The Three-Dimensional Product Manager

If you talked to many product managers, you’d get the feeling that people in this role frequently sort themselves into one of two buckets.

Technical product managers are strong technologists and focus on how the product is built. They lead technical innovation by contributing themselves or by doing something akin to R&D supervision. They manage the product from within, and rely on people from Sales and Marketing to bring the product to market.

Business product managers take a customer-centric view of the product, focusing on market needs, business models and UX. They rely on well-run engineering and research departments to cater for the technical aspects of the product.

This dichotomy is, of course, rooted in the product manager’s experience and education. If they come from engineering, they will tend to be technical product managers. If they come from business school or a business function in the organisation, they will tend to be business product managers. It’s natural, and not necessarily an issue.

It’s rare to find someone who has cultivated both flavours of product management, but they exist. I’d like to think that I’m one of them, coming from a software engineering background but having run a business (in a completely different field) as well.

In The Corporate Startup, authors Viki and Toma define innovation as:

The creation of new products and services that deliver value to customers, in a manner that is supported by a sustainable and profitable business model.

I interpret this to mean that any part of the business model can be a potential area for innovation. Classic examples include direct-to-consumer mattress companies, eschewing the retailer and thus offering better prices, or car sharing companies, changing the value proposition from renting for a day to renting for a ride.

When I think of a business model, I like to return to the Business Model Canvas. I use this simple tool more like a checklist, reminding me of all the aspects a business model can encompass:

• The customer
• The relationship to the customer
• The channels for reaching them
• The value proposition
• The resources
• The activities
• The key partnerships
• The revenue
• The costs

So coming back to the technology/business duality, I think of the product as a three-dimensional thing that lets you see inside it, a little bit like the old iMac G3 from 1998. Seen from the front, it presents a beautiful, clean two-dimensional surface: that’s the business model canvas. But turn it 90 degrees to the side, and you discover all the electronics underneath that make it work, the technological depth and richness that make the magic come to life.

Every product I’ve been in charge of has exerted this kind of fascination on me. I can spend days turning the thing on its side and back again, fascinated to discover new potential every time.

In 2016, my friend and colleague Michael Greig contacted me because he wanted to investigate the possibility of introducing an annual licensing plan for our professional audio software for the UK educational market. Back then, the product, Ableton Live, was not written to use the kind of revocable authorization that would be needed for this. I explored the solution space a little bit, realized that changing the authorization system would require substantial development resources, but also that this was a premature solution: we really only wanted to prove that there was general interest in such a licensing model. So the solution I ended up proposing was a simple 1-page contract stipulating that the customer would pay a third of the price every year (since we released a new version roughly every third year), with upgrades included and a simple agreement to stop using the software upon cancellation. We went to talk to a handful of universities we knew and trusted to uphold their end of the bargain, and within a few months, we had signed up five of them, which was about as many as Accounting was willing to approve without triggering new processes. We still don’t have an official annual plan due to shifting priorities, but these five customers are still happily paying us every year, and have provided us with ample evidence of the market’s appetite for such a solution.

We later revisited this topic together, and I created the offering called the Education Access Seats. I not only created the business model for it, I also architected the necessary technical and organizational changes, led its development after prototyping the solution, and ensured we released a high quality system—to this day, with millions of users using the code we wrote, will still have zero defects reported.

Because I knew the system had more potential than just educational licensing, I ensured the technical solution could support a wider range of business models. Shortly after the Education Access Seats, Ableton launched a rent-to-own scheme for students based on that very technology.

Together, both offerings have generated over half a million Euros in additional revenue in just a few months.

Three-dimensional product managers know how to turn the product sideways and look inside, and can see opportunities others miss.