From the category archives:

Product Management

When I spoke with Amit Elisha of OutBrain a few weeks ago, we discussed the company’s software release strategy.

OutBrain operates under what’s considered the new Gospel of product development: get a basic version out there with a minimum number of features and maybe even a few known bugs, make it free, then let your users flood you with feedback so you can iterate and build your next version better.

Continue this process until you climb out of alpha into beta and eventually to a fully functional product (which, to follow Google’s prolonged beta label example, could take many years).

Jason Cohen

Jason Cohen

An interesting article by Jason Cohen, the founder of Smart Bear Software, on the On Startups blog challenges this methodology. Releasing too early and relying on the power of the crowd, he suggests, can potentially harm your reputation and potentially kill your product.

He uses the iPod as an example. Apple designed its game changing music device far away from the public eye. If it had been part of a release-and-iterate cycle, he says, could Apple possibly have gotten away with building a battery-powered device where you can’t change the battery! Or one without an FM radio (which was already included in many early iPod competitors – it’s finally been added to the new iPod Nano years later).

“Disruptive products by definition cannot be built by consensus,” he writes. “’’Design by committee’ is a sure-fire way to get mediocre design.”

Cohen presents additional points to back up his hypothesis.

  • Startups often invoke the 80/20 rule that says you can implement just 20% of your features because that’s what 80% of your users want anyway. But Cohen says that doesn’t apply the way you think it does. The truth is that 80% of your customers use a different 20% from each other. So you need to push out more features, not less, to satisfy a larger cross-section.
  • Twitter is often trotted out as a classic example of “get it out fast,” but it’s a bad one. While the service quickly gained a large and rabid following, it has been suffering from backend scalability problems ever since. Twitter has sufficient capital and some super-smart engineers who can work around the clock to fix what ails it, but your two-person startup may not be so lucky if you release before you’re ready.
  • Customers don’t actually know what they want. “They’re much better at describing what’s difficult in their life, what frustrates them, or what takes up a lot of their time,” Cohen writes. But did anyone ever say “gee, I wish that I could send a video ringtone to my friends” (this is an idea that only a couple of smart entrepreneurs could think up).

Over the last 20 years, I’ve built or been a part of a team building a number of products. When I was working at CD-ROM developer Mindscape, I got into a huge fight with my boss over when to release a product that I had been toiling over for the better part of a year. The company had sales orders from its distributors, but I knew the product was still buggy and wasn’t ready.

Even worse, this was in the pre-Internet days; once the CD was shipped, it would take a new budget allocation to fix it, which I knew would be hard to obtain. When I was essentially given a choice – ship the product or pack your bags – I opted for prudence.

More recently, though, I fell victim to my own emotional involvement with a product that would have done better to release early and iterate. I got so caught up in getting it right, I didn’t realize that the business model was wrong, something that would have become apparent if users had a chance to kick the tires.

Two other examples from opposite poles:

1) Craigslist – if ever there was a bottom up, build it fast and they will come approach to web development, Craigslist would be the poster child. Of course, Craigslist got stuck after the first round of iteration – the site hasn’t been functionally updated for years, but it works and no one’s complaining.

2) The Apple Newton – this is not so much an example of slapped together product development, but it nevertheless demonstrates how a bad start can sink a product. The world’s first PDA came out in the early 1990s. It was a revolutionary product but “the handwriting recognition sucked and there weren’t a lot of apps,” Cohen explains. The public’s response: “it doesn’t do a lot and what it does do doesn’t work well.” By the time Apple addressed its myriad problems, it was too late.

Ultimately, there’s no clear-cut approach. I tend to lean towards the “you’ve got only one chance to make a first impression” direction but, as a number of comments on Cohen’s blog post argued, not every company is Apple.

“They have the money and market control needed to focus on building a complete product at the expense of time to market,” writes Paul May. “Few startups have this luxury.”

What do you think? Which direction is more likely to lead to success…or kill a company? I’d love to hear from you in the comments to this post.

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StarsOutbrain is a company I like a lot. It has a seemingly simple product that provides some very useful functionality: content rating and recommendations for blogs.

