intro to product management and business model canvas (bmc)

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Product Management Class #1 Mulyadi Oey Jul 6, 2015

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Page 1: Intro to Product Management and Business Model Canvas (BMC)

Product Management Class #1

Mulyadi Oey Jul 6, 2015

Page 2: Intro to Product Management and Business Model Canvas (BMC)

Who are Product Managers?

•  Many moved from Engineering to Product Management. – And, also popular, from general business

(MBA, management consulting) and social sciences (psychology, linguistics).

•  People who “manage” product(s) or product portfolio. – Decide how the product looks and feels like

today, and in the future. – Mini-CEO

•  But, really, what do they do?

Page 3: Intro to Product Management and Business Model Canvas (BMC)

What do Product Managers do?

Page 4: Intro to Product Management and Business Model Canvas (BMC)

Innovation Cycle: A Learning Process

Synthesis (How?)

Abstract Conceptualization

Concrete Experience

       TRANS-FORMING

Insight Generation

Customer Empathy

Idea Generation / Combining and Refining Ideas

Experimentation and Learning

Analysis (Why?)

Page 5: Intro to Product Management and Business Model Canvas (BMC)

What do Product Managers do?

•  Sensing: – Understand strategic environment – Evaluate business model – Assess customer and user needs

•  Seizing: – Create new business models – Plan & manage product portfolio – Manage product life cycle – Set pricing strategy

Page 6: Intro to Product Management and Business Model Canvas (BMC)

What do Product Managers do?

•  Transforming: – Test options – Lead product teams – Negotiate strategically and influence

Page 7: Intro to Product Management and Business Model Canvas (BMC)

Do I Need a Product Manager?

•  Who is (or, are) “owning” the product(s) in your company?

•  After a product / iteration release, who is closely monitoring whether it satisfies your users’ or customers’ needs?

•  Who is leading the process to improve your product(s)?

•  What stage is your company currently in? •  Hiring: “What are my job descriptions?”

Page 8: Intro to Product Management and Business Model Canvas (BMC)

Product Management 4 Summary Points

1.  You’re not managing a product. You’re managing the problem it solves.

2.  Your product is only as good as a user’s perspective of it.

3.  Product Managers are neither designers nor engineers.

–  Expert on whether the design & functionality meet the user needs.

4.  It’s not about being a star. It’s about managing a universe.

Page 9: Intro to Product Management and Business Model Canvas (BMC)

What Product Management is:

•  Being the heart, mind, and voice of users. •  Facilitating cross-functional teamwork. •  Making product trade-offs. •  Meeting an end-goal with fixed time and

resources. •  Leading people along a product journey.

Page 10: Intro to Product Management and Business Model Canvas (BMC)

What Product Management is *not*:

•  Being the most important voice. •  Being the only idea-generator. •  Being a designer. •  Being a programmer. •  Managing QA. •  Optimizing websites.

Page 11: Intro to Product Management and Business Model Canvas (BMC)

Product Management: Another View

Page 12: Intro to Product Management and Business Model Canvas (BMC)

7 Traits of Successful Product Managers

1.  Communication skills. 2.  Leading without authority. 3.  Learning skills. 4.  Business acumen. 5.  Love for products. 6.  Eye for details. 7.  “Routine” product management skills.

–  MRDs & PRDs, competitive analysis, product roadmaps, defining user experience, etc.

Page 13: Intro to Product Management and Business Model Canvas (BMC)

Business Model Language

http://asburyandasbury.typepad.com/blog/2011/03/1000-words-paint-a-picture.html

A business model describes the rationale of how an organization

creates, delivers, and captures value  (economic, social, or other forms of value)

Page 14: Intro to Product Management and Business Model Canvas (BMC)

A tool that helps teams describe, challenge, design and invent business models more visually and systematically.

