26
Apr 17

Writing For Product Managers: Readability Is More Persuasive

In my Writing Tips for Product Managers post I suggested making your writing more readable. I mentioned a tool I use called Hemingway. It has both a Mac app and an online version.

In this post I’m going to show how I use Hemingway. (In my upcoming writing course I’ll give a video demonstration of Hemingway.)

Starting from terrible

I’ll start with a paragraph from a blog post I wrote in 2013. It’s not a bad post! But it was before I discovered the importance of readability. In 2015 started using sites like readability-score.com to help me improve my writing’s readability. And then I got Hemingway, which is much more convenient.

The original paragraph reads:

Of course, we have a lot of best practices. We know that requirements are a best practice, but we also know that a lot of successful products have been delivered without much in the way of requirements. We know that prototyping is a great way to converge on a product design, but there are lots of products that don’t have much design that do OK, and lots of beautiful products that sink like cannonballs. We know that having a well-articulated value proposition is a great best practice, but we know lots of companies that manage to do without them, at least initially.

Loading it into Hemingway, I get this:

The image is a screenshot of the Hemingway editor, which has highlighted three sentences as being very hard to read.

The original paragraph. Hemingway says three of four sentences are “very hard to read.”

Hemingway says this paragraph is Grade 12. And it’s remark is “OK. Aim for 9.” Its assessment of the writing is on the right. I did avoid passive voice and adverbs in the original. But Hemingway deems three sentences “very hard to read.” What makes a sentence hard to read? Length is one criterion. Shorter is better. Length of the words in the sentence also contributes.

You can see that I love to make long sentences. I often put a thought into a sentence, and then expand on the thought. And this can lead to very long sentences. It’s a habit I’m trying to break. Hemingway is helping me.

Making it all better

The first thing I do is to shorten some of my sentences a little bit. A natural place to shorten a sentence is at a comma. For example, in the original we had this very long sentence. It has 28 words!

“We know that requirements are a best practice, but we also know that a lot of successful products have been delivered without much in the way of requirements.”

I shorten it by putting a period in at the first comma. I take off the “We know that…” fragment. It doesn’t add much. Then I rewrite the second clause a bit. As two sentences, the meaning is the same – perhaps even enhanced. And the grade level has dropped to 9.

The image is a screenshot of Hemingway, showing that simply fixing the first very hard to read sentence has improved the paragraph's overall readability.

After fixing the first “very hard to read” sentence.

After I make the same transformation on all the long sentences, I end up with this. Reading level 6. Two-thirds as many words. No passive voice. No adverbs.

The final image shows the paragraph after all three very long sentences have been edited. The paragraph now has a reading Grade level of 6, and it's much shorter as well.

The final version.

Here are the original and the updated paragraphs side by side. The new paragraph now has a grade level of 5.

Before: 102 words, Grade 12After: 73 words, Grade 5
Of course, we have a lot of best practices. We know that requirements are a best practice, but we also know that a lot of successful products have been delivered without much in the way of requirements. We know that prototyping is a great way to converge on a product design, but there are lots of products that don't have much design that do OK, and lots of beautiful products that sink like cannonballs. We know that having a well-articulated value proposition is a great best practice, but we know lots of companies that manage to do without them, at least initially.Of course, we have a lot of best practices. Requirements are a best practice. But many successful products have never had much in the way of requirements. Prototyping is a great way to converge on a product design. But many products that don't have much design do OK. (And lots of beautiful products sink like cannonballs.) A well-articulated value proposition is a great best practice. But many companies manage to do without them.

Readability increases readership!

Improving the readability of your writing is definitely worthwhile! I have found visitors are much more likely to read my blog posts when they are easy to read. Even if your readers are highly educated, they prefer easier-to-read writing.


11
Apr 17

The Value Inequality – The Real Meaning Of “Customer Value”

Cost Plus Pricing = No Good

You must balance value versus (multiple) costs to determine price. (By Hans Splinter, Attribution-NoDerivs 2.0 Generic (CC BY-ND 2.0))

People sometimes ask me “how should I price my product?” so I Googled it. I found a LOT of blog posts about pricing. A surprising number recommend “cost plus” pricing. How much does it cost to make your product? How much do you have to sell it for to make money? They say “Sell it for more than that.”

It’s well known that “cost plus” pricing doesn’t work for enterprise software. In fact, it doesn’t work for most high value products of any type.

The alternative to “cost plus” pricing is “value-based” pricing. A few people recommend this. And then they don’t say much about what that means.

