Talent Development Business Growth: Product Strategy

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One of the conclusions I’ve drawn from my 40+ years in the talent development vendor industry is that few companies know how to consistently develop market-viable products or programs. In fact, in an informal survey I conducted of 24 talent development vendors, I found that on average, 70% of vendor business revenue comes from their very first product, even 20 and 30 years older. late. When I talk about
product, I mean any offer you make to your customer base. It can be a highly personalized program, an off-the-shelf product, or even a consulting service.

Of course, this could be interpreted as the fact that they all understood very well how to develop a product, given that it has supported their business for many years. But few have been able to repeat that initial success, relying almost exclusively on product extensions to generate additional revenue. The question then becomes, what is it about the structure and process of these companies that allowed them their early success, but hindered their later innovation in product development? My guess is that their early products were based more on the whim, insight, and even genius of their founders than a well-crafted product strategy discipline.

What would such a strategy look like? In general, there would be two different documents. The first would be a Market Requirements Document (MRD). This document would identify key market drivers, market size, market saturation assumptions, and a financial analysis that aggregates this data into a projection of expected performance in terms of revenue and profit for each product.

The second document would be a Product Requirements Document (PRD) defining topics, length, format, etc. new and existing products needed to meet identified market requirements. It sounds relatively simple, except for the discipline required of largely entrepreneurial businesses. The result would be a strategic product roadmap placed side by side with market and product initiatives and the time horizon over which they would be deployed. This roadmap would delineate timelines from initial research, then MRD and PRD development, through market and product initiatives, ending with the first revenue period for each product. This type of roadmap can help establish a business plan for the resources needed over a period of years, and how and when there will be a return on that investment.

Combining a market analysis with a product development plan can result in what is called an Ansoff Matrix, first published in harvard business review in 1957 (see figure below). This is a simple two-by-two window, as shown below, that can give you a line of sight to your overall product strategy.

From this matrix, you can not only decide on your specific product strategy, but also determine where your relative risk lies. The highest risk would be when you need to diversify by selling new products in new markets. The lowest risk would be when you need to enter an existing market; i.e. extending your current offer to a market in which you are currently selling. Medium risks arise when you are developing new products for existing customers or doing market development by selling existing products to new customers.

Implementing a forward-thinking approach to developing your offerings will save you a lot of time, money, and effort. But, more importantly, it will allow you to better meet the needs of your customers while effectively respecting your development plan.

What have you done or could you do to integrate your market and product development initiatives to create a strategic product roadmap?

For more information see The Complete Guide to Starting and Growing a Talent Development Business.

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