Product Management for Startups
Dan Olsen
CEO, YourVersion
Nov 14, 2009
                     Copyright © 2009 YourVersion
My Background
Education
  BS, Electrical Engineering, Northwestern
  MS, Industrial Engineering, Virginia Tech
  MBA, Stan...
What is Product Management?




                    Copyright © 2009 YourVersion
Product Management is
        Critical Link in Value Creation



    Market            Product          Development 
    •...
What’s the Formula
        for a Winning Product?
A product that:
   Meets customers’ needs
   Is better than other altern...
Problem Space vs. Solution Space
 Problem Space                  Solution Space
   A customer problem,            A specif...
Problem Space vs. Solution Space
         Product Level
Problem Space       Solution Space
 (user benefit)       (product)...
Problem Space vs. Solution Space
           Feature Level
Problem Space              Solution Space
 (user benefit)       ...
How Do You Prioritize User Benefits 
     and Product Features?
Need a framework for prioritization
  Which user benefits ...
High Importance + Low Satisfaction =
Importance of User Need
                        Opportunity
                         ...
Kano Model: User Needs & Satisfaction
              User Satisfaction
                                  Delighter (wow)


...
Olsen’s Hierarchy of Web User Needs
       (adapted from Maslow)
    Customer’s Perspective                               ...
Importance vs. Satisfaction
       Ask Users to Rate for Each Feature
              100                                   ...
Prioritization and Scope
Customer value is only half of the story
How much engineering effort will it take?
Need to consid...
Prioritizing Product Ideas by ROI

                                         ?
Return (Value Created)




                 ...
Have to Prioritize Across Multiple 
                  Dimensions At The Same Time

                                       ...
User Benefits vs. Ease of Use
Q: If two products equally deliver the exact 
same user benefits, which product is better?
A...
The UI Design Iceberg
  What most 
  people see
  and react to                       Visual
                              ...
Elements of User Interface Design
Consists of Three Distinct Elements:
  Information Architecture
     Structure and layou...
“Ramen” Usability Testing for Startups
 Learning from 1‐on‐1 user feedback is invaluable
 Keep it real: have user bring th...
Approaching Business as an 
    Optimization Exercise


Given reality as it exists today,
optimize our business results
su...
Define the Equation of your Business
          “Peeling the Onion”
Advertising Business Model:
Profit = Revenue ‐ Cost

  ...
Sample Signup Page Yield Data
                                                Daily Signup Page Yield vs. Time
           ...
Identifying the  “Critical Few” Metrics
  What are the metrics for your business?
  Where is current value for each metric...
Optimization through Iteration:
  Continuous Improvement
                   Measure
                  the metric


       ...
Early Stage Product Management 
            Cheat Sheet
Understand your customers’ needs
Use problem space thinking to ens...
Great way to stay on top of your interests
Real‐time discovery engine
  Discovers new, relevant content tailored to your 
...
Questions?
@danolsen
dan@yourversion.com   www.yourversion.com
                             Copyright © 2009 YourVersion
Product Management for Startups by Dan Olsen
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Product Management for Startups by Dan Olsen

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My Product Management talk from the NextGen Conference at Stanford on Nov 14, 2009.

Published in: Business, Technology
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  • Hi. If you like my presentations, I encourage you to check out my startup YourVersion http://www.yourversion.com where I've been applying the product management principles that I talk about in my SlideShares.
    YourVersion is 'Pandora for your real-time web content': a personalized discovery engine that brings you the latest relevant news, blogs, tweets, and videos tailored to your specific interests.
    We launched to the public at the 2009 TechCrunch50 Conference where we won the People’s Choice Award.

    In addition to the website, we also offer a free iPad app http://bit.ly/yv-hd, a free iPhone app http://bit.ly/yv-app, and a free Android app so you can discover on the go. We also offer free browser extensions for Firefox, Chrome, and Safari browsers. Learn more at http://yourversion.com

    I'd love to hear any feedback or suggestions you have on our products.

    Thanks!

    Dan Olsen
    CEO & Cofounder, YourVersion
    http://www.yourversion.com
       Reply 
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  • If you like my presentation, I'm excited to tell you about an all-day workshop I'm hosting on Jun 12th in Palo Alto. It's called 'Toolbox', and we'll be covering best practices in product management, UI design, and marketing with an emphasis on startups.

    Learn more at http://toolbox.eventbrite.com. Please use promo code 'slideshare' for a big discount! Thanks!
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Product Management for Startups by Dan Olsen

  1. 1. Product Management for Startups Dan Olsen CEO, YourVersion Nov 14, 2009 Copyright © 2009 YourVersion
  2. 2. My Background Education BS, Electrical Engineering, Northwestern MS, Industrial Engineering, Virginia Tech MBA, Stanford PHP, MySQL, JavaScript, XHTML, CSS, UI design 18 years of Product Management Experience Managed submarine design for 5 years 5 years at Intuit, led Quicken Product Management Led Product Management at Friendster Olsen Solutions LLC, PM consultant for startups CEO & Founder of YourVersion, real‐time discovery startup Will post slides to http://slideshare.net/dan_o Copyright © 2009 YourVersion
  3. 3. What is Product Management? Copyright © 2009 YourVersion
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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
  16. 16. Have to Prioritize Across Multiple  Dimensions At The Same Time Ease of Use Customer Value Quality Functionality Customer  Understanding Time Copyright © 2009 YourVersion
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. “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
  21. 21. Approaching Business as an  Optimization Exercise Given reality as it exists today, optimize our business results subject to our resource constraints. Copyright © 2009 YourVersion
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 27. Great way to stay on top of your interests Real‐time discovery engine Discovers new, relevant content tailored to your  specific interests News, Blogs, Tweets, Webpages, Videos, Products Bookmark and share via email, Twitter, Facebook Launched at TechCrunch50, won People’s Choice Free iPhone app, optional Firefox toolbar Check it out at www.yourversion.com Copyright © 2009 YourVersion
  28. 28. Questions? @danolsen dan@yourversion.com www.yourversion.com Copyright © 2009 YourVersion
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