Author: Jason Nash

Embracing AI and Smart Agents

July 27, 2023July 17, 2023by Jason NashLeave a comment

The technology landscape is evolving rapidly, with AI and large language models (LLMs) reshaping how businesses operate. NVIDIA’s recent announcement of AI Foundations, a cloud service offering that enables businesses to build, refine, and operate custom LLMs and generative AI models using proprietary data, highlights the growing importance of AI in the corporate world.

Just as websites transitioned from being a novelty in the early days of the internet to an essential component of any business, AI is poised to become an indispensable tool for organisations across industries. One area where AI’s impact is particularly evident is the emergence of smart agents, which are transforming both internal processes and customer-facing interactions.

Internal Smart Agents (internal like Intranet):

Process automation: Streamline repetitive tasks like data entry and report generation.
Knowledge management: Organise and manage internal knowledge for quick access.
Decision support: Analyze data and provide insights for informed decision-making.
Employee onboarding and training: Offer personalised guidance and integration for new hires.
Virtual assistants: Support employees in daily tasks, schedule management, and reminders.
AI board members and strategic advisors: Utilize AI to identify trends, assess risks, and provide unbiased insights for strategic decisions, such as the AI board member “VITAL” developed by Deep Knowledge Ventures.

External Smart Agents (Like a web page):

Customer support: Provide instant, personalised assistance for customer inquiries and issues.
Sales and marketing: Guide potential customers through purchasing with relevant product suggestions.
Personalised recommendations: Enhance the customer experience with tailored product or service recommendations.
Content creation and curation: Generate personalised content based on customer interests.
Social media management: Engage with customers on social platforms and manage online communities.
NVIDIA’s AI Foundations, along with similar advancements, make it easier for businesses to harness the power of AI and LLMs to create smart agents tailored to their specific needs. These technologies offer a competitive edge, enabling companies to optimise processes, enhance customer experiences, and drive innovation.

As AI progresses, forward-thinking businesses must embrace these transformative tools to stay ahead and remain competitive. Failure to do so will mean a non-competitive cost model and, ultimately, business failure.

Balancing the Pain of Product Management: A Guide for Business Leaders

July 25, 2023July 13, 2023by Jason NashLeave a comment

The practice of product management is often likened to a balancing act. Product managers must juggle various stakeholders’ interests, including sales, marketing, technology, support, and, most crucially, the customer. The “pain” of product management, or the pressure and challenges faced, tends to shift around the organization depending on whether the business is sales-led or marketing/product-led. This article explores these dynamics and offers insights for C-level leaders, product managers, and product leaders on navigating these complex waters.

The Pain in Sales-Led Organizations

In a sales-led organization, the sales team is the primary driver of product strategy. The product is often shaped by what the sales team believes it can sell, which can sometimes lead to selling the future rather than the existing product. “If we just had this feature, we could sell it to X,” is a common refrain.

In this scenario, the pain tends to reside with product management, technology delivery, and support. Product managers can feel the pressure to continuously add new features to meet sales promises. The technology team might struggle to deliver on an ever-growing backlog of features, and the support team can be stretched thin trying to help customers navigate a product that’s constantly changing.

The Pain in Marketing/Product-Led Organizations

In a marketing or product-led organization, the focus is on building a product that meets customer needs and then crafting a marketing message that resonates with potential customers. The sales team’s role is to sell the product as it exists today, without overselling or over-promising.

In these organizations, the pain often sits with the sales and marketing teams. The sales team might feel the pressure to sell a product that doesn’t have all the bells and whistles they think customers want. The marketing team may grapple with crafting compelling messages that can compete with competitors’ more feature-packed offerings.

Shifting the Pain: A Delicate Balancing Act

The pressure to pass the pain to other parts of the business can be intense. However, time and time again, businesses find that an honest and truthful pitch tends to build trust with customers and allows the rest of the organization to do its best work. This approach requires a cultural shift towards transparency, a focus on delivering consistent value, and strong leadership to maintain this focus amidst the pressures of the market.

