How not to ignore warning signal – To arrest product decline

As a Product Manager, my biggest fear is not to be conscious of the changes that are causing my product to decline much faster and much earlier. The changes could be triggered by either an individual or combination of sources such as competition, technology, customer preferences, new product etc. The changes could be either phenomenal such as 10x change, illustrated by Andy Groove in his book “Only Paranoid can Survive” or it could be incremental/sustaining causing a tangible dip in revenue/ market share.

10x changes do not happen on every day basis, but when occurred they prove disruptive. They create a new business model and trigger a new eco-system paving way for lots of additional opportunities while at the same time making older ways of doing things irrelevant. Microsoft Windows is definitely a 10x change, iTunes is another classic example. Both the products have disrupted desktop and music industry respectively.

I have to regret for repeatedly using Smartphone industry for illustration, nevertheless each one of us have witnessed those changes and hence it would be easy to connect to those illustrations. I would not call iPhone and Android as 10x changes but they definitely had created huge impact and it is evident for all of us. I list Android for the reasons that I had stated in earlier blog post: Has Android really changed the dynamics of Smartphone industry. Online shopping is another example especially after tremendous hit of  in India and for the impact that it is eventually having on retail stores.

All the above changes when unattended might prove disastrous to our existing product and it can even lead to slow death of our product. I am using the word ‘change’ in a more generic way to refer to any impending new product introduction or new competitor arrival or new technology introduction or anything similar that can cause some potential impact to the existing product/ players in the market. The changes that were illustrated earlier do not happen overnight, they happen gradually and steadily leaving us some amount of time to adapt/change/refine our strategy.

So we are eventually heading to the crux of our discussions that any changes will eventually throw certain signals which we should not ignore. Before the change occurs, we might hear about them in press or other tech blogs about possible launch of a new product or arrival of new competitor/technology. Though it would be too early to anticipate the impact, I would at least stress not to discard the changes. We can probably do a scenario analysis on how the changes when occurred would impact us. On the contrary what happens is that we turn out pessimistic about the changes. For instance in case of possible news about iPhone development, all the CxOs were expressing pessimisms over the success of iPhone:

  • In December 2006, Palm CEO Ed Colligan summarily dismissed the idea that a traditional personal computing company could compete in the smartphone business. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
  • In January 2007, Microsoft CEO Steve Ballmer laughed off the prospect of an expensive smartphone without a keyboard having a chance in the marketplace as follows: “Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”
  • In March 2007, computing industry pundit John C. Dvorak argued that “Apple should pull the plug on the iPhone” since “There is no likelihood that Apple can be successful in a business this competitive.” Dvorak believed the mobile handset business was already locked up by the era’s major players. “This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.”


On the contrary to the perceptions of all those gentlemen, iPhone has tasted tremendous success threatening the existence of traditional players like Nokia, Motorola and Blackberry. The reason for those gentlemen to express pessimism is that each of them had tasted tremendous success and they probably hope that what made them successful at one point of time will ensure their success forever. However we have to understand that every day is a new beginning and what made us successful yesterday will not make us successful today. So it is always fair to keep the threat perception open and constantly revisit until it is proven that the change(s) does not cause any impact. For instance certain products/technology arrives with much fanfare but fade eventually (like Nokia N-gaze)

After the changes has occurred (be it either a new product, new competitor, new technology) the impact will be tangible at least through revenues, negative feedback from sales/distribution channels. Momentary decline or random negative feedback should be OK, so we should look out some common patterns and occurrence of any such patterns should be viewed as warning signals that should essentially caution us and trigger us to do a candid introspection of how our product is performing. Now it brings us back to our earlier blog post discussions on ‘Need for introspection of our target market’ to script turnaround story.

There are also instances where the changes would leave us no chance for survival and we have to graciously kill the product. There is no scope for survival of pagers after mobile phones were established. In such cases it is better not to try too hard to survive by burning lots of money. One simple rule to consider whether to KILL the PRODUCT is to verify whether both the product and market is in sunset mode.

