How to add value to your customers not your product: The value creation and capture model

The goal of this post is to help breakdown value creation and value capture. At first glance we can see that there is more than one way we can add value and that not all value added will actually go to the user.
There are 3 fundamental ways to add value to your customers:
1. Add value to the product without increasing Intrinsic costs or Financial Costs
2. Reduce Intrinsic costs (e.g., complexity, training requirement, filling in forms, etc.)
3. Reduce Financial costs to the user (e.g., licensing costs, product maintenance cost, etc.)
The model below illustrates how the pieces of the Value Pie are divided:
Simply Broken - Value creation and capture model

Product management in 5 simple steps

My goal in this post is to break down the main activities great Product Managers do and briefly discuss each. This is meant to help organize and break apart the complex world of product management and allow further research into each area (this article does not cover aspect of Product Strategy and Portfolio Management, just managing and growing a single product).

The goal of a product manager is to help drive the product forward, make it better and create more value to the company and users. To do so there are 5 main activities involved (In really fast environments, like small startups, complete cycles can happen in less than a day!)(Quick Note: As the company gets bigger the below activities are usually divided among several product managers)


1. Discover features – Products are made of features. Each feature creates value to the user and allows him to interact with the product. Methods for feature discovery are abundant. From brainstorming with employees to adding a feedback mechanisms to you current product. I will cover this topic more in depth  in one of my future posts. (Note: Feature discovery could also include removing or iterating on current features.)

A simple model for feature prioritization

In this post I hope to quickly break apart the feature prioritization process. My goal is to help make prioritization more of a science and less of an art. Nothing below is ground breaking, but breaking it apart may help understand and manage the process better. Looking forward to hearing your thoughts and comments.

Prioritization Model:

Simply Broken - Prioritization Model