your product? What is the one sentence that sticks in peoples minds and brings instant connection with your idea? Be creative. Be imaginative. Make it memorable.

I Still Like Julius Genachowski

Last June, I stated my case that FCC Chair Julius Genachowski is good for mobile marketing. Today, I re-iterate my case, though with a bit more guarded enthusiasm due to greater education on my part.

I originally was highly in favor of Network Neutrality which was one influence in my support for Genachowski. Since that time, I've had the opportunity to hear both sides of the story - especially after having a good chat with two representatives of the CTIA when we were all in Los Angeles for the Mobile Marketing Association Forum last November.

How would you feel if a complete stranger moved into your house, ran his business out of your house and make millions every month. Meanwhile, you're stuck with the mortgage payments, the utility bills, the food bills, and oh - by the way - you have to clean up after him. And you don't see a single penny of that money much less even get a thank you. I'm sure that you wouldn't even allow this stranger anywhere near your property. But what if the government said that you had to, and there was nothing you could do about it? That, my friends, is Network Neutrality in a nutshell.

The network infrastructure providers maintain that Google and others like them have made vast fortunes freeloading on their groundwork. Meanwhile companies like Global Crossing, Level 3, and Nortel Networks took a beating in recent years.

The FCC's recent inquiries into competition in the mobile wireless industry is another cause for raised eyebrows. As long as the inquiry remains an inquiry and does not devolve into intervention, then I'm okay with that. I believe in free market principles - not "fair market" principles. There is no such thing as "fair". Only little children and socialists believe that "fairness" is a reality.

So even with this dose of reality, I still am a fan of Julius Genachowski.

Genachowski's recent speech at the Innovation Economy Conference in Washington D.C. gives me reason for hope.

He displayed a fascinating insight when he equated his vision of the impact of universal broadband to the impact of universal electricity - something that we today take for granted (at least until the lights go out).

"Broadband is reshaping our economy and our country more fundamentally than any technology since electricity. Indeed, there are echoes in the current moment of the era when electricity became widely available in America, unleashing a torrent of innovation. Ubiquitous electricity extended the day into the night. It brought us refrigerators and washing machines; radios and televisions; phones, wired and wireless; data processors, then computers. These and other electricity-driven appliances transformed virtually everything about how we live and how we work."

"Ubiquitous high-speed broadband, like other transformative general purpose
technologies, can spark innovation of every kind -- many we can imagine, and even more we can’t. Indeed, broadband offers particularly powerful opportunities for accelerated innovation through the broad and fast collaboration and information-sharing it enables.

Because of its power to propel innovation, broadband can be our platform for economic prosperity and opportunity for all Americans. It can be our engine for enduring job creation and economic growth. Our Internet ecosystem has already created millions of jobs, and universal broadband can accelerate that. Studies show that increases in broadband penetration translate into increases in GDP." (my emphasis added)

"...we see huge opportunities -- and real risks -- around mobile broadband. Much of what we see suggests that mobile broadband can be the preeminent platform for innovation in the next decade. To be the global leader in innovation 10 years from now, we need to lead the world in wireless broadband."

I think Genachowski "gets it." He clearly understands what's happening in the world today and where it is heading tomorrow.

Check out this quote from the closing of this speech:

"While invisible, spectrum is the lifeblood of our wireless networks and a critical part of our innovation infrastructure. In recent years, the FCC has authorized a three-fold increase in commercial spectrum. But experts anticipate a 30-fold increase in wireless traffic. Given that spectrum can take many years to reallocate and build out, if we don't start the process now, we'll pay a steep price in innovation down the road.

To meet this spectrum challenge, the FCC will have to encourage more efficient uses of spectrum and devices through innovative spectrum policies. We’ll look at increasing spectrum flexibility and opening secondary markets for licensed use. And we’ll look to unlicensed spectrum as well, so that entrepreneurs and inventors have some open space in which to dream up the next miracle wireless technology.

I totally love the idea of opening up an unlicensed spectrum to facilitate innovation incubation. By lowering the barrier to broadband spectrum access, the FCC helps to make it easier for entrepreneurs to develop world-changing inventions.

By recognizing the economic value of broadband - including mobile wireless broadband, Genachowski bodes good news for the growth of the mobile marketing industry.

I'm not a starry-eyed follower of Genachowski, but so far so good.

Is THIS the Year of Mobile Marketing?

"Is this the Year of Mobile Marketing?" That was the running gag at the recently concluded Mobile Marketing Assocation Forum in Los Angeles.

I attended the Forum back in 2007 and again this year. Oh, what a difference two years makes. Back then, the iPhone was only a few months old. Android phones weren't even on the market. Carriers controlled the majority of subscriber's web experiences; "on-deck" and "off-deck" were the buzz words of the day. Fast forward to present day and here's what we have now:

• 100,000 apps in the iPhone app store with a total of 2 billion downloads
  
  
• For the first time in this year, the total number of text messages sent exceeded the number of voice calls placed.
  
