to the January, 2003 issue of the SVPMA newsletter. This issue
covers the November meeting and the most recent book by Paul Wiefels
of the Chasm Group. Also, in this issue, Contributing Editors
David Highbarger writes about the challenges of internationalization
a product and Sonya Doernberg explores careers in biotech marketing.
8, 2003, Marissa Mayers from Google will present on Creativity
in Product Management
of Product Management - Two Day Seminar
As another special membership benefit from the SV Product Management
Association, we are offering a $500 off discount to members to
the upcoming Fundamentals of Product Management offered by Sequent
OVERVIEW: The Fundamentals of Product Management course teaches
practitioners how products are created, developed, launched, and
managed throughout the entire life cycle. Students are introduced
to the disciplines of product planning, new product introduction,
product life cycle management, and product portfolio management.
It reinforces the need to link corporate strategies with customer/market
information and product capabilities. Supporting this extremely
thorough introductory course is an explanation of product management
roles and activities. Through a series of "skill building" exercises
and interactions, we equip the participant with key tools and
skills, including market research, financial techniques, and cross-functional
OFFER: The course is offered to members of the Silicon ValleyProduct
Managers Association for only $895, which is $500 off its normal
price of $1,395. This one-time only offer is valid only for the
San Francisco delivery of this course (January 21-22) To register,
you need to call 1-800-606-2777 and identify yourself as a member
of the SVPMA.
SEQUENT: Sequent Learning Networks uses a comprehensive curriculum
derived from years of benchmarking companies, across industries
regarding their product management and product development practices.
We learned what the 'best of the best' do, and how the success
rates of their products is higher than those of companies who
don't utilize best practice approaches to managing their products.
Sequent's curriculum leverages a phased methodology supported
by best practices activities and tasks. It's curriculum is facilitated
by experienced coaches who can guide participants using interactive
discussions and relevant exercises.
THE WEB: Sequent can be found at www.sequentlearning.com
On the Move
you or a product manager you know has recently been promoted or
started a new job, please email the SVPMA at OnTheMove@svpma.org.
Applying the Chasm Group Model to Product Management
Wiefels, Co-founder and Partner of the Chasm Group, spoke to a
crowd of over 100 product management and marketing professionals
at the November 6th meeting of the SVPMA at the Wyndham Hotel
in Sunnyvale. Paul presented on Applying the Chasm Group Model
to Product Management, which is one of the topics covered in his
recently published how-to book The Chasm Companion.
opened with a reality check on the current high-tech malaise by
covering what’s in and what’s out. Some of the highlights were:
the next wave
the leaky pipe
Markets and Tornadoes
Alleys and Main Street
also out is your application category having its own line item
in the budget. All the areas are now lumped in with the IT department
budget. Since 40%-50% of a company’s IT budget is already committed
to maintenance, the total addressable market has already been
cut in half.
the news was not all bad, as Paul then reviewed the Chasm Model
and launched into strategies to survive and even thrive in this
current downturn. He offered five questions to evaluate one’s
vulnerable are we to fundamental marketplace change?
powerful is our category? Is
the power of our category rising or falling?
important are we in the category? (also realizing that we
can’t be more powerful than our category)
we have the right strategy to advance or survive?
our organization understand what it takes to compete?
we execute or are we playing to yesterday’s rules?
then stated that Product Managers must define themselves and take
responsibility for much more than the product. They should really
view themselves as Value Chain Managers because this is what is
necessary to be successful. The product manager must manage the
ROI of their solution; of which the investment includes the entire
solution, for example systems integration, and not just the application.
Further, the product manager must correctly address the needs
of the technology buyer, end user, and economic buyer on the customer
side. Linking these parts together completes the value chain.
The way in which these links are managed will change throughout
the Technology Adoption Life Cycle (TALC).
must also focus on selling to pragmatists, as the visionaries
who drive early adoption are in hiding after enjoying more than
a decade in the limelight. The problem with pragmatists is that
they see the risk before they see what the solution does. They
believe their business is different and do not reference visionaries.
Pragmatists buy a 100% solution. Therefore, the conventional approach
of building to 80% of the common enhance requests will fail. To
succeed in the bowling alley and in this market, you must focus
on a single customer segment and build the whole product for that
segment. You can then leverage that experience and product to
move into a similar segment.
conclusion, a company must change its strategy during the course
of the TALC, sometimes acting in the opposite way. With this in
mind and an honest assessment of your company’s category and position,
you can create winning strategies in this difficult market. To
learn more about Paul Wiefel's presentation, click here to see
a Product: Product Internationalization 101
article covers some of the critical basics of taking a product
to international markets, focusing on software and web-related
products from the perspective of US companies. There are many
steps needed to successfully launch a product in a foreign market.