Product leaders have a crucial role to play in this balancing act. They must ensure that the product strategy is driven by a deep understanding of customer needs and that sales and marketing messages align with what the product can deliver today. They also need to manage expectations within the organization, ensuring that all teams understand the strategy and their role in executing it.

Harnessing Constraints to Drive Innovation

Interestingly, constraints often serve as the breeding ground for innovation. Consider the original iPhone. It lacked several features that were common at the time, such as 3G connectivity and a physical keyboard. Yet, it boasted revolutionary offerings such as visual voicemail, Google Maps, and a powerful browser. The absence of 3G allowed Apple to reduce costs, offsetting the higher costs of the screen and other innovative features. This strategic trade-off was not accidental but the result of meticulous discovery work by product managers and designers who understood their customers’ key jobs to be done. Deciding which features not to build is just as important as selecting which one you will.

This highlights the importance of strategic focus in product development something only the CEO can ensure happens. It’s not about packing in every possible feature, but understanding what truly matters to your customers and delivering that exceptionally well. Overfunded ventures with too much cash can sometimes lose sight of this, leading to Frankenstein Products that stray from their key customer value proposition.

Conclusion

Navigating the ‘pain’ of product management is an inevitable part of the role. The location of this pain within an organization can significantly influence its effectiveness, culture, and overall success. Whether your organization leans towards a sales-led or product-led approach, the key to seamless operation and a wining lies in a clear focus on customer needs, a commitment to ethical selling practices, and effective leadership. With a shared understating across the leadership team that, constraints can be a catalyst for innovation. A well-focused, adequately funded product built with a clear understanding of the customer’s needs can outperform a feature-packed ‘Frankenstein’ product every time.

However, in addition leadership teams must understand that actions taken by one department can have repercussions that ripple throughout the organization. Short-term strategies to meet end-of-quarter targets might seem beneficial, but if these actions merely shift the pain elsewhere, they can create a debt that must be repaid eventually. Ignoring this can lead to chronic issues and dysfunction over time, damaging the culture. For example, working in a business where only the sale team are seen as the heroes.

Leadership should adopt a holistic view of their organizations, recognizing that short-term gains shouldn’t jeopardize long-term health. They should foster an environment that encourages addressing challenges head-on, instead of passing them off to other departments.

Understanding the cost ratios across departments can provide valuable insights into the type of organization you lead. Assessing the proportion of your costs spent on front-of-house activities (such as sales, marketing, and product discovery) versus back-of-house activities (like onboarding, support, and product delivery/development) can give you valuable insights into the health of your product and your culture.

CEOs who understand these cost ratios can make better choices. By deliberately shifting spending, they can better motivate their leadership teams and build a winning culture. Leaders who are prepared to balance immediate needs with long-term goals and recognize that the organization succeeds or fails together are more likely to share the pain and win in the market together.

Identifying Zombie Products & What Leaders Should Do About Them

July 18, 2023July 13, 2023by Jason NashLeave a comment

“Zombie Products” is a metaphor for products that, despite underperforming and consuming significant resources, continue to exist within a company’s portfolio. This article aims to provide product managers, product leaders, and C-level executives with an understanding of Zombie Products, their potential impact, and strategies to deal with them effectively.

Recognising Zombie Products: The Warning Signs

Zombie Products often linger in larger corporations, particularly those that house multiple products under the same umbrella or have recently undergone mergers or acquisitions. These products are typically characterized by:

Poor Financial Performance: Zombie Products consistently fail to meet revenue or profitability expectations.
Low Usage: These products often see significantly lower usage compared to other offerings in the portfolio.
Negative Customer Feedback: Zombie Products can consistently receive poor reviews, leading to a negative impact on the brand.
High Support Costs: If a product requires a disproportionate amount of support or maintenance, it could be draining resources without delivering sufficient value.
High technical debit: products which large amounts of defects running on legacy tech that have not been maintained.

The Impact of Zombie Products on Your Portfolio and Brand

Zombie Products can have a significant impact on your brand and portfolio. They not only consume resources that could be better utilized elsewhere but can also confuse customers and dilute your brand’s value. Furthermore, in the context of Private Equity (PE) where businesses often bring multiple products together under one umbrella, Zombie Products can create unnecessary complexity and hinder the transition to a unified product platform.

