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"Nano"nomics - What does it mean for product engineering?

Think about any product that you have recently used - there's a "nano" version, isn't it? Let's take a few examples to validate my hypothesis - automobiles have mini cars, software products have "lite" versions, FMCG (Fast Moving Consumer Goods) products have sachets, tablets have mini versions, even transaction volumes are sub $1, you can buy single track vs. the entire album, and probably many more such examples when you think about it.

Before we get into the intricacies of the engineering involved in creating the nano or lite versions, let's understand the business rationale - why do companies invest to create such products? Here are the top reasons that I can think of, and I encourage you to share your thoughts as well:

Before we get into the intricacies of the engineering involved in creating the nano or lite versions, let's understand the business rationale - why do companies invest to create such products? Here are the top reasons that I can think of, and I encourage you to share your thoughts as well:

  1. Broaden the customer base in existing markets: This can be done by creating compelling and right priced "nano" versions of successful products that appeal to customers who desire but find the full blown product too pricey!
  2. Target new markets and thereby new customer base: Develop lighter flavors of product customized to a new region or market to expand the customer footprint and brand.
  3. Experiment new ideas and innovation: This one is a little different where you first create a light version first and then depending on the market response quickly scale up the product. The new age internet companies are great examples here.

There are influencers such as technology advancements, consumer behavior, supply chain efficiencies, manufacturing innovations that contribute to the design and development of these nano products. Product Portfolio Management is a complex topic that needs laser focus, inputs from diverse sources, managing stakeholders and finally matching the demand and supply. This by no means is to trivialize the subject, but the context is essential to deep dive into the engineering aspects.

Let's now look at some of the product engineering dimensions that are required to make this happen. You might find that the commentary is leaning towards software product engineering and that's because of my background. However I strongly believe, there are aspects that can quickly be adapted to other industries as well.

  • Role of product manager: This is a very crucial role. a product manager must have the vision and translate it into product roadmaps that can catapult the core offering and lighter versions into unbeatable value propositions for the customer anytime, anywhere and any channel
  • Agility in execution: Having a product roadmap has to be well supported and backed by agility in execution. This is to churn out the innovation, test it the market and roll out the product. Agility in all aspects of product execution and not just the development is critical.
  • Robust and flexible product framework: I am calling it out as a product framework so that it is generic and can be adapted to multiple industries. Having a framework that can scale helps in rolling out various flavors of the product and increases the ability of business to segment.
  • Built-in product intelligence: This is really something that is gaining a lot of traction recently. While some industries have been ahead of the curve, the ability to extract real time usage data, fault information is exploding with growth in connectivity and sensors. This provides deep insights into product usage as well
  • Superlative product support: After sales support is critical in any industry. Having the right forums, community based support, multiple channel access that are driven and governed by the stringent SLA frameworks. Don't differentiate between "nano" and the full blown version.
  • Flexible business models: This is in many ways is the essence of "nano"mics. Can you charge per packet/per use/per unit of time. Does the product architecture and enablers support monetization in multiple ways?

Nano products are a reality and the question is not "if" but "how" and when". Organizations that adapt quickly to these changing dynamics will continue to grow.


Vinod you are able to beautifully pen down your thoughts on the subject. We come across this transformation in every field. Immediately what comes to mind is the Lite and full version of many apps available in Apple Stores. It is a way to increase the customer base and once you find it useful you will end up buying the full version.

Very nice thought process Vinod. Going forward, every product will implement this nano formula.

Thank you Tomy. You are absolutely right - the app economy is another classic case of nanonomics. I think this has triggered multiple offshoots such as in-app purchases and am certain that there will be newer and creative commercialization models

Dear Vinod,
Nice thoughts on 'Nano'mics & the role of the Product Portfolio Management in the same.
I do believe that Product Architecture is also a key factor in providing the ability to
scale up/down & pick apt components / tune them for the different scaled versions.
Often, Products whose Architecture was not envisioned for such 'nano'nomic requirements
(as you rightly pointed out by having the 'right roadmap') early on, end up being re-defined.
One-size-fits-all is not a product motto for most of the engineering organizations, however
there is still a lot of efficiency that could be achieved when the Product platforms / components
are leveraged across the Products / Services. Enterprise Architecture (in Software)
is a primary function focussed on this aspect.

Thanks Senthil. The one size fits all does not work anymore and classic analogy is in sachets that have redefined fast moving consumer goods in emerging markets.

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