<Exploring Late Majority Product Management in Today's Landscape>
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Late 2022 has ushered in an exhilarating period for product managers. With advancements in cloud technology, the surge of AI and machine learning, and the increasing investment from venture capitalists, product managers find themselves at the forefront of innovative product development. Those at companies like Snowflake, Doordash, Palantir, Gitlab, FreshWorks, and Coinbase, which went public in 2021, are enjoying significant success. However, a considerable number of product managers are engaged with products in the later phases of the Technology Adoption Life Cycle (TALC), specifically within the late majority and laggard categories. In fact, these products contributed to over half of the software product revenues in 2021. While managing late majority products can be demanding, it's a necessary role that someone must fulfill.
In this discussion, we will cover:
- The Revenue and Profits Found in Later TALC Stages
- Evaluating Your Product: Cash Cow or Dog?
- Understanding the Boston Consulting Group Growth-Share Matrix
- The Nature of Late Majority and Laggard Products
- Challenges in Late Majority Product Management
- Resource Limitations
- Employee Morale
- The Fundamentals of Product Management
- The Late Majority Product Management Manifesto
Technology Adoption Life Cycle
The Technology Adoption Life Cycle remains a cornerstone of contemporary software marketing. Initially introduced in a 1957 paper titled "The Diffusion Process" by agricultural researchers Beal and Bohlen, the concept was popularized in Geoffrey Moore's 1991 book "Crossing the Chasm."
This model categorizes technology adopters into five distinct groups:
- Innovators: Customers willing to take risks on new products, eager for innovation and the first to purchase.
- Early Adopters: Individuals or businesses that embrace new products ahead of the majority, often paying a premium to enhance efficiency and market presence.
- Early Majority: Customers who buy new technologies after they have been validated by earlier adopters.
- Late Majority: The second-to-last group to adopt new innovations, typically older, less affluent, and less educated.
- Laggards: Those resistant to change, adopting new technologies only when traditional options are no longer viable, focusing on reliability and cost.
Marc Andreessen of Andreessen-Horowitz famously noted that “Any new technology tends to go through a 25-year adoption cycle.” Recent trends indicate that this timeline is accelerating. As highlighted in discussions around the changing dynamics of technology adoption, the time to achieve 50% market saturation is decreasing significantly.
Academic researchers Gil Appel and Eitan Muller published findings in 2021 that compared technology adoption rates from 1999 to 2021, illustrating a marked increase in the speed of adoption.
Further, CB Insights noted a reduction in the time between a tech company reaching unicorn status and its IPO, emphasizing the rapid pace of technology adoption.
Significant Revenue and Profits in Later TALC Stages
While products in the Early Adopter and Early Majority phases may seem more glamorous, there is substantial financial opportunity within the Late Majority and Laggard segments. As Ben Horowitz emphasized, significant value is generated in the latter stages of the TALC.
Historically, major technology cycles span about 25 years, with most purchases occurring in the final five to ten years as older cohorts (less likely to adopt) phase out and younger, more tech-savvy cohorts enter the market.
Examining past computing cycles prior to the Internet reveals similar patterns.
Evaluating Your Product: Cash Cow or Dog?
In 1970, the Boston Consulting Group introduced the Growth-Share Matrix to help companies manage their product portfolios effectively. The goal was to maintain a balanced portfolio with diverse growth rates and market shares, guided by cash flow considerations.
The quadrants of this matrix include:
- Cash Cows: Products with high market share in slow-growing industries, generating surplus cash.
- Dogs: Units with low market share in stagnant markets, often breaking even.
- Question Marks: Products in high-growth markets but with low market share, requiring careful evaluation for potential growth.
- Stars: Leading products in fast-growing sectors with the potential to evolve into cash cows.
Most products eventually transition to the Late Majority and Laggard stages, often becoming cash cows that generate steady revenue with minimal investment.
The Challenges of Late Majority Product Management
Managing products in the Late Majority or Laggard categories can be particularly challenging. Many product management strategies designed for early-stage products do not apply here. By this phase, market dynamics are well understood, and the competitive landscape is established.
Resource Limitations
Products in these categories often experience decreasing resources. When a product owner or team member departs, their role may not be filled, placing additional burdens on remaining team members. Companies, especially those backed by private equity, often pursue cost-cutting measures that impact staffing.
Employee Morale
Product managers for Late Majority products often find themselves acting as mini-CEOs. Employees may feel disheartened, longing for engagement with newer technologies and innovations. It's crucial for managers to foster a sense of achievement and significance within their teams.
Fundamentals of Product Management
Even in late-stage product management, core tasks remain. Managers must still define user stories, manage backlogs, and facilitate essential meetings. Balancing functional and non-functional requirements is vital.
The Late Majority Product Management Manifesto
Product management for more established products requires a different mindset. The Late Majority Product Management Manifesto outlines key principles for navigating these challenges:
- Tailor product management approaches to the market and organizational capabilities.
- Acknowledge business constraints and optimize within them.
- Prioritize business outcomes over superficial metrics.
- Understand market and user challenges.
- Translate user problems into actionable needs across the organization.
- Define priorities without dictating technical implementation; allow engineering teams to determine execution.
- Success hinges on collaboration across various departments.
- While Agile methodologies are beneficial, full enterprise adoption may not always be feasible.
- Experience outweighs formal certifications in product management.
- Embrace innovation across all market segments.
- Utilize both quantitative and qualitative data in decision-making.
- Recognize the role is not equivalent to being the CEO of the product.
Summary
The current era presents a thrilling opportunity for product managers. The evolution of technology and robust funding avenues places them at the heart of product innovation. However, many product managers also grapple with the realities of managing products in the late stages of the TALC, which collectively represent a significant portion of software revenue. Late majority product management poses its own set of challenges, but it remains an essential domain within the tech landscape.
Originally published at Development Corporate.