Product Managers guiding the creation of software enabled solutions need to be aware of the Industry Lifecycle which provides a model for growth, maturation, and eventual decline of a collection of companies that serve common market needs. Knowing your location and leveraging opportunities at every stage can improve profitability over the solution lifecycle. Ignoring it brings on mistakes, delays, and missed opportunities. Watch Applied Frameworks’ Laura Caldie, Luke Hohmann and Carlton Nettleton for this short 15 min webinar!
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Everyone can find 15 minutes a week to learn something valuable. This series, the Product Management Minute, gives Jason Tanner and Carlton Nettleton the opportunity to talk about essential topics for Product Managers who guide the development of software enabled solutions. The topics and ideas they discuss come directly from questions and feedback we hear from students and graduates of the Profitable Software Academy, an Applied Frameworks program supporting the professional development of product managers at all career levels.
Luke is Chief Innovation Officer and SAFe® Fellow at Applied Frameworks. Author of Software Profit Streams™ A Guide to Designing a Sustainably Profitable Business as well as a number of other books. Luke is a SAFe® Framework contributor and contributed majorly to the SAFe Agile Product Management (APM) and Lean Portfolio Management (LPM) competencies and the SAFe POPM, APM, and LPM courses. Through his experiences, Luke has gained insight that can help any product manager in their journey.
Carlton is the SVP of Product at Applied Frameworks and a Certified Scrum Trainer recognized for designing engaging courses for professionals building amazing Software Enabled Solutions across multiple industries. As an instructor in the Profitable Software Academy, he has a front row seat in helping participants tackle all the tricky but energizing problems product managers face as they guide the development of the solutions they manage.
*transcript was created by ai, please excuse any spelling and grammar errors
Laura Caldie 01:57
Hey everyone. Welcome to today webinar. It’s called the product management minute intentionally because we think everybody has at least 15 minutes to learn something important and useful. And so we want to keep it 15 minutes. So no matter what I’m going to cut you guys off. But we pick these topics because the world of product management is complicated, complex and a whole lot of collaboration needs to happen between all kinds of stakeholders internal and external. So given how complicated this is, we thought we’d break down the topics and highlight some that are in the book that Luke Holman our guest is one of the co authors of the software profit streams. And if we pick off important topics one at a time, then we can keep it to no more than 15 minutes. So the other reason I like to help folks like this together is the content that is created and delivered in the profitable software Academy. These folks that we have on this product management minute are either instructors, content developers or in a lot of cases both. So this profitable software Academy is targeting the most important concept while all of them but how do you how do you shepherd a successful profitable software enabled solution? And this academy really helps product managers at all levels of their career, learn and practice skills that are really important in order to make this happen. So with that, I thought we would just get going on the topic at hand. So what we’re talking about today is the industry lifecycle. So Luke, maybe you can start us off by talking a little bit about what the industry lifecycle is and then I’ll let you to discuss.
Luke Hohmann 03:52
Sure, well, the industry lifecycle defines the actual evolution of new entire industries from inception to their eventual demise or replacement. So an example of an industry could be the car industry, which started well more than 100 years ago, and we’re still going strong in the car industry, or the industry lifecycle could describe the cotton gin, which started even further, longer ago, but now we don’t use manual cotton gins anymore, we use other techniques. So the industry lifecycle has a specific number of phases and it describes how an industry evolves. And then what happens is that product managers will be working within that industry.
Carlton Nettleton 04:45
Hey, Luke, what are what are the numbers represent on this diagram?
