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Great product managers always slip up before they become great

A quick question for you: are you afraid to fail? Would you be willing to take on responsibility for a product that might not be a success? I’m willing to bet that a lot of us would say “no” – our company’s product managers who are perfect are rewarded while product managers who fail are kicked to the curb. Nowhere on the product manager job description is there a place where you can brag about how many times you’ve failed. However, I’m going to tell you that you’re wrong – get ready to fail if you want to succeed.

How To Kill Your Product Management Career

In your job right now, what would happen to you if you failed? If the account manager and business development manager for your product didn’t get to you first, then that end-of-year review would still be a tough one to sit through, right? Let’s face it, failure is not something that is rewarded in our workplace and in fact it’s something that we all actively avoid if we possibly can.

However, maybe we’re just setting ourselves up for a much bigger career disaster. Can we all admit that the world as we know it is changing? Can you remember watching old-time movies where the hero would get a job at a company and then spend his or her entire career working there? We all know that those days are long gone.

Something else is changing also: our jobs. The job that you had when you started working may already be gone. The one that you’re doing right now probably won’t exist in what, 2, maybe 3 years from now. This all means that you are going to have to change and change involves risk and along with risk comes the very real possibility that you are going to fail.

How To Become A Success By Failing

Well, that failing stuff doesn’t sound like it’s going to be any fun. But wait, has anyone else ever failed? Turns out that yes, in fact most successful people can look at their past and point to failures that helped them to get to where they are now.

The poster child for this kind of “good failure” would be Howard Schultz – the guy who founded the Starbucks chain of coffee shops. We all know and love the Starbucks store today, but when Howard first started it he really blew it. There were no chairs, he played lots of opera music, and his menu was in Italian. Clearly he realized that he had failed, quickly adjusted, and went on to become a big success.

You can do the same. Failure is actually a part of your product’s overall strategic management. You need to learn to make lots of small bets. Some of these bets will pay off, and some won’t. It’s through what you learn from the failures that you’ll be able to make tiny changes to your approach and try, try again.

If we keep doing things the same way that we’ve always been doing them, then we will eventually stagnate and then we’ll go into decline. However, if you have the courage to start to fail and to learn from those failures, then the future contains limitless possibilities for both you and your career.

What All Of This Means For You

Product managers who are afraid to fail will never become a true success. Oh sure, they may do ok for a few years, but when things get really rough, they’ll wash out.

If you are willing to adjust how you view failure, your career can take off. Sorry, there’s still no place on a product manager resume to proudly list your failures. However, if you can start to look at failures as being simply being learning experiences that are not be feared, but they are to be used to become a better product manager then you’ll be able to grow and become better at what you do.

No, you can’t be an idiot about this and do silly things that cause your product to fail, but if you try your hardest and your product still fails than you will have learned what doesn’t work. The big deal is that it takes courage for you to be able to do this.

Product managers who are a success have to had failures in their past. It’s from the forge of failure that the steel of success is formed. Learn how to make small bets so that you can learn what works and what doesn’t. Do this well and you’ll become a successful product manager.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What’s the best way to get your management to become comfortable with failures as a sign of success?

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The Accidental Product Manager Blog is updated.

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What We’ll Be Talking About Next Time

So what’s your product strategy? If you are like most product managers, you probably don’t have one. Oh sure, if somebody asks you what your product’s strategy is, you can quickly come up with some words that sound good – increase market share, drive down costs, beat the competition, etc. But really, just between us girls, you don’t have a strategy for your product do you? Good news, I think that I can help you out here…

No related posts.

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Sure It's Pretty, But Is It Better Than An iPhone?

Come with me while we travel back in time, not far, just 5 years or so. Now that we’re here, take a look around. What do you see? I bet you see just about all of those corporate folks using their Blackberries to make calls and check email. Poof! Now we’re back in current times. Something has gone horribly wrong at the Blackberry parent company, RIM, and is it the fault of RIM’s product managers?

Nothing Is Every Constant But Change

One of the problems that all product managers face is that if they own a market there is no place to go but down. Research In Motion (RIM) certainly owned the market for smartphones before the term had even been invented.

RIM had a great relationship with CIOs and enterprise IT staff. Everyone was buying Blackberry servers and installing them at their company. The RIM product managers would meet with corporate IT teams and based on what their needs were, the product roadmap for the Blackberry phones would be laid out.

