hi everyone welcome back to our channel and you’re watching episode two of our special series with uh but my good friend lucas here we are talking about different ways that small to medium enterprises can navigate themselves in their 2020s how are you today lookit doing well doing well it’s been what is it a week since we last had it yeah you’re going well going well busy week oh gosh yes it’s a little bit like that it’s a like for any small business owners it’s always a bit of app and flow isn’t it that’s like yeah you never never predict exactly what’s going to happen in the week oh gosh hey when i was looking into some of the articles it reminded me of something do you remember cds yes absolutely i remember yeah remember cassettes and winding them back oh guys
with the carbon tape or something like that those are good um anyway the reason i raised that is because we in uh in the early 2000s there are pop musicians that would put like kind of like a special coding cds to prevent people from copying now that’s the beginning of the music industry transforming into digital which is what is going on now um i guess that applying that that technology is kind of part of product design it’s i hope you’re looking at it yeah i i i guess if you’re thinking about product design people talk too much about their features don’t they really it’s talking about the speed and accuracy in which you can solve the customer problem so it gets back to getting the job done faster and or better music industry is a great example isn’t it the way that product design has to change to suit the need and cds came along but they’re still solving that problem of can people listen to music remotely and be comfortable while doing so and cds came along and of course some people thought there was a market for cds and invested heavily into that technology others got on board the digital revolution and realized that it’s going to be mp3 format mainly the larger companies that were smart enough to invest in the mp3 format they got the benefits from it the others who stuck with the old technology and didn’t see the change uh dinosaurs well look i mean the thing is with those particular cds like not only cd but the ones that needs that i was talking about before you need to play it on the computer you have to open his own app for it to launch his own app on the disk for it it’s technically it’s smart it’s functioning but then the problem is it’s not making it faster it’s actually making it slower and the quality is pretty much the same so it well if i’m being brutally honest it actually pushed me into going digital and have a little little mp3 player yeah music industry music industry is an interesting one isn’t it because none of those technologies when we think back they don’t seem to have a long product life cycle even though maybe you know cds of 10 15 years the company that comes to mind when i think about being able to ride the wave of incremental improvements to their technologies is intel intel really has has had a technology that’s core to a computer processor and they’ve been able to increase the speed and accuracy whether annually or bi-annually for i don’t know how many years would intel have been writing success for that’s a rare company that can just make incremental improvements to their product and product design and maintain market share or increase the rest of us we need to adjust and realize that nothing’s certain that look i mean we’re not all produ music producer with like pop artists following us and something like that we’re just small businesses for crying out loud but uh i guess one of the key things that is like you know why have we established like the understanding of how our future delivered what like you mentioned before sleep speed and accuracy yeah yep so if you say that we are small businesses which which we are and a lot of small businesses or a lot of businesses in the last five years have put disruptive innovation in the too hard basket because it’s misdiagnosed and it’s it’s categorized used to categorize anything that’s new but that’s incorrect and we can apply disruptive innovation ourselves disruptive innovation usually means looking at the features and functionalities you’ve got and reducing it because the customers in the market are over served they don’t need any more bells and whistles so by reducing the product design cutting off the features and functionalities you can hopefully get a cheaper solution that may not get the job done as well as the large established players because it doesn’t have all the features and functionalities but yeah for those of us that are over cert we’re not looking for all the additional bells and whistles the days of lining up product features and making your decision on what you’re going to purchase compared to the competitors offering i’m not sure if any of us actually do that oh look at that i think um in in the in the 2000s uh it’s all about what the feature the list of features the bigger the list it is the the better it seems but then i think it educated the customers a little bit better that by 2010s that people will be like do i need to pay for all of this like yeah yeah when i started in strategy consulting and i had good mentors this was just the way we would do things there’s two sides to it one was one was sizing the market so we would size the market using things demographics and geographics and psychographics which is still valid right now you look at a market based on the job to be done because you don’t want to hit a moving