7 Ways to Think about Product Roadmap
By: Robert Hacker
Tags: Iteration, Platform, Product Roadmap, Synthesis, Vision

People frequently ask me to develop talks, workshops, courses or even a degree. For research, my first reaction is to go to my 14,000+ articles in Evernote. If Evernote fails me, which recently happened, I might search Harvard Business Review, Wikipedia, Stanford Encyclopedia of Philosophy or Investopedia. It recently proved a challenge to find a comprehensive article on “product roadmap”, so I thought I would share my thoughts on the subject.

One of the keys to building a great company is the founder’s vision, what Simon Sinek calls the “why”. The “why” should be wrapped in an inspiring story to motivate all the stakeholders, starting with investors and customers. A part of the vision is frequently a product roadmap, preferably with social impact. A product roadmap shows the evolutionary plan for product development over time. Frequently the roadmap is steeped in project management or agile management jargon, but this is to lose sight of the customer and their wants, needs and fears.

The product roadmap should reflect a well-defined understanding of the customer segment, but as a new company one should realize that this understanding could change or evolve. In other words, a product roadmap should reflect the iterative, exploratory approach that is best practices in a startup. Therefore, a product roadmap should be additive and not multiplicative. Additive approaches utilize independent components that add value. Multiplicative approaches build on required technology or products. Parler’s recent termination experience with AWS is an example. Develop the product roadmap additively so that value is always maintained regardless of new developments.

I offer seven strategies for how to think about a product roadmap:

1. Features

2. Products

3. Customer experience

4. Cost reduction

5. Customization

6. Platform

7. Hybrid

Features

One traditional way to think about evolving a product is to think about the functionality or feature set of the product. Think about the camera in the iPhone, which launched in 2007. The camera has increased in popularity as people have found new purposes for this tool and Apple adds new camera capabilities with every new phone release. Part of this added camera functionality is for the Facebook user, but part of this expanded functionality and features is for telemedicine and image recognition applications. Done properly the product increases in popularity and value. Done poorly, one has feature creep, the annoying add-on of features that provide no value to the customer. Product development lead by engineers frequently suffers from feature creep.

Products

Another traditional approach to product roadmap is to develop new products, as shown in the image above. I will spare you another example from Apple and will use Ford. Ford, of course, started out with the black Model T. Think about all the new products over the years — trucks, convertibles, the Mustang sports car, the Falcon — all built with combustion engines, and soon the electric car and UMVs. Every successful new product matches a new customer segment or a need for a portion of existing customers. Note how Ford’s strategy was always additive using the same technologies in new ways. Also, Ford (and Apple) combines a product strategy with a feature strategy and has over the years added radios, air conditioning and GPS maps to their cars and trucks. For the younger reader, I would point out that my first car had none of these “expensive” optional features.

Customer Experience

A comparatively new way to think about a product roadmap is to go beyond feature and product and focus on how the interaction between customer and company will evolve. For example, training manuals have been offered for at least sixty years, but now we have videos, toll free customer service, independent consultants supported by the company, content marketing, influencers, user communities and customer mapping to improve the entire experience from the starting Google search to post onboarding. The premier example of a company that constantly perfects customer experience is Disney, who even has a consulting subsidiary to train other companies (such as Miami-Dade Expressway). As the digital technologies advance, we are not far away from personalized, individual services especially in healthcare.

Cost reduction

Clayton Christensen, a famous HBS professor, coined the phrase “disruptive innovation”. Disruptive innovation said that a new competitor could reduce the feature set of an existing company’s product, thereby reducing the cost and expanding the number of customers. Of course, the same strategy would work for your own product. Reduce the feature set, reduce the cost and increase the number of customers who can afford the product. Just be careful that you do not trade your existing customers down to the cheaper product and less gross margin dollars. The computer industry would be an example, where the product originally was a multi-million-dollar mainframe computer and now we have watches with formidable computing power. A better example is maybe Motorola, who offered the first cell phones in a 20-pound briefcase and down-sized them all the way to a flip phone (shown below).

Credit: T Mobile, Samsung

Customization

Customization is the practice of fine-tuning a product or service to match the specific needs of an individual customer or class of customers. SAAS software implicitly is a customization strategy where the customer can decide which part of the feature set they need and are willing to pay for. A great example of customization is Costco, where they have extra-large packs for their large number of small restaurant customers. Regular people have to buy the same package, which helps increase the average customer transaction. Substantially cheaper unit cost and many times better quality (compared to national brands) make this strategy work for regular Costco customers also. Dodge and Ford police cars would be another example. Amex Platinum Card is another.

Platform

Many people talk about the unbundling of services. Why do I need to use Citibank to process payments on my website when I can pick a fintech company that specializes in payments. Then I can pick another provider for my bank account, my wire transfers, my payroll services, etc., all state-of-the-art best practices in fintech. As the owner of the e-commerce site, you could bundle these best of class services and offer them to other e-commerce sites. That’s a platform strategy. Square is a fintech company using a platform strategy. Google and AWS offer a platform strategy for cloud computing. Data storage, connectivity, tools and algorithms and processing, all from one service provider. Platforms originally gained popularity as communities and two-sided marketplaces. Now platforms are becoming the infrastructure for smaller companies. Good for lowering costs and state-of-the-art technology but remember the multiplicative risk of Parler. Consider as soon as affordable to add a second cloud provider, maybe from Russia, India or Brazil. (Note: Brazilians should consider setting up a cloud computing provider as an alternative/backup to the big American companies, assuming the U.S. cannot cut off network connectivity. India is another candidate but they would need to harden the service to new levels. Raised in the cold War, I am reluctant to rely on the Russians.)

Hybrid

It is widely acknowledged that creativity is a combinatorial process (Poincaré, Einstein) wherein components are synthesized to create new components (Herbert Simon). The hybrid strategy builds on the component nature of reality. Today the component we are adding is new technologies. A hybrid example is using Apple Watch to capture biodata for machine learning to determine an individual’s mental health. Machine learning is complementing or even replacing the doctor and there is no COVID risk from visiting the doctor’s office. If you captured the data on one hundred thousand or one million patients, the database might be more valuable than the mental health services. Creating the database to also commercialize would be another form of hybrid strategy. Capturing the data from networked devices in hospitals that monitor patients and provide scheduled medications is another variation of the hybrid strategy. Cybersecurity companies protecting these networked devices could also capture the data for resale, perhaps offering cybersecurity for free.

Conclusion

One of my favorite business books is Ten Types of Innovation by Larry Keeley. This book shows how to add value in the ten parts of the value chain of every company (building on Michael Porter’s original work on value chain). Using the ten alternatives, as shown below, would be an excellent technique to more rigorously evaluate each stage of the roadmap and the entirety of the plan.

With seven ways to approach the development of a product roadmap, no company should lack a multi-year plan. The smaller the company, the shorter the plan with 18–36 months a good time horizon. Iteration and pivots are healthy reactions in startups that suggest shorter plans initially. For the visionary founder amongst us who may object to such a short plan, I would remind you that entrepreneurship is the conversion of the abstract idea to tangible customer value. Pay attention to the tangible such as the earlier end of the product roadmap.