Dealing with Zombie Products: Effective Strategies

Once you’ve identified a Zombie Product, there are several strategies you can employ:

End of Life (EOL): Sometimes, the most cost-effective decision is to discontinue the product, freeing up resources to focus on more promising offerings.
Shift to a Product P&L Approach: Alternatively, you might decide to invest in the product, moving it from a project-based approach to a product-based one. This means investing in ongoing development, tracking its Profit & Loss (P&L), and holding a dedicated team accountable for its performance.

A bubble chart can be an effective tool for portfolio management, particularly when making decisions about product end-of-life. This type of visualization allows you to represent three dimensions of data, which can be extremely valuable in assessing the performance and future potential of different products in your portfolio. For instance, the X and Y axes could represent two key performance indicators such as revenue and profitability, while the size of the bubble could represent another important metric such as market share or customer base size.

By plotting your products in this way, you can quickly identify which products are high performers (high revenue, high profitability) and which ones are underperforming. This visual comparison can help you to make informed decisions about where to invest and where to consider product end-of-life. Products that are underperforming on multiple metrics and have a small market share may be prime candidates for discontinuation, freeing up resources that can be better utilized elsewhere in your portfolio.

Portfolio Rationalization for the Benefit of Customers and Shareholders

In the case of businesses undergoing mergers or acquisitions or those with an extensive product portfolio, a key part of dealing with Zombie Products involves portfolio rationalization. This process involves evaluating each product in the portfolio and deciding whether to invest in it, maintain it, or retire it. The goal is to create a streamlined, focused product portfolio that delivers value to customers and shareholders.

Identifying and effectively managing Zombie Products is a crucial. It helps ensure that your product portfolio remains vibrant, healthy, and valuable, and that your resources are focused on creating products that customers love and that drive profitable growth. Understanding the warning signs of a Zombie Product, the potential impact on your brand and portfolio, and the strategies to deal with them can help you navigate the complex landscape of product management effectively. In our next article, we’ll continue our exploration of product management challenges, so stay tuned for more insights.

Navigating the Growth Crossroads: When to Shift from Sales-Led to Product-Led Growth

July 13, 2023by Jason NashLeave a comment

I often speak to organisations who find themselves at a crossroads. One of the most critical junctures is the decision to transition from a sales-led growth strategy to a product-led growth strategy. Sales-led growth focuses on acquiring customers through sales efforts above all else. In contrast, product-led growth leverages the product itself to drive customer acquisition, often using growth hacking along the way. Some well-funded (startups are organisations set up to prove product-market fit through validated learning) scale-ups go down the product-lad growth route from the outset. Knowing when to make this shift and IF to make it is crucial for the long-term success of a business. This article aims to provide insights into why and when to make this transition and how a product growth coach can be an invaluable asset during this shift

Understanding Sales-Led and Product-Led Growth

Sales-Led Growth: Here, the primary driver of customer acquisition is the sales team. This strategy is common in B2B companies where the sales cycle is longer, and the focus is on building relationships with the customers.
Product-Led Growth: In contrast, product-led growth relies on the product itself to attract, retain, and expand the customer base. This approach is more common in consumer-focused companies or those with a shorter sales cycle.

Why be product Led? Apple & Tesla?

Apple and Tesla are renowned for being quintessential examples of product-led organisations, where the emphasis is placed on product innovation and customer experience. Until recently, Tesla has primarily relied on the allure of its cutting-edge electric vehicles and the public persona of its CEO, Elon Musk, for promotion, rather than traditional marketing efforts. However, during a recent investor meeting, Tesla announced its plans to explore conventional marketing channels.

