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How to Build Great Products by Dan Olsen

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How to Build Great Products by Dan Olsen

  1. 1. How  to  Build  Great  Products   Dan  Olsen   Olsen  Solu:ons  LLC   August  24,  2011   Copyright  ©  2011  YourVersion  
  2. 2. Copyright  ©  2011  YourVersion  
  3. 3. What's  the  Formula  for   a  Great  Product?   n  A  product  that:   n  Meets  customers'  needs   n  Is  bePer  than  other  alterna:ves   n  Is  easy  to  use   n  Has  a  good  value/price   n  Also  known  as  product-­‐market  fit   n  Simple,  right?   n  It's  easy  to  understand  at  the  conceptual  level   the  aPributes  a  great  product  must  possess   n  Hard  part  is  HOW  to  achieve  a  product  like  that   Copyright  ©  2011  YourVersion  
  4. 4. My  Background   n  Educa:on   n  BS,  Electrical  Engineering,  Northwestern   n  MS,  Industrial  Engineering,  Virginia  Tech   n  MBA,  Stanford   n  Web  development  and  UI  design   n  20  years  of  Product  Management  Experience   n  Managed  submarine  design  for  5  years   n  5  years  at  Intuit,  led  Quicken  Product  Management   n  Led  Product  Management  at  Friendster   n  PM  consultant  to  startups:  Box.net,  YouSendIt,  Epocrates   n  CEO  &  Cofounder  of  YourVersion,  startup  building   “Pandora  for  your  real-­‐:me  web  content”     Will  post  slides  to  hPp://slideshare.net/dan_o   Copyright  ©  2011  YourVersion  
  5. 5. Quick  Poll  of  Audience   n  Func:onal  role   n  Industry   n  Product  Management   n  Web   n  Marke:ng   n  Mobile   n  Other  business  roles   n  Hardware   n  Designer   n  Biotech   n  Engineer   n  Greentech   n  Other  technical  roles   n  Other   n  Market   n  Size  of  company   n  Consumer   n  Small:  <  50  ppl   n  Enterprise   n  Medium:  50  –  500  ppl   n  Large:  >  500  ppl   Copyright  ©  2010  YourVersion  
  6. 6. Understanding  Customer  Needs   6                          Copyright  ©  2011  YourVersion  
  7. 7.   Problem  Space  vs.  Solu:on  Space     n  Problem  Space   n  Solu:on  Space   n  A  customer  problem,   n  A  specific   need,  or  benefit  that  the   implementa:on  to     product  should  address   address  the  need  or   n  A  product  requirement     product  requirement     Example:   n  Ability  to  write  in  space   n  NASA:  space  pen     (zero  gravity)   ($1     M  R&D  cost)   n  Russians:  pencil   Copyright  ©  2011  YourVersion  
  8. 8. Problem  Space  vs.  Solu:on  Space:   Product  Level   Problem  Space   Solu:on  Space   (user  benefit)   (product)   Prepare Pen and my taxes paper Check my File my TurboTax taxes taxes Maximize Reduce TaxCut deductions audit risk Copyright  ©  2011  YourVersion  
  9. 9. Problem  vs.  Solu:on  Space:  Feature  Level   Problem  Space   Solu:on  Space     Help me Tax Interview prepare taxes Wizard Empowerement/ Reduce my Audit Risk Confidence audit risk Analyzer Check my Tax Return return Error Checker Save time Tax Data preparing taxes Downloader Save Time Save time filing Electronic Tax taxes Return Filing Maximize my Tax Deduction Save Money tax deductions Finder Copyright  ©  2011  YourVersion  
  10. 10. Priori:za:on  Part  1:   Customer  Value:  Benefits  &  Features   n  How  do  you  priori:ze:   n  Which  user  benefits  should  you  address?   n  Which  product  features  to  build  (or  improve)?   n  Importance  vs.  Sa:sfac:on   n  Importance  of  user  need  (problem  space)   n  Sa:sfac:on  with  how  well  a  product  meets  the   user's  need  (solu:on  space)   Copyright  ©  2011  YourVersion  
