Product Management is Inherently Political

Recently, I had lunch with a bright young product manager trying to perfect the process for deciding which features to include in his next product release.  Skipping past theory about “internal ROI” and other quantitative approaches, we talked about having to choose among the many demands for enhancements from sales teams: that MRDs are only the starting point in an ongoing lobbying campaign for product improvements.  In other words, product managers will always have to manage the emotional world of people and internal politics.

First, Let’s Set the Stage
As product manager for the next version of TechX, you’ve collected a nearly infinite list of possible improvements, advances, new features, and architectural repairs.  Your goal is to build an orderly list of items, review them with Engineering for size and suitability, then issue a definitive requirements document (MRD or PRD) that formally declares what will be built.  Being analytical and a bit compulsive, you think of this as the end of a long process, after which Engineering will leap into action.

You’ve had to make choices from a dissimilar list of potential projects:

• Customer specials needed by specific big accounts, even if they are not likely to be of general use to others (more on this later)


• Broad feature improvements as demanded by the market, reviews, user groups, and your keen sense of what customers want


• Internal architectural changes that will be invisible to customers but are needed for improved quality or longer-term goals


• The occasional high-profile product bet anticipating emerging market needs or hoped-for shifts in related technologies.

Trade-offs within each group are easy, but across groups are nearly impossible.  Part of your job is to balance these different categories so that your next release meets a few needs from each group.  (Does this sound like a state budgeting process?)
Within each group, you try to draw up rational criteria.  Among features demanded by specific customers, you look to your sales teams for revenue commitments and certainties.  ("How big is the deal?  Is this the only feature blocking the sale?  Can we get a commitment from the customer to buy if we deliver by March 15th?") You probably built a deal-specific spreadsheet to track opportunities and likelihoods, which you will need later.

For more general market requests, you poll sales teams and industry analysts.  Engineering typically demands a few sacrifices to the gods of architecture, so a few of these make the cut.

In addition, you are trading off time and resources against your overall list.  For example, adding a data conversion option will push back the release date by two weeks.  Including Voice-over-Telepathy costs five month.  Since most engineering schedules run late, you need to negotiate a delivery date that gives you some breathing room.  Etc.

Ultimately, an MRD is the culmination of intense negotiations with all parties (engineering, marketing, sales, customers).  It represents a compromise based on your best judgment and the facts on hand.  BTW, great PMs deliver superior MRDs and also leave each constituent group feeling valued/respected/listened to.  After emailing the final MRD to all groups, your team takes you out for a well-deserved celebration.  This feels like a milestone.

But The Fun Has Just Started
Nearly immediately, two kinds of problems arise.  One is caused by actual changes in the world: shifting customer needs, market trends, product experience, and general evolution.  The second is lobbying from the sales teams who did not get their favorite enhancements into your MRD.  By making hard choices about which features are in your next release, you’ve had to postpone other legitimate requests.

A quick aside about your most successful sales teams: they are experts at understanding and influencing how customers make decisions.  Faced with customers who want to make rational buying choices using objective criteria, they will cajole, schmooze influencers, rewrite RFPs, promise upcoming features, sponsor golf outings, scrutinize budgets, and generally work to tilt rational decisions in your company’s favor.  This is precisely what makes them so successful and so valuable to your company.  And why they take deals away from less aggressive competitors.  And why they wield such influence internally.

What should you expect from sales teams that don’t get their favorite features committed in your MRD?  The same behavior that you’ve consistently rewarded them for: lobbying Sales executives about the strategic importance of their deals, having customers call you demanding action, rejiggering revenue projections to improve relative ranking, taking you to lunch, asking your boss to send you “into the field” for a week, insisting that one more feature can be shoehorned into the release.  You may call this “politics.” Sales teams call this “influencing decision-makers to improve the MRD process.” Remember that you normally applaud this approach.

