Saturday, September 18, 2010

Not only an idea, not only a product, we need a long term strategy

The fast pace of technical innovation fueled by the aggressive competition that drives today's markets makes product and services to become obsolete very quick.
At this point is not big news that the lifespan of products is much shorter than a few decades ago. What is not as evident are the multiple reasons that make products die young.

Not just a move, a game strategy. Source: FreeDigitalPhotos.Net

Obviously technical innovation is a key factor for fast path to product obsolescence; for instance, my current smart phone is fairly new, it was one of the most advanced models at the time i bought it (only a few months ago); despite of having a great embedded camera, it does not have a second front-facing camera (front-facing cameras started to show up in phones days after I got my phone). Mobile video conversations are becoming a common practice, soon the pressure of my relatives and friends will make me feel alienated or be called "dinosaur" if I do not video-chat with them. This social catastrophe can be easily avoided if I rush to my mobile provider's website and buy the new phone model, which at that point, I am sure it will be available not just with a front-facing camera but also loaded with three 360 degrees infra-red cameras with 3D capabilities and fourteen other features that I will never use. Perhaps I am not the best example of the type of consumer that could feel such pressure, it is very probable that I will get another phone only when mine dies, but for each consumer like me I am sure that there several others that will feel the mentioned social panic and will definitely rush to their favorite site to order a new phone.

In other situations the technical innovation affects the longevity of a product in more indirect ways. In many scenarios a third product (in a somehow unrelated market niche) becomes a competitive factor that affects our market space or even destroys it entirely. Letraset Transfers is (or it was when used to be a real market) the world's leader in pen-transferable characters to paper, the product represented an innovative option back at its inception times, it enjoyed a long period of success during the '70 and '80. Back then, it was very common to see Letraset-crafted labels, sign, brochures, etc. in every office, school, or shop.
Later, personal computers and printers made even easier the ability of creating professional-quality labels and documents at home or in the office in a matter of minutes, not just that, they could be changed as many times as you wanted in your computer screen before printing them (not to mention that on top of that the word processor and and the printing software opened a whole new word of creativity potential while keeping the effort relatively low).
My point is that product competitors may suddenly appear from unexpected fronts. I am sure that at the time of the popularization of the first personal computers, many could predict that they would replace calculators, large super computers, or even workers, but I bet that not many were able to anticipate that a decade later they will be a key factor in the drastic reduction of the pen-transfers letters market.

In other cases, the technology was there for some time but there weren't products exploiting it. If a technology is forced to enter in production with the goal of disrupting a market only through technical innovation, it may lead to frustrated attempts of imposing "products" in the market mainly based on technology edge, in many cases, such attempt results in failures, due to the fact that there is not a genuine consumer need for the product or there are not enough consumers to cover the cost of producing the offering.
It is often a good idea to keep an eye (or the investment) on technology research and development, but instead of rushing technologies to market, it is more important to be ready to quickly productize the technology when a genuine product idea emerges as solution (or as anticipation) to a real market demand or consumer desire, that is the exact point in which we should take one of the technologies under research or find new ones that can represent the perfect fit to realize the new product vision.

As an example of technology availability versus market opportunity let's take the case of Video Conferencing over the web, the technology behind it was ready for years before it actually really took off, the network bandwidth and the performance of personal computers represent for long time big impediments for this technology to become massively adopted; years later the rest of the technology landscape eventually started to catch up thanks to faster PCs, graphic cards, and networks; but web conferencing did not become a profitable market sector until real market forces made it a business opportunity. Factors like the economic downturn that started in United States of America by to the end of 2007, the cost of petrol, and the rise of airplane tickets made many organizations to reconsider the cost/benefit of business traveling. Many organizations decided that not all but a subset of the business trips could be replaced by comparatively cheaper web video conferencing services. The described reasons are an example of a genuine market need driven by real consumers, in this case, all these these conditions helped web video conferencing reincarnate as a profitable business, offering well rounded service offerings targeting small businesses and corporations of diverse sizes.
Technical innovation in networking and computer hardware were key enablers, but were not a significant driver to develop a market, real consumer demand was the one that originated the right environment for product ideas to surge, satisfying tangible consumer requirements. Those ideas happened to grab a pre-existing technology and use it in their favor.

Good market reading and innovative ideas can lead to good products, however big ideas behind successful products not always enjoy market acceptance eternally, products need to constantly follow new market trends and tailor themselves to the changing waves of consumer demand and competition. But adapting to market change in a reactive way is not always enough, short term adaptability should can get you only so far, at some point playing catch-up for too long could be dangerous. Quick adaptability should be combined with a long term product vision and strategy that can be materialized into different product incarnations across the time.

Ideally, a product should be only one of the milestones in a branched timeline into the future, projecting several potential product incarnations and mutations of a single vision. Such vision should translate into ways of solving a particular market need, as well as the strategy to make a successful business out of it.
Not only that, the vision itself should be susceptible to frequent review and trajectory correction.
A nice visual analogy to this concept could be the type of branched timeline charts that are often used to represent the evolution of species in natural sciences:
In this representation evolving in time from left to right, products branch out from the original idea, some times they last for quiet some time, in other cases they die quickly; both eventually get to the circle that denotes the end of their lives. The ones in the extreme right are still living and evolving; while the dotted line represents new research ideas under development.

