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Best Practices in 
Product Management 
for V1 Web Products
Dan Olsen, CEO, YourVersion



Silicon Valley Product Management 
Association (SVPMA)
June 2, 2010

                  Copyright © 2010 YourVersion
What I’m Covering
What is product management?
Understanding customer needs
Prioritization and maximizing ROI on 
engineering resources
Validating your product concept
UI design
User feedback / usability testing

     Will post slides to slideshare.net/dan_o
                                     Copyright © 2010 YourVersion
My Background
Education
  BS, Electrical Engineering, Northwestern
  MS, Industrial Engineering, Virginia Tech
  MBA, Stanford
  Web development and UI design
19 years of Product Management Experience
  Managed submarine design for 5 years
  5 years at Intuit, led Quicken Product Management
  Led Product Management at Friendster
  PM consultant to startups: Box.net, YouSendIt, Epocrates
  CEO & Cofounder of YourVersion, startup building 
  “Pandora for your real‐time web content”

                                              Copyright © 2010 YourVersion
Quick Poll of Audience
Job function
  Product Management
  Marketing
  Other business role
  Designer
  Technical (Developer, QA, Ops)
Company size
  Small    < 50 people
  Mid‐size 50 – 500 people
  Large    > 500 people
Consumer vs. B2B
                                   Copyright © 2010 YourVersion
What is Product Management?




               6    Copyright © 2010 YourVersion
Product Management is
    Critical Link in Value Creation




Market            Product    Development 
• Current       Management      Team
  customers
• Prospective
  customers
• Competitors




                             Copyright © 2010 YourVersion
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 © 2010 YourVersion
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 © 2010 YourVersion
Overlap in PM and UI Design Roles
                        Prospective                        Existing
                        Customers                         Customers
External
            Marketing
                              Listening to customers


                          Product           UI
Interface               Management        Design               Support




                                        Engineering               QA

 Internal
                                                      Copyright © 2010 YourVersion
The Product Manager’s Job:
       A Successful Product
Be the expert on the market and the customer
Translate business objectives and customer 
needs into product requirements
Be the clearinghouse for all product ideas 
Work with team to design & build great product
Define and track key metrics
Identify, plan & prioritize product ideas to 
maximize ROI on engineering resources

                               Copyright © 2010 YourVersion
Understanding Customer Needs




               12   Copyright © 2010 YourVersion
For a V1 Product,
   Which is More Important?


                 or


 Qualitative          Quantitative 
Information?          Information?
        “When you’re Small, 
         start with Qual!”
                         Copyright © 2010 YourVersion
How is developing a v1 Product Different 
from developing a Later Stage Product?
With a v1 stage product, you have
WAY MORE uncertainty about:
  Who your target customers really are
  Which customer needs you should address
  How to best meet those needs
  What product design works best
These are qualitative learnings/decisions
Quantitative is also valuable (later)
                              Copyright © 2010 YourVersion
What’s the Formula
       for Product‐Market Fit?
A product that:
  Meets customers’ needs
  Is better than other alternatives
  Is easy to use
  Has a good value/price
Simple, right?
It’s easy to understand conceptually 
what we want to achieve
HOW to achieve it is the hard part
                                 Copyright © 2010 YourVersion
Problem Space vs. Solution Space
 Problem Space                  Solution Space
   A customer problem,            A specific 
   need, or benefit that the      implementation to 
   product should address         address the need or 
   A product requirement          product requirement
Example:
  Ability to write in space     NASA: space pen
  (zero gravity)                ($1 M R&D cost)
                                Russians: pencil

                                      Copyright © 2010 YourVersion
Problem Space vs. Solution Space
         Product Level
Problem Space       Solution Space
 (user benefit)       (product)

                      Pen and
  Prepare              paper
  my taxes

                     TurboTax
   File my
    taxes
                       TaxCut
                         Copyright © 2010 YourVersion
Problem Space vs. Solution Space
           Feature Level
Problem Space              Solution Space
 (user benefit)               (feature)
                               Gmail
 Make it easy                 importer
   to share a
 link with my
     friends
                  Design       Design             Design
                    #1           #2                 #3