target which is which is product and people don’t all make consumption decisions in the same way because of their location or race and nationality the other thing we would do we would do competitor analysis by taking the client’s product and lining it up against six other main competitors and then ticking off features to see which one you had and didn’t have and then often your advice to the client would be well this this client doesn’t have these features and functionality so there’s your blue ocean let’s go out and create a marketing campaign about it so wrong i have to admit it’s so wrong yeah i must say that uh myself or some of my friends in marketing that do sometimes receive requests like that uh and yeah people still do it yeah if you’re getting marketing advice and the first thing the consultant is asking you is about the features and functionalities of your product walk away well i mean it’s a little bit like i think for for me that the most effective campaigns that i ran so far like you know i can’t speak for myself for the entire life i haven’t left left it yet but it’s a little bit like it’s the one that with the why like you know why they’re doing this why they are here and that and that connected to the product and then kind of like you know it’s a little bit like the the features are like icing on the cake why are you focusing on the icing when you have a nice cake yeah exactly that y part that you just mentioned and that’s what we focus on at new ledge and last week we looked at customer segments the reason why we’re looking at product design today is that it should happen sequentially that your your marketing team understands the user better because they’re on the ground talking to them but they should be working so closely with product design that product design does not design anything unnecessarily it all has to fit an outcome that the customer wants and that’s often something that’s neglected you know your r d departments even in medium sized companies will work independently and then your marketers are on the ground and they regularly irregularly sit together and really work it out as marketers that you do need to say to say to the clients it’s like okay i do need this time to talk to the r d people i do need this time to talk to these people and yes it’s true like um i’m i must say that i’m at the point in my life that i’m fortunate enough that i can be a little bit choosy which is great but i would imagine that many um emerging marketers that they might go into the part that they try to do too much to a point that uh they they don’t get to understand the r d and the nature of the product itself before they push it up there and then unfortunately it will get to a point that it gets a little bit generic and you know what happened at generic things it’s a little bit like your clients go online google something similar compare the price with similar or the same feature and go for the cheapest one and look if that’s the marketplace that you want yourself in that’s fine uh but of course like you know for for the purpose of this series it’s a little bit like we noticed that the events of 2020s did wipe out a lot of businesses using that approach and because they’re not as agile and and their narrative can’t be adjustable from a marketing point of view their narrative cannot be adjusted because well
they only know their script they don’t exactly know how what the why the product is the way it is so so there you go it’s tough isn’t it to unders you have to understand the competitors because you don’t want to be blindsided but then again once you start looking too close at the competitors it starts to shape what you do and that can be dangerous as well so it’s a fine line between okay i’ve done my homework i know what’s out there but i’m not going to look too closely at that company’s features and benefits because it will instinctively guide what you do so you need to sort of be disruptive that you you know what’s there but then you’re creative and you really you try to push new ground with whatever you’re doing there you go there you go that’s that’s a that’s a good point thank you we should talk a little quite a bit about product planning so obviously the first question is well we would ask is have you conducted product planning yeah absolutely so so with with all of these impact as we look at there’s an enhancing and there’s a transforming effect and if we have to enter into product planning we’re talking about transforming innovation most companies don’t just have one product they’ll have a core product and then they’ll build other offerings around it but you always need to manage your portfolio of products so even if you and i have some service offerings some of them will be our our cash cow the one that we know is stable and we can use to sustain revenues and put into other ideas and and hope for something disruptive so usually your your product portfolio will have a couple of different offerings and some of them will be more high risk where you’re trying to do something that’s really novel but you know in the end of the day we as individuals and companies we still need to pay the bills so you can’t go all in with disruptive innovation you need your incrementally sustaining cash cows once you’ve got your identity like you know you know where the what the opportunity is the big question is have you addressed it what do you think lucas if you’re if you want to sell existing products into existing markets that’s a market penetration strategy so if you