Tenzing’s Entrepreneur-in-Residence, Glenn Elliott, shares how creating a balanced product roadmap can help you drive sales, reduce churn and make your business more profitable.
Your software business is growing and you’ve got the attention of private equity. You’re winning new customers, but churn is irritating. Customer feedback shows that your software isn’t all that easy to use. And you’ve had a couple of security issues that shouldn’t have happened. So what can you do to get back in control? Which jobs should you tackle first? And how do you know you’re not overlooking something important?
The solution to all these problems could be taking a more balanced approach to your product roadmap. My method for developing product roadmaps is based on just four categories which will help you think about overlooked priorities and do the right work in the right order.
What is a product roadmap?
There are lots of product roadmap definitions, but here’s a simple one:
You might be surprised by how many of the businesses we invest in that don’t have a published roadmap of any form. The lack of a roadmap is often due to the tension they can cause:
- Product people feel tied down by promising features too far in advance that they later feel are no longer relevant.
- Engineers think a roadmap is a rod to be beaten by. They’re worried they’ll be told: “You said this would be built by Christmas, and it’s not.”
- Sales wants to know which product features are coming. But product and engineering are frightened that the features will be sold before they’re ready.
- Leadership desperately wants to know where all the money goes – a roadmap provides part of the answer.
- The board is clinging to the hope that someone has a clear product vision so they can feel confident in the business’ direction.
As you can see, there’s a lot of pressure on these roadmaps. So it is understandable why some people avoid them.
However, product roadmap development doesn’t need to be complicated. Don’t plan too far in advance – maybe 2, 3 or 4 quarters and use these four categories to make sure your business is doing everything it needs.
Category 1 – sellable features
Sellable features are things that prospective customers can imagine they need that are also simple enough you can explain them in a sales pitch. Startups’ roadmaps will rightly be packed full of these easy features.
Category 2 – non-sellable features
As you start to mature, things get slightly more complicated. Not only have you got to build sellable features to win new clients, but your existing clients want added product features.
These could be things that bring them joy, make their experience better and increase usage, engagement and customer ROI. Some of these elements will be sellable. But some of them won’t be, because explaining them at the point of sale is too complicated. Or they’re something a buyer can’t imagine the need for until they’ve started using the product.
The challenge with introducing non-sellable features is that your CTO might dismiss some of the items as “not critical”. If your clients can do x, y and z anyway – albeit, in a slower, more difficult way – these features might not be seen as a priority. But the problem with this kind of thinking is that you can lose renewals.
The renewal gap
When it comes to pitching for a contract renewal, your customer is comparing the reality of your product against the competition’s unicorn and rainbow promises.
New clients buy promise
When clients buy software for the first time, they get a demo, screenshots or a video. They don’t truly know what they’re getting. They’re buying a promise, a dream, a fantasy!
Renewing clients buy reality
Renewing clients have lived with your product for some time. They know it warts and all, where it’s annoying, slow or deficient. They renew – or not – on the basis of reality. It can be harsh!
Category 3 – service continuity, resilience and security
As you continue to grow and win more, maybe bigger, clients, you also need to consider internal and external threats. Issues like system stability, server speed and boring but essential stuff like disaster recovery. You’ve got to think about stuff like backups, scaling architecture, resilience and multi-site failover.
This isn’t very sexy, doesn’t help sales much and it takes time and engineering resources to build. Your customers don’t notice your investment because they assume you already have everything in place. The sales team becomes frustrated that “nothing new has come for ages”. Regardless, this is a necessary piece of regular work to help you stay ahead of threats and continue to scale.
Category 4 – reducing operational and support costs
The fourth and final category is the one that’s most often overlooked. People typically spend a lot of time and investment in the first two or three areas and think they’ve mastered everything. Then, ten years down the line, they’re wondering: “Why are my profits so low?”
You need to keep a focus on lowering operational and support costs. Knowing how many people it takes to implement or support a customer, or how many manual workarounds there are in the back office, is key to understanding where the opportunities exist to tighten up operations. Usually through automation that eliminates or manages down manual work and keeps profit margins high.
Balancing your roadmap
A balanced roadmap doesn’t need you to invest 25% in each area at all times. Instead, work will ebb and flow between them. However, if any of the four categories gets no attention for too long, you’re likely to have problems.
How much you focus on each element depends on the size and scale of your business. Start-ups quite rightly focus solely on category one. But as you grow, you need to start consciously thinking about the others. Because if you don’t, you’ll impact your bottom line through churn, risk impact and cost inefficiencies.
By balancing the four quadrants appropriately, you’ll also balance the outcomes that each drives.
Why do roadmaps lack balance?
A balanced roadmap relies on having different champions for each section with equally loud voices. Yet, what tends to happen is this:
- The CEO and Sales Director, two loud voices with a lot of weight, champion sellable features.
- The Client Success Director or person in charge of renewals backs non-sellable features that clients love. The CEO only becomes interested when customer churn becomes problematic.
- The Head of Security, IT or Architecture (or someone less senior if these roles don’t exist) champion features that keep you up, running and secure. These are, generally, quieter voices, plus this is also technical work that scares people.
- The Operations Manager or Service Manager back features that reduce overhead costs. They’re usually the quietest voice in the room – in fact, these individuals might not even be invited to raise their issues.
Rebalance your roadmap by asking the relevant people in your business to discuss it and ensuring everyone is heard.
Then, explore what your company has built over the last 18 months. Add the features to the four categories, check for gaps or under-investment in any category and decide whether this is storing up problems for the future.
It’s fine if you want to do all the sales stuff in Q1 because that’s what you need. With the product roadmap in place, you’re making a conscious choice to do one piece of work over another.
It’s also good to be aware that doing work in some of the quadrants will impact some of the others. For example, more features might create the need for more backup and extra service support.
Consciously eliminate technology debt
Every company has constrained resources – even Google. But successful businesses direct those resources to where they’re needed most.
A product roadmap empowers you to do this by consciously choosing what to do and what not to do. As long as you carry out delayed work when the time is right, you’ll build and scale efficiently, continually improve your service levels and drive even bigger profits.