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How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne

Dan Olsen
Dan Olsen

Overview I gave of my book The Lean Product Playbook at Leading the Product Melbourne on October 20, 2016.

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how to lead
customer
Value
creation
DAN OLSEN
OCT 20, 2016
How	Does	Your	Company	
Make	Money?
By	Crea5ng	Value	
for	Customers
Product-Market	Fit
Who	at	your	company	
creates	value	for	customers?	
Who	at	your	company	
creates	value	for	customers?
Whose	job	is	it	to	
make	sure	your	company	is	
crea5ng	value	for	customers?
A	Product	Manager	
by	any	other	name…
Spiderman’s	mo.o:	
“With	great	power	comes	
great	responsibility”
Product	Manager’s	mo.o:	
	
	
Spiderman’s	mo.o:	
“With	great	power	comes	
great	responsibility”	
	
“With	great	responsibility	
comes	NO	power”
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
It’s	More	Like	This
As	a	Product	Manager,	Your	Job	Is	To:	
n  Herd	the	cats	inside	your	company	
n  To	get	them	to	create	value	for	customers	
n  Under	condi5ons	of	extreme	uncertainty	
Sounds	great!	
Where	do	I	sign	up?
That’s	Why	I	Wrote	
Copyright	©	2016	@danolsen
The	Product-Market	Fit	Pyramid
The	Product-Market	Fit	Pyramid
The	Product-Market	Fit	Pyramid
The	Product-Market	Fit	Pyramid
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
The	Lean	Product	Process
Copyright	©	2016	@danolsen
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
Transporta5on	within	100	km	of	my	home	
Soccer	Mom	
	
	
Speed	Demon	
Carry	kids	&	gear	
Safety	
Fuel	economy	
Go	fast	
Looks	cool	
Makes	me	look	cool	
	
	
	
	
	
Target	Customer	Has	Dis5nct	Needs	
High-level	need	
	
Target	Customer	
	
	
	
Detailed	needs	
	
Ideal	Product	
Soccer	Mom	 Speed	Demon
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
n  Russians:	pencil	
n  NASA:	space	pen	
($1	M	R&D	cost)	
	
	
	
	
Example	
n  Ability	to	write	in	space	
(zero	gravity)	
Problem	Space	vs.	Solu5on	Space	
Problem	Space	
n  A	customer	problem,	need	
or	benefit	that	the	product	
should	address	
n  A	product	requirement	
Solu5on	Space	
n  A	specific	implementa5on	
to	address	the	need	or	
product	requirement	
Copyright	©	2016	@danolsen
Problem	vs.	Solu5on	Space:	Product	Level	
Problem	Space	
(user	benefits)	
Solu5on	Space	
(product)	
TurboTax
TaxCut
Pen and
paper
Prepare
my taxes
File my
taxes
Check my
taxes
Maximize
deductions
Reduce
audit risk
Copyright	©	2016	@danolsen
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
Problem	Space	
	
Problem	vs.	Solu5on	Space:	Feature	Level	
Copyright	©	2016	@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
Solu5on	Space
Priori5zing	Needs:	Importance	vs.	Sa5sfac5on	Importance	of	User	Need	
User	Sa5sfac5on	with	Current	Alterna5ves	
Compe55ve
Market	
Low	 High	
Low	
High	
Not	Worth	Going	Ajer	
Copyright	©	2016	@danolsen
Priori5zing	Needs:	Importance	vs.	Sa5sfac5on	Importance	of	User	Need	
User	Sa5sfac5on	with	Current	Alterna5ves	
Low	 High	
Low	
High	
Copyright	©	2016	@danolsen
Priori5zing	Needs:	Importance	vs.	Sa5sfac5on	Importance	of	User	Need	
User	Sa5sfac5on	with	Current	Alterna5ves	
Low	 High	
Low	
High	
Copyright	©	2016	@danolsen
Priori5zing	Needs:	Importance	vs.	Sa5sfac5on	Importance	of	User	Need	
User	Sa5sfac5on	with	Current	Alterna5ves	
Compe55ve
Market	Opportunity	
Low	 High	
Low	
High	
Not	Worth	Going	Ajer	
Copyright	©	2016	@danolsen
Priori5zing	Needs:	Importance	vs.	Sa5sfac5on	Importance	of	User	Need	
User	Sa5sfac5on	with	Current	Alterna5ves	
Low	 High	
Low	
High	
Copyright	©	2016	@danolsen
Crea5ng	Customer	Value	
Copyright	©	2016	@danolsen	
Importance	of	User	Need	
User	Sa5sfac5on	with	the	Product	
Low	 High	
Low	
High	
Area	=	
Customer	
Value	
Created	
Area	=	
Opportunity	
to	Create	
Customer	
Value
Users	Rated	13	Key	Features	in	a	Survey	
Recommended	reading:	
What	Customers	Want 	by	Anthony	Ulwick	
Great	
Copyright	©	2016	@danolsen	
Bad
Kano	Model:	User	Needs	&	Sa5sfac5on	
User	Sa5sfac5on	
User	Dissa5sfac5on	
Performance	
(more	is	bener)	
Delighter	(wow)	
Need	
not	met	
Need	
fully	met	
Must	Have	
Needs	&	features	
migrate	over	5me	
Copyright	©	2016	@danolsen
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
What	is	Your	Value	Proposi5on?	
Copyright	©	2016	@danolsen
What	is	Your	Value	Proposi5on?	
n  Which	user	benefits	are	you	providing?	
n  How	are	you	bener	than	compe5tors?	
	
