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Unit 1. Introduction to the Product Lifecycle.

Jez Humble
August 27, 2018

Unit 1. Introduction to the Product Lifecycle.

In our first class, we’ll discuss the various characteristics and types of products, paying particular attention to the product lifecycle. We’ll introduce the idea of a business model, and discuss the various risks that products might face in different parts of the product lifecycle. We’ll review a brief history of project and product management, and discuss the differences between the two.

Jez Humble

August 27, 2018
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  1. i290 lean/agile product management


    unit 1: foundations
    @jezhumble


    https://lectures.leanagile.pm/


    [email protected]
    This work © 2015-20 Jez Humble


    Licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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  2. grasp the history of project management


    understand the lifecycle of products


    be able to perform basic risk analysis


    know the di
    ff
    erence between product and project


    understand the forces acting on products now


    learning outcomes

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  3. by type: web service, user-installed, embedded


    something people will give you money for


    goods and services


    by lifecycle stage: disruptive, incremental, commodity


    by market: b2b (enterprise); b2c (consumer)


    product

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  4. di
    ff
    usion of innovations
    Competitive


    advantage
    Commodity
    Total Addressable Market (TAM)

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  5. technology adoption lifecycle
    Geo
    ff
    rey Moore, Crossing the Chasm

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  6. new way
    What are the most important costs inherent in our business model?
    Which Key Resources are most expensive?
    Which Key Activities are most expensive?
    Revenue Streams
    Through which Channels do our Customer Segments
    want to be reached?
    How are we reaching them now?
    How are our Channels integrated?
    Which ones work best?
    Which ones are most cost-efficient?
    How are we integrating them with customer routines?
    For what value are our customers really willing to pay?
    For what do they currently pay?
    How are they currently paying?
    How would they prefer to pay?
    How much does each Revenue Stream contribute to overall revenues?
    Channels
    Customer Relationships Customer Segments
    channel phases:
    1. Awareness
    How do we raise awareness about our company’s products and services?
    2. Evaluation
    How do we help customers evaluate our organization’s Value Proposition?
    3. Purchase
    How do we allow customers to purchase specific products and services?
    4. Delivery
    How do we deliver a Value Proposition to customers?
    5. After sales
    How do we provide post-purchase customer support?
    Mass Market
    Niche Market
    Segmented
    Diversified
    Multi-sided Platform
    examples
    Personal assistance
    Dedicated Personal Assistance
    Self-Service
    Automated Services
    Communities
    Co-creation
    For whom are we creating value?
    Who are our most important customers?
    What type of relationship does each of our Customer
    Segments expect us to establish and maintain with them?
    Which ones have we established?
    How are they integrated with the rest of our business model?
    How costly are they?
    Value Propositions
    Key Activities
    Key Partners
    Key Resources
    Cost Structure
    What value do we deliver to the customer?
    Which one of our customer’s problems are we helping to solve?
    What bundles of products and services are we offering to each Customer Segment?
    Which customer needs are we satisfying?
    What Key Activities do our Value Propositions require?
    Our Distribution Channels?
    Customer Relationships?
    Revenue streams?
    Who are our Key Partners?
    Who are our key suppliers?
    Which Key Resources are we acquiring from partners?
    Which Key Activities do partners perform?
    What Key Resources do our Value Propositions require?
    Our Distribution Channels? Customer Relationships?
    Revenue Streams?
    characteristics
    Newness
    Performance
    Customization
    “Getting the Job Done”
    Design
    Brand/Status
    Price
    Cost Reduction
    Risk Reduction
    Accessibility
    Convenience/Usability
    categories
    Production
    Problem Solving
    Platform/Network
    types of resources
    Physical
    Intellectual (brand patents, copyrights, data)
    Human
    Financial
    motivations for partnerships:
    Optimization and economy
    Reduction of risk and uncertainty
    Acquisition of particular resources and activities
    is your business more:
    Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)
    Value Driven (focused on value creation, premium value proposition)
    sample characteristics:
    Fixed Costs (salaries, rents, utilities)
    Variable costs
    Economies of scale
    Economies of scope
    www.businessmodelgeneration.com
    The Business Model Canvas On:
    Iteration:
    Designed by:
    Designed for:
    Day Month Year
    No.
    types:
    Asset sale
    Usage fee
    Subscription Fees
    Lending/Renting/Leasing
    Licensing
    Brokerage fees
    Advertising
    fixed pricing
    List Price
    Product feature dependent
    Customer segment dependent
    Volume dependent
    dynamic pricing
    Negotiation( bargaining)
    Yield Management
    Real-time-Market
    This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
    To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
    or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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  7. risk management
    product development is primarily about
    risk management. what are the risks? what
    are the probabilities and economic
    impacts? which ones do we care about?
    how can we measure and mitigate them?