Let’s explore this idea a bit more, and see what we can learn.

The customer’s perspective

Of course, the customer cares zero, not one iota, NOTHING, about your problems with making money. OK, they might care a tiny little bit if they want you to be around to support them. But they don’t care very much. It is not their problem if you make money or not based on choosing the wrong pricing.

But customers do care about something. In so many words, the customer has a problem. The problem is costing the customer some amount of money or time or business friction. They are looking for a solution to that problem. Your product may provide a solution to that problem. That’s what the customer cares about – solving a problem.

The first rule of pricing is:

Your product must cost less than the problem costs the customer. No customer will pay more to solve a problem than the problem is costing them.

Corollary: If your product doesn’t solve a problem the customer needs to solve, it cannot be successful.

But the customer has other concerns, not just about the price of your product:

  • Your product represents a big risk to them. Does your solution solve their problem? It looks like it does, but until they put it into production, they won’t know for sure. That risk makes your product worth less, until they are confident it solves their problem.
  • Your product represents a big change management cost. Their current solution or lack of solution to the business problem is costly. Your product may completely solve that business problem. But the cost of moving from their legacy solution to your solution will be significant. In some cases the cost of putting a new solution in place can outweigh the benefits of the new solution, irrespective of its price.
  • Your product represents an opportunity cost. The business problem you solve is not their only business problem. By buying your solution they won’t be able to buy a solution to some other business problem.

The Value Inequality

If you put all these customer concerns together into kind of some math, you get the following inequality:

V > P + R + M + C

The customer will only buy your solution if:

The value (V) the customer gets from your solution is greater than the price (P) of the solution plus the risk factor (R) that the solution will or will not work plus the cost of migrating (M) to your solution plus the opportunity cost (C) of not using that money to solve some other problem.

I call this the “Value Inequality.”

To buy your solution, the value the customer gets (solving the business problem) must be greater than all these costs combined.

And to make your sales easier, strive to ensure the value the customer gets from your solution is MUCH greater than the price of the solution. (In math terms:

V >> P + R + M + C

As product managers we have some control over all the terms in that inequality. In the next installment I’ll give you concrete ways to get this inequality working in your favor.

Three Things You Can Do Today

In the meantime, here are three things you can do today to start using these ideas.

  1. Put yourself in your customer’s shoes. What are the risks, change management costs, and opportunity costs they perceive with your product? Be specific. You should be able to come up with ten or more items.
  2. Start from the risks you found in step one. Find three ideas for reducing the customer’s risk of implementing your product. For example, do you have successful customers already? Can you use the story of their success to reduce the fear of a new customer?
  3. Find three ideas for increasing the customer’s perception of your product’s value. Again, you might be able to use the experience of existing customers. Get a good story from an existing customer about the value they experienced when they implemented your product. Or maybe your product has features whose value is not described well in your sales and marketing.

I’d love to hear your feedback on this idea. Have you used a model like this for pricing?


16
Sep 16

Mental Models for Product Managers – Part 2

Brain Wiring

Brain Wiring (by Wellcome Images, CC licensed)

In part 1 I introduced mental models and some reasons they are important. And I provided a few “general purpose” examples. In this part we dive into what you really came here for – product management-specific mental models.

Why are product management-related mental models different?

The mental models I’m going to talk about share two key characteristics:

  • They are about about products
  • They are not used enough

We have some great mental models in product management. But we have not been doing a great job of using them to help us make better products. While I think a lot of us have intuitive ideas about “how to think about” product management, my observation is that these mental models are not as widely used as they should be.

I wouldn’t be surprised if you haven’t even heard of these mental models. And if you’ve heard of them, you may not know how to use them.

The value proposition

For example, one of the powerful mental models is “the value proposition.” I’m sure you’ve heard this term. It’s very easy to say, and rolls off the tongue. Yet in my experience many product managers don’t know that a value proposition has a specific structure. A properly constructed value proposition is extremely compelling to prospects. But a “value proposition” that doesn’t have the four specific components of this structure is significantly less powerful.

What are the four components?

  • Who the product is for (the market)
  • What the product is (the category)
  • What the product does (its key features)
  • Why my product is a better choice for you (the differentiators)

This is the classic framework from Geoffrey Moore’s Crossing the Chasm. I’ve written about value propositions at greater length in A Weak Value Proposition Is A Symptom, Not A Disease.

Mental Model Categories

The value proposition is a mental model in the form of a template. It gives you a structure for your thinking and research. I like using good templates. Of course they are used throughout our domain – a user story is a very simple template, a Jira issue is created using a template. And most product management tools are essentially a database of items created by filling in templates.

