presents

Product Management and
the Search for Product
Market Fit
Jeffery Bussgang
@Bussgang

CONFIDENTIAL PRESENTATION | ...
Product	
  Management	
  101:

Intelligent.ly
Jeff	
  Bussgang	
  
General	
  Partner,	
  Flybridge	
  Capital	
  
Senior	...
Session	
  Objectives
• What	
  people	
  mean	
  when	
  they	
  use	
  the	
  phrase,	
  
“Product	
  Market	
  Fit”	
  ...
Context	
  for	
  My	
  Perspective
• General	
  Partner	
  at	
  Flybridge	
  Capital,	
  early-­‐stage	
  VC	
  firm	
  ...
Agenda
• Customer	
  Development	
  /	
  Modern	
  Product	
  
Management	
  
• The	
  Product	
  Manager	
  –	
  Role	
  ...
Old	
  School	
  Product	
  Management
•
•
•
•
•

Report	
  to:	
  	
  Marketing	
  
Output:	
  	
  Requirements	
  Docume...
Modern	
  Product	
  Management
•
•
•
•
•

Report	
  to:	
  	
  CEO	
  
Output:	
  	
  Prototypes	
  
Methodology:	
  	
  ...
Customer	
  Development

vs.	
  Product	
  Development
Product Development
Concept/

Bus. Plan

Product
Dev.

Alpha/Beta
T...
“Lessons	
  Learned”	
  Drives	
  Scaling

Concept

Business 

Plan/Canvas

Test
Hypotheses

Lessons
Learned

Scale

Do th...
Hypothesis-­‐Driven

Entrepreneurship	
  

Pivot

Desirable

Perish
Viable

Envision
Venture
Concept

Generate
Business
Mo...
Startup
1. A	
  team	
  launching	
  a	
  new	
  product	
  under	
  
conditions	
  of	
  extreme	
  uncertainty	
  	
  
2...
The	
  Lean	
  Startup
• Many	
  startups	
  fail	
  because	
  they	
  waste	
  capital	
  and	
  time	
  
developing	
  ...
Lean	
  Startup	
  Principles
• No	
  idea	
  survives	
  first	
  customer	
  contact,	
  so	
  get	
  out	
  of	
  
the	...
CONFIDENTIAL PRESENTATION | PAGE
Practical	
  Pointers
• Outline	
  for	
  an	
  MRD	
  	
  
• PRD	
  template	
  
• Persona	
  examples:	
  http://bit.ly/...
Other	
  Tools/Techniques
•
•
•
•
•
•
•
•
•
•
•
•

Structured	
  idea	
  generation	
  
Business	
  model	
  generation	
 ...
Crossing	
  The	
  Chasm

CONFIDENTIAL PRESENTATION | PAGE
Where	
  are	
  You?
After	
  Product-­‐Market	
  Fit:	
  
Scaling	
  &	
  Optimization
• Building	
  a	
  robust,	
  feat...
Should	
  You	
  Always	
  Nail	
  It

Before	
  You	
  Scale	
  It?
• That	
  is,	
  when	
  is	
  it	
  ok	
  to	
  be	
...
Agenda
• Customer	
  Development	
  /	
  Modern	
  Product	
  
Management	
  
• The	
  Product	
  Manager	
  –	
  Role	
  ...
Product	
  Management	
  Skills
• Responsibilities:	
  

– Define	
  the	
  new	
  product	
  to	
  be	
  built	
  
– Secu...
Product	
  Management	
  Skills	
  (2)
•
•
•
•
•
•

Think	
  Big	
  
Simplify	
  (Product	
  Manager	
  as	
  Editor)	
  
...
A	
  Few	
  PM	
  Profiles

Adi	
  Kleiman	
  
• Tel	
  Aviv	
  University	
  (industrial	
  
engineering,	
  MBA)	
  
