From Product Zero to Product Hero: How to Build a Great Web 2.0 Product by Dan Olsen

What’s the Formula for a Great Web 2.0 Product?A product that: Meets customers’ needs Is better than other alternatives Is easy to use Has a good value/priceAlso known as product‐market fitSimple, right?It’s easy to understand what a great product is at the conceptual levelHOW to achieve that product is the hard part Copyright © 2011 YourVersion

My BackgroundEducation BS, Electrical Engineering, Northwestern MS, Industrial Engineering, Virginia Tech MBA, Stanford Web development and UI design19 years of Product Management Experience Managed submarine design for 5 years 5 years at Intuit, led Quicken Product Management Led Product Management at Friendster PM consultant to startups: Box.net, YouSendIt, Epocrates CEO & Cofounder of YourVersion, startup building “Pandora for your real‐time web content” Will post slides to slideshare.net/dan_o Copyright © 2011 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 requirementExample: Ability to write in space NASA: space pen (zero gravity) ($1 M R&D cost) Russians: pencil Copyright © 2011 YourVersion

Problem Space vs. Solution Space: Product Level Problem Space Solution Space (user benefit) (product) Prepare Pen and my taxes paperCheck my File my TurboTax taxes taxes Maximize Reduce TaxCutdeductions audit risk Copyright © 2011 YourVersion

Problem vs. Solution Space: Feature Level Problem Space Solution Space Help me Tax Interview prepare taxes WizardEmpowerement/ Reduce my Audit Risk Confidence audit risk Analyzer Check my Tax Return return Error Checker Save time Tax Data preparing taxes Downloader Save Time Save time filing Electronic Tax taxes Return Filing Maximize my Tax Deduction Save Money tax deductions Finder Copyright © 2011 YourVersion

Prioritization Part 1:Customer Value: Benefits & FeaturesHow do you prioritize: 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 © 2011 YourVersion

High Importance + Low Satisfaction = Opportunity to Add Customer ValueImportance of User Need High Competitive Opportunity Market Not Worth Going After Low Low High User Satisfaction with Current Alternatives Copyright © 2011 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 SatisfactionRecommended reading: “What Customers Want” by Anthony Ulwick Copyright © 2011 YourVersion

Kano Model: User Needs & Satisfaction User Satisfaction Delighter (wow) Performance (more is better) Need Neednot met fully met Must Have Needs & features migrate over time User Dissatisfaction Copyright © 2011 YourVersion

What is Your Value Proposition? Which user benefits are you providing? How are you better than competitors? Competitor A Competitor B YouMust Have Benefit 1 Y Y YPerformance Benefit 1 High Low MedPerformance Benefit 2 Low High LowPerformance Benefit 3 Med Med HighDelighter Benefit 1 Y ‐ ‐Delighter Benefit 2 ‐ ‐ Y Copyright © 2011 YourVersion

Prioritization Part 2:Customer Value & Engineering EffortCustomer value is only half the equationHow much engineering effort will it take?Need to consider value and effort (ROI)Ruthlessly prioritize: rank order (10 Highs = FAIL)Be deliberate about scope & keep it small Strategy = deciding what you’re NOT doing Break features down into smaller chunks LAUNCH! Smaller scope → faster iterations → higher cust value Copyright © 2011 YourVersion

User Benefits vs. Ease of UseQ: 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 & frustration Makes user feel empoweredUI Design can be differentiatorOlsen’s Law: “The less user effort required, the higher the percentage of users who will do it” Copyright © 2011 YourVersion

The UI Design Iceberg What most people see and react to Visual Design What good product people Interaction think about Design Information Architecture Conceptual DesignRecommended reading: Jesse James Garrett’s“Elements of User Experience” chart, free at www.jjg.net Copyright © 2011 YourVersion

Elements of User Interface DesignConsists 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 © 2011 YourVersion

Customer Feedback: Problem Space vs. Solution SpaceCustomers CAN’T articulate problem spaceCustomers CAN react to solution spaceBut, customers can’t give you solutionsCustomers aren’t designers Multiple use cases and priorities Trade‐offs and constraints Don’t have PM, design, and technical skills Copyright © 2011 YourVersion

Iterating Your Product Vector Based on User Feedback in Solution Space Problem Space Solution Space (your mental model) (what users can react to) Help user Help userbook travel plan travel Mockups / Code Customer Feedback Copyright © 2011 YourVersion

What Are You Getting Feedback & Learnings About? Problem Space Solution Space(your mental model) (what users can react to) Feature Set Customer Understanding (needs & preferences) UI Design Messaging Copyright © 2011 YourVersion

“Ramen” User Feedback for StartupsAnyone can do it!Ingredients: Solution‐space product/mockup to test 1 customer (with laptop if testing code) 1 desk 1 person to conduct the session Pen and paper Optional note‐taker and observers Copyright © 2011 YourVersion

Typical Format for Customer Session5 ‐ 10 min: Ask questions to understand user needs and solutions they currently use30 ‐ 50 min: User feedback Show user product/mockup Non‐directed as much as possible When necessary, direct user to attempt to perform a specific task5 ‐ 10 min: Wrap‐up Answer any user questions that came up Point out/explain features you want to highlight Ask them if they would use the product Copyright © 2011 YourVersion

