Talk I gave at the Growth Hacking Summit in August 2015 sharing ideas from my new book "The Lean Product Playbook". You can learn more at http://tiny.cc/LPP

1. How to
Create
Products
for Growth
DAN Olsen
August 4, 2015

2. Copyright
©
2015
@danolsen
My
Background
n Educa=on
n Engineering
background
n Stanford
MBA
n UX
design,
web
and
mobile
coding
n Experience
n Led
Quicken
Product
Management
at
Intuit
n Led
Product
Management
at
Friendster
n CEO
&
Cofounder,
TechCrunch
award
winner
YourVersion
n Product
consultant:
Facebook,
Box,
MicrosoS
n Organizer:
Lean
Product
&
Lean
UX
Meetup
Silicon
Valley
Slides
at
hUp://slideshare.net/dan_o
TwiUer:
@danolsen

3. n Win
a
signed
copy
of
book
n Tweet
about
this
webinar
n Include
@danolsen
n Can
include
screenshots
of
slides
you
like
n Hashtags:
n #growthhacking
n #leanstartup
n #prodmgmt
n bit.ly/leanplaybook
Copyright
©
2015
@danolsen

4. The
3
Phases
of
Your
Product
Copyright
©
2015
@danolsen
BEFORE
Product-­‐Market
Fit
AFTER
Product-­‐Market
Fit
BEFORE
your
product
is
live
Phase
1
AFTER
your
product
is
live
Phase
2
#
of
Customers
Time
0
lots
Phase
3

5. The
3
Phases
of
Your
Product
Copyright
©
2015
@danolsen
BEFORE
Product-­‐Market
Fit
AFTER
Product-­‐Market
Fit
Growth
Mainly
Quan=ta=ve
BEFORE
your
product
is
live
Phase
1
Test
hypotheses,
gain
confidence
before
building
Qualita=ve
AFTER
your
product
is
live
Phase
2
Improve
product-­‐
market
fit
Qualita=ve
&
Quan=ta=ve
Goal:
Methods:
Phase
3

6. Qualita=ve
vs.
Quan=a=ve
Qualita=ve
Interviews,
User
Tes=ng
Quan=ta=ve
Analy=cs,
A/B
tes=ng
Oprah
Spock

7. Phases
1
&
2:
The
Product-­‐Market
Fit
Pyramid

8. Phase
2:
If
you
could
only
track
1
metric
to
measure
your
Product-­‐Market
Fit,
which
metric
would
it
be?
Copyright
©
2015
@danolsen

9. Reten=on
Rate
n Reten=on
rate
tracks
what
%
of
your
customers
are
s=ll
ac=ve
over
=me
~80%
never use
app again
Curve
eventually
flattens out

10. Improving
Reten=on
Rate
Over
Time=
Increasing
Product-­‐Market
Fit

11. Phase
3:
ASer
Product-­‐Market
Fit
Copyright
©
2015
@danolsen

12. Iden=fy
highest
ROI
idea
Design
and
Implement
Analyze
How
the
Metric
Changes
Brainstorm
Ideas
to
Improve
Metric
Copyright
©
2015
@danolsen
Lean
Product
Analy=cs
Process
Iden=fy
What
Your
Metrics
Are
Measure
Metrics
Baseline
Values
Evaluate
Metrics
Upside
Poten=al
Global
Level
Metric
Level
Select
Top
Metric
Learn
&
Iterate

13.
SEO
Visitors
x
Conversion
Rate
+
SEM
Visitors
x
Conversion
Rate
+
Viral
Visitors
x
Conversion
Rate
+
…
+
Visitors
from
Channel
N
x
Conversion
Rate
Paying
Users
x
Revenue
per
Paying
User
New
Paying
Users
+
Repeat
Paying
Users
Previous
Paying
Users
x
(
1
–
Cancella=on
Rate
)
Trial
Users
x
Conv
Rate
Profit
=
Revenue
-­‐
Cost
Equa=on
of
your
Business:
Subscrip=on
Business
Model
Copyright
©
2015
@danolsen

