What the Whatsapp deal can teach all Product Managers

There are lots of lessons behind the curtains of the $19 BN Whatsapp acquisition by Facebook. There’s lessons about the scale and value of social, about the continually evolving mobile platform. There’s of course the rags-to-riches story of the founders going from food stamps to being billionaires in just a few short years, and a casual reminder that investment bankers are greedy.

But a few layers deeper there’s another lesson. It’s simple:

Whatsapp was not the first mobile messaging app.

When talking with Product Managers at lots of different companies I often hear sentences like these:

  • That’s not ‘new’ enough.
  • No, there’s already an app that does that.
  • If we could just find a completely new idea…

The problem is:

“There are no new ideas under the sun.”

Whatsapp was not the first mobile messaging app, and Facebook was not the first social network.

So what is the lesson? You don’t need to be first to win.

In fact, often not being first is an advantage. Look at Facebook – Mark Zuckerberg was able to learn from the failings of all the social networks that came before him. He learnt the importance of scaling from the failed Friendster, whose incredible pains scaling under rapid growth ultimately killed it. He learnt about network interactions from MySpace, which was still the biggest social network in 2006.

Another particularly good example: look at the category of To-Do List apps. There are literally hundreds in the app stores, and more pop up every month. Some are more successful than others, but the most successful ones, such as Wunderlist (currently #44 on the iOS store, and #29 grossing app), have only been around a relatively short amount of time. There were countless To-Do list apps before Wunderlist, and there’ll be countless more. What makes Wunderlist successful?

The value in a new product or service is seldom that it finds a completely unmet need. The value is often solving a known need in a new and innovative way.

When looking at product opportunities, the question is not if there is another product that solves the problem you intend to solve. The question is: can we be different? Can we be better?

A Very Simple Model for expressing a Customer Value Proposition

There are many frameworks available to help product teams develop and express a customer value proposition. One of my favourites is this Value Proposition Canvas, which was based on the canvas from the creators of the Business Model Canvas.

Expressing the proposition on this canvas is a great way of forcing you to think through the whole proposition, from beginning to end, and it is particularly useful for helping you identify problem-solution fit – that is, identify and articulate which needs or problems your product is addressing, and how.

While this model has worked very well for me, I would like to share a different, (even!) simpler model. It’s a well-known idea that any product or business should be able to be expressed within a single sentence. This model is all about getting to one sentence.

It’s as simple as answering three questions about your product:

  1. What it IS
  2. What it DOES
  3. HOW it does it

Step 1: Answer the three questions

What it IS

This describes the broad product category. What IS this thing you’re building? An app? What kind of app? Is it a service? What type?
Examples:

  • A messaging app
  • A maps app
  • A customer relationship management service

What it DOES

What does this product actually DO?
Or to put it another way – what are the benefits that this product provides to the customer? What needs does it solve?
Examples:

  • Send a text, image or video message to anyone you want, instantly, for free.
  • Find new and trending places to try that match your tastes in your neighbourhood.

HOW it does it

How does this product deliver the benefits you’ve described in the section above? What particular features or experiences are key to how your product will do this?
Examples:

  • Extremely simple interaction model with delightful user experience.
  • The fastest, most robust messaging cloud service.
  • Recommendations based on the activity/history of your friends.

Step Two: Prioritise

Do you have multiple answers under some or all of the questions above? If so, prioritise them. What is more important? What is critical? What is core to the whole product, and what is secondary?

Which items, if removed, would result in the product not being viable any more? These are your core propositions.

Step Three: Circle the differentiators

Which items you’ve circled are the ones that differentiate your product from others on the market? Which ones make your product truly different from the competition?

Step Four: Your proposition in one sentence

Now, try making a single sentence out of your answers in the three columns, focussing on a) what is top 1-2 in terms of priority, and b) what is differentiating.
(Hint: you don’t need to use every column!)

The formula for the sentence is as follows:
This product is a x (what it IS) that y (what it DOES) by z (HOW it does it).

Example: This product is a messaging app that allows you to send a text, image or video message to anyone you want, instantly, for free.

