About Joca

I've been helping companies succeed in the digital era by guiding them on how to create and manage successful digital products that connect their strategic objectives with the problems and needs of their customers.

Product vision

Despite being only 10% of a product leader’s time, defining the product vision is the most important responsibility. Without a clear product vision, it is very difficult to work on any other product topic. What are the priorities? What product team structure is needed? Is this request from the sales team important? And this one from the customer support team? And that request from the CEO / Founder? Should we focus on having more customers or retaining the ones we already have? These questions are very difficult to answer if there is no clarity about the product vision.

When I join a new company, whether in a full-time role or as an advisor, my first concern is to understand if there is a product vision and if it is clear to everyone in the company. This is always my first focus, because from the product vision derives all product development work.

What is a product vision?

The product vision is nothing more than an understanding of what your product will look like in the future. By “the future” I mean mid to long-term, like more than 2 or 3 years. How will it achieve the objectives of the company that owns the product while solving problems and needs for its users?

Building the product vision is a collaborative work done together with several people inside the organization, as well as with input from outside people such as customers and non-customers, suppliers, competitors, market specialists, etc. This is a job led by the head of product, whether he is a VP or CPO, whether he is a GPM. If he is a VP or CPO, the vision will scope all products of the company or area, while if it is a GPM, the focus of the vision will be one of the products, or part of a bigger product, that this GPM takes care of. For the GPM to be able to build the vision, he needs to have a clear understanding of the company’s product vision.

In my book “Product management: How to increase the chances of success of your software”, I explained that to make the product vision it is necessary to be clear about the company’s objectives, as well as to deeply understand the problems and needs that customers have and that will be resolved by the product. Some examples of product visions I helped build:

Locaweb Email Product

During my time at Locaweb, we put together the following product view for the Locaweb E-mail product:

Locaweb’s E-mail product will be the most complete and flexible email solution ** in the Brazilian market.

CONTA AZUL product view

We created the Conta Azul product vision as an image, because with the image it was easier to explain all the elements that we saw as the future of the Conta Azul product.

Conta Azul product vision

Gympass product overview

Again, we prefered a picture over words. The saying a picture is worth a thousand words has a reason for existing.

Gympass product vision

Product vision creation process

Here is a step by step on how to create the product vision:

  • get the strategic company objectives: if you don’t have this information yet, go get it. Talk to company leaders, the CEO, the founders, the board. Of course, every company wants to grow and have more revenue and customers, but how? What are the company’s goals, and what is the strategy to achieve those goals?
  • get an understanding of customers’ problems and needs: if this is still unclear, there are several tools that help. In the chapter on Vision and Strategy of my book “Product management: How to increase the chances of success of your software” I mentioned empathy and personas as useful tools to obtain this information. There are several other tools such as observation, interview, research, job to be done etc. Anyway, there are several tools for you to obtain this information.
  • draw the first version of the vision: once you have both information, you can already make the first version of the product view. This is a creative job and is more productive if done alone. I already tried to do this work together with other people and the process ended up taking a long time and the result was not so good for having several people discussing something that didn’t exist yet. Based on my experience, it is more productive and produces better results when the head of product makes the first version and, from there, iterates to collect feedback and refine the vision.
  • iterate and refine: once the first version of the product vision is done, it’s time to iterate and refine the vision. First people to iterate are the people on the product development team. PMs, GPMs, designers, engineers. Listen to their feedback and refine the product vision based on that feedback. Then, present to the leaders of the other areas, managers, directors, c-level, founders, advisors, more feedback and refinement. I prefer to do these feedback and refinement sessions individually. Although it takes more work and time, it gives everyone the opportunity to speak.
  • communicate: after the iterations and refinements of the product vision in 1:1 sessions with stakeholders, the next step is to communicate this vision to the entire company and even outside the company. This must be done repeatedly. At every opportunity, remember the product vision. I usually use the product vision at all possible times. All-hands, product, board, onboarding meetings, etc. I even use it publicly in lectures and articles to explain how we see the future of the product in our company. I also use it in conversations with candidates, to help them understand what we are building and to encourage them to join us.
  • review: it is important to review the vision periodically, to check if all its elements still make sense and if something new needs to be included. My suggestion is to do this review once a year, or when something new appears, like a new competitor, or some change in the market.

There you go, the steps to make the product vision.

Summing up

  • Despite being only 10% of a product leader’s time, defining product vision is his most important responsibility. Without a product view all the product development work is much more difficult.
  • The product vision is nothing more than an understanding of what your product will look like in the future.
  • To make the product vision it is necessary to be clear about the company’s objectives with the product, as well as to deeply understand the problems and needs that customers have and that will be solved by the product.
  • The 6 steps to build a product vision are to obtain strategic objectives of the company, gain understanding of the problems and needs of customers, design the first version of the vision, iterate and refine, communicate and review.

In the next chapter, we’ll look at how to execute your product vision.

Missing something?

So, did you miss something in this chapter? What else would like me to cover?

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? While you wait for new book, check out my Digital Product Management bundle with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

Product management career

In my book Product Management: How to increase the chances of success of your software I comment on career progression starting with Business Analyst (BA) as the beginning of a career, with the responsibility of specifying what the product development teamwill build, then going to Product Owner (PO) which, in addition to specifying, must also prioritize what the product development team should do and, at the top of the career comes Product Manager (PM) who, in addition to specifying and prioritizing, must also define the vision and strategy of the product or piece of product that she takes care of.

BA, PO and PM

Another way that many companies have designed this career evolution is to consider the BA and PO phases as Associate Product Manager (APM), with the responsibility of specifying and prioritizing. It is the first step in a product management career.

APM and PM

Since product management is a role of great responsibility, I recommend that people entering the product career be people with some previous experience in other areas such as engineering, design, or marketing. I have also seen great product managers coming from operations, support, project management, financial, and even legal. Throughout my career I have noticed that people who have just left college do not have the necessary baggage to be able to be good product managers. It is important to have this experience in other areas to help you understand how your product impacts those other areas.

And then?

The question that remains is, what’s next? A person goes from APM to PM, then to Senior PM, but what is the next step in your product management career?

A minimum product development team is made up of a few engineers, usually starting with 2 engineers and reaching up to 7 engineers, one of whom is someone more senior, with a tech lead role, plus a product designer (PD) and a product manager (PM). When there is a need to create a second team to take care of another part of the product, there are two ways to make this team expansion:

  • expand engineers, divide and hire PM and PD: we can divide the team of engineers into 2 teams, each with a focus, and temporarily keep the product manager and product designer in these two teams until we are able to hire a second product manager and a second product designer. This model is used when the scope of work of the second team is very clear.
  • hire PM and PD to do discovery, expand engineers and divide: in this case we bring first a PM and an additional PD to work on the discovery of what we want to do with this second team. Meanwhile, more engineers are being hired to expand the first team. At a certain point in the discovery, already having some clarity of what this second team is going to do, then do the team division. This model can be useful when there is still no clarity as to what this second team will work on and it is necessary to do a work of discovery that does not fit in the day-to-day of the original PM and PD.

In both cases, if the original product manager is a more senior product manager, we can hire that second more junior product manager or even an associate product manager and give the more senior product manager the opportunity to help that junior product manager develop. It would be a first people management opportunity for this more senior product manager, if that is something she is looking for in her career. While she still takes care of a product or piece of product with the first team, she can begin to experience the leadership of another, more junior product manager.

After one to two quarters running in this configuration, it is possible to understand if the most senior product manager liked this new role, of helping a more junior PM to develop. If that role is something that makes sense to the senior PM, it is possible to think about adding more junior product managers to help her. At that point it will become increasingly difficult for this PM to manage a product or a piece of a product.

I am focusing on the career of product manager, but there is a similar path in both engineering and product design. The most senior tech lead may come to lead the other team’s tech lead, just as the most senior product designer can lead the other team’s product designer.

Group Product Manager

This is the moment when the senior PM becomes a Group Product Manager (GPM). This is the first step in a product leader career, when the product manager does not directly care for a product or a piece of a product and is responsible for helping other product managers to develop and manage their products. This usually happens when the person is leading 3 or more product managers and is responsible for a set of features or even an entire product. In some companies, this position is called head of product, or product director, or even product vice president.

At Conta Azul we had GPMs that took care of pieces of the product. A GPM was more focused on the product’s financial features such as financial reporting, issuance of bank slip, etc. while the other was more focused on accounting and tax functionalities such as registration of purchase and sale, inventory management, issuance of invoices, etc.

At Gympass we had product directors focused on each actor in our marketplace. One product director focused on gyms, another focused on our clients’ HR and a third focused on our clients’ employees.

