Hardware Product Management: The Road to Hard Trade



    Over the past few years, a new profession has appeared and taken shape in Russia - the product manager. Of course, 10 years ago there were specialists who performed the duties of a product manager or these responsibilities were distributed among several people. Now on the market there are many ready-made specialists, the demand for them, as well as a host of different training courses, articles on this topic and so on.

    Unfortunately, 99.9% of all these useful materials and courses are related to software product management. Moreover, most of them focus on online services and mobile applications. They discuss MAU and other metrics, as well as tools that help them work. Unfortunately, most of these metrics do not work for enterprise products or for hardware products.

    There is very little information on managing hardware products, I'll try to fix it. Let's start with a short article about the differences between hardware product management and software product management.

    Complexity


    Most hardware products are more complex than most software products. No, I in no way want to belittle the complexity of large software products or web services. Just a very often web service, it is only a web service. A hardware product is almost always not only the hardware itself, but also the drivers, application software, and even additional web services for working with this hardware. In the worst case (in terms of complexity of course) you need to create an Apple iPhone, when in addition to application software you need to build an entire ecosystem.

    For example, our company is engaged in the production of electronic identifiers for authentication and digital signature. In our case, the product is not only a piece of hardware, but also drivers for Windows, Linux and MacOS + application libraries + SDK + application software + browser extension + application for mobile phones (Android and iOS). It is also necessary to support various open-source software working with such devices (openssl, opensc, openct and so on). Plus documentation and knowledge base.

    This leads to the fact that when creating such a hardware product you have to work with many different teams: from mobile developers to circuit designers. Even designers for such a product need at least two - for software and the so-called industrial designer.

    Design


    Design and engineering are important in any development. In the modern world, products are increasingly starting to compete with each other, not only and not so much in functionality, as in ease of use. Fortunately, for software developers, the design can be redone. And in most cases this is not such a difficult task. Everything is much more complicated with hardware products - the external design is directly related to what is inside, for example, a printed circuit board. And the desire to slightly redo the external design can lead to a complete redesign of the product inside. So this change requires much more time and specialists. Plus, the hardware design is closely related to the production and future maintainability of the product. Remember the sad story with the Galaxy Note 7 cases, when the decision to reduce the case by a few millimeters led to massive fires.



    Launch and rhythm releases


    Adding new features or product releases when managing a software product depends only on the people of your company - developers, marketers, lawyers, and so on. And the production of hardware-product includes proper coordination and work with a host of other companies. The development of hardware includes natural life cycles, which means that once crossing a certain milestone, you find yourself at a point of no return, when changes can lead to very large delays in your roadmap - not to mention a significant increase in cost.

    For example, Rutoken tokens have a limited set of colors and shapes. Imagine that in the middle of development a product manager decided to make a device of a new non-standard color and shape. Such a process will require not only redesign and prototyping, but also verification that production can really produce such a product, search for suppliers of plastic of the right color with the right characteristics, supply of plastic to the production (at the right time and for the right price), production of the first batch, additional testing, and it is possible to add something to the firmware. This process can take months! Compare this with the addition of a button or a color change in the user interface in a software product, where the entire process before release can be less than a week.

    The release of a completely new product may take more than a year from the moment of idea to delivery to end users and this is an absolutely typical story. Much can happen on the market during this time, and without good research, you may find yourself with a product that the market does not need at all. When developing an online product, you can enter the market in less than 6 months (but even during this time a lot can change).

    Even iterations to update software for hardware may require a combination of server, client, firmware, changes in the OS, and all this can take a very long time.

    Metrics and hypothesis testing


    Hypothesis testing in hardware products is much more complicated. Very often you can monitor the effectiveness of a particular feature only by watching sales and then indirectly. Imagine that you added a button to a vacuum cleaner or refrigerator for a new mode of operation. How to understand its effectiveness?

    Even after conducting a direct survey and finding out that users do not use this button, is it not so easy to understand why - was there a poor marketing of this function? Was the instruction poorly written? Or users do not need this feature at all? This is further complicated by the fact that between you and the end user very often there is a retail that can have its own interests. For example, users aggressively promoted an additional guarantee on the device for which you just raised reliability.

    There are generally fantastic situations here. Imagine that you are producing filters for drinking water. Tomorrow you developed a new technology and released a filter that needs to be changed one and a half times less often than that of competitors. On the one hand, it looks like a product advantage. On the other hand, it is more profitable for a retailer to say that all filters are the same and they need to be changed with the same frequency, as this allows him to sell more and earn more accordingly. And your competition is of little interest to him.

    It is more difficult for you to feel like a user of the system, so you need to communicate with real users as often as possible. Moreover, it is necessary to communicate not only with B2B clients, but also with end users. And tech support should be your best friend. For example, if you produce electronic signatures, some test scenarios are available only for certain groups of legal entities. In the case of the EGAIS system - only for suppliers or sellers of alcoholic beverages. And none of the participants in such a system wants to give you combat certificates for full-scale testing and to identify any problems.

