Product Value Creation

STUDY FINDS COST PER WEAR INFORMATION SHIFTS SHOPPERS TO QUALITY: A new study published in Psychology & Marketing offers a fascinating look at what fashion drives fashion purchasing decisions. Researchers from the University of Bath and Cambridge University found that simply showing consumers the cost per wear (CPW) of garments (price divided by the number of times an item can be worn) can shift preferences away from cheap, low-quality clothing toward higher-priced, longer-lasting options. The findings draw on behavioural psychology to reveal that people respond more to perceived 'economic value' than to abstract sustainability messages. When shoppers could compare CPW between garments, and especially when figures were backed by trusted certification, they were far more likely to choose quality over quantity. The authors suggest CPW could be a powerful tool for brands and policymakers seeking to reframe sustainability as smart spending. Full story in comments.

Few Lessons from Deploying and Using LLMs in Production Deploying LLMs can feel like hiring a hyperactive genius intern—they dazzle users while potentially draining your API budget. Here are some insights I’ve gathered: 1. “Cheap” is a Lie You Tell Yourself: Cloud costs per call may seem low, but the overall expense of an LLM-based system can skyrocket. Fixes: - Cache repetitive queries: Users ask the same thing at least 100x/day - Gatekeep: Use cheap classifiers (BERT) to filter “easy” requests. Let LLMs handle only the complex 10% and your current systems handle the remaining 90%. - Quantize your models: Shrink LLMs to run on cheaper hardware without massive accuracy drops - Asynchronously build your caches — Pre-generate common responses before they’re requested or gracefully fail the first time a query comes and cache for the next time. 2. Guard Against Model Hallucinations: Sometimes, models express answers with such confidence that distinguishing fact from fiction becomes challenging, even for human reviewers. Fixes: - Use RAG - Just a fancy way of saying to provide your model the knowledge it requires in the prompt itself by querying some database based on semantic matches with the query. - Guardrails: Validate outputs using regex or cross-encoders to establish a clear decision boundary between the query and the LLM’s response. 3. The best LLM is often a discriminative model: You don’t always need a full LLM. Consider knowledge distillation: use a large LLM to label your data and then train a smaller, discriminative model that performs similarly at a much lower cost. 4. It's not about the model, it is about the data on which it is trained: A smaller LLM might struggle with specialized domain data—that’s normal. Fine-tune your model on your specific data set by starting with parameter-efficient methods (like LoRA or Adapters) and using synthetic data generation to bootstrap training. 5. Prompts are the new Features: Prompts are the new features in your system. Version them, run A/B tests, and continuously refine using online experiments. Consider bandit algorithms to automatically promote the best-performing variants. What do you think? Have I missed anything? I’d love to hear your “I survived LLM prod” stories in the comments!

Innovation isn’t just about upgrading your tools—it’s about reinventing how you create, deliver, and capture value. Digital business models are reshaping industries by creating value in ways unimaginable a decade ago. These aren't your grandparent’s business models with a digital veneer—they're transformative, leveraging tech to disrupt markets, engage customers, and redefine competition. This revolution is captured brilliantly in the book: 𝐷𝑖𝑔𝑖𝑡𝑎𝑙 𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑀𝑜𝑑𝑒𝑙𝑠 𝑓𝑜𝑟 𝐼𝑛𝑑𝑢𝑠𝑡𝑟𝑦 4.0: 𝐻𝑜𝑤 𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝑆ℎ𝑎𝑝𝑒 𝑡ℎ𝑒 𝐹𝑢𝑡𝑢𝑟𝑒 𝑜𝑓 𝐶𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠. 𝐅𝐨𝐮𝐫 𝐏𝐢𝐥𝐥𝐚𝐫𝐬 𝐨𝐟 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐌𝐨𝐝𝐞𝐥𝐬: • 𝐃𝐢𝐠𝐢𝐭𝐚𝐥𝐥𝐲 𝐄𝐧𝐚𝐛𝐥𝐞𝐝 𝐕𝐚𝐥𝐮𝐞 𝐂𝐫𝐞𝐚𝐭𝐢𝐨𝐧: Value driven by tech, not just supported by it. Think smart thermostats optimizing energy, not just controlling it. • 𝐌𝐚𝐫𝐤𝐞𝐭 𝐍𝐨𝐯𝐞𝐥𝐭𝐲: New offerings or ways of doing business—like predictive maintenance or on-demand manufacturing. • 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐓𝐨𝐮𝐜𝐡𝐩𝐨𝐢𝐧𝐭𝐬: Customer relationships built through apps, IoT, and connected services. • 𝐃𝐢𝐠𝐢𝐭𝐚𝐥𝐥𝐲 𝐃𝐞𝐫𝐢𝐯𝐞𝐝 𝐔𝐒𝐏: Unique selling points rooted in data and digital capabilities. But how do we map the revenue streams emerging from these shifting dynamics? I’ve come to see it through three essential components: • 𝐂𝐨𝐫𝐞 𝐕𝐚𝐥𝐮𝐞 𝐏𝐫𝐨𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 (What is being offered?) • 𝐕𝐚𝐥𝐮𝐞 𝐂𝐫𝐞𝐚𝐭𝐢𝐨𝐧 𝐌𝐞𝐜𝐡𝐚𝐧𝐢𝐬𝐦𝐬 (How is value created?) • 𝐑𝐞𝐯𝐞𝐧𝐮𝐞 𝐒𝐭𝐫𝐞𝐚𝐦𝐬 (How is value captured?) 𝐑𝐞𝐚𝐝 𝐟𝐮𝐥𝐥 𝐚𝐫𝐭𝐢𝐜𝐥𝐞: https://lnkd.in/ewhRUM28 ******************************************* • Visit www.jeffwinterinsights.com for access to all my content and to stay current on Industry 4.0 and other cool tech trends • Ring the 🔔 for notifications!

