Tuesday, December 16, 2008

Prioritizing features

So we've built our list of (it turns out) over 85 new scope features that the site should someday have (through "pie"-in-the-sky brainstorming). How do you prioritize 85 new features? Which ones should we concentrate our efforts on - which are more or less important than others. Basically this can be done with a "factorial decision tree". Let's take a more manageable example. Say I know I like 5 pies, but can't decide which one to eat. My list initially looks like this:

Cherry Pie
Peach Pie
Pecan Pie
Blueberry Pie
Apple Pie

So the next stage is to take our first table item and compare it to each other item below it in the list. If we HAD TO CHOOSE and we could include only ONE of the two items in the final product (or in this case to eat) which would we choose. If we chose the first item we flag that one, and if we like the second item we flag that one instead. So for our first comparison we compare Cherry to Peach Pie. If I had each in front of me and had to choose one, I'd choose Peach. I'd score a 1 for peach and not points for cherry. Our next comparison is Cherry to Pecan. I'd prefer Cherry, so I score one for cherry, and none for Pecan. My next choice is Cherry and Blueberry, etc. till I reach the end of the list. So after round one we should have as many hash marks as (# of items - 1):

Cherry Pie1 1
Peach Pie1
Pecan Pie
Blueberry Pie
Apple Pie1

After round one is done we go to the second item on the list and compare to everything under that. Peach to pecan, Peach to Blueberry, etc.:

Cherry Pie1 1
Peach Pie1 1 1
Pecan Pie
Blueberry Pie
Apple Pie1 1

You continue to work your way down the list until you've done all the comparison. Here is my final result:

Cherry Pie1 1
Peach Pie1 1 1
Pecan Pie1
Blueberry Pie
Apple Pie1 1 1 1

We then translate the priority hash marks into numbers that are the final weighting of each item:

Cherry Pie2
Peach Pie3
Pecan Pie1
Blueberry Pie0
Apple Pie4

The final weighted and rated rankings end up as: Apple, Peach, Cherry, Pecan, and Blueberry. If we wanted we could do a run off with matching choices if we had lots of choices by using the same methodology to choose one over the other and scoring it. And now you know I like Apple pie.... :)

The last step will be to add scope and complexity measurements to the lists. That we'll reserve for next post.

Friday, December 12, 2008

Customer loyalty vs product features....

My good friend Bill Self, in his thinkinglikeacustomer.com blog has a great article on the difference between product focus and customer focus. I recently had a brainstorming session with my long-time customer Knowledge Athletes. We were trying to look further out than the next funding round so we could prioritize scope and determine what things to concentrate on after completing the scope we'd already committed to. We also wanted to be sure we weren't looking at the trees and forgetting about the forest.

We started with an hour or so on mission statement. KA has a GREAT mission statement to start with, but it's useful to periodically review your mission statement to be sure that as you develop new ideas your mission doesn't change. By publicly declaring the mission statement we also gave ourselves a measurement to determine if each presented idea fit within that statement. This stayed on a whiteboard during the entire session.

Our next step was a brainstorming session to get down ideas for the product. Ideas were contributed by the business folks, educational leader, programmers, advertising, customers, sales and marketing. The rules were as follows:

  • There are no bad ideas - we're putting them ALL up there, and we'll judge them later.
  • We're not evaluating ideas - no judgements on how hard they are to implement, whether they complicate or simplify the user interface, or whether they add value or not. Just get the idea on paper (or in this case spreadsheet). We'll evaluate later.
  • View the feature from the customer's point of view - at this stage, since we're looking at features (rather than infrastructure) we're suggesting features only from the point of view of the customer. "If I were a customer I'd love it if the product can do X (and define X)." This is the part that relates to Bill's article.
  • Don't dig too deep - while we're capturing input on the ideas, don't start speccing the whole idea out - we just need to get the gist of the idea to prioritize and evaluate it. We can dive into the nitty-gritty of what the feature does and how it does it later. This requires a moderator to call "time out" if the topic strays.
  • Use end-user input data - During the brainstorming phase we extensively used the vast amount of research data KA collected during our initial proof-of-concept phases. What did users stumble over? What did they have a hard time learning (IE not intuitive)? Where did the product complexity not solve their problem or issue? What suggestions did THEY have for improvements

After we concluded our brainstorming session we had over 70 new features to evaluate. Note I didn't say add - we still needed to look at what is more important, what is easy or hard to do, and whether the addition of a feature adds or removes user complexity and capability. Obviously the budget doesn't support all these new features so we also have to prioritize them. I'll address how we went about that process in my next post. In the meantime be sure to check out thinkinglikeacustomer.com - it's an awesome blog.

Friday, December 5, 2008

What does it really cost....

One of the most frequent enquiries we get from web and software entrepreneurs is "how much would it take to build something just like X". Leaving aside the implication that you could penetrate a market someone else has already occupied with a "me-too" product, in most cases the would-be entrepreneur can answer this question themselves! It's actually really easy in today's world. Let's say you wanted to build a product just like the popular restaurant reservation system Opentable.com. (Or just like it with some difference or tweak you think will make it better). Here's how you find out what kind of investment you'd need to make to build it:

  • Fire up Google.
  • Now put the following phrase into the search box: Opentable venture funding. You can also try Opentable angel funding.
  • The first article that comes up is a press release from Open Table indicating that they received in 2000 a $10M venture capital infusion, after a $2M initial angel and VC round.
  • The $2M was probably pretty close to the cost to build out their initial demo/proof of concept and implement it in a small controllable beta (probably by region), and some portion of the $10M was used to make that scalable, fully featured, and to build the sales, marketing and business arm of the company to make it huge. There was probably an additional initial investment in Friends, Families and Acquaintances dollars (typically under $1M).

You can use this same methodology to find out the initial venture funding of most of the companies out there that have received venture dollars in the past. Sometimes you have to dig a little deeper, or you might have to go through a few articles to find either the actual or estimated dollar amount (except for public companies they're not required to report it). Alternatively you could look at other similarly scaled apps and check their funding.

The mix of how they spent their venture might be a little trickier, but most start-ups are spending the bulk of their initial cash on initially building software, and the bulk of their second round on infrastructure, scalability, marketing and sales. A me-too product would probably have to spend even more money on marketing and sales to be successful, since they'd have to fight off competition the first company into the space didn't have.

So what does that mean for the would-be entrepreneur? It means you'd better have something so interesting, new and revolutionary that no one else has thought of it if you expect to get funded and bring the product to fruition. Google took over the search market from Yahoo by presenting a simple semantic search interface instead of yahoo's structured/categorized search. It changed the world, but most of the success stories today are for new ideas no one ever thought of before.

Assuming you do have that revolutionary idea, be prepared to invest some serious dollars into making the thing a world-wide success. Treat the development effort and the business model development as the serious task that it is. Do some due diligence, market research, business planning, and specifications work before you jump into the development process feet first. Be sure you're prepared to stay the course and hear NO a lot before you dive into the Venture and Angel Capital fray - there are a very few applications that get funded, and the better prepared you are the more likely you'll be to be one of them.


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