Apple, on the other hand, has masterfully built a loyal customer base, often referred to as ‘Apple fanboys and fangirls’. This is a testament to the powerful impact of investing in products and understanding customer evangelism – a strategy whereby customers become ardent advocates for a brand or product. The devotion of Apple’s customer base is rooted in the company’s commitment to design excellence, seamless user experience, and continuous innovation. These customers are so enamoured with Apple’s products and brand that they not only eagerly anticipate new product releases but also passionately promote them through word-of-mouth and social media – such is the power of great products and great service

For both Apple and Tesla, the focal point has been creating products that resonate deeply with consumers. This strategy has led to the organic growth of a community of brand evangelists who are profoundly connected to the products and are willing to champion them to others. This form of marketing is incredibly powerful as it is based on genuine customer satisfaction and trust, and often results in higher customer retention and acquisition rates – key reasons for being product led

Product Led → Sales Led Atlassian Software SaaS B2B

Atlassian’s IPO in 2015 was noteworthy because the company had shown strong financials, efficient growth, customer loyalty, and an intriguing cost structure. Atlassian’s IPO documents revealed that it was a rapidly growing software business. For example, in its fiscal year 2013, the company generated $149 million in revenue, which rose to $215 million in 2014, and by fiscal year 2015, it had a total of $320 million in revenue. This revenue growth was underpinned by a significant increase in its customer base, which grew at a compounded annual growth rate of 34% between fiscal years 2010 and 2015

Three key financial elements stood out in Atlassian’s IPO documents:

Efficient Growth: Atlassian demonstrated a history of efficient growth, indicating that it was able to grow its business without excessively increasing its costs. Efficient growth is vital for a company’s long-term success as it ensures that the company is not just growing revenues but also managing its costs effectively.
Customer Loyalty: Atlassian had established strong customer loyalty, which is crucial for sustaining revenue streams. Customer loyalty can lead to repeat business and can also create advocates for the brand, leading to new customer acquisitions.
Intriguing Cost Structure: The company had an interesting cost structure (considerably lower cost of sales & marketing). That played a role in its growth. Having a well-thought-out cost structure can help in managing expenses in a way that supports sustainable growth.

Atlassian’s case is a good example of the advantages of a product-led growth strategy. By focusing on building a strong product that met customer needs, the company was able to attract a growing customer base. Jira had a free 30-day trial that was front and centre on the homepage and instrumental in growing loyal customers. This led to the below-industry average costs of sales and marketing. In 2023 for example, Salesforce allocated 43% of its total revenue to marketing and sales expenses, which is a slight decrease compared to 45% in both 2022 and 2021. But way above what you would expect from a product lead organisation. Atlassian product focus contributed to its revenue growth and made it an attractive investment during its IPO. The product-led growth strategy often focuses on letting the product itself be the primary driver of customer acquisition rather than heavy spending on sales and marketing efforts. This can lead to a more efficient and sustainable growth trajectory, as seen in Atlassian’s case. Clearly, since the IPO they have shifted to more of a sales-lead strategy interested in how their customers feel Companies that offer freemium models generally tend to be product led and have confidence in their customer/user experience. Always be wary of products that don’t allow trials. It generally means the products are over-engineered, with poor user experience resulting in costly and time-consuming setup and training, further increasing the overall cost of ownership!

A checklist for product led

Before making the leap from sales-led to product-led growth, it is essential to evaluate if both the product and the organisation are ready. Here is a checklist to guide this assessment:

Product Maturity: Is the product developed enough and does it have unique features that can attract and retain customers without heavy sales efforts? have you build feedback loops into the product that allow customers to share their good experiences with your prospects
Market Demand: Is there sufficient market demand for the product that can be tapped into through product-led strategies?
Customer Feedback: Have customers indicated that the product is solving a significant pain point for them? Have you confirmed problem → solution fit and product → market fit?
Internal Capabilities: Does the organisation have the necessary skills and resources to support a product-led growth strategy? For example, are you going to invest in improvements in support, addressing the top 5 recurring support issues every six months? Or invest behind what you are learning from measuring customer satisfaction measurement (I.e. NPS).
Scalability: Can the product and the organisation scale without a proportional increase in costs? For a service business, product-ising the service offering is an essential first step.
Competitive Landscape: Is the market saturated, or is there an opportunity for rapid growth through product differentiation?
Organisational Alignment: Is the entire organisation, especially the sales team, aligned with the shift to product-led growth?

