What: “Transitioning to Agile Product Development – Lessons Learned”
Where: The Olympic Collection, 11301 W. Olympic Blvd. at Sawtelle Blvd. / West Los Angeles
When: Weds, Nov 11th, 6-9PM
Register here
Members $35 in advance / $45 day of event. Non-members $45 in advance / $55 day of event. Students $30 with ID

Learn about the benefit of agile product development as well as the pitfalls and best practices from agile experts and practitioners about transitioning to an agile product development environment. Experts panelists include:

• Scott Downey – Chief Scrum Master from MySpace.com Scott has been active in the Software Industry for more than 18 years, holding positions at nearly every level of organizations, and in a wide variety of organization sizes. He is currently the Head Agile Coach for MySpace.com and is a Certified Scrum Practitioner, a member of both the Scrum Alliance and the Agile Alliance. He conducts regular Scrum Master Certification courses in Beverly Hills.

• Scott Gilbert – President of Enthiosys Scott is an expert in Agile software product management, business planning, project management and business development. He has worked in a variety of high-tech sectors including enterprise software, aerospace and defense, satellite communications and interactive media as an independent contractor and co-founder of start-up companies. Scott holds BBA degrees in marketing management and international management from the University of New Mexico, received his ScrumMaster certification in 2006, and Scrum Product Owner and Scrum Practitioner certifications in 2008. He is a generous PDMA volunteer.

• Ricardo Aguirre, Consultant Ricardo has over ten years experience creating, developing and delivering innovative web-based and mobile software application products featuring web 2.0 concepts and technologies using both traditional and iterative (Agile) methodologies. He brings experience from Sony, AT&T and Qualcomm to his current position as Sr. Product Manager with Trimble Navigation.

What: “Creating Breakthrough Products Through Collaborative Play” presented by Luke Hohmann
When: Weds Nov 11th, 10am to 10:30am
Where: Westin Market Street Hotel, 50 Third Street, San Francisco
Registration and more information

The conference brings together attendees and speakers interested in building long-term, sustainable and profitable software businesses. Fifteen speakers over two and half days will talk about how to succeed in the business of software.

What: “Battle of the PM Bloggers” panel and competition
Part of: PMEC 2009, AIPMM’s Product Management Education Conference
When: Tues, Nov 17th at 4:00 – 5:00 PM as part of a two-day event
Moderator: Rich Mironov
Participants: top 10 PM bloggers
Where: The Fairmont San Jose, 170 South Market Street, San Jose, CA
Registration and fees: www.aipmm.com/pmec

AIPMM has taken AllTop’s list of the top 10 product management blogs, and invited each of those bloggers to join a panel. Each will have a few minutes to explain why he/she should be selected at the #1 PM blogger.

Should be fun, hope to see you there!

What: “The Agile Product Manager/Product Owner Dilemma”
Part of: PMEC 2009, AIPMM’s Product Management Education Conference
When: Tues, Nov 17th at 11:00 AM as part of a two-day event
Where: The Fairmont San Jose, 170 South Market Street, San Jose, CA
Registration and fees: www.aipmm.com/pmec

Rich has championed discussions within the Agile community about the need for product strategy and business-level planning – and how it needs to wrap around the software development process. He is one of very few people bridging the PM and Agile communities.

Should be fun, hope to see you there!

During the engagement, the client’s sales team identified some real-world messiness that we (as product managers) would prefer to ignore: high-end customers who demand enterprise-wide licenses – instead of limited-use licenses tied to volume. These are sometimes called “all you can eat” or AYCE deals. Let’s describe the situation, then explore a few of the messy conclusions.

PRICING FOR VOLUME

We always try to price our products based on customer value, but enterprise software is ultimately tied to some unit of measure: the thing we count to compute what customers owe us. (See Disruptive Pricing Units and Pricing for Start-Ups). Oracle favors per-CPU pricing; SalesForce focuses on per-seat-per-month subscriptions; Symantec counts desktops; VeriSign and RSA track tokens or certificates.

To protect the innocent, let’s imagine a fictional product that scans each customer’s software and magically identifies obscure coding mistakes. Our uniquely fictional pricing model is to charge only for the mistakes our product finds. Scanning clean code is free, but users will pay us for each error that this is detected and explained.