The most expensive mistake in business is assuming your customers will never change. Last year, something shifted in Indian retail. Gen Z (377 million) overtook millennials (356 million) to become our largest consumer group, influencing $40-45 billion worth of apparel and footwear purchases. But they're not shopping at the stores we built for them. [Et Retail] Brands watched their growth collapse in just 12 months. → ZARA fell from 40% to 8% growth, [Et Retail] → Levi Strauss & Co. crashed from 54% to 4% growth [Et Retail] → H&M dropped from 40% to 11% growth [Et Retail] Here's why the growth has slowed down: 📌 Gen Z discovered new brands like Freakins and Bonkers Corner, offering trendy clothes at ₹500-800 📌 They chose self-expression over brand loyalty 📌 70% of their shopping moved online, heavily influenced by Instagram 📌 They demanded inclusive sizing (XS to XXL) and unisex options that legacy brands ignored Take FREAKINS, which clocked ₹25 crore in FY2023, or Bonkers.corner, clocked ₹100 crore. [The Economic Times] [Et Retail] These brands understood what Gen Z wanted: crop tops, baggy clothes, Korean pants, and oversized tees at prices that let them experiment with three different outfits daily. Body positivity isn't a marketing campaign for this generation. It's how they think. When they couldn't find the sizes or styles they wanted at premium stores priced at ₹1,200-1,500, they simply went elsewhere. Myntra saw the shift and launched FWD with ₹500 price points. The result was explosive: 100% year-on-year growth and 16 million Gen Z users, who now represent one in three e-lifestyle shoppers. [Et Retail] Legacy brands bet that Gen Z would "grow up" and pay premium prices. Instead, 377 million young Indians chose values over logos. The most expensive mistake in business? Assuming your customers will never change. What changes in your customer base have surprised you recently?

We spent the last 3 months researching how PE firms create value 🌱 The result: “The Private Equity Value Creation Report” — one of the most in-depth studies on the topic, based on the data from over 10,000 PE entries and exits globally. 𝟳 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀: 1️⃣ Revenue growth is the largest driver of PE value creation On average, it contributes to 54% of value creation. Recently, revenue growth has become an even more critical driver of success (as multiples have come down), contributing to ~65-70% of value creation in the last 2 years. 2️⃣ Margin expansion plays a smaller role at 15% Margin expansion is most impactful when PE firms target operationally challenged businesses rather than already-efficient businesses. 78% of deals with negative EBITDA margins achieved margin expansion (median +1250bps), while businesses with high EBITDA margins (>30%) typically saw margin contraction. 3️⃣ Multiple expansion contributes significantly at 32% For the top quartile deals, its contribution is even higher at 40%.  By sector, TMT, Science & Health, and Services see the largest multiple expansion. Consumer and Industrials see the least. By size, multiple expansion is the highest for smaller deals under $100M EV. 4️⃣ Growth amplifies all other PE value creation drivers Growing companies benefit from operating leverage and are more likely to achieve margin expansion. 58% of growing firms expand margins compared to 44% of those with negative growth. Higher-growth companies also typically command 30–50% higher multiples at exit. 5️⃣ Top and bottom-performing deals are held the longest Investors hold onto the best-performing assets for greater upside but also hold the worst, trying to fix the business. Assets held in the 3-6 year range tend to cluster around more predictable, moderate returns. 6️⃣ Buy-and-build is central to PE value creation When done right, buy-and-build bolsters all three value creation drivers: revenue growth, margin expansion, and multiple expansion. Buy-and-build works at any size, but the uplift is strongest in small platforms. The multiple arbitrage strategy still works with add-ons trading at a 20% discount to platforms. 7️⃣ Larger deals drive more margin expansion Large businesses ($1bn+ EV) and public-to-private deals, on average, deliver more margin expansion. Smaller businesses, on the other hand, rely more on growth and multiple expansion to drive returns. Given the smaller size, returns on average, are also higher for family-to-sponsor deals. _______ 𝗙𝘂𝗹𝗹 𝗥𝗲𝗽𝗼𝗿𝘁 Don’t miss out on insights: 💡 By Sector 💡 By Deal Type and Size 💡 MOICs and Loss rates + 5 case studies and 43 charts. Get it here ➡️ https://lnkd.in/d9Z3kubU (E-mail required) #ValueCreation #Growth #PrivateEquity