Now, we have an analytically-minded product manager beset by account teams trying to reprioritize the MRD.  Each sales team has some legitimate argument or new information to present.  You would rather be managing the next phase of product delivery than listening politely to ten more pleas for help.  How did you find yourself in this situation, and what can you do next time to avoid this trap?

Political Issues Require Political Solutions
Allocating scarce resources always leaves some people dissatisfied, and drives them to escalate complaints or question the decision-making process.  This is certainly true of MRDs, which prioritize Engineering’s projects and schedules.  You can call this “politics” if you like, or “group decision-making” or any handy phrase from the MBA Organizational Behavior handbook.  Regardless of the label, even the perfect MRD will leave some of your constituents unhappy.  To keep the process moving forward, you need political support for the decision process and your final choices.  Generally, I’d suggest this comes out of a pre-negotiation with the head of Sales.  Imagine this discussion with your VP of Sales:

• “If we’re going to hit our delivery dates for TechX version 5, we can allocate up to 45 engineering-weeks to one-off enhancements for high profile customers.  I need your help to support the most important deals.  I’ve built this spreadsheet of requests, required effort and likely revenue.”


• “OK”


• “Looks like we could commit to these 5 special deals for GM, Goldman Sachs, Deutsche Telekom, the Air Force, and Safeway.  That leaves 20 other deals uncommitted, including Sloan Kettering and FedEx.  Are there any you’d move up the list and replace the ones I chose?  After all, I’m just a lowly product guy and not the all-knowing head of Sales.”


• “This looks about right.  Good job.”


• “One other thing I need: those next 20 account teams are going to be pushing you hard to get their enhancements back in.  I need your commitment that we won’t add any to the list without pulling off one of these 5.  If we expand the requirements, the release date will slip and you’ll lose several of your top deals.”


• “Hmmm.  How about if I go over your list with my regional managers and make sure this is right?  We’ll get back to you by Monday”


• “Absolutely.  You’re my customer on this.  After your meeting, I’d love your initials at the bottom of my spreadsheet, so that I know I have the right information handy for follow-up discussions...”

What just happened?  You found someone in Sales to help make and confirm decisions, and a defined method for considering changes.  When the sales rep covering United Airlines calls you, feel free to explain that her VP of Sales approved the final list.  This also sets up a more rational discussion about changing priorities: if FedEx is suddenly more important than Safeway, you can explore the revenue and technical trade-offs involved in swapping their place in the queue.  Getting “buy-in” from Sales management means that your choices are more likely to meet Sales’ overall goals and revenue objectives.Of course, this applies to the other key constituents of your MRD: executives in Engineering, Marketing and perhaps Finance or Manufacturing.  Having your decisions ratified now by future lobbyists will keep things moving.

Product managers are paid to make decisions that have an impact on the broader organization.  This makes us part of the internal political process.  Rather than ignore this reality, we need to understand how decisions are made and re-made, then design our processes to let the real world help us.

Risk-Sharing and Customer-Perceived Value

Whenever customers buy your product or service, there’s a leap of faith that they will get value from you. An alternative is to offer your solution in return for some of the savings — and to measure this in the customer’s own business units. Even if you fall back on traditional pricing, it will help the customer assign real value to what you deliver.

An example: my company creates knowledge bases (KB) that store the collected wisdom and policies of technical support teams. We claim to speed up problem resolution time by 20%, saving our customers lots of money. Typical pricing strategies are to price this “by the seat” or “by the month” or “depending on the size of your knowledge base.” None of these reflect why your customer is buying this solution.

Consider turning this around, and taking a portion of the actual value you deliver. “We think we will save you 20% of your support costs, or $600,000 per year based on what you spend today. We will give you our product for free, but want 10% of the savings. If we’re right, you pay us 1/10th of the cost reductions, or $60,000. Pay us less if it saves you less — and don’t pay us at all if there are no savings.”

