Product Management for Startups by Dan Olsen

Copyright © 2009 YourVersion
Dan Olsen
Dan Olsen
CEO, YourVersion
CEO, YourVersion
Nov 14, 2009
Nov 14, 2009
Product Management for Startups

My Background
„ Education
„ BS, Electrical Engineering, Northwestern
„ MS, Industrial Engineering, Virginia Tech
„ MBA, Stanford
„ PHP, MySQL, JavaScript, XHTML, CSS, UI design
„ 18 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 startups
„ CEO & Founder of YourVersion, real‐time discovery startup
Will post slides to http://slideshare.net/dan_o

What is Product Management?

Product Management is
Critical Link in Value Creation
Market
• Current
customers
• Prospective
customers
• Competitors
Product
Management
Development
Team
Product Management’s Goals:
•Best Product •Happy Customers •Profitable Business

What’s the Formula
for a Winning Product?
A product that:
„ Meets customers’ needs
„ Is better than other alternatives
„ Is easy to use
„ Has a good value/price

„ Russians: pencil
„ NASA: space pen
($1 M R&D cost)
„
Example:
„ Ability to write in space
(zero gravity)
Problem Space vs. Solution Space
„ Problem Space
„ A customer problem,
need, or benefit that the
product should address
„ A product requirement
„ Solution Space
„ A specific
implementation to
address the need or
product requirement

Product Level
Problem Space
(user benefit)
Solution Space
(product)
TurboTax
TaxCut
Pen and
paper
Prepare
my taxes
File my
taxes

Feature Level
Problem Space
(user benefit)
Solution Space
(feature)
Gmail
importer
Make it easy
to share a
link with my
friends
Allow me to
reuse my
email
contacts
Design
#1
Design
#2
Design
#3
Design
Preview with
checkboxes
User can edit
before import
#1 No No
#2 Yes No
#3 Yes Yes

How Do You Prioritize User Benefits
and Product Features?
„ Need a framework for prioritization
„ Which user benefits should you address?
„ Which product features to build (or
improve)?
„ Importance vs. Satisfaction
„ Importance of user need (problem space)
„ Satisfaction with how well a product meets
the user’s need (solution space)

High Importance + Low Satisfaction =
Opportunity
Importance
of
User
Need
Importance
of
User
Need
User Satisfaction with Current Alternatives
User Satisfaction with Current Alternatives
Competitive
Market
Opportunity
Low
Low High
High
Low
Low
High
High
Not Worth Going After

Kano Model: User Needs & Satisfaction
User Satisfaction
User Satisfaction
User Dissatisfaction
User Dissatisfaction
Performance
(more is better)
Delighter (wow)
Need
Need
not met
not met
Need
Need
fully met
fully met
Must Have
Needs & features
migrate over time

Is the site up when I want to use it?
Is the site fast enough?
Does the functionality work?
Does the functionality
meet my needs?
Olsen’s Hierarchy of Web User Needs
(adapted from Maslow)
Customer’s Perspective What does it mean to us?
Uptime
Page Load Time
Absence of Bugs
Feature Set
Usability & Design
Decreasing
Dissatisfaction
Increasing
Satisfaction
How easy to use is it?

Importance vs. Satisfaction
Ask Users to Rate for Each Feature
98
87
84
86
79 84
70
55 80
72
80
75
41
50
55
60
65
70
75
80
85
90
95
100
40 50 60 70 80 90 100
Satisfaction
Importance
Recommended reading:
“What Customers Want” by Anthony Ulwick
Bad
Bad
Great
Great

Prioritization and Scope
„ Customer value is only half of the story
„ How much engineering effort will it take?
„ Need to consider Return on Investment (ROI):
„ Return: customer value created
„ Investment: development resources required
„ Ruthlessly prioritize: rank order product ideas
„ Be deliberate about scope & keep it small
„ Easy to bite off too much
„ Strategy = deciding what you’re NOT doing
„ Break features down into smaller chunks
„ Smaller scope → quicker releases → more iteration

Prioritizing Product Ideas by ROI
Prioritizing Product Ideas by ROI
Investment (developer‐weeks)
Return
(Value
Created)
Idea C
Idea B
Idea D
Idea A
Idea F
1
1
2
3
4
2 3 4
?