It’s easy as a PM to only focus on the upside. But you'll notice: more experienced PMs actually spend more time on the downside. The reason is simple: the more time you’ve spent in Product Management, the more times you’ve been burned. The team releases “the” feature that was supposed to change everything for the product - and everything remains the same. When you reach this stage, product management becomes less about figuring out what new feature could deliver great value, and more about de-risking the choices you have made to deliver the needed impact. -- To do this systematically, I recommend considering Marty Cagan's classical 4 Risks. 𝟭. 𝗩𝗮𝗹𝘂𝗲 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗦𝗼𝘂𝗹 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 Remember Juicero? They built a $400 Wi-Fi-enabled juicer, only to discover that their value proposition wasn’t compelling. Customers could just as easily squeeze the juice packs with their hands. A hard lesson in value risk. Value Risk asks whether customers care enough to open their wallets or devote their time. It’s the soul of your product. If you can’t be match how much they value their money or time, you’re toast. 𝟮. 𝗨𝘀𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗨𝘀𝗲𝗿’𝘀 𝗟𝗲𝗻𝘀 Usability Risk isn't about if customers find value; it's about whether they can even get to that value. Can they navigate your product without wanting to throw their device out the window? Google Glass failed not because of value but usability. People didn’t want to wear something perceived as geeky, or that invaded privacy. Google Glass was a usability nightmare that never got its day in the sun. 𝟯. 𝗙𝗲𝗮𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗔𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗼𝘀𝘀𝗶𝗯𝗹𝗲 Feasibility Risk takes a different angle. It's not about the market or the user; it's about you. Can you and your team actually build what you’ve dreamed up? Theranos promised the moon but couldn't deliver. It claimed its technology could run extensive tests with a single drop of blood. The reality? It was scientifically impossible with their tech. They ignored feasibility risk and paid the price. 𝟰. 𝗩𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗠𝘂𝗹𝘁𝗶-𝗗𝗶𝗺𝗲𝗻𝘀𝗶𝗼𝗻𝗮𝗹 𝗖𝗵𝗲𝘀𝘀 𝗚𝗮𝗺𝗲 (Business) Viability Risk is the "grandmaster" of risks. It asks: Does this product make sense within the broader context of your business? Take Kodak for example. They actually invented the digital camera but failed to adapt their business model to this disruptive technology. They held back due to fear it would cannibalize their film business. -- This systematic approach is the best way I have found to help de-risk big launches. How do you like to de-risk?

CIOs are leading a transformation focused on strategic, long-term value rather than just adopting the latest tech. 🌍 Lenovo’s Global CIO Study shows 96% of CIOs plan to boost tech investments, focusing on AI and security. From my conversations, it’s clear they’re also thinking about sustainability and future-proofing in a rapidly evolving tech landscape. 💡 However, 61% of CIOs face challenges in proving ROI from these investments, highlighting the need to not only innovate but to deliver measurable outcomes. Here are four strategies to tackle this challenge: 1️⃣ Align Tech Investments with Business Goals Tie each technology decision directly to business outcomes. Whether it’s enhancing customer experience, increasing revenue, or improving operational efficiency, measurable goals make the case for ROI clearer. 2️⃣ Build Cross-functional Alignment Involve key business leaders in the early stages of technology planning. Demonstrating how investments benefit various departments, from marketing to operations, builds stronger support for technology initiatives and ensures alignment with broader company objectives. 3️⃣ Prioritize Long-term Value Creation While short-term wins are important, CIOs must invest in technology that continues to deliver value over time. AI, for instance, plays a pivotal role in future-proofing organizations in a rapidly changing digital landscape. 4️⃣ Leverage Sustainability and Future-of-Work Strategies New growth areas, like sustainability and adapting to the future of work, are top-of-mind for CIOs. AI is central to addressing these trends, from optimizing energy use to enabling more productive environments - key factors in demonstrating ROI over the long term. For me, leading through this transformation isn’t just about adopting AI or new tools. It’s about building a roadmap that is thoughtful and strategic, building a solid foundation today for tomorrow’s growth. How are you navigating your business’s tech transformation to demonstrate ROI? I’d love to hear your insights on the challenges and opportunities. 🤝 #WeAreLenovo #TechTransformation #AI