Follow the easy installation instructions and Outbrain will allow your readers to give your latest post a 1-5 score. Then, based on Outbrain’s massive database of reader tastes and web content, the Outbrain widget that displays on your blog will point visitors to related articles that Outbrain has determined they might find interesting.

Yes, it directs visitors away from your blog, but it also has the potential to turn your site a mini-destination site. (You can see Outbrain at work on this blog – scroll to the end of any post.)

When the company raised a sizable second round of financing earlier this year, a lot of brows were furrowed: $12 million for a blog plug-in? Investors must have had a sneak preview of the company’s latest feature, launched earlier this month: an enhancement that allows publishers to pay for premium placement of their content.

The new goodie is called OutLoud and it costs $10 per URL. Featured content appears at the top of the Outbrain recommendations list and is clearly labeled. Without OutLoud, Outbrain uses its own algorithms to suggest content.

OutLoud can be used in two ways. A publisher can let Outbrain control which sponsored recommendations appear; Outbrain will then split revenue with the blog publisher.

Alternatively, a publisher can set up the OutLoud service to work as an internal referral engine: only URLs from the publisher will appear. This can be used to generate more traffic within a single property or on a network of sites owned by the same publisher.

At first glance, $10 might seem like a no brainer for a small to medium sized online publisher, but it quickly adds up. And the $10 fee per URL is only for a month. You have to pay up if you want the sponsored link to keep going.

Outbrain says that the service is aimed at a number of target clients:

  • Marketers who want to drive word-of-mouth by amplifying positive reviews about their company.
  • Individual bloggers who want to promote their most brilliant posts.
  • Public relations professionals looking for new ways to distribute releases
  • Social media gurus who can push out articles from a corporate blog to drive traffic.

With such a cool product, I wondered what product management is like at Outbrain. Amit Elisha, who directs the process, says that the days of long and involved specs with accompanying Photoshop images are long gone. “We were work on a very fast 3-4 week release cycle,” Elisha said. “We prefer UI (user interface) mock ups over technical documentation, which we keep very brief.”

Elisha’s tool of choice is Balsamiq Mockups which makes it incredibly easy to create a wireframe. I tried it out and it lives up to the hype with a truly drag and drop interface. Thanks Amit for the tip!

Elisha has been with the company since August of last year and moved from Israel, where Outbrain started, to New York for the job. I asked him my favorite question about what parts of product management could be outsourced. None, he said. Outsourced people don’t have the same stake in the company. “We hire people with a certain DNA,” he added.

For publishers looking to generate additional revenue, OutLoud certainly looks promising, although it will take some time before the service has the critical mass to add up to more than just some extra change. On the other hand, it’s free to install and Outbrain doesn’t add its own branding or links back to the Outbrain site.

Outbrain was founded by Yaron Galai and Ori Lahav. The 25-person company has headquarters in New York with R&D in Israel. The latest round was led by Carmel Ventures with previous investors Gemini, Lightspeed and GlenRock Israel filling out the round. Total raised to date: just over $18 million.

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Image from Mary Lindsay's blog

Image from Mary Lindsay's blog

When the web first started becoming paramount in how people consumed news, there was a lot written about the dangers of information “narrowcasting” and how it would result in a populace that knew little about what happening outside their own limited sphere of interest. Traditional print newspapers and magazines were lauded because by their very nature they enable readers to serendipitously stumble across news they might not have searched for on Google.

An interesting interview on a recent episode of NPR’s On the Media with Ethan Zuckerman of Harvard’s Berkman Center, and Clive Thompson, a writer for Wired and The New York Times Magazine, suggested that – surprisingly – social media could be an answer.

Thompson cited the research presented in Malcolm Gladwell’s “The Tipping Point” about how many people someone can actually have as friends or colleagues. The number, says Gladwell, is 150; human beings can’t really keep track of more than that. But on social media, that number jumps to the hundreds (and in some cases, particularly on Twitter, the thousands).