                              Preview with  User can edit 
 Allow me to        Design     checkboxes before import
  reuse my
    email            #1           No                 No
   contacts          #2           Yes                No
                     #3           Yes                Yes
                                   Copyright © 2010 YourVersion
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)
Opportunity =
High Importance need with low Satisfaction

                                    Copyright © 2010 YourVersion
High Importance + Low Satisfaction =
Importance of User Need
                        Opportunity
                          High
                                                              Competitive
                                        Opportunity
                                                                Market




                                              Not Worth Going After

                          Low
                                  Low                                  High
                                 User Satisfaction with Current Alternatives
                                                                      Copyright © 2010 YourVersion
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 © 2010 YourVersion
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 © 2010 YourVersion
Olsen’s Hierarchy of Web User Needs
       (adapted from Maslow)
    Customer’s Perspective                                What does it mean to us?

     How easy to use is it?                                  Usability & Design




                                        Satisfaction
                                        Increasing
     Does the functionality
                                                                 Feature Set
       meet my needs?


  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 © 2010 YourVersion
What is Your Value Proposition?
 Which user benefits are you providing?
 How are you better than competitors?
                        Competitor A Competitor 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 © 2010 YourVersion
Prioritization and Scope
Customer value is only half the equation
How much engineering effort will it take?
Need to consider value and effort (ROI)
Ruthlessly prioritize: rank order
Be deliberate about scope & keep it small
  It’s easy to try to do too much
  Strategy = deciding what you’re NOT doing
  Break features down into smaller chunks
  Smaller scope → faster iterations → better
                                    Copyright © 2010 YourVersion
Prioritizing Product Ideas by ROI

                                         ?
Return (Value Created)




                         4
                                                 Idea D
                         3
                                Idea A Idea B
                         2
                                       Idea C
                         1
                                                 Idea F


                                  1     2     3     4
                              Investment (developer‐weeks)
                                                             Copyright © 2010 YourVersion
UI Design and Ease of Use




              27    Copyright © 2010 YourVersion
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
UI Design can be differentiator
Olsen’s Law: “The less user effort required, the 
higher the percentage of users who will do it”
                                  Copyright © 2010 YourVersion
The Design Gap in Many Teams

Level       Define      Design      Code

 1       Product Mgmt            Engineering

 2       Product Mgmt            Engineering

         Product Mgmt            Engineering


 3            PM                    Eng


                         UI
 4            PM                    Eng


                                 Copyright © 2010 YourVersion
The UI Design Iceberg
  What most
  people see
  and react to                       Visual
                                     Design                      What good
                                                                 product
                                                                 people
                                   Interaction                   think about
                                     Design

                                  Information
                                  Architecture

                                  Conceptual
                                    Design

Recommended reading: Jesse James Garrett’s
“Elements of User Experience” chart, free at www.jjg.net   Copyright © 2010 YourVersion
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
                                              Copyright © 2010 YourVersion
Learning from Customer Feedback




                 32   Copyright © 2010 YourVersion
Iterating Your Product Vector Based on 
    User Feedback in Solution Space
      Problem Space                   Solution Space
    (your mental model)        (what users can react to)
 Help user    Help user
book travel   plan travel




                     Mockups / Code


                    Customer Feedback
                                           Copyright © 2010 YourVersion
Persevere or Pivot?

