Product management has become a key role within most organizations and startups as it combines product development with experimentation to create a successful product in the market. Product management requires a combination of strategic thinking, problem-solving skills, and a relentless focus on customer needs and delivering the right product at the right time. Top product managers use a customer obsession approach to build and launch successful products.
Aspect
Explanation
Definition
Product Management is a multifaceted discipline focused on the development, planning, and execution of a product or service throughout its lifecycle. It involves strategizing, designing, building, and launching products that meet customer needs while aligning with business objectives. Product managers are responsible for guiding a product’s vision, ensuring its market success, and coordinating cross-functional teams to deliver value to customers. This role plays a pivotal role in innovation, market competitiveness, and customer satisfaction.
Key Concepts
– Product Lifecycle: Understanding the various stages a product goes through, from ideation to end-of-life, is essential for effective product management. – Market Research: Conducting in-depth market analysis, customer research, and competitor analysis to inform product decisions. – Cross-Functional Collaboration: Collaboration with engineering, design, marketing, and other teams to bring a product to market. – Customer-Centricity: Prioritizing customer needs, feedback, and user experience in product development. – Iterative Development: Embracing an iterative approach to refine and improve products over time.
Characteristics
– Holistic Approach: Product managers take a holistic view of the product, considering not only its features but also its market fit, profitability, and sustainability. – Decision-Making: They make critical decisions about what features to include, when to release updates, and how to allocate resources effectively. – Communication Skills: Effective communication is crucial for conveying the product vision to cross-functional teams and stakeholders. – Market Insights: Staying informed about market trends and customer needs to make informed product decisions. – Adaptability: Being able to pivot and adapt the product strategy based on changing market conditions.
Implications
– Market Success: Effective product management can lead to market success, including increased market share, revenue growth, and customer satisfaction. – Innovation: It drives innovation by identifying opportunities and creating solutions that address unmet needs. – Resource Allocation: Product managers play a role in allocating resources efficiently and prioritizing features or projects. – Competitive Edge: Well-managed products can provide a competitive edge in the market. – Customer Loyalty: Meeting customer needs and expectations leads to increased customer loyalty and retention.
Advantages
– Strategic Direction: Product management provides a clear strategic direction for product development and innovation. – Efficiency: It helps in streamlining development processes, reducing waste, and improving resource allocation. – Market Responsiveness: Being customer-centric allows for quick responses to changing market demands. – Alignment: Ensures that product development aligns with business goals and objectives. – Cross-Functional Collaboration: Encourages collaboration among diverse teams, fostering creativity and problem-solving.
Drawbacks
– Resource Constraints: Limited resources can lead to difficult prioritization decisions and slower development cycles. – Uncertainty: The dynamic nature of markets and technology can introduce uncertainty into product management. – Conflict Resolution: Managing competing interests and priorities among teams can be challenging. – Market Competition: The pressure to outperform competitors can be intense in some industries. – Customer Feedback: Handling and processing large volumes of customer feedback can be overwhelming.
Applications
– Software Development: Product managers in the tech industry oversee the development of software applications, ensuring they meet user needs and business objectives. – Consumer Goods: In consumer goods, product managers guide the development of physical products, from concept to launch. – Services: Product management principles are also applied to the design and improvement of services, such as banking, healthcare, and hospitality. – Startups: Startups rely on product management to bring innovative ideas to market and secure funding. – Non-Profit Organizations: Even non-profits use product management principles to improve the delivery of their services and programs.
Product management has become a core discipline that focuses on developing and delivering products or services to customers.
The product management pipeline involves managing the entire product life cycle from conception through market understanding, research, and development, while also leveraging intuition to launch successful products.
The Product Life-cycle (PLC) is a model that describes the phases through which a product goes based on the sales of a product over the years. This model is useful to assess the kind of marketing mix needed to allow a product to gain traction over time or to avoid market saturation.
In a classic product life-cyclemodel, the product manager will work through the various stages of it to either build or launch successful products.
But also to extend the life of existing products to make them way more valuable.
Customer Obsession as the underlying force
Take the case of companies like Google or Amazon, which for decades have managed to launch new products while also keep expanding their existing products.
Those companies have teams of product managers that are in charge of making sure those companies keep innovating.
The Amazon of the early days, in particular, used a mindset called customer obsession, which was the key to the company’s ability to develop successful products.
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur of a small or large organization, to understand the pitfalls to avoid running a successful company!
