Getting the priorities right in feature development - what are problems in terms of balance between new features and other work ?

One of the biggest problems that a product development team runs into during the process of product development is about how to prioritize features. Typically for very small products, where the team size is low (less than 5-10 people), there may not be a separate position for a Product Manager, and the work of defining what the Product should be, what features it should contain, and so on, is fairly easy since you have effectively the same person running the engineering and product management activities. However, if you leave aside such cases, you have the normal case of a product that has a separate Product Manager (who works with the engineering teams, and not works for engineering, in order to ensure that there is a clear separation between engineering and the people who drive features).
Now, as I mentioned in the beginning, the problem is in terms of defining the features that need to be added to the product (this is true whether the product is a new product, or whether the product is a newer version of an existing product). A classic Product Manager would want to get new features added that are:
1. Meant to appeal to people from the press and technical reviewers who write about the new product and help in forming pubic opinion about the product. If the product is in a competitive area, then it is critical to get a good series of reviews
2. Mean to ensure that there is not a major discrepancy between the product and competitive products, and more important, the product should have all the latest features that are present with competitors
3. Ensure that existing users get some great new features that will encourage them to update their existing product (for existing products, getting existing users to update is a huge chunk of the business).
So what is the problem in all these ? Consider a team that is working with an older version of Visual Studio or some tool, and needs to upgrade. Now, upgrading the entire project in terms of code can take some time and effort, and this time and effort needs to come out of the same effort that is being used for generating new features. In addition, time needs to be spent on testing existing areas of the product that are not being modified; since they form a part of the product that is being released, they need to be tested to ensure that such functionality is not broken.
The typical problem that arises from these conflicting needs is that, with a given set of resources, not everything that the Product Manager requires will be built. The amount of difference between what the Product Manager wants and what the Product Manager will get accounts for the tension in the team, and can lead to tense discussions (except when you have a seasoned Product Manager who knows the situation, and even while pushing for new features, accepts that a certain amount of time will be utilized for other work).
In the next article on this subject, I will talk about what can be done to make this process much smoother.