Three perennial challenges for entrepreneurs and start-up founds are (1) seriously listening to their markets, (2) building customer-side savings/ROI logic, and (3) whole-product thinking. Tiny companies lack formal product managers, but need to apply some product management thinking to these fundamental product/market needs. This talk was for Stanford Continuing Studies' Entrepreneurship course, “Getting from an Early Idea to a Real Business.”

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Three Product Challenges
for Entrepreneurs
Rich Mironov
May 14, 2013
“Getting from an Early Idea to a Real Business”
Bret Waters, Bus 217, Stanford Continuing Studies

2. • Veteran product manager/exec/strategist
• Organizing product organizations
• Business models, pricing, agile
• “What do customers want?”
• 6 startups, including as CEO/founder
• Author of “The Art of Product
Management” and Product Bytes blog
• Founded Product Camp
ABOUT ME
2W W W . M I R O N O V . C O M

3. What product managers do?
Three product challenges for
entrepreneurs
1. Seriously listening to your
market
2. Customer-side ROI
3. Whole-product thinking
AGENDA
3W W W . M I R O N O V . C O M
Product
Challenges
for Entre-
preneurs

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market information, priorities,
requirements, roadmaps, epics,
user stories, backlogs,
personas, MRDs…
product
bits
strategy, forecasts,
commitments, roadmaps,
competitive intelligence
budgets, staff,
targets
Field input,
Market feedback
Segmentation, messages,
benefits/features, pricing,
qualification, demos…
Markets &
CustomersDevelopment
Marketing
& Sales
Executives
Product
Management
WHAT DOES A PRODUCT MANAGER
DO?
W W W . M I R O N O V . C O M

5. When NASA wanted to
put a man on the moon,
they planned a series of
mid-course
corrections…
AVOID POST-COURSE
CORRECTIONS

6. What product managers do?
Three product challenges for
entrepreneurs
1. Seriously listening to your
market
2. Customer-side ROI
3. Whole-product thinking
AGENDA
6W W W . M I R O N O V . C O M
Product
Challenges
for Entre-
preneurs

7. • Can’t do both in the same meeting
• Selling turns off prospects
• Defensive, waiting for the catch
• Unwilling to give you key information
• It’s all about you
• As soon as you pitch your product,
open-ended discussion stops
• Can you listen (= shut up) for 15 minutes?
SELLING & LISTENING
W W W . M I R O N O V . C O M

8. • You are selling when you…
• Do most of the talking
• Anticipate objections
• Plan your arguments
• Understand the material
• Want to “close” in the meeting
• You are listening when you…
• Ask open-ended questions
• Take notes
• Repeat for clarification
• Use silence
• Expect to be surprised
ARE YOU SELLING OR LISTENING?
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9. • Get inside their heads
• 30+ minute in-person interviews
• Open-ended questions
• Record session or take good notes
• Ask about…
• How their business* works
• What they name things
• What keeps them awake at night (pain)
• Current solutions, alternatives, shortcomings, competitors
• Natural units of work
• Unstated requirements
• How they justify spending (ROI)
EXTENDED INTERVIEWS
W W W . M I R O N O V . C O M

10. • Markets are complex and surprising
• You learn about the world from
customers and prospects
• “What’s the pattern?”
• “Who are the outliers?”
• “How would a customer fit us in?”
• My rule of thumb: you need 8 to 20 in-depth
interviews to start seeing patterns
• Your initial theory is always wrong
DISCOVERY VS. THEORIES

11. • From Blank and Ries…
• Search for market/product fit in early development
• Testable specific questions
• Rapid, goal-oriented
• Within your intended target audience
• Product mock-up, A/B comparison
• But easy to lose
context and force
false choices
LEAN CUSTOMER RESEARCH

12. • “Urgent” versus “Important”
• Truly understanding customers
and markets will save an entire
product cycle
• Customer language and stories
make selling easier
• Postponing market analysis may
cost you the company
YOU HAVE TIME TO BE STRATEGIC
W W W . M I R O N O V . C O M

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What product managers do?
Three product challenges for
entrepreneurs
1. Seriously listening to your
market
2. Customer-side ROI
3. Whole-product thinking
AGENDA
13W W W . M I R O N O V . C O M
Product
Challenges
for Entre-
preneurs

14. • Your products don’t matter
• Your costs don’t matter
• Customers don’t allocate
budgets for you
• Closing a deal is usually hard
• You have to do your customer’s
thinking for him
• How will he justify spending money?
PROSPECTS DON’T CARE ABOUT
YOU
W W W . M I R O N O V . C O M

15. • Why will customers buy?
• Tell a story in customer’s own language
• What’s the natural unit of exchange?
• How do they derive value?
• What does the competition do?
• Don’t expect customers to think for you
• Test, trial-close, get your hands dirty
TELLING THE PRICING STORY
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16. • Businesses buy most products to make money or
save money
• How do they describe value?
• Quantify it for them
• They won’t spend time to fully analyze your product
• Assume you can capture a fraction of value
• Typically 5% to 15%
VALUE FOR B2B CUSTOMERS
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“By using our tech support knowledge automator,
you can reduce your support time per call by 30%.”
HARD COST SAVINGS EXAMPLE
Your support calls/year 22,000
Average minutes/call 16
Total annual support hours 5,867
Current support team FTE 3
Average salary $85,000
Annual staff cost $255,000
Savings per call 20%
Total savings $51,000
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18. • “Anchoring” or comparable product
• Similar shampoos, apps, lawn care services
• Per hour fees for lawyers, tour guides, babysitters
• Sometimes, price = luxury
• Jewelry, designer clothes, chocolate
• Consumers over-estimate usage
• Health clubs, Costco bulk items
• Fairness
• BofA’s $5/month debit card fee
B2C PRICING IS HARDER
W W W . M I R O N O V . C O M

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What product managers do?
Three product challenges for
entrepreneurs
1. Seriously listening to your
market
2. Customer-side ROI
3. Whole-product thinking
AGENDA
19W W W . M I R O N O V . C O M
Product
Challenges
for Entre-
preneurs

20. Customers make our products into solutions
We like to over-simplify their complicated world
YOU SELL PIECE PARTS
Your product
fits here

21. What important things do customer need along
with…
• Electric car?
• Fantasy baseball mobile app?
• Concrete saw?
• Tivo/Roku/Boxee replacement
WHOLE PRODUCT THINKING
W W W . M I R O N O V . C O M

22. • Recruit an outsider
• Provide only product
materials
• No hints, no help
• Watch, listen, learn
• Can you…
Program your DVR?
Read a cell phone bill?
Synch calendars?
HAVE SOMEONE TRY AN INSTALL
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23. Increase your odds of success by
1. Seriously listening to your market
2. Showing customer-side ROI
3. Thinking about whole products
Product managers do this for a living
TAKE-AWAYS
W W W . M I R O N O V . C O M

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Q&A
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CONTACT
Rich Mironov, CEO
Mironov Consulting
233 Franklin St, Suite #308
San Francisco, CA 94102
RichMironov
@RichMironov
Rich@Mironov.com