It’s The Product, Stupid
As I prepare for my new gig as a Product Manager, I’ve been thinking about the relationship between product quality and firm performance. It’s not mind-blowing to argue there’s a correlation between the two. Yet, as the web continues to better inform consumers and enable direct distribution from producers to consumers, I’d argue that the correlation between product and performance is growing… perhaps, rapidly.
Which is why I gave serious pause to a recent example of exactly what NOT to do with a product.
The offender was Time-Warner Cable and their DVR set-top box. This spring, Time-Warner updated the software running on their Scientific Atlantic 8300HD hardware in my old apartment in Austin, TX. The update was, in fact, a big step forward. It brought features one might consider unfathomably absent in the previous version like a real subscription manager and automatic rewinding after fast forwarding. Yet, it was the same software (or quite similar) to that running on my Time Warner DVR in NYC over three years ago. The missing features were a constant frustration over my two years in Austin.
But it gets worse.
The update erased many of my the previously saved recordings (ahem, the Saints winning the Superbowl!) and removed the majority of my subscription settings. To put this in perspective, imagine Apple erasing your music, podcasts and Safari bookmarks with every iPhone update. It would KILL THE PRODUCT.
Now, I understand that Time Warner and Apple operate in very different markets and under very different market forces. The former is a utility and enjoys limited monopoly protection. Plus, there is a major switching cost to their product; changing cable and Internet providers is a pain in the ass. These are significant (if not overt) barriers to competition for a product many consider a necessity and will, therefore, put up with the imperfections. So I can see how Time Warners executives might not spend many cycles thinking about product quality and user experience.
But maybe they should. Despite Bill Gurley’s well-reasoned argument that content fees and kickbacks will keep premium programming behind the telco pay-wall (i.e. ESPN3), there is an ever widening variety of content available online. Yeah, I might not get Sportscenter, but the PTI podcast is free. And, frankly, I’d rather pay subscriptions to Netflix and (soon) Hulu that I can cancel at any time vs. the cable middle-men.
So, when I get to San Francisco, it’s highly unlikely that I’ll sign up for cable TV. It’s the cable companies biggest fear, but just give me a BIG, FAT, DUMB pipe.
I’m no analyst, so I won’t try to infer anything from TWC’s stock performance. But I can say that, if they paid closer attention to the product, they’d be much more likely to keep me as a customer… and I don’t think I’m alone.
Update: Only a few hours after I published this post, Hulu launched Hulu Plus. Yet another nail in the coffin.