Wikipedia defines “industry” as the aggregate of manufacturing or technically productive enterprises in a particular field, often named after its principal product. Many people get this confused with domain experience, which (in my view) comes from having worked within a specific industry for several years. This article explains how to take on the role of product manager in an industry where you have limited experience. Essentially, success means immersing yourself in that industry.
An important part of being a product manager lies in understanding the industry where your product competes. Contrary to popular opinion, you don’t actually require hands-on market experience to understand a market. What you really need is the determination to immerse yourself in it.
Simply put, when you don’t have actual experience in a market, you first need to understand the customers within that space. This understanding is achieved by reading everything you can, viewing every video you can, and constantly talking to everyone you can. Until you get it. Until you really understand the industry.
I’ve immersed myself in four new market spaces in my career. Here are some examples of the sources I study—regularly and intensely—for the first three or four months:
- Analyst reports
- Web searches
- Competitive data and analysis
- Web analytics
- Sales data
- Client/user interviews and discussions
- Internal feedback
Many analysts spend their time living within specific industries. Consider industry analyst firms such as Forrester, Canalys, Gartner, and IDC. All are great organizations, and most will release some excerpts of their analysis via press releases and free reports.
Unfortunately, accessing complete reports is a very expensive way to get the knowledge you need. And many times, the information they present is not compatible with what your own research shows.
It’s not that I don’t trust analysts—because I do. For the most part, they put hard work and time into their reports. But remember: They aren’t the ones out there competing in your market, selling your product, trying to close deals with your customers. If they say one thing, and you find the opposite, believe your own research first. Chances are, you’re right.
Researching by way of Google, Yahoo!, and other search engines can be time consuming. But it can also yield interesting results and information you may not find elsewhere.
Web searches are critical to understanding your market, customers, and competition. Does a competitor have a blog? A user forum? Do they use Twitter? What are other sites saying about them? These are the types of questions you can often answer by way of a few hours spent with a search engine.
Finding blogs written by folks that are passionate about your industry can be an invaluable source of information. And those writers might turn out to be some of your best community members or even customers. Strike up a relationship with them as best you can, and see if they will take part in your product surveys and betas, answer basic questions, and more.
There are numerous blog search engines available. The two favorite I’ve had success with are Google Blog Search and Icerocket. I recommend continuously crafting fresh searches for new information (posted in the last week or month—depending on the posting volume and your eagerness for information), as well as subscribing to the RSS feeds for those results.
Think about other ways to leverage blog searches. You can use blogs not only to find information about an industry or your own company and products, but they can help you gather details about your competitors, as well.
Competitive data and analysis
Competitive analysis is one of the best ways to gather information about the industry in which your product competes, as well as about specific competitors. This is especially important when you are responsible for creating entry barriers against them, rolling out effective competitive pricing strategies, and even taking business away from them.
Remember, this competitive analysis does not have to be complex when you are just starting to immerse yourself in a new industry. Here are some helpful pointers that have gotten me through gathering competitive knowledge in the past:
- Do a feature-by-feature breakdown (simple spreadsheet).
- Determine how you might position your product against a competitor.
- Complete a very basic SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).
- Gather pricing details to figure out how you stack up.
- Collect any marketing materials you can (sell sheets, case studies, and other collateral).
The key to competitive analysis is to select three to five companies, get management agreement on that group, and go from there. You will end up using this information in concert with all of the other data you gather, so don’t spend many weeks analyzing five or more competitors.
Your mileage will definitely vary with Twitter. As a relatively new business tool, many organizations will not have a deep enough presence to matter to you. For example, if you are managing a steel product, you might not get the same Twitter data as if you are managing a new iPhone app.
If you find Twitter produces meaningful results, however, consider setting up search queries for each of your competitors and their products (and, in turn, subscribe to associated RSS feeds, so you don’t have to remember to search manually).
If you are working for a public company, you should also consider StockTwits, which provide alerts about stock prices and news. For example, if you are a product manager for Dell, you might want to set up a query for tweets mentioning Apple.
If your product isn’t currently aggregating web analytics, first find out why not, and then start doing it. The easiest way to begin is by using a packaged tool, such as Google Analytics or Omniture—which provide a plethora of information about your web traffic.
With these tools, you can’t realistically sort through all of the information they provide. Instead, work with your senior management team to establish Key Performance Indicators (KPIs). KPIs are crucial to help you understand why your product might be up in web search rankings—but, more importantly, why it might be down.
Best of all, web analytics can help you figure out how you are performing against your competitors. Services like Compete provide a basic comparative picture. And Google Analytics offers complete industry benchmarking, so you can compare and contrast your product’s performance (albeit anonymously) with others in the same industry.
Analytics are an important part of the industry immersion puzzle—but they aren’t the only answer. You can easily develop a nasty habit of relying too much on analytics. Remember, there are lies, damn lies, and statistics. Keep a solid perspective, and always ask qualitative questions before acting on analytical data— “Why?” and “What does that really mean for our users?”
Ah, sales data. This element of industry immersion is so faceted that it’s difficult to cover all of the important elements. But here are two keys that can help you build insight:
- Sales pipeline
- Win/loss analysis
Sales pipeline. In order to successfully grasp the industry and your business, you absolutely must have a sense of your sales pipeline. What’s coming in, and when is that estimated to happen? If that information is not readily available, spend time talking to each rep in your organization. They are on the front lines and can provide valuable insights.
There is a caveat, however—especially for new product managers. Salespeople really only care about one thing: the next deal in their pipeline. And that is the way it should be. If you have sales reps who don’t care about where the next dollars are coming from, you may want to re-evaluate your position there.