Regardless the lifespan of each product it is a good to have clear what is the big picture of the overall product strategy, this visualization draws the potential evolution of an offering (or even several draft scenarios) projecting how the different variations will play overtime among them and in relation to competition, technical evolution, and other external factors. It does not matter if this picture has to be reformulated or corrected often, the more we update our long term strategy the better. Not just that, it is very hard to have all the market information that we want to contemplate in the mix and foresee all the potential permutations of external factors to paint a perfect picture. Perfect pictures do not exist because we cannot predict the future, but as we move along, we will be capturing more data and learning lessons from our failures; which in turns, will lead to better data points projecting more accurate scenarios over time.

To summarize the concept, let's portrait a sample of a long term product vision and strategy of a product beyond the technical advances underneath:
Product X it is not only an MP3 player, it relays in that technology today but it may use others in the future. Product X brand actually represents a long term vision, that contemplates all the aspects around music acquisition, management, sharing, and enjoyment; as well as the industry ecosystem around it. Product X is constantly proposing to users new unique and innovative ways of interacting with music. The brand's complete user experience is materialized through an evolving family of devices, software, and services that aim to highly satisfy (and in some cases surprise) consumers.  The philosophy behind X is reaffirmed through a strong brand that act as an anchor in the consumer mind as a synonym of this rich music experience.

Thanks for Reading!

Stay up to date on this and related topics by following me on twitter: @Juan_Noceda 

Saturday, January 30, 2010

Map for the Journey

The Journey. Source: FreeDigitalPhotos.Net

In the early days of the software industry, people used to talk about programs and not about products, software solutions used to be simply -built- versus being -designed-. Like in many other disciplines, applied computer science started small, by people writing modest programs that took advantage of those increasingly accessible things called computers.

Programming has evolved organically solving less "scientific" problems, people gradually started talking about "applications" and simple business programs rapidly evolved into sophisticated systems. But only when those systems started to be implemented as repeatable solutions for third parties was when the real industrialization of software started, and when the software as a -product- was born.
A similar phenomenon has taken place in the field of electronics with the massification of integrated circuits and microprocessors, in fact, after the explosion of electronics in the 70's a fascinating synergy between hardware and software produced one of the most accelerated innovation waves of the modern technology, a wave that keeps gaining speed since then.

At that time, it was not hard for many to start discovering the potential of repeatable software solutions and services as a lucrative business. A large number of companies rapidly flourished with the fresh impulse of this fast-growing discipline. The reaction of the business world did not take longer to surge, and very quickly, all the successful business paradigms proven in other industries were adapted to work in the software arena, transforming those programs into actual marketable products.

If we put in the classification of "top-down design" the products that were first conceived to satisfy a market demand and then engineered, we can safely say that the early software products were mostly originated in the opposite way; many early software products were the result of "bottom-up designs", in which new creative ideas were transformed in programs by a brilliant engineering minds and then (no less brilliant) businessmen found ways to identify or in some cases create a market need for them.

The top-down and the bottom-up approaches both have their own strengths and weaknesses, the fact that we live in a modern economy with a mature and competitive software industry that often prefers marketing research and business plans up-front, does not mean that the bottom-up design is a primitive practice, a living proof of that is the fact that the Technical Research and Development departments in most of today's advanced software and hardware development organizations play a leading role in the generation of new products, in fact many successful high-tech products in today's market started as a bottom-up initiatives.

Despite the vertical direction of its conception process, when we refer to the term product, implicitly, it is generally assumed that a we are referring to an entity that has a meaning, an identity, and a value. It is my preference through this writing to judge software products for what they mean for their users and the market. It is not only a matter of the product technical profile or its market positioning but also is key to understand the significance that they have for the ultimate agent that makes them products: the consumer. I propose that we conceptualize High-Tech Products essentially as: Commercial offerings providing value to fulfill a consumer need or desire; which in turn, happen to be materialized through software and/or hardware technology.

I believe that this informal definition of high-tech product disassociates the technical considerations from the core values of any product in general,  helping us to X-ray the products down to their essence, in a way that we expose their true value proposition and distinctive attributes. With this abstract optic, we can easily analyze how they align (or not) with the business vision behind them and the way they are perceived by consumers.

My intention is to humbly contribute to the evolution of the High-Tech community by bringing some additional business and design perspectives not often discussed deeply in the traditional engineering circles, as well as remarking important technical considerations that are typically obscured to business folks.
I will consider myself satisfied if my impressions can help to build the bridge that finally marriages these worlds, so we can think about the conception of High-Tech products as a cohesive whole, encompassing Design, Technology, and Business.

This is an open invitation to an exploratory journey through the exciting world of the creation, evolution, and commercialization of High-Tech products. I hope that, as we go through, you can obtain additional perspectives of this discipline and enjoy the adventure in the same way that I have been enjoying this rewarding profession during all these years. Let's ride!

Stay up to date on this and related topics by following me on twitter: @Juan_Noceda