Have to Prioritize Across Multiple
Dimensions At The Same Time
Customer
Value
Customer
Value
Time
Time
Customer
Customer
Understanding
Understanding
Functionality
Quality
Ease of Use

User Benefits vs. Ease of Use
„ Q: If two products equally deliver the exact
same user benefits, which product is better?
„ A: The product that’s easier to use
„ ‘Ease of use’ provides benefits
„ Saves time
„ Reduces cognitive load
„ Reduces frustration
„ Not many companies excel at UI design
„ ‘Ease of use’ can be differentiator

The UI Design Iceberg
The UI Design Iceberg
Visual
Design
Interaction
Design
Information
Architecture
Conceptual
Design
Recommended reading: Jesse James Garrett’s
“Elements of User Experience” chart, free at www.jjg.net
What most
people see
and react to
What good
product mgrs,
designers &
developers
think about

Elements of User Interface Design
Consists of Three Distinct Elements:
„ Information Architecture
„ Structure and layout at both site and page level
„ How site is structured (sitemap)
„ How site information is organized (site layout)
„ How each page is organized (page layout)
„ Interaction Design
„ How user and product interact with one another
„ User flows (e.g., navigation across multiple pages)
„ User input (e.g., controls and form design)
„ Visual Design
„ “How it looks” vs. “What it is”, often called “chrome”
„ Fonts, colors, graphical elements

“Ramen” Usability Testing for Startups
„ Learning from 1‐on‐1 user feedback is invaluable
„ Keep it real: have user bring their laptop, sit at desk
„ Conduct test sitting next to user. Format:
„ 5 ‐ 10 min: Discovery, ask questions to learn about user
„ 30 ‐ 50 min: Usability test (as non‐directed as possible)
„ 10 min: Wrap‐up: Answer user questions, point things out
„ Usability Do’s
„ Explain rationale, not to worry about hurting your feelings
„ Explain “Think Aloud Protocol”, be fly on wall, take notes
„ Usability Don’ts
„ Ask leading questions
„ “Help” the user or explain the UI (e.g., “click over here”)
„ Get defensive or blame the user

Approaching Business as an
Approaching Business as an
Optimization Exercise
Optimization Exercise
Given reality as it exists today,
Given reality as it exists today,
optimize our business results
optimize our business results
subject to our resource constraints.
subject to our resource constraints.

Profit =
Profit = Revenue
Revenue ‐
‐ Cost
Cost
Unique Visitors
Unique Visitors x
x Ad Revenue per Visitor
Ad Revenue per Visitor
Impressions/Visitor
Impressions/Visitor x Effective CPM / 1000
x Effective CPM / 1000
Visits/Visitor x Pageviews/Visit x Impressions/PV
Visits/Visitor x Pageviews/Visit x Impressions/PV
New Visitors
New Visitors + Returning Visitors
+ Returning Visitors
Invited Visitors
Invited Visitors + Uninvited Visitors
+ Uninvited Visitors
# of Users Sending Invites x Invites Sent/User x Invite Conv
# of Users Sending Invites x Invites Sent/User x Invite Conversion Rate
ersion Rate
Define the Equation of your Business
Define the Equation of your Business
“
“Peeling the Onion
Peeling the Onion”
”
Advertising Business Model:

Sample Signup Page Yield Data
Sample Signup Page Yield Data
Daily Signup Page Yield vs. Time
New Registered Users divided by Unique Visitors to Signup Page
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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
Daily
Signup
Page
Yield
Changed
messaging
Added questions
to signup page
Started requiring
registration

Identifying the
Identifying the “
“Critical Few
Critical Few”
” Metrics
Metrics
„ What are the metrics for your business?
„ Where is current value for each metric?
„ How many resources to “move” each metric?
„ Developer‐hours, time, money
„ Which metrics have highest ROI opportunities?
Return
Return
Investment
Investment
Return
Return
Investment
Investment
Return
Return
Investment
Investment
Metric A
Metric A
Good ROI
Good ROI
Metric B
Metric B
Bad ROI
Bad ROI
Metric C
Metric C
Great ROI
Great ROI

Optimization through Iteration:
Optimization through Iteration:
Continuous Improvement
Continuous Improvement
Measure
the metric
Analyze
the metric
Identify top
opportunities
to improve
Design & develop
the enhancement
Launch the
enhancement
Learning
Gaining knowledge:
• Market
• Customer
• Domain
• Usability

Early Stage Product Management
Early Stage Product Management
Cheat Sheet
Cheat Sheet
„ Understand your customers’ needs
„ Use problem space thinking to ensure your
solution is addressing your customers’ needs
„ Identify opportunities & prioritize by ROI
„ Design and launch your v1 product
„ Talk with users 1‐on‐1 and get feedback
„ Define equation of your business
„ Identify and track key metrics
„ Launch, learn, and iterate

„ Great way to stay on top of your interests
„ Real‐time discovery engine
„ Discovers new, relevant content tailored to your
specific interests
„ News, Blogs, Tweets, Webpages, Videos, Products
„ Bookmark and share via email, Twitter, Facebook
„ Launched at TechCrunch50, won People’s Choice
„ Free iPhone app, optional Firefox toolbar
„ Check it out at www.yourversion.com

Questions?
@danolsen
dan@yourversion.com www.yourversion.com

Product Management for Startups by Dan Olsen

Product Management for Startups by Dan Olsen

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