As with any product launch, a company needs to conduct marketing
research to determine product requirements, positioning, etc.,
as well as sign appropriate licensing, marketing and distribution
agreements. What makes launching a product outside the US unique
is the legal and cultural differences, as well as the internationalization
of the software.
best way to develop a product that will be marketed abroad is
to build it from the very beginning with this in mind. This, however,
is seldom done since the extra effort would delay the launch in
the US market. This is not surprising since it is the largest
borderless market for most products, where legal and cultural
differences vary little compared to international markets. Therefore,
it remains common practice to conduct market research, develop
and launch a product solely looking at the requirements within
a product solely for the US, then subsequently reviewing how it
can be marketed abroad also encourages a very common organizational
structure; one that creates an international team that is separate
from the original "domestic" team. Once a decision is made to
internationalize a product, this almost always leads to freeze
on any additional features while the infrastructure and features
are made capable of working in an international environment. This
freeze, as well as the fact that international markets can take
2-4 times longer to reach a positive ROI (doesn't help that most
companies are driven by quarterly financial results), can easily
cause friction between the international and domestic team. It
is critical that the domestic product manager understands and
supports the internationalization effort, since they almost always
(my experience is 'always') have final say on the product roadmap
regardless of market.
a product has been internationalized, it can lead to longer development
time for adding additional features, since all features must support
international requirements. With all this, it is not surprising
that companies market abroad only after the market in the US starts
to mature, and there is a feeling that they must go international
to continue the expansion. Despite all the effort needed to market
internationally, once established, it is not uncommon for international
markets to show higher profit margins, partially because a lot
of development costs are absorbed by the US operations.
now review the three basic aspects that are unique to launching
a product abroad: Legal and Cultural differences, Internationalization,
While there was a lot of press in tech circles about Yahoo being
recently taken to court for allowing people to sell Nazi memorabilia
in France, US companies being confronted by foreign laws is nothing
new. One excellent way to effectively deal with the local culture,
legal environment, etc., is to partner with a local company who
has intimate knowledge of local laws, culture, business methods,
etc. Coca-cola, McDonalds among others are successful examples
of this. However, if you chose the wrong partner, you could end
up locking yourself out of a market. Do your homework upfront.
For example if you sign an exclusive distribution / marketing
agreement in Japan you could very well be locking yourself out
of 9/10ths of the market since the distribution system is not
an open system like the US; in many cases it is restricted along
corporate groupings. Do not assume anything. Research how other
companies have entered the market or failed trying.
I was developing some products for an international launch at
Netscape, our local partner came back and asked us to change one
of our business practices. This partner was affiliated with an
official government media organization, and they did not want
to distance them (including being banned) by allowing certain
content to be promoted. However this clearly clashed with Netscape's
philosophy of a borderless, censorless Internet. After about three
months of discussions which threatened to delay launch, we were
finally able to reach a consensus, which caused me to slightly
modify one of our business practices (this is an example of an
unanticipated internationalization requirement which is discussed
later in the article).
any product launch has its unforeseen gotchas that have to be
worked out. While product development gives you a straightforward
but undesired choice between delaying a launch or dropping features,
politics can be the most difficult since the solution is not always
the Software Ready
Once you have determined the internationalization requirements,
preparing software for an international market is a two-step process:
internationalization and localization.
a product simply means getting it ready for one or more non-US
markets. Localization, on the other hand, means getting the product
ready for a specific market. Understanding the difference here
is critical, if you localize a product by looking at a single
market, you may very well discover you need to go back to the
drawing board before entering another international market. As
mentioned before, internationalization almost always requires
a product development freeze, so do the research upfront.
example of this would be the registration. Netscape followed the
traditional path, there were about 500 people assigned to the
domestic website, and 30 people for the 15+ international markets.
The registration process was US-centric, one line for street address,
with the expectation of a five digit numeric zip code (which does
not match most other countries ). Since we wanted to allow applications
to be customizable, this required a localized registration system.
first step was to understand the various international requirements.
We made a large effort to understand the various privacy laws
since almost the entire world has stricter laws than the US. The
regulations varied by different age groups. Further, we strove
to create a registration form that allowed people outside the
US to add their data naturally (not customized to US style of
effort occurred during the time that the European Union was getting
ready to implement new online privacy laws, and we did not want
to be out of sync with this (again politics / legal). After researching
the privacy policies for all the targeted regions, I was able
to define the different age breakdowns for specific regions /
countries. Interestingly, Latin America had the strictest privacy
laws. We then determined the different registration field requirements,
including which fields (e.g. 2 or 3 lines for street address)
and methods to validate the info being entered.
with the business logic and general requirements, a good product
manager must also get involved with many of the technical aspects.