In a small company, GPM can be the highest level of product careers. For example, in a company with up to 6 or 7 PMs, a single GPM to coordinate those PMs may be sufficient. When you go over that number, it may be interesting to have a second GPM, or even a CPO or VP of product that leads the GPM and some PMs.

In addition to leading PMs, the GPM also has the role of coordinating the definition of the vision and strategy of a group of products or features. For example, the HR product director at Gympass has to lead the PMs who work on pieces of the HR product, which we called the HR Portal, as well as to define the future vision of this HR Portal, that is, where we wanted to get with the HR Portal and the strategy, that is, the way to get there. And with PMs, he is responsible for executing this strategy.

Interim leadership

I imagine that you have already seen some situation in which the person is an excellent individual contributor, receives a promotion to lead people and, for not being prepared or even for discovering that he does not like to lead people, he ends up having a bad performance as a manager. But this person understands that he cannot go back, returning to a position as an individual contributor can be seen as a setback in the person’s career, as a failure.

An interesting tool to prevent situations like this is the concept of interim. Instead of the person already assuming a permanent position of GPM and leading one or more people, the concept of interim GPM can be used, that is, the person takes on this role temporarily, as a test for him to see if he likes and feels comfortable doing the role of leader. This tool can be used in any career, not just in the product management career. From engineer to engineer leader, from product designers to UX leader, etc.

This tool creates a safeguard, a safety net for people who have never led people and want to try this career option. With this tool there is room to go back if the person does not like it or does not feel prepared to perform this function. It is the famous concept of change rollback or undo that allows to undo a change and return to the previous version if we notice that the change made is not working as expected.

CPO or Product VP

The Chief Product Officer (CPO) or Vice President, Product is the highest product position in a company. Leads GPMs or product directors and is responsible for coordinating the definition of the vision and strategy of all the company’s products, as well as for the execution of this strategy, together with the GPMs and product directors. In some cases it may make sense for the UX area to report to the CPO. Ideally, given the importance of digital strategy in companies, the CPO position should report to the CEO and have access to members of the Board.

Product management career

The nomenclature can be a little confusing. Some companies call this position head of product, others call product director or product vice president or CPO. Although the nomenclature is confusing, the important thing is that the structure is clear to everyone inside and outside the product development team.

There are two models of leadership structure for product development teams, each with its pros and cons depending on the context where this team is:

Unique leadership

At both Locaweb and Conta Azul, I had the role of CPO with the responsibility of leading the entire product development team, that is, product managers, product designers and engineering.

Unique leadership works when you have senior people to help with engineering management as well as design and product management. At Conta Azul, the team had 130 people and I had an engineering head, 4 GPMs and a design head to help me. At Locaweb with a team of 100 people I had two senior engineering managers, 5 senior PMs and a UX head.

I like this configuration because I have always seen the product development team as a single team, with common goals of delivering the best product to meet the company’s objectives while solving problems and user needs. This configuration helps with alignment and this single team vision.

This type of setup works very well for small teams, up to 80 to 100 people. When it reaches that size, there is a risk of overloading this unique leader responsible for the entire product development team. It is a multitude of different themes, hence the importance of having senior people helping in leadership.

In some companies, instead of CPO, this unique leadership is called Chief Technical Officer (CTO) or Vice President of Product Development.

It may make sense to think of dividing the area into two leaders when the team grows to more than 100 people, with a CPO and a CTO doing the shared leadership. It is worth remembering that shared leadership, despite being beneficial in the sense of sharing responsibilities, can have harmful side effects if it is not well managed by the CEO.

Shared leadership

At Gympass we ran for 18 months with a CTO and two CPOs, one of which was for consumer productsand I focused on products for companies and partners. We opted for this configuration because we expected a considerable growth of the team. When the team was still with 60 people, we already saw growth of up to 400 people. Being able to share responsibility, especially when the team grows fast to numbers above 100 people, helps to put more attention and go deeper into the themes that each leader takes care of. This avoids the overhead that I mentioned above.

Product development leadership structure in Gympass

At Gympass, the UX team reported to the consumers CPO while I had, in addition to the product teams for companies and partners, a Professional Services (PS) team that was responsible for making customized integrations with gym and training systems. our customers’ HR systems. This professional services work is more project-oriented, with a clear definition of scope and well-defined deadlines, so we created a separate area to take care of these integrations.

At Conta Azul, when I left there in mid-2018, we were starting to think about dividing the roles between CTO and CPO. So much so that now in 2020 there is this structure with the shared leadership of the product development team.

Product development leadership structure at Conta Azul

Another possibility for shared leadership of product teams is to have head of engineering, products and UX.

Shared leadership has the side effect of the inherent risk of creating silos, that is, of having teams working in isolation and without the necessary collaboration. At Gympass, we had a strong concern to avoid this behavior. We sat 3 side by side and reserved at least three hours a week to talk about topics of the product development team, one hour between the three of us, one hour the three of us together with an HR business partner, and one hour with the CEO. In addition, we sought to set goals in a common way for teams and treated the budget as a single budget for the product development area.

However, despite our efforts, there were still situations of lack of collaboration between members of different teams. For this reason, I prefer configurations with a unique leadership of the product development team, despite the possible overload that this may cause in this leadership. One way to reduce this burden is to have senior leaders.

CPO and CTO

As I mentioned earlier, the product development area is a single area, with the common goal of creating the best product to tend to the company’s strategic objectives while solving customers’ problems and needs. Having two or more leaders for this area requires a lot of coordination between these leaders to ensure that the teams are collaborating and evolving in the same direction. The most common way to share this leadership is to have two people, CPO and CTO, to lead the product development team. While the CPO leads product and UX people, the CTO leads engineering people.

Division of responsibilities between CTO and CPO

The image above illustrates well the responsibilities of each leadership. The CTO takes care of the actual development of the product, that is, it has to be concerned with the quality of what is being developed, as well as with the speed of development. It also takes care of infrastructure and operational issues such as product stability, performance and availability.

The CPO takes care of the product from both the business and the customer’s point of view. From the business point of view, the CPO is responsible for defining the product vision in line with the strategic objectives of the business. From the customer’s point of view, he needs to ensure that the product solves a customer’s problem or need with quality and, for that, he needs to understand the customer’s satisfaction and engagement with the product.

Together, CTO and CPO must define and evolve the structure of the product development team, normally composed of product teams and structural teams (SRE, Data, etc) as we will see in a future chapter, as well as define and evolve the processes that this team will use in their day-to-day activities.

Y career

Career Y is the option given to people to choose the managerial career or to continue in the specialist career. Some senior PMs may not want to manage people, just products. Does this mean that there is no room for her to evolve in her career, since the path of progression seen above goes through the leadership of other PMs? Not necessarily. In companies with more complex products or even with a portfolio of more than one product, there may be room for a role little known in the Brazilian market, but that can help a lot in this context, the Principal Product Manager. This is a role that does not manage people but that, due to its seniority, has a relevant impact on the organization. Its main responsibilities are:

  • Help connect the work of GPMs: as the company grows and we have more than one product development team, each with their own GPM and often focused on the day-to-day life of that team, without looking a lot for what the other teams are doing. It is usually the role of the CPO to maintain the connection between the work of the different teams and their GPMs, but in some structures, it may make sense to have some very senior PM playing this role.
  • Ensuring synchrony and consistency between product teams: regardless of whether we try to structure product teams, there will always be situations in which a team will depend on the work of another team. An example in Gympass are the product teams for the gym and for the end user. The gym team makes a feature that allows the gym manager to create the class schedule, and the team focused on the end user needs to make that class schedule available in the app so that users can view and schedule classes. This coordination is usually done by the PMs of these two teams, but they can benefit from having a third person helping in this coordination. That third person can be a GPM, CPO or even a more senior PM, in this role of Principal Product Manager.

Note that these responsibilities are a subset of the responsibilities of a product head or even a CPO, without responsibility for the management and development of PMs, which can be attractive as a career progression for people who do not want to manage other people. This role is still new. Some companies see this role as just a very senior PM, but I think it makes sense to think about that role with a greater contribution than just a team.

Summing up

  • The product career has progressed from Associate Product Manager (APM) to Product Manager (PM) to Group Product Manager (GPM) to Chief Product Officer (CPO). There are some variations of nomeclature depending on the company and the country, but in general this progression follows. The important thing is that this structure and career progression is clear for the entire company.
  • When talking about the most senior product leadership in a company, there are two options with their pros and cons. One option is the ** unique leadership ** of the entire product development team (PM, UX and engineering) which works well for larger teams but can be overwhelming when teams of more than 100 people. The advantage is having the entire team aligned with a single leadership. The other option is ** shared leadership ** with CPO and CTO. It avoids overload in large teams but can cause a decrease in collaboration if there is not a good harmony between these two or more leaders.
  • For PMs who do not want to pursue a management career, it is important to give the Y career option, with the role of Principal Product Manager which helps in the integration and synchronization of the work of the different teams.