• S...
Product	
  Mgr	
  vs.	
  Proj	
  Mgr
• Project	
  Managers	
  
– Focus	
  on	
  successful	
  delivery	
  of	
  the	
  pro...
Product	
  Mgt	
  and	
  Sales
• The	
  pressure	
  to	
  “add	
  this	
  feature	
  to	
  win	
  this	
  deal”,	
  
parti...
Agenda
• Customer	
  Development	
  /	
  Modern	
  Product	
  
Management	
  
• The	
  Product	
  Manager	
  –	
  Role	
  ...
Open	
  English	
  Case	
  Study
• Online	
  English	
  language	
  learning	
  program	
  
• Founded	
  2006	
  by	
  And...
Personna	
  1

CONFIDENTIAL PRESENTATION | PAGE
Personna	
  2

CONFIDENTIAL PRESENTATION | PAGE
CONFIDENTIAL PRESENTATION | PAGE
Growing	
  Pains
“With	
  all	
  the	
  growth	
  and	
  developments,	
  there	
  was	
  very	
  little	
  
investment	
 ...
Choices
1. Rearchitect	
  vs.	
  Improve	
  in	
  place?	
  
– Continue	
  to	
  progress	
  with	
  incremental	
  improv...
Discussion

CONFIDENTIAL PRESENTATION | PAGE
Summary/Wrap

CONFIDENTIAL PRESENTATION | PAGE
Leading	
  Thinkers/Books/Blogs
• Geoffrey	
  Moore:	
  	
  Crossing	
  the	
  Chasm	
  (read	
  this!)	
  
• Steve	
  Bla...
Product	
  Management	
  101:

Intelligent.ly
Jeff	
  Bussgang	
  
General	
  Partner,	
  Flybridge	
  Capital	
  
Senior	...
Course Title
Course Title
INSTRUCTOR NAME

CONFIDENTIAL PRESENTATION | PAGE
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Product Management and the Search for Product Market Fit

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Jeff Bussgang on Product Management and the Search for Product-Market Fit

Startup product management is both an art and a science.
We're thrilled to host Jeff Bussgang - author, blogger, professor, VC partner, and generally one of the best all round startup minds we know - for an in-depth dive into best practices in product management as well as tactics to achieve product-market fit.

You'll Learn:
-The skills that characterize great product managers
-Tactics and techniques for finding product-market fit

About Jeff Bussgang:

Jeff Bussgang is a general partner at Flybridge Capital, a senior lecturer at Harvard Business School and an author/blogger (book: Mastering the VC Game, blog: Seeing Both Sides). He was previously an entrepreneur, cofounding Upromise (acquired by SallieMae) and serving as VP of marketing and products at Open Market (IPO 1996).

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Product Management and the Search for Product Market Fit