So what does it ‘feel’ like when you shift to product-led

When a company shifts from a sales-led to a product-led growth strategy, several changes occur in its operations, strategies, and interactions with customers, prospects, and employees. Let’s break down what this shift entails and how it impacts different stakeholders:

1. Focus of Growth Strategy:

Sales-Led: The company primarily relies on the efforts of its sales team to acquire customers. This usually involves direct outreach, cold calling, sales presentations, and relationship building.
Product-Led: The product becomes the main driver for growth. This means that the focus shifts to making the product so valuable and user-friendly that customers come to it organically. The company might offer a free trial or freemium model to allow users to experience the product before purchasing.

Implication: The company will invest more in product development, user experience, and customer feedback. Sales teams might still play a role, but they will focus more on facilitating product adoption rather than being the primary driver of new customer acquisition.

2. Customer Acquisition and Experience:

Sales-Led: Customers are often acquired through persuasive sales pitches and might not have a clear understanding of the product until after the purchase.
Product-Led: Customers are more likely to discover the product through recommendations, online searches, or trying it out themselves.

Implication for Customers: In a product-led model, customers are likely to have a better understanding and affinity towards the product because they tried it before making a purchase. This might lead to higher customer satisfaction.

3. Sales Cycle:

Sales-Led: The sales cycle tends to be longer as it involves nurturing leads and building relationships.
Product-Led: The sales cycle is usually shorter as customers are making the decision based on the value they perceive from the product itself.

Implication for Prospects: Prospects have more control over the buying process in a product-led model. They can decide at their own pace, based on the value they find in the product.

4. Role of Employees:

Sales-Led: Salespeople are the stars in this model. They have targets to hit and are crucial to the company’s growth.
Product-Led: The product team takes center stage. Engineers, designers, and product managers become vital for growth.

Implication for Employees: Sales teams might feel a shift in their role and importance. They may need to adapt to new ways of engaging with customers that are more focused on supporting product adoption. The product team will likely experience an increase in resources and responsibilities.

5. Marketing and Messaging:

Sales-Led: Marketing in a sales-led model might be more focused on generating leads for the sales team, often through content marketing, events, and partnerships.
Product-Led: Marketing shifts towards product education, showcasing its features, and encouraging trials or adoption.

Implication for Marketing Team: The marketing team will need to adapt their strategies to focus more on product messaging and education.

The Role of a Growth Coach

In any organisation, internal dynamics such as politics, egos, and insecurities can pose challenges. Research suggests that a well-aligned and supportive leadership team is not common in businesses of all sizes. This is where a product growth coach comes into play and strong product management leadership.

Neutral Perspective: A growth coach provides an independent and unbiased perspective, free from internal politics.
Alignment and Support: They work towards aligning the goals of various departments, with particular emphasis on how we make the product better for the customer, removing the friction from all of the processes across the customer journey which is critical for product-led growth.
Operational Efficiency: By promoting alignment and resolving internal conflicts, a product growth coach can drive improvements in business operations.

Conclusion

Making the shift from sales-led to product-led growth or visa versa is a significant decision that requires careful consideration and planning. Investing more in the product, CX and support over sales and marketing is a strategic decision that will ultimately build a more valuable and sustainable asset. Such a shift in strategy does now work make sense for everyone and might require a new CEO in order for this to successfully happen. Early sales lead startup CEO often struggle to make such a transition. Understanding the readiness of the product and the organisation, coupled with the guidance of a product growth coach, can be instrumental in navigating this critical transition. The ultimate goal is to create a growth strategy that is sustainable and aligned with the market demand and organisational capabilities. If your business is at this crossroads, it might be time to consider bringing in a product growth coach to facilitate this transition and set your company on a path to sustainable success.

Exploring Frankenstein Products in the Age of Artificial Intelligence

July 12, 2023July 13, 2023by Jason NashLeave a comment

What is a Frankenstein Product: Overview

I’m not the first to have used the term “Frankenstein Product” which is often used to describe a product that is a mishmash of features hastily stitched together without a clear vision or purpose. These products often result from a lack of understanding of the customer’s needs or an overzealous attempt to incorporate every possible feature into a single product. The result is a confusing product, difficult to use, and often fails to meet the customer’s needs. It also becomes bloatware difficult to QA, manage and support. For buys, you can also tell these products if suppliers are unwilling to let you have a free trial or if the deployment is measured in months instead of days or weeks!