All good things have to come to an end. This happened in the world of Blackberry about two years ago. That’s when sales of Blackberry phones to consumers overtook sales to corporate users. This was caused by two events: corporate users have more options so they are buying a lot of non-Blackberry phones these days and more consumers are upgrading to smart phones and since they’ve seen all of the business users with their Blackberries, it seemed like a natural next step.

This change in their customer base wasn’t part of the RIM product manager job description. It has caught the RIM product managers by surprise: consumers behave very differently from business users. What’s even worse, consumers don’t have any central IT department that RIM product managers can meet with to find out what should be on their product’s roadmap.

Why Things Went Wrong At RIM

So just how did the wheels fall off of the wagon over at RIM? It basically has a lot to do with product speed. For you see, the world of corporate users moves much more slowly than the world of consumers who have more options does.

According to Phred Dvorak before they knew what was happening the RIM product managers found themselves behind schedule: they had product delays and a bunch of new products ended up being scheduled to hit the market at the same time.

This isn’t all the fault of the RIM product managers. RIM had all sorts of internal issues going on. They were internally divided into separate consumer and enterprise divisions with separate account managers and business development managers. Oh, oh. These two groups did not see the world the same way and lots of disagreements ensued.

The guys who started RIM are very bright. CEO Mike Lazaridis is an engineer and it turns out (hold on, you know where this is going) he is still intimately involved in all of the technical and strategic decisions that are made about RIM products. Ouch – so much for delegation!

What RIM’s Product Managers Need To Do To Save The Day

So is RIM a sinking ship that the product managers should be preparing to flee? No way, RIM has great market share and, if they take the right actions, this is just a bump in the road. There are three things that the RIM product managers need to do in order to get their products back on track.

The first is to accelerate their product development and release schedule. Hopefully this skill is on everyone’s product manager resume. The consumer world moves fast and only the fast will survive. This may mean that there will need to be separate consumer and enterprise product lines. Or, even better, accelerate the enterprise product line also and RIM can impress their corporate customers.

Secondly, the RIM product managers need to change their thinking about what makes their product desirable. Enterprise buyers were members of the IT team and the technical characteristics of the RIM products was what they were looking for. Consumers care about completely different things.

The RIM product managers need to worry less about the security of their product’s transmissions and more about making sure that users have access to and can play “Angry Birds” on their Blackberries. This is a big change and it’s not going to come easy.

Finally, I hate to say it, but the RIM engineers need to leave the planning table. Yes, the engineers still have an important role to play, but it is no longer one of strategic management or deciding what goes on the product roadmap.

What All Of This Means For You

What’s going on over at RIM is not all that unusual – I’ve seen this happen a hundred times. The market for their product has changed on them and they weren’t paying attention and now they are trying to figure out what they need to do in order to adjust to the new world that they find themselves in.

That new world moves a lot faster than the enterprise-led world that RIM is used to. That means that RIM’s product managers are going to have to adjust what goes onto their product roadmaps (more consumer focused features and fewer technical ones) and they are going to have to step up and wrest control of the product away from the engineers.

The good news is that this is not a hopeless situation. The bad news is that there is not much time in which to turn things around. The markets in which RIM competes move very quickly so they are going to have to implement these changes very quickly or risk having their customers hang up on them.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think the first change that RIM’s product managers should make would be?

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P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Hey product manager, so you’d like to find a way to make your product appeal to more customers? Hmm, well let’s think about this for a moment – is there anything in your product manager job description that we can use to solve this problem? Maybe there is. Although many of us work for companies that are national or even international in scope, the hard, cold reality of marketing your product is that all customers are local to somewhere. If you want to capture their attention, then perhaps you need to find a way to successfully do local advertising…

Related posts:

1. How Dell Product Managers Dropped The Ball On Tablet Computers If there was such a thing as a standard product...
2. Fire Sale – What Happened To Cisco’s Flip Camera? Dang it! This was supposed to be a story about...

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The Streak Sure Looks Pretty, But It Missed The Mark…

If there was such a thing as a standard product manager job description, then you’d think that it would contain the phrase “… be responsible for developing products that solve problems and sell well…” The product managers over at Dell recently had a fantastic opportunity to create a tablet product that would take over the world. How come they missed the mark…?

