For many Product Managers who have grown mature product lines, a natural question to ask is: "What's next? How do we continue to grow and expand into new markets?"
For those of us who have wondered how senior product leadership considers these questions and when/how they would add products and lines of business to your companies portfolio, Advancing Women in Product served up wisdom from four stellar product leaders in the Seattle chapter: Valerie Layman (Chief Product Officer, Yapta), Vishal Kapoor (Director of Product, Dropbox), Anushka Anand (Senior Product Manager, Tableau), and Nancy Wang (Senior Manager of Product Management, Amazon Web Services). Each product leader represented a different facet of this question: from startups like Yapta (which is vertical-focused) to large companies like Amazon Web Services (which is known for its horizontal expansion).
We present the highlights of the discussion below:
Deciding when to expand the product portfolio
The first step can be knowing when a good time to expand the current product portfolio can be. A unifying theme among our panelists was product-service delivery metrics: product-driven organizations focus on successful delivery of the core product and service to the customer and measure that success based on metrics such as Cost to Aquire a Customer (CAC), rate of churn (a negative rate of churn is especially desirable), Customer Satisfaction (CSAT), Life Time Value (LTV), and Net Promoter Score (NPS). These indicators can provide visibility into how the product is performing, and if any potential acquisitions may add (or subtract) from the current product performance. Delivery, as our panelists defined, is validating customer personas, designing, and evolving their journeys across the lifespan of a customer's relationship with the product. Having worked at a venture-backed startup prior to Amazon Web Services, Nancy Wang (Founder & CEO of AWIP) remarked:
"Silicon Valley has popularized these metrics (LTV, CAC, CSAT) within the startup community. But learn which ones are most important to telling your product story and when."
Example of a not-so-great acquisition
To this question, Vishal from Dropbox gave a very candid answer. He said, "Mailbox was not a great acquisition for the company; we needed to stay focused on enterprise productivity software and it was diverting our attentions to customer-oriented tech." (Read about the Wired coverage here.) He then gave pointers to the audience if they were ever to consider an acquisition for their organization:
"Product Market Fit: Focus on ensuring your product is doing the job it was hired for. If your current product business line is struggling, look there first to see what gaps you can solve."
Total Addressable (TAM) and Net Addressable Market (NAM) assessments should precede any decision to enter into any new line of business. Expanding to include adjacent "Jobs to Be Done" can be met by either acquiring or building in-house. Valerie added:
"Don't seek to stray your core competencies."
Stay connected with your customers
As a PhD Computer Scientist, Anushka provided the audience with unique insight on how customer feedback could be systematic and analyzed. She mentioned work that she had done at Tableau around customer advisory boards and detailed analysis to show customer trends and thinking. She says:
"Listening to your customers is essential to finding product-market fit. It will give you the answer to what new jobs can be done and when to expand."
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Harvard Business School Press: "Know Your Customer's Jobs to Be Done'" https://hbr.org/2016/09/know-your-customers-jobs-to-be-done
Service Design Thinking: http://thisisservicedesignthinking.com/