More Related Content Similar to Good to Great: Achieving Product Excellence in Web 2.0 by Dan Olsen (20) Good to Great: Achieving Product Excellence in Web 2.0 by Dan Olsen3. My Background
Education
BS, Electrical Engineering, Northwestern
MS, Industrial Engineering, Virginia Tech
MBA, Stanford
PHP, MySQL, JavaScript, XHTML, CSS, UI design
17 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 start‐ups
CEO & Founder of YourVersion, Social Discovery start‐up
Copyright © 2008 Olsen Solutions LLC 7. How do you Create Customer Value?
By offering a product that:
Provides benefits to customers
Fulfills customers’ needs
Solves customers’ problem
Is easy to use
At a good price
Even “free” products have cost to user:
time and attention, which is limited
Is better than other alternatives
Copyright © 2008 Olsen Solutions LLC 8. Types of Customer Benefits
Money
Save money (e.g., VOIP software)
Make more money (e.g., affiliate programs)
Time savings / convenience
Finding desired information (e.g., search engines)
Booking travel (e.g., travel sites)
Communication (e.g., instant messaging)
Emotional
Control (e.g., Quicken)
Feeling informed (e.g., news sites)
Confidence / security (e.g., anti‐virus software)
Enjoyment / entertainment (e.g., YouTube)
Self‐expression (e.g., Facebook)
Status
Copyright © 2008 Olsen Solutions LLC 9. The Customer Benefits “Ladder”
…which means one less thing to
Higher‐level
worry about in my hectic life
benefit
(more abstract)
…which makes me feel more in
control of my finances
…which gives me a clear picture
of how much money I have
Lower‐level Quicken makes it easy for me
benefit to balance my checkbook
(more specific)
Copyright © 2008 Olsen Solutions LLC 10. Olsen’s Hierarchy of Web User Needs
(adapted from Maslow)
Customer’s Perspective What does it mean to us?
Satisfaction
Increasing
Usability & Design
How compelling and easy
to use is the functionality? Feature Set
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 © 2008 Olsen Solutions LLC 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 © 2008 Olsen Solutions LLC 12. 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 © 2008 Olsen Solutions LLC 13. How to Elicit User Needs & Problems
Need to understand your customers
Talk to them
Ask them what they like and don’t like
Observe their behavior
How can you do this with millions of customers?
Quantitative research (i.e., surveys)
Site analytics and usage metrics
Still need qualitative input to hone judgement
Customer suggestions, support emails/calls
Best tool: informal, 1‐on‐1 usability sessions
Copyright © 2008 Olsen Solutions LLC 15. A Product Manager by any Other
Name Would Smell as Sweet
Product managers are sometimes called
Product marketing manager
Program manager
Project manager
Label and definition of role can vary
Based on industry or company
Based on B2C (consumer) vs. B2B (enterprise)
Based on stage of company
Can be area of responsibility vs. actual position
Copyright © 2008 Olsen Solutions LLC 16. Product Management is
Critical Link in Value Creation
Market Product Development
• Current Management Team
customers
• Prospective
customers
• Competitors
Copyright © 2008 Olsen Solutions LLC 17. A Process View of Product Management
“Inbound”
Product “Outbound”
Management Product
Long Business Product Management
Term Strategy Strategy
Market/
Sell
Short Business Product Product
Term Objectives Objectives Development
Service/
Support
Copyright © 2008 Olsen Solutions LLC 20. What does ROI Mean in a
Product Development Context?
Return on Investment (ROI)
Investment = cost or resources required
Return = “profit” gained from investment
What is the Return (R)?
Customer value created, which leads to:
Business value created (revenue)
What is the Investment (I)?
Main investment = developers’ time
Measured in developer‐days or developer‐months
Copyright © 2008 Olsen Solutions LLC 21. Return (Value Created) Analyzing Product Ideas by ROI
?