That being said, you can glean great information from your discussions with salespeople—especially about competitors and the purchasing decisions and buying cycles of your customers.
Win/loss analysis. Many experts have written plenty about this topic, so I won’t attempt to cover it in detail here. I will say this: Chances are, if you are the first product manager in your company, win/loss analysis has probably never been done. Win/loss is best done by Product Management to remain objective, but it’s often a volume concern. You must sell the sales manager on getting the reps to use basic win/loss information—they should want it since it can provide insight for them too. Of course, a rep will always want to protect their ego as the reason for losses might have something to do with the sales process, not the product.
Keep whatever they provide to a very basic level. The product manager can spot trends and decide what areas to follow-up on in more detail.
To get started, work with your sales VP or director. In this case, less is often more—don’t start out asking reps to waste their time completing a 45-minute survey after each deal closes. It will likely never get done.
Implement a brief survey (ideally within your CRM) that can be completed quickly (four to five minutes, tops) and without too much effort.
When analyzing win/loss data, you are primarily looking for answers to the “Why?” questions (especially about losses) and to gain some quick, actionable insights. Both will typically appear in short order. And when they don’t, you should use client interviews to gather more information.
Client/user interviews and discussions
Once you have immersed yourself in the market and have a solid handle on the problem your product solves, it’s time to start reaching out to clients.
By building a relationship with your sales team, you should be able to tag along on some calls or visits. This gives you a chance both to support your reps and to ask some important questions.
Ideally, you want to quickly develop a knack for seeing things from the user’s point of view. The faster you can do that, the better off you will be. Of course, it’s also important to recognize the limitations here, as well. Primarily, users don’t know what they want.
They can tell you what’s good for them—and, more often, what’s bad. You can flat-out ask what they think stinks; I’ve gotten some great responses out of that question, and it can immediately put people at ease.
But know that you have to combine what customers say with all of your other data to begin drawing responsible and accurate conclusions and crafting a roadmap and necessary plans. You have to think about what a user says and abstract the key points. They will never tell you, “It would be great if you could re-architect this feature so that it works like this....” But they will say things like, “I hate the way this feature works, and it drives me crazy.”
Sometimes you can uncover some real gems based on these client interviews and conversations. But typically, you have to analyze the data you get from the discussion and extrapolate from there.
Get your senior management and key stakeholders involved—early and often. Ask for feedback from everyone in your company. In many cases, you will have access to folks that have a ton of experience in the industry you are trying to learn and understand.
As product managers, however, we know that internal “data” is really a set of opinions. And as the instructors at Pragmatic Institute like to say: “Your opinion, although interesting, is irrelevant.”
Leverage the experience and knowledge of your colleagues and compare it to all of the other data you have gathered to create a robust picture of your customer, product, and market problems.
Some final observations
At this point, you are probably wondering, “What next?” The answer is to put together a market analysis document and step through it with your manager or executive team. Capturing your research on paper helps ensure you have clarity and understanding.
Setting a deadline to present your findings to your peers, direct reports, executives, and others in the organization can spur you to craft a set of recommendations that are highly relevant and helpful to the entire product or product line.
What’s most important is to combine the results from all of your industry immersion tactics to get the best result. Not all of these sources may be available to you, of course, and your mileage may vary depending on your organization and the industry itself.
But to ensure you are working with a full set of information, you constantly have to ask “Why?” and seek additional data to help you understand. But don’t forget to make decisions and move ahead. Research is relevant and necessary—but, ultimately, you have to build and ship product.
Before Immersion Begins
Before immersing yourself in any industry, there are a few things you must first understand. Here are three of the most important.
Know the problem
At the very least, you need a basic understanding of the problem you are trying to solve. This seems simple, and you may be thinking, “Of course, I know that.” But there are many circumstances where you actually don’t—and where the company for which you are working doesn’t either. For example:
- The company is angel-backed. Many times, angel investors will seek out great people and back them—assuming that smart folks will eventually figure out the path to success.
- The company is VC-backed and pushing the business to do things that may not make sense, but could result in revenue.
- You may in fact have been hired to identify and define a market problem.
- The company is in transition, and senior management is currently working to identify market problems to which their technology applies.
If you are in a situation where no one seems to care about the problem you’re trying to solve, you need to fight to address that fundamental requirement—or find something else to do. Product managers have no business being at a company where solving a market problem doesn’t matter.
Another flag is a company that attempts to solve too many market problems. A cliché applies here: Just because you can
do something, doesn’t mean you should. Start-ups with a “cool” technology patent often stumble on that cliché. They can always think of lots of things their technology could do that no one else can.
Understand market needs
One of the hardest lessons organizations must learn, and adhere to, is a simple one: If you don’t know exactly for whom you are building a product and what they do, you are already lost.
As the product manager, if you can’t clearly identify your market segments, why they would use or buy your product (i.e., the problem you are solving), and what makes you unique, you have some work to do.
Logically, after answering the question about the problem you are solving, the next natural question to ask is “for whom?” It’s crucial that be answered upfront because it can have core product impact. For example, you may be building CRM software—but that product is going to look drastically different if the CRM software is meant for investment bankers as opposed to vacuum salesmen.
The rules of probability favor companies that are laser-focused on a specific solution for a specific market rather than those that do everything under the sun.
What’s your answer to this question: If one of your clients offered you $10,000 to paint his house over the weekend, would you take it? Yes, this is an extreme case. But it makes the simple point that in order to understand your industry and take your product to the next level, you have to be comfortable (and your investors/backers have to be comfortable) with leaving money on the table.
If that’s not the case at your company, I recommend you try to shift that philosophy, if you can. If you are unsuccessful, you will need to make the choice about whether or not you want to continue to work in that type of environment.
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