This document outlines a presentation on product management and achieving product-market fit. The presentation covers key concepts like the customer development process, lean startup theory, and crossing the chasm. It discusses tools and techniques for validating ideas with customers before and after achieving product-market fit. An exercise about strategic choices for Blackberry 10 is included to help attendees practice applying the concepts. The overall goal is to help attendees devise an approach for rapidly achieving product-market fit and avoiding wasting resources.

1. Product Management 101:
The Search for Product-Market Fit
Jeff Bussgang
General Partner, Flybridge Capital
Senior Lecturer, Harvard Business School
December 10, 2012
CONFIDENTIAL PRESENTATION | PAGE1

2. Session Objectives
• What is great product management?
• What people mean when they use the phrase,
“Product Market Fit” (PMF), plus:
– Customer Development Process
– Lean Start-Up Theory
• Help you devise your approach to achieving PMF
and avoid wasting a lot of money
CONFIDENTIAL PRESENTATION | PAGE2

3. Agenda
• Introduce Concepts – 30 minutes
• Exercise – 30 minutes
• Debrief – 15 minutes
• Q&A and Wrap – 15 minutes
CONFIDENTIAL PRESENTATION | PAGE3

4. Context for My Perspective
• General Partner at Flybridge Capital, early-stage VC firm in
Boston/NY, $560M under management
60+ portfolio companies
• Senior Lecturer at Harvard Business School
• Former entrepreneur
Cofounder/Pres. Upromise (acq’d by SallieMae)
VP at Open Market (IPO ‘96)
• Author: Mastering the VC Game
CONFIDENTIAL PRESENTATION | PAGE4

5. Leading Thinkers/Books/Blogs
• Geoffrey Moore: Crossing the Chasm (read this!)
• Steve Blank: Customer Development Process (read Four
Steps to the Epiphany)
• Eric Ries: Lean Startups (read this too!)
• Marty Cagan: Silicon Valley Product Group (great book
and blog)
• HBS Prof Tom Eisenmann: Launching Tech Ventures
(great blog)
• Sean Ellis: Startup Marketing (great blog)
• Andrew Chen: Growth Hackers (great blog)
CONFIDENTIAL PRESENTATION | PAGE5

6. Startup
1. A team launching a new product under
conditions of extreme uncertainty
2. A vehicle for testing hypotheses about
such an entity
Entrepreneurship: the pursuit of opportunity beyond
resources you currently control
- HBS Professor Howard Stevenson
6
CONFIDENTIAL PRESENTATION | PAGE6

7. Old School Product Management
• Report to: Marketing
• Output: Requirements Documents
• Methodology: Waterfall
• Product lifecycles: Years
• Decision-Making: Opinion-Driven
CONFIDENTIAL PRESENTATION | PAGE7

8. Modern Product Management
• Report to: CEO
• Output: Prototypes
• Methodology: Agile
• Product lifecycles: Weeks
• Decision-Making: Data-Driven
CONFIDENTIAL PRESENTATION | PAGE8

9. Customer Development
vs. Product Development
Product Development
Concept/ Product Alpha/Beta Launch/
Bus. Plan Dev. Test 1st Ship
Customer Development
Customer Customer Customer Company
Discovery Validation Creation Building
Source: Steve Blank
CONFIDENTIAL PRESENTATION | PAGE9

10. Product Management Skills
• Responsibilities:
– Define the new product to be built
– Secure the resources to build it
– Manage its development, launch and
ongoing improvement
– Lead the cross-functional product team
• Attributes:
– Ability to influence and lead
– Resilience and tolerance for amibiguity
– Business judgment and market knowledge
– Strong process skills and detail orientation
– Fluency with technology and implications on product design, business
– Design/UX instincts
Mini CEO – with none of the authority
CONFIDENTIAL PRESENTATION | PAGE10

11. The Lean Startup
• Many startups fail because they waste capital and
time developing and marketing a product that no
one wants
• Lean startups rapidly and iteratively test hypotheses
about a new venture based on customer feedback,
then quickly refine promising concepts and cull flops
• Being lean does NOT mean being cheap, it is a
methodology for optimizing—not minimizing—
resources expenditures by avoiding waste
• Being lean does NOT mean avoiding rigorous,
analytical or strategic thinking
11
CONFIDENTIAL PRESENTATION | PAGE11

12. Lean Startup Principles
• No idea survives first customer contact, so get
out of the building ASAP to test ideas
• Goal: validation of business model hypotheses,
based on rigorous experiments and clear metrics
• Minimum viable product (MVP): smallest set of
features/marketing initiatives that delivers the
most validated learning
• Rapidly pivot your MVP/business model until you
have validation and product-market fit (PMF)
• Don’t scale until you have achieved PMF
12
CONFIDENTIAL PRESENTATION | PAGE12

13. Crossing The Chasm
CONFIDENTIAL PRESENTATION | PAGE13

14. Where are You?
Before Product-Market Fit: After Product-Market Fit:
Search & Validation Scaling & Optimization
• Lean startup approach • Building a robust, feature-rich
• Hunch-driven hypotheses product
• Minimum viable product (MVP) • Crossing the chasm
• Customer development process • Metrics, analytics, funnels
• Selling to early adopters • Designing for virality &
• Pivoting scalability
• Bootstrapping • Challenges with corporate
partnerships
• Small, founding team
• Building a brand
• Product-centric culture;
informal roles • Scaling the team; more
formal roles
• Early in sales learning curve
• Scaling a sales force
CONFIDENTIAL PRESENTATION | PAGE14

15. Tools/Techniques
• Structured idea generation • Conversion funnel analysis
• Business model generation • Landing page optimization
• Customer discovery process • SEM/SEO optimization
• Focus groups • Inbound marketing design
• Customer survey • PR strategy
• Persona development • Customer support analysis
• Competitor benchmarking • Product feature prioritization
• Wireframing • Sales pitch
• Prototype development • Lead qualification
• Usability testing • Bus dev screening
• Charter user program • Net Promoter Score
• A/B test • Lifetime value vs. Customer
acquisition costs
15
CONFIDENTIAL PRESENTATION | PAGE15

16. “Lessons Learned” Drives Funding
Business Test Lessons
Concept Plan/Canvas Hypotheses Series A
Learned
Do this first instead of fund raising
(or raise seed round to test hypotheses…rigorously)
Source: Steve Blank
CONFIDENTIAL PRESENTATION | PAGE16

17. Exercise: Blackberry 10
1. Milk cash cow
Strategic Choices 2. Copy iPhone
3. Leapfrog
CONFIDENTIAL PRESENTATION | PAGE17

18. Exercise Instructions
• Pick a product development methodology
– Agile vs. Waterfall
• Pick the product manager’s role
– Czar
– Democratic leader
– Oligarchy / committee
• Allocate 100 points across key product features
– Apps
– Screen / keyboard
– Form factor (small, light)
– Browser / reading
• Design a falsifiable test to help you with your scoring
CONFIDENTIAL PRESENTATION | PAGE18

19. A Few Resources
• My blog: www.SeeingBothSides.com
• Quora on product management:
• http://b.qr.ae/W1npOi (product mgt skills)
• http://b.qr.ae/sYy4jS (Google product mgt)
• HBS Case Note on Product Mgt - http://bit.ly/TQhw7w
CONFIDENTIAL PRESENTATION | PAGE19

20. Product Management 101:
The Search for Product-Market Fit
Jeff Bussgang
@bussgang
jeff@flybridge.com
December 10, 2012
CONFIDENTIAL PRESENTATION | PAGE20