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Product Management Business Cases: Process More Important Than Models
A critical responsibility of product management is to drive revenue through new products. Unfortunately business cases are usually required to secure the funding needed. Google can help a bit — there are 1.4 billion Google Search results for “Product Management Business Cases”. Regrettably, after about 30 search results Google kind of craps out. In spite of insistence on formal business cases, over 90% of new products in 2020 failed according to Harvard professor Clayton Christensen. Harvard Business School lecturer Shikhar Ghosh says in a WSJ article that 75% of venture-backed companies never return cash to investors and in 30–40% of the cases investors lose their whole initial investment (he works with a dataset of 2000 venture-backed startups). If even the most sophisticated VC firms have such a high failure rate, product managers face equally daunting odds of getting their new product ideas funded. Experience has shown that the process of building a product management business case is as important as the models it contains.
A Typical Product Management Business Case Story
The Backstory
Jack is a senior product manager for FashGen — a $50 million private equity based online apparel retailer. FashGen made its mark in the industry by being the premiere destination for iconic millennial brands like Hollister and Fashion Nova. After five years, FashGen’s revenue growth rate has declined precipitously. Jack has an idea for a product extension that could drive significant incremental revenue.
Jack’s idea is to add Bitcoin and Ether as payment options in addition to the many credit cards and Paypal that FashGen currently offers. Consumers age 18 to 34 are the largest adopters of cryptocurrencies and are a core target market for FashGen. Jack envisions using a payment gateway like Bitfinex. The development effort would be ‘minimal’ since they already had a payment API infrastructure. A significant investment in marketing to crypto enthusiasts would be required, but the net new customers they could attract would drive significant new revenue for FashGen.
One of Jack’s friends, Sameer, is a senior developer for FashGen and is very active in the crypto world. Over a long…