Say Hello (And Goodbye) To The Streak

As all of us writers are so fond of saying, assuming that you’ve not been living under a rock for the past year or so, you should know that those tiny tablet computers seem to be taking over the world. Right now the iPad 2 from Apple rules the world, but it won’t be that way forever.

I can’t quite remember where I read it, but somewhere I ran across a study that showed that the companies that create a new market generally only capture 3% of it over time. That means that all of the firms that follow end up getting 97% of the total revenue over time. This means that the tablet market will eventually be ruled by firms other than Apple. Dell is one firm that would seem to be well positioned to own a big chunk of this market.

The problem is, of course, that initially Dell didn’t have a tablet computer to sell. Each Dell account manager was probably complaining to their business development manager who in turn came to the product manager and said “We need a tablet computer.”

Forget what it says on your product manager resume, dreaming up new products when account managers ask for them goes with the territory. However, this is where things went wrong. Dell talked about the fantastic new tablet computer that they were going to be bringing out back in January of 2010. However, the darn thing wasn’t available to buy in the U.S. for another 8 months.

This delay gave Apple more time. More time to launch the iPad. More time to have more iPad apps to be created that can be sold in their AppStore. More time for the world to associate “tablet computer” with “iPad”.

What Went Wrong At Dell

Dell is a big company and it does a lot of things right. However, when it comes to creating the next generation of tablet computers it seems to have dropped the ball. This of course leads to the question: why? How did the Dell product managers let this happen?

It appears as though a bit of strategic management is what was missing here. Dell has a fundamental problem when it comes to tablets: Dell is a company that primarily serves business customers. At this point in time, tablet computers are primarily a consumer product. It can be very hard for B2B product managers to switch and become B2C product managers.

On top of the excessive delay in launching their tablet computer, the Dell product managers made an additional series of missteps. The first of these was to create an initial Streak that had both a 5″ display and a price tag of US$500. This would have been impressive if it were not for the fact that the Apple iPad had both a larger display for the same price.

Over time as sales lagged, Dell ended up cutting the Streak’s price all the way down to US$180. As the word came back from the account managers and the business development manager, the product managers introduced follow-on products. The Streak 7 came to the market with a couple of strikes against it: its battery didn’t last long enough and its screen was relatively low-resolution. Oh, and Samsung’s Galaxy Tab showed up at the same time with a better display and an updated operating system.

The Dell product managers have grand plans for the future; however, their actions so far have not yielded results that they can build on. Truly, the Dell product managers have dropped the ball.

What All Of This Means For You

As product managers, one of our jobs is strategic management. This means that the new products that we are developing need to meet the needs and expectations of our potential customers. Clearly this has not happened over at Dell when it comes to tablet computers.

What went wrong? The tablet space is a fast moving market and it sure looks like Dell’s internal product development processes were developed to meet the needs of their slower moving business customers, not the fast moving world of consumer products. The initial product announcement in January was ok only if the product was close to being ready to ship – it sure looks like that wasn’t the case.

Product managers need to have the guts to pull the trigger and kill a product launch if a product that they are responsible for just isn’t going to meet their customer’s needs. Clearly Dell needs to make some significant changes to their new product development process. We can all learn from Dell’s missteps…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: If you were a product manager at Dell, how would you make sure there was still a market for your product?

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P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

How do you find your way around these days? If you are like most of us, you probable own one of those pocket sized GPS receivers that show you a map of where you are and how to get to where you want to go to. Lots of companies make these, but Garman was one of the first and still holds a big chunk of this market. How are their product managers doing this?

Related posts:

1. Product Managers Don’t Like Surprises: Know Your Product’s Customers! I find myself telling the product managers that I’m working...
2. Product Managers Want To Know: What Happened To The Microsoft Kin Phones? Gone in 48 days. Ouch – that’s got to be...
3. Fire Sale – What Happened To Cisco’s Flip Camera? Dang it! This was supposed to be a story about...

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What To Do When Your Product Starts To Fall Down?

Of the past 20 years or so, one of the best product management jobs to have in the United States had to be a product manager who was responsible for one of Toyota’s Lexus’ brand’s cars. These cars have been selling very well for a long time and have been very respected in the marketplace. However, it looks like things are starting to change and the big question is what should the Lexus product managers do now…?

