Patterns of Product Improvement

Frank
Frank
Sep 5, 2018 · 7 min read

Your product backlog is loaded with ideas. There is a wide range of feature requests on your to-do list: innovative ideas, customer request and product refinements. There is constant change in the list. Priorities are changing while the product is evolving and the market is moving. Guidance is needed to navigate through this. Building and growing a product means deciding what to build next, over and over again.

The process of deciding what do build next requires a repetitive analysis of cost, benefit and risk. The following typology categorizes product improvements into patterns. Using the patterns helps prioritizing features and speeds up decision making when choosing what to build next.

The Quick Win

Features that can easily be built are often considered as ‘quick fix’. Building and shipping the feature comes at low cost in design, development, production and distribution. But caution is appropriate. The total lifetime cost of a feature also contains maintenance/support and dependencies. There are pitfalls with these late lifecycle costs. Before moving ahead with quick wins analyze the respective feature to make sure you don’t trap yourself.

Start by checking if customers are really asking for the feature. Are you certain it is of value to them? Don’t build it just because you can unless it gives value to somebody. There should be customers asking for it, or self-evident customer benefit.

Continue with checking dependencies. A particular feature may seem easy to create but it can be difficult to use for a certain user type. Example: adding photos to your web app is easy. But for your Android app, dealing with the wide range of hardware of exotic devices can be a nightmare in support and maintenance. A product enhancement may be small and simple but actually add significant complexity for other planned features. Example: you add file attachments to your web app. But when you go ahead with integrating into Facebook Messenger there is an expensive suprise: you suddenly need to manage large file attachments in your chatbot backend which does not support file handling.

To avoid traps validate your quick wins on the following three checks:

  • Is someone actively asking for it?
  • Does the quick fix increase cost of another important enhancement?
  • Is it free of maintenance & support efforts?

Any ‘No’ to these checks should turn your quick win into a more considerate investment decision.

The new Price List Item

These are the classic add-on features. You build something new and your existing users buy into it, paying a price on top of their current contract. The Tesla product works like this: you can buy all the add-ons at a certain price — you pay for what you order whereas Tesla puts everything into the car upfront and add-ons are managed by software. But not all products work well with a highly differenciated price list. Instead, users may consider features to be part of the core product and not be willing to pay an extra price for upgrades. Even when included ‘for free’ that new feature can reduce churn or open additional market segments for your product and hence have a good return on investment.

Before introducing a new price list item, add-on or premium feature check the following:

  • Would customers typically expect it to be included in the viable core?
  • How many on-top price list items does your product already carry, would customers possibly feel overwhelmed by the volume of add-ons available? Is the pricing structure sustainable?
  • Does it reduce churn?

The Viral Factor

Your analyst read an article about viral growth and suggests to add a feature to invite new users. The math is easy: every user invites a new user, there is automatic growth in the product.

But it always looks easy on paper. Reality bites, users just won’t use the new invite-your-friend feature.

Before getting over-excited about viral growth check the following:

  • Is there sufficient benefit or reward for the user?
  • Will you measure the specific contribution to growth?

Cost of Operations

Features can be of zero value to your customers — yet of significant value for your own organisation when they improve your position on cost of operations.

The costly file server storage keeps overflowing? Introduce file compression.

That large AWS bill? Apply performance tuning such that your software consumes less CPU.

Still migrating systems manually? Docker-ize your deployment.

Reducing cost of operations can free up valuable resources. You don’t want your devops to perform repetitive maintenance tasks on your systems, you want the development team to build new features — stuff that sells. Operations tends to be undervalued until it becomes a serious strain. Cost of operations is an important quality of your product and contributes to the product roadmap just like sales and customers. It directly hits your bottom line.

Check: Prioritizing operation improvements should be done with the same cost-benefit-risk analysis like any other roadmap feature. The monetary benefit of reduced cost can easily be compared to the monetary benefit of additional revenue.

Cost of Support

Like cost of operations, cost of support can be a real strain. When users are confused by the system they will hit your hotline with support requests. Support cost, like any other operations cost, directly hits your bottom line. Don’t assume your support staff is around anyways — strive to minimize support efforts. Any support effort on your side is mirrored by effort on your customer’s side. They don’t like talking to a hotline or creating tickets, they would rather want to get things done using your product.

When prioritizing support related product improvements check the following:

  • Is the new feature self-explaining?
  • Does it carry the danger of confusing the user?
  • Did your designer check it?

The Next Big Thing (Anti-Pattern)

Farm Corp employs analysts to understand market demand and needs. The analysts find there is a market gap: transportation is slow, people need faster horses. The marked is ready for strong working horses. The sales guys say they would sell more than 500 fast horses each year — if we only had them at Farm Corp! So let’s invest and raise some horses.

Next year the analysts see that there is strong demand for cows. Just last year we hired horse breeders, built a horse track for training and stocked our warehouses with hay. Now we fire them and tear down the track, we can keep the hay for feeding the cows. Because, in fact, we need cow breeders and grasslands instead of training tracks. Cows is the next big thing, let’s pivot! OK, it’s a one-time restructuring cost — but then things will turn great. We got lucky and sold all the young horses to Farmer Smith from Pennsylvania. Our analysts conclude Smith is an idiot, buying our horses even though cows is the next big thing.

In year three a drought kicks in and nobody buys any stock. At Farm Corp we kill the cows because we need to cut the running operations cost. The analysts have calculated our break even so we survive the drought without losing money. Yay, we even posted a profit in the drought year!

Rain comes in the year after and the market awakes. Everything grows, the economy picks up and people need to transport goods from A to B. People buy horses. Prices paid for fast horses go up and up and up …. At Farm Corp we need to react and take action because we want to participate in that boom. Or analysts find Farmer Smith from Pennsylvania has many valuable horses. We acquire Farmer Smith for $138 million.

To avoid this anti-pattern check your strategy and features on the following:

  • Will you be able to create a minimum viable product? Just getting a foot in the door of your market will not cover the market — it will only keep the door open for a short moment. To prevent having your foot crushed in the door you need a viable product that addresses a market.
  • Analyze optimistic and pessimistic flavours of your strategy.
  • Analyze the lifecycle of your investment. When will revenue start flowing from the investment?

Sales drive Roadmap (Anti-Pattern)

Sales people will be able to tell you what they can sell. It’s a simple and straight strategy: sales drives business. Safe bet. The sales guys will be desperate to close their next big deal and throw everything at it. It’s all about incentives and their bonus structure. Sales will care about immediate success. Customer churn or outrageous support efforts are none of their worries, usually. Closing deals at any price is a short sighted strategy because it does not create synergies between deals. Instead: build once, sell often.

https://twitter.com/ryanflorence/status/227967938005700609?s=09

Check your roadmap features for the following:

  • Does it scale, can it be sold many times? If not, can the customer be a co-innovation customer that drives your product-market-fit?
  • Is it in line with your strategy?
  • Sales is asking for it, but are there real deal candidates behind this?

Summary

Using the patterns listed above helps prioritizing features in your product backlog. Some features may fit multiple patterns or be outliers. Working with patterns speeds up backlog decision making and helps avoiding mistakes. Great products are not the result of a single genius idea but rather grown by deliberate analysis of what to build next and continuous refinement.

Frank

Written by

Frank

Writes about Product Strategy, Growth & Architecture. Creator of https://productific.com.

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