Being deeply analytical product managers, we’ve carefully built a tiered pricing structure which gives deeper volume discounts as customers buy more. For $500 per month, the customer can identify up to 100 mistakes. (That’s $5 per error). $800 per month to find up to 200 problems (at $4 each), $1500 for 500 mistakes ($3 each) and so on. It turns out that a perfectly designed pricing model will appear linear on a log/log chart, so we build some very impressive scatter charts. We feel great, having brought order to a complex problem.

.

YES, BUT…

All is going well until the deals start to get big, and enterprise customers assign their purchasing agents to negotiate contracts. Suddenly, customers start to toss the following at our sales teams:

• “We write a tremendous amount of software, and have no idea how to count the errors that come out of Development. Just give us a one-time ‘all-you-can-eat’ price for unlimited use, and we’ll consider it.”

• “If we make you part of our standard software process, we’ll be scanning billions of lines of code each month. That could turn up tens of thousands of very minor errors. You’ve priced yourself out of being a strategic solution that we use everywhere. We shouldn’t bother with a proof-of-concept test if we know we can’t afford to choose you.”

• “We preconfigure all of our servers the same, with copies of every software package we might need. That way, everyone in the Engineering and Operations groups has identical tools. All of our other vendors have agreed to site-licenses and unlimited installations.”

Sales people hear this all the time. Product managers, though, are buffered behind layers of Sales Ops and SEs and Marketers. As product managers, though, we’re surprised that our carefully designed pricing plans don’t fit every situation. And we want to take these demands at face value – assuming the customers are communicating clear pricing requirements. Customer input is our credo. (“Gee,” says the PM. “I guess we need a site license for deals above 20,000 errors detected per month.”)

So, to get some perspective, Enthiosys polled some Sales VPs at other enterprise software start-ups. How do they think about customer demands for site licenses and ‘all-you-can-eat’? What’s real and how can you tell? Here’s what I learned:

SELLING IS A MESSY, INEXACT PROCESS

[1] Customers try to get the best deal from us. Some have well-designed buying processes to force down prices. This includes purchasing agents paid based on the discount they negotiate; buying from multiple vendors; demands for unreasonable service level agreements; product bake-offs; painstaking reviews of license agreements; upgrade guarantees; pay for performance; etc. Some prospects demand ‘most favored nation’ pricing, where they are entitled to the lowest price you offer to any customer, ever.
So the enterprise buying process often includes a demand for site licensing, regardless of whether it’s truly required by the customer.

Good sales reps can usually sort out whether the customer has a legitimate need for AYCE or is simply using it as a negotiating tactic. (Often, there’s a champion on the customer side who clues in our sales team.) And good Sales VPs push hard to minimize special deals.

[2] Taking the deal off the table. If you have competitors (and everyone has competitors), the market sets an upper limit for some deals. Large customers can get your competitors to chop prices, and you’ll be forced to follow. Sales teams are paid to discover how much money the customer will actually spend, and which are mostly motivated by saving money. Eventually, your Sales VP has to decide which deals are important enough to throw away the price list and agree to something unique.

[3] Some customers have a legitimate need for enterprise-wide licensing. There may not be a reasonable way to track usage, or it may be extremely hard to predict volumes before deployment. Or perhaps your customer is bundling your cool-new-thing into a package that incorporates many different pieces, and is pricing that on an entirely different basis.  Etc.
It’s your job as a product manager, though, to generalize these deals. What if fifty more customers presented the same reasons for AYCE? Have we created a convenient way to undercut our pricing strategy and revenue stream?

SO WHAT SHOULD WE DO?

Our panel of Sales VPs offered two thoughts for managing individual deals and limiting the impact of AYCE licenses.

• Is this one of our top 10 deals for the quarter? If not, then we shouldn’t spend our energy chasing a one-off with unique terms and conditions. The sales team needs to refocus on selling the value of our solution, or identifying champions within the account to push our agenda. And we might just lose this one.

• How can we put limits on this initial sale, and come back later for additional revenue? Maybe we offer an ‘all-you-can-eat’ for three years, and postpone renewal terms for a while. Maybe we set a very large volume cap (up to 50,000 errors per month) and revisit usage after the first year. Maybe this license only covers one division of a huge company, and we’re free to sell more elsewhere. We should avoid unlimited perpetual licenses whenever we can.

Back on the product management side, it’s important to watch for trends without letting a handful of deals whipsaw our pricing model.  Part of PM’s value is to provide strategy and stability in the face of daily events.

