Funding Products
Funding Products refers to the process of allocating financial resources to new product proposals that have been identified as strategically viable and market-ready by product teams.
Goal
The primary goal is to ensure that new product initiatives have the necessary financial resources to move from concept to development and launch, supporting innovation and growth.
Context
Software products can deliver outsized returns, however the development process can be capital intensive. Securing budget is essential to ensure that the product can be developed and scaled effectively. It also ensures that people are doing sufficient due diligence before committing resources.
ZeroBlockers aligns with the concept of 3 horizons for products.
Horizon 3 is for brand new products that the company believes will deliver on the long-term strategy. These products require upfront funding as they will not be able to deliver a return until they are developed and launched.
Horizon 2 products are those that are in the growth phase. Not every product graduates from Horizon 3 to Horizon 2. These products are expected to deliver a return on investment in the medium term. Securing budget for these products is about ensuring that they have the resources to scale and grow.
Horizon 1 products are those that are already delivering a return on investment. These products are self-sufficient and do not require additional funding.
Ecosystem teams treat funding like a VC fund, allocating resources to product teams based on the potential return on investment. They acknowledge that a lot of products in Horizon 3 will fail but by funding a portfolio of products they can ensure that the overall ecosystem is more efficient and effective.
Inputs
| Artifact | Description |
|---|---|
| Ecosystem Strategy | A high-level plan for achieving the ecosystem vision within the next 1-3 years. |
| 6-Pager | A concise document outlining a project or proposal, including background, problem statement, solution, and next steps. |
| Press Release and FAQs | A press release format highlighting the benefits to customers and answering the key questions related to the product, how it will work and how to overcome potential challenges. |
Outputs
| Artifact | Description | Benefits |
|---|---|---|
| Product Budget | The financial resources allocated to the product, including budget constraints and funding availability. | Ensures the internal product team has the necessary resources for development and growth. |
| Product Manager | The single-threaded leader who will be responsible for building and managing the internal product team. | Ensures clear accountability and ownership for the internal product team. |
Anti-patterns
- Overcommitting Resources: Allocating more funds than sustainable, risking the overall financial health of the organisation.
- Underfunding Promising Projects: Failing to allocate sufficient funds to projects with high potential, stifling innovation.
- Lack of Accountability: Not holding teams accountable for budget use, leading to potential misuse of funds.