  Increasing
Product-Market                        Product-Market Fit =
      Fit                             Getting enough data to
                                      validate that you’re
                                      climbing up the
                              Pivot   right mountain




                      Pivot




                                        Copyright © 2010 YourVersion
What Are You Getting Feedback & 
       Learnings About?
 Problem Space            Solution Space
(your mental model)   (what users can react to)


                              Feature Set
     Customer
   Understanding 
      (needs & 
    preferences)
                        UI Design             Messaging 




                                Copyright © 2010 YourVersion
What Can Solution Space Objects
  Can You Test with Customers?
Range of solution space options:
  Wireframe: low‐fidelity graphics
  Mockup: high‐fidelity graphics
  Prototype: interactive graphics or code
  Alpha product: production code
Graphics usually quicker/cheaper to 
change than code
Goal is to gain learnings quickly
                                Copyright © 2010 YourVersion
The Value of User Feedback Sessions
Critical to talk with customers 1‐on‐1
Gain better understanding of
  Customer needs and problems
  Issues with your feature set, UI, messaging
  What alternatives customers are using,
  pros & cons of each, customer preferences
  QA: use cases & bugs you haven’t seen
Really a “user learning” session
Make test as real for user as possible
                                Copyright © 2010 YourVersion
“Ramen” User Feedback for Startups
Anyone can do it!
Ingredients:
  Solution‐space product/mockup to test
  1 customer (with laptop if testing code)
  1 desk
  1 person to conduct the session
  Pen and paper
  Optional note‐taker and observers

                                 Copyright © 2010 YourVersion
Typical Format for Customer Session
5 ‐ 10 min: Ask questions to understand user 
needs and solutions they currently use
30 ‐ 50 min: User feedback
  Show user product/mockup
  Non‐directed as much as possible
  When necessary, direct user to attempt to 
  perform a specific task
5 ‐ 10 min: Wrap‐up
  Answer any user questions that came up
  Point out/explain features you want to highlight
  Ask them if they would use the product

                                     Copyright © 2010 YourVersion
Dos & Don’ts of Conducting Usability
Do
  Explain to the user:
     Their usability test will help improve the product
     Not to worry about hurting your feelings
     “Think Aloud Protocol”
  Ask user to attempt the task, then be a fly on the wall
  Ask non‐leading, open‐ended questions
  Take notes and review them afterwards for take‐aways
Don’t
  Ask leading questions
  “Help” the user or explain the UI (e.g., “click over here”)
  Respond to user frustration or questions (until test is over)
  Get defensive
  Blame the user
                                                   Copyright © 2010 YourVersion
Case Study on Product‐Market Fit:
      MarketingReport.com




                  41    Copyright © 2010 YourVersion
Product‐Market Fit Case Study:
      MarketingReport.com
My consulting client, CEO of TrustedID, 
had an idea for a new product
Team: me, CEO, head of marketing,
UI design consultant
Goal:
  Validate product‐market fit quickly, cheaply 
  without writing a single line of code
  Determine if their was a business 
  opportunity here

                                 Copyright © 2010 YourVersion
Product‐Market Fit Case Study:
    Developing Product Concept
Product Concept was “marketing report” that let 
consumers control the direct mail that they receive
Concept was fuzzy with various components, so we 
broke it into 2 different “flavors”:
  #1 “Marketing Shield”: Service to reduce/stop junk mail
  #2 “Marketing Saver”: Opt in & receive money‐saving offers
  Each product concept consisted of several modules that 
  each mapped to a specific user benefit
Worked with UI designer to create paper mockups of 
pages for each flavor concept (5 pages each)



                                         Copyright © 2010 YourVersion
Clustering Potential User Benefits to 
        Create Product Concepts
“Shield” Concept                 “Saver” Concept



 Reduce          Find out what       Money    Compare             Social
Junk Mail         “they” know        Saving    Yourself         Networking
                   about you         Offers   to Others


  Save             Marketing
  Trees             Report


            Marketing    Marketing
             Score        Profile




                                                Copyright © 2010 YourVersion
Product‐Market Fit Case Study: 
        Recruiting People
Telephone recruit of prospective customers
  Wrote phone‐screen questionnaire to create rough 
  target customer segmentation
    Wanted users who work full‐time & use internet
    Fit for opt‐in concept: use coupons, Costco membership
    Fit for anti‐junk mail concept: use paper shredder, block 
    caller ID
Scheduled 3 groups of 2 or 3 people to discuss 
each product concept for 90 minutes
Moderated each group through the paper 
mockups to hear their feedback
                                          Copyright © 2010 YourVersion
Product‐Market Fit Case Study:
  Findings on Concepts &User Benefits
“Shield” Concept                 “Saver” Concept