But there are other types of mental models. While categorization itself is a type of mental model – the idea that different topics or pieces of information fall into different buckets – it’s not a product management-specific concept. But let’s use the categorization mental model to help organize some more product management-specific ideas.

One possible grouping is:

  • Templates
  • Categorization tools
  • Heuristics and algorithms
  • Cognitive laws

I’ll give a few examples of each in this post, and follow up with deeper dives in future posts.

Templates

  • The Value Proposition as discussed above
  • The Three Laws of Marketing Physics: For the best chance of success, your product should have 1) an Overt Benefit, 2) a Dramatic Difference, 3) a Real Reason To Believe. For more, check out my article on Doug Hall’s Three Laws of Marketing Physics, or his excellent book Jumpstart Your Business Brain!
  • My V.A.L.U.A.B.L.E. rubric for product requirements. I have a podcast episode and a downloadable graphic about this approach to requirements.

Just because you have a template it doesn’t mean your job is done. Filling in the templates is often extremely difficult. For example, articulating a meaningful Dramatic Difference or “differentiator” portion of the value proposition is usually difficult. (This is especially true if your product is really “a solution looking for a problem.”)

Categorization tools

Categorization is not a product-specific concept, but there are some categorization tools that are specifically about product. Here are a few of my favorites:

  • Stack ranking. It rests on another critical mental model, which also underlies “agile” – this is the idea that focusing on the most important thing first is the best use of your time.

Stacking ranking is a “one-dimensional” structure. The next set of examples live in two dimensions:

2x2 Mental Models

NameImageDescription
Cost vs Value Matrix2x2-of-requirement-cost-vs-strategic-scoreThis chart allows you to plot features or projects based on their cost (x-axis, lower values to the right) and their market or strategic value (y-axis, higher values to the top).

The upper-right quadrant of this matrix is features or projects that are inexpensive relative to the value they will deliver.

Features or projects in the lower left quadrant are expensive relative to the value they deliver.

You can make this chart more expressive using bubble size and bubble color (for example, perhaps the color of the bubble represents the risk of the feature or project).
Magic Quadrantgartner-magic-quadrant-software-test-automation-2016-2015_0This is the famous matrix that Gartner uses to categorize vendor products. The y-axis represents "ability to deliver," while the x-axis represents "completeness of vision." The upper right "magic quadrant" is vendors who have a compelling vision and can deliver on it.
The "Eisenhower Matrix"eisenhower-boxMade famous in the book Seven Habits of Highly Effective People, the Eisenhower matrix directs us to strive to spend our time on activities in the Important and Urgent quadrant, and to assess where we actually spend our time (often in the not-Important, not-Urgent quadrant, unfortunately!)
Trikro's Lean Startup Test Categorizationthe-lean-startup-playbook-1024x818Tristan Kromer has laid out a nice categorization of lean startup experiments based on whether you are looking for an idea or testing an idea you already have, versus looking for a market for the idea or validating that your solution to the idea meets the market's needs.
The BCS Growth-Share Matrixbcg-matrixIf you have an MBA you know this matrix. It's useful for evaluating the balance of your product portfolio. The y-axis represents market growth, the x-axis is market share. Each quadrant has a name, such as the "Cash Cow" - products with large market share in markets with slow growth. Cash cows throw off cash (hence the name) that can be used to grow Stars - products with a small share in a high growth markets. Dogs, of course, are products with low share in low growth markets. Usually you want to get rid of your dogs.

Categorization tools are helpful for making decisions and prioritizing features or portfolios.

Heuristics and algorithms

Technically, heuristics and algorithms give you steps to follow in specific situations. But often the steps involve reconceptualizing the situations, which puts them squarely in the province of mental model.

For example, there are some great heuristics in Chip and Dan Heath’s book Decisive that can help us make better decisions. The book is a great and entertaining read. And Teresa Torres has written a number of great articles putting a product management spin on them.

I’m going to touch on two of their mental models about decision making:

  • It’s never an either/or decision – you can always find more options than Yes/No, Go/NoGo
  • The 10/10/10 rule – think about how you’re going to feel about this decision in 10 days, in ten months, and in ten years. This rule helps you get out of the rut of taking hasty action now that you might regret later. Getting caught up in the urgency of something that might not actually be important in the long run. I illustrated the use of this rule in my article 5 tips for when your release is running late? You can push to get it out on time, even if there might be quality problems. That’s going to make you and your execs happy for a few days or weeks, but it’s going to haunt you next year when your customers stop renewing because of “your history of low quality releases.” On the other hand, if you delay the release until the quality is better – that’s a big downer today and for a few weeks, but in six months no one will remember, and in six years your company will be twice as big because all your customers renewed, citing “very high quality releases every time.”