Luke Hohmann 04:49
Well, those numbers represent the specific phases, which is the introduction, growth, maturation and decline. And so one of the things it’s important for product managers to know is where are you situated in that industry, meaning, let’s say that you’re in the car industry, and you’re in a very mature part of that industries. Maturity doesn’t mean there’s not opportunity. There’s plenty of opportunity available. Look at what Tesla has done. They’ve transformed the industry. So there’s opportunity in a mature industry, it’s that the introduction of the new solution is going to be different when you’re mature, versus when you’re the very first car company at the very start of the industry. Well now, the number one is that would be aligning. The solution lifecycle with the industry lifecycle so it’s, we find it valuable, and our clients find it valuable to know where you are in the industry lifecycle because it can guide your in your innovation efforts. It can also guide your profit extraction methods. I’ll give you another example. The particular kind of car known as a combustion engine is on the decline. The data is absolutely clear. That doesn’t mean we’re not going to have combustion engines for a while. It just means that you better have a plan for getting out of that business if you’re a car company.
Carlton Nettleton 06:17
Well and when you say the decline, you mean like section four, right exception number four, that decline? Yeah. And so the maturity is pre precedes that right?
Luke Hohmann 06:27
Yes, the maturity.
Carlton Nettleton 06:29
So, you know, one thing look, I mean, thinking about other technologies that kind of that have faded away, like I’d say, like a CD player, I tried to buy a CD player a couple months back, and I mean, there are still you can still get one even though I would say physical media for music is in decline, for sure. Right. But there are still opportunities in decline to make profit or provide solutions.
Luke Hohmann 07:06
There are I don’t want anyone to hear that. the decline of the industry does not mean that you can’t make profit it I have four kids and one of my kids has a friend who is a record aficionado like the actual physical album, and they love getting the albums and there are high end audio files who find the the kind of the scratchiness or the warmth of those records really appealing. So what you said is factually like let’s just look at the facts. It’s factually true that physical Music Media as an industry is in decline. And it’s also factually true that you can create profit in a declining part of an industry but you need a different kind of company. And you also need a different kind of expectation. You have often tighter focus on your customers, more clarity on the benefits that you’re going to provide. And a laser focus on on a market that you’re willing to say is small. And that’s okay. Right. It’s an you’re certainly not going to get a venture capitalist investing in your company for that company, but that doesn’t mean you can’t make a good company.
Carlton Nettleton 08:17
Yeah, no, I could see that because if like you mentioned the audio file, right? They would be you’d have to really understand, you know, very clearly with personas and what’s the customer benefit that you provide? And I could I could see the audio file be willing to pay a premium for an analog record, right, especially if it’s a title that’s hard to find or an artist that they really like. Absolutely, absolutely.
Laura Caldie 08:46
So what when I’m gonna throw a question in here then too, and I’m going to flip over kind of to the next view here. So I think what you’re getting at is like what it says here, there’s opportunity, it is every stage and so if you’re a company producing a software enabled solution, I could imagine that where your solutions fit into a view like this, you might actually be serving two different industries, right, like maybe you recognize the decline of the CD player and so you’re inventing a solution that actually is intended to keep your company alive a whole lot longer as one as you’re dipping in one area, you actually recognize opportunities to generate something totally innovative in perhaps a related or new area.
Luke Hohmann 09:33
Absolutely, and when you’re looking at the kind of the unique characteristics, characteristics of software enabled solutions, ie we even see this industry cycle emerging as new software is enabling new capabilities and we’re also seeing the maturation phase where there is great opportunity for innovation software itself added to an A solution that previously didn’t have software creates an entire new opportunity for growth and innovation. So I’m seeing software in stoves. Where you can control the stove through an app we’re seeing refrigerators are Carleton, you have an example in one of our courses where you found a toaster that software enabled, like 60 different ways to cook toast which I didn’t know there even were 60 ways to cook toast! but and we all be you know you We joke about it and then you’re like you try it, you’re like wow, I got the toast exactly the way I like it, which is really exciting. Another example of how innovation happens with software enabled solutions in the maturation phase is the juice company in America. Tropicana has a very consistent flavor of orange juice. The reason is because every truckload of oranges that go to the factory is sampled by an AI software solution, and it samples more than 300 attributes of the oranges and it blends through AI different tiny amounts of the different truckloads so that the consumer has this Oh, it’s the Tropicana taste now it’s 100% natural juice. I don’t want to imply that they’re doing something artificial with the juice, but they’re doing something artificial with the intelligence if you will, when you’re doing something a human could do. There’s no human that could balance the equations of 300 You know, 300 different variables, every truck, but by putting software there to Laura’s point by putting software in there, we’ve created an innovation in something that is really beneficial to the consumers. I know I like a certain flavor. I get it. Every time.