14. View
Each
Metric
as
a
Gauge
Copyright
©
2015
@danolsen
Minimum
Possible
Value
Maximum
Possible
Value
Current
Value

15. Iden=fying
the
“Cri=cal
Few”
Metrics
n For
each
metric:
Where
is
the
needle
now?
n How
much
can
we
move
the
needle?
Revenue
impact?
n How
many
resources
will
it
take
to
move
the
needle?
n Developer-­‐days,
money
n Which
metrics
have
the
highest
ROI
opportuni=es?
Return
Investment
Return
Investment
Return
Investment
Metric
A
Good
ROI
Metric
B
Bad
ROI
Metric
C
Great
ROI
Copyright
©
2015
@danolsen

16. Friendster
Growth
Hacking
Case
Study
Copyright
©
2015
@danolsen
Improving
Viral
Acquisi=on
of
New
Users

17. Case
Study:
Op=mizing
Friendster’s
Viral
Loop
Active
Users
Prospective
Users
Invite Click
Succeed
Don’t
Click
Fail
Users
Registration
Process
Copyright
©
2015
@danolsen

18. •
Which
metric
has
highest
ROI
opportunity?
Case
Study:
Op=mizing
Friendster’s
Viral
Loop
Active
Users
Prospective
Users
Invite Click
Succeed
Invite
click-through rate
Conversion
rate
Don’t
Click
Fail
Invites per
sender
% of users
sending
invites
•
Mul=plied
together,
these
metrics
determine
your
viral
ra=o
Users
% of users
who are
active
Registration
Process
Copyright
©
2015
@danolsen

19. •
Which
metric
has
highest
ROI
opportunity?
Case
Study:
Op=mizing
Friendster’s
Viral
Loop
Active
Users
Prospective
Users
Invite Click
Succeed
Invite
click-through rate
Conversion
rate
Don’t
Click
Fail
Invites per
sender
% of users
sending
invites
•
Mul=plied
together,
these
metrics
determine
your
viral
ra=o
Users
% of users
who are
active
Registration
Process
Copyright
©
2015
@danolsen

20. •
Which
metric
has
highest
ROI
opportunity?
Case
Study:
Op=mizing
Friendster’s
Viral
Loop
Copyright
©
2015
@danolsen
Active
Users
Prospective
Users
Invite Click
Succeed
Invite
click-through rate
Conversion
rate
Don’t
Click
Fail
Invites per
sender
% of users
sending
invites
•
Mul=plied
together,
these
metrics
determine
your
viral
ra=o
Users
% of users
who are
active
= 15%
= 2.3
= 85%
Registration
Process

21. The
Upside
Poten=al
of
a
Metric
0
100%
Registra=on
Process
Yield
85%
Max
possible
improvement
0.15
/
0.85
=
18%
Copyright
©
2015
@danolsen

22. The
Upside
Poten=al
of
a
Metric
0
100%
0
100%
Registra=on
Process
Yield
%
of
users
sending
invita=ons
85%
15%
Max
possible
improvement
0.15
/
0.85
=
18%
0.85
/
0.15
=
570%
Copyright
©
2015
@danolsen

23. The
Upside
Poten=al
of
a
Metric
0
100%
0
100%
0
?
Registra=on
Process
Yield
%
of
users
sending
invita=ons
Avg
#
of
invites
sent
per
sender
2.3
85%
15%
Max
possible
improvement
0.15
/
0.85
=
18%
0.85
/
0.15
=
570%
?
/
2.3
=
?%
Copyright
©
2015
@danolsen

24. Is
anyone
feeling
a
sense
of
déjà
vu
right
now?

25. The
Upside
Poten=al
of
a
Metric
0
100%
0
100%
0
?
Registra=on
Process
Yield
%
of
users
sending
invita=ons
Avg
#
of
invites
sent
per
sender
2.3
85%
15%
Max
possible
improvement
0.15
/
0.85
=
18%
0.85
/
0.15
=
570%
?
/
2.3
=
?%
Copyright
©
2015
@danolsen
Metric
B
Bad
ROI
Metric
A
Good
ROI
Metric
C
Great
ROI

26. ASer
Launching
Address
Book
Importer…
Copyright
©
2015
@danolsen

27. ASer
Launching
Address
Book
Importer…
Copyright
©
2015
@danolsen

28. ASer
Launching
Address
Book
Importer…
Copyright
©
2015
@danolsen

29. Questions?
@danolsen
olsensolu=ons.com
slideshare.net/dan_o
leanproductplaybook.com
Book:
bit.ly/leanplaybook