The need for periodic introspection of target market – Part III

This is the last part of 3 part series on the need for introspection of target market. In the last section of part 2, I have spoken about warning signals and panicking. While I promised separate blog post on how not to ignore warning signals, let me talk about the latter aspect of panicking by organization in this concluding series. This is very critical as it gets into a vicious cycle of causing only further damage without leaving any room for resurrection. I am not sure whether panic is a right description, it sounds like a misnomer. Guess, anxious will be very appropriate. When anxiety due to successive failures strikes any organization, upper management tend to take hasty decisions to make quick turnarounds to meet the expectations of the investors. Such hasty decisions without deeper assessment of the causal analysis for the current state of the product will not yield any positive results. After few quarters, the organization would have lost its market valuation significantly. Investors start losing faith on CxO and CxO in a precarious situation of losing his position anytime will not have the confidence to execute his plans.
Moreover organization should have the right attitude to confront and accept the brutal facts. In addition organization should have a culture that permits free flow of bad news (without any tampering) from every nook and corner to the higher management. Any organization devoid of such qualities can hardly make any positive turnarounds and will eventually lose the confidence of investors.
To overcome such a situation, organization has to imbibe the qualities and instill the culture that I have earlier mentioned (hmmm…. this is little difficult for many) followed by 3 simple rules:

  1. Don’t panic or become anxious
  2. Stay calm, pause for a while, look back and perform candid introspection, and chart out a clear action plan
  3. Stay focused.

Last but not the least, just do not allow your Strategic Product Managers entrusted with the responsibility of turning around the fortunes of the product to face the pressure of investors. For them to follow those 3 simple rules, it is imperative to isolate them from all sorts of investors’ pressure and expectations.
I am not sure whom to blame for expectations, but guess raising expectations would have caused all big scandals like Enron, Satyam, WorldCom….

The need for periodic introspection of target market – Part II

As promised, I am back to talk in detail about each of those questions that I have indicated in my earlier blog. Please take a look at my earlier blog before you start reading this blog post.

1. Is the target market still bigger enough to satisfy the growth requirements?
This is critical especially for public listed companies as they have to meet the YoY growth requirements to satisfy their investors’ expectations. Suppose if the target market is shrinking, then it is time for Product Strategists to look for diversification either through new products for the same market or getting into a new market with the same product.

2. Are the requirements / product preferences of target market still remaining same?
There are always untold/implicit product preferences of the target market and hence any organization that is capable enough of understanding those requirements would hit the bulls’ eye. For instance, no one would have ever told Steve Jobs to make a touch phone. Same holds well for IPad too, no one would have every told Steve Jobs to make a larger IPhone that can work like a tablet. Considering the amount of success achieved by those two products, there is clear correlation between success of the product and understanding the customer requirements. Soon after the initial signs of success of IPhone, Blackberry should have assessed whether there is clear shift of preferences from QWERTY to TOUCH and act accordingly. This is one of my other favorite topics ‘Requirements has to be understood, not queried’. I will probably have a blog post on this topic very sooner.

3. Is competitor offering better value proposition by raising the bar of innovation?
BlackBerry was offering lots of values at least until Apple released IPhone. IPhone raised the bar of innovation by several levels by enriching customers through a superb touch screen. Siri application in IPhone 4S only exemplifies that Apple is continuously raising the innovation bar leaving the competitors way behind. Under these circumstances, it might not be possible to compete with Apple and other such products head-on without significantly raising the bar of innovation. Samsung through its S series phones has shown to the world that it can match Apple. Alternate strategy is to create a niche or target a different market segment. For instance, Black Berry can still play a larger role in mobile security space and it might gain prominence with emergence of BYOD (Bring Your Own Devices).

4. Is product getting commoditized?
There is a common theory that the product that offers higher value in the entire value chain will have lion share of the profit. Desktop market offers perfect anology, both Windows and Intel rendered higher value, so all the OEM vendors like Dell, HP and Compaq had to be contended with razor thin margins. To some extent Dell tried to differentiate itself by offering customization. Eventually we had seen acquisitions (by Dell) and mergers (of Compaq and HP). So if the product is getting commoditized, it is time for either acquisitions or mergers for better growth opportunities.

5. Can the target market be served by any alternative product?
Overlooking this aspect has lead to downfall of many giants. Intel also could not realize that the smartphones and tablets can be a viable alternative to laptops and desktops. Eventually they entered the smartphone market bit too late. Initially smartphones never appeared to be an alternate product. The alternative products start in a very small way without attracting much attention, later they slowly and steadily increase their capability to disrupt the established market. Again smartphone is the best analogy. So when trying to evaluate any product(s) as a potential alternative evaluate the progress (in terms of performance and capability) that those products have made over last few years and predict whether those products can improve performance at a same scale to be a viable alternative.

6. Can the product satisfy any unmet needs of adjacent market?
This is more likely a strategic activity. But as I outlined in my blog on ‘Customer Innovations’, our existing customers (more importantly innovative customers) can provide valuable insights on whether the product is being used for a purpose quite contrary to its intended use. Such inputs will be critical for Product Strategists to target a new market and thereby generating additional demand for the product. Though I have touched upon demand generation in the blog topic on ‘Attacking White Spaces’, the detailed blog on demand generation is long due, let me try to write more on this topic ASAP.