In the next chapter we will look at one of the main responsibilities of the product head, the creation of the product vision and strategy.

Missing something?

So, did you miss something in this chapter? What else would like me to cover?

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? While you wait for new book, check out my Digital Product Management bundle with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

Roles, responsibilities, and seniority

In the previous chapter we just reviewed some basic concepts of digital products. Now let’s understand what a head of product is, what its roles and responsibilities are.

As I mentioned in the introduction to the book, the role of the product leader is divided into 3 major areas:

  • product vision and strategy: usually takes around 10% of a head of product’s time. Defining the product vision is defining what the product will look like in the future. What do you want the product to be when it grows? And strategy is the way to reach the vision. Building product vision and strategy is a job that the head of product does in collaboration with the company’s founders, senior management, and the board, with input from all areas of the company and the customer. I will talk more about building vision and strategy in the following chapters.
  • help product managers in their development: depending on the seniority of your team, this will take around 10% to 40%. The more junior and inexperienced, the more time you will have to dedicate to the development of your team. I will talk later about some of the Tools important for the development of your team. 1: 1 meetings, team meetings, evaluation and feedback, product council, product review, and team organization.
  • expectations management: at least half of your time will be devoted to expectations management, reaching up to 80%. In ​​product development and, mainly, when leading digital products, there is no “excessive communication”. There will always be someone who has expectations about the product and is not yet aware of its vision and strategy. With many companies with whom I talk about digital products, I hear a very common complaint that the area of ​​product development is a black box. And that generates a lot of expectations from other areas, which need their product pains to be resolved. On the other hand, the product development team also has expectations, wants to know what the product vision is, what is the strategy, the roadmap, the priorities. The best way to manage these expectations is through communication. As mentioned above, the Tools that will be presented later will be very useful for managing expectations.

Asking people who want to grow in their careers to become head of product why they want this career progression, many answers that they want to be able to have a more active voice and even guide the definition of the product’s vision and strategy. Well, I’m sorry to frustrate you but, as I mentioned earlier, this is only 10% of the work for a product leader.

The other 90% of a product leader’s time is devoted to helping product managers in their development and managing expectations. As I said above, the more junior and inexperienced your team is, the more time you will have to dedicate to the development of your team, which can take up to 40% of your time. On the other hand, if your team is junior and inexperienced, more work will need to be done to manage expectations, which can take up to 80% of your time.

Imagine that you have a junior and inexperienced team, that takes 30% of your time, and that, as a result, you have a lot of expectation management to do, like 70% of your time. That is, 100% of your time will be spent helping your team to develop and managing expectations. Therefore, it is important that you take great care with the seniority of your team, otherwise there will be no time in your day-to-day to take care of the vision and strategy of the product you lead.

Seniority levels

This is a topic that we hear almost daily at all companies: seniority levels. There are many situations in which this topic comes up. Hiring, performance evaluation, increases, promotions, bonuses, etc. The more senior a person is, the more you expect from him. After all, she has experience and knowledge to deal with the most difficult situations at work. My experience has shown me that we need to analyze a person’s seniority based on three dimensions:

Time

We normally assess seniority based on time. For example, if a person has more than 10 years of experience, he is a senior. However, time alone is not enough. If she has done the same thing in these 10 years, without questioning herself and without continually looking to improve and try new things, she has not evolved as a professional. She didn’t put any new tools on her utility belt. Therefore, you will have a lot of difficulty when facing new situations since you do not have the necessary tools.

Knowledge

Therefore, in addition to time, we must also consider knowledge. We can translate knowledge as the set of tools that a professional has in his utility belt. If a person knows only one tool, he will use it to solve all problems. It’s like the law of the hammer, for a hammer, everything looks like a nail. This law is attributed to Abraham Maslow, an American psychologist well known for the pyramid of hierarchy of needs concept.

Maslow’s hammer law

The more tools someone has, the easier it will be to face new situations and find solutions. That is why consultants are so versatile. They work for short periods of time on different clients, facing different problems and need to create ways to solve new problems, since each new client they work for has different problems and contexts.

Sometimes, a consultant with 3 years of experience, working with 6 different clients, will have many more tools in her tool belt than someone who has been with the same company for 10 years. The consultant is likely to be more senior than the person who spent 10 years in the same company, doing the same job and solving the same problems without question and continually seeking to improve, improve and try new things.

To assess someone’s seniority – even when we are self-evaluating our own seniority – we need to look at years of experience and the quality of the knowledge accumulated during those years.

However, this is not enough.

Behavior

Behavior is a dimension of seniority that is not normally discussed when assessing someone’s seniority, but it is just as important as time and knowledge. Sometimes I have the impression that it is even more important than time and knowledge.

Behavioral seniority means that the person knows how to behave properly:

  • be ethical, be a person with integrity and the right intention;
  • have alignment with the company’s values ​​and culture;
  • have alignment and commitment to the company’s purpose;
  • have alignment and commitment to the company’s strategic objectives.

I will give some examples and counter-examples of behavioral seniority to make the concept clearer:

  • Objectives: all companies have objectives. All companies have quantifiable objectives and targets are set to help achieve those objectives. A well-known method for setting objectives and quantifying results is OKR. Some companies even use these targets to define their employees’ variable compensation, also known as bonus policy. Invariably, once targets are set, things change. And even when everything is stable, it may be necessary to do work unrelated to the targets. Someone with behavioral seniority understands that things change, that their work is not limited to previously agreed targets, and will do whatever is necessary. Someone without behavioral seniority will say that she cannot change or do anything other than what is defined as her target.
  • Complaining: as we all know, sometimes things do not go as we expect. That’s how life is. And there are always people who complain. And it is always someone else’s fault and there are always many excuses to explain why things did not go as we expected. Complaining without doing anything to help resolve the situation is typical behavior for someone who has no behavioral seniority. A senior person, when facing problems, tries to understand what happened, without looking for the culprits. She searches for a solution to the problems and tries to understand how to prevent these problems from occurring again.

I believe that with these two examples and counterexamples, it becomes clearer what I meant by behavioral seniority.

In my opinion, this is the most important dimension of seniority. If you have someone with seniority in knowledge and many years of experience, but without behavioral seniority, she will not only be more likely to perform poorly, but will also interfere with your team’s performance.

What is your seniority?

So, the next time you are assessing someone’s seniority level – including when you are evaluating your own seniority – evaluate years of experience, quality of knowledge accumulated during those years, and behavioral seniority. Only then can you fully assess that person’s seniority level.

Summing up

  • The head of product is responsible for coordinating the definition of the product vision and strategy, for helping product managers in their development, and for managing the expectations of all people who have an interest in your product.
  • A very important concept to help a head of product with his responsibilities is the concept of seniority, which has 3 dimensions, two well known, time and knowledge, and a third one not so known, but just as important as the others, the seniority of behavior.

In the next chapter we will understand a little more about the product career.

Missing something?

So, did you miss something in this chapter? What else would like me to cover?

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? While you wait for new book, check out my Digital Product Management bundle with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

What are digital products and product management?

As I mentioned in my article about The role of the Product VP/Head, I’m writing an entire book about the many different aspects and skills needed to be head of product.

The book will be divided into 3 mains sections, Concepts, Principles and Tools.

I’ll publish its chapters as articles so I can collect feedback. The first chapter is a review of the digital product and product management concepts.

What are digital products and product management?

In this chapter, I will review some basic concepts of product management, concepts that are necessary for the next chapters, where I will define concepts more linked to product development leadership.

Let’s start from the beginning:

Digital Product

Digital product is any software that has users.

A common way to classify digital products is by the type of audience it serves. There are products for end consumers (Netflix, Spotify, etc.) known as B2C (business to consumer), for companies (Locaweb, Conta Azul, SAP, etc.) known as B2B (business to business) and mixed products, which serve both end consumers and companies (Instagram, Mercado Livre, etc.)

Another way to classify a digital product is by looking at how the product is delivered to users (such as online, not online and embedded), or according to what it does: email, e-commerce, payment, email marketing, content management, education, communication, collaboration, reporting, entertainment, operating system, ERP, CRM, etc.

These different ways of classifying are not exclusive. For example, Netflix is ​​a digital product for end-users, but it is also an online entertainment product.

Digital or traditional?

In addition to understanding what a digital product is and how to classify it, we also need to understand the nature of the company that owns this digital product.