As we’ll see, this kind of framework can guide product managers to focus on what people want.
While also having an understanding of the market dynamics and trends, and how to anticipate them, to give customers what they don’t know they want yet!
Indeed, product managers are responsible for a few key things, such as:
Explore customer needs.
And based on that, develop strategies to meet those needs.
While leading cross-functional teams to execute these strategies.
Where does the product manager stand within an organization?
The position of the product manager within the organization will highly depend on the organizational structure of the company.
For instance, in companies that follow a hierarchical structure, the product manager will be underneath the hierarchical manager.
In a hierarchical structure, you have a company organized in a vertical manner, where groups follow a top-down decision-making approach, where most decisions flow from the top to the bottom of the organization. One example is Apple’s organizational structure today.
Thus, depending on where the product sits within the organization, the product manager might be underneath one of the key departments.
For instance, a product manager developing a tool that will help the marketing team amplify the company’s message.
Like is the case of a health organization that is creating free tools for users online to calculate their various scores (like BMI or Body Mass Index).
In that case, the contribution of the product manager will be to amplify the company’s reach by bringing traffic to the website and prompting the sales funnel.
Thus, the product manager will coordinate a team of developers on the one hand, and a team of marketers on the other hand, to:
Understand if there is demand for such a tool.
How can this demand be channeled toward a free tool?
How can this traffic be qualified for the marketing team?
How can this traffic be channeled toward the company’s existing service?
The product manager will make sure that this tension between the development team, the marketing team, and the customers translate into a valuable channel of acquisition for the company.
In that case, the product manager will be underneath the CMO (chief marketing officer) or the head of marketing.
In a product-led organization, instead, the product manager might be among the top executives.
This sort of organization has a more functional structure, where each product manager might be in charge of a business unit.
Take the case of Google, Amazon, or Facebook in the early days, before they turned into more hierarchical organizations. There, product managers were among the top executives which helped shape the company’s trajectory.
Depending on the importance of a product, a product manager might report to other top executives or even to the CEO.
Take the case of Google’s CEO, Sundar Pichai, who raised from product manager to CEO.
Indeed, Sundar Pichai grew in Google’s rankings by taking the lead. of various strategic products.
From Google Bar in the very early days, until he led Chrome, which turned into the most successful web browser, and one of the most valuable units for Google.
From there, he raised into the role of CEO.
That is why it’s critical to understand, as someone who wants to undertake a career in product management, where to start and for which organization.
Thus, some of the questions to ask are:
Is this a product-led organization?
Will I be working on a new strategic product?
Will I be learning from the best in the industry?
But do you still find these opportunities, nowadays?
Absolutely, not only it’s plenty of it, but in upcoming startups in various areas (like AI, SaaS, and more), you can also find these opportunities in – now become – large organizations like Google.
You just need to know which unit to look for.
For instance, right now, Google Cloud is an interesting unit, as it’s trying to compete against AWS and Azure, and thus Google is looking for great product managers.
Understand the cloud ecosystem, markets, competition, and user requirements in depth.
Launch new products and features, test their performance, and iterate quickly.
Work collaboratively with Engineering, Marketing, Legal, UX, and other cross-functional teams on cutting-edge technologies.
Develop innovative solutions to some of the world’s hardest problems by collaborating as needed across regions, product areas, and functions.
And you can earn a salary in the range of $153,000-$242,000 + bonus + equity + benefits.
Thus as we saw, product management is an organizational function within a company that focuses on overseeing all aspects of the product’s lifecycle from concept to end-of-life.
Therefore the primary goal of the product manager is to ensure that products are developed with customers’ needs in mind while making sure to align that with business objectives and targets.
What are the responsibilities of a product manager?
A top-performer product manager will be able to manage multiple projects simultaneously.
While ensuring alignment throughout each stage of the process between technical/development, marketing, and sales teams.
The compass is always the customer.
The product manager though, especially if working on innovative products, must be able to understand current customers’ needs, while also anticipating future needs, in what we defined as customer obsession.
Responsibilities include:
Researching customer needs;
Developing detailed specifications for technical teams to implement;
Working closely with engineering teams during design to ensure alignment with business goals and customer needs;
Analyzing performance data to iterate the product;
And reporting results back up to the executive team.
Should any company have a product manager?
In a tech-driven business world, where the web has become the primary marketing and communication channel for most businesses, having a Product Management team can help companies speed up their growth.
