new product development and stage gates
DESCRIPTION
Shared experiences of delivering new software products from start-ups to well established companies -- from no process to very formal stage gates. Presented to University of San Diego Business class.TRANSCRIPT
New Product Development Experiences and Stage Gates
Guest Speaker April 3, 2014
Rick Berzle | President |GoToMarket LLC
Agenda
• Background/Experience • Company Maturity and Product Planning • Formal New Product Planning Processes • Limited/No New Product Planning • Considering GoToMarket Alignment • ParKng Thoughts
Speaker Background
• BS Computer Science/MBA MarkeKng • 8 years in SoNware Development • 10 years in SoNware Product Management • 15+ years in VP-‐level MarkeKng PosiKons • 12 MarkeKng/Business Consultant
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My Story/Career TransiBons • Math major -‐> 1st job Engineer’s Aid • Back to school for Computer Science • Honeywell (LA) -‐> Digital (Boston) • Development -‐> Product Management – Graduated to Product Line Management
• To Apple -‐> Taligent • Taligent -‐> Start-‐ups -‐> GoToMarket • To Peregrine -‐> GoToMarket • Lots of early/mid-‐stage soNware companies
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70’s
80’s
90’s
20’s
Today
Product Planning Processes Factors that influence product planning: • Company size/maturity • Financial stability/shareholder expectaKon • Leadership • Market dynamics • Time-‐to-‐market • Category (soN vs hard) • Capability (experKse)
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Size/Maturity: Product Focus
• Sales leadership • Product suites • Revenue growth • Brand awareness • Integrated sales/mkting
• Technical leadership • One Product Company • Reference Accounts • Sales & Sales Support • Minimal Marketing
Start-up $0-5M
Early-Stage $5-20M
Mid-Stage $20-50M
Growth $50-100M
• Financial leadership • Product lines • Predictable revenues • Brand value • Market/Product Strategy
Mature 100+M
Product Planning Maturity Informal Formal
Maturity/Size: GoToMarket Focus
Start-up $0-5M
Early-Stage $5-20M
Mid-Stage $20-50M
Growth $50-100M
Mature 100+M
• Focus is account acquisition • Product defined by engineering • Marketing is describing what was built • Product Management is non-existent
• Focus is market expansion • Product Management/Marketing blended role • Product strategy and roadmap fundamental • Marketing is about awareness and value proposition
• Product and Product line strategy • Specific marketing disciplines exist • Product management is fundamental • Well-defined marketing/sales boundaries
Digital Equipment Corp
• Formed in late 50’s • Leading suppler of mini-‐computers • Grew to be a complete systems provider – desktop to servers
• $14B in sales; $1B in soNware • Squeezed out of the market – IBM, Dell, Compaq at the low-‐end – IBM at the high-‐end
• Acquired by Compaq (98), merged with HP (02)
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Phase Review Process
• Product Lifecycle Model and Process • Spans all corporate funcKons • Owned by Product Management • Planning and ExecuKon of all phases and phase transiKons of the product lifecycle
• Specific EXIT criteria for each phase • Public Exit Phase Reviews
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6 Phases to the Lifecycle
• Phase 0 – Strategy and Requirements • Phase 1 – Planning & Feasibility • Phase 2 – ImplementaKon • Phase 3 – QualificaKon • Phase 4 – ProducKon and Support • Phase 5 – ReKrement
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Phase 0 – Strategy & Requirements
• IdenKfy a market problem or opportunity
• Propose a product soluKon
• Consistent with Corporate Product Strategy
• Primary deliverable is the Business Plan
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Phase 1 – Planning
• FuncKonal specificaKon and engineering plan
• Preliminary product design
• Integrated implementaKon Plan
• Company fully commits at Phase 1 Exit
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Phase 2 – ImplementaBon
• Design complete • Prototypes built • Product meets phase 0 requirements
• Full funcKonality is tested
• Product launch plan developed
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Phase 3 – QualificaBon
• Qualify producKon-‐level copies of the product
• IniKate field tests • Demonstrate product meets requirements of Phase 0 and specificaKons of Phase 1 and 2