  • Digital: The product sold by the company is the software or technology developed by the product development team. Product Management is the company’s “core”, responsible for the company’s future vision and strategy. The product head will have a central role in defining and executing the company’s strategy. Examples: Zendesk, Instagram, Google Search, etc.
  • Traditional: The product sold by the company existed, probably for many years, without the technology, but the company begins to understand how technology can enhance the product. Product Management is an enabler, but it is not core. It is seen as the “digital area”. The head of products will have to gain her space in the company, showing the benefits that technology can bring. Examples: New York Times, Bank of America, American Airlines, etc.
  • Traditional born-digital: The product sold by the company could exist without the technology, but the technology greatly enhances the product. Product management is also an enabler, but it is not core. The head of product will play a very important role in defining and executing the company’s strategy, but it will not be central. Examples: Netflix, Airbnb, Uber, Gympass, etc.

Platforms

Platforms are products that deliver more value the more users use the platform. It is the famous network effect, based on the number of possible interactions between its users, which is governed by the formula n * (n-1) / 2 where n is the number of users. Platforms have been around for many years in the offline world. A good example is the old markets. They are a two-sided platform, with buyers on one side and sellers on the other. The more sellers you have, the more useful the market is for buyers. And the more buyers you have, the more attractive the market will be for sellers.

There are single-sided platforms (Facebook, Instagram, WhatsApp, etc.) and multi-sided platforms, which can be of 3 types:

  • Exchange: with buyers on one side and sellers on the other side. In this type of platform, it is common for a person to enter on the buyer side and be invited to participate on the seller side. Who has never been invited to drive for Uber? Examples, besides Uber, are Airbnb, eBay, etc.
  • Content: brings together content producers, consumers, and advertisers. Content is the focus and monetization is usually done through ad serving. Examples are Facebook, Google, and news portals.
  • Technical: work as an operating system where, on the one hand, there are specialists and, on the other, users. Android and iOS are a good example, with app developers on one side and users on the other. Xero, an online accounting company from New Zealand, is another good example, on one hand, small business owners and on the other side, accountants.

On platforms, it is customary to develop a product for each platform participant, plus one or more products that take care of the interaction between those participants.

Digital product management

We have already seen the definition of a digital product, the importance of understanding whether the company that owns the product is a digital, traditional, or traditional company that was born digital and we understand what platforms are. Now let’s understand what is product management.

Product Management

Digital product management is the function responsible for all aspects of a software product, throughout the lifecycle of that product, from its conception to the end of its life.

It is the function responsible for making the connection between the company strategy and the problems and needs of customers through the digital product. This should, at the same time, help the company to achieve its strategic objectives while solving problems and meeting the needs of customers.

To know more

There, we have already seen, in a very summarized form, the main concepts of digital product management and we are ready to understand more about how to lead digital products.

In case you want to know more about the concepts I presented above, you can read my book Product management: How to increase the chances of success of your software. In it I talk in detail about these and other concepts related to digital product management, as well as about the life cycle of a software product, the relationship of the product manager with the other areas and functions of the company, product portfolio management, and where use software product management.

Missing something?

So, did you miss something in this chapter? What else would like me to cover?

Where does product management sit in a company?

After reading the article “product marketing and product management“, about the differences between product management and product marketing management, it may seem that the best place to put product management in a company is in the marketing department. However, in fact, it’s not that simple. The answer to the question that is the title of this article is “it depends”! It mainly depends on your main activity.

Companies that develop and sell digital products

For this type of company, until the late 1990s, the software product management function was in marketing. Some legacy software companies still place product management within this area, and among these, some do not even separate the roles of product manager and product marketing manager, described in the article “product marketing and product management“.

However, this is not the most appropriate model. The most pertinent model for companies that develop and sell software requires, first of all, the separation of the product marketing and product management roles as already explained. Next, it is important for the digital product manager to stay in a non-marketing area so that there is really no confusion between roles and not give the marketing manager the false perception that it would be possible to put the two together in a single person.

A very common area for the product management function is technology, linked to the company’s CTO (Chief Technology Officer). It makes a lot of sense because, as the product manager works closely with the software development team, it is only natural that they are within the same area of ​​the company.

On the other hand, most modern tech companies have chosen to create a third area, the product management area, independent from marketing and technology, creating the CPO (Chief Product Officer) role, as a product director. The idea of ​​this separation is to give the three areas equality, so that each one can push the topic to its area of expertise and the final product will benefit from this balance.

Usually, the UX area also reports to the CPO, staying with the product managers. Following this line of isonomy between functions, there are still some companies that have a fourth independent area, the UX area, creating the figure of CDO (Chief Design Officer) or design director.

Startups

For software startups, usually one of the founders has the role of product manager, as she is the one who has the vision of where she wants to go with that software. When the startup grows and the founder who has the role of product manager begins to be pulled into other tasks, it is common to bring someone to be the product manager.

In some cases, someone is brought in from outside; in others, it is common to choose someone from the software development team to be a product manager. This person will have constant contact with the founder of the company and will need to have a lot of skills to earn their trust.

In the first weeks and even months, it is very likely that the product manager who starts working at a startup is just a mere executor of the founder’s ideas. Gradually, the product manager should gain the trust of the founder for more strategic issues, and eventually, these decisions will mostly be taken jointly by the product manager and the founder of the startup.

I was hired at Locaweb to be a product manager in 2005, when the company, founded in 1998, had around 100 employees. During the first year, my work was focused on the process of developing new products, without major interactions on strategic issues. Gradually I gained the trust of Gilberto Mautner, Locaweb’s founder who was more focused on product and technology, for more strategic conversations. From these conversations came Locaweb’s SaaS (Software as a Service) product line, such as Email Marketing, Virtual PBX, Virtual Store, and SMTP, which by 2015 accounted for over 20% of the company’s revenue.

At Conta Azul, I was hired as a CPO after the role was performed by all the founders of the company. At Gympass I was hired after Vinicius Ferriani, Gympass co-founder decided to leave the daily operations of the company.

How does a product manager gain more autonomy?

Every product manager, unless she is the founder, or she’s starting a product from scratch, will join a team that already has a product. The first thing this PM has to do is to understand where the product she’ll manage came from. She should talk to the founders and understand what vision they have for this product. What strategic objectives do they want to achieve with this product? What problem does this product solve? For whom?

In the unavailability of the founders, there will certainly be some person, probably a manager, director, VP, or CEO, who is the sponsor of this product, that is, the person who inherited from the founders the vision of this product.

You, as a PM, have been invited to manage that person’s product to help realize the person’s vision for the product. You probably should have discussed this vision during your interview, even before you were invited to manage the product. Be aware that if you have been invited to manage a product that does not have a clearly defined vision, your work will be very difficult or even impossible as long as this vision does not exist and be clear to everyone involved inside and outside the company. In this scenario, helping to create this product’s vision is your first and highest priority.

By creating this vision alignment with the founders or the people who are the product sponsors in your company, the next step is to ensure that this vision is aligned and clear to everyone involved, both inside (employees, directors, board members) and outside your company (customers and suppliers).

Once this alignment of vision is created, now is the time to work together with this person to create a bond of trust. Then enter the normal product management discovery work with all the techniques already known. Discoveries often lead to important decisions in your product. Start making these decisions together with the founder or sponsor of the product, always bringing your decision suggestion based on your discovery. Validate these decision suggestions with others involved internally and externally.

  1. Discovery plus your decision suggestion.
  2. Joint decision making with product founder/sponsor.
  3. Decision alignment with everyone involved.

You should repeat this cycle until it becomes increasingly clear to the founders or the sponsor of the product and to everyone involved that you are making the right decisions. By doing this you will gain the confidence you need to make future decisions with the desired autonomy.

But remember what Uncle Ben said to Peter Parker, “with great power comes great responsibilities!”

Companies that don’t have software development as their core business

For companies that don’t have software development as their core business, like the ones I mentioned in the article What type of company needs a product manager?, The decision on where to put product management is a little different. It makes little sense to have an independent product management area. The software is an adjunct to the main activity.

For example, in a bank, the software serves to facilitate customer relationships; so, it may make sense for product management to be linked to the CS. A school that wants to implement an e-learning system to complement its students’ face-to-face education may consider having a digital product manager in the education department. Airlines with their loyalty programs have these programs aimed at increasing customer loyalty. This is closely linked to both CS and marketing, so it may make sense to have the digital product manager in one of these two areas. In a brick-and-mortar store with e-commerce it makes sense for the product manager, who takes care of the development of the online store, to be in marketing or sales.

That is, it depends a lot on the theme of the software and how much it is linked to the company’s core business. However, one should always seek to place product management as close as possible to the area dealing with the software theme and the company’s core business.

