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The Lean Product Playbook by Dan Olsen

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Talk I gave at 500 Startups in March 2015 sharing ideas from my new book on how to apply Lean Startup principles to achieve product-market fit. You can learn more at http://tiny.cc/LPP

Published in: Business
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The Lean Product Playbook by Dan Olsen

  1. 1. March 2015
  2. 2. Copyright  ©  2015  Olsen  Solu7ons   My  Background   n  Educa7on   n  Engineering  background   n  Stanford  MBA   n  Web  development  and  UX  design   n  Deep  Product  Management  Experience   n  Submarine  design   n  Led  Quicken  Product  Management  at  Intuit   n  Led  Product  Management  at  Friendster   n  CEO  &  Cofounder  of  YourVersion,  “Pandora  for  your  news”   n  PM  consultant:  Box,  YouSendIt,  Medallia,  One  Medical     Slides  at  hTp://slideshare.net/dan_o    
  3. 3. What  is  Product-­‐Market  Fit?  
  4. 4. The  Lean  Product  Process  
  5. 5. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  6. 6. Transporta7on  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  Dis7nct  Needs   High-­‐level  need:     Target  Customer:         Detailed  needs:       Ideal  Product:   Soccer  Mom   Speed  Demon  
  7. 7. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  8. 8.     n  Russians:  pencil   n  NASA:  space  pen   ($1  M  R&D  cost)           Example:   n  Ability  to  write  in  space   (zero  gravity)   Problem  Space  vs.  Solu7on  Space   n  Problem  Space   n  A  customer  problem,   need,  or  benefit  that  the   product  should  address   n  A  product  requirement   n  Solu7on  Space   n  A  specific   implementa7on  to   address  the  need  or   product  requirement     Copyright  ©  2015  Olsen  Solu7ons  
  9. 9. Problem  Space  vs.  Solu7on  Space:   Product  Level   Problem  Space   (user  benefit)   Solu7on  Space   (product)   TurboTax TaxCut Pen and paper Prepare my taxes File my taxes Check my taxes Maximize deductions Reduce audit risk Copyright  ©  2015  Olsen  Solu7ons  
  10. 10. Problem  vs.  Solu7on  Space:  Feature  Level   Problem  Space     Solu7on  Space   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 Copyright  ©  2015  Olsen  Solu7ons  
  11. 11. Priori7zing  Customer  Needs:   Importance  vs.  Sa7sfac7on  Importance  of  User  Need   User  Sa7sfac7on  with  Current  Alterna7ves   Compe77ve Market  Opportunity   Low   High   Low   High   Not  Worth  Going  Aher   Copyright  ©  2015  Olsen  Solu7ons  
  12. 12. Kano  Model:  User  Needs  &  Sa7sfac7on   User  Sa7sfac7on   User  Dissa7sfac7on   Performance   (more  is  beTer)   Delighter  (wow)   Need   not  met   Need   fully  met   Must  Have   Needs  &  features   migrate  over  7me   Copyright  ©  2015  Olsen  Solu7ons  
  13. 13. Copyright  ©  2015  Olsen  Solu7ons   Importance  vs.  Sa7sfac7on    Ask  Users  to  Rate  for  Each  Feature   Recommended  reading:   “What  Customers  Want”  by  Anthony  Ulwick   Bad   Great  
  14. 14. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  15. 15. What  is  Your  Value  Proposi7on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  beTer  than  compe7tors?     Compe&tor  A   Compe&tor  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  Olsen  Solu7ons  
  16. 16. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  17. 17. What  is  an  MVP?   Courtesy  of  Jussi  Pasanen   See  Aaaron  Walter’s  book  Designing  for  Emo-on   Copyright  ©  2015  Olsen  Solu7ons  
  18. 18. Breaking  Features  Down  into  Chunks   Copyright  ©  2015  Olsen  Solu7ons   Must Have 1 Performance 1 Delighter 1 Delighter 2 Must Have 2 Performance 2 Performance 3 Benefits: M1A P1A D1A D2AM2A P2A P3A Features: P1B D1B D2BP2B P3B P2CP1C P1D D1C
  19. 19. Product  Roadmap:   Features  by  Version  or  Time   Copyright  ©  2015  Olsen  Solu7ons   Must Have Benefit 1 Performance Benefit 1 Performance Benefit 3 Delighter Benefit 1 Performance Benefit 2 Must Have Benefit 2 Delighter Benefit 2 M1A Time v1 v1.5 v2 v2.5 M2A P1A P1B P2A P2B P3A D1A D1B D2A MVP candidate