simply identify that that’s what you’re doing you know that how can you sell more of your existing products to your current customer base and that comes down to things like discounts and good promotions and how you advertise that offering alternatively you might want to sell your existing products let’s say we let’s say we make barbecues in victoria okay so if we want to sell more barbecues in victoria we’re talking about a market penetration strategy if we want to sell our barbecues in new south wales we’re then talking about market development obviously it’s risky stepping into that that new market that’s where we have to you know assess the potential of the new market obviously make sure that our features and functionalities deliver a value proposition so value proposition really we talk about tangible measurable outcomes to the customer somewhere like australia you would assume new south wales would have the same preferences as victoria but again we don’t want to be misled by geographics in defining the target market hey you never know because the two cities may just have really different personalities but i think hey on that barbecue note uh that it would be great to have barbecues that are good for apartment living i mean it’s not even 10 o’clock and i’m already thinking about like you know oh balcony oh the indoor one like the korean bbq yeah they work well definitely sorry i got sidetracked but let’s continue all right sure yeah so product design if we want to talk about that it’s it’s impossible again to talk about new products without talking about markets hence hence why we always talk about the market facing factors and the technology facing factors but one good tool that you use to look at product market opportunities is dance off growth matrix it’s sort of like an entry level strategy tool so it’s a two by two matrix on one you’ve got your new products and then you’ve got your new markets so if it’s the same product in the same market so we’re a barbecue manufacturer if we want to sell more barbecues in victoria that’s market penetration same market same product or technology if we then want to sell our barbecues in new south wales because we’ve previously not had a footprint there to talk about market development and of course that comes with some risks alternatively we might want to sell outdoor furniture in victoria and that becomes product development and i guess with product design that’s what we’re talking about we’re talking about new products alternatively if we’ve got a new market and new product we talk about diversification obviously the most risky so with diversification and product development you’re selling new products so the idea is then well what how is the customer going to measure the value of these products and then we can talk about value propositions and with value propositions we talk about the measurable tangible benefits that the customer receives from the product and sometimes that is a smaller lower scale easier offering for example dropbox when they introduce their first product a very sticky product i’ve had a subscription for years because it just does the job right and when they introduced their first product it was a it was a really good example of a minimum viable product they just had the three or four core functionality that appealed to the market and that’s what they released and they pulled it off really really well i would say that dropbox is one of the earlier um success that get people to get used to using it like for example productivity or graphic ones like canva which i uh i enjoy using but of course that you know it’s it is um how do i put it it’s a little bit like sometimes that when you when you want to take the risk of going into developing a new product or going some in in the new direction not um you do need to do it incrementally and then at the same time you do need to thinking about okay how am i going to do this and how am i going to match up what the client is looking for which is like you know the question of like you know have like have this created a new value proposition that’s the right word right yep value proposition sure so we’ve got two new terms we’ve got our minimum viable product or mvp and we’re talking about value proposition minimum viable product for sas companies i’m i’m wary i tend to think that i mean you know i deal mainly with manufacturers with tangible products like you know food tech and med tech for those companies with really amazing products that they’ve developed that are real and tangible minimum viable products really important to get that feedback because if you get stuck in the redevelopment cycle because obviously you’ve got more capital intensive resources when you produce and make goods it’s more expensive but for sas companies i’m reluctant to say that we really deserve to release minimum viable products that are crappy
it just pisses people off well i mean if it is hard if it is horrible no one’s going to touch it so we might not even know it but some of the i mean if you look at lean canvas and business model canvas i mean what they what they subscribe or what they tell people is that you just get the bare skeleton out there and then you get people using it and they’ll give you constructive feedback in from my experience unless they’re family and friends you’re just going to make enemies