For example, when counting Chinese characters, which are double-byte,
am I supposed to double the number of characters needed for that
field when specifying requirements in my functional spec? By the
way, the answer is 'no'. Or since the servers are located in the
US, a German 11 year old registers, then when you see their age
/ country you must purge all their personally identifying info.
There was some discussion as to whether the fact that the information
may sit in memory constitutes a violation. The registration servers
sat in the US, and we had web servers in Germany, but concluded
that it was unavoidable so we continued crossing our fingers.
The point is that you'll spend a lot of time analyzing stuff that
would not be necessary for a US-only launch. We were dedicated
to establishing ourselves in Germany and wanted to abide by local
laws instead of figuring out if we could escape them if we ran
gathering all these requirements and different scenarios, there
was still a lot of work creating an integrated flow for the applications
we were developing as well as minimizing the impact to the domestic
team. Due to the various factors, including using a database that
could not handle double-byte characters, it took almost two years
to internationalize our registration system, even longer if you
count other earlier attempts.
once you get the product ready for an international audience,
then you must localize it. Sticking with the registration example,
we then had to translate the help files and instructions, make
sure the proper fields were correct, and that they flowed properly.
After we were done with all this, it was ready for a single international
market. We were able to expand easily into other targeted markets
since we did the proper research upfront and had internationalized
our registration system to accommodate each countries local requirements.
conclusion, developing a product for either domestic or international
markets have a lot of similar steps; conducting market research,
establishing marketing and sales channels, marketing materials,
PR, etc. The difference between getting a product ready for a
domestic market versus an international market is that almost
all steps take longer and mistakes can be more costly, in both
lost revenue (and legal issues if you did not do your homework
upfront) as well as additional engineering effort. Organizational
structures that separate out and subjugate the international team
also subjugate their efforts and potential return of international
markets to domestic markets. To be successful in international
markets, it is necessary that the entire organization supports
expanding abroad and has a realistic understanding of the effort
needed to make it successful.
Highbarger started his product management experience while working
for IBM in Japan. He honed his web experience during his four
years at Netscape, where he successfully established several new
products in the Asian, Latin American and European markets.
About Biotech? Some Words of Advice From Those In The Field
by Sonya Doernberg
high-tech being caught in a downward cycle, many Silicon Valley
Marketing professionals are considering a transition into biotech.
The biotech sector has been getting a lot of attention due to
its relatively stable growth. Other factors, such as the mapping
of the human genome and the threat of a biological warfare have
woken up the scientist, if not the crusader, in many of us.
is biotech marketing different from high-tech marketing? Here
is what I was able to learn in talking to Exelixis and Gilead.
in South San Francisco, Exelixis collects genetic data from fruit
flies, worms, zebrafish and mice to develop drug targets for cancer
and other diseases. These drug targets are of interest to companies
looking to design new medications.
Greer, The Vice President of Communications
at Exelesis, says that biotech product development is highly regulated.
It can take as long as a decade to bring a new treatment to fruition.
As a result, many of competitors become collaborators in the process.
Exelixis, for example is sharing some of its discoveries with
Bristol-Myers Squibb to create new cancer therapeutics that would
kill cancer cells while leaving normal cells intact.
engaged in development and research, Exelixis, like many young
biotech companies, has yet to introduce a product to market. In
the early stages of a biotech company or start-up, public and
investor relations groups are the marketing arm of the company.
contrast, Foster City-based Gilead has six products on the market.
Gilead is a biopharmaceutical company, focused on therapeutics
for infectious diseases. A balm by the name of Tamiflu is designed
to fight the flu bug. AmBisome, a "best-seller" in its category,
is used to combat systemic fungal infections that can accompany
AIDS. Viread is Gilead's HIV therapy product used with other antiretroviral
agents. DaunoXome treats Kaposi's sarcoma. To cure eye infections,
Gilead rolled out Vistide. And hepatitis B is treatable with Hespera.
Founded in 1987, the company has more than 1,000 employees worldwide.
Its well-known chairman, Donald Rumsfield, resigned in 2001 to
be come U.S. Secretary of Defense.
Flood has been with Gilead's communications group for three years.