  11. 11. High  Importance  +  Low  Sa:sfac:on  =   Opportunity  to  Add  Customer  Value   Importance  of  User  Need   High   Compe::ve Opportunity   Market   Not  Worth  Going  Aner   Low   Low   High   User  Sa:sfac:on  with  Current  Alterna:ves   Copyright  ©  2011  YourVersion  
  12. 12. Importance  vs.  Sa:sfac:on    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  ©  2011  YourVersion  
  13. 13. Kano  Model:  User  Needs  &  Sa:sfac:on   User  Sa:sfac:on   Delighter  (wow)   Performance   (more  is  bePer)   Need   Need   not  met   fully  met   Must  Have   Needs  &  features   migrate  over  :me   User  Dissa:sfac:on   Copyright  ©  2011  YourVersion  
  14. 14. What  is  Your  Value  Proposi:on?   n  Which  user  benefits  are  you  providing?   n  How  are  you  bePer  than  compe:tors?     Compe&tor  A   Compe&tor  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  ©  2011  YourVersion  
  15. 15. Priori:za:on  Part  2:   Customer  Value  &  Engineering  Effort   n  Customer  value  is  only  half  the  equa:on   n  How  much  engineering  effort  will  it  take?   n  Need  to  consider  value  and  effort  (ROI)   n  Ruthlessly  priori:ze:  rank  order  (10  Highs  =  FAIL)   n  Be  deliberate  about  scope  &  keep  it  small   n  Strategy  =  deciding  what  you're  NOT  doing   n  Break  features  down  into  smaller  chunks   n  LAUNCH!   n  Smaller  scope  →  faster  itera:ons  →  higher  cust  value   Copyright  ©  2011  YourVersion  
  16. 16. Priori:zing  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  ©  2011  YourVersion  
  17. 17. Very  Important  to  have  a     Priori:zed  Feature  List   n  Have  only  1  list  &  only  1  keeper  of  the  list   n  Should  be  a  living,  real-­‐:me  document   n  Always  in  rank  order  &  always  up  to  date   n  Update  as  new  ideas  come  up   n  Should  be  accessible  any:me  by  team   n  Google  Spreadsheets  works  great  for  me   n  APributes  of  a  good  tool   n  Other  tools  you’ve  used?   Copyright  ©  2011  YourVersion  
  18. 18. UI  Design  and  Ease  of  Use   18                          Copyright  ©  2011  YourVersion  
  19. 19. User  Benefits  vs.  Ease  of  Use   n  Q:  If  two  products  equally  deliver  the  exact   same  user  benefits,  which  product  is  bePer?   n  A:  The  product  that's  easier  to  use   n  “Ease  of  use”  provides  benefits   n  Saves  :me   n  Reduces  cogni:ve  load  &  frustra:on   n  Makes  user  feel  empowered   n  UI  Design  can  be  differen:ator   n  Olsen's  Law:  “The  less  user  effort  required,  the   higher  the  percentage  of  users  who  will  do  it”   Copyright  ©  2011  YourVersion  
  20. 20. 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  GarreP's   “Elements  of  User  Experience”  chart,  free  at  www.jjg.net   Copyright  ©  2011  YourVersion  
  21. 21. Elements  of  User  Interface  Design   Consists  of  Three  Dis:nct  Elements:   n  Informa:on  Architecture   n  Structure  and  layout  at  both  site  and  page  level   n  How  site  is  structured  (sitemap)   n  How  site  informa:on  is  organized  (site  layout)   n  How  each  page  is  organized  (page  layout)   n  Interac:on  Design   n  How  user  and  product  interact  with  one  another   n  User  flows  (e.g.,  naviga:on  across  mul:ple  pages)   n  User  input  (e.g.,  controls  and  form  design)   n  Visual  Design   n  “How  it  looks”  vs.  “What  it  is”,  onen  called  “chrome”   n  Fonts,  colors,  graphical  elements   Copyright  ©  2011  YourVersion  
