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Product Management 101 for Startups
- 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
- 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. Product Management’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
- 13. What’s So Great about “Lean”?
What’s wrong with Startups are at risk until
being not‐so‐lean? they’re profitable
Funding cocoon only lasts
so long
Limited resources
Tech markets move fast
Time is the real enemy
“Time is the scarcest
resource and unless it is
managed nothing else can
be managed.”
‐ Peter Drucker
Copyright © 2010 YourVersion
- 14. 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
- 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
- 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. Have to Prioritize Across Multiple
Dimensions At The Same Time
Ease of Use
Customer Value
Quality
Functionality
Customer
Understanding
Time
Copyright © 2010 YourVersion
- 30. The Design Gap at Many Startups
Level Define Design Code
1 Engineering
2 Product Mgmt Engineering
3 Product Mgmt Engineering
Product Mgmt Engineering
4 PM Eng
UI
5 PM Eng
Copyright © 2010 YourVersion
- 31. 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
- 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
- 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
- 37. 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
- 38. 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
- 39. 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
- 40. 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
- 41. 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
- 42. 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
- 44. Measuring Key Conversions:
Conversion Funnel
•Tie user actions to
business goals
•Instrument key steps in
user flow
•See where users are
dropping off
•Quantify improvement
from changes
Copyright © 2010 YourVersion
- 46. 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
- 48. 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
- 49. 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
- 50. Product Management 101
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
- 51. 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
Bookmark and share via email, Twitter, Facebook
Weekly personalized email digest
Free iPhone app
Firefox toolbar, Chrome extension, bookmarklet
Launched at TechCrunch50, won People’s Choice
Check it out at www.yourversion.com
Copyright © 2010 YourVersion
- 52. My Workshop Topics
Hands On Mini‐talks
Clarifying your product Case study on product
vision validation
Identifying customer Case study: in‐depth
benefits feature analysis
Prioritizing features Case study: using
Evaluating your metrics to optimize
product’s UI design UI Design 101 for PMs
Optimizing your new Working with developers
user flow Creative bootstrapping
Google Analytics Myers ‐ Briggs
Copyright © 2010 YourVersion