  20. 20. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  21. 21. The  UX  Design  Iceberg   Copyright  ©  2015  Olsen  Solu7ons   What most people see and react to What good product people think about
  22. 22. Gelng  Customer  Feedback:   Problem  Space  vs.  Solu7on  Space   n  Customers  CAN’T  ar7culate  problem  space   n  Customers  CAN  react  to  solu7on  space   n  That’s  why  you  need  something  tangible  to   show  to  customers  to  get  good  feedback   Copyright  ©  2015  Olsen  Solu7ons  
  23. 23. Design  Ar7facts:   Interac7vity  vs.  Fidelity   Copyright  ©  2015  Olsen  Solu7ons   Hand   sketch   Interac7vity   Fidelity   Interac7ve   Prototype   Sta7c   Wireframe*   Clickable   Wireframe*   Mockup     Clickable   Mockup**   *  Balsamiq:  balsamiq.com   **  InVision:  invisionapp.com  
  24. 24. Design  Tools:   Fidelity  vs.  Effort   Copyright  ©  2015  Olsen  Solu7ons   Hand sketch DesignFidelity Effort to Create Artifact Sketch Balsamiq1 2 3 Designers All Product People
  25. 25. Why  You  Should  Wireframe   n  In  case  you  don’t  have  UX  designer  (ohen)   n  To  clarify  and  refine  your  thinking:   n Informa7on  Architecture,  layout,  naviga7on   n  To  communicate  your  ideas  to  others   n  Modern  tools  make  it  easy  and  fast   Copyright  ©  2015  Olsen  Solu7ons  
  26. 26. The  Lean  Product  Process   1. Determine  your  target  customer   2. Iden7fy  underserved  customer  needs   3. Define  your  value  proposi7on   4. Specify  your  MVP  feature  set   5. Create  your  MVP  prototype   6. Test  your  MVP  with  customers   Copyright  ©  2015  Olsen  Solu7ons  
  27. 27. What  Are  You  Going  to  Get  Feedback  &   Learnings  About?   Problem  Space   (your  mental  model)   Solu7on  Space   (what  users  can  react  to)   Customer   Understanding   (needs  &   preferences)   Feature  Set   UI  Design   Messaging     Copyright  ©  2015  Olsen  Solu7ons  
  28. 28. “Ramen”  User  Feedback  for  Startups   n  Anyone  can  do  it!   n  Ingredients:   n Solu7on-­‐space  product/mockup  to  test   n 1  customer  (with  laptop  if  tes7ng  code)   n 1  desk   n 1  person  to  conduct  the  session   n Pen  and  paper   n Op7onal  note-­‐taker  and  observers   Copyright  ©  2013  Olsen  Solu7ons  
  29. 29. Typical  Format  for  User  Tes7ng  Session   n  5  -­‐  10  min:  Ask  ques7ons  to  understand  user   needs  and  solu7ons  they  currently  use   n  30  -­‐  50  min:  User  feedback   n  Show  user  product/mockup   n  Non-­‐directed  as  much  as  possible   n  When  necessary,  direct  user  to  aTempt  to   perform  a  specific  task   n  5  -­‐  10  min:  Wrap-­‐up   n  Answer  any  user  ques7ons  that  came  up   n  Point  out/explain  features  you  want  to  highlight   n  Ask  them  if  they  would  use  the  product   Copyright  ©  2015  Olsen  Solu7ons  
  30. 30. Dos  &  Don’ts  of  User  Tes7ng  Sessions   n  Do   n  Explain  to  the  user:   n  Their  feedback  will  help  improve  the  product   n  Not  to  worry  about  hur7ng  your  feelings   n  “Think  Aloud  Protocol”   n  Ask  user  to  aTempt  the  task,  then  be  a  fly  on  the  wall   n  Ask  non-­‐leading,  open-­‐ended  ques7ons   n  Take  notes  and  review  them  aherwards  for  take-­‐aways   n  Don’t   n  Ask  leading  or  close-­‐ended  ques7ons   n  “Help”  the  user  or  explain  the  UI  (e.g.,  “click  over  here”)   n  Respond  to  user  frustra7on  or  ques7ons  (un7l  test  is  over)   n  Get  defensive   n  Blame  the  user   Copyright  ©  2015  Olsen  Solu7ons  
  31. 31. Copyright  ©  2015  YourVersion  
  32. 32. Itera7ng  Your  Product  Vector  Based  on   User  Feedback  in  Solu7on  Space   Problem  Space   (your  mental  model)   Solu7on  Space   (what  users  can  react  to)    Customer  Feedback   Mockups  /  Code   Copyright  ©  2015  Olsen  Solu7ons  
  33. 33. Problem   Space   Solu7on   Space   Copyright  ©  2015  Olsen  Solu7ons  
  34. 34. Copyright  ©  2015  Olsen  Solu7ons   Case  Study  on  Product-­‐Market  Fit:   Marke7ngReport.com  
