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A Playbook for Achieving Product-Market Fit

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Dan Olsen, The Lean Product Playbook , @danolsen
Room: C260
Everyone working on a new product is trying to achieve the same goal: product-market fit. Although product-market fit is one of the most important Lean Startup concepts, it’s also the least well defined. Dan Olsen shares the top advice from his book The Lean Product Playbook, including the Product-Market Fit Pyramid: an actionable model that breaks product-market fit down into 5 key elements. Dan also explains the Lean Product Process, a 6-step methodology with practical guidance on how to achieve product-market fit, illustrated with a real-world case study.

Published in: Business

A Playbook for Achieving Product-Market Fit

  1. 1. A Playbook For Achieving Product- Market Fit DAN OLSEN NOV 12, 2015
  2. 2. My  Background   Educa/on   n  Engineering  background   n  Stanford  MBA   n  UX  design,  web  and  mobile  coding     Experience   n  Led  Quicken  Product  Management  at  Intuit   n  Led  Product  Management  at  Friendster   n  CEO  &  Cofounder,  TechCrunch  award  winner  YourVersion   n  Product  consultant:  Facebook,  Box,  MicrosoM   n  Organizer:  Lean  Product  &  Lean  UX  Meetup  Silicon  Valley     I  will  post  my  slides  at  hOp://slideshare.net/dan_o   Copyright  ©  2015  @danolsen  
  3. 3. What  is  “Lean  Startup”  all  about?   n  Ar/culate  hypotheses   n  Iden/fy  fastest  way  to  test   n  Keep  scope  small:   minimum  viable  product  (MVP)   n  Test  with  customers   n  Learn  and  iterate   n  Achieve  product-­‐market  fit   Copyright  ©  2015  @danolsen   Sounds  easy,  right?  
  4. 4. That’s  Why  I  Wrote  a  How-­‐To  Guide   For  Achieving  Product-­‐Market  Fit     hOp:///ny.cc/LPP
  5. 5. What  is   Product-­‐Market   Fit?  
  6. 6. The  Product-­‐Market  Fit  Pyramid  
  7. 7. The  Product-­‐Market  Fit  Pyramid  
  8. 8. The  Product-­‐Market  Fit  Pyramid  
  9. 9. The  Product-­‐Market  Fit  Pyramid  
  10. 10. The  Lean  Product  Process  
  11. 11. The  Lean  Product  Process  
  12. 12. The  Lean  Product  Process  
  13. 13. The  Lean  Product  Process  
  14. 14. The  Lean  Product  Process  
  15. 15. The  Lean  Product  Process  
  16. 16. The  Lean  Product  Process  
  17. 17. The  Lean  Product  Process  
  18. 18. Copyright  ©  2015  @danolsen  
  19. 19. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  20. 20. Transporta/on  within  100  miles  of  my  home   Soccer  Mom       Speed  Demon   Carry  kids  &  gear   Safety   Fuel  economy   Go  fast   Looks  cool   Makes  me  look  cool             Target  Customer  Has  Dis/nct  Needs   High-­‐level  need     Target  Customer       Detailed  needs     Ideal  Product   Soccer  Mom   Speed  Demon  
  21. 21. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  22. 22.     n  Russians:  pencil   n  NASA:  space  pen   ($1  M  R&D  cost)           Example   n  Ability  to  write  in  space   (zero  gravity)   Problem  Space  vs.  Solu/on  Space   Problem  Space   n  A  customer  problem,  need   or  benefit  that  the  product   should  address   n  A  product  requirement   Solu/on  Space   n  A  specific  implementa/on   to  address  the  need  or   product  requirement   Copyright  ©  2015  @danolsen  
  23. 23. Problem  vs.  Solu/on  Space:  Product  Level   Problem  Space   (user  benefits)   Solu/on  Space   (product)   TurboTax TaxCut Pen and paper Prepare my taxes File my taxes Check my taxes Maximize deductions Reduce audit risk Copyright  ©  2015  @danolsen  
  24. 24. Problem  Space     Problem  vs.  Solu/on  Space:  Feature  Level   Copyright  ©  2015  @danolsen   Save time filing taxes Save time preparing taxes Maximize my tax deductions Check my return Reduce my audit risk Help me prepare taxes Empowerment/ Confidence Save Time Save Money Tax Interview Wizard Audit Risk Analyzer Tax Return Error Checker Tax Data Downloader Electronic Tax Return Filing Tax Deduction Finder Solu/on  Space  
  25. 25. Group  Exercise:  Customer  Needs   n  Think  about  Airbnb   n  Focus  on  the  problem  space   n  What  customer  needs  does  Airbnb  address?   Copyright  ©  2015  @danolsen  