Indeed product managers take ownership of existing or new products or services, and they can help a company look into new ways to enhance distribution.
Or launch new products and services, in line with the business objectives.
Or yet, help the organization improve business processes across its department.
Indeed, product managers can be employed for both internal foci (improve efficiency) and external focus (enhance marketing and distribution or create new products in line with the services offered by a company).
A good product manager also helps the organization keep an eye on the execution, experimentation, and discovery of new products and services.
Product management, therefore, is essential to any startup’s success.
What drawback do you want to avoid as a product manager?
Some of the risks of employing product management badly are related to the opposite of what is meant to be.
In fact, product management is meant to:
Discover new product lines, which help the company understand its position in the market.
Experiment as part. of the company’s mindset, which helps – through small failures – also create big product hits.
Expand the organization’s scope by exploring new business areas where customer demand is shifting, thus enabling the company to stay relevant in a changing market.
Innovate to find new product lines that can help solve new customer needs.
Disrupt by discovering products that can shift customer demand, thus anticipating or creating whole new markets!
Instead, often time, organizations feel the need to follow what other successful startups are doing without really understanding what product management entails; they end up doing exactly the opposite.
In that case, product management becomes a way to:
Slow down execution by adding additional management layers within the organizations rather than wrecking off the siloes between departments, which is what a great product manager should do.
Waste of resources as instead of enabling better communication flows between departments, politics kicks in.
Killing employees’ morale, especially in technical departments that don’t like dealing with too many management layers. When development teams see the company getting too procedural and formal, this kills their ability to ship and deliver fast.
Bad allocation of time as development and marketing teams are employed in meticulous tasks rather than on things that can have an impact on the organization.
To prevent these, you should understand what a great product manager needs to do, to make the whole company aligned with a customer obsession mindset, and these comprise:
Wreck off the silos by creating growth teams. These growth teams are multidisciplinary teams comprised of developers, engineers, programmers, marketers, and salespeople working together toward a common goal. And they all need to speak the customers’ language.
Flatten the organizational structure by reducing the space between managers, executives, and product teams. You want. to make sure that there are fewer layers between operating and executive teams and possibly having some of the best operators within the executive team.
Organize departments around product units by transforming the organization from hierarchical to product-led.
Create product innovation units or small separated growth teams whose focus is on coming up with whole new products.
Facilitateintrapreneurship by incentivizing both independent and group thinking.
If there is one lesson we learned from the Internet playbook of doing business, growth teams need to work in functional groups where siloes are wrecked off, and product/engineering, marketing, and sales come together to work on the full funnel!
The growth hacking canvas is a tool and framework to have a set of processes that allow you to ask the right questions to generate growth ideas consistently.
Summarizing the responsibilities of a product manager
Product management is a business discipline that focuses on developing and delivering products or services to customers.
It involves managing the entire product life cycle from conception to launch with a customer obsession mindset.
The product manager’s responsibilities include researching customer needs, developing specifications, setting pricing plans, and exploring new product business models.
Product management also needs to be able to re-structure the whole company around product-led units rather than hierarchical units.
How to Become a Product Manager
Product management is a challenging and rewarding career path that requires understanding the product development process, customer needs, market trends, and more.
Thus it’s a multidisciplinary field, that requires an understanding of various areas.
Is there an educational path for product managers?
Usually, product managers have a bachelor’s degree in business or a related field such as engineering or computer science.
Some employers prefer candidates with an MBA or other advanced degrees.
Yet, there is no fixed rule there and it will depend on the industry and type of organization.
Product managers thought, should have some experience working in the software development team.
One. of the key functions will be to understand how to align technical and marketing teams.
Thus, they need to be able to deeply grasp the technical aspects of their products, while staying up-to-date on industry trends.
Thus some of the fields of study in line with becoming a product manager are:
Business Administration.
Computer Science.
Engineering, Mathematics.
In short, there is no fixed educational path for product managers.
What will matter is the ability to develop a professional/business experience where you get to know the in-depth technical stuff, with a business focus.
You need to understand that product management is a sweet spot between engineering and marketing.
With that in mind, you might want to look for practical experiences that can give you a deep technical understanding while getting acquainted with market dynamics.
What skills do you need as a product manager?
The core skill of a product manager is a combination of technical and communication skills that need to be balanced internally and externally to enable the team to build viable products.
Product managers need:
Strong communication skills to effectively communicate with stakeholders (developers, marketers, salespeople, customers, etc.).