    When developing a software product, you and the team can experiment and add only suitable pieces to the final release, while easily cutting out unnecessary ones. When developing a hardware product, creating a prototype and getting feedback can take a lot of time and can be very expensive. Iron products almost never receive a true beta period and cannot be patched after release if a critical issue is discovered.

    The product can be touched


    A hardware token is a tangible product that is delivered to end customers. And this means that the manager of such a product receives additional work - delivery and warranty service.

    Clients cannot simply download a new token or log in by clicking a button. It doesn’t matter whether you deliver to your business partner, or agree with retail, the product manager receives an additional bundle of headaches - supply and demand, logistics, packaging and retail partnerships.

    Product packaging often plays a very important role - this is the first user experience to interact with your product. As in product development, a significant trend in this direction is set by Apple. Her iPhone boxes forever changed the packaging of the smartphone. Good packaging should be attractive, functional, reliable, good instructions should also be mentioned. And the return of products - this is the opposite of logistics - warranty repair, diagnostics, replacement, and so on.



    Certification


    If you are developing products in the field of information security, then you are aware of the various certifications and requirements for certain products. This applies to both software and hardware products. FSTEC, the FSB and the Ministry of Defense - this is only a small list of certification bodies in the field of information security in Russia.

    Even if you do not work in the field of information security, but produce products for a wide consumer, you will need to meet a host of requirements. Surely you saw various badges and stickers on the instructions of household appliances about compliance with various standards and compliance with the conditions of various certification. What is even sadder is that this certification is usually tied to specific regions, which means that when delivering a product to several countries you need to take into account their requirements. And since these requirements may contradict each other, you may find yourself in a situation where you need to release several versions of the same product for different regions.

    Standards are a great thing, but sometimes they have a certain set of requirements that dictates the behavior of a product or limits it. This adds a challenge to the product team, which should make a product that meets all the requirements and at the same time creates a good user experience.

    This challenge is especially strong when developing products related to security in general and information security in particular, where most of the security requirements reduce user experience in one way or another. Unfortunately, the majority of domestic products in this area make users not rejoice at the new product, but suffer.

    Product life


    If you are developing an online service, then all your users use the latest version. And you need to support only her. In the case of heavy software, support can last for years. But in the case of “iron” products, it almost always amounts to years or even tens of years. And the device should not only work physically, but in most cases be supported by your new software. The burden is growing not only on developers, but also on technical support staff. All this you need to consider when releasing a new version.

    You need a strategy in advance to complete the life cycle and complete product support. And you need to prepare in advance the smoothest opportunity for the transition.

    Reliability


    Even the first version of your product should be 100% working. When you write software, especially if we are talking about various online services, you do not have any problems with temporarily broken components or errors. You can correct them and quickly roll them out. When you buy an iron product, making corrections is almost impossible. Plus, the users themselves, when buying something tangible, are extremely confident that there will be no problems during work.
    If the online service drops by 5 minutes, then the maximum that will happen is a couple of bad news on the Internet. If a piece of iron in critical infrastructure fails for 5 minutes, you will have big problems.



    Economics and Cost


    Usually developing hardware products requires a lot more money. In addition to the development cost, this also includes the cost of components, production capacities, production personnel, and the cost of storage (both components and finished products).

    As a product manager, you should think about reducing production costs. New products must be designed using off-the-shelf solutions or standard components. This is important not only to reduce the cost of your product, but also allows you to standardize production. Which, in turn, will further reduce the cost of production and, more importantly, increase the speed at which a new product enters the market.

    Sales forecasting


    Forecasting sales becomes very important, not only for revenue estimates, but also for the supply chain and production load. The right communications with your sales managers, and their proper communications with customers, are needed to analyze performance and evaluate future investments.

    Volume forecasting allows supply chain and production teams to create a production plan and maintain optimal inventory levels of components and finished products for cost savings. The supply chain additionally uses forecasting to optimize the cost of components needed to manufacture your product.

    Logistics and Production


    Supervise production, suppliers and logistics. As a product manager, you absolutely do not want to do this, but it is definitely vital for understanding current operating expenses that help to avoid unexpected expenses such as recalling a product or not having it in stock.

    For example, is the logistics process automated or not? Do they have their own health check points at each stage? How does the plant make decisions on vital components? These are just a few examples, but don't be afraid to dive deeper and ask questions. Even when asking questions, the team will be involved and if any problem happens, you will know the right people with whom you can solve it.



    Brief summary


    I hope that the difficulties I described and the problems that the hardware product manager is facing will not scare away those who decided to take this path, but only spur them on. After all, creating products that you can touch with your hands is really great!

    Yes, along this path there will be many difficult tasks, difficult decisions and difficult compromises. But without this, you won’t get a good product, whatever it is - hardware, software or service. The main thing is to be as close as possible to your end users in order to create a truly useful product. And be as close as possible to the production process so that the creation of your product is cost-effective.

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