Earlier I wrote about general lessons from Apple, but now that i've had my iPhone for a couple of weeks, I thought I'd talk about some of the lessons from this new product. I believe there's much to learn (good and bad) from virtually every new product introduction, but this one is a particularly rich example.
Even though we've been estimating project costs since the beginning of software, it's remarkable to me how much confusion remains. I think the root cause of this confusion is that management needs cost information very early in the process, yet engineering doesn't have the information it needs to do a reasonably accurate estimate until much later in the process. The result is either premature estimates that prove wildly inaccurate, or surprises because people had different assumptions all along and when the accurate estimate comes in, management has a severe case of sticker shock.
How many of you understand the economics of your product? Do you know your exact revenue model? Do you know the total costs of your product? Do you know how much you pay for each new customer? Do you know their lifetime value to the company? Do you know the return your product has generated for the company?