Carlton Nettleton 11:59
Well, and that’s really interesting, because this is a mature market, right? And so they’re using the innovation of software to help preserve preserve their brand, right? It’s not necessarily it could be helping them grow right? But it’s certainly to preserve their brand and their market position.
Luke Hohmann 12:19
Well, growth in I’m glad you brought up growth, because the industry lifecycle also gives us some insights into growth. If, if I’m in the innovation phase, or the introduction phase of the industry lifecycle. Everyone’s growing and we’re all happening, but it’s called the expanding pie, right? There’s no fighting because Wi Fi the competitor, when we’re all just getting bigger and bigger and bigger anyway. In the in the growth stage, you start to see the acquirer acquisition and merge. But that’s where the industry kind of consolidates and you get a few big players in the maturation phase. That’s when when the growth objective changes, so Tropicana is now going to fight other orange juice companies because it’s a mature industry. So the maturation phase is really about taking market share, because the market has kind of stabilized. Now, you could argue orange juice is going to grow roughly as big as the population. So there’s, there’s intrinsic growth as the population grows. But most of the actual growth of a company in the maturation phase is going to be about taking market share from someone else.
Carlton Nettleton 13:34
Yeah, well and look at some of the going back to the orange juice example. I mean, you people differentiate around like if it’s organic or not, right or if it’s fresh squeezed as opposed to concentrate or support the degree
Luke Hohmann 13:50
of pulp do I want mid pulp heavy pulp, all that? Oh, that. So as we closed on our minute, because of course, we’re we could talk for longer than a minute. The industry life cycle. I would summarize the importance of knowing the industry lifecycle is, you’re not going to really materially change the industry lifecycle, right? It is going to be a larger force that you really can’t control. But if you don’t understand it, then you’re at the whims of your competitors who may understand the industry lifecycle. You can’t you, you know, that’s to say that there’s a larger force. Therefore, I don’t have to know about it is not true. There’s a larger force. And by understanding that larger force, I can position my solution and my work as a product manager to take advantage of that force to know how I can leverage it as best I can. And to put myself into a position where as this is changing, I’m ready to change with it.
Laura Caldie 14:55
Well, that’s actually a good segue into kind of what’s coming next right so we have the industry lifecycle, the next time we get together on August 11. We’re going to talk about the solution lifecycle. And I think you’re you’re highlighting what we always say in this product management minute, which is it is a systems thinking approach is part of kind of every product manager secret weapon. And part of what you’re highlighting both in the book and in these webinars is well what are the different elements of the system that a product manager either needs to understand or can manipulate or tools they can use in order to really take advantage of where they are in the lifecycle of the market, where they are in in terms of their solution, and then what are their customers needing and requesting. So, that’s the next webinar. We have recordings of past ones that are again all about describing this system that product managers are interacting with so check out our recordings, and stay tuned for where you can sign up for the next one. And before we leave, do either of you have any last words of wisdom or parting thoughts?
Carlton Nettleton 16:04
I am going to have a glass of orange juice Oh, my word of wisdom is I think, you know, the industry lifecycle. I have to admit this was kind of a new metaphor for me a couple years ago, and so I really find it useful just to understand these big macroeconomic trends.
Luke Hohmann 16:26
I just think that thankful that we’re here and we love feedback from our customers, so and our webinar listeners, so if there’s a hot minute that you want us to provide, send it to us. We’re readily available on social media, and we’d love to hear from you. Thank you so much. Hey, thank you
Laura Caldie 16:42
both and I’ll see you next time.