Business Model Canvas

Page 15: Intro to Product Management and Business Model Canvas (BMC)
Page 16: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 17: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 18: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: The 9 building blocks

Page 19: Intro to Product Management and Business Model Canvas (BMC)

Customer Segments (CS)

Page 20: Intro to Product Management and Business Model Canvas (BMC)

1. Customer Segments

•  Might be grouped into segments. •  Hopefully, profitable customers. •  Choice of number of segments depends

upon: competition, heterogeneity of customer needs, technology.

–  Mass market, niche market, micro market, mass customization.

Page 21: Intro to Product Management and Business Model Canvas (BMC)

Value Propositions (VP)

Page 22: Intro to Product Management and Business Model Canvas (BMC)

2. Value Propositions

•  The reason why customers turn to one company over another.

•  Solves a customer problem or satisfies a customer need.

•  A bundle of products and/or services that caters to a specific customer needs.

Page 23: Intro to Product Management and Business Model Canvas (BMC)

Channels (CH)

Page 24: Intro to Product Management and Business Model Canvas (BMC)

3. Channels

•  Customer touch points. •  Serve important functions such as:

–  Raise awareness about a company’s products and/or services.

–  Help customers to evaluate a company’s value propositions.

–  Allow customers to make a purchase. –  Deliver a value proposition to customers.

•  E.g. direct (sales force, web sales), indirect (partner stores, wholesaler).

Page 25: Intro to Product Management and Business Model Canvas (BMC)

Customer Relationships (CR)

Page 26: Intro to Product Management and Business Model Canvas (BMC)

4. Customer Relationships

•  Describes the type of relationships with specific Customer Segments.

•  Driven by 3 motivations (might occur at different period:

–  Customer acquisition –  Customer retention –  Boosting sales (upselling)

•  E.g. personal assistance, self-service, communities, co-creation.

Page 27: Intro to Product Management and Business Model Canvas (BMC)

Revenue Stream (R$)

Page 28: Intro to Product Management and Business Model Canvas (BMC)

5. Revenue Stream (R$)

•  Cash that a company generates from each Customer Segment.

•  “For what value is the customer willing to pay?”

•  E.g. asset sale, usage fee, subscription fee, lending / renting / leasing, licensing.

Page 29: Intro to Product Management and Business Model Canvas (BMC)

Key Resources (KR)

Page 30: Intro to Product Management and Business Model Canvas (BMC)

6. Key Resources

•  The most important assets to make a business work.

•  Depends on the type of business. •  E.g. physical, intellectual, human, financial.

Page 31: Intro to Product Management and Business Model Canvas (BMC)

Key Activities (KA)

Page 32: Intro to Product Management and Business Model Canvas (BMC)

7. Key Activities

•  The most important things to do to make a business work.

•  Depends on the type of business. •  E.g. production, problem solving, platform /

network.

Page 33: Intro to Product Management and Business Model Canvas (BMC)

Key Partners (KP)

Page 34: Intro to Product Management and Business Model Canvas (BMC)

8. Key Partnerships

•  The network of suppliers / partners to make a business work.

•  4 different types: –  Between non-competitors. –  Between competitors (coopetition). –  Joint ventures to build new businesses. –  Buyer-supplier relationship.

•  E.g. optimization & economy of scale, reduction of risk, resource acquisition.

Page 35: Intro to Product Management and Business Model Canvas (BMC)

Cost Structure (C$)

Page 36: Intro to Product Management and Business Model Canvas (BMC)

9. Cost Structure

•  Describes the most important costs incurred to operate a business.

•  2 broad classes: cost-driven vs. value-driven. •  Might fall into these 4 characteristics:

–  Fixed costs –  Variable costs –  Economies of scale –  Economies of scope

Page 37: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 38: Intro to Product Management and Business Model Canvas (BMC)

BMC: Freemium Pattern

Infrastructure development

& maintenance

Platform

Fixed cost Cost of

service for free users

Free basic service

Free users (large base)

Cost of service for *premium*

users

Premium service

*Premium* users (small

base)

Free basic services

Paid *premium* services

Page 39: Intro to Product Management and Business Model Canvas (BMC)

BMC: Skype

Software development

Software development

Free internet & video calling

Global Internet

users

Cheap calls to phones

(SkypeOut)