  22. 22. Early  Stage  Product  Management   Dan  Olsen   CEO,  YourVersion   July  24,  2009   Copyright  ©  2009  YourVersion  
  23. 23. Advice  on  UI  Design   n  People  need  visual  ar:facts  to  facilitate   discussions  about  UI  design   n  Sketch!  On  paper,  whiteboard,  sonware   n  1st  sketch  will  be  bad:    embrace  itera:on   n  Diverge  (explore)  then  converge  (narrow)   n  Collaborate  in  person  (vs.  remotely)   n  Great  rapid  wireframing  tool:  Balsamiq   n  Get  feedback  from  users   Copyright  ©  2011  YourVersion  
  24. 24. Learning  from  Customers   24                          Copyright  ©  2011  YourVersion  
  25. 25. Customer  Feedback:   Problem  Space  vs.  Solu:on  Space   n  Most  customers  CAN'T  ar:culate  problem   space  to  you   n  Customers  CAN  react  to  solu:on  space   n  But,  customers  can't  give  you  solu:ons   n  Customers  aren’t  designers   n  Mul:ple  use  cases  and  priori:es   n  Trade-­‐offs  and  constraints   n  Don't  have  PM,  design,  and  technical  skills   Copyright  ©  2011  YourVersion  
  26. 26. Itera:ng  Your  Product  Vector  Based  on   User  Feedback  in  Solu:on  Space   Problem  Space   Solu:on  Space   (your  mental  model)   (what  users  can  react  to)   Help  user   Help  user   book  travel   plan  travel   Mockups  or  Product    Customer  Feedback   Copyright  ©  2011  YourVersion  
  27. 27. What  Are  You  Gezng  Feedback  &   Learnings  About?   Problem  Space   Solu:on  Space   (your  mental  model)   (what  users  can  react  to)   Feature  Set   Customer   Understanding   (needs  &   preferences)   UI  Design   Messaging     Copyright  ©  2011  YourVersion  
  28. 28. Persevere  or  Pivot?   Increasing   Product-­‐Market   Product-­‐Market  Fit  =   Fit   Gezng  enough  data  to   validate  that  you're   climbing  up  the   Pivot   right  mountain   Pivot   Copyright  ©  2011  YourVersion  
  29. 29. “Ramen”  User  Feedback  for  Startups   n  Anyone  can  do  it!   n  Ingredients:   n  Solu:on-­‐space  product/mockup  to  test   n  1  customer  (with  laptop  if  tes:ng  code)   n  1  desk   n  1  person  to  conduct  the  session   n  Pen  and  paper   n  Op:onal  note-­‐taker  and  observers   Copyright  ©  2011  YourVersion  
  30. 30. Typical  Format  for  Customer  Session   n  5  -­‐  10  min:  Ask  ques:ons  to  understand  user   needs  and  solu:ons  they  currently  use   n  30  -­‐  50  min:  User  feedback   n  Show  user  product/mockup   n  Non-­‐directed  as  much  as  possible   n  When  necessary,  direct  user  to  aPempt  to   perform  a  specific  task   n  5  -­‐  10  min:  Wrap-­‐up   n  Answer  any  user  ques:ons  that  came  up   n  Point  out/explain  features  you  want  to  highlight   n  Ask  them  if  they  would  use  the  product   Copyright  ©  2011  YourVersion  
  31. 31. Dos  &  Don’ts  of  Conduc:ng  Usability   n  Do   n  Explain  to  the  user:   n  Their  usability  test  will  help  improve  the  product   n  Not  to  worry  about  hur:ng  your  feelings   n  Think  Aloud  Protocol   n  Ask  user  to  aPempt  the  task,  then  be  a  fly  on  the  wall   n  Ask  non-­‐leading,  open-­‐ended  ques:ons   n  Take  notes  and  review  them  anerwards  for  take-­‐aways   n  Don't   n  Ask  leading  ques:ons   n  Help  the  user  or  explain  the  UI  (e.g.,   click  over  here )   n  Respond  to  user  frustra:on  or  ques:ons  (un:l  test  is  over)   n  Get  defensive   n  Blame  the  user   Copyright  ©  2011  YourVersion  
