Product/Market Fit As a Organizing Principle for PMMs

“Product-market fit means being in a good market with a product that can satisfy that market.

Marc Andreessen, co-founder and General Partner, Andreessen Horowitz, Guide to Startups

When I’m asked “What does Product Marketing do?” I respond that it’s the core role that drives product-market fit, matching the product to the right buyers. All markets are made up of buyers and sellers… and when the needs of buyers are met by the offers of sellers, there’s a transaction. For me, it’s the role of Product Marketing Management (PMM) to drive this for the company that is, to influence product development to meet the market needs, and to help find the right market buyers that need the product being offered. When both of those conditions are met (and it’s a continual process!) there’s great fit and a successful business. (Really, this is just a variation of Bid/Ask). So, PMMs are the core role rationalizing Product Management, Sales, and Go-to-Market motions. 

Full article published to LinkedIn

Advice to the Aspiring Employee

I’ve spent the past few weeks busy evaluating team performance for our semi-annual review process. And every year, I take it more seriously because every year I realize how much more important *people* are to the company. 

I used to think this was a throw-away comment - but hiring, developing, promoting and rewarding the “A” players is the difference between a high-performing company, and all the other average players.

Anyone reading this might ask, “Well, what do you mean by an ‘A’ player? I work really hard. I have great ideas. I’ve got experience. Doesn’t that make me an ‘A’ player too? How do I get promoted?” 

Well, from a manager’s perspective, here’s the advice I give, and what I look for in “A” players - and believe most other management does too.

1. Table-Stakes: Do your core job well. You’re expected to be competent, handle your responsibilities, know your skills, execute on-time, and keep your accountabilities on-track.  And for all of that, you’ll achieve being a solid “average” player.  There’s absolutely nothing wrong with this - unless you’re looking to grow, get a promotion, and excel at the company. But you have to start here.
   
   
2. Next: Your willingness and ability to go above-and-beyond. This means that if/when there is a “crunch-time”, when there is an aggressive project, an emergency, a “special assignment” etc., you’re willing to put in the extra hours to get it done. These extra hours might be over a period of days -- and occasionally over weeks. But you’ve got to be willing to show your commitment to do this. It means that you’re able to identify the important projects (maybe only 1-2 a year) and rally to deliver them on time. Your management will notice, because it shows an awareness and commitment to do what needs to get done. BTW, a word of caution: This does NOT mean you are constantly working 80 hour weeks! (you’ll burn yourself out).  
   
   
3. The hard one: Learn to push the envelope of your Job Description: Here’s the aspect of your job that signals your most “promotable” aspect: I like to think of it as “pushing the envelope” of the job. Others might call it “working at the next level above you”. Either way, it means you are thinking outside the box that’s called your job description.
   
   Is there an idea you have that management hasn’t thought of? An opportunity nobody’s identified yet? A strategy that hasn’t been pursued? Whatever the instance, it should be incremental to your role (but not so “blue-sky” as to be immediately dismissed).  But here’s the key: Management *loves* new ideas - and execution of those ideas - coming from employees. It means the employee is interested, motivated, ambitious. Who wouldn’t like someone like that on their team?
   
   One other perspective in which to hold “pushing the envelope”: It’s all about your attitude. Try this thought experiment - if you got a promotion tomorrow, what would you do differently? How would you act? What goals would you set for yourself? How would you team/partner differently? How would you communicate differently with management?  So start acting/doing all of that NOW! Promotions most frequently happen to people who are ALREADY acting and executing at the next level. 
   

What if you don’t know what “outside the box” means for you?  Then my recommendation is to brainstorm with your manager… or with their manager. You don’t need to have all the answers, but you should show the eagerness to inquire and discover. 

There are tons of other skills, attitudes, and attributes that’ll help you be a star. And sometimes, it’s just-plain experience that helps too. 

But if you’re wondering “how will I get that great review” or “am I promotable”, my suggestion is to first focus on the 3 points above.

Gartner MQ, Forrester Wave: A Disservice to Innovation?

Note: Read this blog more as a wakeup call to vendors than as a criticism of Industry Analysts. By inadvertently playing into analysts’ narrow definition of products and categories, vendors can become distracted from their real goal – pursuing meaningful, valuable, and unique innovation. 

Prologue
Industry analysts have an important job in the technology industry: To help customers better understand trends, technologies, and vendors, so they can make better, more confident purchasing decisions. And for vendors, analysts are helpful by providing market research, trend analysis and evaluation of products and technologies.

But in my experience, analysts also have a fine line to walk when they make vendor evaluations. Since analysts take money from both vendors and customers, they put themselves in potential conflict-of-interest positions, if not also risking bias.  This is made worse by lack of transparency in their evaluation methodologies.

The most popular – and influential – evaluation tools analysts offer are periodic product analyses and ratings. The well-known Gartner Magic Quadrant (MQ) and Forrester Wave are at the top of the list, with others such as KuppingerCole’s Leadership Compass. These reports are pervasive, with Wikipedia listing 66 different Gartner MQs – with many more unlisted.

