© Hanken Svenska handelshögskolan / Hanken School of Economics, www.hanken.fi

SW product management in a startup

Juhana Peltonen, D.Sc. (Tech.)

© Hanken Svenska handelshögskolan / Hanken School of Economics, www.hanken.fi

Assistant Professor

Erling-Persson Centre for Entrepreneurship

Hanken School of Economics

Agenda

» How to match fast and iterative business development activities with agile product development in a startup context (~30 mins)

» Design Thinking: Learning by doing (~40 mins)

» Essay (~20 mins)

11/9/2017Laitoksen nimi

4

Product development: The traditional way

11/9/2017Laitoksen nimi

5Royce, Winston (1970), "Managing the Development of Large Software Systems"

Product development: The traditional way

Product development: The traditional way

Create positioning and

marketing materials

Hire PR agency and

Sales VP

Launch event, create

demand and branding

Royce, Winston (1970), "Managing the Development of Large Software Systems"

In other words:

2: Success / fail ?

1: Burn through all funding for product development

The agile approach in software engineering

Product positioning – the traditional way

Product

Design, technology, quality, packaging, branding, accessories, warranties, aftersales, services

Price

Strategies, tactics, rebates to distributors, discounts, payment terms.

Place

Distribution channels, distribution area, point of sale, warehouses, means of transport

Promotion

Building awareness, advertising, sales force, public relations, free advertising

Marketing mix

+ 3P´s = Process, People, and Physical Environment

McCarthy EJ. (1960) Basic Marketing: A Managerial Approach.

What if?

Agile productdevelopment

’Agile’ customer development?

Successful venture

Idea

Fast failure

Content of the day

How fail or succeed faster and cheaper?

Lean startup

idea BuildLearn

DataMeasure

Code

MVP

Ries, Erik. “The Lean Startup”. 2012

How fail or succeed faster and cheaper?

Customer Development

Customer

discoveryCustomer

validation

Customer

creationCompany

buildingSTOPSTOP STOP

• What are the

customers’ top

problems?

• Does your product

concept solve

them?

• How much will

customers pay?

• Focus on

’earlyvangelists’

• Do you understand

the customers

buying process?

• Does you financial

model make sense?

• Do you have a set

of orders?

• Crossing the

’chasm’ (from early

adopters to the

early majority)

• Existing market /

Resegmented

market / New

market

• Professionalizing

management

• Does the company

have a clear

mission?

• Growth and sales

plans match the

market?

Blank, Dorf. The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company. (2012)

Product development

Customer discovery

1. State your business modelhypotheses

2. ”Get out of the building” to test the problem: ”Do people care”?

3. ”Get out of the building”: Test the product solution

4. Verify the business model: Pivot or proceed

Blank, Dorf. The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company. (2012)

The business model canvas: A useful way to organize hypos.

A. Osterwalder, 2008

The business model canvas: A useful way to organize hypos.

Ver 0.1 Ver 0.2 Ver 0.3

Test &

revise

Test &

revise

….Scalable

BM?

Testing hypotheses on market size and growth

A market is the set of actual and potential buyers of a product/service.

Thus, the size of a market depends on the number of people who…

1) exhibit the need for the product/service

2) have resources to engage in exchange

3) are willing to offer these resources in

exchange for what they want

You should have some initial estimates of market size, in terms of number of customers, the number of units and the total sales in euros.

Total addressable (/available) market (TAM), vs. served available market (SAM), vs. target market.

Earlyvangelists - the most important customers for startups?

Has

aquired

a budget

Assembled a solution out of parts

Been actively looking for a solution

Is aware of having a problem

Has a problem

Blank, Dorf. The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company. (2012)

Minimum Viable Product (MVP)

» A strategy to maximize customer learning in the shortest possible time using the smallest possible engineering resources.

» Has the minimun features that still solves the core customer problem and demonstrates the value of the product

» Not just a prototype!

Oculus rift prototype

Source: Endgadget