They must develop excellent problem-solving abilities to identify issues – worth solving – and solve bottlenecks in the product development process.
Multi-tasking and organization, as product managers are often juggling multiple projects simultaneously while keeping track of deadlines and tasks of the product team.
Analytical skills to know how and what data is worth collecting, analyzing, and dissecting from user testing sessions, which can provide valuable insights into how customers use products.
What job opportunities can you seek?
Product managers’ salary in the US ranges from $70K to $150K, with an avaregae of $102,530 as reported by Indeed.
According to Indeed, in the US a product manager can earny anywhere between $70K (in the low-range) to over $150K (in the high-range).
In addition to that the product manageers will get cash and non-cash benefits.
Below some of the most common benefits for product managers, in the US, according to Indeed.
Most common benefits for product managers, in the US, comprise 401(k), commuter assistance, dental insurance, discounts, flexible schedules, hybrid work environments, retirement plans and stock options, as reported by Indeed.
There are numerous job opportunities available for those interested in becoming a product manager.
Startups may be looking for someone who understands both technology and business operations.
While larger companies may seek experienced professionals to lead complex projects involving multiple teams across different departments within the organization.
One of the many reasons Google consistently brings innovative, world-changing products to market is because of the collaborative work we do in Product Management. Our team works closely with creative and prolific engineers, designers, marketers, etc. to help design and develop technologies that improve access to the world’s information. We’re responsible for guiding products throughout the execution cycle, focusing specifically on analyzing, positioning, packaging, promoting, and tailoring our solutions to our users.
What are the cities, fors instance, in the US that pay the most for the product manager role?
Among the top four paying cities in the US, for product managers, comprise San Francisco ($129,271 per year), New York ($120,979 per year), Atlanta ($112,870 per year), Austin ($112,562 per year), as reported by Indeed.
And what are some of the top companies looking for product managers?
Top paying companies, in the US, for product managers comprise Meta, Boeing, VMware, Accenture and Google. As reported by Indeed.
And what roles pay a similar salary?
Roles like Technical Product Mnager, Mobile Product Manager, Product Owner, Product Marketing Manager, Project Manager, and Program Manager pay similar salaries in the US, according to Indeed.
Key takeaways from the product management career path
Product management is a rewarding career path that requires understanding product development, customer needs, market trends, and more.
To be successful in this role, you must have the proper education and training as well as develop specific skills such as solid communication abilities, problem-solving skills, organizational aptitude, and analytical thinking.
With the proper knowledge and experience, numerous job opportunities are available for those interested in becoming a product manager.
Processes, Methodologies and Frameworks in Product Management
What are some of the processes, methodologies and frameworks product managers can leverage on to succeed?
Let me show you a journey of frameworks, processes and methodologies that can be extremely helpful in your journey as product developer.
I’ve personally gone through this process of understanding these various methodologies both in my role of busineee developer and director of sales, building businesses from scratch, by coordinating technical, marketing and sales teams to achieve business goals.
As a combination of my career in the last decade, my research on FourWeekMBA of the last decade, and my passion for the business world, I’ll lead you from the most basic to advanced frameworks.
This will lead you toward the path of understanding how to integrate what I like to call Business Engineering.
Key Highlights
Product Management Overview:
Product management is crucial for successful product development and delivery.
It requires a mix of strategic thinking, problem-solving, and customer-centric focus.
Product Management Definition:
Product management involves overseeing the entire product life cycle, from conception to launch.
It combines market understanding, research, and intuition to launch successful products.
Customer Obsession:
Successful companies like Google and Amazon use a customer obsession approach to innovate and meet customer needs.
Customer obsession is a key factor in developing valuable and successful products.
Responsibilities of Product Managers:
Product managers research customer needs, develop strategies, and lead cross-functional teams to execute plans.
Their role involves aligning customer needs with business objectives.
Hierarchy and Reporting:
The position of a product manager varies based on the company’s structure.
They might report to different departments or even hold high-level positions in product-led organizations.
Educational Path and Skills:
Product managers typically have a background in business, engineering, or related fields.
They need a mix of technical and communication skills, problem-solving abilities, organization, and analytical skills.
Job Opportunities and Salaries:
Product manager salaries range from $70K to $150K in the US.
Opportunities exist in startups and larger companies, requiring collaboration with cross-functional teams.
Processes, Methodologies, and Frameworks:
Various methodologies and frameworks aid product managers in successful product development.
