In Product Management, It's All About Location, Location, Location!

Over the last few months, while talking to a range of Indian and Global tech companies, I noticed an interesting trend in the determination of location for key functions, specifically product management.

Global MNCs: During conversations over the last few months with some North America based technology MNCs, I observed that a lot of them plan to create product management functions for local markets and ensure better insights by placing the product managers in the local markets.  By this, they plan product functionality and global roadmaps accordingly.

Most people who have worked with global MNCs will, time and again, have observed that products are not created for Indian (or emerging) markets.  Most product managers continue to design products for their home markets (typically the more mature markets), with limited focus on local market insights.

India Based Product Companies: In a majority of these companies, more so the startups, senior management executives are either based out of, or are relocating to their largest markets (read North America, maybe South East Asia).  The logical reason is to be close to the key markets and customers.

The rest of the functions (operations, product management and engineering, service delivery, shared services), continue to be based in India.

And this is where I started thinking about the ideal location for product management.

Typically, Indian product startups focus on building a customer base (and credibility) in India, and once established, extend to more mature and higher revenue markets e.g. North America.  As they expand, they locate their sales teams there, but continue to have their product management teams based in India. 

Extending the logic of creating products suited for the key markets, shouldn't product management at Indian product companies be based in the potentially largest markets?  The refrain often is that they cannot afford to have product managers based out of the higher cost markets.

I recognize that there is no easy solution, and companies choose different approaches to manage this.

Location Options	Typical Company	Advantage	Challenge
Located with Development	About 50-60% of companies, Indian and Global	Ensure that the product development matches product definition	Not enough market exposure for the product managers
Split between Development and   Market locations	Taken by SI firms, where the product manager travels specifically for large opportunities	Balance between development and market needs, being an effective bridge	Customer meetings are for closures, not for discovery - thus, not able to really get deep proactive insights into the market
Extended Product Management teams in the market	Taken by about 15% of companies, having an advanced roadmap	Get market feedback and also be able to effectively engage with the development teams	Presales / solution responsibilities are pushed onto local product managers, limiting market feedback and insights
Located in the Market	About 5-10% of companies (mainly Global)	Capture direct and deep market feedback to ensure product truly meets market needs	Limited engagement with the development teams

My belief is that while there may be no one answer, it is fundamentally linked to the stage the company is in, and the ability to effectively capture market feedback into the company's product management teams.

The Location Matters

For product startups, however, it becomes extremely critical to get the right market insights (on an ongoing basis) so that they can actively differentiate and continue to retain their market edge as compared to some of their better entrenched competitors.  Having local market feedback could well be the key differentiator that could help them build and deliver significant value to their customers.  And could result in the long term growth and survival.  When one evaluates the employee costs of keeping the product management function in the key markets against the opportunity costs, it becomes apparent that the benefits derived can easily justify the investments.  However, the choice of the right product manager is also critical, otherwise you may end up getting pre-sales and reactive insights, which is not what the goal is.

Of course, an extreme option could be to follow Dogbert's advice:

Look forward to your insights on approaches that have worked for product companies across multiple markets.

The 4 Ps for Successful Telco Cloud

About 5 years ago, I surveyed over 200 global telcos to assess their plans for rolling out Cloud services to their customers.  The conclusion: about half of them had some basic services (email, collaboration), while a few had broadened the portfolio with CRM, Web Conferencing, etc.  However, there was no real success story, even at a small scale.

Cut to 2013, and (unfortunately) the story hasn't really changed much.  A few telcos have made some headway, but even they are some way off to having built significant revenues or customer base.   Most telcos do recognize that with connectivity increasingly becoming a pricing conversation, the only option is to move up the value chain of their customer needs.  Cloud is one path that can help them leapfrog ahead of competitors across segments.

Logically, telcos are well suited to offer Cloud services, having the following assets:
- Connectivity and Hosting: the infrastructure required to host, and for end customers to connect with
- Brand: having invested heavily in their brands, they are well known and credible
- Reach and distribution: an extensive channel and retail network which can reach remote corners of the country
- Billing relationship: a recurring relationship, which also supports both prepaid and postpaid billing models

With so much going for them, why have there been no real success stories for Cloud with Telcos?

Is there a way for Telco Cloud initiatives to turn out like this?

Having engaged with telcos for various Cloud services during the past 6 years, my experience brings me to the following two observations:
a) the intent to offer Cloud is clearly there, and all have evaluated cloud
b) the changes required to deliver on that intent require some fundamental rethink, and herein lies the gap.

I am listing the 4 Ps I believe can help telcos bridge the gap between intent and success for Cloud.  