“Rules of thumb” are another set of good heuristics that represent useful mental models. in my Rules of Thumb series I wrote about a few I use.

Cognitive laws

These mental models are rooted in the way people really think and make decisions (as opposed to how they think they do).

  • Customers don’t know what they want – this is an agglomeration of the results of a lot of different cognitive biases our customers have. Steve Jobs had a great quote, “A lot of times people don’t know what they want until you show it to them.” This doesn’t mean you shouldn’t talk to your customers. But you need to talk to them about their problems, not about “what they want.”
  • Personal goals – this is another one that’s easy to say, and powerful, but hard to do in reality. It turns out that customers and users don’t care that much about the business benefits that our products provide. What they actually care about is achieving personal goals. I wrote about this idea in greater detail in The Best Way To Engage Your Audience Is To Help Them Kick Ass.

Summary

I’ve only begun to touch on mental models for product managers – most of these I’ve described with a few sentences.

I haven’t even talked about some of the valuable larger frameworks of mental models (although I do have blog posts about some – like Kathy Sierra’s “badass” approach).

And I haven’t mentioned anti-models – mental models that are actively dangerous for product managers (despite their ubiquity).

So, there will be more coming in future blog posts. But, in the meantime, I want to make sure you have some actionable, concrete advice for making use of these ideas.

Three things you can do today

You can start putting these mental models to use, and work on your own library of mental models, with these three actions:

  1. If you don’t have a value proposition articulated using the four part framework – category, customer, benefits, differentiators – then do it. You’ll learn a lot. This is hard, by the way. And you might find yourself struggling. That’s a good sign. If you’re struggling, imagine how your market is struggling to understand why they should buy your thing.
  2. If you can’t do the 10x thing for your product, get to work on that. It’s also a hard thing. Luckily, in most cases you can do the 10x against business as usual, and not against your competitors. Although if you can do it against your competitors, that’s amazingly powerful. “Not only will you have 1/10 the downtime, but you’ll implement 10x faster than with our competitors.”
  3. Study up on mental models. This really means studying up on ideas – ideas from different domains that focus on understanding how things work, and how things can be improved. A good list of mental models to start from is Mental Models I Find Repeatedly Useful by Gabriel Weinberg.

02
Sep 16

A Toolset For Getting Unstuck When Your Creativity Is Blocked

Penrose Triangle - A Very Creative Block

A Very Creative Block – Penrose Triangle by Wes Peck, CC 2.0 license

We product managers are inventing stuff most of the time. Whether it’s new features, or designs, or go to market materials, or just making decisions. And that means we are going to have creative blocks. A lot. That is, except for those times when we can steal stuff from others. Unfortunately, we can’t steal as much as I’d like!

A Toolset for Overcoming Creative Blocks

So, I’ve honed a set of “thinking tools” over the years to help me make progress in this invention process. Especially when I’m stuck (which happens all the time), I find I can often get unstuck using one or more of these techniques. This list includes:

  • Mindmaps – I have several product management-specific mindmap templates
  • My product management rules of thumb
  • The V.A.L.U.A.B.L.E. rubric for requirements
  • The Cynefin framework, especially the Complex quadrant
  • Asking good questions (open-ended, “5 Whys”)
  • Talking to other people, even people who don’t know anything about the topic and aren’t that interested – it turns out I “think by talking”
  • Creating a Powerpoint about the topic, and then presenting it (out loud, but only to myself)
  • Crappy first drafts and “Just get started” and “The simplest thing that could possibly work
  • Write the Amazon review first
  • Anthropology – getting back to the people whose problem I’m solving to make sure I really understand it. (Problems are much easier to solve when you understand them correctly!)
  • Sketching and mockups, even though I’m a terrible artist and designer. Simply putting something down on paper or in Balsamiq or Powerpoint often breaks down obstacles.
  • Appropriation – seeing how others have solved this problem, or finding out how similar problems are solved in a different domain. (“Good artists copy, great artists steal.”)

Especially if I’m stuck, I do some of these things and I find myself, against all odds, making progress.

Some of these I’ve discussed before (links provided above). But much of this post is only a tease. I plan to make follow on posts about my mindmaps. But let me know if you want me to drill down one of more of these ideas.