 Reduce          Find out what       Money    Compare             Social
Junk Mail         “they” know        Saving    Yourself         Networking
                   about you         Offers   to Others


  Save             Marketing
  Trees             Report

                                                   Legend
            Marketing    Marketing
             Score        Profile                  Strong appeal

                                                   Somewhat positive

                                                   Low appeal
                                                Copyright © 2010 YourVersion
Product‐Market Fit Case Study:
      Learnings from Research
Learned that “Shield” (anti‐junk mail) concept was 
stronger than “Saver”
People didn’t like many of the “Saver” concept 
components
Learned users’ concerns / questions about “Shield”
concept
Refined “Shield” concept:
  Removed irrelevant components
  Improved messaging to address user concerns / questions
Validated revised “Shield” concept with quick 2nd
round of tests
  No customer concerns
  Clear willingness to pay

                                        Copyright © 2010 YourVersion
50   Copyright © 2010 YourVersion
Product‐Market Fit Case Study:
           Summary
4 weeks from 1st meeting to validated 
product concept
Cost $1,500 to talk with 20 users ($75 
each)
1 round of iteration on product concept
Identified compelling concept that users 
are willing to pay $10/month for
Trimmed away non‐valuable pieces
You can achieve similar results
                             Copyright © 2010 YourVersion
Getting Quantitative:
Optimization Using Metrics




              52    Copyright © 2010 YourVersion
Approaching Your Business as an 
     Optimization Exercise


Given reality as it exists today,
optimize our business results
subject to our resource constraints.




                            Copyright © 2010 YourVersion
Define the Equation of your Business
          “Peeling the Onion”
Advertising Business Model:
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 Conversion Rate


                                                          Copyright © 2010 YourVersion
Equation of your Business
          Subscription Business Model
Profit = Revenue ‐ Cost

   Paying Users x  Revenue per Paying User

   New Paying Users +  Repeat Paying Users

   Trial Users x  Conv Rate       Previous Paying Users  x  ( 1 – Cancellation Rate )

   ( SEO Visitors + SEM Visitors + Viral Visitors )  x  Trial Conversion Rate




                                                           Copyright © 2010 YourVersion
How to Track Your Metrics
Track each metric as daily time series
           Unique     Page       Ad      New User 
                                                         …
  Date     Visitors   views    Revenue   Sign‐ups
 4/24/08    10,100    29,600        25        490
 4/25/08    10,500    27,100        24        480
   …

Create ratios from primary metrics:  X / Y
  Example: How good is your registration page?
  Okay:    # of registered users per day
  Better: registration conversion rate =
           # registered users / # uniques to reg page
                                               Copyright © 2010 YourVersion
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 © 2010 YourVersion
Identifying the  “Critical Few” 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?

           Metric A                Metric B                 Metric C
           Good ROI                Bad ROI                  Great ROI




                                               Return
                         Return
Return




           Investment             Investment              Investment

                                                   Copyright © 2010 YourVersion
Metrics to Validate Product‐Market Fit
 Survey results
   Importance & Satisfaction
   Net Promoter Score




   Survey.io
      “How would you feel if you could no longer use Product X?”
          Very disappointed, Somewhat disappointed, Not disappointed
 User behavior
   Prospects sign up (high conversion rate)
   They keep using it (high retention rate)
   They use it often (high frequency of use)
                                                    Copyright © 2010 YourVersion
Continuous
Improvement



      60   Copyright © 2010 YourVersion
Adding Metrics and Optimization to 
             your Product Process
                                                                 Site Level
           Business     Product       Prioritized 
Plan      Objectives   Objectives    Feature List


                                                      Scoping       Feature 
                                                                     Level

