The Value of Product Management

As a product manager, I will be the first to admit that much of product management is rote, overrated, anyone-can-do-it, etc. The key word is "much." The perspective that I believe product managers bring to the table is that they understand how consumers think about products. Let me give an example...

I watch The Apprentice regularly, and I've found it to be an interesting measure for me to test my instincts. In the last show, the teams had to create a new dish for El Pollo Loco (fast food chain in southern California), and were measured on total sales. Based on the product alone, I predicted that the "Tortilla" team was going to beat the "Mango" team. Why? Very easy to see that the Tortilla product was not as big a stretch from El Pollo Loco's core offering; as such, it would be easier for customers to identify with and try. A fruit/chicken combo, while tasty, is just too far out there to generate significant sales. This obversation should not be a surprise, and most people understand this basic concept.

So, why wasn't this considered as part of product design? Why wasn't this part of the thought process? Instead, both teams jumped on the "sales and marketing" bandwagon, as if sales and marketing can account for all product ills.

This is the job of product managers: to understand the market, to understand consumers, and to design a product that meets the needs of the market and internal goals/strategies. Sales and marketing exists to communicate benefits of said product, not to cover up for deficiencies in the product or strategy gaps. For some reason, this basic concept, while usually briefly touched upon, is consistently overlooked on The Apprentice.

Ultimately, I am always surprised at what passes muster on Trump's show. Apparently bravado, energy, and communication skills weigh in higher than creativity, knowledge, insight, and accomplishment. A key miss on the show is the notion that the winning team "did it right" and the losing team "did it wrong." If only business were that black and white.

eBay's strategy panning out

Just like I predicted (ok, you will have to dig through the archive page to find my commentary on eBay's strategies to clean up its marketplace through higher seller fees). See this article in BusinessWeek. To whit...

Positive Pruning

Whitman attributed the solid quarter, in part, to more product listings turning into actual sales on eBay's site. The company's core auction business had suffered last year from sellers dumping slow-selling and patently unwanted merchandise in their eBay stores, as well as pricing some items too high for eBay's bargain-hunting audience. The result was a poorer experience for buyers and inventory that sat on the site far longer than desired, Whitman explained.

Last spring and summer, eBay raised fees by roughly 6% in order to encourage merchants to sell items people want and to price them to move (see BusinessWeek.com, 7/19/06, "Will eBay Fee Hikes Recharge Growth—or Drive Away More Merchants"). So far, the plan seems to be working. The site saw declines in the inventory that languished in eBay stores before selling or that didn't sell at all. "We are moving toward a better eBay marketplace," Whitman said during the call, cautioning that there was still work to do this year. Company CFO Bob Swan said that conversion rates have yet to reach their 2005 levels, but that they markedly improved since 2006.

Indeed, focus on the end customer is always a sound strategy. Despite the uproar from the eBay seller community, eBay did right for the customer, and are rewarded in the stock price. Quite a lesson for everyone in the e-commerce space.

I'm still hiring software developers!

By the way, I'm still looking for strong software developers for a new Amazon product we are going to launch this year in the Amazon Web Services organization. If you know Java, have some experience with e-commerce or payments processing, love technical challenges, like to innovate, and are interested in shaping the future of Amazon Web Services, please contact me at jvreagan at gmail dot com, or submit your resume directly here.

Real savings from Amazon S3

An interesting blog post from the SmugMug folks talking about real dollar savings from using Amazon S3.

Prioritize and focus, prioritize and focus

Let me say it again, prioritize and focus.

This is something I am addressing on my current product... making sure the team focuses on the core issues, the product basics, and getting those right before solving the 10% problems or the fringe problems.

This sounds so basic, but it is a consistent challenge that a leader faces: how do you keep your team focused on the high priorities and what's important, especially if those two are not sexy enough?

What I do is acknowledge that those other issues are important, and are relevant, they just do not rank in priority relative to other features. For example, Amazon.com is a great retail site with lots of features, but none of those features (product recommendations, shipment tracking, cancelling orders, gift options, wishlists) would be relevant without the basics: placing an order, processing payment, emailing confirmation to the customer. While that sounds obvious, and it is obvious, it is still true that many. Take a bunch of Amazon engineers, ask them to build an e-commerce site from scratch, and I guarantee the first questions and focus would be around shipping, promotions, recommendations, split orders, etc. The discussion would not start around the basics.

In addition to acknowledging those fringe features, I document them and put them on a priority board. Acknowledging the importance, and selling the idea that there are simply more important things to focus on, is an important step when these issues come up. In addition, it gives a great respite for engineers that need a break from the here and now and want to spend a short amount of time working on something new - there's a board already set up to pull those ideas from.

None of this is rocket science, none of this is new. That said, I do see teams managed that do not execute in this manner; they may have these tools, but they are not enforcing this as part of culture and execution. That's what needs to change. It will be your biggest challenge in product development.

Innovation is my inspiration...

... leadership is my aspiration

I stole that from an Amazon employee, but I LOVE it! Perfectly summarizes my drivers and goals.

This is too funny

How to deal with telemarketers

Now this I like

Well, kinda. Just stumbled across a new search engine that actually incorporates human screening of sites into its search results. Pretty interesting concept; I won't repeat it, you can read about it there.

I certainly don't think this is scaleable, nor do I think that I will get the best results just because a human has interjected. What I *do* like is that they've acknowledged the problem in the current search engine space - there is too much crap out there, and a search engine's job isn't about finding related content, it's about filtering out crap. Knowing the problem is half the battle.

Innovation in the kitchen

Very good move for Whirlpool, nice to see them try to take this concept to market. Wish I could say this was one of my ideas while I was at Whirlpool, but alas, this wasn't my baby(although I knew the guy that championed and sold this idea).

I like the name Centralpark as well - good brand name for this concept.

2008, eh? I won't be in the market for a new fridge then, sigh :(