When Lexus Ruled The World

Before we can talk about how things went wrong over at Lexus, we need to first talk about how they went so very right. Back in 1990 Toyota, which had always been known for great low-priced cars, introduced its high-end Lexus line. The cars were well received and their legendary reputation for quality made them fly off of dealer’s lots. At this time the other luxury cars, BMW and Mercedes, were struggling with quality and so Lexus really stood out.

In just 10 years Lexus became the best-selling luxury car brand in the U.S. At the same time it stated to contribute 50% of Toyota’s U.S. profits. Not bad!

Why Things Went Wrong

Product managers know that nothing ever stays the same. In the world of luxury cars this is especially true. The past year has been brutal for Lexus product managers. Things first started to go bad for them when Toyota had to recall some Lexus cars due to an unintended acceleration problem that appeared to be caused by faulty floor mats.

Things went from bad to worse when Japan suffered a massive earthquake on March 11, 2011. This caused Lexus plants in Japan to be shut down and this threatens Toyota’s ability to sell enough cars to retain its #1 ranking in car sales volume.

Just to make the product manager’s lives even harder, the Lexus models are starting to show their age. They were last “refreshed” all at once back in 2006-2007 when Lexus was making a big push into Japan, Europe and China. Now in comparison to their rivals, the Lexus products are looking old and dated.

What Lexus Product Managers Should Do Now

Lexus product manager have a real challenge on their hands (does any of this seem vaguely familiar to you?) They are saddled with old products and are still dealing with the fallout from some negative publicity. What they need to do is to divide time up into two parts: before the new models arrive and after the new models arrive.

Before the new Lexus models arrive (perhaps as long as a year), the Lexus product managers need to find fresh ways to communicate what they already have. Their best potential customers are going to be those Lexus owners who have not upgraded to the current models. The product managers need to come up with ways to motivate these drivers to check out the current models and they need to create incentives that will cause them to buy.

Once the new Lexus models arrive, the Lexus product managers need to treat it as a new birth of the Lexus brand name. Create a clear division between the 2010-2011 troubles that Lexus faced and the new 2012 models that are in the showrooms. Customers will quickly forget the issues and can be convinced to once again to view Lexus the way that the product managers want it to be viewed: as a high quality luxury brand.

What All Of This Means For You

As product managers we all hope that at some point in time our products will become the market dominating products that we all hope that they can be. However, as Lexus as shown us, once this happens there’s only one way for us to go: down.

When this starts to happen, as product managers we need to be ready for it and we need to take actions to stop it from occurring. Lexus product managers need to take two steps to stop their tumble. They need to convince existing customers to upgrade to the current models and they need to create a program that will allow Lexus to be “re-born” once the new models arrive.

The most important point for all of us to learn from Lexus’ troubles is that just because a product falls from its once mighty perch, does not mean the end of the product. Rather, this should be treated as a very natural occurrence that could happen to any of us. The most important thing for product managers is to be able to recognize it when it occurs and to know what steps to take to turn things around…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think the Lexus product managers’ first step to save their products should be?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

As product managers we try very hard to make sure that our products have all of the features and functionality that our customers want and need. In order to get our customers to purchase our products we attempt to make our products look like the type of product that they’d be proud to own. This all seems to work pretty well with one exception. We’ve all been told that if our product’s reputation gets damaged, we can expect to see customers walking away from our product in droves. In this day and age, is this still true – does a product’s reputation really matter?

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2. Fire Sale – What Happened To Cisco’s Flip Camera? Dang it! This was supposed to be a story about...
3. Product Managers Need To Find A Way To Slim Down – Their Products! Is it possible that you are managing too many products?...

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The Flip Video Camera Seemed To Have Everything Going For It…

Dang it! This was supposed to be a story about a product success, not a product failure. Pure Digital created the low-end highly portable video camera market a few years back and then got bought out for a half a billion U.S. dollars by the networking giant Cisco. Cisco is stuffed with smart, bright product managers and they should have been able to boost this successful product into outer space. But they didn’t and now the Flip video camera is going away, what happened?

Why I Loved The Flip Video Camera

So I’m willing to ‘fess up – I own a Flip video camera. In fact, I so fell in love with this product that I bought one early on when it was still owned by Pure Digital. However, after a while of traveling around in my pocket all the time, the screen failed. I ended up getting a Kodak Zi8 to replace it in part because the Zi8 had a feature that the Flip never did – it had a jack that allowed it to be used with an external microphone.