Dos & Don’ts of Conducting UsabilityDo Explain to the user: Their usability test will help improve the product Not to worry about hurting your feelings “Think Aloud Protocol” Ask user to attempt the task, then be a fly on the wall Ask non‐leading, open‐ended questions Take notes and review them afterwards for take‐awaysDon’t Ask leading questions “Help” the user or explain the UI (e.g., “click over here”) Respond to user frustration or questions (until test is over) Get defensive Blame the user Copyright © 2011 YourVersion

Product‐Market Fit Case Study: MarketingReport.comMy consulting client, CEO of TrustedID, had an idea for a new productTeam: me, CEO, head of marketing,UI design consultantGoal: Validate product‐market fit quickly, cheaply without writing a single line of code Determine if their was a business opportunity here Copyright © 2011 YourVersion

Product‐Market Fit Case Study: Developing Product ConceptProduct Concept was “marketing report” that let consumers control the direct mail that they receiveConcept was fuzzy with various components, so I broke it into 2 different “flavors”: #1 “Marketing Shield”: Service to reduce/stop junk mail #2 “Marketing Saver”: Opt in & receive money‐saving offers Each product concept consisted of several modules that each mapped to a specific user benefitWorked with UI designer to create paper mockups of pages for each flavor concept (5 pages each) Copyright © 2011 YourVersion

Clustering Potential User Benefits to Create Product Concepts“Shield” Concept “Saver” Concept Reduce Find out what Money Compare SocialJunk Mail “they” know Saving Yourself Networking about you Offers to Others Save Marketing Trees Report Marketing Marketing Score Profile Copyright © 2011 YourVersion

Product‐Market Fit Case Study: Recruiting PeopleTelephone recruit of prospective customers Wrote phone‐screen questionnaire to create rough target customer segmentation Wanted users who work full‐time & use internet Fit for opt‐in concept: use coupons, Costco membership Fit for anti‐junk mail concept: use paper shredder, block caller IDScheduled 3 groups of 2 or 3 people to discuss each product concept for 90 minutesModerated each group through the paper mockups to hear their feedback Copyright © 2011 YourVersion

Product‐Market Fit Case Study: Findings on Concepts &User Benefits“Shield” Concept “Saver” Concept Reduce Find out what Money Compare SocialJunk Mail “they” know Saving Yourself Networking about you Offers to Others Save Marketing Trees Report Legend Marketing Marketing Score Profile Strong appeal Somewhat positive Low appeal Copyright © 2011 YourVersion

Product‐Market Fit Case Study: Learnings from ResearchLearned that “Shield” (anti‐junk mail) concept was stronger than “Saver”People didn’t like many of the “Saver” concept componentsLearned users’ concerns / questions about “Shield”conceptRefined “Shield” concept: Removed irrelevant components Improved messaging to address user concerns / questionsValidated revised “Shield” concept with quick 2ndround of tests No customer concerns Clear willingness to pay Copyright © 2011 YourVersion

Product‐Market Fit Case Study: Summary4 weeks from 1st meeting to validated product concept with zero codingCost $1,500 to talk to 20 users ($75 each)1 round of iteration on product conceptIdentified compelling concept that users are willing to pay $10/month forTrimmed away non‐valuable piecesYou can achieve similar results Copyright © 2011 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 © 2011 YourVersion

How to Track Your MetricsTrack each metric as daily time series Unique Page Ad New User … Date Visitors views Revenue Sign‐ups 4/24/08 10,100 29,600 25 490 4/25/08 10,500 27,100 24 480 …Create ratios from primary metrics: X / Y Example: How good is your registration page? Okay: # of registered users per day Better: registration conversion rate = # registered users / # uniques to reg page Copyright © 2011 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 © 2011 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 ReturnReturn Investment Investment Investment Copyright © 2011 YourVersion

Metrics to Validate Product‐Market Fit Survey results Importance & Satisfaction Net Promoter Score Survey.io “How would you feel if you could no longer use Product X?” Very disappointed, Somewhat disappointed, Not disappointed User behavior Prospects sign up (high conversion rate) They keep using it (high retention rate) They use it often (high frequency of use) Copyright © 2011 YourVersion

Adding Metrics and Optimization to your Product Process Site Level Business Product Prioritized Plan Objectives Roadmap Feature List Scoping Feature Level Requirements Design & Design Code Test LaunchDevelop Metrics & User Optimize Feedback Copyright © 2011 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 © 2011 YourVersion

Web 2.0 Product Hero Cheat SheetClarify problem space by iterating in the solution space & getting user feedbackRevise feature set, UI design, and messaging to improve product‐market fitRuthlessly prioritize based on ROIDefine equation of your businessIdentify and track key metricsLaunch, learn, and iterate Copyright © 2011 YourVersion

Try it out at: http://www.yourversion.com Free apps: iPad http://bit.ly/yv‐hd iPhone http://bit.ly/yv‐appAndroid phone http://bit.ly/yv‐apAndroid tablet http://bit.ly/yv‐tab Copyright © 2011 YourVersion

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http://www.conseilsmarketing.fr	29
http://bgrigson.posterous.com	3
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http://www.inmomatica.com	1
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From Product Zero to Product Hero: How to Build a Great Web 2.0 Product by Dan Olsen

by Dan Olsen on Mar 29, 2011

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From Product Zero to Product Hero: How to Build a Great Web 2.0 Product by Dan Olsen — Presentation Transcript