Ten years ago it was typical that only system architects uttered the phrase API. Since 2005 the programmable web has exploded from a handful of open APIs to thousands of companies exposing functionality for developers to harness. Firms like Salesforce and eBay enjoy more than half of all their transactions via their API while social networks such as Twitter experience well over 10bn API calls a day.

Exposing an API helps organisations deliver more functionality and achieve faster times to market. The API allows businesses to use the best of class existing services and focus on delivering customer value, for example catalog management, rating providers, shipping carrier integration, pricing engines, inventory systems, payment gateways, social integration, recommendations, image manipulation, video streaming, ticket booking, etc, etc.

The business benefits of building an API depend on context and focus but include…

  • Customer innovation,

  • partner network development,

  • increased sales conversions,

  • professional services revenues,

  • speed of development,

  • and user acquisition.

The business of APIs is huge and many successful multi million dollar firms do nothing but operate an API such as Twilio.

Probably because an API has no traditional user interface and is consumed by engineers many organisations make the enormous mistake of failing to invest in API product management. This results in API initiatives that deliver low or zero business value.

API product management has to focus on two key personas:

  • Engineer / Developer who will consume the API.

  • The users of apps the above engineers build.

Product managers need to fully appreciate the pain points the engineers face to consume the API. If the API uses unusual protocols or forces the engineer to ‘jump through hoops’ they are less likely to confirm to management that it is feasible to integrate your API.

If engineers inform their management your API is poorly designed and will take many man hours to integrate, management are more likely to de-prioritise the work or suggest the engineers look for an alternative. The engineers consuming the API are your key stakeholder and customer.

Posted
AuthorDave Martin

Many product managers depend on evidence or analytic data to make winning product decisions, how many times does the improvement go live and fail to have the desired impact? Why is it that great product managers consistently deliver improvements that move the needle?

I recently was reminded of a anecdote where a maths teacher plays a simple game with their class. The teacher sets out a challenge, he has a rule which results in a sequence of numbers "2, 4, 6". The pupils can make as many guesses about the next numbers and the teacher will answer with "follows the rule" or "breaks the rule". The pupils can only have a guess the rule once.

This feels very similar to product managers using analytic evidence to validate their assumptions about a new enhancement.

The first pupil guesses 8 and the teacher replies "follows the rule", the pupil then guesses at 10, the teacher again replies "follows the rule". Feeling confident, the pupil guesses the rules as being "add 2 to the previous number". The teacher says "No that is not the rule."

The pupil obtained evidence that showed his assumption as being correct. Pleased with positive results the pupil made the common mistake, they failed to validate their assumption by attempting to break it. We typically look to prove we are right, instead of proving we are wrong.

A different pupil, unaware of the incorrect answer, also had a hunch the rule was add 2 to the previous number, they also guessed 8 and then 10. However, instead of guessing the rule, this pupil then guessed 13, the teacher responded "follows the rule". By attempting to break his rule the pupil discovered his assumption was wrong - 10 add 2 is not 13.

He had another idea, so guessed 10 (so the sequence is 2,4,6,8,10,13,10), the teacher replied "breaks the rule". The pupil then guessed various numbers lower than 13 and then numbers bigger than 100 getting larger and larger. The pupil then offered a solution - "The next number has to be bigger than the previous number", the teacher congratulated the pupil on getting the correct answer.

When product management validates assumptions there is often an eagerness to find evidence that the assumption is correct. This results in the common mistake of product enhancements being invested in which will deliver no additional value or return. 

Great product managers validate their assumptions by looking for evidence to show the assumption is wrong. This approach results in more enhancements being developed that increase value. It also encourages a culture surrounding product that failing quickly is good and improves our understanding. 

Posted
AuthorDave Martin

In this short series I am addressing the question of should all companies invest in product management? Can product perfection drive marketing leading positions. In part one of this series I explored what I call the Product Motivational Hierarchy. 

One set of signals that will inform you of route to achieving a “Favorite” product in your market is frequency of use and perceived competing value.  I call this the Market Frequency Value Matrix which can be used to analyse your product and the market. 

