A simple product design framework

Just some stuff from my evernote notes that I packed out today. Describes a product company in the foundational layers it has to tackle to enter the market with a set of value related activities.

Development side

1.Value creation

You start buy building technical solutions to clearly defined problems. This could be a tin opener. Or finding the number of empty spaces in a text. Or showing the cheapest hotels in a geographic area on a specific day.

2. Value bundling

How do you bundle the value created into technical products? You developed a new spoon and a action figure for girls? You probaly can’t bundle that into a technical product. You created a remote control and a TV set, that’s probably a good technical bundle.

The bundling has an additional overhead.

Now you have a bundle. You still have not defined how these things are integrated to provide an integrated, unified experience. Your TV remote doesn’t control the TV you built? Bad. You build a remote with a “open” and “close” button and your customer can now switch channels with it. Also not good. How does he change volume? Also not included.

With software products, you are building ten different screens, but there is no workflow, journey or consistent call to action management that allows a useful use of these components as a unified technical product. Solve this.

3. Value bundle optimization

Now you have a working TV and working remote. But your target segment is elderly people and you designed tiny buttons. Or you wrote everything in Chinese, but you are selling to French people. Bad. What you now have to optimize is the user experience for your customers. The experience must deliver on the created value and the bundled value.

What the user wants is the general – not specific, but overal – simplest representation of solving this problem. If you want your fridge to regulate cold and warm, don’t use a 9 key entry interface, but a simple knob. Turn right to increase intensity / make colder, turn left to make it decrease intensity. That’s how every knob on the planet works. Don’t write watts consumed or degrees on it, but use one, two, three snowflakes. Simple. Since your fridge can’t regulate on exact degrees anyway. Your total product solves a few problems, all problems should be solved with the most efficient algorithm in the most simplest steps using the simplest mental representations. Why? Because everyone has enough cognitive load already on his head and the only way to keep his load minimal is by making it fundamentally intuitive, easy to learn as a habit and it must give desired results as expected given his entire life he has learned that certain things happen when sees a design pattern.

Sales & Delivery Side

4.Value proposition

Next step is to nail down the target markets and segments and identify pains and how you solve it. Simple value proposition analysis. Once this done, cross reference with your assumptions and choices on Value bundling and bundle optimization. Build a laser-fitting bundle for every segment that requires a different bundle to adress its pain. Conceptually, this is value creation all over, but not on the R&D side, but the business side. You don’t solve a clearly defined problem, but a user problem that he is willing to pay for and that has to be elicited and understood. The bundled that you get out are “products” without the limiting qualifier “technical” before it. But no whole products yet. This is now something you can expose clients with and start a customer-development process and hypothesis testing with.

5. Value Delivery

So you created a set of products. By creating a set of technical products based on the value created by your R&D organization and bundled by your technical product management. Now that product needs to be sold and serviced to work for your customer. This requires channel design around your sales and services. And you need a process to manage these channels.

Since you cannot sell fridges by sending them on free trial mode via e-Mail or mailorder, and you cannot sell airplanes via facebook marketing and a sign-up and credit card purcase, you need to build a (beyond-technical, business included) product. Also you might not sell a CIO via a website chat, but need visits on customer premise. For that you might buy suits for your sales force and have a file archive with sales deck elements you bundle to create the pitch for the various stakeholders you are meeting with. Once you designed all this through, your you have a new set of product-channel bundles. You are not busy defining sales and service channels. And eventually have to test out how these work in execution. So its channeled customer-development and testing.

6. Value Activation

Coming again to bundle optimization, now on the business side. So we call it activation, because the goal now is to design everything on the business side as to allow customers to capture value for which they want to pay for and to highlight and increase the visbility of this value incrementally as they go through your marketing, pre-sales, sales, post-sales etc funnel. Once you optimized the value delivery and “UX optimized” it with messaging, stories, product information and so on so value becomes visible to the customer, your delivery framework post-sale helps realize this value and the value creation and activation process in the hands of the customer is satisfying, you have a paying and recurring customer.

Voilá, if you iterate this all over and you come up with a total set of optimally acivated products that lasor target your segments, delivery on the right working channels, etc. you build a set of “whole products

Marketing and Messaging optimizations

7. Value Catalyst Design

Before you start blowing money into marketing and lead gen channels, you now have to work on the context and artifacts that serve as passive and semi-active supporting catalysts of your value activation and value delivery channel. Whitepapers, product, service and company information on your website, your trust-building statistics around social media engagement, client lists and recommendations, case studies, market research and a total messaging strategy that is targeting your client, fits your products, is authentically representing everything and is keeping your marketing costs low later on. Those are your passive catalysts. Adding a chat on the website and doing anything where you engage and get in contact with your customer to offer non-sales related information and to drive engagement during his decision making journey, you are in a semi-active catalyst channel. This all helps the customer in understanding his problem and your solution to it before he actively thinks about being hunted by you and your sales funnel. This soft-touch product information channel fuels the value activation, delivery and realization story of your product for your customers and makes the cost of sales go down later on.

8. Value communication

Now starts your awareness and leadgen activity

Some more questions

All that said, we completely lost track of the question : When do you do what and how do you finance it? There is no clear answer to when to do what. Typically it starts somewhere in the lower layers between 1 and 4. Staying too long in one lower layers keeps you running blind and reduces your ability to learn from the market signals around your initial more technical and head-first approach; taking a lower level not serious enough and hardening them against minimal viability criteria for your overall strategy will likely break the value process down the line and will require fixes later on. All layers should be in the hands of a holistic product management function, at least in a product organization. The weaker the middle tear and the stronger the higher tier, the more likely you are in a sales organization. The more you are neglecting the higher levels above level 3, you are in an engineering company.

But, after all, doing everything perfectly and correctly on all layers will cost you execution, burn and market access. So nothing learned so far.

Financial Value aspects

Now to the key question of financing the whole thing.

9. Value Costing

Value feasability is a total cost analysis for your strategy. It’s time to find out if a single focused strategy works and scales. Do bundles of these strategies scale? Will something break by growing exponentially in cost when you increase bundles covered? What is the breakpoint short-, mid- to long-term. Is your breakpoint on the R&D side, on the UX side, the product side. On the delivery / sales / service side? Scalability is simply scalability of the financial model of your organization as it scales with bundles and adoption of bundles by the market.

10. Time Value of Value / Value ROI

What is the highest NPV of your organization you can achieve in this framework given your current financing situation? You will likely not have unlimited financing and have to identify the best strategy to get some segment into pay-for-product mode. Will the overall strategy only work if the catalysts are strong and can those only be realistically financed with a multi bundle offering? What level of cash burn is required? So what is the minimal cost for each product to return a set of dollars.

11. Time Constraints of Value / go-to-market risks

And finally, is your financing strategy aligned with the time you have to take the market before you get driven out of the markt by your competitors. You can of course spend yourself into oblivion by not being focused. But you can also save and focus yourself to death if you cannot capture enough financing to address the entire markets you can serve with your bundles in due time.

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