Mar 18, 2010

Software Product & Customer Values

I learned a simple graph in the past about product features & value to the customers. I would like to share it with you. This blog entry may look "obvious" but over & over how many complex software products are introduced into the marketplace? (& failed miserably)


Let's take a look at this simple graph:(click/right click to view it)

We design a new software product based on some facts, some assumptions, some technical innovation and big assumption is that it will make ton of $. ( This blog is not applicable to eyeballs, VC$ is the source of revenue, grow big, don't worry about making $ and eventually bought by Google type websites!)

In the beginning, the value to customers increases linearly with the product features.(It should, otherwise it's a false start!) Then it stops at some point. After that it's flat - we keep adding new features to the product but it doesn't increase value to the customers. The interesting thing is that after some time, the worse thing starting to happen...the value starts to goes down with new features! The complexity starts the moment when there is no value increase with new features.

The result of complexity for customers are-
  • Months to install & configure the product
  • Needs professional support, professional service, professional x, y & z to keep it running
The product may still be selling but it may end up shelf-ware sale! Finally products gets its result- EOL!

The product team may think that there are still new features that they think is useful to the customers. One of the option is to build a new product instead of keep adding features to an existing product. OR at-least create a next generation of old product.

The best example is Apple: Mac, iPod, iPhone, iPad. The underlying platform is same but they are not bundling into 1 big product. Separate products for separate customers for separate markets.

It's easy to say that these 2 are the most important criteria but to know these 2 requires deep domain/technical expertise + deep insight into customer environment/problems.
[a] Tipping point in the graph
[b] Number of customers who need this product @1

The rate of success of the software product is directly proportional to the size of the circle in the graph.

It's the reason that I strongly believe that business team(product management, marketing, sales) input to the product is very valuable & should be continuous.

In the end, it's the customers who will tell us whether the product is good or not.


At 4/19/2010 11:48 PM, Blogger David said...

first your sharing the understanding of the success of a software product is highly appreciated.

But tell me if the successful softwares are necessarily the ones without any problems ?

On one hand even if the software has some problems if the circle as you put it, is large enough then the software goes on to be a success.

At 4/20/2010 6:37 AM, Blogger Uday said...

I agree with you that successful software product can have problems.

Eg, Windows OS. For long period of time, it had the unstable-blue screen issue but still it went on to capture 80% of desktop OS.

I was mostly talking about feature vs value to customers.



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