Ian McAllister, Director at Amazon: There is an approach called "working backwards" that is widely used at Amazon. We try to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it. While working backwards can be applied to any specific product decision, using this approach is especially important when developing new products or features.
For new initiatives a product manager typically starts by writing an internal press release announcing the finished product. The target audience for the press release is the new/updated product's customers, which can be retail customers or internal users of a tool or technology. Internal press releases are centered around the customer problem, how current solutions (internal or external) fail, and how the new product will blow away existing solutions.
If the benefits listed don't sound very interesting or exciting to customers, then perhaps they're not (and shouldn't be built). Instead, the product manager should keep iterating on the press release until they've come up with benefits that actually sound like benefits. Iterating on a press release is a lot less expensive than iterating on the product itself (and quicker!).
If the press release is more than a page and a half, it is probably too long. Keep it simple. 3-4 sentences for most paragraphs. Cut out the fat. Don't make it into a spec. You can accompany the press release with a FAQ that answers all of the other business or execution questions so the press release can stay focused on what the customer gets. My rule of thumb is that if the press release is hard to write, then the product is probably going to suck. Keep working at it until the outline for each paragraph flows.
Oh, and I also like to write press-releases in what I call "Oprah-speak" for mainstream consumer products. Imagine you're sitting on Oprah's couch and have just explained the product to her, and then you listen as she explains it to her audience. That's "Oprah-speak", not "Geek-speak".
Once the project moves into development, the press release can be used as a touchstone; a guiding light. The product team can ask themselves, "Are we building what is in the press release?" If they find they're spending time building things that aren't in the press release (overbuilding), they need to ask themselves why. This keeps product development focused on achieving the customer benefits and not building extraneous stuff that takes longer to build, takes resources to maintain, and doesn't provide real customer benefit (at least not enough to warrant inclusion in the press release).
Heading: Name the product in a way the reader (i.e. your target customers) will understand. One sentence under the title.
Subheading: Describe the customer for the product and what benefits they will gain from using it. One sentence only underneath the Heading.
Summary Paragraph: Start with the city, media outlet, and your proposed launch date. Give a summary of the product and the benefit.
Problem Paragraph: This is where you describe the problem that your product is designed to solve. Make sure that you write this paragraph from the customer’s point of view.
Solution Paragraph(s): Describe your product in some detail and how it simply and easily solves the customer’s problem. For more complex products, you may need more than one paragraph.
Quotes & Getting Started: Add one quote from you or your company's spokesperson and a second quote from a hypothetical customer in which they describe the benefit they are getting from using your new product. Describe how easy it is to get started, and provide a link to your website where customers can get more information and get started.
Q: What is the price?
Q: How do I get it?
Q: How does it work? (You are likely to have multiple versions of this question that cover different aspects of the customer experience.)
Q: How large is the estimated consumer demand for Melinda? What is the TAM (total addressable market?
The component parts to answering this include: