Playing the Investment Game–what outcomes will the business bet on in the next one-to-two months?

The Investment Game needs to be played as a collaborative exercise with representation from all stakeholders. A stakeholder is one of these:

• Anyone who is likely to influence product decisions
• Anyone who is impacted by product outcomes
• Anyone who is involved in product implementation

Buy a Feature game

The Investment Game draws inspiration from the Buy a Feature game. If you have played Buy a Feature (http://www.innovationgames.com/buy-a-feature/), then you may be familiar with the format of this game. The idea of the game is to help stakeholders to get a sense of how costly a product feature is. The trigger for getting stakeholders to "buy a feature" is when we have a product backlog that has been estimated by developers, and we know that within the give time/budget we may be unable to deliver the backlog. The Buy a Feature game is an effective way of asking stakeholders to indicate feature priorities. It is also quite effective when asking stakeholders to indicate "must haves" and "should haves" on the product backlog.

The cost for each feature is determined on roughly sizing the feature cost in terms of the effort needed to build it. The game is very practical and has a dramatic influence on how business stakeholders view features. It's like stakeholders are shopping for features with limited money, and that brings in a real-world view of operating under financial constraints.

The Investment Game is different in that it does not require costs to be derived upfront. It is essentially following the format of using real money and using a limited amount of money, but that's where the similarity with the Buy a Feature game ends.

This is what we need for playing the Investment Game:

1. A list of Key Business Outcomes
2. Data (market trends, customer insights, feedback, and success metrics) that can influence business decisions
3. Limited amount of real money (capital to invest)

What we don't need for playing the Investment Game is this:

1. Product functionality/features/backlog items
2. Costs

We limit the amount of capital that is allowed to be invested. While it may be possible to raise money for the business, the reality is that product building does operate under constraints. Limiting the money available to play this game helps us to artificially enforce that constraint and forces people to critically evaluate their choices. We are not concerned about the costs or actual product functionality for playing this game. This is an iteration on the business model thinking and an attempt to capture the risk and investment appetite of the business.

We ask stakeholders to plan their investment priorities, by indicating how much money they are willing to invest on delivering a solution (the Impact Driven Product) that meets a business outcome. At this point, we're not yet defining how the product will contribute to that value, or how to measure the benefits from this investment. We will do that in the next step in the Impact Driven Product development cycle.

During the early stages of product development, we may or may not have many data points to back up our decisions. If the product has not yet been launched, then insights from problem interviews with customers can feed into this activity. Typically, we may invest in outcomes that correspond to our product's core value propositions or those that validate our riskiest propositions. Also, since this is a collaborative activity, it forces stakeholders to actively discuss and debate their investments. This can quickly get into a war of opinions, and it is best kept in check by presenting any data available.

"If we have data, let's look at data. If all we have are opinions, let's go with mine." – Jim Barksdale, Netscape

Let's look at our list of business outcomes again:

• Growth
  • Acquisitions (new registrations)
  • Marketing (branding, reach, visibility, and virality)
  • Scale (gearing up exponential growth)
• Sustainability
  • Revenues (sales)
  • Investments (fundraising)
  • Costs (reduction/control)
  • Streamlined operations (improved SLAs)
• Influence
  • Retention (churn)
  • Engagement (active users, support, and content)
  • Adoption (training, access, and user experience)

Let's consider this is the initiation of product development for the ArtGalore digital gallery, introduced in Chapter 1, Identify Key Business Outcomes. We have our business model (Lean Canvas). We also have insights from problem interviews with customers. We are ready to determine what solution to build in order to meet the business constraints of launching this before the Big Art Show (refer to the business outcomes, business context and constraints, and market factors in the following image). We have a high-level idea of the solution from the Lean Canvas model.

The question we're trying to answer here is: what business outcome should we try to meet within the one-month timeline dictated by the business/market constraint? Should we look at brand building? Should we look at revenues?

As you may observe, the one-month timeline is only to launch the solution. It is not a timeline for creating a brand presence or making revenue. Those will come into effect only after the solution is launched. However, given the time constraints our lack of digital marketing expertise, and based on insights we have from problem interviews and existing customers, and so on, the business needs to decide which business outcome to invest in.