  26. 26. Priori/zing  Needs:  Importance  vs.  Sa/sfac/on  Importance  of  User  Need   User  Sa/sfac/on  with  Current  Alterna/ves   Compe//ve Market  Opportunity   Low   High   Low   High   Not  Worth  Going  AMer   Copyright  ©  2015  @danolsen  
  27. 27. Crea/ng  Customer  Value   Copyright  ©  2015  @danolsen   Importance  of  User  Need   User  Sa/sfac/on  with  the  Product   Low   High   Low   High   Area  =   Customer   Value   Created   Area  =   Opportunity   to  Create   Customer   Value  
  28. 28. Users  Rated  13  Key  Features  in  a  Survey   Recommended  reading:   “What  Customers  Want”  by  Anthony  Ulwick   Great   Copyright  ©  2015  @danolsen   Bad  
  29. 29. Kano  Model:  User  Needs  &  Sa/sfac/on   User  Sa/sfac/on   User  Dissa/sfac/on   Performance   (more  is  beOer)   Delighter  (wow)   Need   not  met   Need   fully  met   Must  Have   Needs  &  features   migrate  over  /me   Copyright  ©  2015  @danolsen  
  30. 30. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  31. 31. What  is  Your  Value  Proposi/on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  beOer  than  compe/tors?     Must  Have  Benefit  1   Performance  Benefit  1   Performance  Benefit  2   Performance  Benefit  3   Delighter  Benefit  1   Delighter  Benefit  2   Copyright  ©  2015  @danolsen  
  32. 32. What  is  Your  Value  Proposi/on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  beOer  than  compe/tors?     Compe5tor  A   Compe5tor  B   You   Must  Have  Benefit  1   Performance  Benefit  1   Performance  Benefit  2   Performance  Benefit  3   Delighter  Benefit  1   Delighter  Benefit  2   Copyright  ©  2015  @danolsen  
  33. 33. What  is  Your  Value  Proposi/on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  beOer  than  compe/tors?     Compe5tor  A   Compe5tor  B   You   Must  Have  Benefit  1   Y   Y   Performance  Benefit  1   High   Low   Performance  Benefit  2   Low   High   Performance  Benefit  3   Med   Med   Delighter  Benefit  1   Y   -­‐   Delighter  Benefit  2   -­‐   -­‐   Copyright  ©  2015  @danolsen  
  34. 34. What  is  Your  Value  Proposi/on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  beOer  than  compe/tors?     Compe5tor  A   Compe5tor  B   You   Must  Have  Benefit  1   Y   Y   Y   Performance  Benefit  1   High   Low   Med   Performance  Benefit  2   Low   High   Low   Performance  Benefit  3   Med   Med   High   Delighter  Benefit  1   Y   -­‐   -­‐   Delighter  Benefit  2   -­‐   -­‐   Y   Copyright  ©  2015  @danolsen  
  35. 35. Group  Exercise:  Value  Proposi/on   n  Recall  our  discussion  on  Airbnb  user  needs   n  Who  are  Airbnb’s  compe/tors?   n  Think  about  how  Airbnb  meets  those  needs   beOer  than  alterna/ve  solu/ons   n  What  are  Airbnb’s  differen/ators?   Copyright  ©  2015  @danolsen  
  36. 36. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  37. 37. What  is  an  MVP?   Courtesy  of  Jussi  Pasanen   See  Aaron  Walter’s  book  Designing  for  Emo-on   Copyright  ©  2015  @danolsen  
  38. 38. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  39. 39. The  UX  Design  Iceberg   Copyright  ©  2015  @danolsen   What  most   people  see   and  react  to   What  good   product  teams   think  about  
  40. 40. Geqng  Customer  Feedback   Problem  Space  vs.  Solu/on  Space   n  Customers  CAN’T  ar/culate  problem  space   n  Customers  CAN  react  to  solu/on  space   n  That’s  why  you  need  something  tangible  to   show  to  customers  to  get  good  feedback   Copyright  ©  2015  @danolsen  
  41. 41. Product  Design  Ar/facts   Copyright  ©  2015  @danolsen   Hand   sketch   Interac/vity   Fidelity   Interac/ve   Prototype   Sta/c   Wireframe*   Clickable   Wireframe*   Mockup     Clickable   Mockup**   *  Balsamiq:  balsamiq.com   **  InVision:  invisionapp.com   Live   Product  
  42. 42. Itera/ve  Design  &  Test  Workflow   Copyright  ©  2015  @danolsen   Hand   sketches   Interac/vity   Fidelity   Clickable   Wireframes   Clickable   Mockups   Live   Product   Test   Test   Test  
  43. 43. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden/fy  underserved  customer  needs   3. Define  your  value  proposi/on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  @danolsen  