it’s a it’s an interesting thing because if you just only have family and friends it would just be a positive echo chamber so you may not get the most realistic but the kindest comment which is lovely but then is it useful that’s another thing but then if you got the enemies to say [ __ ] to you that actually you might be able to pick one or two bits to improve yourself that remind me of a project that i’ve done quite a few years ago that kind of like um back in hunter valley it was a festival uh an art festival it was really good but what was a big flaw if you may um is that that particular year that uh the the organizers somehow for some reason decided to add a kind of like a degas station tour which it sounds great in theory but what what i found that is um it was failing to understand the audience the the clients that attended this festival uh because even though that they’ve been around for about 10 years at that point in time that they didn’t really have a good understanding of what their customers are i mean many people go there just want to have a nice weekend with their family and things like that in my opinion that i think even if they do kind of like a musical concert or like a pop concert or something like that that would be really suitable for these family audience and clients but then at the station would be like you know it sounds great in theory i mean you know if you watch those tv shows like country hubs rescue or something like that fabulous idea but then it only fit one small segment of their clientele and then they unfortunately alienated the family clients because i mean i don’t know i’m presuming i don’t have kids but then i would imagine that if a family of four with two kids and two adults they don’t have the patience to go through the diga station to go to one winery to another and have a meal it’s not their market so and i think unfortunately that that’s um i was commissioned to write a report for for the for the funding party so basically i just explained this to them is like it was a very well intended idea but sometimes when you have an idea you do need to see like you said are we creating new value propositions to the customer because if not even if it’s a great idea it may not be beneficial for what your business is doing yeah and you may have just hit the nail on the head and identified that market perfectly then because you said that it is families um maybe they just want to have a nice weekend without any drama and they don’t want to spend too much money that could be the market the definition of the market exactly well i mean that’s why it’s a little bit like you know on an outdoor concert or carnival like you charge 20 bucks per head or something like that that’s that’s a that’s a that’s a price range that is compatible to the customers and oh trust me they hate me they hit me for saying that there’s nothing it’s it’s hard to they say kill off your darlings so if you’re developing a product or an offering and you’re in love with what you’ve developed and you might be because it’s clever yeah but if it’s not fitting that value proposition it should be it should be culled look i mean trust me i think if that particular uh festival was targeting a different demographic of people of a different income range that legalization idea would be fantastic but unfortunately it should be something completely separate because they are not matching the clients at the time and look i mean i know they hate me but then i don’t give a crap i got paid to do a report and just kind of like you know just investigating what the f is going on and that’s why yeah yeah yeah you’re not gonna get too much repeat business just telling everybody that their baby’s beautiful sometimes you gotta deliver the hard truth i mean actually that reminds me it’s a little bit like because i think one of the exciting thing in in the early in the first two decades maybe just the first decade of the 2000 is that so many people are so excited to list their features but then um i think customers are growing smarter information are more available to a point that it’s a little bit like do we need that much stuff it’s really like that’s wrong
when you’re um even when you’re listing features so you’ve got your website you’ve got your offering and you you want to list your features because you know it’s a great feature you still have to bring it back to the benefit to the customer so it’ll almost be two lines it’s like this is the feature and this is the benefit as long as you can do that because you just have to think the person reading it’s not going to be impressed now particularly with sas products we’ve all got sas products right that’s if you fall in love with the fact that you’ve got a platform you’re on you’re on a down downwards slide pretty quick it’s a little bit like falling into the rubber hole and just kind of like i think uh if anyone if everyone had asked me like you know just kind of like what a sas product it was like well if you can run your stuff on the internet browser that you’re probably using sats yeah i mean it’s essential essential and new ledges is a sas product and i really rarely go down that path of talking about those features and functionalities but you’ve got to get it right and the only way to get it right is to make sure that that value proposition is tangible tangible measurable outcomes to the customer and iterative development not putting a minimum viable product out there do you think hey everyone’s going to be so excited i’ve got a platform they’re going to love to trial it get the product as close to right as you can with the budget you’ve got and have done your homework previously so you really understand the market and then talk