| You would think that if your product was the biggest | | | | The Facebook product managers have created a |
| one in it's market, you'd be sitting pretty as a product | | | | virtual currency called Facebook Credits that can be |
| manager, right? Sure, this might be an easy trap to fall | | | | used to buy both virtual and real goods. Right now only |
| into; however, if you start to take it easy once you are | | | | a few vendors are using these credits to allow users |
| the king of the hill, then that's when your competition | | | | to buy things, but that may all change quickly. |
| shows up and knocks you off. Over at the big online | | | | Facebook has opened up a gift shop that accepts |
| payment processor PayPal, their product managers | | | | Facebook credits and they are starting to sell both |
| are currently doing quite well. However, they can see | | | | virtual goods as well as products from other |
| the handwriting on the wall and are taking some bold | | | | companies. This sure sounds like what they talked |
| steps to remain #1... | | | | about in that book The Innovator's Dilemma... |
| What Me Worry? | | | | How PayPal Product Managers Are Fighting Back |
| If you want to have a successful product that | | | | As you might expect, the PayPal product managers |
| everyone needs, then the world of online payment | | | | are not taking this competitive challenge lying down. |
| processing was the business to go into awhile back. | | | | They believe that the key to their long-term success is |
| Something like a zillion dollars gets exchanged online | | | | to make their payment processing system an integral |
| everyday and right now there's pretty much one main | | | | part of many different products so that it will always |
| player in this industry: eBay's PayPal unit. | | | | be there ready to be used by consumers. |
| As product managers we all realize that when you | | | | In order to make this happen, they are preparing to |
| become very successful, that is a signal for other | | | | rollout a new system that will make it easier for |
| companies to create products to compete with you. | | | | software developers to integrate the PayPal system |
| It's taken awhile, but now the PayPal product | | | | into their own applications. This new software, called |
| managers are starting to see some competition. | | | | PayPal X. |
| Serious competition. This when product managers | | | | The key goal of this new software is to eliminate the |
| need to be extra careful and not make marketing | | | | need for customers to have to sign into a separate |
| mistakes. | | | | PayPal web site in order to complete their purchase. |
| And In This Corner We Have... | | | | Instead, they'll be able to complete it without leaving the |
| Don't get me wrong, the PayPal product managers | | | | web site that they are on. |
| have created a very good product and they've | | | | What All Of This Means For You |
| listened to their customers and they've made it very | | | | All product managers dream of being responsible for a |
| easy to use. However, this market is too big right now | | | | wildly successful product. The PayPal product |
| and growing too fast not to attract some highly | | | | managers have clearly succeeded in achieving this |
| qualified competition. | | | | dream. What is interesting for the rest of us to |
| currently sells just about everything on the planet. | | | | observe is what they do now: do they rest on their |
| already has a huge customer base and enormous | | | | laurels or do they kept moving forward? |
| computing power. They are looking to leverage this | | | | Clearly PayPal's competition has shown up in force in |
| with a new transaction processing service that they | | | | the guise of both and Facebook. Both of these |
| are calling "Pay-Phrase". The product managers are | | | | companies have the luxury of having been able to |
| betting that if they make it even easier to shop with | | | | watch what PayPal has done and learning from their |
| them, then more people will do so. | | | | mistakes. The products that the competition rolls out |
| Google offers the most direct competition in their | | | | will pose a serious threat to PayPal. |
| "Google Checkout" payment processing system. One | | | | Before you start feeling too sorry for those poor |
| of their greatest strengths going forward is that this | | | | successful PayPal product managers, realize that they |
| service has been integrated into the Android mobile | | | | seem to have realized that they are facing a threat |
| operating system. | | | | and are taking steps to stay in the lead. |
| Facebook may represent the greatest threat to the | | | | For the rest of us, I believe that the message from this |
| PayPal product manager's long term success. Simply | | | | competition needs to be that no matter how |
| put, Facebook's user base of over 300 million users | | | | successful our product becomes, we can never take it |
| gives it an unprecedented reach into the consumer | | | | easy. We will always have competition, it's what we |
| market. This is exactly what any online payment | | | | do to meet it is what determines how successful we |
| processing company needs in order to succeed. | | | | will be as product managers. |