We have arrived at the moment we need to sell our new product concept to senior leadership. We have completed customer discovery and established a concept that satisfies a significant unmet need for our customers. We have established with a representative mix of our publishing partners a model they will support with licensed content. Finally, we have considered the strategic, technological and go-to-market context of our business and we know our new product concept is aligned with our companies’ strengths and growth objectives. A well-constructed business case, presented with confidence, is the critical next step to take our proposed product from conceptual to development. The components of a business case will vary at the discretion of product management leadership and company culture, but I recommend the following 10 components:
1. Brief description of the customer pain point and the proposed product solution
Think of this as the elevator-pitch. Can you communicate in one slide, in one or two sentences, the core customer problem and your proposed solution? For example: “Librarians need a predictable annual cost combined with selected ownership of highly used titles. Build-by-Choice, as a benefit of an Academic Video Online subscription, will provide a predictable annual subscription cost with a single-title ownership benefit tied to the value of the subscription.
2. Brief summary of the customer discovery process
Provide a brief summary of the number of customers interviewed, their geographic and other segmentation, such as community college versus Ph.D. granting, the timeframe interviews were conducted and the core questions posed to those interviewed.
3. Brief summary of content partner concept validation process
This is very similar to the summary of the customer discovery process. Detail the publishers interviewed, the reason for their selection (e.g., major partner, innovator, new model skeptic), and the critical questions posed to your content partners.
4. Wireframes/Mock-Ups
A wireframe or “click through” brings your proposed product concept to life, allowing your audience of decision-makers to “see” how the product will function in the common user experience and design of the company’s product infrastructure.
5. The Market Opportunity
Is this a product for the global library market? Will it serve only top-tier, research-oriented institutions? Is this a product that builds on a required supporting product being in place? The business case must offer a reasonable representation of the revenue opportunity by customer segment and probable total revenue generation over a defined time period.
6. Product requirements and preliminary engineering personnel/sprint estimates
In the first five slides of your business case you have defined a problem and a solution, validated your discovery process with customers and content partners, provided a visual experience of a proposed product, and given a reasonable view of the revenue opportunity and market segments to be served. Now the business plan must turn to the critical questions that will inform the potential profitability of the solution. First among these is a first-pass engineering estimate based on your product requirements that includes a view on the number of engineering personnel required and a timeline to launch.
7. Required content set for launch
This is as simple as how many titles, pages, minutes, etc. of content the customers will expect to see at launch, the mix of genres or categories of content and the key publishers and content brands that must be present at launch.
8. Tentative timeline to launch with key milestones
It is important to provide a timeline to launch that represents the best possible window to introduce the new product. For example, a new subscription product should be launched at least six months ahead of the typical cycle your customer engages with renewals aligned to institutional budget cycles. The timeline must include key milestones established to validate the successive releases with your development partners.
9. Development Partners
In the Market Opportunity section described above, customer segments and probable revenue generation is listed as necessary. The development partner panel must represent these assertions in actual representative customers. The development partner panel should be every bit as invested in the success of the proposed new product as is the product manager, perhaps even more so as they feel the need, know the pain point and are working with the product team to craft the product they are likely to use at launch.
10 Financial Modeling
This is a basic P&L that captures the expected revenue over a three to five year period post-launch. The modeling will include production and engineering estimates, royalty and publisher payment estimates, and larger promotion and marketing spending tied to the new product roll-out that stands apart from already budgeted marketing costs. Most businesses will provide a template for what is expected from product management in generating financial modeling for a new product proposal.
And that is it! Or is it? I am often asked why I do not include a competitor analysis in my 10 components of a business case. The answer is simple if not a bit idealistic. My view is the big problems and pain points that our customers face that are worthy of new product development and investment are without a current offering. To be sure, there will be products in the market that our new offering will “compete” with, and we will need to provide our sales team with our positioning and differentiation. But a truly meaningful and winning new product will introduce something wholly new that will inspire imitation; leave it to your competitors to describe how their imitation matches your innovation.
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If you want to work together on your new product development strategy, contact me directly.
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