about testing it with the customer and iteratively redeveloping or refining i think many um company or organizations that um i think i mentioned it before maybe in a different video is a little bit like sometimes when they are trying to do something different they just throw everything to the wall and see what sticks no unfortunately it’s a little bit like we all we don’t have unlimited money like none of us have under unlimited money so it’s for particularly for smes it actually can be legal to do to approach it that way and actually i wonder uh lucas or like even for yourself or some of the r d people that you work with previously um have you have you got to a point that uh have you ever interact have an interaction is a little bit like people find it difficult to kill off a product or killed off an idea because they’ve been loving it and working on it for like years and they they like you know i would imagine the excuses would be all over the places but they come in all shapes and sizes isn’t it yep yep really interesting one there’s a company that worked for danny lara and they make radiators for heavy uh diesel machinery like off-road on-road big mining vehicles trains and trucks and there was new regulation coming in that you weren’t actually allowed to use the lead solder anymore so half half of their team was wanting to completely redevelop and redevelop their core product and core materials and technology around that and sure it would have worked it would have taken a few years but they would have met the regulation the consultant came in and i worked with them and we found out that they were actually able to within their own production environment produce the lead-free fold solder and heat the product or allow the product to be heat insulable at the level with what they already had so that went from costing them about thirty thousand dollars in advice to who knows how many hundreds of thousands to go into product development and the time and the time somebody would have been upset that their baby wasn’t put on the on the product portfolio list for development for school well look i mean the thing is sometimes that we need to be like look um how to put it um look i mean it’s a little bit like if you look at different businesses like businesses have been around a long time is that they need to reinvent themselves regularly anyway so it’s a little bit like sometimes for people in operation or such as that it is the one of the tricky bit is kind of like get over that psychology of um killing off their babies yes and once you commit to it on the other hand so that was a that was a real incremental innovation that was sustaining but they had existing customers so that was okay alternatively in engineering tech this other company they made components for high performance engines now they actually entered into 3d additive manufacturing to make the part that was previously you know made with traditional materials so that’s a whole new product design transforming product design innovation very successful now they’re really really successful company but to commit to that you’ve got to know a lot you’ve got to know what the demand is you’ve got to know that you’ve probably got key customers locked in to pay for that product development so that’s their two two alternative ways of looking at product design you’ve got your enhancing and transforming both positive effects of innovation so uh and on that note i hope that you find something useful for your own businesses when you’re thinking about your product or service design and how you can do uh the way that you do it and also how it may match up with your clients or not now um as usual that if you find this useful uh please consider watching another video there’s uh there’s more videos from this series or i have done another a bunch of videos interviewing lucas about new ledge and of course that lucas if people want to reach out to you about new ledge how are they going to find you yeah i think for now you can just email lucas l-u-c-a-s at new ledge dot io or you can visit us obviously on our website um always linkedin’s the only social media channel i use at the moment so contact me through linkedin it’d be great fair enough and hey i mean you don’t need to use every single pref platform you just use the one that’s right too many features and functionalities not required just imagine that if you have like 16 apps on your phone that it’s like on the same page that all of them are just imagine that if you got one inquiry from each of them oh gosh that’s nice well uh and uh what uh i guess a next episode will be back from the customer market point of view again isn’t it yeah so what are we looking at next next we’re back to customer customer to market facing capabilities and this is a really interesting one we’re going to look at customer or market applications so really we’re talking about okay you’ve got your product here and it’s working in this market how can we then apply it into adjacent markets or how does it apply and it’s a really interesting topic like reaching out to the whole new land well new year’s eventually nearby reach out to the next time well um anyway so thank you so much and thank you lucas and thank you for the audience for taking uh for watching this and also all of the our contact details are underneath this video and uh yeah so everyone have a great day ahead uh if you are watching wherever you are have a nice morning or have a nice afternoon have a nice evening yeah thanks to the chatty curator thanks