In the past, I have always thought of product strategy as simply “solving problems”. I recently listened to a podcast on iTunes U in which the guest speaker was Scott Kriens of Juniper Networks. Kriens made a brief comment on the evolution of their product strategy which has given me a new perspective on the way I think about software product management/strategy.

His comment was that Juniper had to move from a “niche” strategy of “making a faster box” – which is essentially solving a “problem” – to a broader strategy that addresses the question, “Where is the source of the money and how can I leave the source better off?”

The idea is essentially taking a more holistic view of your product and your customer, but I think Kriens had an interesting way of framing the concept.

The example he used went something like this (I am paraphrasing the example as I understand it, so this is not a direct quote and/or case study from Kriens).

Problem

As an example, consider an organization like Walmart. Walmart has a problem; they have web servers, file servers, desktops, infrastructure, etc that need to be connected via a network/routers.

Solution

Juniper provides networking/routing equipment that can solve the problem of “connecting” the infrastructure. Of course, there are other networking/router providers, why would Walmart chose Juniper? Enter the “niche” strategy…

Niche

For Juniper, the niche strategy of making a fast router would (in theory) make the communications between Walmart’s equipment much faster. So the differentiating factor for Walmart’s decision-makers was that Juniper’s solution was “faster”. In this case, the “speed” is primarily an appeal to the IT decision-maker – ie: bandwidth, throughput, overhead, kbits/s, etc. – not necessarily the “business” side.

Where is the source of the money

As Krien’s described it, the “where is the source of the money” thinking is slightly different. It is rooted in the premise that there are check-writers and check-cashers.

In this scenario, Walmart’s end customer is the check-writer and Walmart and Juniper are check-cashers. Why? Think about it this way… The customer comes to walmart.com and buys a product online (check writer), Walmart receives the payment (check cashing).

Juniper is also a check-casher because Walmart buys Juniper equipment to support their network – networking is infrastructure, hence a cost of doing business for Walmart. Ultimately, network equipment isn’t a source of money for Walmart (revenue generator), it is a cost/support requirement.

The application of the “where is the source of the money and how can I leave the source better off” goes something like this… For Walmart, their ultimate goal is to get a customer in and to spend money.

If, for example, the customer visits the site on “Black Friday” and the network is overwhelmed and slow, the customer may close the website and go to Target to spend their money. Networking issues may also cause transaction delays in physical stores on the registers – ie: the point-of-sale. When these problems occur, Walmart doesn’t “cash” a check; hence Juniper won’t ultimately cash a check.

So, the solution described in the podcast was that Juniper created a more intelligent network/routing system in which it would weight/treat an ecommerce transaction more favorably than (as an example) an email. Thus, the intelligent processing provided a faster AND more reliable ecommerce experience for Walmart’s end-user (source of money) which facilitated “check-writing”. The trade-off may have been a slight delay in (as an example) email, but Walmart was not hindered in their ability to process transactions (check cashing).

So, by considering Walmart’s business and where Walmart’s “source of money” is, Juniper is able to build a better solution that improved Walmart’s core business – not just solving an “IT” problem of connecting the infrastructure.

The concept of considering your client’s business is not new, but I liked the “model” Krien’s used in framing the business/product in terms of check-writing, check-cashing, and “where is the source of money”.

This entry was posted on Friday, December 18th, 2009 and is filed under Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.