  1. 1. presents Product Management and the Search for Product Market Fit Jeffery Bussgang @Bussgang CONFIDENTIAL PRESENTATION | PAGE
  2. 2. Product  Management  101:
 Intelligent.ly Jeff  Bussgang   General  Partner,  Flybridge  Capital   Senior  Lecturer,  Harvard  Business  School   @bussgang   December  11,  2013 CONFIDENTIAL PRESENTATION | PAGE
  3. 3. Session  Objectives • What  people  mean  when  they  use  the  phrase,   “Product  Market  Fit”  (PMF),  plus:   – Customer  Development  Process   – Lean  Start-­‐Up  Theory   • What  is  great  product  management?   • Exposure  to  some  tools  and  techniques  to  be  a   great  product  manager CONFIDENTIAL PRESENTATION | PAGE
  4. 4. Context  for  My  Perspective • General  Partner  at  Flybridge  Capital,  early-­‐stage  VC  firm  in   Boston/NY,  current  fund:  $280M   ➢70+  portfolio  companies;  seed  and  Series  A  focused   • Senior  Lecturer  at  Harvard  Business  School   • Former  entrepreneur   ➢Cofounder/Pres.  Upromise  (acq’d  by  SallieMae)   ➢VP  at  Open  Market  (IPO  ‘96)   • Author:    Mastering  the  VC  Game   • Blog:    Seeing  Both  Sides CONFIDENTIAL PRESENTATION | PAGE
  5. 5. Agenda • Customer  Development  /  Modern  Product   Management   • The  Product  Manager  –  Role  &  Responsibilities   • Open  English  Case  Study CONFIDENTIAL PRESENTATION | PAGE
  6. 6. Old  School  Product  Management • • • • • Report  to:    Marketing   Output:    Requirements  Documents   Methodology:    Waterfall   Product  lifecycles:    Years   Decision-­‐Making:    Opinion-­‐Driven CONFIDENTIAL PRESENTATION | PAGE
  7. 7. Modern  Product  Management • • • • • Report  to:    CEO   Output:    Prototypes   Methodology:    Agile   Product  lifecycles:    Weeks   Decision-­‐Making:    Data-­‐Driven CONFIDENTIAL PRESENTATION | PAGE
  8. 8. Customer  Development
 vs.  Product  Development Product Development Concept/
 Bus. Plan Product Dev. Alpha/Beta Test Launch/ 1st Ship Customer Development Source: Steve Blank CONFIDENTIAL PRESENTATION | PAGE
  9. 9. “Lessons  Learned”  Drives  Scaling Concept Business 
 Plan/Canvas Test Hypotheses Lessons Learned Scale Do this first instead of scaling (or raise seed round to test hypotheses…rigorously) Source: Steve Blank CONFIDENTIAL PRESENTATION | PAGE
  10. 10. Hypothesis-­‐Driven
 Entrepreneurship   Pivot Desirable Perish Viable Envision Venture Concept Generate Business Model Hypotheses Feasible Product-Market Fit: Proceed with Scaling Test Hypothesis Using Minimum Viable Product Persevere with Next Test 10 CONFIDENTIAL PRESENTATION | PAGE
  11. 11. Startup 1. A  team  launching  a  new  product  under   conditions  of  extreme  uncertainty     2. A  vehicle  for  testing  hypotheses  about  such   an  entity Relentless  Focus Novel/Innovative Entrepreneurship:    the  pursuit  of  opportunity  beyond resources  you  currently  control             -­‐  HBS  Professor  Howard  Stevenson Resource  Constrained 11 CONFIDENTIAL PRESENTATION | PAGE
  12. 12. The  Lean  Startup • Many  startups  fail  because  they  waste  capital  and  time   developing  and  marketing  a  product  that  no  one  wants   • Lean  startups  rapidly  and  iteratively  test  hypotheses   about  a  new  venture  based  on  customer  feedback,  then   quickly  refine  promising  concepts  and  cull  flops   • Being  lean  does  NOT  mean  being  cheap,  it  is  a   methodology  for  optimizing—not  minimizing—resources   expenditures  by  avoiding  waste   • Being  lean  does  NOT  mean  avoiding  rigorous,  analytical   or  strategic  thinking 12 CONFIDENTIAL PRESENTATION | PAGE
  13. 13. Lean  Startup  Principles • No  idea  survives  first  customer  contact,  so  get  out  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  of   features/marketing  initiatives  that  delivers  the  most   validated  learning   • Rapidly  pivot  your  MVP/business  model  until  you   have  validation  and  product-­‐market  fit  (PMF)   • Don’t  scale  until  you  have  achieved  PMF 13 CONFIDENTIAL PRESENTATION | PAGE