  35. 35. Product-­‐Market  Fit  Case  Study:   Marke7ngReport.com   n  My  consul7ng  client  (CEO)  had  an  idea   for  a  new  product   n  Team:  me,  CEO,  head  of  marke7ng,   UI  design  consultant   n  Goal:   n Validate  product-­‐market  fit  quickly,  cheaply   without  wri7ng  a  single  line  of  code   n Determine  if  there  was  a  business   opportunity  here   Copyright  ©  2015  Olsen  Solu7ons  
  36. 36. Product-­‐Market  Fit  Case  Study:   Developing  Product  Concept   n  Product  Concept  was  “marke7ng  report”  that  let   consumers  control  the  direct  mail  that  they   receive   n  Concept  was  fuzzy  with  various  components,  so  I   broke  it  into  2  different  “flavors”:   #1  “Marke7ng  Shield”:  Service  to  reduce/stop  junk  mail   #2  “Marke7ng  Saver”:  Opt  in  &  receive  money-­‐saving  offers   Copyright  ©  2015  Olsen  Solu7ons  
  37. 37. Clustering  Poten7al  User  Benefits  to   Create  Product  Concepts   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 “Shield” Concept “Saver” Concept Copyright  ©  2015  Olsen  Solu7ons  
  38. 38. Copyright  ©  2015  Olsen  Solu7ons  
  39. 39. Copyright  ©  2015  Olsen  Solu7ons  
  40. 40. n  Telephone  recruit  of  prospec7ve  customers   n  Wrote  phone-­‐screen  ques7onnaire  to  create  rough   target  customer  segmenta7on   n  Wanted  users  who  work  full-­‐7me  &  use  internet   n  Fit  for  opt-­‐in  offers:  use  coupons,  Costco  membership   n  Fit  for  an7-­‐junk  mail:  use  paper  shredder,  block  caller  ID   n  Paid  each  person  $75   n  Scheduled  3  groups  of  2  or  3  people  to  discuss   each  product  concept  for  90  minutes   n  Moderated  each  group  through  the  paper   mockups  to  hear  their  feedback   Product-­‐Market  Fit  Case  Study:   Recrui7ng  People   Copyright  ©  2015  Olsen  Solu7ons  
  41. 41. Product-­‐Market  Fit  Case  Study:   Findings  on  Concepts  &User  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 Legend Strong appeal Some appeal Low appeal “Shield” Concept “Saver” Concept Copyright  ©  2015  Olsen  Solu7ons  
  42. 42. Product-­‐Market  Fit  Case  Study:   Learnings  from  Research   n  Learned  that  “Shield”  (an7-­‐junk  mail)  concept  was   stronger  than  “Saver”   n  People  didn’t  like  many  of  the  “Saver”  concept   components   n  Learned  users’  concerns  /  ques7ons  about  “Shield”   concept   n  Refined  “Shield”  concept:   n  Removed  irrelevant  components   n  Improved  messaging  to  address  user  concerns  /  ques7ons   n  Validated  revised  “Shield”  concept  with  quick  2nd   round  of  tests   n  No  customer  concerns   n  Clear  willingness  to  pay   Copyright  ©  2015  Olsen  Solu7ons  
  43. 43. Copyright  ©  2015  Olsen  Solu7ons  
  44. 44. Product-­‐Market  Fit  Case  Study:   Summary   n  4  weeks  from  1st  mee7ng  to  validated   product  concept  with  zero  coding   n  Reasonable  cost   n  1  round  of  itera7on  on  product  concept   n  Iden7fied  compelling  concept  that  users   are  willing  to  pay  $10/month  for   n  Trimmed  away  non-­‐valuable  pieces   n  You  can  achieve  similar  results   Copyright  ©  2015  Olsen  Solu7ons  
  45. 45. The  Lean  Product  Process   1.  Determine  your  target  customer   2.  Iden7fy  underserved  customer  needs   3.  Define  your  value  proposi7on   4.  Specify  your  MVP  feature  set   5.  Create  your  MVP  prototype   6.  Test  your  MVP  with  customers   Iterate:    Ÿ  Hypothesize-­‐Design-­‐Test-­‐Learn  loop    Ÿ  Improve  product-­‐market  fit   Copyright  ©  2015  Olsen  Solu7ons  
  46. 46. Laura  Klein:  April  14  in  Palo  Alto   Author  of  UX  for  Lean  Startups   How  to  use  Qualita&ve  &  Quan&ta&ve  Research  
  47. 47. Copyright  ©  2015  Olsen  Solu7ons   The  Lean  Product  Playbook   n  Published  by  Wiley   n  Comes  out  May  26th   n  Hardback  &  ebook   n  Available  for  preorder   on  Amazon:   hTp://7ny.cc/LPP    
  48. 48. Questions? @danolsen   olsensolu7ons.com   slideshare.net/dan_o   meetup.com/lean-­‐product     Book:  hTp://7ny.cc/LPP      

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