Notice how this turns you into a partner, instead of a vendor:

• You understand the customer’s business. This proposal addresses your buyer’s actual need: to reduce support costs, and in language she uses with her own management. Normally, the customer has to hope that purchases will lead to results.
• The short-term risk is gone. It’s hard to reject a vendor who is willing to work for nothing. The fear that products will be useless ("dead on arrival") is removed. Collectively, corporate technology buyers have been burned many times.
• Your business interests are aligned. You have every incentive to make the customer successful, not just collect an up-front commission. This separates you from the many drop-and-run vendors with poor post-sales training and follow-through.

Sounds Great, I Think...?
On the flip side, these arrangements create a different set of risks for both parties. You are now tightly linked, jointly committed to delivering the savings that you promised. Dangers and concerns:

• You didn’t get paid yet. If your company needs hard cash for payroll and electricity, this isn’t it. CFOs and auditors will be unhappy with risk-sharing or revenue-sharing deals, and will insist on deferring sales commissions until the actual money arrives. Revenue may trickle in over several quarters or years.
• Customer implementations matter. Even the best products are worthless when not implemented, and some customers will never get things right. You now have to motivate and instigate a good outcome, even if it takes more resources than you planned.
• Measurement is hard. Defining precise and fair metrics for cost savings or incremental revenue is tough. You may be wrestling about what costs are “included” in relevant savings, or how much additional revenue would have come in without your brilliant marketing program.
• You may ultimately be overpaid. Customers should do some mental math about upsides, not just downsides. If your new web commerce application brings in $100M in new business instead of $8M, are they still willing to pay you 10%?

In a famously apocryphal story, one big computer company ‘gave’ a mainframe computer to Sabre early in the development of airline reservation systems. The system was delivered at no charge, but with a cents-per-transaction agreement that would continue paying for the life of the application. Over the years, this was dramatically more than the initial value of the gear.

So Who Would Agree To This?
In reality, not many customers will sign up for this kind of split-incentive model. It is hard to define, hard to approve through Accounts Payable, and generally doesn’t fit corporate purchasing models. It can still help you close a traditionally priced sale for services or products—by forcing customers to calculate your value for themselves. We’ve turned their ROI into your own ROI and shown how much you can contribute.

Imagine that you are a world-famous designer of automotive plants, offering to help a client reconfigure his truck line. You think you can squeeze out 5% more SUVs per day by re-arranging various steps in the assembly process, and have asked for a portion of the incremental profits. Your client’s internal musings go like this:

• “My plant is building 400 trucks per day now, and Jim thinks he can boost this 5%, to 420. Allocated overhead per truck is $1000, so we would save $20,000 per day in plant and equipment by squeezing out 20 more trucks...
• “That’s $4M per year. I’m a hero if I can deliver even a piece of this...
• “Jim wants 8% of the improvement, though, for the first two years. That’s $320k per year. No way that I can get my CFO to sign off on this. Besides, if he does even better, we’ll owe him even more. I need to negotiate a fixed fee...
• “Wonder if he will settle for a one-time $250k engagement? Then we get to bank the rest of the money we would have paid him.”

In fact, he will probably have this precise discussion with his boss before asking to sign you up. If you can help a client think through your value to him, then justifying a small portion of it shouldn’t be so difficult for either of you.

Not a New Thing
Historically, we’ve seen incentive pay for commissioned sales people, Hollywood talent agents, and lawyers taking contingency cases. It’s emerging in the web search market ("pay per click"). Pushing this to the extreme, there might be lots of pay-for-performance schemes:

• Direct mail agencies getting higher fees for response rates over 1%
• Academic coaches rewarded for their pupils’ SAT scores
• Cable TV companies paid for the number of channels watched, rather than delivered
• Home security patrols with rebates for break-ins
• Product managers who want a small portion of eventual revenues for their MRDs and pricing strategies...

Most of these are fraught with difficulties and moral hazards, but considering them may present some novel opportunities.

