product planning with pesto goggles

Sometimes, I find it easier to understand a process when I don’t apply it to my ‘area of expertise’. Whether my product is the next Twitter of Facebook, or if I’m simply planning to make a birthday cake, the process is essentially the same.

You’re probably wondering at this point how pesto fits into product planning? Well, wonder no more!

Pesto is a super simple product, so it serves as a great test case… but don’t be fooled! There are tonnes of user cases. There’s lots of flavour options (I often make coriander & almond pesto, carrot pesto etc). There are many competitors. And within pesto ‘the category’, there are a myriad of product lines. Each product line suited to a different market segment … a different vision.

Let’s start with a quick poll…

If you have a great product planning process, then you probably shouldn’t read this. But feel free to add your comments and tips below!

I think the key to a great product is great planning. And it’s hard to have a great plan without a great process. Today, instead of using dry ingredients like sign up screens and server loads, let’s look at the high level product process through pesto goggles.

Have you ever made pesto? No? Well, then let’s start with a basic recipe: Combine basil, garlic, pine nuts Parmesan or Pecorino cheese and olive oil.

It’s dead easy. Right?

WRONG! I can’t tell you how many times I’ve eaten horrid pesto (think: that jar of pesto that’s been sitting in the back of your friend’s fridge since 1986).

Revisiting focus!

In an earlier blog post, I spoke about (brutal) focus, broken into the following sections (thx @liubinskas)

• Vision
• Market Segment
• Core Feature
• Key Metric

As we learned earlier, pesto has 5 simple ingredients: basil, garlic, pine nuts, cheese and olive oil. But it’s dead easy to fuck up.

Let’s journey through this process to start up Mishy’s Multinational Pesto Corporation Pty Ltd, which will no doubt be cash flow positive by year end.

Vision:

For the pesto product plan, my vision couldn’t be clearer! I want to make the world’s #1 Best Pesto! It’s so simple… Let’s move on.

Market segment

Who am I making this pesto for? Who is my #1 ideal customer? Is it sold at a Saturday market? In the local corner shop? In a supermaket chain? Who is it best for? Am I really going global right away?

We encounter our first stumbling block. We need to refine the vision…

Vision 2.0:

I want my Pesto to be the #1 Pesto on sale at the Fox Studio Saturday Farmers Market (let’s start small, we don’t want to get carried away).

That’s better. The vision now helps me understand my market segment. I even know when and where I’m distributing, and the likely customer reach (mid-upper class foodies and families).

The more refined my vision is, the more likely I’ll get an early win. But is my vision too narrow? Maybe I should aim higher? #1 Pesto on sale in Australia? Too high! #1 Pesto on sale in Sydney’s Gourmet Markets & Stores?

Ask yourself ‘is my vision realistic?’ If your vision is too big, you’ll most likely feel deflated before you reach your end goal. Start small and build up from there.

I’m settling with “#1 Pesto on sale at Sydney’s Farmers Markets & Gourmet Grocery Stores”

This still covers a lot of ground. Sydney (whilst not as big as New York or Shanghai) does still have a lot of gourmet food outlets & farmers markets.

So, now we go back to market segment…

Market segment 2.0

I’m going to target middle aged affluent, educated women who live in the Eastern Suburbs of Sydney.

Why? Because (based on personal experience & broad stereotypes) often these women either don’t want to cook, don’t have time to cook or don’t know how to cook. They also like to buy presents for dinner parties, for friends, for their children, for Christmas/Chanuka/Housewarmings, thus they can extend my reach.

Core feature

It’s always tough to pick one core feature. I think for this product, it’s a given that it needs to taste like great pesto, but does it need to be the best tasting pesto in the world? Probably not. Is freshness important? Yes. But is it the core feature? Not likely. I need my pesto to stand out. I need one single feature that will make it remarkable. That will make it stand apart from all the other pesto on sale at the market.

So, in this instance, I’m being brave and opting for stunning packaging as my core feature. I know that if it doesn’t stand out, it won’t sell. It needs make noise. It needs to look like a gift. Something you could take to your friends place for dinner in place of a good bottle of wine or box of Lindt chocolate.

I know, I know, of course, it has to taste great (ie. it has to work), but for my market segment it really needs to look impressive. Whether they gift the pesto or keep it for themselves, it needs to feel like a real treat. An indulgence. It should even have a gift tag so people know that it’s perfectly acceptable to give to a dinner party host. (In future I may even include an option for the pesto pamper hampers which can be delivered, like flowers, to your loved ones, but let’s keep it simple for now!)

So, in sum, my core feature is actually the bottle which showcases the pesto!

Key metric

This could simply be ‘number of sales/day’ to begin with.

In future, I’ll track number of hampers sent, number of repeat sales, or number of subscribers (in my ideal world, people subscribe to pesto) but like I said, I’m keeping it simple while I’m in start up mode.

What else have a learned about my product through this process?

I know it needs to be good quality. It needs to taste fantastic. It needs to look expensive. It needs to be fresh. I can’t cut corners because these people expect the best (no substituting pine nuts for walnuts to reduce the cost ok?). It needs to last for a while out of the fridge if I’m going to sell it at Farmers Markets.

I know my price point (a little less than a decent bottle of wine eg. $15-20). Maybe I need to bundle the pesto with free home made lavosh crackers so they feel like they are getting good value? That would also mean that it’s ‘ready to go’ straight from the Farmers Market to the lunch table.

I know my vision, my market segment, my key feature & my metric… Now what?

The next step is research! Confirm your assumptions. Go to the markets. Check out what else is on sale. Taste the competition. Speak with the stall holders. Find out how much foot traffic is likely each Saturday. Check out the Gourmet food outlets in the area. Get out there and ask some questions!!!

I’ve done some research… where to from here?

Now I know what I’m making, who I’m making it for, what my goal is and how I’m going to track my success, I just need to make a checklist of the next steps:

1. Budget – how much is it going to cost to produce and how much do I need to sell to make a return?
2. Time line – do I to have something ready this Saturday or is there a 6 month waiting period for a stall at the market?
3. Resourcing – am I making it at home, by myself? In my tiny mortar and pestle? Or should I outsource it? Will I run the stall or hire a more polished sales person?
4. Distribution – Where are you going to target first? Start with the Fox Studios Farmers Market, then tackle Ultimo, Glebe, Rozelle?
5. Marketing – How are you going to market your product? Are you going to advertise or is word of mouth sufficient? Are you offering a starter special (2 for 1) or will this cheapen the brand? Are you hosting a dinner party for gourmet foodies to up-sell your product? (I know most product plans don’t include marketing, but I think it’s important to have an idea of how the product is going to be marketed, so you can ensure you are creating something desirable for the customer you’re trying to reach. If you don’t know how you’re going to reach your market, how are you going to get your plan off the ground?). It’s a bit of chicken-and-egg, but if you don’t plan you plan to fail!

Of course, this is only a high level product plan. But it’s a step in the right direction toward global domination (or whatever it is that you’re trying to achieve). Remember, the more refined your plan is to begin with, the less headaches you’ll have down the track!

What’s your #1 product planning tip?

Tip: If you want your pesto to stay green add a handful of chopped flat leaf parsley to the mix.