In the Artificial Intelligence (AI) age, the risk of creating Frankenstein Products is even greater. With the vast array of AI technologies available, it’s tempting for businesses to incorporate as many features as possible into their products. However, without a clear understanding of the customer’s needs and why the customer will use your to-do list over the competition’s; and a strategic approach to product development, these products can quickly become unwieldy and ineffective. I could name some examples, but maybe that is better for people to leave in the comments.

The term “Frankenstein Product” is derived from Mary Shelley’s novel Frankenstein, in which a scientist creates a monster by stitching together parts from various bodies. Just like the monster in the novel, Frankenstein Products are often seen as abominations, lacking in coherence and functionality.

Why AI will lead to an explosion of Frankenstein Products

AI’s emergence has revolutionized product development. It enables the analysis of massive data volumes, prediction of customer behavior, task automation, and personalization of experiences. For developers, AI enhances speed, bolsters QA procedures, and aids in code refactoring. However, this acceleration could lead to an overabundance of features. Without collaboration between a product manager and a product designer skilled in UX and CX, this risk escalates.

Speed does not equate to value if quality or usefulness is missing; a principle acknowledged in Agile, where building irrelevant or unused features quickly is the most significant form of waste, moves you further from the goal of product-market fit. Hence, the emphasis should be on outcomes rather than output when creating products that customers will love.

The problem lies in the fact that AI is not a one-size-fits-all solution. Each AI technology has its own strengths and weaknesses, and not all of them will be relevant or beneficial to every product. Furthermore, the integration of AI technologies into a product requires a deep understanding of the technology and its implications. Without this understanding, businesses run the risk of creating products that are confusing, difficult to use, and fail to deliver on their promises.

Moreover, the rapid pace of AI development means that new technologies are constantly emerging. This can lead to a constant cycle of adding and removing features, resulting in a product that is constantly changing and lacks stability.

How to Avoid Frankenstein’s Monster: Product Market Fit

To avoid creating a Frankenstein Product, businesses need to focus on achieving product-market fit. This means developing a product that meets the needs of specific customer segments and creates value for them which in turn creates value for the business building them at a price that the market is willing to pay.

Achieving product-market fit requires deeply understanding the customer’s needs and desires. This can be achieved through customer interviews, surveys, and market research. By understanding the customer’s pain points, businesses can develop a product that provides a solution to these problems. To do this good product managers and product designers need to spend a minimum of 20% of their time interviewing customers. Yes, that one whole day a week? Are you spending that much time a week interested in the comments below?

Know your customer’s Jobs-to-be-done.

The final guard against creating Frankenstein Products is deeply understanding the customer’s Jobs-to-be-done (JTBD). The JTBD framework is a way of looking at customer needs not in terms of products or services, but the jobs that customers need to get done. By understanding the customer’s JTBD, businesses can develop products that solve these jobs. This can help ensure the product is relevant and valuable to the customer. Mapping your product blue ocean strategy canvas can also help you avoid the monster.

The concept of Jobs-to-be-Done (JTBD) was popularized by Clayton M. Christensen, a Harvard Business School professor, in his book “The Innovator’s Solution: Creating and Sustaining Successful Growth,” which was published in 2003. The book was co-authored with Michael E. Raynor.

The JTBD theory is a framework for understanding what causes consumers to adopt new products or services. According to Christensen, customers don’t simply buy products or services; they “hire” them to perform a job that they need to get done. This idea has influenced a wide range of innovation and product development practices.

In conclusion, while the advent of AI has opened up a world of possibilities for product development, it has also increased the risk of creating Frankenstein Products. By focusing on achieving product-market fit, understanding the customer’s JTBD, and being strategic in using AI technologies, businesses can avoid this pitfall and create valuable, relevant, and loved products. Next time I will wring about Zombie products, why they exist and what to do about them. Tip: Traditional projects have a lot to answer for…