With the increase of relevance of digital products, some companies are starting to create separate departments to deal with their digital products. They call this area Digital, or Lab, or Innovation. I recently joined Lopes Consultoria de Imóveis, one of the biggest real estate companies in Brazil who has more than 80 years of history and wants to use technology to improve their customers’ experience. At Lopes we have a dedicated team, called Lopes Labs, focused on all digital product initiatives. This set up works well as long as the product management constantly aligns with the core business areas of the company.

Companies that develop software on demand

For companies that develop software on demand, such as those cited in the article What type of company needs a product manager?, as they begin to adopt the practice of digital product management, the most common thing is to leave this role with software developers. As this product management practice becomes important within the enterprise, it may make sense to create an independent area for this function, which may, in addition to being part of the on-demand software development service, also be an independent consultancy service, specifically focused on empowering companies in the software product management function.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? Check out my new bundle Digital Product Management with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

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What type of company needs a product manager?

When we think about the product management function, we always imagine it being exercised in a company whose core business is software offered via the internet, also known as Software as a Service, or SaaS. However, in my opinion, this is not the only type of company that benefits from having one or more product managers to help with the software development process. There are 3 other types of companies that can, and should, benefit from the work of a product manager.

Companies Developing Non-Online Software

There is still a lot of non-online software that needs to be installed on a computer to run locally, or access data from a server (client-server software). Even with the strong growth of SaaS applications of various types – such as ERP, CRM, BI, Supply Chain Management, among others – there is still a lot of software from these and other categories that are not online, that is, that run on the computer, local, or networked on the client-server model, known as on-premises software, as opposed to online software.

This type of software will not cease to exist anytime soon, either due to technical needs or due to use policy issues. It is not uncommon to find companies that could use online software but that, per company policy on information security and privacy, want to keep these data and the software that manages it within the company premises.

In the future, it is very likely that business use policies and fears will soften to the point that no more companies want to have software installed in their own premises for security reasons, just as today it is quite rare to find companies or people who manage their own energy supply. However, there will always be those who choose to have software installed in their own premises for some specific reason, despite the cost this practice may incur.

On the other hand, technical issues may make it impossible to use online software. Just imagine situations where you can’t be online, such as on a plane or a boat without connectivity. Here you can also imagine a future where connectivity will be good and universal, but there may still be situations where running the software locally makes the most sense.

That is, even if there is this movement towards online software, there will still be on-premises software for a long time to come. This, like online software, is software that has to meet the needs of its owner, while meeting the needs of its users.

For this reason, companies that develop non-online software should also have software product managers on their development team.

Companies that don’t have software development as their core business

Many companies do not have software as their main business. See some examples in the following figure:

Companies that don’t have software as their core business

However, most probably all of them use software. They have computers and internal systems to support and enhance the various processes of the company. Due to the familiarity and usefulness of computers and systems to these companies, it is common to see them starting to think about having one or more digital products to help them interact with their customers.

In the examples in the picture, New York Times has a digital edition, McDonald’s has an app so their customers can order food, Toyota has its Entune App which allows you to access smartphone applications via the in-vehicle touchscreen display, Coca-Cola has an app to manage their reward program, and Bank of America has app so their customers can manage their accounts.

Even though this software is not their core business, they are part of their strategy. For this reason, they should be managed by someone who has knowledge of software product management to ensure that they meet both their owner’s and their users’ goals.

Companies that develop software on demand

The best companies that develop software on demand are always on the cutting edge when it comes to software development. They use new technologies, new programming languages, databases, and architectures; and propose new ways of making software like the agile methodologies, Scrum, Kanban, Lean.

Incidentally, the term Product Owner comes from agile methodologies. This role is responsible for building the backlog, prioritizing the work to be done according to customer demands. That is, companies that develop software on demand know the importance of having a product manager in the team that develops software. So much so that they use this function both on their products and on demand software.

Companies that develop software on-demand

However, usually, companies that make software on-demand assume that their client knows how to manage software. For this reason, these companies only work to meet their customers’ demands and requirements. They hold meetings with their customers asking what they want and expect from the software, collect the requirements, prioritize them according to what the customer demands, and start developing the software. A good company that develops software on demand will try to make frequent deliveries so that it cannot only see progress but validate what is being delivered.

The problem is that this customer doesn’t know how to manage software! If this is her first software, it will be even worse! She can run her own business, and may even know how to acquire off-the-shelf software; however, she will not have a clue about what is needed to own a software, and that the software is very flexible and must adapt to meet the goals of the company and its users. This is all news to her.

For this reason, companies that develop software on demand have an obligation to include in their development package some training or advice to prepare their clients to manage it. Only in this way can these companies increase the chances that the software being developed on demand will meet the goals of their customers and their customers’ users.

Concluding

In my opinion, any company that owns software, or develops software for themselves or other companies, should have one or more software product managers on its team. This will greatly increase the chances of success, that is, meeting the goals of both the software owner and its users.

Also, in my opinion, companies that develop software on demand have an additional obligation in this software development cycle: to teach their customers about software product management, the importance of this function in their success, and what it takes to make good digital product management.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? Check out my new bundle Digital Product Management with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

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Organizing for focus and diversification

When a company opts for diversification, team organization tends to be simpler. For each product, there will be a single team of engineers (2-8 people, which can be back-end or front-end or full-stack, depending on your product needs), plus a SysAdmin (system administrator), or up to 9 people in engineering. In addition, it will have 1-2 UX people, one of whom will focus more on visual design, and ultimately a product manager. This is the core team of the product we commented in the article What is digital product management?.

Organization of a multifunctional product team

It can often happen that some people on the team are shared with other products. Top candidates to share are the visual designer, product manager, SysAdmin, and front-end engineer. Back-end engineers should not be shared.

Organization of two cross-functional teams for two distinct products, sharing PM and UX

It is important to remember that by sharing a person between two products, her attention will be shared, which has both strengths and weaknesses. The obvious downside is that she will pay less attention to each of the products she cares for. On the other hand, the fact that she lives two realities, that is, taking care of two products, can make her bring good practices from one team to the other (and vice versa).

However, even if there is this positive point, there are other ways to exchange good practices without sacrificing a shared person’s time and attention. Therefore, the best thing to do is not to share people between two products. Of course, if you have financial constraints, this division between products is acceptable, but try to consider this a temporary situation.

Attention

Sharing people between more than two products is extremely inadvisable. The maximum acceptable share is two, and this will already have a considerable impact on attention, productivity, and quality.

Another important point of this type of structure is the importance of maintaining functional cohesion. This can be done through functional leadership, or functional self-organization.

Functional cohesion is important to ensure that there is consistency between team work, and that each one learns from the other’s good practices. Otherwise, each team will make a product that will look, not only from a different team, but from a different company!

At Locaweb, we choose to maintain cohesion through functional leadership. We have leaders in UX, product management and engineering. This guarantees us a good consistency between different products. For example, we created interaction patterns, Locaweb Style, so all Locaweb products have an equal interaction pattern. An Email Marketing product customer knows that when using the Backup product, he will not have to learn the interaction all over again. Locaweb Style is available as open source.

How to organize big teams?

When your product grows – whether in a single-product company or one with a diverse portfolio – the questions begin about how to get organized. This usually takes longer in companies with a diversified product portfolio, because whenever a particular team grows a little, there is a desire to get some people from it to focus on a new product.

In a single product-focused company, the need to organize large teams happens very quickly. It is not difficult to imagine more than 8 engineers available to work on a product and, as we saw earlier, each product team must have a maximum of 6 to 8 engineers. How to organize with larger teams?

The product should be broken into subsystems. These will certainly have some kind of integration and interdependence, but their architectures should be such that interdependence is minimal to make the integration layer as simple as possible. Each of these teams will need back-end and front-end engineers, UX, SysAdmin, and product manager. Because they are subsystems of the same product, these teams may eventually share the same product manager, the same UX, and the same SysAdmin. Here, sharing is a bit more acceptable and sharing may exist in up to 2 subsystems.

However, you must be careful that these people shared between more than one subsystem do not see bottlenecks. The ideal is to have people 100% dedicated to each one. In this ideal scenario, where each member of the teams taking care of each subsystem is 100% dedicated, it is very important for someone to have an overview to help coordinate work between teams. As mentioned, it is important to minimize the interdependence of these subsystems, but some dependency will always exist, and this will need to be coordinated. Eventually, a product manager may be needed to help with this coordination. Ideally, we should have a product manager, an engineering manager who tracks the work of all engineering teams, and a UX manager to help coordinate the work of each subsystem’s UX designers.

Organizing multiple multifunctional teams for a single product, with Product Manager, UX and Engineering Manager

For example, the Website Hosting product is divided into 7 developer teams that focus on different product subsystems. One team works on the development of the hosting control panel; and another works on the provisioning subsystem, which is responsible for installing, suspending, and uninstalling the components that make up Locaweb Website Hosting, that is, the hosting itself – which may be Linux or Windows, the database, and the email.