Unintended consequence: Category myopia

A closer look at how the MQs, Waves, and other evaluation are constructed reveals massive spreadsheets that vendors are asked to complete. They largely focus on product feature comparisons, and to a lesser degree, company operations. I’ve personally helped complete countless numbers of these – and it’s often a multi-person, multi-week vendor effort.

But the spreadsheet questionnaires have an unintended consequence: They inadvertently treat each vendor product/category as a fungible, semi-generic solution to meet a limited set of problems.  Further, they often track technology categories that can quickly become outdated, even as analysts struggle to update them.

The result is that vendors are compelled to play the analyst’s game... not their own.   The unintended myopia – the forced “thinking-inside-the-box” – manifests itself this way:

• Vendors end up spending time, R&D resources, and marketing expense to chase feature boxes that will yield them high evaluation scores.  This inadvertent “keeping up with the Jones’ ” for feature parity does an injustice to innovation they would otherwise pursue.  It is the rare visionary vendor that’s able to say “screw the features the analysts want, we want to innovate in a different direction”.  And, unfortunately, those same vendors might be penalized in the next vendor evaluation for not “checking the boxes” even though they may have a breakthrough approach to the market.
• Customers may also be misled by these evaluations, often narrowly viewing the product sector through the narrow lens presented by the analysts.  While some customers will benefit by an apples-to-apples comparison of features, many may miss appreciating the variation in vendor options, approaches, and overall direction/strategy – things not generally reflected in simple checkbox evaluations. 

True innovators are penalized
A great set of podcasts by Christopher Lochhead focus on “legendary marketers” and innovators who re-think their products, market strategies, and ultimately create new concepts and categories.  But in the world of  standard analyst categories, innovators of new categories are penalized, because (a) they are not being considered for a MQ or wave, or (b) receive poorer ratings on the standard category ratings... even if they offer a truly revolutionary approach to solving a technology problem.


Now, to play my own devil’s advocate, I recognize the need for analysts to create some level of standardized evaluation criteria – the industry needs this. However, analyst criteria can be mistakenly held as the end-all and be-all, rather than as general guidance.  Further, most analysts fail to go the extra mile to fully explain the differentiations between vendors and products.

Note to Vendors: Analysts assess the Finite Game, not the Infinite Game
In his excellent new book The Infinite Game, Simon Sinek outlines the notion of great companies focusing on the “infinite game” – one where there is vision, constant reinvention and constant shifting of the playing field... and even shifting the definition of what it means to succeed.  This is in contrast to playing the “finite game” where the rules are defined, there is a limited set of metrics, and a singular clear goal to win.

The current mindset which is rewarded by MQs and Waves is that of the Finite Game... where vendors are encouraged play to their competition, innovate with the “check-the-box” mentality, and where customers might errantly treat vendor solutions as generic and fungible.

My candid vendor advice is this: Yes, we need to play the analyst’s game. There is absolutely a service to our customers using this approach. But proceed with caution and intelligence – There may not be not a need to “check all the boxes”, nor necessarily should you. Balance that effort against your own vision, direction and approach to differentiation. And ensure that if you opt for a powerful direction, albeit one that could weaken your evaluation, emphasize your believe/vision with the analysts.  Remember: There are lots of billion-dollar firms that aren’t leadership quadrant companies.

My advice if you’re a customer: Don’t blindly choose to put the top 3 vendors of a leadership quadrant on your short-list.  Look more deeply, and have your own set of criteria developed when selecting a vendor.   All-too-often, a vendor might have a solid offering in a given category, but ultimately fail to demonstrate the strategy and direction that will carry your company forward a few years in the future.

Coda: A note to analysts: 
I have the greatest respect for you – and for the incredible knowledge you have and advice you give.  (Even some of my own best friends are Analysts).  But please emphasize that your evaluations are standardized.  Go the extra mile to really understand and communicate

• how vendors differentiate their products
• where vendor visions lead and/or diverge
• adjacent categories to the vendors’ own (or categories that overlap)
• how the vendor’s products are either “pure-play” in the category, or how it expands the category definition. 

I look forward to your comments/feedback

Own Your Category With a Network-Effect Product

At the intersection of product marketing and product development is constructing a “data flywheel” business model 

I recently found myself speaking with a number of companies - in completely different industries - yet all expressing the same essential strategy: We’d like to make our product more valuable - and more difficult to duplicate - by making it constantly learn from our customers. 

I stopped to think about that as an increasingly common strategy…. And how (in contrast) I’d been accustomed to marketing products that are just a race against competitors who were adding similar features to mine. That old approach was an endless technology treadmill, constantly trying to outpace feature parity for leadership.  

My insight was that a *real* leader is a product (or service) that develops an unfair edge, a hard-to-duplicate sustainable advantage, that makes (and keeps) the offering a runaway success. The "network effect" of customer usage is how it keeps its edge over the competition.

This is how I rediscovered the notion of the “Data Flywheel”; The idea that the more relevant data you collect from users, the more you can build better learning/algorithms and continuously develop a better and more valuable product. And finally, this positive feedback is what helps you acquire even more users and defend against competitors. 

