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Fgvn 3 25-2015


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Techniques to Find Product-Market Fit - from Growth Hacking to Lean Methodology

Published in: Business
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Fgvn 3 25-2015

  1. 1. CONFIDENTIAL PRESENTATION | PAGE1 The Search for Product-Market Fit Jeff Bussgang General Partner, Flybridge Capital Senior Lecturer, Harvard Business School March 25, 2015
  2. 2. CONFIDENTIAL PRESENTATION | PAGE2 Concepts • What people mean when they use the phrase, “Product Market Fit” (PMF), plus: – Lean Start-Up Theory – Customer Development Process • Help you devise your approach to achieving PMF and avoid wasting a lot of money • What is great product management?
  3. 3. CONFIDENTIAL PRESENTATION | PAGE3 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 3
  4. 4. CONFIDENTIAL PRESENTATION | PAGE4 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 4
  5. 5. CONFIDENTIAL PRESENTATION | PAGE5 Where 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 curve After Product-Market Fit: Scaling & Optimization • Building a robust, feature-rich product • Crossing the chasm • Metrics, analytics, funnels • Designing for virality & scalability • Challenges with corporate partnerships • Building a brand • Scaling the team; more formal roles • Scaling a sales force
  6. 6. CONFIDENTIAL PRESENTATION | PAGE6 Careful What You Measure Vanity Metrics • Downloads • Page views/traffic • Registered users • Twitter followers • Pipeline • Press mentions Actionable Metrics • Retention • Repeat usage • Cohort analysis • Net promoter score • A/B test results Impress investors… …and your mother Maximize learning… …and create equity value
  8. 8. CONFIDENTIAL PRESENTATION | PAGE8 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
  9. 9. CONFIDENTIAL PRESENTATION | PAGE9 Tools/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. Customer acquisition costs 9
  10. 10. CONFIDENTIAL PRESENTATION | PAGE10 Can You Growth Hack Your Way There? • Leverage other people’s platforms, especially social (e.g., Twitter, Facebook) • Guerilla outreach (e.g., reposting Pinboards of reporters as a PR tactic) • At intersection of product and marketing, can unify the company around common goal • Users that come via growth hacks can be less engaged than others – need to watch cohort analysis carefully • Dependency on other platforms can be dangerous – e.g., they can cut you off • Tactics may give temporary boost, but can’t scale Range of techniques that combine the culture of hacking with startups marketing tools to drive growth Growth Hacking Benefits Growth Hacking Gotchas
  11. 11. CONFIDENTIAL PRESENTATION | PAGE11 “Lessons Learned” Drives Funding Concept Business Plan/Canvas Lessons Learned Series A Do this first instead of fund raising (or raise seed round to test hypotheses…rigorously) Test Hypotheses Source: Steve Blank
  12. 12. CONFIDENTIAL PRESENTATION | PAGE12 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)
  13. 13. CONFIDENTIAL PRESENTATION | PAGE13 The Search for Product-Market Fit Jeff Bussgang General Partner, Flybridge Capital Senior Lecturer, Harvard Business School March 25, 2015