So, another team takes care of the e-mail control panel and webmail, and finally 4 more teams take care of the subsystems connected directly to the infrastructure, which are the Linux, Windows, database, email and database infrastructure teams. We have two product managers for all of these teams: one focused on website hosting subsystems, the other focused on email subsystems. We also have two UX designers, with the same focus separation, plus a product manager, one UX designer, and one engineering team.

Another good example on a considerably larger scale is Spotify, a music streaming application created in Sweden in 2008, which has over 75 million users according to June 2015 data. The company has over 1,500 employees, all dedicated to one product, and most of them are part of the product development team.

They posted two videos telling a little about their culture and how they organize themselves. It’s worth watching them! They can be found at https://vimeo.com/85490944 and https://vimeo.com/94950270.

Spotify Engineering Culture – part 1 from Spotify Training & Development on Vimeo.

Spotify Engineering Culture – part 2 from Spotify Training & Development on Vimeo.

About QA (and Front-End and BA)

When this chapter was published on my blog, I received some comments about the lack of QA (Quality Assurance) role in team organization. Therefore, I decided to include some considerations on the subject here.

However, before considering, I would like to quote a very nice phrase I once heard that should be remembered whenever conversations about different points of view take place: the fact that we disagree does not necessarily mean that one of the two is wrong.

What’s the point?

In my view, processes, methodologies and ways of organizing a team are not the goal itself, but the means, the tools to achieve a goal. In the case of software, the goal is usually to meet the strategic goals of the software owner while solving problems and needs of users of that software.

QA (and Front-End and BA) at Locaweb

Until the middle of the second half of 2015, we had product engineering teams at Locaweb, one team for each or two products. We also had two separate functional teams from these product engineering teams, the front-end and QA teams. At the end of 2015, we decided not to have a front-end team or QA anymore.

About the Front-End Team

  • The team had 5 developers, while Locaweb had 12 product and system development teams. Since back-end developers didn’t mess with the front-end, the front-end team ended up becoming a bottleneck.
  • The team had developed, along with UX, Locaweb Style, a front-end behavior and style framework that we use in our products and made available for anyone to use in their projects. Locaweb Style aims to facilitate front-end programming of our product interfaces. Locaweb Style makes it easier for back-end developers to front-end, thereby reducing the bottleneck.
  • As a result, we decided to no longer have the front-end team and front-end developers went to product teams where front-end is most relevant. Front-end developers also started to work on back-end, just as back-end developers started to work on front-end. Always respecting Locaweb Style.
  • The front-end functional team coordinator became a product engineering team coordinator. This gave him and the front-end team members (who are now developers assigned to a product team) a greater sense of purpose as they deliver a complete product and not just interface programming.

About the QA Team

  • When QA function is separate from software development function, it is common to hear phrases such as “feature is ready, now in QA”. This denotes a waterfall culture, which can greatly increase development time and negatively impact software quality.
  • When there is a separate QA function from the software development function, it is also common to hear phrases like “Why didn’t QA catch this bug?” This denotes a culprit-seeking culture that can be very detrimental to the team’s climate and consequently negatively impact software quality.
  • Quality should not be the concern of one person or team, it should be the concern of all the people working on the software.
  • Quality is a non-functional requirement, that is, a requirement that specifies a criterion for judging the operation of software, which is different from a functional requirement, which specifies software behavior. Performance, scalability, “operability”, “monitorability” are some examples of non-functional software requirements that are as important as quality. Even so, there are no roles of * performance assurance *, * scalability assurance *, * operability assurance * and * monitorability assurance *. Why is quality the only non-functional requirement that has a specific function in place to ensure it?
  • QA focuses on ensuring the quality of the software development process. If a separate role is required to ensure this quality, why there is no need for a separate role to ensure the quality of the product management process, the UX design process, the product marketing process, the sales process, and the financial process?
  • At Locaweb, we had around 12 QAs, some more developer profiled and some more SysAdmin profiled. As we proposed the extinction of the role of QA, some of the QAs became devs of a product while others took on the role of SysAdmin.
  • There was concern among devs that if the dev itself will now have to test, deliveries will take longer to get ready. This concern existed as devs considered their work to end when they passed the story for QA to test. However, this ready-made view of dev is incorrect, as it only passed the story to the next phase, the test. From the software user’s point of view, the story is only ready when the user can use the new feature. And what happens when the story goes through QA, is rejected and needs to go back to development?

When I joined Conta Azul in August 2016, I learned that they had also extinguished their role as QA earlier that year. The motivation was a series of visits they made to Silicon Valley companies and realized that they did not use QAs and that everyone on the team was responsible for the quality of the software developed. At Conta Azul, QAs made the career change to BAs.

About BA

Another question I received when I published the text of the previous chapter was about the absence of BA (Business Analyst). I did not explicitly state BA, as BA and PO are similar roles in software development. The differences were explained in the BA, PO and PM article. However, both have the same goal: to help the team make software that meets the software owner’s goals while solving their users’ problems and needs.

In some organizations, it may happen that BA is focused exclusively on business, that is, understanding only what the business objectives are, leaving aside the problems and needs of users. In this case, it is important for BA to also take into account the problems and needs of software users, balancing them with business objectives.

Concluding

In this article, I showed you how to organize your product development team depending on whether your strategy is to diversify your product portfolio or focus on a single product. I even explained the absence of QA and BA in my recommendations on organizing product and system development teams.

Remember that processes, methodologies, and ways of organizing a team are not the goal in itself, but the means, the tools to achieve a goal. In the case of software, the goal is usually to meet the strategic goals of the software owner while solving problems and needs of the users of that software.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? Check out my new bundle Digital Product Management with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

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QA or no QA? That’s NOT the right question…

Back in 2016, I wrote an article about the reasons that motivated us at Locaweb to extinguish the QA function in our product development team. At Locaweb we had 12 QAs, some with a developer profile and others with a SysAdmin profile. In proposing the extinction of the role of QA, some of the QAs became devs while others have taken on the role of sysadmins. The reasons that motivated us to extinguish the QA function at Locaweb are:

  • When there is a QA function separate from the software development function, it is common to hear phrases like “the feature is ready, now it is in the QA phase”, which denotes a waterfall culture. This culture can considerably increase development time and negatively affect the quality of the software.
  • When there is a QA function separate from the software development function, it is also common to hear phrases like “why didn’t QA catch this bug?”, Which denotes a culture of finding the culprits. This culture can be very harmful to the team’s engagement and motivation and, consequently, negatively impact the quality of the software.
  • Quality should not be the concern of one person or one team, it should be the concern of everyone who is working on creating the software.
  • Quality is a non-functional requirement, that is, a requirement that specifies a criterion to assess the operation of a software product, which is different from the functional requirement, which specifies a behavior of the software. Performance, scalability, operability, monitorability are some examples of non-functional software requirements that are just as important as quality. Even so, there are no defined functions for performance assurance, scalability assurance, operability assurance, and monitorability assurance. Why is quality the only non-functional requirement that has a specific dedicated function to ensure it?
  • QA focuses on ensuring the quality of the software development process. If a separate role is needed to ensure this quality, why is there no need for a separate role to ensure the quality of the product management process, the UX design process, the product marketing process, the sales process, the financial process of a company?
  • There was a concern among devs that, if the dev herself will now have to test, deliveries will take longer to get ready. This concern existed because the devs considered that their work was finished – and the delivery was ready – when they passed the story to the QA to test. However, this dev’s readiness concept is incorrect, as she just passed the story on to the next phase, the testing. From the user’s perspective, the story is only ready when the user can use the new feature. So the time the delivery stays in QA is still dev time, even not being in the dev’s hand anymore. And this time gets even bigger when the story goes through QA but is rejected and has to go back to development.

When I joined Conta Azul, they had also just extinguished the QA role, and the former QAs became business analysts, mainly helping product managers.

I’ve seen other companies also discussing the need for QAs and in some cases a heated debate emerges around this topic. However, having or not having QAs should not be the center of the discussion. Having or not having this role is a solution to a problem, normally stated as “how can we improve the quality of our product?”, and this problem should be the center of the discussion.

How can we improve the quality of our product?

A simple Google search about software quality will yield tons of definitions normally around meeting functional and non-functional requirements. When software does not meet a functional or non-functional requirement, it has a defect, a bug. So, to improve the quality of a software product, we need to work on two things:

  • reducing its existing bugs;
  • not generating new bugs.

A good way to control this is having a weekly measurement of your bug inventory and new bugs per week and discuss this every week with the team. We did this at Gympass. We defined at the beginning of every quarter what’s the target for bug inventory and average new bugs per week.

