Just about every company I talk to now is outsourcing to one degree or another. Yet the results are decidedly mixed. I think there are several reasons for the problems that companies are having. Often the problems stem from issues with the product development process, or from language or cultural issues, but more often than not I think the core issue stems from using outsourcing for the wrong reasons.
With apologies to one of my favorite authors, Michael Lewis’ “The New New Thing,” I wanted to talk today about what I see as a common misconception among product managers and companies in general. So many companies believe they need to create an entirely new market in order to do something big. The media helps fuel this; probably the single most common question I get, especially from the press, is “what’s going to be the next new thing?”
A pig is a bad product. Lipstick on a pig is when product marketing tries to make the best of a bad situation. The metaphor may be a bit harsh, but the message is clear.
“Never tell people how to do things. Tell them what to do, and they will surprise you with their ingenuity.”
If you have been wondering what’s going on with all these startups with 20-something founders and product leaders, you’re not alone. There are some great companies that have been started by some very young people, several of whom dropped out of college to pursue their ideas. I’ve talked earlier about the value of experience, but in this note I’d like to talk about the problem I see of people discounting product leaders because of their youth.
I’ve been working with quite a few startups over the past few years, usually in an advisory capacity, but sometimes more directly involved. Startups are essentially all about new product creation, so they’re a terrific place for product managers to do their thing, and it’s why I love working with startups so much. Yet I believe that the prevalent model for how startups go about coming up with their first product is terribly inefficient, and why so many otherwise good ideas never get funded or make it to market.
How many times have you seen the situation where a sales rep brings to the CEO a proposal from a prospect that says, “if you will just add these seven features to your product then we’ll buy your software and even pay you an extra $X.” Or, lest anyone thinks that this situation is unique to enterprise software companies, for consumer service companies, your ad sales person comes over saying that “a big prospective partner will sign a seven-figure advertising and sponsorship deal with you if you’ll just agree to these site integration and placement requirements.”
One of the most difficult - but highest leverage - types of product management is to define successful platforms. By platforms, I am referring to foundation software that is used by application developers to create end-user solutions. Examples include operating systems (e.g. Windows, MacOS, Palm OS), operating environments (e.g. Java, Flash), Web services (e.g. Amazon’s or eBay’s integration API’s), and game developer platforms (e.g. XNA).
Some people believe that business is all about marketing and building brand - establishing a great brand in the mind of consumers. Many of these same people also believe that one of the biggest weaknesses of Silicon Valley-style companies is that we just don’t get marketing in general and brand development in particular.
I’m frustrated by the state of the Enterprise Software industry, and I have been for quite some time. While there are some notable exceptions, I find fewer examples of good products in this space than any other. Many people view the enterprise software market as “mature” or worse, but I think customers are just frustrated and aren’t anxious to spend yet more money on more disappointing products. And they’re just not willing to dish out hundreds of thousands of dollars – or even millions – on “professional services” just to get them working.