A Playbook For Achieving Product-Market Fit

March Event Review: “A Playbook For Achieving Product-Market Fit” with Dan Olsen

By Rohan Balwani

March 2016 Event

Dan Olsen, product management consultant and author of The Lean Product Playbook, presented a step by step guide to pivoting and refining your product until you achieve product-market fit.

Dan defined Lean Startup as:

  • Articulating a hypothesis
  • Identifying the fastest way to test
  • Keeping the scope small and creating a Minimum Viable Product (MVP)
  • Rapidly testing with customers
  • Learning, modifying and iterating
  • And finally achieving product-market fit

When the value proposition of your product fulfills underserved needs, you have achieved product market fit.

Dan explained that the Lean Product Process starts with determining your target customer, who usually has very distinct needs.  For example, among the group of people who need transportation within 100 miles of their home, the specific needs of a soccer mom would be very different from that of a speed demon.  Safety, economy and the ability to carry gear and kids would be important to a soccer mom, making a mini-van the ideal product for her, whereas a speed demon values speed and looks, and therefore would prefer a sporty muscle car.

The next step is to identify underserved customer needs.  At this point Dan illustrated the differences between Problem Space and Solution Space.

Problem Space

●     A customer problem, need or benefit that the product should address

●     A product requirement

Solution Space

●     A specific implementation to address the need or product requirement

Example:

●     Ability to write in space

Example:

●     NASA: Space pen ($1M R&D cost)

●     Russians: pencil

Dan further spoke about the Product Space and Solution Space at the Product and Feature level

Problem Space (user benefits)

Prepare Taxes

Check my taxes, File my taxes

Maximize deductions, Reduce audit risk

Solution Space (product)

Pen and Paper

Turbo Tax

Tax Cut

(benefits)

Empowerment/Confidence

Problem Space (benefits)

Help me prepare taxes

Reduce my audit risk

Check my return

Solution Space (Features)

Tax Interview Wizard

Audit Risk Analyzer

Tax Return Error Checker

Save Time

Save time preparing taxes

Save time filing taxes

Tax Data Downloader

Electronic Tax Return Filer

Save Money Maximize my tax deductions Tax Deduction Finder

Dan then spent some time explaining why it is important to prioritize customer needs and he spoke about the importance of user need vs user satisfaction with current alternatives. Dan explained that maximum opportunities lie in the areas with high customer need and low level of user satisfaction with current products. A higher user satisfaction with current products would prove to be a very competitive market. Customer Value can be created by increasing user satisfaction with your product.

Dan described the Kano Model of user needs and satisfaction:

  • Must Haves: Must have features do not lead to any additional satisfaction from users but lead to extreme dissatisfaction if they aren’t present.
  • Performance: User satisfaction is directly proportional to product performance.
  • Delighter: Features which have a “Wow” factor dramatically increase user satisfaction if present but do not affect it if missing.

Dan mentioned that over time, needs and features migrate and what was once a delighter feature could become a must have in the future.

The next step in the Lean Product Process is defining your value proposition.  This can be achieved by completing a competitive analysis of each must have, performance and delighter benefits and choosing to focus time and resources on certain features that will increase user satisfaction with your product.

Specifying a feature set for your Minimum Viable Product is the next step in the product process.  Dan defined an MVP as a product that not only contains partial functionality, but also reliability, usability, and delighter features.

The next step is to create the MVP prototype.  Dan explained that UX design involves a lot more than the visual design aspect that users see and to which they react.  Good product teams also think about Interaction Design, Information Architecture, and Conceptual Design.  Dan highlighted the importance of getting user feedback.  He pointed out that customers can’t articulate the problem space, but can react to the solution space, which is why it is important to create an MVP to get good customer feedback.

Dan suggested that product design should start with hand sketches and iterate until it is refined.  Next, create clickable wireframes and test them.  Follow this up with clickable mockups, which are also tested. Finally create the Live Product, which also has been thoroughly tested.

The final step is to test the MVP with customers.  The testing process involves

  • 10 – 15 minutes of warmup and discovery, which includes user needs and priorities, learning about solutions they use, their likes and dislikes
  • 30 – 50 minutes of user feedback on the prototype. Show the user the product, and be as non-direct as possible.  Also, ask questions to gain understanding.
  • 5 – 10 minutes of wrap up. This entails answering any questions or issues that came up, pointing out features you want to highlight, and asking if the user liked the product

Some Dos and Don’ts of User Testing Sessions

Dos:

  1. Explain to the user that feedback will help improve the product, not to worry about hurting your feelings, and to follow the “Think Aloud Protocol”
  2. Try to be a fly on the wall and make quiet observations without influencing the user.
  3. Take notes and review them afterwards for take-aways.

Don’ts

  1. Help/guide the user or explain the UI
  2. Ask leading or close-ended questions
  3. Get defensive or blame the user

After gaining customer feedback, use it to improve and iterate your product and test again until you the customer finds your product valuable.  Pivot as necessary.

Dan presented a marketingreport.com case study in the final segment of his presentation.  He was helping the CEO of a company to analyze a product idea and to see if a business opportunity existed.  Dan helped map customer benefits and defined two different MVPs with different benefits.  He got mockups created, recruited target customers using a customer research firm and a screener.  After the first round of customer feedback, Dan assessed that the appeal of the main product was not very high and instead ancillary features received more interest.  He was hence able to pivot the product to serve the high interest areas and was able to identify a product to serve a market of consumers who would be willing to pay for the value added by the product.

Dan wrapped up his presentation by reiterating the need to iterate as you go through the Lean Product process, which involves the Hypothesize – Design – Test – Learn loop to improve product-market fit.

Rohan Balwani is a product enthusiast with 7 years of engineering experience and is currently a student at Berkeley-Haas.  He can be reached at rbalwani@gmail.com