  14. 14. CONFIDENTIAL PRESENTATION | PAGE
  15. 15. Practical  Pointers • Outline  for  an  MRD     • PRD  template   • Persona  examples:  http://bit.ly/18puWOx   CONFIDENTIAL PRESENTATION | PAGE
  16. 16. Other  Tools/Techniques • • • • • • • • • • • • Structured  idea  generation   Business  model  generation   Customer  discovery  process   Focus  groups   Customer  survey   Persona  development   Competitor  benchmarking   Wireframing   Prototype  development   Usability  testing   Conversion  funnel  analysis   A/B  test • • • • • • • • • • • • Landing  page  optimization   SEM/SEO  optimization   Inbound  marketing  design   PR  strategy   Customer  support  analysis   Clustering  and  feature   prioritization   Sales  pitch   Lead  qualification   Bus  dev  screening   Charter  user  program   Net  promoter  analysis   Lifetime  value  vs.  Customer   acquisition  costs 16 CONFIDENTIAL PRESENTATION | PAGE
  17. 17. Crossing  The  Chasm CONFIDENTIAL PRESENTATION | PAGE
  18. 18. Where  are  You? After  Product-­‐Market  Fit:   Scaling  &  Optimization • Building  a  robust,  feature-­‐rich   • Lean  startup  approach   product   • Hunch-­‐driven  hypotheses   • Minimum  viable  product  (MVP)   • Crossing  the  chasm   • Customer  development  process   • Metrics,  analytics,  funnels   • Designing  for  virality  &   • Selling  to  early  adopters   scalability   • Pivoting   • Challenges  with  corporate   • Bootstrapping   partnerships   • Small,  founding  team   • Building  a  brand   • Product-­‐centric  culture;   • Scaling  the  team;  more  formal   informal  roles   roles   • Early  in  sales  learning  curve • Scaling  a  sales  force Before  Product-­‐Market  Fit:   Search  &  Validation   CONFIDENTIAL PRESENTATION | PAGE
  19. 19. Should  You  Always  Nail  It
 Before  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 | PAGE
  20. 20. Agenda • Customer  Development  /  Modern  Product   Management   • The  Product  Manager  –  Role  &  Responsibilities   • Open  English  Case  Study CONFIDENTIAL PRESENTATION | PAGE
  21. 21. Product  Management  Skills • Responsibilities:   – Define  the  new  product  to  be  built   – Secure  the  resources  to  build  it   – Manage  its  development,  launch  and   ongoing  improvement   – Lead  the  cross-­‐functional  product  team • Attributes: – – – – – – Ability  to  influence  and  lead Resilience  and  tolerance  for  ambiguity Business  judgment  and  market  knowledge Strong  process  skills  and  detail  orientation Fluency  with  technology  and  implications  on  product  design,  business Design/UX  instincts Mini CEO – with none of the authority CONFIDENTIAL PRESENTATION | PAGE
  22. 22. Product  Management  Skills  (2) • • • • • • Think  Big   Simplify  (Product  Manager  as  Editor)   Prioritize   Forecast  and  Measure   Execute   Cross-­‐functional  leadership CONFIDENTIAL PRESENTATION | PAGE
  23. 23. A  Few  PM  Profiles Adi  Kleiman   • Tel  Aviv  University  (industrial   engineering,  MBA)   • SAP  Product  Manager  (4.5  yrs)   • VP  of  Products,  tracx Nagarjuna  Venna • Warangal  (CS  &  eng) • Siemens,  Lucent,  Banyan   engineer  (4.5  yrs) • MIT  Sloan • Start  up  product  manager • Founder,  Chief  Product  Officer,   BitSight CONFIDENTIAL PRESENTATION | PAGE
  24. 24. Product  Mgr  vs.  Proj  Mgr • Project  Managers   – Focus  on  successful  delivery  of  the  project:    deadline,  budget,  goals   – Coordinate  the  cross-­‐functional  team  involved  in  delivering  a   project  /  product   – Professional  operational  managers   – Live  and  die  by  the  “Gantt  Chart”   • Sometimes  PM  plays  Project  Mgr  role,  other  times  they  are   distinct  roles   • Important  to  be  clear  on  roles,  responsibilities  and   ownership  going  into  a  product  release CONFIDENTIAL PRESENTATION | PAGE