  
• The average age of "texters" is 38-years old.
  
  
• Mobile phones outnumber PCs by 4 to 1 worldwide with 6.8B people, 4B mobile phones, 1.4B TVs, and 1B PCs
  
  
• Mobile adoption is no longer the domain of the affluent. Of the 4.1B mobile subscribers, 70% of them live in so-called "developing nations".
  
  
• An extra ten phones per 100 people in a typical developing country boosts GDP growth by 0.8 percentage points. (The Economist, November 2009 issue)
  
  
• There are >4.1B text msg sent in the US every day compared to 304M Google searches in the US every day
  
  
• The mobile phone has become the convergence of many consumer devices. Quick question: who is world's largest manufacturer of digital cameras by total units sold? Who is the world's largest manufacturer of MP3 players by total units sold. Answer: Nokia on both counts.
  
  
• There are seven Mass Media Channels defined as: Print, Recordings, Cinema, Radio, TV, Internet, Mobile. The mobile device has become a single device that can consume all 7 channels of mass media.
  
  
• Thanks to the precedence set by the iPhone, carriers' roles are changing from media empire to ecosystem enablers.
  
  
• Revenue from voice has been consistently falling over the past 7 years while revenue from data has been consistenly rising over the same time period.
  
  
• The Kelsey Group projects that total US spend on mobile search will grow from $162M 2009 to $2.3B by 2013. 50% of US mobile search ad revenue is local search.
  
  
• Monthly searches per user are ~20% greater for mobile local search vs. online local search. Call through rates are 30x greater.
  
  
• For many people across the world, the mobile device is the only way to access the Internet. By 2020, it will become the #1 access point to the Internet worldwide.
  

So what's still next for mobile marketers?

• Mobile marketing works best when integrated with other media channels. But how to tie all channels together with integrated consistency? It's still too fragmented; it's difficult to communicate the value of mobile advertising; metrics have to be understandable.
  
  
• As mobile marketing becomes more mature and marketers become more sophisticated, the need to have independently verified measurements becomes greater.
  

...and it wouldn't be a gathering of mobile marketers without a dig at carriers for continuing to make the SMS campaign provisioning process unnecessarily painful.

So was 2009 the Year of Mobile Marketing? Only time will tell. But from what we discussed this time around at the 2009 Forum, mobile marketing is certainly one of the fastest growing channels worldwide.

Pitching the Mobile Storyline to the Studio Exec

My fellow Product Managers and I recently met to brainstorm ideas on how we could accelerate innovation within ours organization. Over the course of the discussions, we realized that there are amazing parallels between producing a product and producing a movie. In our company, the Product Management Team meets with the Executive Team on a monthly basis to review key product initiatives for the company. The executives are the ones who review and approve the commitment of resources to bring a product to market.

Pitching an idea for a movie is an experience similar to ours. A good movie is all about the story. Whether an idea for a movie gets approval or not depends on how well you can tell that story within the first few minutes to a studio executive. Even if the actual plot is complex with convoluted twists and turns, the story about the story has to be concise and it has to be compelling.

So - in three sentenses or less - what's the story for SMS marketing?

This is what we came up with: You're a marketer and you're already engaged with your customers through your existing marketing mix. Your prospects and customers are holding your brand message and calls to action in their long term memory. An SMS message at the right time brings an instantaneous connection with your brand, pulling your brand and call to action out from memory into the here and now.

Here's a simple plotline: You're a national retailer and it's that time of the year to jumpstart your sagging sales with special promotions to bring traffic to your stores. Your marketing mix includes TV, radio, newspaper, email, direct mail, search, and your web site promoting your call to action. "Sale starts this Saturday at 9AM! Come in for discounts between 30% and 70% on all items." People have seen your TV and newspaper ads, heard your radio ads, and read your email alerts at one point or another during the week. It's now Saturday morning. Peoples' awareness are focused on the here and now, "it's the weekend, "what's for breakfast", "what's a fun thing to do today?" Bing! A reminder about the sale sent via SMS on Saturday morning brings instantaneous recollection and connection with your call to action that you spent the whole week building awareness for.

Every movie has a tag line, too: "A long, long time ago, in a galaxy far, far away," "Just when you thought it was safe to go back into the water."

What's the tagline for SMS marketing?

"Add instant energy to your marketing mix"

What one-word keyword(s) best summarizes SMS marketing?
1. NOW
2. Impulse
3. Anywhere

What's your take on our story? Do you have a better one? How would you tell your version of the story in three sentenses or less? What's your tag line? What one-word keyword do you believe best summarizes SMS marketing? Post your comments!