SOUND BYTE

High-end selling is a messy, complicated, people-intensive process. Every deal appears to be a special case. Sales teams are hired, trained and paid to sort it out and find the revenue. Product managers should be humble, helpful and ready to spot the trends.

What: San Francisco QRCA Technology Day
When: Nov 6th, 10:00 AM to 2:00 PM
Where: Schlesinger Associates, 150 California Street, Suite 800, San Francisco
Cost: $25 for members and $40 for qualified non-members* and includes lunch.
RSVP to Ellen Schaefer at ellen@groupworks.net.

The Qualitative Research Consultants Association’s San Francisco Chapter (SF QRCA) is holding its annual SF QRCA Technology Day on Friday, November 6th at Schlesinger Associates in San Francisco. The line-up of presentations and demonstrations includes:

• Social Networking: Social networking includes things like Facebook, LinkedIn and Twitter. This presentation will explain what Social Networking is and how to use it to build your business.
• Innovation Games Online: This is a new tool that allows product managers, researchers, and others to collaborate with customers and find what they really want.
• Livescribe: Livescribe is a Bay Area company with a new device that could change how you take notes at meetings, brainstorming sessions and even qualitative research
• On-line Qualitative research: This presentation will focus on what is new in the world of on-line qualitative research.

Members are invited to bring/present other new technologies that they are especially excited about.

*Qualified non-member = Practitioners who specialize in the conduct and analysis of primary qualitative research and who function as research suppliers and/or consultants. Qualified non members may attend a lifetime maximum of four (4) regular Chapter meetings before joining the organization.

What: Role of Product Management When Development Goes Agile
When: Friday, Nov 6th, 10:00 AM – 11:00 AM PST

Replay the webinar here

The Pragmatic Marketing Framework has guided product managers for more than 15 years. Periodically – and very carefully – Pragmatic Marketing updates it to align with current best practice.

This webinar is an update to the “Role of Product Management When Development Goes Agile” session presented last year.
What is the role of product management in an agile environment? Is the role of product owner something different? Developers often see product managers as technical resources. Agile seems to have made this orientation worse, with product managers getting pulled into deeper, tactical activities. But spending so much time with internal teams means less time spent in the market as a resource for strategy and business thinking at the product level.

Rich and Steve co-chaired the new Agile Product Manager/Product Owner track at this year’s Agile 2009 conference.

Download the keynote slides

What: “Agile Comes to You,” a mini-conference with experts from AccuRev, Coverity, Electric Cloud, Enthiosys, and Rally Software. Hosted by Agile Journal.
Where: Hilton Santa Clara, 4949 Great America Parkway, Santa Clara
When: Thursday, Nov 5th
Attendees also got a copy of Rich’s book “The Art of Product Management”.

Shrinking budgets. Competing priorities. Schedule risk. It’s easy in a turbulent time to keep your head down, focus on putting out one fire at a time, and hope things get better. But this is actually a great time to look at how Agile software development techniques and the tools that support them can help you reduce risk, boost the productivity of your existing organization, and cut development costs. Not enough time or budget to travel to industry events this year? This unique conference brings Agile thought leaders and solutions to you.

Rich’s keynote summarized the Agile software movement, with emphasis on executive-level benefits, agile transformations, and organizational planning. As a long-time software product strategist and Agile product manager, he focuses on framing our opportunity for improving how we define and create software.

Joel’s latest post, Figuring out what your company is all about is just awesome. He references another of my favorite bloggers and authors, Kathy Sierra, who, as Joel describes, challenges us to explain our mission in the in the form, “We help $TYPE_OF_PERSON be awesome at $THING”.

Here at Enthiosys, we can answer that simply and directly: We help Product Managers be awesome at Agile Product Management.

When we focus on our Innovation Games practice area, we find that who we help and how we help them be awesome becomes even richer.

• Innovation Games help sales teams develop the deep customer relationships that result in sustainable, mutually beneficial transactions.

• Innovation Games help strategic planning teams develop their strategy, and then the games help these teams negotiate and select the projects that align most effectively to the firms strategy.

• Innovation Games help corporate leaders who want to engage their global workforcein tackling the issues that are challenging us all through serious, collaborative play.

• Innovation Games help market researchers generate the insights that result in breakthrough products and services.

• Innovation Games help product teams create richer, more accurate project plans, improve their development processes, and manage the evolution of their products and services.