"Marketing starts with physicians," said Amy. "This is a physician-driven
market. Marketing begins with clinical trials."
trials are medical research used to determine whether new drugs
are safe and effective. The research is usually funded by a variety
of organizations or individuals such as physicians, medical institutions,
foundations, voluntary groups, pharmaceutical companies, and federal
agencies. Clinical trials is one of the reasons why it can take
10 years to bring a therapeutic product to market.
an English major with an interest in science, Amy spent several
years at a New-York based public relations firm, focusing exclusively
on pharma and biotech accounts. Amy has always found biotech to
be very rewarding because of its potential to save lives. However,
she also thinks that many P.R. skills are transferable from industry
to industry and that P.R. tactics are essentially the same across
asked Amy what words of wisdom or advise she has for those who
are contemplating a transition into biotech. "Take a look at your
skill set and how to translate them. You may have to take a step
back in terms of title or make a lateral move." It is important
to be ready to "jump in with both feet." Her most encouraging
words to those seeking refuge from high-tech: "Smart people are
Doernberg has been working in market research for over 15 years.
Her background includes hardware, e-commerce, financial services,
and health care industries. She is a graduate of the Wharton School
Book Review: The
Wiefels, of the Chasm Group, spoke at the November 2002 SVPMA
event about applying the Chasm Group Model to Product Management.
In this issue, we review Paul's new book, The Chasm Companion.
the cover of The Chasm Companion reads "a fieldbook to
Crossing the Chasm and Inside the Tornado". These earlier works,
published by Chasm Group founder Geoffrey A. Moore in 1991 and
1995 respectively, remain two of the most important texts written
about high tech marketing. Adding to these titles is no small
task, but Paul Wiefels achieves his goal of creating a useful
field book and meaningful text in it own right.
The Chasm Companion shows the reader how to execute on
the marketing strategies laid out in Moore's earlier writings.
The book is divided into three sections:
- How High-Tech
the Market Development Strategy to Market
1 covers the Chasm Group Strategies that have been the subject
of Geoffrey Moore's books. It begins with a back to basics, post
internet bubble review of the technology adoption life cycle (TALC):
it starts with the early market, proceeds through the chasm, the
bowling alley, the tornado, and ends on main street. If you have
read the other books listed above, this is a solid refresher with
some great real life examples. If not, this section covers the
concepts in enough detail to realize the full benefit of the other
the end of section one, it is clear that the optimal strategy
depends on where your company's products are on the TALC and your
market position. This creates a smooth transition into Part 2,
which has a series of tools to help the reader develop a market
strategy. The reader uses the first tool to locate where his or
her products are on the lifecycle curve. The next chapter addresses
discontinuity analysis to measure whether the benefit or gain
realized by the customer justifies the outlay or pain required
to implement to the solution. Finally a nine-point checklist lets
the reader identify everything from the target customer, to necessary
partners, to pricing, and competition. This checklist is the basis
of the market development strategy. Paul then covers the variables
that effect the ability to create a market, the attractiveness
of that market, and ultimately impact the company's ability to
penetrate that market. The relative priority of the elements on
the checklist change throughout the TALC and with a company's
market position relative to the competition.
final section, Part 3, details four initiatives that can determine
the success or failure of the market development strategy. This
includes validating the strategy, delivering the whole product,
the marketing communications plan, and field engagement strategy.
In the strategy validation, the reader tests whether the assumptions
behind the nine-point checklist are accurate. Delivering the whole
product deals with completing the value chain for the customer
based on the TALC. For the early market, the generic product is
sufficient and the customer will cobble together the necessary
pieces to complete the solution. But your company will never cross
the chasm until the whole product is present and elements of the
whole product will change as the product matures. The marketing
communications plan focuses on creating demand for the product
and shortening the sales cycle. Finally, the field engagement
strategy aligns your company's selling process with the target
customer's buying process.
element of the book that makes it unique and valuable is the considerable
space devoted to succeeding as the number two, three or Nth player
in the market: in Chasm speak, the chimpanzee or monkey. There
are many successful companies that do not enjoy gorilla status
in their market space. Paul Wiefels shows how the strategy differs,
sometimes radically, when you are not the market leader.
lifted the following from the epilogue of the book. It sums up
the need for a company's strategy to be dynamic as a technology
company's competitive advantages in sum can be sustained over
time. The parts that make up these advantages, taken singularly,
are not sustainable."
simply, what made you successful today will not make you successful
tomorrow and this is why you should read The Chasm Companion.
Letters to the Editor
you have an issue you would like to share with the membership,
feedback on a presentation or article, or suggestions for the
newsletter? Let us know. Please email all comments to email@example.com.
is an association for Product Managers in Silicon Valley
and around the San Francisco Bay area.
provide a forum to share day-to-day experiences and insights
in Product Management
create a safe network of peers
promote research and education in Product Management
expand the newsletter, the SVPMA is looking for contributing
authors. If you have an idea for an article or would like
to be part of the editorial staff, please email firstname.lastname@example.org.