Published on November 14, 2009
Product Management for Startups Dan Olsen CEO, YourVersion Nov 14, 2009 Copyright © 2009 YourVersion
What is Product Management? Copyright © 2009 YourVersion
Product Management is Critical Link in Value Creation Market Product Development • Current Management Team customers • Prospective customers • Competitors Product Management’s Goals: •Best Product •Happy Customers •Profitable Business Copyright © 2009 YourVersion
What’s the Formula for a Winning Product? A product that: Meets customers’ needs Is better than other alternatives Is easy to use Has a good value/price Copyright © 2009 YourVersion
Problem Space vs. Solution Space Problem Space Solution Space A customer problem, A specific need, or benefit that the implementation to product should address address the need or A product requirement product requirement Example: Ability to write in space NASA: space pen (zero gravity) ($1 M R&D cost) Russians: pencil Copyright © 2009 YourVersion
Problem Space vs. Solution Space Product Level Problem Space Solution Space (user benefit) (product) Pen and Prepare paper my taxes TurboTax File my taxes TaxCut Copyright © 2009 YourVersion
Problem Space vs. Solution Space Feature Level Problem Space Solution Space (user benefit) (feature) Gmail Make it easy importer to share a link with my friends Design Design Design #1 #2 #3 Preview with User can edit Allow me to Design checkboxes before import reuse my email #1 No No contacts #2 Yes No #3 Yes Yes Copyright © 2009 YourVersion
How Do You Prioritize User Benefits and Product Features? Need a framework for prioritization Which user benefits should you address? Which product features to build (or improve)? Importance vs. Satisfaction Importance of user need (problem space) Satisfaction with how well a product meets the user’s need (solution space) Copyright © 2009 YourVersion
High Importance + Low Satisfaction = Importance of User Need Opportunity High Competitive Opportunity Market Not Worth Going After Low Low High User Satisfaction with Current Alternatives Copyright © 2009 YourVersion
Kano Model: User Needs & Satisfaction User Satisfaction Delighter (wow) Performance (more is better) Need Need not met fully met Must Have Needs & features migrate over time User Dissatisfaction Copyright © 2009 YourVersion
Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Customer’s Perspective What does it mean to us? How easy to use is it? Usability & Design Satisfaction Increasing Does the functionality Feature Set meet my needs? Does the functionality work? Absence of Bugs Dissatisfaction Decreasing Is the site fast enough? Page Load Time Is the site up when I want to use it? Uptime Copyright © 2009 YourVersion
Importance vs. Satisfaction Ask Users to Rate for Each Feature 100 98 Great 95 84 87 90 Bad 86 85 79 84 55 70 80 Importance 80 75 72 80 70 75 65 60 55 41 50 40 50 60 70 80 90 100 Satisfaction Recommended reading: “What Customers Want” by Anthony Ulwick Copyright © 2009 YourVersion
Prioritization and Scope Customer value is only half of the story How much engineering effort will it take? Need to consider Return on Investment (ROI): Return: customer value created Investment: development resources required Ruthlessly prioritize: rank order product ideas Be deliberate about scope & keep it small Easy to bite off too much Strategy = deciding what you’re NOT doing Break features down into smaller chunks Smaller scope → quicker releases → more iteration Copyright © 2009 YourVersion
Prioritizing Product Ideas by ROI ? Return (Value Created) 4 Idea D 3 Idea A Idea B 2 Idea C 1 Idea F 1 2 3 4 Investment (developer‐weeks) Copyright © 2009 YourVersion
Have to Prioritize Across Multiple Dimensions At The Same Time Ease of Use Customer Value Quality Functionality Customer Understanding Time Copyright © 2009 YourVersion
User Benefits vs. Ease of Use Q: If two products equally deliver the exact same user benefits, which product is better? A: The product that’s easier to use ‘Ease of use’ provides benefits Saves time Reduces cognitive load Reduces frustration Not many companies excel at UI design ‘Ease of use’ can be differentiator Copyright © 2009 YourVersion
The UI Design Iceberg What most people see and react to Visual Design What good product mgrs, designers & developers Interaction think about Design Information Architecture Conceptual Design Recommended reading: Jesse James Garrett’s “Elements of User Experience” chart, free at www.jjg.net Copyright © 2009 YourVersion
Elements of User Interface Design Consists of Three Distinct Elements: Information Architecture Structure and layout at both site and page level How site is structured (sitemap) How site information is organized (site layout) How each page is organized (page layout) Interaction Design How user and product interact with one another User flows (e.g., navigation across multiple pages) User input (e.g., controls and form design) Visual Design “How it looks” vs. “What it is”, often called “chrome” Fonts, colors, graphical elements Copyright © 2009 YourVersion
“Ramen” Usability Testing for Startups Learning from 1‐on‐1 user feedback is invaluable Keep it real: have user bring their laptop, sit at desk Conduct test sitting next to user. Format: 5 ‐ 10 min: Discovery, ask questions to learn about user 30 ‐ 50 min: Usability test (as non‐directed as possible) 10 min: Wrap‐up: Answer user questions, point things out Usability Do’s Explain rationale, not to worry about hurting your feelings Explain “Think Aloud Protocol”, be fly on wall, take notes Usability Don’ts Ask leading questions “Help” the user or explain the UI (e.g., “click over here”) Get defensive or blame the user Copyright © 2009 YourVersion
Approaching Business as an Optimization Exercise Given reality as it exists today, optimize our business results subject to our resource constraints. Copyright © 2009 YourVersion
Define the Equation of your Business “Peeling the Onion” Advertising Business Model: Profit = Revenue ‐ Cost Unique Visitors x Ad Revenue per Visitor Impressions/Visitor x Effective CPM / 1000 Visits/Visitor x Pageviews/Visit x Impressions/PV New Visitors + Returning Visitors Invited Visitors + Uninvited Visitors # of Users Sending Invites x Invites Sent/User x Invite Conversion Rate Copyright © 2009 YourVersion
Sample Signup Page Yield Data Daily Signup Page Yield vs. Time New Registered Users divided by Unique Visitors to Signup Page 100% 90% 80% Daily Signup Page Yield 70% 60% 50% 40% 30% Started requiring registration 20% Changed Added questions messaging to signup page 10% 0% 1/31 2/14 2/28 3/14 3/28 4/11 4/25 5/9 5/23 6/6 6/20 7/4 7/18 8/1 8/15 8/29 9/12 9/26 10/1 0 Copyright © 2009 YourVersion
Identifying the “Critical Few” Metrics What are the metrics for your business? Where is current value for each metric? How many resources to “move” each metric? Developer‐hours, time, money Which metrics have highest ROI opportunities? Metric A Metric B Metric C Good ROI Bad ROI Great ROI Return Return Return Investment Investment Investment Copyright © 2009 YourVersion
Optimization through Iteration: Continuous Improvement Measure the metric Analyze Learning the metric Gaining knowledge: • Market Identify top • Customer opportunities to improve • Domain • Usability Design & develop the enhancement Launch the enhancement Copyright © 2009 YourVersion
Early Stage Product Management Cheat Sheet Understand your customers’ needs Use problem space thinking to ensure your solution is addressing your customers’ needs Identify opportunities & prioritize by ROI Design and launch your v1 product Talk with users 1‐on‐1 and get feedback Define equation of your business Identify and track key metrics Launch, learn, and iterate Copyright © 2009 YourVersion
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Questions? @danolsen email@example.com www.yourversion.com Copyright © 2009 YourVersion
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