  44. 44. “Ramen”  User  Tes/ng  Session   10  -­‐  15  min:  Warm  Up  and  Discovery   n  Understand  user  needs,  priori/es   n  Learn  about  solu/ons  they  use,  likes  and  dislikes   30  -­‐  50  min:  User  Feedback  on  Prototype   n  Show  user  mockup/product   n  Be  as  non-­‐directed  as  possible:  like  you’re  not  there   n  Ask  ques/ons  to  gain  understanding   5  -­‐  10  min:  Wrap  up   n  Answer  any  ques/ons  or  issues  that  came  up   n  Point  out/explain  features  you  want  to  highlight   n  Ask  if  they  would  use  the  product   Copyright  ©  2015  @danolsen  
  45. 45. Dos  &  Don’ts  of  User  Tes/ng  Sessions   Do   n  Explain  to  the  user   n  Feedback  will  help  improve  the  product   n  Not  to  worry  about  hur/ng  your  feelings   n  “Think  Aloud  Protocol”   n  Try  to  be  a  fly  on  the  wall   n  Take  notes  and  review  them  aMerwards  for  take-­‐aways   Don’t   n  Ask  leading  or  close-­‐ended  ques/ons   n  “Help” user  or  explain  the  UI  (e.g.,  “click  over  here”)   n  Get  defensive  or  blame  the  user   Copyright  ©  2015  @danolsen  
  46. 46. What  Are  You  Tes/ng  and  Learning?   Problem  Space   All  your  hypotheses   Solu/on  Space   User  reac/ons   Feature  Set   UX  Design   Messaging     Copyright  ©  2015  @danolsen  
  47. 47. Itera/ng  Between  User  Tes/ng  Waves    Customer  Feedback   Mockups  /  Code   Copyright  ©  2015  @danolsen   Problem  Space   All  your  hypotheses   Solu/on  Space   User  reac/ons  
  48. 48. Problem   Space   Solu5on   Space   Copyright  ©  2015  @danolsen  
  49. 49. Persevere  or  Pivot?   Increasing   Product-­‐Market  Fit   Pivot   Product-­‐Market  Fit  =   Geqng  enough  data  to   validate  you’re  climbing  up   the  right  mountain   Copyright  ©  2015  @danolsen  
  50. 50. The  Lean  Product  Process:   Marke/ngReport.com  Case  Study   Copyright  ©  2015  @danolsen  
  51. 51. Marke/ngReport.com  Case  Study   n  My  client  (CEO)  had  a  new  product  idea   n  Team:  me,  CEO,  VP  marke/ng,  UI  designer   n  Goals   n  See  if  business  opportunity  exists   n  Do  so  quickly  and  inexpensively  (no  coding)   n  “Marke/ng  report” would  let  consumers   control  the  direct  mail  that  they  receive   n  Analogous  to  credit  report   Copyright  ©  2015  @danolsen  
  52. 52. Mapping  Out  Customer  Benefits   Reduce Junk Mail Find out what “they” know about you Money Saving Offers Compare Yourself to Others Social Networking Marketing Report Marketing Score Marketing Profile Save Trees “Marke/ng  Shield”   Concept   “Marke/ng  Saver”   Concept   Copyright  ©  2015  @danolsen  
  53. 53. Copyright  ©  2015  @danolsen  
  54. 54. Recrui/ng  Target  Customers   n  Used  customer  research  firm  (panel)   n  Wrote  screener  to  iden/fy  target  customers   n  Work  full-­‐/me   n  Fit  for  Saver:  use  coupons,  Costco  membership   n  Fit  for  Shield:  use  paper  shredder,  block  caller  ID   n  Offered  $75  compensa/on   n  Scheduled  3  groups  of  2  or  3  people  for  90  min   n  Moderated  each  group  through  the  mockups   Copyright  ©  2015  @danolsen  
  55. 55. Learning  from  First  Wave  of  User  Tests   Reduce Junk Mail Find out what “they” know about you Money Saving Offers Compare Yourself to Others Social Networking Marketing Report Marketing Score Marketing Profile Save Trees Legend Strong appeal Some appeal Low appeal “Shield” Concept “Saver” Concept Copyright  ©  2015  @danolsen  
  56. 56. Copyright  ©  2015  @danolsen  
  57. 57. Summary  of    Case  Study   n  4  weeks  to  validated  product  concept   n  1  round  of  itera/on   n  Zero  coding   n  Reasonable  cost   n  Customers  willing  to  pay  $10/month   n  Trimmed  away  non-­‐valuable  pieces   n  You  can  achieve  similar  results   Copyright  ©  2015  @danolsen  
  58. 58. The  Lean  Product  Process   1.  Determine  your  target  customer   2.  Iden/fy  underserved  customer  needs   3.  Define  your  value  proposi/on   4.  Specify  your  MVP  feature  set   5.  Create  your  MVP  prototype   6.  Test  your  MVP  with  customers   Iterate:   §  Hypothesize-­‐Design-­‐Test-­‐Learn  loop   §  Improve  product-­‐market  fit   Copyright  ©  2015  @danolsen  
  59. 59. Questions? @danolsen   olsensolu/ons.com   slideshare.net/dan_o   leanproductplaybook.com     Book:  hOp:///ny.cc/LPP    

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