In rough terms, tools in the left column are used pre-PMF, and those in the right post-PMF. A/B tests are used in both phases.
Transcript of "Product Management 101: The Search for Product-Market Fit"
CONFIDENTIAL PRESENTATION | PAGE1Product Management 101:The Search for Product-Market FitJeff BussgangGeneral Partner, Flybridge CapitalSenior Lecturer, Harvard Business School@bussgangApril 2013
CONFIDENTIAL PRESENTATION | PAGE2Session Objectives• What is great product management?• What people mean when they use the phrase,“Product Market Fit” (PMF), plus:– Customer Development Process– Lean Start-Up Theory• Help you devise your approach to achieving PMFand avoid wasting a lot of money
CONFIDENTIAL PRESENTATION | PAGE3Context for My Perspective• General Partner at Flybridge Capital, early-stage VC firm inBoston/NY, current fund: $280M70+ portfolio companies; seed and Series A focused• Senior Lecturer at Harvard Business School• Former entrepreneurCofounder/Pres. Upromise (acq’d by SallieMae)VP at Open Market (IPO ‘96)• Author: Mastering the VC Game
CONFIDENTIAL PRESENTATION | PAGE4Startup1. A team launching a new product underconditions of extreme uncertainty2. A vehicle for testing hypotheses aboutsuch an entity4Entrepreneurship: the pursuit of opportunity beyondresources you currently control- HBS Professor Howard StevensonRelentless FocusNovel/InnovativeResource Constrained
CONFIDENTIAL PRESENTATION | PAGE8Product Management Skills• Responsibilities:– Define the new product to be built– Secure the resources to build it– Manage its development, launch andongoing improvement– Lead the cross-functional product team• Attributes:– Ability to influence and lead– Resilience and tolerance for amibiguity– Business judgment and market knowledge– Strong process skills and detail orientation– Fluency with technology and implications on product design, business– Design/UX instinctsMini CEO – with none of the authority
CONFIDENTIAL PRESENTATION | PAGE9The Lean Startup• Many startups fail because they waste capital andtime developing and marketing a product that noone wants• Lean startups rapidly and iteratively test hypothesesabout a new venture based on customer feedback,then quickly refine promising concepts and cull flops• Being lean does NOT mean being cheap, it is amethodology for optimizing—not minimizing—resources expenditures by avoiding waste• Being lean does NOT mean avoiding rigorous,analytical or strategic thinking9
CONFIDENTIAL PRESENTATION | PAGE10Lean Startup Principles• No idea survives first customer contact, so getout of the building ASAP to test ideas• Goal: validation of business model hypotheses,based on rigorous experiments and clear metrics• Minimum viable product (MVP): smallest set offeatures/marketing initiatives that delivers themost validated learning• Rapidly pivot your MVP/business model until youhave validation and product-market fit (PMF)• Don’t scale until you have achieved PMF10
CONFIDENTIAL PRESENTATION | PAGE12Crossing The Chasm
CONFIDENTIAL PRESENTATION | PAGE13Where are You?Before Product-Market Fit:Search & Validation• Lean startup approach• Hunch-driven hypotheses• Minimum viable product (MVP)• Customer development process• Selling to early adopters• Pivoting• Bootstrapping• Small, founding team• Product-centric culture;informal roles• Early in sales learning curveAfter Product-Market Fit:Scaling & Optimization• Building a robust, feature-richproduct• Crossing the chasm• Metrics, analytics, funnels• Designing for virality &scalability• Challenges with corporatepartnerships• Building a brand• Scaling the team; moreformal roles• Scaling a sales force
CONFIDENTIAL PRESENTATION | PAGE14Tools/Techniques• Structured idea generation• Business model generation• Customer discovery process• Focus groups• Customer survey• Persona development• Competitor benchmarking• Wireframing• Prototype development• Usability testing• Charter user program• A/B test• Conversion funnel analysis• Landing page optimization• SEM/SEO optimization• Inbound marketing design• PR strategy• Customer support analysis• Product feature prioritization• Sales pitch• Lead qualification• Bus dev screening• Net Promoter Score• Lifetime value vs. Customeracquisition costs14
CONFIDENTIAL PRESENTATION | PAGE15“Lessons Learned” Drives ScalingConceptBusinessPlan/CanvasLessonsLearnedScaleDo this first instead of scaling(or raise seed round to test hypotheses…rigorously)TestHypothesesSource: Steve Blank
CONFIDENTIAL PRESENTATION | PAGE16Should You Always Nail ItBefore You Scale It?• That is, when is it ok to be a little “fat”?• If you are in a winner take all market• Deep customer lock-in / high switching costs• Network effect businesses• Capital is cheap• Executive team knows how to scale• Upromise example• Series A: $34m (March 2000)• Series B: $55m (October 2000)• Launch service: April 2001
CONFIDENTIAL PRESENTATION | PAGE17Leading Thinkers/Books/Blogs• Geoffrey Moore: Crossing the Chasm (read this!)• Steve Blank: Customer Development Process (read FourSteps to the Epiphany)• Eric Ries: Lean Startups (read this too!)• Marty Cagan: Silicon Valley Product Group (great bookand blog)• HBS Prof Tom Eisenmann: Launching Tech Ventures(great blog)• Sean Ellis: Startup Marketing (great blog)• Andrew Chen: Growth Hackers (great blog)
CONFIDENTIAL PRESENTATION | PAGE18Additional Resources• My blog: www.SeeingBothSides.com• Quora on product management:• http://b.qr.ae/W1npOi (product mgt skills)• http://b.qr.ae/sYy4jS (Google product mgt)• HBS Case Note on Product Mgt - http://bit.ly/TQhw7w
CONFIDENTIAL PRESENTATION | PAGE19Product Management 101:The Search for Product-Market FitJeff BussgangGeneral Partner, Flybridge CapitalSenior Lecturer, Harvard Business School@bussgangApril 2013
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