The concept of the data flywheel was originally conceived by Jim Collins, author of “From Good to Great” IMO, a seminal business book. Another great discussion of this model is from Christopher Lochhead’s podcast (#24) part of an excellent series of marketing discussions. This product-centric network effect isn’t a new concept, but definitely one I don’t (yet) see most companies pursue. With the acceptance and maturation of more Artificial Intelligence (AI) engines, I expect this trend to accelerate over the next few years.

Your customer data is value - and key to valuation 

I’ll begin with this contrast: If your business is purely transactional, if you have no ongoing relationship to customers, if your product is not constantly learning and improving from interactions, then this should be a warning sign. It's because your customers only present a single value-in-time (the moment of purchase) and that’s all. Worse, you'll eventually lose to a competitor and/or be disrupted by someone evolving faster than you.

Many in the financial industry believe that ongoing customer interactions and data have very *real* value. Consider the simplistic example of valuing a company for its customer list and their purchase history, not just for its existing cash flow. (A very good paper by Glue Reply is on models of valuation of data as an asset) Or, consider valuing a company for its customer database, not just for hardware sales… a great recent example is Google’s acquisition of Fitbit. Per Motley Fool, “...there's a lot of data in there, of course. Fitbit collects all this health data. They've been building this digital health platform, much like Apple. Both Fitbit and Apple want to help users be able to manage their health data on this platform". At the acquisition price of $2.1 billion, this represented a valuation of approximately $75/customer.... a bargain if you think about the follow-on products/services Google may be able to offer in the near future. 

I recommend both product marketing and product development need to re-think what information the company can (or should) consider collecting, using, and ultimately monetizing in the form of a continuously improving product/service... and one that can generate recurring revenue while doing so.

Where Product Marketing and Product Management might begin:

In some cases it might be obvious what information you could collect to begin to build an accretive “flywheel”. If not, I suggest bringing engineering, product management, customer success leaders, and product marketing together - for a facilitated brainstorm. 

Ideally you want to answer this: “If we just knew ____, we’d provide incredible new value and insight for our customers.'' Consider dwelling on questions such as...

1. How could we create a better customer “network effect”?
2. What types of benchmark customer data sets could we develop, offer, and use?
3. If we had it, what external data would we tap into? (Or, could we partner with others to develop it?)
4. Do our customers want to compare themselves to others? What questions do *they* ask that we could help answer?
5. What customer information do we already have that other business (even unrelated) want? how could we monetize it?
6. What continuously updated product feature or data would keep customers returning to use our product/service?
7. Could we apply AI/ML to detect customer use patterns for higher-value offerings?
8. During your session, it’s important to think outside your current business model, and even outside your current product category. Remember - you’re trying to pursue a potentially disruptive approach to an otherwise traditional product. It might lead you in some exciting directions.

Finally, you'll probably want to build a customer “data lake” (as I see it often referred to) a unique, highly-valuable collection of customer interactions, intentions and experiences. And, if used wisely, it’s what will make your product/service more competitive and sustainable. It could include customer use of your product, their interactions on your web properties, their profiles they (opt-in to) provide to you, and even related public-domain data. But choosing what data to capture is key...

A few examples to get you thinking (real and invented)

• A software security vendor - builds a database of past attack vectors across all of its customers, including a list of previously compromised login credentials. In turn, the security software provides customers with increasingly faster, more complete responses to security threats and attacks. 
• A network monitoring vendor - builds a customer database of network performance benchmarks and typical precursors to failures across various technical environments and architectures. It then constantly provides better predictive alerts to potential failures rather than waiting to react to existing failures.
• A vape pen provider - through its interactive app, assembles a database of feedback to/from customers about satisfaction ratings of oils, oil vendors, and optimal devices and temperature settings for each. It also correlates age and sex of users to preferred oils, to make suggestions for future use and purchases.
• Automobiles - Unlike traditional insurance vendors, Tesla can assemble a database of driving habits of individual drivers to create custom risk profiles allowing the company to often offer less-expensive automobile insurance than a typical broad-based actuarial tables would otherwise permit.
• Entertainment/content providers - Netflix, Amazon, and others constantly monitor viewing and purchasing habits and demographics to recommend additional products as well as follow-on entertainment suggestions for constant up-sell opportunities.
• Excercycles - Peloton has famously created a subscription service for its exercise hardware that gathers and constantly updates a database of user data and demographics, matches individuals for competitions, tracks improvement, and creates custom workouts.
• Custom Sports Helmet Vendor - a custom 3D-printed sports helmet manufacturer provides a database of customer-submitted custom designs and improvements, as well as user ages and sports levels - proactively recommending new/upgraded helmets for growing and advancing athletes.

I’d love to hear how some of you have pursued a “data flywheel” approach to your product or service - and I’m sure other readers would too.

For More Inspiration…. 

Here are some additional links/articles you might find relevant:

• Strategy+ Business: How to build disruptive strategic flywheels
• Forbes: How To Hack Your Way Into A Proprietary Data Set
• JP Morgan: Go deep on data and grow your e-commerce business
• Reply.com: The valuation of data as an asset: a consumption-based approach (PDF)

Thanks for reading!