There’s a fine line between saying “no” because of attitude and saying “no” because you understand the value of what you bring to the table. Early on, I realized it wasn’t about followers, views, or appearances. It was about attention to detail, the process and the standards I had set for myself and my team. When clients asked to lower rates or push budgets, the response was simple: That’s my price. No over-explaining, no defending, no justifying. Confidence in the value you create is often more persuasive than any argument about experience or past projects. This mindset helps attract the right clients as well. The people who value your approach and respect your standards naturally gravitate toward working with you. And sometimes, it allows you to say “no” to opportunities that don’t align, preserving focus, quality and integrity. It’s also about presence. In client interactions, nothing replaces direct engagement. Even with a capable team, certain conversations, especially first calls or high-stakes projects, benefit from your direct involvement. People want to feel the commitment, the clarity, & the vision firsthand. That connection often determines whether a client signs on or walks away. At the end of the day, value is in how you position it, how you communicate it & how you stand by it. The right clients recognize that and the wrong ones fade away. And that’s exactly how you build sustainable, meaningful work that makes a real impact. #graphicdesign

🔊 AI is making services sexy again. 🔊 The core promise of AI is the elimination of barriers to creation. Text, audio, video, code... all become easier to generate. When creation becomes that simple, it doesn’t just empower—it commoditizes. What once required deep expertise and high barriers to entry can now be built by many, intensifying competition in software. Meanwhile, service businesses—the ones we’ve all ignored because, let’s be honest, their margins weren’t great—have a shot at massive value creation. Here's the math: 👩🏭 Average professional services margin: 15-25% 👨💻 Average software margin: 70-80% 🤖 AI-powered services margin: Approaching software territory AI fundamentally alters the unit economics of human labor by scaling a single person’s productivity exponentially. It can convert a 5-person team into a 50-person productivity powerhouse. Services that traditionally lived in the low-margin corner are now knocking on the door of software-like profitability. In a commoditized software world, the moat shifts. It’s not about the code—it’s about who owns the customer relationship. It’s in trust. It’s in delivery. Services businesses that leverage AI effectively are on the verge of tremendous value creation. 📈 💰 The ultimate irony is that the technology that’s supposed to take over the world, might actually put the power back in human hands. As software commoditizes, the intangible stuff—relationships, service, trust—becomes the differentiator.

In a post earlier this week, we discussed how value is created and sustained on factors wider than price. It is interesting to visualize this via data. The diagram below shows the position of retailers with at least something of a focus on price. Their consumer rated scores for price are on the x axis. The further to the right, the better the score. The y axis shows each retailer’s top non-price strength - design for IKEA, style for Primark, convenience for Walmart and Amazon, and so on. Higher is better rated. There are some interesting positions on the chart. The strongest area is the upper right. These retailers are highly regarded on price and are also great at delivering something else alongside. This makes their value proposition incredibly strong. The weakest area is the lower left. Here, retailers like Family Dollar and Big Lots have lackluster price scores - a big problem as this is supposed to be their point of differentiation. They don't score well on other factors either. Note, that these scores are from last year so before Big Lots went bankrupt. It’s fine to be middling on price if you excel elsewhere. Amazon and Costco are in this bucket: they're competitive, but they don’t solely focus on the lowest possible prices; however, they really deliver on other factors. TJX's brands are also present: by design, they offer great bargains, which is a little different to low prices. The bottom right, where Shein and Temu are placed, is interesting. Both are really strong on price but are relatively weak on secondary factors. This creates very one-dimensional loyalty, which is an issue now their low-price operating model has been disrupted. I have not included every retailer on this chart and there is a bit more noise in some of the data. But the creation of a thoughtful and differentiated value proposition, aligned to consumer desires, is one of the most critical things in retail. #retail #retailnews #value #price #retailers #strategy #consumers