1. People and GTM - Telcos will need to build up capabilities, either directly or through partners, to effectively engage the target segments.  For SMEs, this means channels that a) understand IT in addition to networks b) are able to talk solutions.   For large enterprises, this means a) creating solutions teams that are able to talk business pains before technology b) an extended SI / delivery partner ecosystem that can actually deliver on those solutions (e.g. Telco partnership with SI).  Teams need to be able to talk as effectively with, for example, the Sales and Marketing head as with the CTO.

2. Product - Most product teams come from the traditional telco background and struggle with the paradigm shifts required for Cloud services. These product teams tend to go with the market trends, and work on what their cloud partners suggest.  The offerings then tend to be "me too", not a real differentiator (e.g. most have partnerships with either of Google Apps or Office 365, most are considering IaaS / StaaS / DRaaS as initial offerings).  Moving beyond this to analyze their customer base, identify core needs and build services to address those is possibly the most effective way. 

3. Processes - Processes are typically geared for their bread and butter business i.e. data and voice connectivity.  Some of them are not relevant for the Cloud environment (e.g. requiring a week to provision a Cloud service for a customer) and being able to identify and adapt those processes based on the fundamental customer need, is critical.  Cloud processes need to be ensure faster delivery and adaptability based on market feedback.  

4. Prioritization - This by far is the biggest challenge and the responsibility rests on the executive management.  Cloud is viewed as something they cannot avoid, and they invest in the PR when announcing Cloud initiatives.  That PR is subsequently not backed up with their commitment and empowerment required by the teams to align the above and build up a profitable business line in the mid to long term.

Some have made attempts by forming completely separate entities (e.g. Alatum by Singtel, Telefonica Digital).  The initial success rates have been better, but since the people and most processes are defined by the parent organization, there continue to be challenges. Some have acquired core infra companies (e.g. Verizon and Terramark) to move forward faster, and the initial results have again been positive.

I have engaged with teams across multiple telcos that are putting in a lot of effort to bring out Cloud, but the overall organization is still geared towards their core businesses.  I do see (and hope) that changes, and as the maturity and awareness starts coming in, there could be a sizable telco cloud business that builds up in the next couple of years.

Clearing The Air: 3 Roles Indian IT Providers See as Product Management

The Indian IT industry is over $100bn, but still struggles in creating global IT products.  While there has been the occasional Tally, Ramco, or Finacle, there is not much else.  One critical reason I attribute this to is that Indian IT companies do not really understand how Product Management can create long term customer value and business sustainability.  While one can argue that there have been more of these companies in the last 5 years (Livemint: Tech Startups), the next 5 years will determine whether India has actually created global products.

Most Indian companies view product management as either of these: Product development, delivery (or project) management, and marketing (or marketing communications).

Role 1: Product Development:  Great at problem solving, developers are expected to provide insights on what they believe the customer wants, and create products based on their understanding.  Let's admit, very few engineers are comfortable socializing with customers (aka Raj Koothrapalli - awkwardness multiplied a few times).  I have often encountered developers spending hours defining products, with limited idea on how the customer environments actually are (a few minutes meeting customers would have saved those hours).  The smarter ones are able to engage with customers, but put them in front of a business strategy plan, and things slow down again.  BTW, this may work for startups, where the founder often has a clear intuition about the idea, but when they have to scale revenues up (to new customers or increased wallet share of existing customers), most struggle.

Role 2: Delivery (or Project) Management: They engage with customers and internal teams, to co-ordinate schedules and resources.  However, expecting them to gather requirements because they are engaged with customers, based on which products are created, is better suited for an IT services delivery, not for sustainable product IP creation.  Today, most Indian SI companies are struggling as they attempt to create product IP and value, because of this belief and expectation from delivery managers to "productize" based on customer specific projects.

Delivery and Services Approach

Role 3: Marketing (or Marketing Communications): Marketing teams are definitely engaged with the market, but most are focused on lead generation and marketing communications, and the execution of those plans, rather than gather actual feedback.  Thus, what we get are customer leads, with very little investment in market research aligned with direct customer engagement.  Recall the last time you attended an IT vendor's event, and exchanged business cards with their marketing person - I can't!

As long as Indian IT companies continue to depend solely on one of the above to help create long term products, they are going to struggle in creating global products, and building the valuations that Apple / Microsoft / Google / Salesforce (and many others) have.  

I end with my definition of Product Management - engagement with the market and customers, through multiple channels, to understand stated and unstated needs, analyze the potential opportunities, align with corporate strategy, and work with sales, marketing,  and development teams, to translate the needs into a multi year product roadmap, eventually creating products that customers desire (read Apple, though the approach may have been slightly different :) )

If your current teams are geared and empowered to do this effectively, time and again, then you may be in the right direction to be hailed as an Indian product company (if not already) soon.