Offering to share results and risks with your client enables some exciting discussions. Even if you fall back on more traditional pricing, you’ve demonstrated your appreciation for the customer’s own issues.

Why are there Serial Entrepreneurs?

From the outside, it might seem that joining a fledgling start-up should only be about economics and the big payoff: the popular business press always has stories of farsighted technologists, instant millionaires, and thirty-somethings coping with Sudden Wealth Syndrome. And there are certainly enough folks in the Valley who have made it that most of us know one.

This strikes me as too narrow a view, though - and leaves out the important emotional aspects of start-ups. Deep into my fourth adventure, I’m less occupied by eventual exit strategies than by the day-to-day challenge of managing chaotic growth.

If getting rich were the only motivation for joining a new venture, there would be a steady migration of one-time “winners” leaving Silicon Valley to buy Napa wineries. Instead, I see teams from successful as well as failed start-ups throwing themselves into new ventures again and again — reinventing themselves and reinvesting their time in yet another dream. Rather than an end goal, this seems much more of a lifestyle, an addiction, an ongoing creative cycle.

Running the Numbers
First, a few dispassionate statistics: most proto-companies never get past the “idea” stage, with 90%+ closing without ever getting funded. These consume months (years) of unpaid work and late nights from their founders, with very few getting a first product to market. Among companies that raise first-round venture money, more than half shut their doors and return nothing to founders or investors. The small fraction of “successful” companies — those that achieve a soft landing and pay back their investors — are mostly acquired for their intellectual property. There were only 69 IPOs in the last half of 2003, with average value of $196M.

All this is a round-about way of saying that the odds of any particular start-up delivering serious money are quite slim. Even with a great team. And on-schedule product delivery. And good market timing. On top of that, life-altering wealth is only possible for founders, executives, and the first handful of employees.

Rationalizing our Choices
Why lay out such a grim picture? I’m looking for other motives. Silicon Valley seems to be fueled by more than simple greed. Here’s an assortment of motivations and rationales: perhaps a few will feel familiar to you. After all, none of us is single-minded or purely rational…

• Gambler’s Fallacy. The odds don’t apply to me. I’m much smarter, see the market more clearly, and can form the best team in this new space. My VC contacts will jump at the chance to fund us, for “first mover” advantage. Our founders have all formed companies before, so we’ve made our mistakes elsewhere. (Do you know any founder who doesn’t truly believe this?)
• I won’t work for big companies anymore. The big rush of a start-up is sitting face-to-face with customers and trying to solve their problems. There’s a scramble of activity focused on actual results, not an internal negotiation among business units and multilayered functional organizations. My little team can build and ship a solution in 4 months by avoiding the 18 months of budget reviews and executive sponsorships and trade-offs that are inevitable in a 1000 person company. 
• I can’t work for big companies anymore. After a couple of start-ups, I’ve lost the patience, process view, and polite attitude that bigger companies demand. My urgent need to make something (anything!) happen leaves me unable to sit through a two-hour budget meeting. I can’t resynch my “fix it today” expectations with the long-term planning of a broader organization. 
• It’s not the company, but the work. My sense of belonging is to my functional team, not to this particular start-up: I’m a journeyman tech writer (QA engineer, channel sales manager, product marketer) rather than a long-term employee. Being at a one-product company means that I’ll have fewer reorganizations and interruptions, since we have only one thing to build. If this company evaporates, our entire crew will move to the next start-up — and we can pick up where we left off. (This might be like the medieval stone masons: when one cathedral was finished, they packed their tools and walked down the road to the next cathedral-in-progress.) 
• Big companies are no longer hiring. Since exiting HP or Sun or Oracle or SGI a couple of startups ago, there’s no way back. There’s no stability to be found in the Valley, and I might as well have some upside. Over the course of a career, I’m certain to be at one start-up that makes me a bundle. What’s the alternative? 
• The valley is really one big company already, just broken into many parts. There are partnerships, zaibatsus, ecosystems and old-boy networks that substitute for much of the big company structure. If I think of business development as the modern replacement for departmental politics, everything looks the same as before. My last few failed start-ups form a terrific alumni network. 
• Start-ups are addictive. “Hi, my name is Rich and I’m hooked. I was clean for two years, but somehow fell in with another venture-backed company...” Perhaps all of our rationales are irrelevant, and we just crave the daily confusion and adrenaline. Smart folks can eventually justify any behavior.