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  8. 3. contingency planning. What do we do if the risk
    materializes?
    1. risk discovery. Initial analysis, then ongoing


    2. exposure analysis. quantify risks


    probability [0-1] x impact [$]
    5. ongoing monitoring. Track risks, look for
    materialization, mitigate.
    4. mitigation. Make sure planned contingency
    actions will work
    measuring risk

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  9. risk matrix
    probability
    impact
    low probability
    low impact
    high probability
    low impact
    low probability
    high impact
    high probability
    high impact

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  10. 3. feasibility risk (whether our engineers can build what we
    need with the time, skills and technology we have)
    1. value risk (whether customers will buy it or users will
    choose to use it)
    2. usability risk (whether users can
    fi
    gure out how to use it)


    4. business viability risk (whether this solution also works for
    the various aspects of our business)
    measuring risk
    https://svpg.com/four-big-risks/

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  11. exercise
    visit https://bit.ly/lapm-risk


    • 5m to come up with ideas individually


    • 10m to create risk matrix as a group


    • 5m to present back to rest of group

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  12. exercise
    Third parties mess with you


    It's too hard to use


    You can't actually build it


    The law of unintended consequences


    Your business runs out of money


    Your supply chain is disrupted


    No one wants it


    You can't sell it pro
    fi
    tably


    It's dangerous


    The government intervenes


    Acts of god

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  13. di
    ff
    usion of innovations
    MOST IDEAS
    FAIL!

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  14. key transitions
    1. problem/solution
    fi
    t


    - do we have a problem worth solving?


    2. product/market
    fi
    t


    - is there strong demand for our
    product?

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  15. explore vs exploit

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  16. three horizons
    Baghai, M., Coley, S. and White, D., The Alchemy of Growth

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  17. Intuit horizons and metrics

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  18. optionality
    Nassim Taleb, Antifragile

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  19. SAGE console
    By Joi Ito from Inbamura, Japan - USAF/IBM SAGE, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=2106156

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  20. Margaret Hamilton
    (Director, Software
    Engineering Division,
    MIT Instrumentation
    Laboratory) in 1969
    with source code from
    the Apollo Project


    (bit.ly/agc-code)


    http://bit.ly/2ciNWcY

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  21. waterfall
    “Managing the Development of Large Software Systems” by Dr Winston W Royce. 1970
    I believe in this concept, but the
    implementation described above is
    risky and invites failure.

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  22. @jezhumble
    v-model

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  23. @jezhumble
    Shareholder value is the dumbest idea in
    the world … [it is] a result, not a strategy
    … Your main constituencies are your
    employees, your customers and your
    products.
    Jack Welch | http://www.ft.com/cms/s/0/294ff1f2-0f27-11de-ba10-0000779fd2ac.html
    Bernard Gagnon

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  24. @jezhumble
    http://www.
    fl
    ickr.com/photos/subtle_devices/849361922/

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  25. Testing Business Ideas, Bland / Osterwalder, px

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  26. We must set measurable objectives for each next small
    delivery step. Even these are subject to constant
    modi
    fi
    cation as we learn about reality. It is simply not
    possible to set an ambitious set of multiple quality, resource,
    and functional objectives, and be sure of meeting them all as
    planned. We must be prepared for compromise and trade-
    o
    ff
    . We must then design (engineer) the immediate technical
    solution, build it, test it, deliver it—and get feedback. This
    feedback must be used to modify the immediate design (if
    necessary), modify the major architectural ideas (if
    necessary), and modify both the short-term and the long-
    term objectives (if necessary).
    Tom Gilb, Principles of Software Engineering Management (1988), p91

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  27. @jezhumble
    releasing frequently
    1. build the right thing
    2. reduce risk of release
    3. real project progress

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  28. manufacturing vs software
    Manufacturing Software
    Must be completed before it can be
    used
    Can start using it from early on in
    product development process
    Must avoid signi
    fi
    cant “discoveries”
    once design complete
    Cheap to change if we discover
    problems early enough
    Doesn’t change much once
    completed
    Successful products evolve
    enormously

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  29. apple macintosh
    “Instead of arguing about new software ideas,
    we actually tried them out by writing quick
    prototypes, keeping the ideas that worked
    best and discarding the others. We always had
    something running that represented our best
    thinking at the time.”


    “The Macintosh Spirit” | http://www.folklore.org/StoryView.py?
    project=Macintosh&story=The_Macintosh_Spirit.txt

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  30. product vs project
    • projects have an end-date and a single
    customer, and we care about scope, cost,
    quality, and hitting the date.


    • products are evolving continuously, we have
    multiple customers, and we care about a
    broader set of risks

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