Software Product Managers – What are you selling? Product, category or need?


Everything that one tries to sell, in my opinion, starts or ends in one of three buckets.

  1. A need sell
  2. A category sell
  3. A product sell

Let me explain in more detail on what I mean.

1) A need sell is the worst place for a product long term. If your product is here, you are essentially trying to convince the customer that he has a need and that he needs your product or service. You cannot sell to someone who won’t buy. Products that remain here either are:

  • Products that are typically technology driven and hence looking for a problem to solve or just plain stupid products – someone told me that there was Sharper Image tire pressure gauge that had a clock built into it – yah, right I was missing that – guess where Sharper image ended up to be.
  • Products that are way ahead of their time – the market is just not ready for it or the technology has not matured enough that the initial implementation is just not the right way to do it.

You may be able to sell a few of these products via lengthy sales cycle, but nothing to keep you going long term – the very existence of a product should be to solve an existing need and not to convince the customer that they have a need.

2) A category sell to me is where the prospect knows that he/she has a problem, but does not think it is possible to solve it and is skeptical whether the problem can be solved. New products that solve an existing problem in a very new way (pragmatic shift) could remain here for a little while. There are many examples that come to mind:

  1. Salesforce.com comes to mind during its early days. The dotcom bubble had burst, people were just wary of anything related to the internet, internet connectivity was sketchy and here was a company that wanted to do salesforce automation on the web. I am sure it was a tough sell in the beginning.
  2. “Data loss prevention” products – large corporations are always wary of insiders leaking confidential information to the outsiders accidentally or intentionally. Technology exists to solve this problem, but it is a little bit of a hard sell. This is not only because of the sophisticated technology, but also convincing someone that the technology actually works.

Many products/services could end up in a pilot and a longer sales cycle. You may not be able to convince everyone and hence you may sell less especially in the early days. Once enough people buy it and the product becomes mainstream, it will move into the “product sell” category. Such products/services follow the classic product adoption cycle made famous by Geoffrey Moore in “Crossing the Chasm” as long as the product can cross the chasm.

3) A product sell is basically where a prospect walks in and says “Give me this product” – the customer knows that the product solves a well known problem. You don’t have anything to sell, you just have to let the customer buy it from you. This is the sweetest spot you want to be in. You sell a ton (yes, there will be competition, but you still could do very well) at a very fast pace. This is where successful products eventually end up.

Salesforce.com is currently in this category. Microsoft Windows ended up here. Apple iPhone and iPod are here. Getting here should be every product manager’s dream. But products don’t end up here only by luck – they ended up here because they solved a real problem, solved it in the most innovative way and also enjoyed some luck by being at the right place at the right time. But products cannot be complacent once they get here, because there could very well be a competing product currently in the “category sell” that is solving the same problem in a whole different way, just waiting in the wings to take off.

As a software product manager, it is extremely important that you know where your product/service lies and then try to see how you can move quickly to a “product sell” as soon as possible. If you are stuck in the “need sell” category, you may want to rethink your strategy, reinvent your product or call it day and cut your losses.

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5 Responses to Software Product Managers – What are you selling? Product, category or need?

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  2. subrataalpha says:

    A “need sell” product may do well in an upbeat market, where consumers have the spending leeway to try a product and feel a (perhaps latent) need satiated.
    There are instances where “Category sells” remain that for a very long time and perhaps never make it to the “Product Sell” Zone. Take open office applications for example. Google docs and friends do solve a need in a different way but there are adoption pains, pains that dissuade users to move to it. There could be situations where “Need Sell”s – especially the ahead-of-time stuff – take as much time to become “Product Sell”s as do “category Sell”s.
    Btw, is this ladder progressive or is it possible for a product to get from “Need Sell” to “Product Sell” straightaway?

  3. gopalshenoy says:

    Hi Subrata,

    Anything that is a “need” sell is a scary place to be, it is a solution looking for a problem to solve – and success is based on a lot of hope and prayer. Yes, you could get lucky and someone may recognize a need that gets solved by the solution and you could move directly to a “product” sell. It sure can happen, but as a product manager I would not bet on it. I would rather build something that is a “category” sell or a “product” sell.

    Gopal

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  5. davidwlocke says:

    The need sell happens because we code to please ourselves. The remedy is finding a client and coding their product visualization on top of your technology. This makes for a slow process. Being a software company is supposed to be, but rarely is, a forever proposition.

    I don’t know that Salesforce.com ever created a new category. It was just the first late market CRM (as a service) product.

    As for the product sale, they span the early and late IT horizontal. They do need to be rewritten to transition to the late market, but once they do, your company better have another product entering the market. The prospect of continuing income is mostly a mirage. The transition to late market killed most of the software companies that ever existed, the once whose names we don’t recall.

    You really have to do all three: need sell, then category sell, then product sell. Beyond these, you will have to do a HypeCycle, next generation sell if your company is still around.

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