                                    Requirements 
Design                                & Design


                                        Code           Test        Launch
Develop

                                    Metrics & User 
Optimize                              Feedback
                                                       Copyright © 2010 YourVersion
Optimization through Iteration:
  Continuous Improvement
                   Measure
                  the metric


                                   Analyze
       Learning                   the metric
         Gaining knowledge:
         • Market                 Identify top 
         • Customer              opportunities
                                   to improve
         • Domain
         • Usability           Design & develop  
                               the enhancement


                 Launch the
                enhancement
                                  Copyright © 2010 YourVersion
Product Management for V1 Products
           Cheat Sheet
Clarify problem space by iterating in the 
solution space & getting user feedback
Revise feature set, UI design, and 
messaging to improve product‐market fit
Ruthlessly prioritize based on ROI
Define equation of your business
Identify and track key metrics
Launch, learn, and iterate
                              Copyright © 2010 YourVersion
‐“Pandora for your real‐time web 
                         content”
                         ‐Aggregates latest news, blogs, 
www.yourversion.com      twitter, etc. tailored to your 
                         specific interests
                         ‐Free iPhone App, browser tools



                         ‐Intimate, all‐day workshop 
                         on Product Management, 
                         Design, & Marketing
                         ‐Sat June 12th in Palo Alto
                         ‐Use discount code ‘svpma’
toolbox.eventbrite.com
                                     Copyright © 2010 YourVersion
Questions?
@danolsen




www.yourversion.com


             Copyright © 2010 YourVersion

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Best Practices in Product Management for V1 Web Products

