Taking Control of the Portfolio using Investment Horizons
The Product Investment Horizon will tell us valuable information:
What is our focus right now?
When can we expect return on investment?
Depending on the investment horizon your product is in, your team will have different goals:
For Horizon 3, the goal is to Learn. At this stage your company is just starting to invest in an idea. No one really knows if the idea will work out. At this stage we might not have competence, we don't know whether there is a market out there, we don't know if or when we will be able to reach product-market fit.
At this stage it's best to use a small team and apply Lean Start-up and Design Thinking practices such as prototyping in order to get the fastest feedback with the smallest investment.
At this point we are trying to understand whether the product is viable or feasible.
In Horizon 2, the goal is increase market share. At this stage we are starting to see the first results of our work and we need to our due diligence and understand whether our product can become desirable and sustainable.
There is no point in spending a lot of money on something that will not help our business. In horizon 2 we are looking to have a clear business case, gain market awareness and develop the first sellable increment of the product.
For Products Horizon 1, the goal is to Make Money. Money is the blood of the company. Everyone working for the company is putting their faith in the company's ability to generate money for salaries and growth.
In Horizon 1 we expect solutions to have matured and have gained a market presence. Here is where we invest in viable solutions, make the profit that sustains the whole organization (salaries, new product development, facilities, utilities, equipment, etc.)
Here is where we want to make sure that our solution gains new marketshare and is sustainable for the longest period of time.
At Horizon 0, the goal is Not to Burn too much Money. It's tough to decommission a product that has been serving the company faithfully for years. This is not an easy call. However, markets shift and people change. Our Grandparent have different needs than us and our Grandchildren will have different needs.
The overall goal of Horizon 0 is to understand that there is still a cost associated with decommissioning. Ongoing customer support, security updates, warranties and anything else that is required to maintain the promises of our enterprise to our customers does come out of our bottom line.
All Enterprises should analyze their portfolios, assess which products belong where, which product investments are never going to pay off, where is our product pipeline weak and where is our product pipeline strong.
This visualization and realization will drive forward innovation and make the company survive and thrive in the digital age.
