Ecosystem Development in Product Management
Everyday over six thousand app releases occur on Google Play, yet very few apps go on to become unicorns (See figure 1). Whether the product under consideration is a piece of software or hardware, chances are that neither superior product features nor having 10X engineers is sufficient to guarantee mass adoption. A large percentage of products do so well with early adopters and yet fall spectacularly short of gaining mass-market virality (See figure 2). One way to build products for mass adoption is to embed “whole offer” thinking into your product management framework. The “whole offer” is a core product that is augmented by everything that mainstream customers require to have a compelling reason to buy and solve an end-to-end problem.
Figure 1: Android App Releases per Day from 2016 to 2018 (Source: Statistica, 2020)
Figure 2: Whole Products and the Consumer Adoption Cycle (Source: Mohanbir Sawhney)
Consider the sale of household items on Amazon. Amazon certainly has a brilliant website/app with state-of-the-art machine learning and Artificial Intelligence code that recommend products to visitors and constantly adjust prices throughout the day to match customer needs/willingness to pay. Yet, there are four other factors that Amazon has built into its product ecosystem to create a whole offer. First, the app meets the aesthetic needs of consumers utilizing a virtual reality feature that allows buyers visualize the products in their living spaces prior to ordering. Second, Amazon has a first-rate delivery/returns system. Third, Amazon offers a rich set of warranties “protection plans” for household items such that users can return products up to four years after purchase – this also comes with tech support for some products. Fourth, Amazon has a large third-party seller ecosystem that has doubled product variety and assortment without increasing Amazon’s inventory costs. The result is that we all enjoy the Amazon Prime shopping experience. Amazon’s added value exceeds its app and flows from the complexity and robustness of its operations.
To replicate Amazon’s success, it is imperative to understand the concept of Total Customer Experience. It is the value products offer customers at the functional, emotional and, ancillary levels of interaction. Experiences are the sum of the functional as well as emotional benefits customers perceive minus the financial and other costs they incur. For example, when some people go to a cinema, the functional goal is to see a movie, the emotional goal may be to connect deeply with loved ones, and the ancillary goal is to avoid feeling hungry/sleeping while watching by snacking on popcorn and soda. To meet these needs, Netflix has recently launched Netflix Party (See Figure 3) that allows a group of friends watch a movie synchronously and chat whilst watching. Maybe in the future, there would be a world where Netflix will partner with Uber Eats to deliver freshly made popcorn to friends all over the world simultaneously.
Figure 3: UX of Netflix Party App (Source: Netflix.com)
To develop products that cross the chasm and become mainstream, product owners must begin by mapping out the total customer experience of the personas their apps are designed to serve and note any gaps in experience. This process of comparing the full range of customer needs to the functionality your app offers is called an “experience audit”. To map the Total Customer Experience, a company must understand the customer journey across all stages, from the expectations they have before they experience the product to the judgments they make after the experience is over. By diagnosing this gap, you can define the ancillary products and services that you need to augment the core product. The gap can be bridged by a combination of “make, buy or ally” strategies (See figure 4).
Figure 4: Scenarios on when to make or buy or ally (Source: Ukemeobong Etokowo Owoh)
In summary, when developing a new product you should do three things: develop a comprehensive map of the Total Customer Experience; second, identify which aspects of the customer experience will be made internally and which elements will be outsourced/procured; third, breakdown this overarching framework into smaller product version chunks such that by the fourth or fifth iteration of your product release cycle, the customer’s total experience would be complete and whole.
Poatek is a global leader in developing software that builds out a unique customer ecosystem as the core driver of value. Our developers and product managers see beyond just writing lines of code to developing operating model implementations that ensure your project scales and delivers long-lasting value.
Featured Image by Marc-Olivier Jodoin on Unsplash