  • 2.
  • 4. My Background Education BS, Electrical Engineering, Northwestern MS, Industrial Engineering, Virginia Tech MBA, Stanford Web development and UI design 19 years of Product Management Experience Managed submarine design for 5 years 5 years at Intuit, led Quicken Product Management Led Product Management at Friendster PM consultant to startups: Box.net, YouSendIt, Epocrates CEO & Cofounder of YourVersion, startup building  “Pandora for your real‐time web content” Copyright © 2010 YourVersion
  • 5. Quick Poll of Audience Job function Product Management Marketing Other business role Designer Technical (Developer, QA, Ops) Company size Small < 50 people Mid‐size 50 – 500 people Large > 500 people Consumer vs. B2B Copyright © 2010 YourVersion
  • 6. What is Product Management? 6 Copyright © 2010 YourVersion
  • 7. Product Management is Critical Link in Value Creation Market Product  Development  • Current  Management Team customers • Prospective customers • Competitors Copyright © 2010 YourVersion
  • 8. 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 © 2010 YourVersion
  • 9. 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 © 2010 YourVersion
  • 10. Overlap in PM and UI Design Roles Prospective Existing Customers Customers External Marketing Listening to customers Product  UI Interface Management Design Support Engineering QA Internal Copyright © 2010 YourVersion
  • 11. The Product Manager’s Job: A Successful Product Be the expert on the market and the customer Translate business objectives and customer  needs into product requirements Be the clearinghouse for all product ideas  Work with team to design & build great product Define and track key metrics Identify, plan & prioritize product ideas to  maximize ROI on engineering resources Copyright © 2010 YourVersion
  • 12. Understanding Customer Needs 12 Copyright © 2010 YourVersion
  • 13. For a V1 Product, Which is More Important? or Qualitative  Quantitative  Information? Information? “When you’re Small,  start with Qual!” Copyright © 2010 YourVersion
  • 14. How is developing a v1 Product Different  from developing a Later Stage Product? With a v1 stage product, you have WAY MORE uncertainty about: Who your target customers really are Which customer needs you should address How to best meet those needs What product design works best These are qualitative learnings/decisions Quantitative is also valuable (later) Copyright © 2010 YourVersion
  • 15. What’s the Formula for Product‐Market Fit? A product that: Meets customers’ needs Is better than other alternatives Is easy to use Has a good value/price Simple, right? It’s easy to understand conceptually  what we want to achieve HOW to achieve it is the hard part Copyright © 2010 YourVersion
  • 16. Problem Space vs. Solution Space Problem Space Solution Space A customer problem,  A specific  need, or benefit that the  implementation to  product should address address the need or  A product requirement product requirement Example: Ability to write in space  NASA: space pen (zero gravity) ($1 M R&D cost) Russians: pencil Copyright © 2010 YourVersion
  • 17. Problem Space vs. Solution Space Product Level Problem Space Solution Space (user benefit) (product) Pen and Prepare paper my taxes TurboTax File my taxes TaxCut Copyright © 2010 YourVersion
  • 18. Problem Space vs. Solution Space Feature Level Problem Space Solution Space (user benefit) (feature) Gmail Make it easy importer to share a link with my friends Design Design Design #1 #2 #3 Preview with  User can edit  Allow me to Design checkboxes before import reuse my email #1 No No contacts #2 Yes No #3 Yes Yes Copyright © 2010 YourVersion
  • 19. 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) Opportunity = High Importance need with low Satisfaction Copyright © 2010 YourVersion
  • 20. High Importance + Low Satisfaction = Importance of User Need Opportunity High Competitive Opportunity Market Not Worth Going After Low Low High User Satisfaction with Current Alternatives Copyright © 2010 YourVersion
  • 21. 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 © 2010 YourVersion
  • 22. 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 © 2010 YourVersion
  • 23. Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Customer’s Perspective What does it mean to us? How easy to use is it? Usability & Design Satisfaction Increasing Does the functionality Feature Set meet my needs? 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 © 2010 YourVersion
  • 24. What is Your Value Proposition? Which user benefits are you providing? How are you better than competitors? Competitor A Competitor 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 © 2010 YourVersion
  • 26. Prioritizing Product Ideas by ROI ? Return (Value Created) 4 Idea D 3 Idea A Idea B 2 Idea C 1 Idea F 1 2 3 4 Investment (developer‐weeks) Copyright © 2010 YourVersion
  • 27. UI Design and Ease of Use 27 Copyright © 2010 YourVersion