 

 


01
Sep 16

Mental Models for Product Managers – Part 1

The importance of mental models

Knitted Brain Hat

Model of the brain – in yarn (CC 2.0 by Linden Tea)

There’s been an explosion – at least in my feed – of folks talking about the importance of having a lot of good mental models to help you make better decisions.

A lot of this goes back to a talk by Charlie Munger at USC Business School in 1994. He’s the other old white guy who works with Warren Buffet at Berkshire Hathaway making lots of high-payoff investments. Munger said their “latticework of mental models” is one of their core competitive advantages.

What is a mental model?

“Any concept that helps explain, analyze, or navigate the world.”

I’d also add, specifically

  • That helps you make better decisions
  • That guides you on how to take better actions

Mental models are like tools in a toolbox. If you have only a few tools, you can only solve a few kinds of problems. Like the famous saying – If you only have a hammer, then you have to treat every problem as a nail. If you have a full toolbox you have a lot more flexibility and subtlety about how you can go after problems. And tools that aren’t quite up to the job is almost as bad as not having the right tools. You can’t fix a sink if you don’t have some plumbing tools.

Mental models can also help compensate for your own limitations. We all have limitations in the way we think which mental models can help address. They can be like a mental checklist, or like a jig or fixture. Things we know we should do but forget, or things we normally don’t think about but know we should.

Mental models comprise different types of things: heuristics, “cognitive laws,” templates, categorizations and categorization strategies. And there are hundreds if not thousands of mental models. Munger says “80 or 90 important models will carry about 90% of the freight in making you a worldly‑wise person.”

Mental Model Examples

Some general purpose mental models are very useful for product managers. This short list is taken from a fantastic list of mental models by Gabriel Weinberg:

  • Cognitive bias – and all the particular cognitive biases that arise in different situations.  “Tendencies to think in certain ways that can lead to systematic deviations from a standard of rationality or good judgments.” (See list of cognitive biases.)
  • Ask Why Five Times – Arguing from First Principles .  “A first principle is a basic, foundational, self-evident proposition or assumption that cannot be deduced from any other proposition or assumption.”
  • Scientific Method .  “Systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.”
  • Order of Magnitude.  “An order-of-magnitude estimate of a variable whose precise value is unknown is an estimate rounded to the nearest power of ten.”

You’re probably familiar with these and many more like them already.

Mental models for product managers

What about mental models for Product Managers specifically? There are quite a few mental models about products and making them successful. Too many to cover in this post, which is already getting long, so stay tuned for the next post.

What mental models do you use and depend on for getting your job done?


22
Aug 16

Selection Criteria for Product Management Tools

Tools For What We Do

As a product manager, I’d like to find some tools that help me do my job. I deal with:

  • Customers – finding their problems and listening to their product feedback
  • Markets – my segments, their problems, and how to reach them with my solution (and if they are big enough for me to make money)
  • Positioning and value propositions – what my product does for my segment, and why it’s a better solution than the competition
  • Strategy – how the goals of my company drive the solutions I deliver, and how my solution aligns with those goals
  • Revenue and profit – how my solution will generate top and bottom line dollars
  • Roadmapping – how my solution will be shaped over time
  • Competitors – who my competitors are, their strengths and weaknesses, and what I need to do to take advantage, or overcome gaps
  • Prioritization – out of all the features and solutions I could deliver, which ones should I deliver?
  • Go to market – how my potential customers hear about my solution, its value to them, and why they should buy my solution instead of our competitor, or instead of doing nothing

And oh, yeah:

  • Building a solution – addressing the customer’s problem effectively with technology, with enough differentiation that it’s possible to sell successfully

Tools for building the solution and managing that process are a dime a dozen.

But tools that help me with all those other things? Practically nonexistent. Mostly I have to use Word, or Confluence, or spreadsheets, or just my big brain, to manage all that.

My Selection Criteria

If a tool really cared about product managers, it would understand:

  • We have customers
  • Revenue is interesting
  • We do a lot of market research
  • There is competition
  • We have to take our solutions to market

And it would help us prioritize our solution based on those.

What You Can Do

  1. Irrespective of your tools, you need to keep all those things I listed in mind as a product manager.
  2. If your tooling doesn’t understand our domain specifically, you will need to augment whatever you are using to capture and manage that information. You can use templates, best practices, or just the power of your mind.
  3. If you’re evaluating or testing product management tools, make sure to ask the vendor about the topics I list above. How does the tool support your customer interactions? Your prioritization? Your value proposition?