What happens when product, and business development people join the same squad?

Product development, and partnership teams are critical for business value creation, and growth. The product development team is key for improving a company’s offer to customers. This attracts more of them, and can also increase value from the lifetime of each customer relationship. Partnership teams aim to achieve company growth; They’re like a SWAT team that opens access for other companies’ resources, and exposes the product to new markets.

Product, and partnership teams usually operate separately. This separation seems logical. Each team focusses on what they’re good at: creating product value, and driving growth. But in this article I’ll show how the separation of functions drives a wedge into the overall business value creation process, and how collaboration needs to change to resolve it.

Product, and Partnership: Better when they’re together.
Instead of looking into ways for improving partnership, and product development teams to function separately, lets take a look at what would happen if we just put these people on the same team.

Product, and partnership teams in tandem, generate more value, than they would separately. A great example of a company that has achieved this is Nespresso. By combining Nespresso’s capabilities on (coffee) product marketing, with the coffee machine manufacturing partners’ capabilities of channel marketing for kitchen appliances, Nespresso achieves significantly more leverage from the partnership than they would from just outsourcing manufacturing.

Another example is Tesla’s (former) partnership with Toyota. By jointly working on developing electric vehicle parts, and electric car manufacturing systems, Tesla learned about mass-production of cars. This was key for launching their famous Model S. So, by not only focussing on combining technologies in the partnership, but also utilising that technology in a new way of production, the partnership actually took product development to a whole new level for Tesla.

These examples show how transgressing product, and partnership team boundaries, broadens the scope for new business value creation. Neither Nespresso, nor Tesla would be where they are today, if they wouldn’t have looked at product development and business growth in an integrative way.

From marriage to divorce…
In a fledgling company you see that the functions of product, and partnerships, are combined within the same, small group of people: the same team. Often the startup CEO takes on both product and business development roles. In this situation, it’s natural to align the functions of product, and partnerships, and make product value creation and growth efforts click.

But the moment the startup starts evolving into a real company, the product, and partnership functions will branch off into separate teams. And that is where the seamlessness of their alignment is lost.

The product team starts focussing on its own resources, and existing product development roadmap, rather than looking out for ways to leverage their work through partnering.

Partnership teams will tend to focus on the existing product and finding partners for that. They have to work with what’s on the shelf, because they’re usually not in a position to tailor the product to growth opportunities themselves.

The upshot is that both product, and partnership people each start tweaking their part of an existing business model. They gradually lose the ability to operate jointly, and invent new ones in a concerted, fundamental ways.

Re-uniting product and growth.
What can we do to put the power of product, and growth back together again?

Firstly, it comes down to a joint understanding between both teams about the process that is applied for product development. Product, and partnership teams need to jointly define, and have visibility on priorities, as well as on the big questions that need to be solved to bring the product forward.

Secondly, the product and partnership teams need to start jointly experimenting with growth opportunities for the product, and make those experiments part of the product development process. It’s not sufficient to start searching for growth once the product is done. The product will also likely need to adapt to the growth opportunities that arise.

Thirdly, product and partnership teams need to start operating in the same rhythm of iterations in product development. This means that partnership teams should be able to shift with changing priorities of the product. The other way around, product teams should also be able to adapt to shifts in opportunity on the partnership end.

To support these 3 points of alignment, visual tools like the business model, and partnership canvas are really helpful. These tools enable all participants to step in and create the alignment that is needed to search for repeatable, and scalable partnership opportunities, that sync with the direction that the product needs to take. Once product, and partnership are able to apply rapid joint framing of priorities, and decision making on what steps to take, then the business value creation process is mended. The company will operate in the mode that is once did as a startup.


Interested to learn how you can reinvent your industry through partnerships?
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The minimum viable product for physical products; what we can learn from the makers.

Imagine you live in rural India and you own a motorbike. Every once in a week or so, you are approached by a passer-by or a neighbor to help out because his bike has run out of gas and the nearest station is 16 kilometers away. Sometimes they’re lucky. You have enough gas to share and you’re able to perform the icky job of siphoning off your gas with mouth and hose. People even pay you extra for your discomfort, enabling you to buy a pack of gum to clear away the taste from your mouth.

So, after a couple of times of doing this, and the unintended near swallowing of petrol, it hits you! Could there by a market for this? Could I build a filling station with the purpose of helping people reaching the next village? A solid discovery of a customer problem, and a potential solution to tackle that problem.

Now the question is what a physical prototype of your business model would look like. Fortunately you’re strapped for cash at your 2 dollar a day income, imperative for lean decision making. It prevents you form asking the wrong type of questions for your prototype like:

  • What colors should my uniform be to look credible enough for my customers to buy from me?
  • Do I serve Coke or Pepsi at my station?
  • How about a drive-through bike wash?

In this case you need to earn before you spend. So no, it won’t be a lavish, fully furbished, high-tech unmanned petrol station. It might look more like something below:

 ….the Minimum Viable Gas Station (photo credit to Niti Bhan).

This prototype would be the most reduced concept (generally referred to as the Minimum Viable Product (MVP)). The MVP enables you to test the most essential parts of your business model: How do customers interact with and value my product? The downside is that it looks scrappy, but the dominant positive side is that you will naturally test better questions about your business model:

  • Would customers pay extra for this type of filling service? And, how much?
  • What volumes will they need, and how much stock do I need to keep?
  • Is there a pattern in demand which is prevalent throughout rural areas?

Through such essential questions you are also more inclined to focus on gathering essential data for testing your idea. So it’s not so much the total number of motor bikes that zip by your station that count as an indicator for the potential of your idea. Depending on that in your case will make your family go hungry. Naturally, it’s the number of people that actually make a stop for a fill that does.

What’s more is that through playing with pricing, you might discover that customers are willing to pay 4-5 times the market rate for petrol, because your service saves so much effort (so radical affordability as the main constraint in servicing the BoP appears to be an assumption). Now you have found the essentials for scaling a profitable business: franchise anyone?

What we can learn from the makers
In short the MVP emphasizes what matters, and prevents you from wasting resources on testing the non essentials and using non-essential data. But conceiving your MVP is hard. How do you define your product in the most undressed way possible to test your product and its features? It is even more difficult to build an MVP for physical products like a gas station than for a web application (where the MVP concept naturally originated from), as you often incur more costs in time and materials to test them.

But, as the example in rural India shows, constraints like money and time spark creativity and can invoke “the maker” in all of us. Play around with representation: there is always a prototype! In our case we redefine the gas station to a jerry can and a funnel: the smallest representation with which all essential features of a gas station can be tested. People like Steve and Woz of Apple started out with just a motherboard.

Invest in defining, and cutting & pasting your MVP. It keeps you from carrying around stupidity for too long; it prevents you from filling the bucket with so much water that it starts spilling over the rim once you start walking. Build with less.