Good product managers know what to build; great ones know what not to build.

There are really four kinds of feature that we put in a product or service: Functional, acquisition, onboarding, and market development. If you’re building products, you usually have a list of features, which you prioritize. Most product managers treat the last three—those that don’t satisfy the needs of existing customers—as afterthoughts. Like many product managers, I focused too much on functional features at the expense of the other three. Mea culpa. I was myopic.

At first glance, it might seem like these four categories only apply to the software industry. But today, software is eating the world. Everything—from cars, to pizza orders, to dishwashers, to parking ticket payment, to hair salon scheduling—is software. If you think these lessons apply to your product or service, rest assured: they will soon.

Functional features

Functional features are those your current customers need. Many of them are easy to figure out, if you’re listening, through focus groups, feedback forms, even search results. They’re features that form the core of your product or service, and satisfy the needs of the customers you have (and the prospects like them.)

Some functional features are harder to determine, because your customers don’t know they want them yet, and aren’t asking for them. Good product managers focus on the jobs a customer is trying to accomplish, and figure out the best way to get those jobs done.

Much has been written about prioritizing functional features. There are entire marketing frameworks, such as Pragmatic Marketing, that explain how to identify and rank features, and how to create not only the product itself but also the related support, positioning, pricing, and distribution.

But in many cases, building more functional features is exactly the wrong thing to do.

Acquisition features

Acquisition features help you acquire prospects. Dropbox, for example, created a system where existing users could invite new ones and earn free storage for both themselves and the new user. This took development work: time to design, code, and test.

Referrals - Dropbox 2015-09-18 14-59-08

In enterprise software, companies often rely on demonstrations or trials to prove their value. These demos are often cobbled together by sales engineers, using badly concealed data from existing customers or unbelievable, made-up data.

Today’s buyer expects to try the product or explore the service digitally. It’s the role of the marketing team to make this easy for customers. It shouldn’t be an afterthought. Modern marketing campaigns take software development—which is often not accounted for in product roadmaps. That means access to the engineering team, which traditionally has a strained relationship with sales and marketing.

Good acquisition helps with virality and word-of-mouth growth, and shortens sales cycles.

Onboarding features

When a player starts playing World of Warcraft, the interface is simple. They see a clean screen with few buttons, and a person with an exclamation mark over their head. It’s clear what they should do next; the first quest they get is a simple one. As they advance in the game, the quests—and interfaces—become more complex. By the final levels, the screen is covered with buttons and plugins, and dozens of players litter the screen.

WOW onboarding

Blizzard pioneered this kind of gradually advancing complexity with games like Warcraft, Starcraft, and Diablo. The learning curve is gradual, and players don’t need to consult a manual to understand how to play. Mobile apps and games, designed to be downloaded on impulse and played standing or commuting, have also mastered this.

In enterprise software, companies often resort to wizards or virtual agents to coach users (who can forget the well-intentioned Clippy?) Ableton, the music software, starts with a number of explanatory mouse-overs:

Monosnap 2015-09-18 16-00-29

Slack has a Slackbot which chimes in, offering help.

Slack 2015-09-18 15-59-32

Wizards are getting better, but they’re still a crutch. DJ Patil, now the Chief Data Officer of the US government, calls this the Zero Overhead Principle: no feature may add training costs to the user. And the biggest sign of bad onboarding design is documentation, which is a clear indicator that the user interface isn’t intuitive enough.

Proper onboarding is critical not only because it reduces customer support costs, but because it increases stickiness: Users learn about new features as their needs become more sophisticated, and become more loyal to the tool that satisfies those needs.

Market development

The fourth kind of feature helps the business reframe the product. Early-stage companies may not have found the ideal market for what they’re making—the one in which their particular strengths matter most, and their weaknesses are least important. Market development features help them explore new markets.

For example, consider a company that makes embedded web charts and graphs. Their initial market is “prosumer” bloggers, who love the tool. But that initial market is too small to sustain the company’s growth. So how to they explore new markets?

  • One way might be to automate the ability to import data from specific sources. They could make it easy to turn Eventbrite ticket sales data into a beautiful visualization, then launch a campaign aimed at event organizers who want to summarize their event to attendees. They could try this with other data: Paypal, corporate credit cards, government reports, and so on. With each automated data set, they’d explore a new potential target market.
  • Another way might be to add analytics to the charts and graphs, giving the publisher more insight into which information readers are interested in. A pharmaceutical company publishing data on drug side-effects to physicians could use this feedback to identify which side effects physicians cared about the most, and address them.
  • A third way might be to build a browser plug-in that lets a user select a range of data in Google Sheets, then automatically chart the data within the tool. The company could then position itself as “the missing button for Google Sheets”

Note that in each of these examples, the feature lets the company explore and develop a new market. It doesn’t seem like a high priority to existing customers, and is often discounted or delayed as a result. “Event Organizers” or “Pharmaceutical Companies” or “Google Sheets Users” are potentially bigger, more lucrative markets than “Prosumer Bloggers.” But Prosumer Bloggers probably wouldn’t have requested features that lead to those markets.

By creating a relatively small new feature, then branding it properly, the company gives itself a reason to have a conversation with these markets. It also repositions its offerings in a way that lets it test how the new market reacts.

For more established companies that already have a successful business, and have figured out what products to sell to a market, market development features are about exploring new markets. The Mr. Clean Magic Eraser is melamine foam, which started out as aircraft noise insulation, but P&G changed the packaging and sizing in a way that allowed it to explore an entirely unrelated market: housecleaning.

Balancing the four features

Every product manager needs to look at their product roadmap through the lenses of function, acquisition, onboarding, and market development.

fourfunctions

The mix of these four kinds of feature depends on the company’s current challenges:

  • If current customers are complaining about key functions, or willing to pay more for specific features, then functional features should dominate. This is also the case if major market shifts—such as legislation or a new technology platform—are on the horizon.
  • If it’s costing too much or taking too long to acquire customers, then customer acquisition features should take precedence.
  • If customer support costs are through the roof or churn is high, then onboarding features should come first.
  • If the company hasn’t found product/market fit, or if the current market is becoming saturated—often indicated by shrinking margins—then market development features are what matter most.

I wish I’d reviewed every product roadmap with this perspective. Onboarding, acquisition, and market exploration don’t happen by themselves. They require software development and integration.

If you’re not including the time and effort they will take in your schedules, you’re lying to yourself. But if you treat onboarding, acquisition, and exploration with the same amount of planning and discipline that you do functional features, you’ll be far ahead of the competition.

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