Tellumar Kampiva: Values in B2B Product Development

Preface

This was written at my employer Acrolinx in June 2020.
It's reproduced here with friendly permission of Acrolinx.

Start

When reading about product software development, one reads a lot about "creating customer value". This happened to me, too. And I started asking people in various functions what this "customer value" actually is. Over time, I got to the conclusion that many people use the phrase without having a clear understanding of the concept and that people who actually have a concept sometimes differ in their definition.

I also asked this question to the whole audience while delivering a conference talk in 2024 and enjoyed a lively discussion popping up.

So, there's value (sic) here in discussing the topic. Let's discuss and seek some clarity.

Value for an Organization

Let's ask ourselves: What makes an organization survive and succeed?

Most prominently, that's things that can be translated into 'money':

The organization can write an invoice and create an influx of money directly.
The organization can increase its market and reach more potential customers.
The organization can either save money or make more things with the same amount of money.
The organization keeps their customers happy so that they don't run away and churn.
The organization invests now and firmly believes that it will pay off in one of the above ways in the future.

There are some more items to add to the list of important factors for a successful organization that not necessarily translate into money directly:

The organization complies with some regulations. Being non-compliant would cost money.
The organization can attract talent. Good talent leads to better things being done in the organization leading to more money being made.
The organization can make its brand better known. A better brand identity helps selling the brand's product.
The organization has a good culture and solid internal values (in a different sense than in the rest of the document). People working at the organization enjoy their work and have a higher likelihood of contributing to the organization's success.

Here's the list with catchy short names

Direct revenue

Larger market

Efficiency

Happy customer

Invest in future

Regulation/Compliance

Attract Talent

Brand identity

Support Culture

If a product or a service supports any of these items, it provides value to the organization.

Which Organization

Some confusion arises around the question which organization should be in focus. The answer here is: both.

Selling a product usually involves two parties. There's the vendor that creates the product and there's the buyer who pays for it. In B2B, both are organizations. And the value creation items can be applied for both.

There are scenarios where selling a product involves more parties. Examples are marketplaces or business partners. Usually, their value delivery is taken care of by the business setup already. If your product focuses on such scenarios you can just add a third party to the story and look at their value delivery, too.

So, if you are a software vendor in a B2B market, assess all those value items for your own company as well as for the customers (and optional partners). You'll find that you do some things only to address more customers or for your own efficiency and others to help your customers become more efficient, etc.

Example Slack

Let’s assume the organization you work for pays for Slack and you are a software vendor yourself. In this scenario, your organization is the customer and Slack Inc. is the vendor. Why do you pay for it? What value does it deliver for you?

Direct revenue	Larger market	Efficiency	Happy customer	Invest in future	Regulation/ Compliance	Attract Talent	Brand identity	Support Culture
❌ Your org can't write an invoice because it's using Slack.	❌ Your org can't address more customers by using Slack.	✅ You have a quick way of communicating directly and in groups. Your efficiency is increased.	❌ Does it make your customers happier if you use Slack? Rather not.	❌ Do you invest in Slack now because it'll pay off later? No.	❓ Are you regulated and can use Slack to comply with something? Maybe. The archived communication may be relevant.	✅ Does Slack help you find talent for your company? Could be. Millennials may expect to find Slack at their workplace	❌ Does your own brand improve because you use Slack? No.	✅ Does Slack help you with your company culture? Possible if direct communication and flat hierarchies are part of your culture.

And now, let's imagine you work at Slack. What are the values your teams are working on for your own company?

Direct revenue	Larger market	Efficiency	Happy customer	Invest in future	Regulation/ Compliance	Attract Talent	Brand identity	Support Culture
Work on SAML which is a paid upgrade	Build a Linux client to reach more people	Work on automatic deployments	Work on a dark mode	Get rid of technical debt	Implement encryption in the stored data. Have a button to delete a person's data.	Host a meetup, write about your tech (during work time)		Use Slack yourself. Dedicate some screen real estate to a diversity topic.

Content Left Out

: The original internal post had some internal examples of values for Acrolinx and it's customers here. I consider that internal information and removed it.

Value Redux

Is the list we came up with complete? Will companies find other things they deem 'valuable'? Given how many different companies and different people are out there, it seems very likely that they will.

To address this, here's a beautiful simplification of ‘value’:

: Value is everything that your customer is willing to pay for.

For many discussions it's good enough to keep this in mind. But to understand why your customer may be willing to pay for your product, refer to the more detailed value creation items.