I was recently having a conversation with a friend who was working on the outline for a new product his team is working on. We were going back and forth on what features might be valuable to users and how hard they might be to implement. We were simply mapping items out on a year-long calendar broken down by quarters and had overlaid the business goals to ground our conversation.
After some time of not making much progress, we pivoted the conversation to a new framework. This changed the conversation and gave us a new lens to bucket each feature into. I’ve written in the past about how important it is to start with a framework when making complex decisions and I think this one is a particularly useful framework. Christian suggested that I write it up, so here we go!
The framework has four key pieces organized on a grid: Incubation, Differentiation, Neutralization, and Maintenance.
The product vision roadmap which breaks down the vision into four key buckets: incubation, differentiation, neutralization, and maintenance.
Lets break down the four categories…
Maintenance: This is a fairly easy quadrant to understand. What technical debt do you need to solve? If you ask any developer or TPM on your team they will likely tell you 15 things for this box and usually that is a great place to start with prioritizing features in this bucket. Also in this box are technical improvements which will provide gains of developer efficiency. Our team is adding Sentry to our website as part of maintenance work. This simple tool will meaningfully decrease the time it takes to reproduce bugs reported by customers.
Neutralization: What are the key features which your competitors have and your customers expect you to have? One famous example of this is Facebook copying Snapchat Stories. Snapchat introduced stories and continued stealing users from Facebook. Users came to expect a temporary, yet public, space to post pictures and preferred this to the persistent posts of Facebook. Facebook simply copied Snapchat and introduced stories across their suite of applications. By doing this, Facebook quickly neutralized Snapchat.
As a quick side note, it is often easiest and fastest to simply copy competitors. While this does not remain true for the other buckets in the framework, tasks within the neutralization bucket are not meant to be things which you will build a unique advantage. In these cases, your competitor has already done the hard work to optimize the designs, just copy it.
Differentiation: Differentiation features are where your secret sauce or unique value proposition starts to build up. These are things which give you a significant leg up on your current competition. Anything in this bucket should leverage something unique within your business. Unique value usually comes in a few ways including access to data which your customers do not have, exclusive partner relationships, and in some industries access to physical resources such as a global supply chain. A great example of differentiation is the Gmail smart compose functionality. This is a clear time-saver for users. Google was only able to create this with the large email dataset and legal ability to use them in their training models.
Incubation: Incubations are efforts which bring your product/service into a new market by utilizing your unique value. This new market will have new competitors, new regulations, and sometimes a new business model. For example, Uber began as a simple, effective way to replace cabs. After years of building up a network of drivers in cities around the world, Uber launched UberFreight, a long-haul package delivery service. UberFreight leverages Uber’s unique matching algorithms which have been optimized over years of matching riders and drivers to match truck drivers with people who need to send packages. This introduced Uber into a completely new market with new competitors such as UPS, FedEx, and even Amazon.
Incubations are also the most likely to fail and should be shut down fairly quickly. Within Alphabet (Google’s parent company), nearly all incubations are driven within X which actively tries to shut down projects. Incubations, if successful, take significant time and energy to build. Finding the right ones to grow is an incredibly hard challenge.
Lets put this together with an example. Suppose we are creating a competitor to Taco Bell called Taco Door. This is how a product manager at Taco Door might breakdown their next 6–12 months of work.
Maintenance:
- Introduce new grills which cook chicken 10% faster
- Introduce new receipt printers to decrease the environmental impact
Neutralization:
- Sell through delivery services (Doordash, UberEats, etc)
- Add touchscreen ordering
- Add Apple/Google pay in POS systems
Differentiation:
- Leverage partnership with Coca-Cola to introduce coke flavored margarita
- Utilize supply chain data to optimize routes eliminating 15% of our food wasted during transit
Incubation:
- Utilize worldwide locations to store luggage for travelers while they explore a city
- Leverage our global supply chain to begin selling raw ingredients in grocery stories
While this is a fairly ridiculous example, you can directly see examples of this in companies around the world. Taco Bell leveraged their relationship with Frito Lay to introduce a Doritos Locos Taco. This created a differentiable moat against their current competitors (other fast food/Mexican restaurants).
In the above cases, the buckets are fairly random including GTM, new user-facing features, and more. These buckets do not have to reference only user-facing features. A product manager focused on supply chain for may have significantly different items in each bucket than a product manager focused on the ordering experience.
It is not only important to understand what is in each bucket but also how much time your team is spending in each bucket. Spending too much time in any one bucket can kill your company. Each company/industry will have a unique split of how much time they spend in each bucket.
Recently, my team has been spending nearly 70% of time in the maintenance bucket as we rewrite our codebase from the ground up. This was absolutely necessary for our team and this framework helped us map out this decision even more. Now that we are wrapping up the rewrite, we plan to spend only 10% of time in the maintenance bucket. As a team, we believe our ideal time split is incubation (20%), Differentiation (50%), Neutralization (20%), and maintenance (10%).
Zoom image will be displayed
The full outline of this framework broken including what percentage of the team’s time is spent in each bucket.
The full grid gives not only you as the product manager a clear view on what is going on, it makes it simple to communicate up and down within your organizational structure. When talking with your board of directors, you will likely focus on the percentages the organization is spending within each both. When talking with a front-end engineer, you’ll discuss what the best library is to use when implementing any single feature.
It goes without saying that the percentage your team spends in each bucket can be fairly different depending on many factors including your company size, position, leadership support, industry, and the time horizon you’re focused on. Brilliant Hire is a startup in a space which is radically innovating forcing my team to focus attention on our unique differentiation. We have an incredibly supportive leadership team and our small team size makes us incredibly agile (required for quick differentiation).
Thanks Eran Megiddo and friends at Microsoft for introducing me to this years ago. I also want to give credit to Geoffrey Moore and his book Escape Velocity: Free Your Company’s Future from the Pull of the Past as I believe this is the origin of this framework. I hope this is useful and thanks Christian for suggesting that I write it up!