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Product development cycle

The business of MSP will be structured around products. Each product will be clearly defined and a written plan will exist for each product. At any given time, it will be possible to list all the active products and review their performance.

Each product will follow a well-defined life cycle. It begins when somebody decides that something looks like a good potential product. This is briefly written up and then discussed at the next planning meeting. If the product looks like it might be worth doing, one or more partners undertake the preparation of a development plan. The development plan spells out the specifications for the final product (at the level of detail a brochure might offer), lists potential competitive products and why ours would be better for the potential purchaser, and estimates the time and other resources which would be required for development. If after reviewing this plan the product still looks good, we sound out potential marketing channels and supplement the plan with projections for marketing cost and sales. The final plan is subject to approval by the partnership before development is started. Once development is authorized, the project goes into the implementation phase.

During the implementation phase, the partner or partners responsible for the project write and test the code and prepare the user manual. Those responsible should be left alone as much as possible during this phase. Only a devastating competitive announcement should be reason to reopen the project for consideration while implementation is underway. As long as it is on schedule, the project is of little concern to the other partners. Once an initial version is completed, including documentation, the project moves to the evaluation phase.

In the evaluation phase, a completed user copy of the package is given to a partner who has little knowledge of its internals and is in a good position to evaluate the package from a user standpoint. That partner's critique of the package as well as bug reports from the initial testing are used to refine the package so that the first release meets the highest professional standards. Remember, outfits like Lifeboat evaluate a package based on their customers' first impression of it. A rough first release can doom the package's prospects. While this evaluation is going on, the manual is edited into final camera ready form, advertising copy is prepared, and product brochures and other promotional material are prepared and printed. When the package has been shaken down to the extent that all are happy with it, it moves to the initial marketing phase.

In the initial marketing phase, manuals are printed so that orders can be filled immediately. New product announcements are sent to all trade publications and advertisements are placed as specified in the plan. Marketing channels (e.g. Lifeboat, etc.) are contacted and provided with sample copies, presentations, and/or demonstrations of the package. If trade journal articles have been prepared about the package, they should be timed to appear during this time. We want to have the maximum impact possible with the introduction of the package to prompt people to try it. After they try it, we hope the package will sell itself on its merits. This is the phase in which the largest negative cash flow will be experienced, and the project will be constantly reviewed against the plan to make sure it is within the budget. As orders begin to come in, the negative cash flow begins to turn positive and to pay back the initial marketing debt. As this happens, the project moves to the marketing follow-up phase.

In the marketing follow-up phase, we find out how well we've done. The project is reviewed based on:

and based on those considerations, we decide how to treat the package. We want to be as responsive to bug reports as possible, and to regularly release updates and enhancements. We want the user to feel that the package is ``alive'', not a take it or leave it item. Also, we develop a profitable aftermarket in updates among those already committed to the package. As long as a project is still active, we budget funds for advertising and other marketing, and our goal is to pyramid the success of products which sell well. This means (and this is critical) that our first priority is support, enhancement, and promotion of those products which are doing well. We don't know in advance which of our products that (or those) will be--we have to let the market tell us, but we have to listen and respond to the market's message. Marinchip's greatest failure was to develop a product and then not follow it up because another attractive development project was dreamed up. We cannot let that happen here.

Optimally, the success of one or two of our products will lead to natural follow-on projects (as Wordstar led to Mailmerge, Spellstar, etc.), which build on the sales of the original product (to start with, users of our first product are very likely to buy the add-on). That way we can let the market lead us into the area of business we do best in. We should review new product proposals in the light of our existing products, to see whether they complement them. Not that we shouldn't enter new lines of business, but those companies that have succeeded have done so by concentration, not by breadth of product line.

If a product fails to meet its sales plan, then in the follow-up we will review its performance and the reasons for its failure. Based on this review, we may decide to terminate the project or to remedy the product based on market response or to modify the promotion campaign based on reactions received. However, we must avoid throwing good money after bad, and we should expect a majority of products to fail and their projects to be terminated. That's why we establish an advertising budget in advance and stick to it. Only exceptional and well documented changes in the marketing environment should cause us to decide to increase our potential loss on an unsuccessful project.

Obviously the time scale of all of this will depend on the magnitude of the product undertaken. It's conceivable that a little CP/M utility might go from concept to follow-up in 2 months (although advertising lead times would limit the impact of advertising until later). Given the resources we have, I don't think we should undertake any project where the follow-up comes any later than 9 months after the project is first defined. We just aren't rich enough to piss away our resources for longer than that on a potential loser. If we decide that we want to do a massive system with lots of parts, let's do it in pieces that are individually salable. Then we not only get user feedback to guide our future development, that development is paid for from sales revenues, not from our pockets.

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Editor: John Walker