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The image above shows the evolution of our bug inventory for Q2 of 2019. We started the quarter with 215 bugs in our inventory and we aimed at a target of less than 166 by the end of the quarter, a decrease of almost 23%. We were able to end the quarter with an inventory of 136 bugs, a 36% decrease. We did this by focusing not only on resolving bugs in our inventory, but also controlling the number of new bugs per week.

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In Q1 2019 we had an average of 26.2 bugs created per week. During Q2 we reduced this average to 17.4 new bugs per week, to a total of 226 new bugs during the quarter. That’s a 33% decrease in the number of new bugs per week.

This looks like a very good improvement, right? But there’s plenty of room for improvement there. Let me explain the math of bug management:

If we were able to reduce our bug inventory from 215 to 136, this means we solved at least 79 bugs. However, we created 226 new bugs (17.4 new bugs per week x 13 weeks) during the quarter. So we solved 79 + 226 = 305 bugs during the quarter, that’s a lot of bug correction work. If we had generated 90 new bugs during the quarter, an average of 6.9 new bugs per week, instead of the 226 new bugs, we could have zeroed the bug inventory.

An additional aspect of the bug resolution to be measured is the resolution SLA, i.e., how many days the team took to solve a bug from the day the bug was first identified. To do this, we classified the bugs by its severity, which is the impact it causes to the users and to the business. Highest severity bugs are the ones that we need to solve in the same day. High severity bugs in 7 days and medium severity in 14 days. The chart below shows how we were at Gympass in Q4 2019.

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This is not the ideal visualization because it only shows a picture of the moment, and not an evolution. In order to understand the evolution of any metric, you need to see how it performed in different points in time.

Why quality is so important?

Any user prefers to use a product with good quality, i.e., that behaves as expected. This is front and center to provide a good user experience.

Besides the user experience, there’s also another important aspect to consider when we talk about quality and bugs.

Whenever someone needs to work on solving a bug that was found in a software product, this person needs to stop working on whatever she is currently working to be able to work on the bug. This is an interruption in the workflow. If this person were able to deliver the software without that bug, she could continue to work on new things without interruptions, which will make her more productive.

Summary

  • Questioning if a product development should or should not have a dedicated QA team is not the right question.
  • The underlying problem you are trying to solve is how to improve the quality of your product.
  • A good proxy metric for quality is bugs. Bug inventory, new bugs per week and bug resolution SLA.
  • A product development team should have all of its members following these metrics and acting on how to improve them
  • Quality is front and center to provide a good user experience. But it is also key to increase the speed of your product development team. The fewer bugs a team has to fix, the more time it will have to focus on new things.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? Check out my new bundle Digital Product Management with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

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Focus or diversification?

Okay, I convinced you that those who do not diversify can get into a difficult situation, because a single product company ends up dying sooner or later. I also explained strategies for portfolio diversification and showed how to manage a product portfolio.

On the other hand, there are several examples of companies that have opted for focus. A very interesting story of focus strategy is 37signals. They were a website development company. To help them follow their website development projects, they developed software that allowed for greater visibility into project progress for everyone involved, including the client.

Customers enjoyed interacting with this software and asked 37signals to use this software on other projects at their companies. At that time, 37signals decided to turn this software into a product, and they named it Basecamp. After some time, they stopped developing on-demand software projects and focused all their attention on the Basecamp product.

Later, following the portfolio diversification strategy I described in the previous articles, they launched more products: Highrise, a contact management system; Backpack, internal communication system; and Campfire, the corporate chat system.

In early 2014, 37signals decided to adopt a new strategy. They decided that from that time on they would focus 100% on Basecamp. The other products would no longer accept new customers. And the “icing on the cake” of this strategy was the change of company name, which would no longer be called 37signals to become Basecamp. These changes turned out to be the subject of a Harvard Business Review article titled “Basecamp’s Strategy Offers a Useful Reminder: Less Is More” 2014 Basecamp Strategy offers a useful reminder: less is more – in which the author says:

“It’s a natural tendency for humans to want to do more. Most of us have difficulty moving away from tempting opportunities, whether at the dinner table or at work. That’s why we end up with indigestion at home, or overworked at work. That’s why it takes a lot of discipline, and even courage, to lose weight both physically and strategically.” – Ron Ashkenas

Focus is not such a rare strategy. Some other examples from the software world:

  • Facebook: Despite having a people profile, group page and company page, as well as an ad system (which could be considered as products), these systems are nonetheless different views of a single product. Yes, they have diversified their product portfolio, but always through acquisitions like Instagram and WhatsApp. These acquisitions continue to function as independent companies, each one is also 100% focused on their respective products.
  • Twitter: Another company that is a sizable company that remains 100% focused on its single product. It also focuses on a second group of customers, the advertisers, but always focusing on their one product.
  • LinkedIn: Another company that is of considerable size and still 100% focused on its unique product. They have also focused on a second group of customers, the advertisers, but always focusing on their unique product.
  • Spotify: Example of a company 100% focused on its only product, music streaming.
  • MailChimp: Email marketing software company. This company usually makes acquisitions, but all of their acquisitions are within the same theme, email marketing and email sending.
  • DigitalOcean: VPS (Virtual Private Servers) company which is also a good example of a company 100% focused on its single product.
  • Airbnb: intermediation company between people who want to rent real estate or rooms for short periods, and people who are looking for accommodation. It is a platform 100% focused on your only product.

On the other hand, we already talked about Google with its 177 products and its more than 70 discontinued products. This vast portfolio eventually led them to revise their brand strategy, and to create a “parent company” called Alphabet, of which Google would be just one company, and several companies of Google’s other products would become independent. This is a strategy of increasing focus, but nonetheless, Google remains a multi-product company (Search, Adwords, Gmail, Google Apps, App Engine, Youtube, Android, etc.).

Another extreme example of portfolio diversification is 3M, which has over 55,000 products in its portfolio. That’s right, you read that right, over 55,000 products in its portfolio. Just imagine 3M’s BCG matrix. 😛

So what is the best strategy?

With the examples given, the question remains: what is the best strategy, diversification or focus?

As I was preparing a presentation on this topic, I was struck by the spelling of the two words. Focus is a very short 5 letters word, while diversification has 15 letters. I found it curious that the complexity of the spelling of words is all about their meaning, at least in this case.

To understand which strategy is best, we must first understand the negative aspects of each strategy.

Focus

When a company is focused on a single product, it loses the opportunity to solve its customers’ other problems, which can be bad for two reasons. The first (and quite obvious) is the fact that you miss an opportunity to earn new revenue. The second (not so obvious) reason is the risk of losing the customer, because when she looks for who can solve this other problem, she may find someone who not only solves this other problem, but also the initial problem that your product already solves, and this customer may decide to move all her needs to this new supplier.

Also, as we saw in the article Are you thinking about your new product? No? So you are already late, a single product company may eventually die, either because its product has not crossed the chasm or because the product has reached maturity.

Diversification

On the other hand, diversification also has its disadvantages. The first is that more investment is required to take care of more than one product. You will need a development team for each of your products, and this can be costly.

Another disadvantage is the waste inherent in the structure of different groups working on similar things. For example, at Locaweb we have several products designed to allow customers to send emails; the email product itself, website hosting, reseller hosting, email marketing and SMTP. Because there are different teams that take care of each of these products, their architecture does not necessarily leverage the learning and infrastructure of each other.

How to choose?

To be able to choose between these two strategies, one has to look at both internal and external factors.

The internal factor to be looked at and understood is the company culture. If your company has a culture that values ​​entrepreneurship highly, it is very likely that diversification is most appropriate. On the other hand, if the company’s culture values ​​excellence very much, it is most appropriate to adopt a single product focus strategy. In Locaweb’s case, we have always had a very strong entrepreneurial spirit from the founders. While excellence is important to Locaweb, entrepreneurship is more. On the other hand, Conta Azul culture was always focused on excellence, which is clear in the focus on one product.

However, looking at the internal factors alone is not enough. You also need to look and understand the factors external to your company, i.e., the market. If you are in a small, low growth, or very competitive market, diversification is most appropriate. If you are in a poorly served market, focus is the best option.

In Locaweb’s case, we face competition across all our product lines. Recently, we have started to have international competition operating in Brazil in all our main lines of business. Therefore, diversification is the most appropriate strategy for us. On Conta Azul’s case, even though there’s competition, there’s a lot of room to grow. We have more 14.5MM micro and small enterprises in Brazil, enough market for more than one competitor. And Brazil’s bureaucracy creates an entry barrier against international competitors.

So a single product company will…

As I explained at the end of the article Are you thinking about your new product? No? So you are already late, a single product company will eventually die, because either its product will not cross the chasm or, if it does, it will eventually reach the end of its life.

