Segment Profitability

Product Management, Profitability, segmentation

As a product manager you look at creating extensions to meet needs of different markets. However not all segments are created equal.

While it’s good for the ego to know that our product is present in multiple segments, some segments are more profitable than others. As a product manager you need to be aware of it because otherwise some finance guy may draw up his own conclusions and shut down your product line.

There could be various ways of doing an analysis of each segment. One method that I have found easy and quick to use & keep me aware is suggested by Richard Koch in his seminal book The 80/20 Principle. If you have not read this book, I would recommend you stop doing everything else and pick it up at the Kindle store.

His suggestion is to segment your market by competitors. The segment where you face the same competitors you club together. Whenever the competitors change you account as different segment. Now fighting different types of competitors in different market segments requires bandwidth of all kinds of resources.

If you know against which competitors you win more easily and also make more money because of scale or whatever else, then as a product manager you should do everything to win even more so that the absolute profit that your product line creates grows.

On the other hand if there are segments, where you find it difficult to win against other types of competitors then you should avoid.

There was a time when I was carrying a product line of an operating system . Now I could sell services to end customers for managing their operating systems, I could sell them training on those operating systems for corporate customers and individuals who wanted to pick up the skill.

While it was easy to sell services and training to companies, when it came to selling in retail our systems were failing against dedicated retail training companies. So even though my product remained the same, in the retail market my competitors were different and I had to leave that segment. Till that time I had not read this book. Now I like to keep evaluating on regular basis how my different product lines are doing in different competitive segments.

Till next time then.

Carpe Diem!!!

Small interventions with charity – big impact on society

charity, Karma, Leverage, prioritizing

If you follow my blog you would know I am a big fan of 80/20 – small causes which can create big impact. I am all about using leverage- in the positive sense.

I am also big into doing charity because it is good Karma.

But I think not all charity is created equal. In my opinion if you do charity to solve a problem at the grass root level then in the long run it can have a major impact on the society. Its all about prioritizing how your funds can have the biggest impact.

In India one of the big challenges we face is poverty. So poor people don’t send kids to school because they get additional hands to work, earn money and therefore feed the family.

Since the kids don’t go to school they also spend their life in poverty-stricken situations. This also leads to an increase in crime, drug abuse etc.

A simple solution that was found, was to feed kids in schools so that the kids get one good meal. Now the incentive for the parents to send the kid to the school is not educational but the lunch that the kid will get. On the other hand for the government and society the long term benefits are better, healthier citizens who may eventually come out of poverty and the crime rates will also be lower.

The challenge is how do you feed so many kids. That’s where NGOs come in. They take donations from people like us.

A lot of NGOs do good work. However I support these kind of charities because the small interventions of feeding say 25 kids for a full year, every year will ensure that 10 years from now I know there will be 25 less people who will be on the road living in poverty. The amount needed to feed one wholesome nutritious meal to say 25 kids for a year would be just USD 500 but the long term impact could be so amazing.

Mohnish Pabrai runs a similar program where he helps kids get trained for higher education and sponsors their education. The Grameen Bank founder and Nobel prize winner did a similar thing by giving micro loans to the poor people so they could do their own business.

While all charity is very good, give wherever and whenever you can, however if you can also do some focused charity it can have major long term benefits for society.

Till next time then.

Carpe Diem!!!

There is nothing sexy in the process of achieving financial freedom

Financial Independence, Uncategorized

FB-YOUR-STORY Over the last few years I have been reading a lot of books/biographies/auto biographies to find out some kind of drama around suddenly amassing a fortune.

Somewhere I had this feeling that there must be a magic formula or providence would strike and I would definitely be as rich as the Oracle of Omaha – Warren Buffet. I read the Snowball by far one of the most authentic accounts of his life and other books on him. Found nothing dramatic or sexy in it. As a matter of fact you sometimes find them boring because their life seems to have the same twists and turns.

I read Tony Robbins and his “Unshakable” and “Money – Master the Game”. Then among others I also went out and read Ramit Sethi and Richard Koch. Again nothing romantic that could suddenly help me leave my job and do what I want to do.

Now most of these guys are seriously rich so they must be doing something right. Some definitely had their take on finding different ways, like Richard Koch with his fundamental book on 80:20.

Well if you remove the stories and hype surrounding these guys…they just ensured they were following a system continuously for the long term.

They had the same short term distractions that you and I have. Some of them may have some luck on their side sometimes. However they just kept at the system they decided they would follow to achieve their freedom.

Unlike me and a lot of us. We get distracted with things, which when they appear, seem to be big. But when you look back at life they were small blips but they broke us away from our long term goal.

Irrespective of the path you want to follow, ensure that short term blips do not deviate you from your long term goal. There will be zigs and zags but keep at it

Carpe Diem!

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