Author: Ravi Akella

If I were to make a list of exciting market segments that beckon innovators, the home cleaning supplies segment would probably be at the bottom of the list. For most of the late 20th century, this segment was a yawn-generating, environmentally tone-deaf, behemoth-dominated doldrums. Enter the intrepid folks at Method Home – who decided that this market was ripe for disruption. Thanks to them I have a sparkling home and an awesome buy, use, love story to tell.

Method products stare back at me in all our bathrooms and our kitchen. They’re easy on the eyes so we leave them out in plain sight instead of hiding them in cupboards. There’s even a Method tote bag lying around that’s a conspicuous reminder that my wife and I are in plastic bag rehab. It’s safe to say that Method products have taken over the households of many people we know.

To me, Method is a great example of a company built on an opportunity that could not have been quantified or justified before the fact. During the early days of Method, the simplest SWOT analysis would have made it clear that taking on Clorox, P&G and SC Johnson is nothing short of suicidal. Surely, I thought, there are some great Product Management lessons lurking in this story…. here’s what I learned.

Fortune favors the differentiated
Method disrupted a well-consolidated market segment and stirred up some really powerful giants. This, predictably, provoked a response like the GreenWorks product line and litigation threats from Clorox. In this hyper-competitive environment, Method survives and thrives because they differentiate along many independent axes with superior fragrances, earth-friendly formulations and chic bottle designs. As Product Managers, we’re always seeking a defensible competitive position. The Method example reiterates the need to strive for multiple differentiators that independently make the products more appealing to the target customers. Individual differentiators might be easy to replicate (setting a new normal in the market) but it’s the combination of independent differentiators that buys the disruptor enough time to establish a foothold.

You don’t have to do it all
Method’s large competitors employ scores more people than Method and own the entire value chain from the research labs to the bottling plants and distribution. However, Method manages to stay ahead of these competitors because of it’s ability to stay nimble by subcontracting work to many different vendors. This gives them the chance to iterate often and react quickly when a product fails to generate demand. Many Product Managers juggle build or partner options all the time and Method’s example points to the benefits of delegating some effort to trusted partners. Of course, this needs to be done carefully making sure that the competencies that create perceptible value to the customers are kept in-house and that partners have shared principles.

Balance innovation with practicality
The aesthetic and functional genius behind Method’s product packaging is a major draw for their customers. However, they’ve been more than willing to roll back design innovations to improve customer experience. For example, they discontinued an ingenious yet unloved self-dosing cap for laundry detergent because customers preferred to control how much detergent they used with every load (the detergent itself was a big hit). Creating the right balance of functional and cool is an unending challenge for all Product Managers. It doesn’t hurt to pay close attention to customer behavior and to adapt without regret when new information presents itself.

Method’s belief that everyday people would pay a premium for high-quality, earth-friendly products in eye-catching packaging is an important reminder about taking risks and learning quickly. We can’t control the vagaries of luck but, hopefully, we can hold our nerve long enough to make educated bets.

Transforming an industry that has been incrementally improving on a business model and technology for over 500 years is not for the faint of heart. Although it might still be too early to compare the impact of ebooks to that of the mechanical printing press (invented by Gutenberg in 1440), the Amazon Kindle seems up to the task.

I ordered my 2nd generation Kindle as soon as it was released in early 2009 (yup, I paid the premium) and it has fundamentally changed how I read. I read a lot more now than I used to, I never lose my page, I always have a dictionary at hand, I can carry a whole slew of books on every vacation, I beam with pride (at least I used to, back in 2009) when people ask to take a closer look and I try to sell a Kindle to everyone who cares to listen. Yup, you guessed it… the Amazon Kindle far exceeds my buy, use, love threshold.

It was pretty obvious to me that there are some key lessons in the Kindle saga for Product Managers like me. And, I’m glad to report that I was not disappointed… here’s what I found.

Going the distance matters more than being first out of the gate
With all the profiles that I’ve written, it’s become clear that creating great products and services is a marathon, not a sprint. It doesn’t really matter who gets out of the gate first; the winners are prepared to go the distance and this is truly the case for the Kindle. The Sony Reader hit the shelves at Borders in 2006, well before the first Kindle was released. However, today the Kindle leads the ebook market because Amazon optimized the whole customer experience. Amazon went beyond the device and obsessed about the size of the catalog, the buying experience, the ability to share content across different devices, etc. All good Product Managers want to take the long view, but we all know that short term pressures are real and endless. When in doubt, redouble your focus on the entire customer experience and barter speed for stamina.

Identify and beat the real competition
Regardless of all the iPad talk, the primary competition for ebooks today is… you guessed it… good old paper (this will likely change in the future with greater adoption of ebooks). And, today the Kindle does an exceptional job of matching or beating a paper book when it comes to the buying, carrying and reading experience (and lately they’ve been working on the sharing bit as well). As Jeff Bezos put it during an interview with Charlie Rose, “You think Hemingway is going to pop more in color?” Understanding the target market and customer behavior well enough to accurately identify the real competition is key for all Product Managers. No amount of competitive feature/functionality wins can make up for confusion about the target market and customer needs.

Sometimes innovation demands brand new skills
It’s pretty normal to think… “but, Amazon is an e-commerce company not a hardware company.” The Kindle is a great example of a company seeking to understand their customers’ needs and then learning new skills to meet those needs. Amazon started up a subsidiary called Lab126 to build the hardware expertise it needed and based the group in the best place on earth to find the talent, Apple country – Cupertino, CA. For businesses and Product Managers, it’s pretty easy to pigeonhole oneself and one’s product into a well-defined category. However, innovation often happens at the fringes of existing domains. If success lies in creating a new domain or radically redefining an existing one, then obviously being a customer and market expert (by being humble and observant) is more critical than being a domain expert.

