Introduction
One of the roles that an engineering manager has to occasionally play is advocate for a product that you believe in. Every successful product that I can think of began with some individual who was an internal advocate, a role which is sometimes referred to as a product champion. This advocacy frequently requires that you perform some market analysis. I believe that market analysis is key to developing products that address customer needs. The best product designs tend to strike the right balance between cost, features, and time to market. Setting this balance requires market information.
Some companies may use/develop software to better understand their customer base, this could be using software like advance gaze data analysis. This type of technology can help companies/researchers better understand what the customer's needs are and what they go for by analyzing where they look and what they zone in on mostly. It is something that has become more advanced in years and can be looked at as a precise marketing tool. Coupled with the right Excel plugin for conjoint analysis, most modern marketers will have unparalleled insight into their customer's preferences.
Investing in the markets is something which more and more people are becoming interested in. From the stock market to cryptocurrency, individuals can find advice, like this ber Bitcoin Bank berichtet (report on Bitcoin Bank), online about investing. However, when it comes to market investment, not many people understand the basic mathematics that is involved.
Gathering mathematical information requires some digging. The mathematics is pretty simple (adding and subtracting), but is nonetheless important. I thought I would document some recent work to show you how I go about it.
Market Analysis Example
I cannot go into the exact details of the product that I am championing, but I can say the following:
- I need to understand the percentage of people that live in homes (broken down as detached or attached homes -- attached homes are row houses) or apartments (often referred to as multi-dwelling structures)
- I need to understand how these percentage vary by region of the US or by country in Europe.
It turns out that this information is readily obtainable from web sites that specialize in demographic data:
- US Census Bureau
This place has an amazing amount of information of all sorts. We will focus on the housing information. - Eurostat
This site also has a lot of country-specific information.
This data helps provide us into several critical product development factors:
- Total Addressable Market (TAM)
For businesses and investors, calculating total addressable market is a crucial part of their success. TAM is important because the market must be large enough to provide the required Return on Investment (ROI).
- Feature Mix
Successful product development usually deals with issues that I call "Goldilocks Problems." Goldilocks wanted porridge at just the right temperature. Successful products solve just the right problems. They solve the problems of enough people at the right price that you will sell enough product to make money. Solving all the problems of all the people tends to result in products that nobody can afford.
- Geographic Locations to Focus On
Just like you would not want to sell snow-making machines to someone who lives in the arctic, you want to focus your sales efforts where the buying customers are.
Results
It was surprising easy to find the data that I needed. The census data was downloaded as Excel files. I threw the data into a pivot tables and generated the following plots.
US Data
Figure 1 illustrates the mix of housing in the US by region.
Figure 1: Mix of US Residential Housing By Region.
Figure 2 illustrates the size distribution of multi-dwelling units in the US.
Figure 2: Size of Multi-Dwelling Units in the US.
This data will help me answer questions like:
- Should we focus on single-family homes or apartments?
Single-family homes have different packaging and powering requirements from apartments. We need to know which type of residence we are targeting in order to get a solution that is easy to deploy.
- What is the mix of services required?
Fiber to the home customers need voice, video, and data services. Providing ports for these services is a major cost driver. To make money, we need to sell enough products to justify the development cost. To sell enough products, we need to provide enough ports to ensure we meet the needs of the bulk of the customers.
- Where are the customers for our products?
We want to focus our sales efforts where the customers are.
International Data
Figure 3 shows the residential housing mix for a number of European nations.
Figure 3: European Residential House Mix.
Figure 4 shows the mix of MDU sizes for a number of European nations.
Figure 4: Size of European MDU Units.
Conclusion
Sometimes product development requires looking at customer requirements in order to define the correct product. Often the numbers are difficult to acquire. In this case, I found the numbers I was looking from European and American census data. It was a simple, effective, and free way to get product information.