5 Effective Steps for Initial Product Backlog Creation Using Business Model Canvas
Updated: Feb 16
Let us think of a virtual scenario - You are a Product Owner in a small to medium sized organization and will be starting on a new project. The Product Owner is an important role in Agile framework. She is the bridge between the business goals that an organization pursues and the scrum teams which achieves them. She is the interface on whom the organization depends to maximize value streams. She extracts maximum value for the customers by owning and prioritizing the Product Backlog.
The glaring question then hangs in front of you - How do you go about creating the first draft of backlog items? Of course it will be full of EPICS and THEMATIC stories. However, we need to start somewhere. The question is how and where do we start?
The general practices followed are -
If the project is small, create backlog based on Product Owner's understanding of the project goals. This list is discussed with stakeholders and team members and becomes initial PBI. This practice is heuristic in approach.
The Backlog is inherited or extracted from legacy projects. In this case only re-prioritization needs to be done on a case-to-case basis by the Product Owner. This process is based on experience.
Talk to Subject Matter Experts and Business Analysts and create a backlog. Here the Product Owner would initiate separate discussions with SMEs, Analysts and any other stakeholders and get a basic view of goals associated with the project. She can then create a backlog to take to the scrum teams.
User Story Workshop - bring across above stakeholders and additionally experienced team members for initial backlog creation. This is an official face-to-face meeting which is timeboxed for 4-8 hours. The attendees thrash out the initial version of stories ensuring only EPIC level story creation. The outcome of this meeting is then taken to scrum teams for project kickoff or Sprint planning.
Depending on the size and scope of the project one of the above mechanisms could be used by the Product Owner for the first draft of that all important set of Product Backlog. What would you use?
Being a Scrum Master, I have understood that each project in unique and requires a unique approach. Hence, I am always on the lookout to try new methods and processes which can be used as a template for other projects. Recently, while coaching a startup, I arrived at a novel process through which Product Owner can create the initial backlog, which I have detailed below.
We start by creating the Business Model Canvas as detailed by Alexander Osterwalder & Yves Pigneur. I will not give the detailed steps in this article. The complete details can be gleaned from the book "Business Model Generation" by Alexander Osterwalder & Yves Pigneur. Suffice it to say that there are 9 building blocks for any business model.
These are -
Each of these blocks act as cogs in a wheel. All 9 need to be brainstormed to create a successful model. The blocks should be discussed in the order listed above. Detailed discussion about the activities or the merits or demerits of this model is beyond the scope of this blog. We will now see how this can help a Product Owner create and prioritize the initial backlog using this canvas as a source.
Business Model Canvas is generally created through brainstorming session with C-level stakeholders along with Product Owners. For the Product Owner specifically, some of the blocks are sources for initial Backlog. We will now delve into the details of these few blocks.
We identify our key customer groups and may de-group or re-group various customer bases based on multiple criteria. Identifying such groups based on our ability to reach through same channels and provide similar value gives the Product Owner a clear view about the customer segments being targeted. This also clears the view for scrum teams downstream during their planning sessions.
A Business Model Generation meeting is ongoing within a startup with C-level members, facilitator and Product Owners. The organization was on track to target corporate customers as their primary customer segment. They would also want to see if they can broaden their customer base by including B2C customers.
P: Till date we have conceived only B2B customer segment,i.e, we sell to other corporate retailers. However, why cant we actively cultivate retail consumers as a segment.
S: Well we certainly can do that. After all the product remain same. However, wouldn't we need to completely tweak our channels and CR details for these?
P: Not only that, the value proposition itself needs to change for this customer base. The point however, is should we neglect this whole segment ?
Sa: Guys, this is a the correct platform to thrash out details if you want to approach a new customer base. I think all your points are valid. Should we add a new customer base and see where we reach during our discussion about other blocks?
P: I certainly think we should add and go forward with this segment as well.
As shown in the discussion above, Product Owner can glean the information from above discussion that the project will be changing in scope henceforth. Adding a customer segment would mean multiple other changes and these would add to the backlog stories. Product Owner notes that a new customer base will be added for our product
This is the most important segment for not only the Canvas but our Product Owner. This block will inform what value we wish to provide to our customers. The organization's goals and value propositions go hand in hand. The stakeholders can determine the success of the venture by adapting the correct value proposition. On the other hand, Product Owner can determine her EPIC stories for initial backlog directly from these details in the block.
Case Study contd...
S: Since two different customers bases are being targeted, value proposition would alter for these segments. What is the core value that we want to propose for our retail customers?
N: Innovative - we provide the ability to see all your cameras in one arena and view patterns on a monthly basis.
P: Economical - We charge subscription value, so that buying hardware does not become a burden
Sa: Isn't the biggest value convenience for our customers? We provide a secure environment where even minute behavioral change is clearly visible to end user through web/iOS/Android platform.
S: But the biggest question is - How do we ensure customer care for a large retail consumer base? How can we say value for customers without providing adequate customer care
P: Such a huge base will be difficult for us to handle. We will bleed too much money. Let us split our customer base to those who are purchasing for entire household (minimum 4 devices)
N: Ok. so that means customer base reduced hence, our reliability to be tested against a trimmed customer base. However, value proposition would remain same.
Sa: So to summarise the Values we provide to our customer base (who buy at least 4 devices) are - 1. Innovative product
2. Convenient and hassle free usage and setup
3. Economical (subscription based)
Can you see the EPIC level stories shaping up for the Product Owner? Let us try to identify one of them here -
As a USER, I want to SETUP 4 DEVICES THROUGHOUT THE HOUSEHOLD WITH MINIMUM NUMBER OF STEPS so that I CAN VIEW ALL ACTIVITIES THROUGH WEB/HANDHELD (iOS/Android) DEVICES.
