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Designing a Product Roadmap – I

February 2016 Product, Selling

Introduction

David Ogilvy’s historic tagline for Dove, “One-quarter cleansing cream,” was a hit in 1950s and can still sell the soap today—almost 60 years later (though it was modified to “One-quarter moisturizing cream” in 1970s). With time, soaps keep changing (let’s call it innovating) in packaging, shape, size, flavor and all that jazz, but they’re still used for cleansing today just like the good old 1950s. So if a soap can cleanse it has a market.

Not all products however enjoy the ‘soap & detergent’ kind of stability. Phones in 1990s were used for calling and today calling is one of the many functions of a phone. Cars back then were mechanical marvels and now they’re practically computers on wheels. In the case of software and applications, the product life-cycle graph is even thinner and very well summed up in a comment by Reid Hoffman (Linkedin Cofounder): “If you are not embarrassed by the first version of your product, you’ve launched too late.”

Product Portfolio versus Product Roadmap

It is important at the very outset to not confuse between product portfolio and product roadmap. Any company that sells products needs and has a product portfolio. Improving on one’s portfolio is a continuous process for all product makers across the globe. It holds true for P&G, Apple, Intel, GM and Benetton. Product roadmap, however, may not be a necessity for all.

Assume a company has been manufacturing soaps with three types of fragrances: jasmine, rose and almond. Now a market research reveals that there is a huge market for soaps that smell like chocolates. The research report leads the company to introduce a fourth type of soap that smells like chocolates. In the process, the company ends up increasing its basket of offerings but the roadmap stays unchanged—since the market for jasmine, rose and almond is not dying out due to the chocolate attack!

Now for a smartphone maker the situation is different. In 2005 its flagship model had an internal storage of 1GB and it used a 256MB RAM. In 2016 can it still continue to sell the same phone? Maybe yes if it charges 10% of the price it charged in 2005 and also is willing to accept the fact that the cost of manufacturing will be same as 2005 or maybe higher.

The Reality is Loud and Rude

Some products don’t change much with time while some products do. The latter group of products may evolve in months or change over the course of many years.

If your business involves the latter group of products, then you need much more than a promising basket of products. You need a product roadmap.

A product roadmap documents how the company plans to evolve a product with time…

Objective of Creating a Roadmap

Similar to the strategy formulation process for any business function, product roadmap decision is also driven by a single mission: to stay in business profitably in the long run.

The guidelines for designing a great product roadmap can be derived from breaking down the above mission statement:

  1. What would it take for me to stay in business?
  2. How can I stay profitable in the long run?

Let’s now address the questions one at a time…

Staying in Business in the Long Run

When the products and services stay unchanged in the long run then the focus of a firm is limited to ensuring supply stability and ensuring that the products are marketed and sold adequately. They do develop new products but that is more a mean to increase business size than a mere survival strategy.

On the other hand for some products change is the only constant. This is where “staying in business in the long run” is highly dependent on having a concrete product roadmap.

The change could be driven by multiple factors and in most cases these factors are external. Going back to the example of the smartphone maker from 2005—what changed for them? One major change was how the end-users used a smartphone. No need to go into details about that as I assume that all readers who are reading marketing articles online are well aware. Then there was also a change in the eco-system. Smartphones are left with very few operating systems to choose from and not supporting a standard operating system is kind of suicidal. Thus to some extent the resource needs of the standard operating systems are dictating terms for the smartphones. The suppliers, especially the semiconductor companies, are also migrating per their own roadmaps.

Consequently the smart-phone is left with two options—evolve or die. To survive it needs to keep migrating its processor upwards towards higher specifications and also keep increasing it memory. It also needs to live by the expectations that are set by the competition, such as adopting a touch interface instead of the traditional key-board.

It is not possible to successfully predict all the innovations expected in the next ten years while designing a roadmap. However some logical trends can be helpful:

  1. What factors are helping me sell today?
  2. How frequently are these factors changing in magnitude?
  3. What are the external variables which I don’t control but impact me?
  4. How do I plan for such an impact?
  5. What is competition up to?
  6. How are my supplier industries evolving?

Not planning out by analyzing the trend and instead waiting for the right signals to jump onto the bandwagon leads a firm to becoming highly reactive or enacting the “me too” syndrome. Often in an evolving market, the best in business are the proactive ones.

Staying Profitable

Sometimes a product roadmap is required for the very purpose of staying profitable. For semiconductor companies, for example, the need to shrink the chips to a lower process technology is perennial (Check my article: Moore’s law and Semiconductor pricing). If a chip doesn’t migrate to a process tech as the same or better than competition very soon, it will be out of market. For the customers too, it is difficult to get best pricing if they are not buying the suppliers latest offerings—without best BOM (Bill of material) cost it is difficult to stay profitable yet competitive in the end market. Each time the internal components of something change, the final product advances too.

In the sequel to this article I will explain how an effective product roadmap is designed while describing specific real world examples.



About the author

Anirban is a core-team member at Lifkart (an Early stage Indian Construction Start-up). Prior to the current gig he worked for about 5 years as a pricing manager at Cypress Semiconductor. He holds a BE in Electrical Engineering from National Institute of Technology , India and an MBA in Marketing from Symbiosis Centre for Management and Human Resource Development (SCMHRD), Pune, India.

Anirban Sengupta
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