  • 28. 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 UI Design can be differentiator Olsen’s Law: “The less user effort required, the  higher the percentage of users who will do it” Copyright © 2010 YourVersion
  • 29. The Design Gap in Many Teams Level Define Design Code 1 Product Mgmt Engineering 2 Product Mgmt Engineering Product Mgmt Engineering 3 PM Eng UI 4 PM Eng Copyright © 2010 YourVersion
  • 30. The UI Design Iceberg What most people see and react to Visual Design What good product people Interaction think about Design Information Architecture Conceptual Design Recommended reading: Jesse James Garrett’s “Elements of User Experience” chart, free at www.jjg.net Copyright © 2010 YourVersion
  • 31. 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 Copyright © 2010 YourVersion
  • 32. Learning from Customer Feedback 32 Copyright © 2010 YourVersion
  • 33. Iterating Your Product Vector Based on  User Feedback in Solution Space Problem Space Solution Space (your mental model) (what users can react to) Help user Help user book travel plan travel Mockups / Code Customer Feedback Copyright © 2010 YourVersion
  • 34. Persevere or Pivot? Increasing Product-Market Product-Market Fit = Fit Getting enough data to validate that you’re climbing up the Pivot right mountain Pivot Copyright © 2010 YourVersion
  • 35. What Are You Getting Feedback &  Learnings About? Problem Space Solution Space (your mental model) (what users can react to) Feature Set Customer Understanding  (needs &  preferences) UI Design Messaging  Copyright © 2010 YourVersion
  • 36. What Can Solution Space Objects Can You Test with Customers? Range of solution space options: Wireframe: low‐fidelity graphics Mockup: high‐fidelity graphics Prototype: interactive graphics or code Alpha product: production code Graphics usually quicker/cheaper to  change than code Goal is to gain learnings quickly Copyright © 2010 YourVersion
  • 37. The Value of User Feedback Sessions Critical to talk with customers 1‐on‐1 Gain better understanding of Customer needs and problems Issues with your feature set, UI, messaging What alternatives customers are using, pros & cons of each, customer preferences QA: use cases & bugs you haven’t seen Really a “user learning” session Make test as real for user as possible Copyright © 2010 YourVersion
  • 38. “Ramen” User Feedback for Startups Anyone can do it! Ingredients: Solution‐space product/mockup to test 1 customer (with laptop if testing code) 1 desk 1 person to conduct the session Pen and paper Optional note‐taker and observers Copyright © 2010 YourVersion
  • 39. Typical Format for Customer Session 5 ‐ 10 min: Ask questions to understand user  needs and solutions they currently use 30 ‐ 50 min: User feedback Show user product/mockup Non‐directed as much as possible When necessary, direct user to attempt to  perform a specific task 5 ‐ 10 min: Wrap‐up Answer any user questions that came up Point out/explain features you want to highlight Ask them if they would use the product Copyright © 2010 YourVersion
  • 40. Dos & Don’ts of Conducting Usability Do Explain to the user: Their usability test will help improve the product Not to worry about hurting your feelings “Think Aloud Protocol” Ask user to attempt the task, then be a fly on the wall Ask non‐leading, open‐ended questions Take notes and review them afterwards for take‐aways Don’t Ask leading questions “Help” the user or explain the UI (e.g., “click over here”) Respond to user frustration or questions (until test is over) Get defensive Blame the user Copyright © 2010 YourVersion
  • 41. Case Study on Product‐Market Fit: MarketingReport.com 41 Copyright © 2010 YourVersion
  • 42. Product‐Market Fit Case Study: MarketingReport.com My consulting client, CEO of TrustedID,  had an idea for a new product Team: me, CEO, head of marketing, UI design consultant Goal: Validate product‐market fit quickly, cheaply  without writing a single line of code Determine if their was a business  opportunity here Copyright © 2010 YourVersion
  • 43. Product‐Market Fit Case Study: Developing Product Concept Product Concept was “marketing report” that let  consumers control the direct mail that they receive Concept was fuzzy with various components, so we  broke it into 2 different “flavors”: #1 “Marketing Shield”: Service to reduce/stop junk mail #2 “Marketing Saver”: Opt in & receive money‐saving offers Each product concept consisted of several modules that  each mapped to a specific user benefit Worked with UI designer to create paper mockups of  pages for each flavor concept (5 pages each) Copyright © 2010 YourVersion
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  • 46. Clustering Potential User Benefits to  Create Product Concepts “Shield” Concept “Saver” Concept Reduce Find out what Money Compare Social Junk Mail “they” know Saving Yourself Networking about you Offers to Others Save Marketing Trees Report Marketing Marketing Score Profile Copyright © 2010 YourVersion