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Phase 4 – ProducBon/Support
• Achieve and maintain steady-‐state volume producKon, sales and service
• Phase 4A – Ramp-‐up • Phase 4B – Steady-‐state
• Monitor/adjust to meet product and market performance targets
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Phase 5 – ReBrement
• Implement Product Phase Down Plan
• Fulfilling internal and external commitments
• Require the same level of complexity as new product development
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Challenges for Tech Products
Point of Sale Sold direct to customer by sales/channel
Capability/ROI Emphasized, demonstrated ROI
Pre-‐Sale EvaluaKon Demos, Pilots (months)
Post-‐sale support DocumentaKon, training, service, support
Purchasing risk High (many products don’t meet their hype)
Intangible factors Trust, reputaKon, references, financial stability
Product/Technology Roadmap Lifecycle and extendibility
Must consider go-to-market cost/risk in the Tech Market
Formal New Product Planning
Digital Equipment CorporaBon examples: • Low-‐end Laser Printer (opportunity) • WorkstaKon Publishing (make vs buy) • 2D/3D graphics (industry standard) • OperaKng Systems (strategic)
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Informal/No Product Planning
Early-‐stage/High-‐growth examples: • Peregrine – Rapid expansion of product porlolio – Mergers/AcquisiKons – Infrastructure Management
• IT, Telecom, FaciliKes, Vehicles, ..
• ServiceNow (soNware-‐as-‐a-‐service) • Customer-‐first soluKons (producKzed)
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A few final thoughts on go-‐to-‐market consideraBons
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Go-‐To-‐Market Alignment
Market Opportunity Revenue Attainment
Target Market Customer Buyer/Influencer Need/Pain CompeBtors MarkeBng Strategy
Who? (customer)
Requirements Use Cases Service/Support PosiBoning/Branding Value ProposiBon Pricing/Packaging
What? (soluBon)
Demand GeneraBon Sales Model/Channel OpBmizaBon Team OpBmizaBon Sales ExecuBon Measurement/Metrics
How? (execute)
ü Poor alignment results in missed market and revenue opportuniKes ü Good alignment requires organizaKonal cooperaKon and collaboraKon ü Agreed set of strategic/tacKcal goals and a sharp focus
PosiBoning Template
“FOR (who is the target customer) WHO (what is their need or opportunity) YOUR PRODUCT or SERVICE NAME IS A (product category) THAT (key benefits – the compelling reason to buy) UNLIKE (primary compeKKve alternaKve) OUR OFFERING (statement of primary differenKaKon)”
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GoToMarket Example For soNware vendors who develop, market and sell soluKons/services to an enterprise customer and deploy on-‐site or as a service (SaaS) Who are focused on aligning their go-‐to-‐market strategies and tacKcs to consistently meet market penetraKon and revenue aqainment goals GoToMarket is a markeKng/sales consultancy and interim execuKve management company That provides unique execuKve-‐level operaKonal experience to idenKfy the go-‐to-‐market gaps that affect the vendor’s ability to predict and meet revenue/market aqainment goals in a sustainable fashion. Unlike other consulKng firms, GoToMarket provides highly successful and experienced professionals with deep soNware markeKng and sales operaKonal experience that can idenKfy go-‐to-‐market revenue chain gaps/issues and provide the operaKonal leadership to implement needed changes Our Offering takes a pragmaKc approach to the strategic and tacKcal elements of the go-‐to-‐market revenue chain that rapidly determines both the internal barriers to sales success and the associated remedies to align markeKng and sales for opKmal producKvity -‐-‐ expanding the opportunity pipeline, improving customer acquisiKon and retenKon, lowering the cost of sales and ulKmately ensuring reasonable revenue aqainment targets are achieved.
Recommended Reading
• “Crossing the Chasm: MarkeKng and Selling DisrupKve Products to Mainstream Customers” by Geoffrey Moore
• “Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets” by Geoffrey Moore
• “Rules For Revolu7onaries: The Capitalist Manifesto for CreaKng and MarkeKng New Products and Services” by Guy Kawasaki
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Thank You. I hope this was helpful.
[email protected] linkedin.com/in/rickberzle