Whew! That’s a lot! Stay tuned, because we’ll be expanding on how our games accomplish all of these things over the next few months.

I’ll start with my memories of the Apple Knowledge Navigator, in which a handsome (of course) and unbelievably smart (naturally) actor plays a university professor who collaborates with a colleague to develop and share some critical new insights into global warming, to the plethora of tools that are being created that enable “instantaneous” collaboration with a group of people. As is common in these videos, the collaboration between the professor and his colleague:

• happens in real-time;

• with a colleague who is completely ready for the collaboration (was she psychic?);

• where both of them have all of the information they need, easily obtained available with powerful, context driven, natural language search.

Now, of course I can’t really fault Apple for creating a brilliant vision of the future of collaborative work. This video was, and still is, an amazing vision of the future, not unlike Doug Engelbart’s original demonstration of the collaborative work in 1968 (which, in many ways ways, we’ve only just begun to realize in our systems).

Variations of this notion of collaborative work can be seen in some of the visions about large scale collaborative work and crowdsourcing, including Wikipedia. Note though, that these collaborations don’t occur in real-time, and that the number of people involved in the collaboration are typically small even though the potential pool of collaborators is large (e.g, lots of editors at Wikipedia, but only a small fraction of them edit a given article). That’s OK, because the meaningful communication that is required for collaborative work breaks down after 8 people or so are involved in the work.

If we take a step back, I’m noticing a fairly large number of incorrect assumptions about ad hoc collaboration. The moment you identify the need to collaborate with others to solve a problem is rarely the moment you’re ready to collaborate with others about the “thing” that you want to collaborate about. When the task is complex, to effectively collaborate you need to create the right context and prepare yourself and your collaborators so that you can collaborate effectively. You also need to give some thought to who is going to be involved, the goals that you’ve established (e.g., why are you working as a group?) and the tools that you’re going to use. You’ve got to schedule time for people to prepare (research, reflect), collaborate, and then, as needed, continue to take action against the goals.

All of this taken together means that for many “ad hoc collaborative tasks” (aka, unstructured work flow), we’re simply not going to be running around with our PDAs, instantly ready to  join forces and collaborate. Instead, we’re going to see an increasingly powerful set of tools that enable us to collaborate more effectively, which is good. But not instantaneously.

Before you think I’m dissing your favorite collaborative tool, think again:  start with a user-centered design perspective of what’s happening in the moment of the collaborative process. When I’m collaborating, I really do enjoy the many tools that have been developed to help me, from simple white boards to much more sophisticated solutions. And, I fully expect that collaborative technologies will continue to evolve to make it really easy for me to select and use the right tool in the moment of collaboration, just like I expect scheduling systems to become increasingly smart about recommending the right participants and coordinating our busy schedules. But that’s a really, really different concept than ad hoc, instantaneous collaboration.

Here is how these concepts have influenced the design of Innovation Games online both now, and in the future.

• The most important influence is that we don’t provide just one game and expect it to solve all of your needs. We provide several different in-person and online games, each tuned to the problem you’re trying to solve. To help you select the right game we provide books, educational classes, a wonderfully supportive LinkedIn group, and other forums for discussion on planning, playing, and post-processing the results of the right game for your needs.

• Our system provides a specific scheduling mechanism where planners can schedule the games with participants. This is important because many times game participants simply can’t join a game on the fly. They need time to prepare for the game. And coordinating the schedules of players can be pretty demanding. And while this scheduling mechanism works well enough, we’ve also had requests for “in the moment” / “instantaneous” games. This is natural evolution of our offering, and we’ve got this on our roadmap.

• We also have been struck that planning for an Innovation Game is NOT a solitary activity. Instead, planning for a game is also a collaborative game. So, we’re going to improve our planning process to allow for collaboration.

• We already provide tools to help planners reflect and process the results of games. I’ve described our approach for this here.

• We enable facilitators to prepare a group for playing a game by assembling the group in a lobby before the game begins. This helps create a better result by providing the facilitator with a means to explain the goals of the game, answer any questions about the structure / goals of the game, and prepare the players.

As you consider how the Collaborative Web is going to affect your business, keep in mind that the future of work is NOT going to be based on interrupt driven, ad hoc, and semi-randomized collaboration. We’re still going to have to define goals and select tools that help us achieve these goals, schedule meetings, help people prepare for the act of collaborating, help them in performing the work, and so forth.