I kept my eye on the Flip over time because I was still seduced by its small size. I never again bought one simply because it never really seemed to change – the Flip that is being offered today sure looks the same as the Flip that I bought several years ago. Sure, they’ve come out with an HD version and some pretty “skins” that allow you to personalize it, but that seems to be about it.

What Went Wrong Between Cisco And The Flip

Cisco is a smart company. They employ smart product managers. Something went wrong here. Brian Chen and Chunka Mui have both taken a close look at what happened here, and it’s not pretty.

It appears as though the reason that the Flip product line didn’t do well under management by Cisco is due to two preventable sets of conditions: the Flip was a bad purchase decision for Cisco and then Cisco did a poor job of managing the product once they had it. The product line might have been able to survive one of these mistakes, but it couldn’t overcome both of them.

The Wrong Decision

Cisco should not have purchased the Flip product line. Sure, at the time it seemed like a good idea. Cisco’s John Chambers announced that Cisco was buying Pure Digital so that they could promote products that would create content that would drive the need for bigger networks – Cisco’s core business.

However, what was missed in all of the glowing press releases was that Cisco bought Pure Digital not because they were in a fantastic “adjacent market”, but rather because Cisco’s core business was slowing. Because of this mistake, Cisco found itself in a market that it really didn’t know anything about – consumer electronics. The forces that drive this market are unlike those that drive Cisco’s main enterprise networking market.

Additionally, Cisco thought that their brand name that conveys quality and innovation in the enterprise market would help to sell more Flip video cameras. It didn’t. I, for one, don’t associate Cisco with home products and would rather buy something from Sony or Apple before I’d buy something from Cisco. Finally, any thoughts that Cisco had about using the Flip product line to cross sell its other products was a pipe dream. People who are buying a US$100 video camera are not going to be the same people who buy a US$25,000 high-end router.

Bad Product Decisions

Did I mention that the Flip product line seemed to be stuck in a time-warp? In the fast moving field of consumer electronics, this is the worst thing that can happen. The Flip pretty much got mowed over by the arrival of smartphones: both Apple and Android products keep getting better and better every couple of months at doing what the Flip does.

The Cisco product managers could have saved the Flip. Just like the folks over at MySpace, they could have specialized to save the ship from going down. One way to do this would have been to work very hard to incorporate social networking features into the Flip. Just imagine if you could shoot a video of your dog barking a Christmas song and then hit a button and have it automatically uploaded to both YouTube and your Facebook account. But that never happened.

Finally, the product never moved on. There was never a compelling high-end Flip product that I saw in magazines that caused me to pause, and look longingly at (e.g. the iPad 2) thinking about what I could do with it. The Cisco product managers would have had to be careful here, but things like a good zoom lens, Wi-Fi connectivity, and maybe even an apps store just for the Flip would have done the trick. We’ll never know…

What All Of This Means For You

When a company wants to grow its bottom line, purchasing another company to get a successful product sure seems like a simple way to make this happen. However, the ultra-successful Cisco has just proved that this can actually be a risky way to do things.

Their purchase of the Flip video camera product line was flawed in several ways. Although the product was hot when they bought it, the future was already getting cloudy as smartphones kept getting smarter and cheaper. The lack of any compelling high-end features or social networking tie ins reduced consumer interest in carrying this extra electronic gadget. Finally, Cisco just didn’t know that much about the consumer market that they were getting into.

In the end it all comes down to doing the basic product manager homework that we’ve all been taught to do. You need to take a look at the market and understand what need they are looking to fill. Then you need to take a look at your product and make some hard decisions as to how you are going to be able to fill that need better than anyone else. It cost Cisco over US$500M to learn this lesson, let’s hope that the rest of us can learn from their mistake…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: If you were running Cisco, would you have shut down the Flip product or would you have tried something else to make it successful?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

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Microsoft Kin , We Hardly Knew You…

Gone in 48 days. Ouch – that’s got to be some sort of record. As product managers we try to do all of the right things when we’re handed the responsibility of birthing a new product: determine what our customer’s needs are, understand the competition, calculate costs and price points, and create clever tag lines and flashy graphics to capture our customer’s imagination. Microsoft’s product managers did all of this (and more), and yet the Kin One and Kin Two mobile phones from Microsoft got yanked off the market after a life of only 48 days. What happened here?