WoW! That is a good EPIC to start with. Please note that this is a starting point. This will go through multiple iterations with stakeholders and then scrum team to give it a final format. It is kept an open ended story so that proper discussion can happen before a final version shapes up.
How does the organization propose to pass on the value proposition to its customer base? What mechanism will user use to buy the product or service? We need to identify how we can create awareness among potential customers. The Product Owner in this case, can extract additional user stories from the discussion as stories might not only lead to physical marketing channels but digital ones which would need to be handled by scrum teams. Creating digital storehouse, handling digital retail shop etc require new stories from scrum teams.
Case Study contd...
P: What would this mean for our channels to our consumers? Can our retails customers purchase our products over e-com platforms? Or do we open a new e-shop? Or provide it in retails stores?
S: Putting our hardware in retail shops would mean a cost which we are not ready to bear yet.
N: Wouldn't it be better that to start with we simply put our hardware on e-com platform and re-direct all our customers to these links?
P: It would certainly be correct at our current operational levels. However, even if we do that, we need a mechanism to allow end users to unbox and login seamlessly.
N: Also, create a tracking for end users to be identified throughout their lifetime in a unique way.
Sa: We would also need them to have relatively fewer views than our corporate customers as they are not going to scale up in a massive way. Hence, they need to have a separate view which shows live version of devices and monthly/yearly patterns
P: A page will be required with subscription details and reminders/notifications
Sa: However, upgrades will remain through same channels as corporate customers hence, no new channels required for this.
Can you identify the EPICs from above conversation? I see quite a few there -
As a CUSTOMER SERVICE REP, I want to VIEW ALL DETAILS OF CUSTOMER THROUGH UNIQUE ID INSTANTANEOUSLY, so that LIFETIME TRACKING OF CUSTOMERS CAN BE ENABLED.
As a USER, I want to CLICK ON A DIGITAL AD AND BE DIRECTED TO A SECURE ENVIRONMENT WHERE I CAN PURCHASE DEVICE, so that MY PERSONAL DATA/INFORMATION IS NOT LOST.
The Product Owner can extract all of these and revisit them once the full Canvas is available with the team.
How do we maintain our relationship with our customer so that a positive impact is felt and recurring and referred customer count increases? How do we aim to acquire new customers and maintain positive relationship with current ones at least cost? Answering these queries will throw up new stories which should be used by Product Owner to shape up the Product Backlog. Please remember not to prioritize stories at this point of time. We will revisit and prioritize once the Canvas is fully formed.
Case Study contd...
P: How do we reduce cost for a positive relationship with our customers. Providing a full fledged call centre will be huge cost.
Sa: My experience tells me that most customers call with 'How To' queries. Can we introduce tutorials step wise during installation? this will surely reduce the number of queries.
N: Sure. So we create stages of installation and provide video based tutorials for each of these.
P: There is one more possibility where calls could escalate. And that is failure of our devices.
S: We need absolute stringent quality control. We can be late but if we are not going with a full fledged call centre we cannot give way on quality.
Do you see Non-Functional Requirements (NFRs) and spikes/enablers already from above discussion? Well lets not run off with this. Remember, lets keep the discussion open and lets only have EPIC level stories which are not too detailed. Only business level commitments are to be closed in this discussion. Team commitments need to be concluded after Release planning meetings.
What are the key activities required to bring to fruition this business model? Does it include Production/Operation level activities? If so, what are the changes foreseen from current operations? Or is a different platform to be created which can be used as a resource for monetization? Will there be API level subscription model created? In that case, will API management turn out to be our key activity?
These queries will provide an indirect input to Product Owner for refining backlog items or creating enablers.
Case Study counted…
P: Regardless of the segment of customer, our main asset is our platform.
S: True. It is scalable and accommodates both corporate and retail clients without modification.
Sa: But guys, think again. Now that a new segment of customer base is added, is there a change in key activity?
P: I don’t think so. Our main activity is to ensure our platform as a service is maintained with impeccable quality. Secondary activities relate to customer care operations.
N: Correct. Moreover, openness is another aspect of our platform and needs to be maintained as well.
P: Yes that is also part of our key activity.
Sa: Therefore, we can figure out the high level key activities. Primarily it is to provide an open and high quality platform which acts as a service. Secondary activities include those required for customer care. Now lets get into the details…
Do you see the NFRs and enablers again? Well, extracting them from these conversations will result in a neat round-off of our Initial Backlog items which the Product Owner has consolidated. It will give us a mix of workable backlog items as well as enablers/spikes to ensure future work on architectural runway.
As an example, following enabler story can be added to the backlog -
For every outward delivered API, security aspects need to be tested as per specifications listed.
The backlog items consolidated by Product Owner thus far are listed. This is then revisited by all members after the initial meeting is over. The re-check is done in order to verify the suitability of the Backlog item and relative priority with a perspective to business values. Once confirmed this list becomes the Initial Backlog with EPIC stories and enablers.
Product Owner now takes the list to scrum team to have an initial meeting ensuring team gets accustomed to the list. The due processes prescribed within Agile framework can then take over.
The above stated steps can be used by Product Owner’s in some cases with extremely high impact for Initial Backlog creation.
About Me : A passionate Agile leader having 16+ years of experience in software industry, I have handled Agile projects of various complexities. Having successfully handled Agile transition for multiple organizations, I write about my experiences, challenges and some solutions.