And so on. Perhaps one of these strikes home. Or, if I’ve missed your special rationale for being part of a jumbled experiment, please let me know. There’s probably a twelve-step program here that a clever entrepreneur can shorten to four steps — and ship in 1/3 the time.

Being part of a start-up is about more than get-rich-quick dreams. It’s an emotional commitment to a hurried, harried, adrenaline-driven way of working. For those who can cope, it seems oddly addictive.

sales-friendly price lists

Price lists are never quite current enough, sufficiently detailed, or cover enough of the awkward special situations that customers raise. So, there's a tendency for HQ product and pricing folks to do a lot of tinkering on the margins with their price lists. We may be forgetting the "consumers" of price lists, though: sales reps who pay our salaries and customers wondering what to buy. Complicated pricing models may be self-defeating.

First, the necessary disclaimer. I'm someone who takes obscure pleasure in tuning prices and packaging for marginal improvement. Finding a clever way to boost profits by another 1% is an intellectual victory. Rejiggering bundles and suites is a way to signal which products are important. Part numbers beg for housekeeping.

I see hidden costs in excessive revisions to price sheets, though. Let's consider two: slow absorption and excessive complexity.

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Publishing Isn't the End

Sitting in the corporate ivory tower, it's easy to imagine that publishing a new price list is the completion of a process. After intense negotiations among the financial / engineering / marketing folks, you've come to some agreement. At 10AM on a Tuesday, you formally post a new version of your price list to the company website and begin to mail it out to key resellers. In reality, the work has just begun.

Throughout your sales channel and customer base, there are now people with outdated price sheets. Not just the most recent one, but 4 or 5 generations of out-of-date product numbers and configurations and prices. Some copies are pinned to cubicle walls, others are laminated in binders or stapled to slow-moving customer proposals. Even though these are legally invalidated by your new version ("effective immediately, supersedes all previous"), the world doesn't stop. And you really don't want your sales force to interrupt deals already in progress.

With an aggressive push, you've started the trickle of new price lists replacing old. Unfortunately, sales teams don't share your fanatical devotion to staying current, and don't want to confuse prospects with new stuff. I usually assume 30 to 90 days for word to get out.

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What to do?

• Change as few things as possible. Assume that resellers and customers will be working from last year's list, so identical prices and product numbers will let them place some of their orders correctly.
• Choose a regular expiration date for price lists, perhaps twice per year. Even if nothing is new, the old price sheets will be replaced each January 15th and July 15th. Your biggest challenges will be to get sign-off on all changes before the deadline, and to avoid interim updates.
• If publishing schedules won't work, tie new price lists to major product announcements. You will be sending out cartons of new materials anyway - data sheets, presentations, train-the-trainer videos, whatever. "Since WidgetWare v6.0 replaces v4.0 through 5.9, we are adding its new modules and packaging to our revised price list. Previous price sheets are now obsoleted."

Remember that price list updates are expensive for you and painful for the recipients. Regardless of the number of changes. Tiny improvements and clarifications are rarely worth the trouble.

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Keeping It Simple

A bigger problem is an overly complicated price list. This may be a reflection of an overly fussy pricing model that has too many dimensions. ("For 50,000 transactions per month or less, the per-seat charge plus the per-server charge apply except when the customer wants a site license...") Mere mortals will never get it right, even with 100 pages of examples.