7.Is the target market over served?
Any product over serving significant part of the target market is tantamount to losing that portion of target market to the competition. For instance, Intel always tried to roll-out higher end processors into the market. But not everyone are heavy users, certain low end processors are good for performing minimal job of browsing, email, power points creation and doc reading. So Intel cautiously released Atom processor to cater to the over-served target audience. Please note I am referring to a timeframe (2-3 years earlier) when the smartphones and tablets are not very familiar. Now they both are considered to be alternative products, we have discussed about them little earlier. But the decision to roll down a scaled down version of the product will always depend on the organization strategy. For instance, in hospitality industry Hilton or Welcome Group will never get into a budget hotel business. If such move is necessitated, they might utmost do with different brand name. In smartphone industry, Samsung is synonymous with all range of mobile phones, whereas Apple only caters to high-end segment and they would never enter ‘dumb-phone’ market irrespective of the attractiveness of that market. So the decision to roll out a downgraded version of the product does not purely depend on the size of Total Addressable Market (TAM).

The above responses (with exception of last 2) would only provide a snapshot of how our product is currently performing in the market and the candid introspection will help us reveal lots of insights about customer preferences, competition and the direction in which market is heading. However this exercise alone is not sufficient if the response to majority of the questions (excluding last 2) is negative and it should ring alarm bells in the higher echelons of the organization. In such case, this activity should be followed by a deeper strategic analysis of how to elevate the product. On the contrary what happens in most of the public listed companies is that they either ignore such insights calling them as fad or panic. Probably I need to talk about the former of how not to ignore early warning signals. Oops I am promising lots of blog articles, really not sure how long will I take to complete all those promised blogs given the duration taken to write each blog. May be it is time to pull myself before I suggest others on how to revamp their products. I will also talk little about the later aspect of panicking..
Please keep glued to this space for more details.


The need for periodic introspection of target market – Part I

As the old adages goes, change is the only constant and change is inevitable. But high-tech industry is undergoing so many changes at a rate faster than anyone can ever fathom. We are witnessing rise and decline of technology giants in a short span of a decade. Moreover the intensity of changes that we are experiencing in the last 2 decades (at least since mid 90’s) is much larger than changes that occurred in the previous 5 decades. The belief was further reinforced after I read an article titled ‘Bye Bye BlackBerry. How Long Will Apple Last?’ The article was also raising doubts on the longevity of Apple in retaining its supremacy. Coincidentally there was another article in Forbes that was speculating about the possible disappearance of Google and Facebook in 5 years.

Even though the thought that Google and Facebook will disappear and Apple will lose its supremacy is unbelievable and daunting, I decided to have an open view that anything might possible and start contemplating possible ways to arrest the decline of any technology giant. So the blog posting is to share some of my thought process on those lines. The decline of all the technology giants is directly correlated to the decline of their respective flagship product(s), so let us focus on how to arrest the decline of their flagship product(s). Rather than saying decline, I would prefer to use the term ‘Inflection point’. Let us discuss how we can ensure that the product does not hit the ‘Inflection Point’. There are several stalwarts who have done a thorough research on this topics and authored great books. Some of my favorites are ‘Innovators Dilemma’ and ‘Innovators Solution’ by Clayton M. Christensen and ‘Only Paranoid Survives’ by Andrew Groove. I am not an expert or genius to talk anything beyond what those gentlemen have already elaborated in their books, I am just trying to use some of their concepts and focus on the very basic concepts of product marketing/product management.

Every product is conceived to either solve the pain points or enrich the experience of target market. So every organization has to constantly re-invent and consistently raise the bar of innovation to ensure that their products(s) is aligned to the changing needs of our target market.

In rapidly changing high-tech industry, there is an imperative need to constantly introspect to check whether a product is still relevant to its target market vis-à-vis competition. One significant reason for any product to get into sunset mode is that the product has lost relevance in target market. With that intention, I have basically arrived at a few set of questions (presented below) to help us validate how a product is positioned to serve its target market. Candid and honest response is critical to validate relevance of the product in its target market.

1.      Is the target market still bigger enough to satisfy the growth requirements?
2.      Are the requirements / product preferences of target market still remaining same?
3.      Is competitor offering better value proposition by raising the bar of innovation?
4.      Is our product getting commoditized?
5.      Can the target market be served by any alternate product?
6.      Is the target market over served?
7.      Can the product satisfy any unmet needs of adjacent market?

I will elaborate on each of the above questions in my subsequent blog post. I will also attempt to address whether answering each of the above questions would suffice to arrest the decline of any product.