  • 47. Product‐Market Fit Case Study:  Recruiting People Telephone recruit of prospective customers Wrote phone‐screen questionnaire to create rough  target customer segmentation Wanted users who work full‐time & use internet Fit for opt‐in concept: use coupons, Costco membership Fit for anti‐junk mail concept: use paper shredder, block  caller ID Scheduled 3 groups of 2 or 3 people to discuss  each product concept for 90 minutes Moderated each group through the paper  mockups to hear their feedback Copyright © 2010 YourVersion
  • 48. Product‐Market Fit Case Study: Findings on Concepts &User Benefits “Shield” Concept “Saver” Concept Reduce Find out what Money Compare Social Junk Mail “they” know Saving Yourself Networking about you Offers to Others Save Marketing Trees Report Legend Marketing Marketing Score Profile Strong appeal Somewhat positive Low appeal Copyright © 2010 YourVersion
  • 49. Product‐Market Fit Case Study: Learnings from Research Learned that “Shield” (anti‐junk mail) concept was  stronger than “Saver” People didn’t like many of the “Saver” concept  components Learned users’ concerns / questions about “Shield” concept Refined “Shield” concept: Removed irrelevant components Improved messaging to address user concerns / questions Validated revised “Shield” concept with quick 2nd round of tests No customer concerns Clear willingness to pay Copyright © 2010 YourVersion
  • 50. 50 Copyright © 2010 YourVersion
  • 51. Product‐Market Fit Case Study: Summary 4 weeks from 1st meeting to validated  product concept Cost $1,500 to talk with 20 users ($75  each) 1 round of iteration on product concept Identified compelling concept that users  are willing to pay $10/month for Trimmed away non‐valuable pieces You can achieve similar results Copyright © 2010 YourVersion
  • 52. Getting Quantitative: Optimization Using Metrics 52 Copyright © 2010 YourVersion
  • 53. Approaching Your Business as an  Optimization Exercise Given reality as it exists today, optimize our business results subject to our resource constraints. Copyright © 2010 YourVersion
  • 54. Define the Equation of your Business “Peeling the Onion” Advertising Business Model: 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 Conversion Rate Copyright © 2010 YourVersion
  • 55. Equation of your Business Subscription Business Model Profit = Revenue ‐ Cost Paying Users x  Revenue per Paying User New Paying Users +  Repeat Paying Users Trial Users x  Conv Rate Previous Paying Users  x  ( 1 – Cancellation Rate ) ( SEO Visitors + SEM Visitors + Viral Visitors )  x  Trial Conversion Rate Copyright © 2010 YourVersion
  • 56. How to Track Your Metrics Track each metric as daily time series Unique  Page  Ad  New User  … Date Visitors views Revenue Sign‐ups 4/24/08 10,100 29,600 25 490 4/25/08 10,500 27,100 24 480 … Create ratios from primary metrics:  X / Y Example: How good is your registration page? Okay: # of registered users per day Better: registration conversion rate = # registered users / # uniques to reg page Copyright © 2010 YourVersion
  • 57. 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 © 2010 YourVersion
  • 58. Identifying the  “Critical Few” 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? Metric A Metric B Metric C Good ROI Bad ROI Great ROI Return Return Return Investment Investment Investment Copyright © 2010 YourVersion
  • 59. Metrics to Validate Product‐Market Fit Survey results Importance & Satisfaction Net Promoter Score Survey.io “How would you feel if you could no longer use Product X?” Very disappointed, Somewhat disappointed, Not disappointed User behavior Prospects sign up (high conversion rate) They keep using it (high retention rate) They use it often (high frequency of use) Copyright © 2010 YourVersion
  • 60. Continuous Improvement 60 Copyright © 2010 YourVersion
  • 61. Adding Metrics and Optimization to  your Product Process Site Level Business Product Prioritized  Plan Objectives Objectives Feature List Scoping Feature  Level Requirements  Design & Design Code Test Launch Develop Metrics & User  Optimize Feedback Copyright © 2010 YourVersion
  • 62. Optimization through Iteration: Continuous Improvement Measure the metric Analyze Learning the metric Gaining knowledge: • Market Identify top  • Customer opportunities to improve • Domain • Usability Design & develop   the enhancement Launch the enhancement Copyright © 2010 YourVersion
  • 63. Product Management for V1 Products Cheat Sheet Clarify problem space by iterating in the  solution space & getting user feedback Revise feature set, UI design, and  messaging to improve product‐market fit Ruthlessly prioritize based on ROI Define equation of your business Identify and track key metrics Launch, learn, and iterate Copyright © 2010 YourVersion
  • 64. ‐“Pandora for your real‐time web  content” ‐Aggregates latest news, blogs,  www.yourversion.com twitter, etc. tailored to your  specific interests ‐Free iPhone App, browser tools ‐Intimate, all‐day workshop  on Product Management,  Design, & Marketing ‐Sat June 12th in Palo Alto ‐Use discount code ‘svpma’ toolbox.eventbrite.com Copyright © 2010 YourVersion
  • 65. Questions? @danolsen www.yourversion.com Copyright © 2010 YourVersion