Similarly, complex price lists may be the accumulation of different usage scenarios. If a PM has failed to choose a target customer and application, she may try to define a half-dozen different ways to buy her product, and wrap each in its own pricing model. ("For hosted applications, see page 3. For pay-per-transaction customers, page 4. One-time licenses plus annual maintenance on page 6.") In the real world, it's very difficult to define the exact boundary between hosted and leased software, forcing every large sale to be reviewed by Talmudic scholars.

Out in the field, where sales teams wrestle to bring in your paycheck, pricing should never be the focus of a sales call. You want your reps to spend prospects' precious time on benefits, solution selling, and creative problem-solving. As soon as pricing becomes the focus, the sales team loses their ability to sell value.

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Sounds Like...

Try on these three customer conversations about an accounting package:

Worst:

• Sales rep: "...it includes general ledger integration, Sarbanes-Oxley reporting, automatic calculation of Federal and state depreciation, and meets all of the requirements you've listed in your strategic overview."
• Customer: "Great. How's it priced?"
• Sales rep: "Well, depending on whether you choose the server-based option with concurrent licensing or the per-seat ASP hosting approach, and estimating your usage at 500 to 1000 completed transactions per week plus 200 MB of downloaded reports and partial support upgrades..."
• Customer, unspoken: "My head hurts, and I'll have to run every scenario myself to see which is the best deal."

Your masterpiece is alienating customers. Dumb prospects will walk away, and smart ones will force your rep to negotiate against himself. Expect to hear about it later.

Weak:

• Customer: "Great. How's it priced?"
• Sales rep: "I have the Nov-25th price sheet, and it was $215 per seat per year plus options, but there may have been some changes since then. When I get back to my desk, I'll check the online version and send over a quote."
• Customer, unspoken: "I wonder if this guy is disorganized, dishonest, or just works for a screwed-up company."

You haven't helped your team close the deal.

Best:

• Customer: "Great. How's it priced?"
• Sales rep: "It's roughly $200 to $240 per seat per year, depending on the options."
• Customer "OK. I'd really like to see you demonstrate the interface with our existing warehouse systems...?"

Your team sold solutions and benefits. Pricing was never the focus and didn't confuse anyone.

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Sound Bytes

Sales teams want to spend time selling benefits and solutions. Customers want to solve problems, perhaps with the stuff you sell. Pricing is best when it is simple and stable enough to blend into the background.

Insider Thinking

Product managers and other product champions spend a lot of their time driving internal processes and decisions — the daily incremental struggle for progress on pricing, packaging, release schedules, upgrade policies and other bits of the production puzzle. This relentless motivation is indispensable, the tech equivalent of keeping the trains running on time. PMs should also be spending time with customers, refreshing their sense of needs and marketplaces.

It’s easy to get stuck at headquarters, chairing meetings and shepherding action items. Being important is habit-forming. In fact, the more you drive as product champion, the easier it is to be shackled with additional internal responsibilities. Too long without a road trip, though, and you can lose that visceral sense of customer reactions. I call this problem “insider thinking:” losing touch with external success by over-focusing on the details of delivery processes.

I’m recently back from a road trip to customers and industry press — the best way to combat insider thinking. The trip called to mind some oft-seen examples (with products and markets changed to protect the guilty).

Packaging by Organization
You’re bringing out a new database product that sometimes needs a separately delivered device driver. Why is it separate? Internally, you have a very rational explanation about… divisional revenue recognition and how the Networking Drivers group needs to track shipments to justify its effort. Or uncoordinated release schedules. Or the terms of a restrictive license agreement. Or having a common set of part numbers across all divisions. Or because changing a software bill-of-materials takes months of political infighting.

Within days, Customer Support is getting calls from customers who can’t install your latest release. Most callers have ignored a README and several product bulletins explaining that updated network drivers are required, and must be ordered separately. Even worse, the sales force keeps submitting new orders without the specially discounted driver package ("DP8410-db-linux") that they’ve been briefed on.