I have over 600 Facebook “friends.” Do I know all of them well? Certainly not. But something interesting happens when it comes to learning about news. The more “friends” we have, the more likely it is we’ll learn something about a topic we didn’t expect to and likely wouldn’t have searched for either.

And if enough of our friends share or re-tweet on a particular subject, we will come to think this is “important” (even if it’s really about some ludicrous boy in a balloon). More seriously, the tweets emanating from Iran during the recent mini-revolution definitely opened many new eyes.

Admittedly, most of our friends are “like us” in terms of educational backgrounds and socio-economic standards. But some of those friends may have a wider circle that includes one or two more exotic colleagues. And I have not been terribly discriminating about who I “friend” – when I have a question that I need answering, I then have a wider circle to whom I can publish.

The issue of serendipity in social media has come up recently with one of my clients. The client has a particular organizational focus, and most of what we post relates to that topic. But sometimes we also publish links to articles off-topic which we feel will be interesting to our readers. It’s a way of keeping the site timely and relevant. But it also has the effect of populating our fans’ activity streams with news they might not have seen otherwise.

So, if part of the product management services you provide your clients includes preparing and executing on a social media “content plan,” keep in mind the serendipity effect. It can help establish you more as a destination site within the social media universe…and it’s good for the world too.

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Flip MinoWhy has the Flip video camera (and now its key competitor the new iPod Nano) been such as a roaring success? An article in the September issue of Wired suggests it’s part of a technology trend to build “good enough” products.

In terms of growth (if not total numbers), the little Flip is beating the pants off full-featured digital camcorders from Sony, Canon and the like (sales at Flip are up 200% this year even in the recession). The video on the Flip is indisputably crappy; the camera itself has none of the bells and whistles of its bigger cousins (there isn’t even a proper optical zoom); even the view screen is tiny.

But, as Wired senior editor Robert Capps writes, the camera does the minimum of what consumers want: it fits in a pocket and it quickly uploads videos to YouTube. And at under $200, it’s “good enough.”

The Wired article presents a number of other examples, from “eLawyering” to reduced expectations from military hardware. The most familiar, though, is the de-evolution of music quality.

Even today, old-fashioned records are still considered to deliver the highest-fidelity sound. Of course, by the end of the 80s, these were nearly entirely replaced by CDs, which purists derided for years.

But the real change is the MP3 which is clearly inferior in sound quality. But, again, it’s “good enough.” Music lovers can store thousands of songs on a mobile device and easily share or download the small files.

Even more: in an informal poll conducted over the last six years by a Stanford University professor, young people are increasingly stating that MP3s sound “better” than CDs, because they’ve become accustomed to the distortion found in compressed audio. If that isn’t “good enough,” I don’t know what is.

So what does this have to do with product management, the theme of this blog? The same trend in end user products has crept into the product planning and strategy phase. It used to be that you needed significant capital to properly launch a startup (we raised just under $1 million in the first round for Neta4 in 1998 – and that was considered on the low side).

It’s much easier today for a couple of talented engineers to cobble together a working beta (and isn’t everything beta for years nowadays?) quickly and with little or no investment. When you’re coding in hurry, there’s no time for product management. You post it and then crowd source changes in near real time.

The problem is that this approach has led to a delge of half-baked sites and services that nevertheless get covered on TechCrunch and other review sites only to eventually enter the inglorious “dead pool.”

There are two schools of thought here: virtually ship it “good enough” and iterate, or get it right before launching, the thought being the old adage that you only have one chance to make a first impression.

It may seem that I’m arguing for the latter approach, but truthfully, they both can work (and they both can fail). For agile companies in a hurry, I’d recommend that as soon as they do receive funding (and after all, other than a few viral Facebook, Twitter and iPhone apps, it’s pretty hard to make it to the big time without investor backing), they back up and start the product management tasks they didn’t have time for the first time out – planning, strategy, specifications, prioritization, roadmap, business intelligence, competitive analysis and more – with an aim towards hiring a full time product manager as soon as possible.

There are some great companies out there that have taken unorthodox ways on the path towards success. “Good enough” technology is here to stay. That doesn’t mean that product management necessarily has to follow suit.

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