Must	Have	Benefit	1	
Performance	Benefit	1	
Performance	Benefit	2	
Performance	Benefit	3	
Delighter	Benefit	1	
Delighter	Benefit	2	
Copyright	©	2016	@danolsen
What	is	Your	Value	Proposi5on?	
n  Which	user	benefits	are	you	providing?	
n  How	are	you	bener	than	compe5tors?	
	 Compe9tor	A	 Compe9tor	B	 You	
Must	Have	Benefit	1	
Performance	Benefit	1	
Performance	Benefit	2	
Performance	Benefit	3	
Delighter	Benefit	1	
Delighter	Benefit	2	
Copyright	©	2016	@danolsen
What	is	Your	Value	Proposi5on?	
n  Which	user	benefits	are	you	providing?	
n  How	are	you	bener	than	compe5tors?	
	 Compe9tor	A	 Compe9tor	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	©	2016	@danolsen
What	is	Your	Value	Proposi5on?	
n  Which	user	benefits	are	you	providing?	
n  How	are	you	bener	than	compe5tors?	
	 Compe9tor	A	 Compe9tor	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	©	2016	@danolsen
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
What	is	an	MVP?	
Copyright	©	2016	@danolsen
What	is	an	MVP?	
Courtesy	of	Jussi	Pasanen	
See	Aaron	Walter’s	book	Designing	for	Emo-on	 Copyright	©	2016	@danolsen
What	is	an	MVP?	
Courtesy	of	Jussi	Pasanen	
See	Aaron	Walter’s	book	Designing	for	Emo-on	 Copyright	©	2016	@danolsen
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
The	UX	Design	Iceberg	
Copyright	©	2016	@danolsen	
What	most	
people	see	
and	react	to	
What	good	
product	teams	
think	about
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
The	UX	Design	Iceberg	
Copyright	©	2016	@danolsen	
What	most	
people	see	
and	react	to	
What	good	
product	teams	
think	about
Itera5ve	Design	&	Test	Workflow	
Copyright	©	2016	@danolsen	
Hand	
sketches	
Interac5vity	
Fidelity	
Clickable	
Wireframes*	
Clickable	
Mockups**	
Live	
Product	
Test	 Test	
Test	
*	Balsamiq:	balsamiq.com	
**	InVision:	invisionapp.com
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
The	Lean	Product	Process	
1. Determine	your	target	customer	
2. Iden5fy	underserved	customer	needs	
3. Define	your	value	proposi5on	
4. Specify	your	MVP	feature	set	
5. Create	your	MVP	prototype	
6. Test	your	MVP	with	customers	
Copyright	©	2016	@danolsen
Dos	&	Don’ts	of	User	Tes5ng	Sessions	
Do	
n  Explain	to	the	user	
n  Feedback	will	help	improve	the	product	
n  Not	to	worry	about	hur5ng	your	feelings	
n  Think	Aloud	Protocol 	
n  Try	to	be	a	fly	on	the	wall	
n  Take	notes	and	review	them	ajerwards	for	take-aways	
Don’t	
n  Help 	user	or	explain	the	UI	(e.g.,	 click	over	here )	
n  Ask	leading	or	close-ended	ques5ons	
n  Get	defensive	or	blame	the	user	
Copyright	©	2016	@danolsen
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
Itera5ng	Between	User	Tes5ng	Waves	
	Customer	Feedback	
Mockups	/	Code	
Copyright	©	2016	@danolsen	
Problem	Space	
All	your	hypotheses	
Solu5on	Space	
User	reac5ons
Problem	
Space	
Solu9on	
Space	
Copyright	©	2016	@danolsen
The	Lean	Product	Process:	
Marke5ngReport.com	Case	Study	
Copyright	©	2016	@danolsen
Marke5ngReport.com	Case	Study	
n  My	client	(CEO)	had	a	new	product	idea	
n  Team:	me,	CEO,	VP	marke5ng,	UI	designer	
n  Goals	
n  See	if	business	opportunity	exists	
n  Do	so	quickly	and	inexpensively	(no	coding)	
n  Marke5ng	report would	let	consumers	
control	the	direct	mail	that	they	receive	
n  Analogous	to	credit	report	
Copyright	©	2016	@danolsen
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
Marke5ng	Shield 	
Concept	
Marke5ng	Saver 	
Concept	
Copyright	©	2016	@danolsen
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
Copyright	©	2016	@danolsen
Recrui5ng	Target	Customers	
n  Used	customer	research	firm	(panel)	
n  Wrote	screener	to	iden5fy	target	customers	
n  Work	full-5me	
n  Fit	for	Saver:	use	coupons,	Costco	membership	
n  Fit	for	Shield:	use	paper	shredder,	block	caller	ID	
n  Moderated	users	through	the	mockups	
Copyright	©	2016	@danolsen
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	©	2016	@danolsen
Copyright	©	2016	@danolsen
How to Lead Customer Value Creation by Dan Olsen at Leading the Product Melbourne
Summary	of		Case	Study	
n  4	weeks	to	validated	product	concept	
n  1	round	of	itera5on	
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	©	2016	@danolsen
The	Lean	Product	Process	
1.  Determine	your	target	customer	
2.  Iden5fy	underserved	customer	needs	
3.  Define	your	value	proposi5on	
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	©	2016	@danolsen
Qualita5ve	vs.	Quan5ta5ve	Approach	
Qualita5ve	 Quan5ta5ve	
Oprah	 Spock
THANK
YOU!
@danolsen	
dan-olsen.com	
slideshare.net/dan_o

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