Insider thinking has you steamed: “What more can I do to educate customers about the need for supplemental driver packages? RTFM!” Outsiders have a simpler view, though: “How could you ship me something that doesn’t work?” Your company’s organizational problems are of no interest to paying customers, so should never be part of your packaging strategy.

Parents will be whispering obscenities next week as they try to assemble holiday gifts for their children. Including a 20-cent Allen wrench with the bicycle kit might be helpful. Or a sticker that reads “nearly-impossible-to-find batteries not included.”

Cost-Based Pricing
Prospects will compare your prices to the competition, and ask why yours is higher. (Somehow, it always is.) Good answers are about customer value: extended support, saved time, more features, ROI, customer endorsements, or product integration.

Your insider thinking is showing, though, if your prices are justified by inputs. Customers rarely care if you have more expensive engineers on the team, or headquarters is demanding profitability, or you signed an unfavorable license agreement with Microsoft. Don’t mention that you’re using outdated memory boards, or that Purchasing forgot to buy in bulk.

[For instance, Apple iPods are priced by song capacity, not at 35% above cost-of-goods. Likewise, we choose heart surgeons based on reputation and referral, not on least cost per valve replacement or their Porsche payments.]

Decide internally if you can compete, behind closed doors. Chain an MBA or two to spreadsheets until you understand break-even and ROI for each new project before launching the latest teen-targeted PDA or Wi-Fi clearinghouse. Once the decision is made, though, start pitching customer value — and hide the insider thinking.

Talking to Yourself
At a trade show, random attendees ask what your company does. Pulling out your cue card, you recite something about the “dominant OEM vendor of mid-market, cross-platform storage optimization algorithms.” After a few dumbfounded looks, you try again with “our software helps squeeze more data onto disk drives.”

What happened? You’ve dragged out a complex internal positioning statement, painfully built by a marketing-engineering committee. Motivated by the best insider thinking, PM spent months drawing competitive matrices to show Gartner Group how your start-up is slightly better positioned than your VC-backed arch-enemies

Unfortunately, most customers have never heard of you or your competitors. They don’t care if you focus on the mid-market or that your archrival only runs on Windows. There’s not a single meaningful word in this positioning mumbo. Spending some time with prospects (alongside the sales team) reduces your jargon level and refreshes your customer vocabulary.

Inside the Beltway
National politics is an extreme case of insider thinking: sometimes news and decisions from Washington DC are inexplicable to folks half a continent away. The internal complications of political decision-making and fundraising can result in odd or contradictory outcomes. We often refer to career politicians and lobbyists as “inside the Beltway” that circles Washington and its near suburbs, and their art-of-the-possible solutions as “inside the Beltway thinking.” Here’s to being an Outsider with only the market to answer to.

Fake Comparisons
We’ve all reverse-engineered competitive matrices to look good. These are the familiar checklists of features and benefits that prove we outshine the other guys. (By the way, they have a similar matrix that outscores us.) Often, we reach too far.

These fake comparisons don’t award any check marks to the competition, and include obviously silly advantages. ("Day and night operation” for flashlights comes to mind.) Choked with insider thinking, they insult the customer. Smart customers will have several versions and judge you on your helpfulness. [Even if you forget, competitors will mention that your hardware failed FCC radio testing or is suspected of causing blindness.]

Online ROI calculators suffer a similar fate. We’ve trained customers to view these very skeptically, especially when the expected savings is impossible to measure. You may be more helpful to prospects by providing the elements and assumptions needed for a custom cost justification — rather than jumping to unexplainably great results.

Hoping for naive customers is insider thinking. Providing customers with relevant, meaningful product comparisons helps them through the selling cycle. Coincidentally, this is also good marketing.

Stuck at headquarters, it’s easy to forget customer realities and needs. Great PMs know that internal goals and criteria are only one part of a successful product. Frequent escapes to talk with live customers are essential to remind us of what’s important.