  25. 25. Product  Mgt  and  Sales • The  pressure  to  “add  this  feature  to  win  this  deal”,   particularly  at  the  end  of  the  quarter   • When  do  you  listen  to  your  salespeople  /  customers,  and   when  do  you  direct  them?   • Sometimes  need  to  slow  things  down  to  go  faster  –  focus   on  infrastructure,  scalability   • Special  cases  for  the  business  vs.  sticking  to  the  product   roadmap   • Opower  Case  Study:    token  system   – Opower  product  organization CONFIDENTIAL PRESENTATION | PAGE
  26. 26. Agenda • Customer  Development  /  Modern  Product   Management   • The  Product  Manager  –  Role  &  Responsibilities   • Open  English  Case  Study CONFIDENTIAL PRESENTATION | PAGE
  27. 27. Open  English  Case  Study • Online  English  language  learning  program   • Founded  2006  by  Andres  and  Nicolette  Moreno   – Andres:  Grew  up  in  VZ,  Simon  Bolivar  (engineering),   cofounded  offline  English  language  school   – Nic:  CO  born,  Pepperdine  (Business  and  Psychology),   non-­‐profit  exec,  got  into  but  chose  not  to  attend   Stanford  GSB  to  co-­‐found  Open  English   • Launched  in  late  2009  as  a  subscription  service   – ~$1,000  per  year  –  guarantee  you’ll  learn  English   – Pay  up  front  or  monthly CONFIDENTIAL PRESENTATION | PAGE
  28. 28. Personna  1 CONFIDENTIAL PRESENTATION | PAGE
  29. 29. Personna  2 CONFIDENTIAL PRESENTATION | PAGE
  30. 30. CONFIDENTIAL PRESENTATION | PAGE
  31. 31. Growing  Pains “With  all  the  growth  and  developments,  there  was  very  little   investment  in  the  learning  platform.”  –  Andres  Moreno   ! • Rigid  infrastructure  made  it  difficult  to  add  features   • Limited  personalization,  ability  to  predict  churn   • Back  end  that  wouldn’t  scale  more  than  20-­‐30%  above  current   volumes   • 12  month  product  with  one  price  point  vs.  ability  to  upsell,   continue  over  longer  duration  to  improve  LTV   • Payment  system  only  accepted  money  in  US  $  from  consumers   who  held  credit  cards,  not  local  currencies CONFIDENTIAL PRESENTATION | PAGE
  32. 32. Choices 1. Rearchitect  vs.  Improve  in  place?   – Continue  to  progress  with  incremental  improvements   rather  than  stop  everything,  pay  down  technical  debt  and   rearchitect  the  system  from  scratch   2. Inside  team  vs.  outside  team?   – Who  should  handle  the  work:    the  current  team  or  hire  an   outside  team  so  as  to  not  distract  the  current  team? If  you  were  Nic/Andres…what  would  you  do? CONFIDENTIAL PRESENTATION | PAGE
  33. 33. Discussion CONFIDENTIAL PRESENTATION | PAGE
  34. 34. Summary/Wrap CONFIDENTIAL PRESENTATION | PAGE
  35. 35. Leading  Thinkers/Books/Blogs • Geoffrey  Moore:    Crossing  the  Chasm  (read  this!)   • Steve  Blank:    Customer  Development  Process  (read  Four   Steps  to  the  Epiphany)   • Eric  Ries:  Lean  Startups  (read  this  too!)   • Marty  Cagan:  Silicon  Valley  Product  Group  (great  book  and   blog)   • HBS  Prof  Tom  Eisenmann:    Launching  Tech  Ventures   (great  blog)   • Sean  Ellis:  Startup  Marketing  (great  blog)   • Andrew  Chen:  Growth  Hackers  (great  blog) CONFIDENTIAL PRESENTATION | PAGE
  36. 36. Product  Management  101:
 Intelligent.ly Jeff  Bussgang   General  Partner,  Flybridge  Capital   Senior  Lecturer,  Harvard  Business  School   @bussgang   December  11,  2013 CONFIDENTIAL PRESENTATION | PAGE
  37. 37. Course Title Course Title INSTRUCTOR NAME CONFIDENTIAL PRESENTATION | PAGE

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