From the list of business outcomes under growth, sustainability, and influence, we may determine that acquisitions, revenue, engagement, and marketing, all seem to be geared toward doubling the revenue in two years. Among these, is there a relative priority? Each stakeholder could have a different perspective of what we need to invest in, based on what we know today. They also need to gauge relative priorities between these outcomes. As in, how valuable is getting a good number of qualified leads (marketing)? Is it more valuable than converting these leads into registered users (acquisitions)? Is that less valuable than getting customers to pay (revenues)? However, since the amount of money to play the Investment Game is limited, they will have to carefully choose where they want to invest.

So, let's say that the stakeholders collectively determine that they want to invest in engagement (of existing customers) and revenue. Now, this decision is based on the people and the unique context of the business. No two businesses are alike, and hence the choice of where they want to invest may be different:

• Business #1 may invest as shown in the following figure:
• Business #2 may invest as shown in the following figure:

The ArtGalore business may choose to invest as shown in the following figure:

There is no right or wrong way to make an investment, but this nature of input allows the product team to focus on building a solution that is driven by business context. It is indeed possible that a decision could backfire. It is also possible that a business may lose customers due to poor user experience. That is the risk that the business is willing to take when stakeholders indicate their preference.

In a product that is already being used, we are likely to have insights from customers. We may have data on engagement, adoption, revenue, reach, and so on. This is also the right forum to highlight our critical metrics and see if that influences business inclination to invest. For instance, customer support could highlight the rise in customer complaints due to a feature that we recently launched. The stakeholders may consider this data, but they might feel that it does not impact our primary goals of revenue and growth. This also means that the business is willingly making a trade-off by prioritizing revenue over adoption.

The important thing at this stage is to enable conversations between stakeholders. This activity helps the stakeholders to pitch to each other what business outcome they feel is critical. It gives them an opportunity to evaluate their priorities as a group. It is worthwhile spending as much time as needed having discussions, especially when there are conflicting points of view. This is also the main reason for ensuring that all stakeholders participate in this activity, since it allows them to get a sense of the overall priorities and provides a forum for pitching the priorities of their inidual business functions.

When I ran this activity in a nonprofit, there were about seven stakeholders who participated. In the lead-up before the session, I had inidual conversations with many business stakeholders. I listened to a lot of passionate ideas about influencing the community they were trying to serve. I also listened to a lot of ideas that floated around the visibility of their brand and how to increase their reach. It was noteworthy that the engineering team had a different mandate altogether. They had been working on performance fixes and automating operation tasks! Eventually, when the group got together, fundraising for the organization came out as their top priority. Nearly no money was invested in marketing, community impact, or operational efficiency!

This was the first time that the group got together to discuss and review their priorities. They could establish that the lack of visibility surrounding funding was their biggest bottleneck in delivering impact. Unless they raised funds, they would be unable to reach any of their milestones that were planned for later that year. While there were other areas that needed attention, the group agreed that fundraising needed the most attention. This then set the tone of product development. Product managers should ideally be a key stakeholder in this type of activity and also facilitate this activity since the output from the activity feeds into product priorities.

The final output from the Investment Game captures the business outcomes that were prioritized (for a specific timeline) and the amount invested against each of them. These values will be used in the subsequent prioritization of product functionality/value proposition and trade-offs.

The following table captures the amount that, in our example, ArtGalore stakeholders invested in their Key Business Outcomes. We now have a value for the most important business outcomes.

At the end of one month, once we have launched our first version of the product experience, we need to get all the stakeholders back together to review any other insights we have and determine the next milestone. Once again, we will evaluate the business context and the investment that we are making in Key Business Outcomes. For instance, it is possible that either our competitor beat us to the market, we raised new investments, or we signed up a celebrity artist since the last time we evaluated our business context. These factors can influence how we want to steer our product and our investment decisions.

Iterating through business priorities in the language they speak is important when we're setting the stage for product development. It can help to guide product development in a tangible, measureable, and iterative model. This also helps us to avoid surprises later, as we proactively think about where the business is headed to and make an implementation plan that can align with the business direction, while still delivering maximum value to customers. Being proactive in identifying and investing in Key Business Outcomes can help us to avoid situations where we have built a product that is no longer useful for the business.