What The Kin Was Supposed To Be

Microsoft, the corporation, realizes that the mobile ecosystem is a very valuable place to be. They’d like to create products that would be used by mobile users. The Kin was supposed to be their entry into this environment and they were going to get there by winning over the kids with the very hip Kin phones.

According to the New York Times, Microsoft spent two years to develop the Kin phones and spent a lot on the marketing to promote them. The Kin phones were manufactured by Sharp for Microsoft, and available exclusively on Verizon Wireless.

The Microsoft product managers had decided that they wanted to target those mobile phone users who are also addicted to Web based social media sites. You know, sites like Twitter and Facebook. This market includes teens and so in order to have a chance, the Kin phones needed to be seen as being “cool”.

Clearly, something bad happened. Microsoft is not known for walking away from struggling products. Remember that everyone says that it takes three tries for Microsoft to get something right. However, this time they threw in the towel after only 48 days. Clearly this product was doomed from the beginning. What went wrong?

Why The Kin Failed

Every product manager knows that a product consists of many, many moving parts. For a product to be successful, these parts have to all line up. However, for a product to be as much of a failure as quickly as the Kin was, there has to be a whole bunch of things that go wrong.

Priya Ganapati over at Wired has taken a close look at the Kin event, and believes that we can understand what went wrong if we dig deep enough:

• The Operating System Matters: in a perfect world, what operating system a mobile phone uses wouldn’t matter. However, we don’t live in a perfect world and so it does matter. The Kin used a bastardized version of the new mobile Windows OS. This meant that nobody knew what to make of it and so they reacted by not buying it.
• How Much Does That Cost?: when you are targeting kids, you need to keep in mind that they don’t all have tons of disposable cash. The data plan that you needed to have in order to use the Kin cost $70/month. Ouch! It turns out that was too much for the market to bear.
• Yes, We Have No Bananas: Microsoft decided to not allow the Kin to make use of either apps or games. The social networking services that the phone came with were all that you were going to be getting. Anyone who has an iPhone or a friend who has one knows that these days mobile phones are all about the apps. No apps meant no sales for the Kin.
• Your Dad’s Cell Phone: if you are trying to capture the hearts and minds of kids, then your product had better be “buzz worthy”. The Kin was not – other phones that kids could buy, like the Motorola Cliq or a HTC Hero, were way cooler.

What All Of This Means For You

Microsoft’s product managers simply didn’t do their homework when it came to the Kin. The idea of creating a phone to go after the admittedly huge youth and social networking segment of mobile phone users was a good idea, Microsoft’s execution was not.

They didn’t go wrong in any one area. Instead, they dropped the ball in several different areas including creating a confusing product, making it too expensive, not permitting it to use apps, and missing out on the “cool factor”.

Just because the Kin didn’t work doesn’t mean that Microsoft can’t succeed in this market segment. However, the Microsoft product managers need to do a better job of doing their homework and listening to what their customers really want next time around.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that Microsoft should try to create another mobile phone or give up and let Apple have the mobile market?

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The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

There’s an old saying that goes something like this: “There is no such thing as bad publicity – all publicity is good publicity”. Hmm, should product managers really believe this? A good case study may have just happened over at the Gap. They decided to redesign their logo, and it went over like a lead balloon. What can we product managers learn from their fiasco?

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Customers Said That They Liked New Coke Better, What Went Wrong?

In the world of product managers there are a few stories that the old hands talk about when they get together. The product failures, the flubs, and the downright fiascos that have grown into legends that are now only mentioned in hushed tones when a  product manger is trying to kill a product idea that he / she knows will doom a product. One such story is the tale of New Coke.

What Was New Coke?

You young whipper-snapper product managers out there might not be familiar with the story of New Coke, so we probably should go all the way back to the beginning – April 23, 1985.

The Coca-Cola company had a problem back in the early 1980′s: people were telling Coke that they liked the sweeter taste of Pepsi better than the taste of Coke. Being a careful company who didn’t like to rush into anything, Coke spent the years from 1981 to 1984 taste testing both a new and the old formulas of Coke. They ended up doing this over 200,000 times in 25 different cities.