People who want to call

phones

Free

SkypeOut pre-paid / subscription

Software

Software developers

Complaint management

Payment providers

Distribution partners

Skype.com

Self service

Page 40: Intro to Product Management and Business Model Canvas (BMC)

BMC: Bait & Hook Pattern

Production and/or service delivery

Patents brand

Production & services

Subsidizing of “bait” product

“Bait” product

Customer segment

“Hook” product / service

1x purchase of “bait”

Repeat purchases of “hook”

Page 41: Intro to Product Management and Business Model Canvas (BMC)

BMC: Multi-Sided Platform Pattern

Platform

Platform management

& development

Subsidizing of “bait” product

Value proposition

#1

Value proposition

#2

Revenue flow #1

Revenue flow #2

Service provisioning

Platform management

Customer segment #1

Customer segment #2

Value proposition

#3

Customer segment #3

Revenue flow #3

Page 42: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 43: Intro to Product Management and Business Model Canvas (BMC)

Exercise: build your own BMC

•  Divide into 2 groups: –  Group 1: People who is currently working

together in a same company / organization (max. 3 people).

–  Group 2: Not currently in a same company (max. 2 people):

•  Have a business idea. •  Don’t have a business idea. It’s OK!

•  “Coaches” are welcome.

Page 44: Intro to Product Management and Business Model Canvas (BMC)
Page 45: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 46: Intro to Product Management and Business Model Canvas (BMC)

Exercise discussions

•  Group 1: Did your peers have the same understanding about the business?

•  Group 2: Did you discover more clarity about your business? Can you explain / pitch better?

•  Use colors to represent segments.

Page 47: Intro to Product Management and Business Model Canvas (BMC)

BMC Example: Wireless service provider

Hi-volume data users

Phone only users

Engineer-ing

Retail stores

Ease of integration

and support

Low cost, always works, phone service

Other phone operators

Applica-tion providers

Engineers

Salespeopl Customer

service reps Engineer-ing Bundled

monthly fee Prepaid

Direct Salesforce

24/7 support

Sales, customer service

Phone vendors

Page 48: Intro to Product Management and Business Model Canvas (BMC)

Tell me about this business (strategy) #1

Page 49: Intro to Product Management and Business Model Canvas (BMC)

Tell me about this business (strategy) #2

Page 50: Intro to Product Management and Business Model Canvas (BMC)

Tell me about this business (strategy) #3

Page 51: Intro to Product Management and Business Model Canvas (BMC)

Tell me about this business (strategy) #4

Page 52: Intro to Product Management and Business Model Canvas (BMC)

Business Model Canvas: Agenda

•  9 blocks of Business Model Canvas – 20m •  Explore examples of BMC – 10m •  Exercise: build your own BMC – 20m •  Exercise discussions – 10m •  What’s next? – 10m

Page 53: Intro to Product Management and Business Model Canvas (BMC)

The value of using BMC

•  Understand the essence –  Visual language, capturing the big picture,

seeing relationships. •  Enhance dialogue

–  Collective reference point, shared language, joint understanding.

•  Explore ideas –  Idea trigger, play.

•  Improve communication –  Create company-wide understanding, selling

internally / externally.

Page 54: Intro to Product Management and Business Model Canvas (BMC)

What’s next?

•  Share your BMC. –  Depending on your situation, you might want

to “re-package” your BMC.

•  Success stories? E.g. Provisi Education (Indonesia)

Page 55: Intro to Product Management and Business Model Canvas (BMC)

Share your BMC

Share your business model canvases with your peers / colleagues Identify issues, opportunities, gaps in knowledge Fix colors as you share, if needed

Page 56: Intro to Product Management and Business Model Canvas (BMC)

Thank You!

•  Connect on LinkedIn: – https://www.linkedin.com/in/oeymulyadi – Write a recommendation, for Indonesia

Product Management Consortium.

•  Fill out the 3-minute feedback form / survey. •  Spread the words, share what you’d learnt

today.