However, as we have seen, there are several companies that choose to focus on single product rather than portfolio diversification. Does this mean that these companies are bound to die? Yes, but the fact that they know this makes them think better about the future, and what happens is that they not only prepare for the end of life, but also plan the end of life and new versions of their product that will come next.

That’s what I explained in the article Lifecycle of a software product, where I told how the TV market matured some 30 years after the TV was invented and that its manufacturers are always inventing it all the time. Something new to make us buy a new TV: first they were in black and white until they hit SmartTV. All of this so that they could continue to earn new revenue from their customers after the end of the previous product’s life.

Therefore, both focus and diversification are valid strategies. The important thing is to understand the pros and cons of each one well, and to understand in which context each one is most appropriate.

Feature lifecycle

If you decide to focus on one product, or even with a diversification strategy when you end up with one or more products that are big, with many features you think about applying the 4 phases lifecycle not only to a whole product, but also to its major features.

To give you an example, let’s imagine our whole product being Linkedin. Let’s say that we decide to develop a new feature for Linkedin, for instance, the article publishing feature I use to publish my articles on Linkedin. During the feature innovation phase, we’ll have to find the product-market fit. In this case it will be feature-market fit, and the market is the entire user base of Linkedin.

If we are able to find the feature-market fit, then it’s time to grow the feature usage, i.e., implement additional features to the publishing feature we’ve just launched so it can be a complete feature to be used by the maximum number of users possible.

After the growth of the publishing feature adoption in Linkedin user base, comes the feature maturity. In this stage, the publishing feature is complete in terms of its possibilities and since it’s used by the majority of the user base, its growth slows down.

Then, after growth comes the end of life stage for the publishing feature. It can happen if Linkedin as a whole enters this phase, or if the feature is replaced or discontinued for any reason.
Next time you decide to develop and launch a major feature for your product, you can apply the product lifecycle view to help you manage the lifecycle of this new major feature.

Concluding

In this article, we saw that not only from portfolio diversification lives a software product company. It is possible to survive by maintaining 100% focus on a single product. Incidentally, several companies have chosen this path successfully.

At Locaweb, we opted for the diversification strategy, both due to internal motivators and entrepreneurial culture, as well as external motivators, such as the constant increase of competition in all our business lines.

Often, I used to receive inquiries from employees, customers, and partners about our product portfolio of over 25 products. They ask us if this really is the right strategy for us. We believe we have adopted the most appropriate strategy, not only for the reasons already explained (entrepreneurial culture + competitive market), but mainly because of the growth numbers. If Locaweb had not diversified its product portfolio and had focused only on website hosting, today Locaweb would only have 38% of its current size.

Digital Product Management Books

Do you work with digital products? Do you want to know more about how to manage a digital product to increase its chances of success? Check out my new bundle Digital Product Management with my 2 books where I share what I learned during my almost 30 years of experience in creating and managing digital products.

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Saiu a 3ª edição do livro Gestão de Produtos

Ficou pronta hoje a 3ª edição do meu livro “Gestão de Produtos, Como aumentar as chances de sucesso do seu software“. E como presente de lançamento, aqui vai um cupom de 10% de desconto (JocaCDC10).

Changelog

A primeira edição em português deste livro é de 2015. Escrevi uma versão atualizada em 2017. Apenas três anos se passaram desde a sua versão mais recente. No entanto, o aprendizado é um esforço contínuo. Continuo aprendendo com minhas experiências diárias e publiquei o que aprendi no LinkedIn. Agora, decidi não apenas traduzir meu livro para o inglês, mas também atualizar o conteúdo de 2017 com meus aprendizados desde então.

Neste Changelog, registro o que mudou desde a edição de 2017:

  • Estou usando software, produto e produto digital de forma intercambiável. Para o contexto deste livro, esses termos são equivalentes.
  • Atualizei as estatísticas ao longo do livro, para manter os dados relevantes, com comentários sobre a evolução dos dados.
  • Paulo Caroli teve a gentileza de escrever o prefácio desta terceira edição! (=
  • Mais exemplos, não apenas da Locaweb e Conta Azul, mas também do Gympass, um marketplace de três lados que conecta parceiros de fitness a empresas e seus funcionários. No Gympass, liderei uma equipe de desenvolvimento de produtos, juntamente com Rodrigo Rodrigues e Claudio Franco. Temos o desafio de criar um produto global usado por parceiros, empresas e usuários de fitness em todo o mundo. Como somos líderes nesta categoria, temos o desafio adicional de ser os primeiros a enfrentar certos problemas, o que é bastante empolgante.
  • No capítulo “O que é um produto digital?”, descrevo a diferença entre empresas digitais e tradicionais e apresento o conceito de empresas tradicionais que já nasceram digitais. É muito importante para um gerente de produto entender com que tipo de empresa e produto ele está lidando, para saber como desempenhar melhor seu trabalho.
  • Também no capítulo “O que é um produto digital?”, descrevo uma maneira diferente de categorizar plataformas. Além de toda categorização que já apresentei na 2ª edição, podemos categorizar plataformas como plataformas de transação ou de inovação.
  • Em “Dicas de liderança para gerentes de produto”, adicionei mais informações sobre porque é tão importante definir o contexto, e alguns exemplos de obstáculos que um gerente de produto pode remover para sua equipe.
  • Adicionei um novo capítulo intitulado “Dois hacks para promover e fortalecer sua cultura de produto digital” onde conto um pouco de minha experiência em gerir produtos em uma empresa que não tinha cultura de produto digital e o que fiz para ajudar a promover e fortalecer essa cultura.
  • Adicionei a seção “Foco no problema vs foco na solução” ao capítulo “Inovação: foco no problema” com alguns exemplos práticos de soluções simples encontradas quando se foca em entender bem o problema.
  • No capítulo “Crescimento: o que é um roadmap?”, adicionei uma seção inteira descrevendo uma ferramenta que utilizo com sucesso na Conta Azul e Gympass, o rolling roadmap de 12 meses.
  • Também no capítulo “Crescimento: o que é um roadmap?”, adicionei uma seção inteira sobre quando usar OKRs e quando usar roadmaps.
  • No capítulo “Crescimento: como priorizar o roadmap?”, adicionei mais informações sobre como lidar com solicitações especiais, especialmente se você gerencia um produto digital B2B com grandes clientes.
  • Adicionei uma seção de exemplo em “O que é e como criar a visão e a estratégia do produto?” para ilustrar diferentes tipos de visões de produtos digitais, incluindo uma visão hipotética do produto digital do banco, e três visões reais do produto: visão de produto da Locaweb E-mail, visão de produto da Conta Azul e visão de produto da Gympass.
  • Na seção SWOT de “O que é e como criar a visão e a estratégia do produto?”, adicionei mais técnicas para ajudar você a preencher um SWOT mais útil para dar suporte ao design da sua estratégia de produto.
  • Adicionei um novo capítulo intitulado “Crescimento: reunindo tudo – visão, estratégia, roadmaps e OKRs”, onde explico como usar juntas as diferentes ferramentas que devem ser usadas durante a fase de crescimento de um ciclo de vida de produto digital – visão, estratégia, roadmap e OKRs.
  • Adicionei um capítulo intitulado “Projetos vs problemas”, onde explico o que acontece nos ciclos de planejamento, principalmente nos ciclos anuais, quando acabamos nos focando em fazer uma lista de projetos e nos esquecemos de que problemas queremos resolver com aqueles projetos.
  • Adicionei um capítulo intitulado “Crescimento: como gerenciar produtos durante crises”, onde conto qual é o papel de um gestor de produtos em uma crise.
  • Adicionei uma nova seção sobre as diferentes opções para expandir um mercado no capítulo “Como diversificar seu portfólio de produtos?”.
  • No capítulo “Foco ou diversificação?”, adicionei uma seção explicando quando e como usar o ciclo de vida de quatro fases para os recursos individuais do seu produto.
  • Adicionei duas novas seções ao capítulo “O problema da TI”. Uma sobre a ThoughtWorks, uma empresa de consultoria de desenvolvimento de software conhecida por estar sempre um passo à frente na indústria de software, sugerindo que apliquemos o gerenciamento de produtos a plataformas internas. E a outra sobre a “falácia do cliente interno”, onde questiono o conceito normalmente utilizado em algumas organizações de cliente interno ou usuário interno ao discutir o trabalho realizado entre as áreas.
  • No capítulo “Onde está o gerenciamento de produtos de software em uma empresa?”, adicionei uma seção explicando como um gerente de produto pode ganhar mais autonomia.
  • Na “Conclusão”, adicionei uma seção para explicar como fazer uma mudança de carreira para gerenciamento de produtos.

Boa leitura! \o/