4
Idea D
3
Idea A Idea B
2
Idea C
1
Idea F
1 2 3 4
Investment (developer-weeks)
Copyright © 2008 Olsen Solutions LLC 22. Return (Value Created) Prioritizing Order of Ideas by ROI
8
7 Idea C
6
5 Idea B
4
3
2 Idea A
1
1 2 3 4 5
Investment (developer-weeks)
Copyright © 2008 Olsen Solutions LLC 23. Can Improve ROI by Covering Key
“Product Thinking Steps” Efficiently
Business Product Product Site Level
Strategy Strategy Strategy Roadmap
Business Product Prioritized Release
Planning Objectives Objectives Feature List Plan
Feature Scoping
Level
Product Product
Design
Requirements Design
Code Test Launch
Development
Copyright © 2008 Olsen Solutions LLC 25. Web 2.0 PMs Need UI Design Skills
The Design Gap
Many start‐ups don’t have UI designers
Product managers often asked to fill the void
Faster pace = less documentation
Long‐winded MRDs and PRDs are dead
Now: short specs with wireframes, wikis,
whiteboard
UI changes can cause dramatic changes in
key business metrics: good and bad
Copyright © 2008 Olsen Solutions LLC 26. The UI Design Iceberg
What most
people see
and react to Visual
Design What good
PMs and
Designers
Interaction think about
Design
Information
Architecture
Conceptual
Design
Recommend reading: Jesse James Garrett’s “Elements
of User Experience” chart, free at www.jjg.net Copyright © 2008 Olsen Solutions LLC 27. Elements of UI Design
User Interface (UI) Design
Conceptual Design: e.g. Quicken’s checkbook metaphor
Interaction Design: flows and navigation
Information Architecture: structure and layout
Visual Design: graphical treatment, aka chrome
Documents used
Flow charts
Wireframes (often black & white)
Mock‐ups or comps (e.g., image created in Photoshop, etc.)
Prototypes (interactive, e.g. HTML or Flash)
Usability Testing
Evaluating how easy your product is to use
Can solicit feedback on product or design documents
Copyright © 2008 Olsen Solutions LLC 31. The Fold Isn’t Binary Either
768 px
% of Users
600 px 1024 px
Data courtesy of ClickTale
Free trial at www.clicktale.com Copyright © 2008 Olsen Solutions LLC 34. Optimizing The Equation
of your Business
“If you’re not clear on your objective,
you will probably never achieve it.”
Copyright © 2008 Olsen Solutions LLC 36. Identify the Equation of your Business
“Peeling the Onion”
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 Click‐through Rate
Copyright © 2008 Olsen Solutions LLC 38. Using Metrics to Optimize the
Equation of your Business
What are the key metrics for your business?
Where is the current value for each metric?
How many resources does it take to “move” each
metric a certain amount?
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 © 2008 Olsen Solutions LLC 41. Viral Loop Steps and Metrics
% of users Invites per Invite
sending sender click-through rate
invites
Fail
Active Invite Prospective Click
Conversion
Users Users Event
% of users Succeed
who are Don’t
active Click
Conversion
Users rate
• Multiplied together, these metrics determine your viral ratio
• Need to identify which metrics have biggest opportunity
Copyright © 2008 Olsen Solutions LLC 42. Define Your Funnel & Ratio Metrics
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Sent Invitation Receive Invitation Open email Click link Register
Delivery Open Click-through Registration
Success Rate Rate Rate Yield
Copyright © 2008 Olsen Solutions LLC 43. 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 © 2008 Olsen Solutions LLC 44. Optimization Through Iteration
Measure
the metric
Analyze
Learning the metric
Gaining Knowledge:
• Market Hypothesize
• Customer oppty’s to
improve
• Domain
• Usability Synthesize
(design the
enhancement)
Implement
enhancement
Copyright © 2008 Olsen Solutions LLC 46. Reducing Registration Process
Abandonment Rate
Abandonment Rate (7 Day Moving Average)
Steps 1-2
80%
70%
Abandonment Rate (7 Day Moving Average)
60%
50%
40%
30% Released
37% improvement
New Design in conversion rate
20%
10%
0%
10/14/02
10/21/02
10/28/02
11/11/02
11/18/02
11/25/02
12/16/02
12/23/02
12/30/02
10/7/02
11/4/02
12/2/02
12/9/02
1/13/03
1/20/03
1/6/03
Copyright © 2008 Olsen Solutions LLC 47. Summary: Cheat Sheet for
Building A Great Web 2.0 Product
Know your customers and their needs
Get clear on how you create customer value
Ruthlessly prioritize product ideas by ROI
Learn and apply UI design principles
Define the Equation of your Business
Instrument your site and track key metrics
Iterate quickly and continuously improve
Copyright © 2008 Olsen Solutions LLC