Market Frequency Value Matrix - helping product managers focus efforts to deliver success

Market Frequency Value Matrix - helping product managers focus efforts to deliver success

Frequency of use is easy to understand, but what is perceived competing value? For the purpose of Market Frequency Value Matrix it is the value or benefit the consumer believes they get from the using your product compared to other products in the market place. Consider it the consumer perceived value of your USPs when compared to the competition. This can be revealing, specially when in some product segments, all the products ironically claim the same USP (not Unique is it). 

For example lets consider the insurance comparison aggregator market. In this sector consumers save time by only having to input their personal information once to get the cheapest insurance quote. Users get the value of saving money and reassurance they have conveniently shopped around from the wide market. Statistics suggest a high volume of consumers of insurance comparison websites get quotes from multiple comparison websites. The product does deliver a high value, it save money and time, however the products have the same perceived value when compared to the rest of the market. In such an example they would be low usage (annually) and low perceived competing value. 

It would take revolutionary innovation (disruption) of the feature set to catapult the product of insurance aggregator to a market leading position. Insight into user pain and learning exactly how users consume the product might inspire a suitably impactful innovation. However probability and investment required for revolutions suggests this should not be the core focus of product management. Referring to the Market Frequency Value Matrix product management needs to focus on optimisation and product marketing to create a differentiation with consumers. Optimising the sales conversion through the customer journey is the core product priority. 

There are other strategies product management can explore when products are in the tricky bottom left corner. Product extension can be a powerful tool, this is where the product aims to solve a related user problem (which may have little or no revenue, or even a cost). The extension must be either highly regularly used and, or has high perceived competing value. 

Focusing on increasing perceived competing value may extend in surprising ways. In the UK the market leading insurance aggregator is CompareTheMarket.com. They have a highly successful marketing campaign which has ran for many years. Through TV advertising they developed lovable fictional characters. The key to the overwhelming success was to create a free product, a soft cuddly toy, of the characters and limiting the toy to be available only when you purchase insurance. In a market place full of low frequency and low perceived competing value they now have a higher value than their competition - because their customers get an exclusive toy. Their marketing has made this toy desirable and focused on the characters more than the insurance comparison. 

When products are in the low usage, low perceived competing value box I have heard people suggest product management is not required. Clearly this is incorrect, it is critical to focus on optimisation and improve features sets as the market develops. 

Posted
AuthorDave Martin

We all have our favorite products that we recommend, we are loyal users of some product and some people are die hard fanboys of products. The product purist in me wants to believe that product perfection exists and can always take a market leading position over inferior products, however this is not reality. So how can a company pick where to invest heavily in product management and r&d? How can great product managers choose which jobs or products to take on, in order to set themselves up for success? What is the objective for product managers in these different situations? Over the next few blog posts I will provide insights, examples and a framework to answer address these questions. 

Lets start by introducing what I call the product motivational hierarchy.

Product Motivational Hierarchy

The first level is “Functional”. The aim for any product is to deliver some value through functionality. To achieve this status there must be value for money or value for cost. This simply means the product solves some problem for the market delivering some perceived value which is greater or at least equal to the cost. The cost may be:

  • money
  • user effort or user time
  • user data
  • user sharing / promotion

The second level in the product motivational hierarchy is “Value Add". This is a products ability to go further than the minimum expectation set by the market and deliver additional value. This unique value proposition is what makes gives a product a competitive edge. In real world this level a moving target, as markets often play copy cat and companies improve their products, which increases what the markets minimum expected value is. In very established markets such as project management software stripping back features and being simpler can be the added value, e.g. Basecamp which simplifies complex project management software. So do not interpret value add as size of feature set. The value add proposition is often derived from a unique insight in to the users real problem.

At the top of the hierarchy we have “Favorite", this is where a product delights users so much they must tell other people how great this product is. This is far beyond your product helping a user post on Facebook that they consume your product. To reach this level your users are loyal and will argue why your product is the best. An extreme example is the army of fans that Apple enjoys. 

Clearly not all products can reach “Favorite” status typically there will be winning and loosing products. It is important to recognize markets exist where it is highly unlikely any product will ever reach that sort after "Favorite" status.

Posted
AuthorDave Martin