Integrating business and engineering is crucial for effective product management.
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.
Agile methodology is one of the most popular processes used in product management today.
This process emphasizes collaboration between teams, customer feedback, iterative development cycles, and continuous improvement.
Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.
The Scrum framework is another commonly used process for product management.
This framework focuses on breaking down large projects into smaller tasks that can be completed more quickly with greater efficiency than traditional methods.
The Scrum framework also encourages team members to work together collaboratively while providing transparency throughout each step of the project’s lifecycle.
The lean methodology is a continuous process of product development to meet customers’ needs. It was in part borrowed by the auto industry and its roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. The lean methodology is, therefore, an evolution from lean manufacturing, based on continuous improvement.
Finally, Lean methodology is a process often employed by product managers to reduce waste and increase productivity throughout the project’s lifecycle.
This approach relies on data-driven decisions and eliminates any steps or activities that do not add value to the final outcome, such as lengthy meetings or redundant paperwork requirements.
Through this method, product managers can focus their efforts on delivering high quality results in a timely manner.
Continuous Integration/Continuous Deployment (CI/CD) introduces automation into the stages of app development to frequently deliver to customers. CI/CD introduces continuous automation and monitoring throughout the app lifecycle, from testing to delivery and then deployment.
For a product management team to keep shipping at high-speed while gathering valuable feedback from customers, a workflow of continuous deployment has become a core tenent for many statups.
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.
Continuous innovation is a key framework to follow for product managers as it puts you in the right mindset to keep iterating and improving product development cycles.
One key thing here is to understand how to tackle the problem rather than falling into the trap of finding a problem for the technical solution.
In the tech-driven world this is one of the major drawbacks, whereas technical people fall into the trap of beliving a technical solution is by default better than another one.
Rather then spending time in defining the problem, and based on that finding a proper solution for it.
For the sake of it a great tool to use is the leaner canvas, by Ash Maurya.
That flips the logic of the MVP upside down.
Rather than following the classic build-demo-sell approach.
you fo for the Demo-Sell-Buil approach!
A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else
A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.
P&G has been managing a portofolio of brands worth $80 billion by 2022, in what they call a Constructive Disruption appraoch, which combines what customers want (market trends) with a fast iteration cycle of consumers’ products.
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.
While on the one hand you want to keep an eye at what customers want as the main compass.
As product manager it’s critical to look ahead to undersatnd what disruptive, bottom-up forces are shaping the makrets today which might run into consolidated trends tomorrow.
In his book, Crossing the Chasm, Geoffrey A. Moore shows a model that dissects and represents the stages of adoption of high-tech products. The model goes through five stages based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggard.
A major mistake companies make when launchng new products, is to look for large segmetns of the market, as if they already had clear all the problems and use cases the product is ready for in the market.
Instead, to make failure cheap, fast ,and improve the chances of success you want to start from a microniche, and create options to scale from there.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.
Developing great products is about kicking off valuable feedback loops.
Indeed, we like to talk about feedback in product development, yet not all feedback is useful.
For a feedback to be really useful for product development those need to be coming from real users or potentially customers that have skin in the game.
They will give you a valuable feedback as result of what we call revealed preferences.
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
Design tinking is another great framework and methodology to use throughout the product development cycle as a customer-centric approach to building products.
A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.
In a tech-driven business world it’s very easy to fall into the trap of belieinvg that all tthat matters is the technical side
Instead, by focusing on demand generation, we can enable a product to improve its utility while drastically imrpvijg its perceived value.
And while initially you might not need a business model for your procut, over time it’s critical to keep making the proucct more relevant to provide a viable business model.
For instance, many believe that just because you build a product and make it free on the Internet, automatically you got a freemium.
But in order to build a freemium model you need to structure a whole company around it, as otherwise that is just an unstustainable free product.
Customer obsession goes beyond quantitative and qualitative data about customers, and it moves around customers’ feedback to gather valuable insights. Those insights start by the entrepreneur’s wandering process, driven by hunch, gut, intuition, curiosity, and a builder mindset. The product discovery moves around a building, reworking, experimenting, and iterating loop.
At the end it’s a matter of combining what customers want now, with whta they don’t even know they want yet.
From this combination of continuous development, and discovery that is how you build great products.
In ten years of resaerch on this blog, professional experience in the field, and by building disgital businesses from scratch, I’ve built a discipline which I like to call Business Engineering.
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.
Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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