Do you have a Product or do you have a Business?

How to bring the customer into your product design and innovate to win.

There's nothing like seeing your customer’s face light up when they have found your product or service makes their life a little better. If you’re lucky, you might even receive a glowing and unprompted testimonial from a customer via email or social media. This is business owner bliss. You know your product/service is delivering value and now the game turns to reaching and converting more customers (and hoping your market sizing reflects reality). But how did you get here? Was it luck or was it your process? And what will you do next year as competition heats up and you need to continuously innovate or deliver products to new markets?

 Alex Westner

Alex Westner

The quick answer is that you need sound product management -no matter who owns this role at your company. During my five years as iZotope’s VP of sales and marketing, I was lucky to work right next door to Alex Westner, head of product. We developed a good chemistry and launched over a dozen products together, many of them award-winning, and at least two industry standards: Ozone and RX.

Alex’s background includes over 15 years in product management, product strategy, and business development, all in music and audio software companies. His engineering background (electrical engineering major with a music minor), followed by graduate work at MIT, led Alex to audio research and programming.

As Alex describes his journey to Product Management, “I found out that I was not a very good programmer, but I was fairly business savvy from being in a band and trying to make the band successful—which turns out is like 95 percent business and 5 percent playing music. I applied what I learned on the streets in a more professional capacity at a small music software company. That’s how I got into product management—I understood how the software worked, I was a customer of the product, and I had a lot more interest in how the business worked than in how to build software. That’s how I got started, and I just progressed from there."

There’s a continuum of product management from technical to marketing, and over time my career became much more marketing-focused than technical-focused.

 The Product Management vs. Product Marketing continuum

The Product Management vs. Product Marketing continuum

In B2C businesses, the customer really is king, and being a product manager in that environment means focusing on the customer.

Being more customer-focused means you’re more external and more outward rather than diving into the details of technology and engineering. You have to be more connected with the customer to do your job well.

How do you become a customer-focused product manager?

Since I’m an introvert by nature, it’s taken a lot of time, encouragement, and coaching from others. Probably the best tool that I still use is called the Lean Canvas, which is a derivation of the Business Model Canvas.

Lean Canvas helps startups to not only think about launching a product but also how to create a business around that product. Looking and listening to the lean startup culture is about understanding the customer and getting the customer/problem fit nailed down.

 Customer Interviews are key to understanding your target market

Customer Interviews are key to understanding your target market

Once you respect that you can’t make a product without the customer, you just have to go out there and talk to them. As you get better at talking to the customer, it becomes more interesting and more fun.

Eventually, you realize that the amount of insight you’re gaining from simple conversations just blows away any kind of market research or survey data. I now feel comfortable just cold calling 15 different people and running through a script and getting a ton of amazing insights. I can’t imagine not doing that now!

  1. Develop a view of the customer—HubSpot persona templates is a perfect place to start
  2. Create a list of the biggest unknowns, assumptions, and risks that need to be tested and proven to be true or false.
  3. Write a script with key questions you want to validate.
  4. Interview lots of customers that fit your target personas and stick to the script.
 Here is an example of a Lean Canvas exercise  done by Spark23

Here is an example of a Lean Canvas exercise done by Spark23


Example customer interview script for a SWOT analysis

  1. Please give me the one-sentence elevator pitch about who you are, what you do, and what matters most.

  2. How long have you been doing this?

  3. How familiar are you with <company>?

Strengths and weaknesses

  1. So what’s the big deal about <company>? What do you think is so great about it?

  2. And what sucks about it?

Opportunities and threats

  1. Where is <company> completely missing the boat? Where could it make a really big impact in the world?

  2. What is going on out in the world that has the potential to just annihilate and destroy <company>?

Trends

  1. Think about all the technology around you now and in your work. What technology trends are you seeing that are starting to have an impact on your work and in your industry?

  2. Are there any legal trends or emerging standards and regulations that you are coming up against that you feel will have a significant impact on your work or in the industry? IOW… is the government cracking down on you in any way?

Thank you and follow-up

Thank you so much for your time—this has been incredibly valuable. Can we follow up soon to get your feedback on some ideas we’re working on?


How do you think about testing pricing strategy?

On a recent project, we tested our pricing models during a process called Design Sprints (more on this in future blog post) and we got some really good feedback. So, we felt pretty confident with our plan. But when we launched, we got all of this hate about our pricing model and the subscription tiers, which surprised us.

First, we learned that the early adopters who found our product first were not our target customer. They were justifiably railing against the product because it really wasn’t for them and so we shouldn’t expect them to buy it in the first place. So that was an interesting challenge that I didn’t anticipate.

Second, there was a surprising emotional response to our pricing. The same people who, in discussions, would say, “Yeah, that totally makes sense,” had a much more visceral reaction out in the wild to the same price they'd liked in a more casual environment.

 Be careful testing for price!

Be careful testing for price!

We learned that in the focus group, people are more rational and logical because they’re thinking. When you expose them to the price in the actual market, with a store and actual dollars at stake, they’re much more like normal buyers who are totally irrational.

Next time I test pricing for a product launch, I will have the product ready for sale so that I can put it in front of someone and say, “Here it is, would you buy it? Here’s the price.” Then I want to see what happens. That’s probably going to be the best chance I’ll have of being able to test pricing. That was a big lesson I learned.

How do you square when being customer-focused is the opposite of your own product intuition?

This is the where the art lies in product management! Too often, product people become obsessed with their own idea or vision and lose sight of what their customers will actually appreciate. Most of my clients or potential clients are entrepreneurs who fell in love with their own solution and—surprise—the product didn’t land well with their customers and… “Now what?!”

Fall in love with the customer, not their problem...
and certainly not your solution.

To avoid this trap, the Lean Startup community praises, “fall in love with the problem, not your solution.” If you focus on customer problems, you can find ways to create innovative solutions that customers are more likely to respond well to. I like to take this mantra a step further even, “Fall in love with the customer, not their problem (and certainly not your solution).” The world changes fast, as do customer behaviors and competitive solutions. If you stay closely connected to your customers, you’re more likely to stay out in front of these changes and evolve with them.

What do you say to product managers and engineers who quote Steve Jobs' rejection of focus groups?

Every day that goes by, I want more customers involved in the process. I don’t think you’ll ever actually end up with too many customers hanging around while you’re developing a product for them. You can always get reactions and feedback to what’s going on and what you’re working on. Even if it’s something a customer has never seen before, your team may still feel really bullish about what you’re building. Customer reactions could be a huge help to the marketing team and how they’re going to sell and explain the story.

If we’ve got you thinking about how to improve your own business model and bring customers into the loop, please reach out to us at Go 2 Market Coach or Spark23 and we’d be happy to help you.

If you like this post, check out part 2 of my interview with Alex, where we dive into how Product Management thinks about metrics, and how they work with marketing, customer service and other parts of the organization to achieve their goals.

In our third post, we discuss “How to win at Design Sprints & Innovation” do sign up for my newsletter to stay in the loop.

Thank you for reading and please pass this on to anyone who you think might find it useful.

 What will these products become? Better yet, will they become my business?

What will these products become? Better yet, will they become my business?