If you find that you cannot get everything you want into one sentence, or if your sentence is more than two lines long, start cutting. Keep cutting until you reach one sentence. What is really core? What is truly differentiating?

Why does this model work?

This model works by forcing you to prioritise. What is really important? What is really core? What is really differentiating?

It is also helpful because it helps visualise where your product’s differentiation lies. Some products differentiate on the benefits, or problems solved, and others differentiate on the solution to those needs. Knowing which is crucial when formulating your value proposition.

Try it, and see. I am interested to hear your feedback and if this model works for you.

The unbundling of Facebook and the evolution of mobile

Last week Facebook announced the new Paper app – an app that turns your Facebook news feed into your own personal newspaper. At the same time they announced Facebook Creative Labs and promised further small, single-purpose apps.

This is all part of a growing trend from Facebook to un-bundle their core mobile product/service into smaller, focussed single-purpose apps that solve specific problems. The first move here was Facebook Messenger, which was designed to compete head-on with the growing number of successful messaging apps that are growing incredibly in the marketplace (Whatsapp, Line, WeChat, Snapchat, etc).

When the giants of the desktop web era (Facebook, LinkedIn, Yahoo, and so on) moved to mobile, to begin with their service architectures stayed more or less intact. On the web, a single product has a single URL, a single brand and a single interface and structure. Facebook on the web is an entire product service that exists behind the facebook.com URL.

It turns out on mobile, however, that there are different dynamics driving user behaviour and expectations. On mobile, how users interact with apps, and how they choose to create and consume content, is very different than it was on desktop.

The structure of apps and the multi-tasking abilities of modern smartphones makes changing apps really easy. It is nearly always easier and quicker to press the ‘home’ button on your smartphone and open another app than it is to navigate the menu structure within the app you’re already in to access a different function.

This dynamic is driving the un-bundling of Facebook’s offer. Others are following. Yahoo already has offered a variety of mobile products since Marissa Mayer joined as CEO. Others, such as LinkedIn, will surely follow. (LinkedIn experimented with an email application, which they have since pulled. I predict they will release a news reader, similar to Paper, some time soon).

On mobile, users prioritise simplicity and speed over flexibility and broad functionality. Apps have a single use-case or purpose, as opposed to web products, or pre-mobile software in general, which cater for maximal different use-cases and functionality.

This is all a further acknowledgement that the paradigms that drove software and user behaviour in the pre-mobile world don’t fit completely to mobile, and the platforms are still evolving and changing.

Benedict Evans has posited that we really don’t know what it even will mean in 5 years to say “I installed an app on my smartphone”. So very little is settled – which means big opportunities – and also big risk – for mobile players.

Location-Based Services in 2014

I’ve been thinking a lot about the future of location-based services lately. The first thing that occurs to me: nobody talks about location-based services anymore. There are just ‘services’.

It occurs to me that Location, in and of itself, is not an ‘experience’, per se. It is an enabler of experiences. Allow me to explain.

There are two critical aspects that make up a location-based service:

  1. The ability to accurately detect the real-world location of the user (or, more specifically, the user’s device) and communicate this back to a service in real-time.
  2. The ability to accurately place this, and other, locations of interest on a map.

Take a classic “location-based service” such as Foursquare, where users ‘check-in’ to venues, stores or other locations with the app on their smartphone when they visit the store physically. The location of the user is the enabler that allows the check-in to take place, and the rendering of a map of the area is the enabler that allows the check-in to be viewed and consumed later.

Location itself isn’t the point or motivator for the experience. It’s just what makes the experience possible.

Hence the term “location-based service” has fallen a bit out of favour. Location is no longer an exciting differentiator among mobile experiences, and the location is very rarely the real point of the ‘service’. The point is always something else: find out how good a hotel is (TripAdvisor), review a restaurant (Yelp), find a new place for lunch (Foursquare), find deals nearby (Groupon, iBeacon), etc.

So the thing to remember about Location: it’s not an experience. Location is an enabler of experiences.