  32. 32. Lean  Product  Management  for   Web  2.0  Products   Dan  Olsen,  CEO,  YourVersion   O Reilly  Web  2.0  Expo  SF   May  6,  2010   Copyright  ©  2010  YourVersion  
  33. 33. Case  Study  on  Valida:ng   Product-­‐Market  Fit:   Marke:ngReport.com   33                          Copyright  ©  2011  YourVersion  
  34. 34. Product-­‐Market  Fit  Case  Study:   Marke:ngReport.com   n  My  consul:ng  client,  CEO  of  TrustedID,   had  an  idea  for  a  new  product   n  Team:  me,  CEO,  head  of  marke:ng,   UI  design  consultant   n  Goal:   n  Validate  product-­‐market  fit  quickly,  cheaply   without  wri:ng  a  single  line  of  code   n  Determine  if  their  was  a  business   opportunity  here   Copyright  ©  2011  YourVersion  
  35. 35. Product-­‐Market  Fit  Case  Study:   Developing  Product  Concept   n  Product  Concept  was   marke:ng  report  that  let   consumers  control  the  direct  mail  that  they  receive   n  Concept  was  fuzzy  with  various  components,  so  I   broke  it  into  2  different   flavors :   n  #1   Marke:ng  Shield :  Service  to  reduce/stop  junk  mail   n  #2   Marke:ng  Saver :  Opt  in  &  receive  money-­‐saving  offers   n  Each  product  concept  consisted  of  several  modules  that   each  mapped  to  a  specific  user  benefit   n  Worked  with  UI  designer  to  create  paper  mockups  of   pages  for  each  flavor  concept  (5  pages  each)   Copyright  ©  2011  YourVersion  
  36. 36. Copyright  ©  2011  YourVersion  
  37. 37. Copyright  ©  2011  YourVersion  
  38. 38. Clustering  Poten:al  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  ©  2011  YourVersion  
  39. 39. Product-­‐Market  Fit  Case  Study:   Recrui:ng  People   n  Telephone  recruit  of  prospec:ve  customers   n  Wrote  phone-­‐screen  ques:onnaire  to  create  rough   target  customer  segmenta:on   n  Wanted  users  who  work  full-­‐:me  &  use  internet   n  Fit  for  opt-­‐in  concept:  use  coupons,  Costco  membership   n  Fit  for  an:-­‐junk  mail  concept:  use  paper  shredder,  block   caller  ID   n  Scheduled  3  groups  of  2  or  3  people  to  discuss   each  product  concept  for  90  minutes   n  Moderated  each  group  through  the  paper   mockups  to  hear  their  feedback   Copyright  ©  2011  YourVersion  
  40. 40. 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  ©  2011  YourVersion  
  41. 41. Product-­‐Market  Fit  Case  Study:   Learnings  from  Research   n  Shield  (an:-­‐junk  mail)  concept  stronger  than   Saver   n  People  didn’t  like  many   Saver  concept  components   n  Learned  concerns/ques:ons  about   Shield  concept   n  Refined   Shield  concept:   n  Removed  irrelevant  components   n  Improved  messaging  to  address  user  concerns  /  ques:ons   n  Tested  revised   Shield  concept  with  quick  2nd  round   n  No  customer  concerns   n  Clear  willingness  to  pay   Copyright  ©  2011  YourVersion  
  42. 42. Copyright  ©  2011  YourVersion  
  43. 43. Product-­‐Market  Fit  Case  Study:   Summary   n  4  weeks  from  1st  mee:ng  to  validated   product  concept  with  zero  coding   n  Cost  $1,500  to  talk  to  20  users  ($75  each)   n  1  round  of  itera:on  on  product  concept   n  Iden:fied  compelling  concept  that  users   are  willing  to  pay  $10/month  for   n  Trimmed  away  non-­‐valuable  pieces   n  You  can  achieve  similar  results   Copyright  ©  2011  YourVersion  