What Coke’s Customers Told Them

The results of the taste tests were very clear to Coke’s product managers: 55% of the people tested preferred the taste of New Coke over the old formula. You might think that people made this selection because they didn’t know what they were drinking. However, the product managers at Coke thought of this also – in the taste tests that they performed where the person knew which sample was New Coke and which was the old formula, people’s preference for New Coke shot up by an additional 6%!

What Happened When New Coke Was Introduced?

On April 23, 1985 Coke announced that they were going to stop making Coke using the old formula and from then on only make New Coke. Boom! The world blew up overnight – at least in terms of Coke drinkers. People overwhelmed Coke’s customer support phone lines by calling to complain, they filed lawsuits to stop the switchover (which got dismissed), they said that they’d never buy Coke again, etc. Clearly the Coke product managers had made a huge mistake…

What Did Coke Do Wrong? (The Scarcity Principle)

So what did Coke do wrong here? Simple – they forgot about The Scarcity Principle. During those taste tests where people knew which sample was New Coke and which was the old formula, they also knew that they couldn’t get New Coke at that time and so they naturally showed a stronger preference for what they couldn’t have.

Coke probably thought that the 6% increase in desire for New Coke when people knew which sample was which meant that customers had a higher desire for something new. However, they were wrong.

When Coke replaced the old formula with New Coke, what happened is that people’s desire for the old formula shot up because now it was the thing that they could no longer have. That’s what caused the riots.

Final Thoughts

One of the best-supported findings in social science is that customers are more sensitive to possible losses than to possible gains. In this case, when Coke announced that they were going to stop making old formula Coke, this was a much bigger deal to Coke drinkers than the general availability of New Coke.

Product managers spend a lot of time listing out all of the benefits of their new products in the hopes of capturing new customers or getting existing customers to trade up. We all need to learn from the story of New Coke that sometimes our customers may have become so attached to our existing product that possibility of losing their existing product far outweighs the benefits of our new product. Being aware of this is how great product managers make their product(s) fantastically successful.

Questions For You

When you ask your customers if they’d be willing to upgrade to a new version of your product, do they tell you that they would? When you introduce the new version of your product do they follow through and upgrade? If a feature gets dropped in an upgraded version of your product do your customers complain louder than if you don’t deliver a promised feature? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

In the current tough economic times we are all feeling the pressure to keep sales of our product either at current levels or to boost them in order to make up for shortfalls in other parts of the company. When  you step back for a moment and realize that our customers, both current and potential, are also feeling the squeeze of tight times, how will a product manager pull off this magic trick…?

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We all have our own set of up close and personal product disaster stories. Just like when we’re out driving and end up having to wait in traffic because there was an accident up ahead, we always hope that they won’t have cleared it completely out of the way by the time that we get to the head of the line because we really want to see the horrible thing that happened. I believe that IT product disaster stories serve the same purpose: an opportunity to professionally rubberneck.

One of my stories (there are many) goes all the way back to the beginning of the ’90s. I was working for a huge telecommunications equipment vendor who had started to believe the trade rags and had invested heavily in a new type of phone technology called ISDN. Basically, this was a first try at moving from the old school analog signal over copper to a new all digital signal. From the get go the deck was stacked against this product. It was created by engineers for engineers. From a user point-of-view there was no really big compelling reason to switch. Oh, and if you did switch, then you had to get all new telephones and all new connectors put into the wall.

I’ve never see so many people work so hard to try to make a pig fly. It turns out that this was a solution in search of a problem. After spending way too much $$$ trying to push this product onto an unwilling public, ISDN slowly morphed into a form of DSL and is now finally being put to rest.

So what can be learned from this product wipe-out? First, you have to clearly identify what problem your product is going to solve (and why it’s a big deal). ISDN didn’t really solve a problem for the customer, it only solved problems for the phone company. Next, you always have to be laser focused on just what the customer facing benefits of your product are. You always have to be broadcasting these benefits and then, this is key, listening to how customers respond. If they don’t care, then you may have a dud product on your hands. ISDN had lots of extra bandwidth; however, in the early 90′s nobody knew what to do with it.

Not every product will succeed. However, a good product manager keeps his/her eyes open and knows when to either change the product or walk away early in the game BEFORE it’s too late.

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