The ebook market is relatively new and very dynamic so it is likely that, a couple of years from now, I’ll look back at this post and wonder what I was thinking. For now, I love my Kindle and the more I read on it, the more I am inspired to listen to my customers, push the accepted boundaries and focus on the entire customer experience.

I never thought I would need a 4-pack of shave foam and a 6-pack of toothpaste. That was until this past August, when some friends made one of the best breakfasts I have ever eaten while camping. Our discussion about this culinary delight quickly turned into an earnest testimonial from them about the food at Costco. Needless to say, my wife and I signed up for a membership the next weekend and I am delighted to report that we’re now happy Costco ambassadors. To paraphrase the writers of Modern Family, “It’s big, it’s not fancy and it dared us to not like it.”

To some, Costco will always be a beacon of conspicuous consumerism. However, I believe that Costco has built it’s reputation by offering something much simpler than vulgar consumerism… an honest deal – great quality products at unbeatable prices. And, Costco does this while facing fierce competition from companies that are several times its size.

As always, the buy, use, love sleuth in me had to investigate to see if Costco’s ways hold any lessons for Product Managers like me. My search was not in vain, here’s what I found…

1. Better instead of more: The number of products carried by a typical Costco warehouse(about 4000 SKUs) is fraction of the number of products carried by competitors. This makes it easier for Costco to reinforce the value proposition and attract discerning customers with deep pockets. I bet all Product Managers have felt the need to do more – more features, more options, more tiers. For some reason, it always seems like it’s easier to sell when one has more, but guess what, doing better is almost always stickier and it drives return business and word of mouth (free marketing!). It also makes it easier for PMs, marketing and sales to succinctly explain what your product and business does and stands for.
2. Build a community of customers: Everyone who shops at Costco, including me, is a card carrying member. Expecting shoppers to pay(billions of dollars annually) for the privilege to spend more money seems laughable, unless your brand generates massive goodwill, trust and word of mouth like Costco’s. And once in the club, members stay loyal. Most software and web Product Managers can’t expect their customers to carry membership cards (or maybe they can) but there is ample evidence that communities of passionate users can drive massive adoption and success. Spend the energy to make it easier for customers to connect with other customers and with you. If they love your product, there will be a constant stream of success stories to drive more business and if they hate your product, you’ll learn earlier to change course.
3. Nobody wins unless everybody wins: Costco is constantly criticised by Wall Street for being too generous to their employees. At the same time, Wall Street is bullish enough about Costco shares to drive up its Price/Earnings ratio(~23 at the time of this writing) much higher than rival Wal-mart’s(~13). Not surprisingly, Costco’s ability to retain and motivate its workforce is a primary driver of growth and success. As Product Managers, we interact with a large and diverse set of people in our organizations. Being forthright, respectful and attentive to the various interests on the team is essential to build a common vision and to deliver exceptional value quickly, efficiently and joyfully.

I started writing this series with a belief that there are some universally applicable ideas, cultures and personality traits that drive outstanding product success. My endeavor is leading me in many different directions(domains, companies) but I feel like everything I learn is somehow vaguely familiar. Let me know if these ideas align with your own experience as a PM.

Before I wrote my first post, I made a list of products and services that I felt met the buy,use, love criteria. They span many industries but today I wanted to pick an industry that continually baffles me with its troubles and its inability to deliver… the airline industry.

There is ample evidence that the demand for travel and air travel, in particular, will continue to grow (after a brief hiccup over the last couple of years) for the foreseeable future.  So the industry definitely doesn’t have a demand problem. The problem might actually be an excessive supply of equivalent offerings fueling the need to differentiate in a crowded marketplace; a familiar problem for a lot of businesses and Product Managers.

In the midst of this endless rat race, one of the airlines compelling travellers to buy, use, love their service is Singapore Airlines. I am sure there are others that are worthy competitors, but I’ve spent decades hearing praises of Singapore Airlines from family members traveling between the west coast of the US and India.

Singapore Airlines’ ability to prioritize and focus on what matters is a great example for Product Managers. Here’s what I learnt…

1. Align with your customers not your competitors: All kinds of businesses, airlines included, look at their competitors’ latest tactic and try to optimize it. This happens mostly at the expense of the customer – think airline baggage fees, no food, charging for water etc. As articulated in this HBR blog post, Singapore Airlines is in an anachronistic state of mind, they still seem to believe that air travel should be a pleasant experience – their customers agree and pay more for it.
2. Spend more on improving the customer experience and less on everything else: Singapore Airlines overspends competitors on airplanes and staff training – areas that directly improve the customer experience (link to HBR article).  They lag their competitors in areas like the swankiness of their headquarters and their back-office technologies.
3. Being flexible and awesome is better than being consistently bad: Everybody loves consistency because it makes it easier to predict the future – after all, all businesses are run based on projections and forecasts. Singapore Airlines trains frontline employees to make one-off judgement calls to wow the customer with exceptional service. The financial impact of a one-off pleasant customer experience can’t be modeled but it’s worth the unpredictability every single time.

As I look back on this post, it all seems so darn obvious. However, we all know, especially Product Managers, that following simple rules to ensure long-term success is a lot harder when there are so many short-term crises to avert. Here’s to taking the long view and sticking to the basics.

Disclaimer: I should specify that I am a software and web guy and not an airline industry expert. My goal is to merely study players in various industries that have created offerings that capture their customers’ imagination to find the common threads of wisdom.