  44. 44. Gezng  Quan:ta:ve:   Op:miza:on  Using  Metrics   44                          Copyright  ©  2011  YourVersion  
  45. 45. Approaching  Your  Business  as  an   Op:miza:on  Exercise   Given  reality  as  it  exists  today,   op:mize  our  business  results   subject  to  our  resource  constraints.   Copyright  ©  2011  YourVersion  
  46. 46. Define  the  Equa:on  of  your  Business   Peeling  the  Onion   Adver:sing  Business  Model:     Profit  =  Revenue  -­‐  Cost         nique  Visitors    x    Ad  Revenue  per  Visitor   U            mpressions/Visitor    x    Effec:ve  CPM  /  1000   I             isits/Visitor    x    Pageviews/Visit    x    Impressions/PV   V       ew  Visitors  +  Returning  Visitors   N      nvited  Visitors  +  Uninvited  Visitors   I        of  Users  Sending  Invites    x    Invites  Sent/User    x    Invite  Conversion  Rate   # Copyright  ©  2011  YourVersion  
  47. 47. How  to  Track  Your  Metrics   n  Track  each  metric  as  daily  :me  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   …   n  Create  ra:os  from  primary  metrics:    X  /  Y   n  Example:  How  good  is  your  registra:on  page?   n  Okay:  #  of  registered  users  per  day   n  BePer:  registra:on  conversion  rate  =      #  registered  users  /  #  uniques  to  reg  page   Copyright  ©  2011  YourVersion  
  48. 48. Registra:on  Conversion  Rate  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  ©  2011  YourVersion  
  49. 49. Iden:fying  the     Cri:cal  Few  Metrics   n  What  are  the  metrics  for  your  business?   n  Where  is  current  value  for  each  metric?     n  How  many  resources  to   move  each  metric?   n  Developer-­‐hours,  :me,  money   n  Which  metrics  have  highest  ROI  opportuni:es?   Metric  A   Metric  B   Metric  C   Good  ROI   Bad  ROI   Great  ROI   Return   Return   Return   Investment   Investment   Investment   Copyright  ©  2011  YourVersion  
  50. 50. Metrics  to  Validate  Product-­‐Market  Fit   n  Survey  results   n  Importance  &  Sa:sfac:on   n  Net  Promoter  Score   n  Survey.io   n  How  would  you  feel  if  you  could  no  longer  use  Product  X?   n  Very  disappointed,  Somewhat  disappointed,  Not  disappointed   n  User  behavior   n  Prospects  sign  up  (high  conversion  rate)   n  They  keep  using  it  (high  reten:on  rate)   n  They  use  it  onen  (high  frequency  of  use)   Copyright  ©  2011  YourVersion  
  51. 51. Con:nuous   Improvement   51                          Copyright  ©  2011  YourVersion  
  52. 52. Adding  Metrics  and  Op:miza:on  to   your  Product  Process   Site  Level   Business   Product   Priori:zed   Plan   Objec:ves   Roadmap   Feature  List   Scoping   Feature     Level   Requirements   Design   &  Design   Code   Test   Launch   Develop         Metrics  &  User   Op:mize   Feedback   Copyright  ©  2011  YourVersion  
  53. 53. Op:miza:on  through  Itera:on:   Con:nuous  Improvement   Measure   the  metric   Analyze   Learning   the  metric   Gaining  knowledge:   •   Market   Iden:fy  top   •   Customer   opportuni:es   to  improve   •   Domain   •   Usability   Design  &  develop     the  enhancement   Launch  the   enhancement   Copyright  ©  2011  YourVersion  
  54. 54. How  to  Build  Great  Products   Cheat  Sheet   n  Clarify  problem  space  by  itera:ng  in  the   solu:on  space  &  gezng  user  feedback   n  Revise  feature  set,  UI  design,  and   messaging  to  improve  product-­‐market  fit   n  Ruthlessly  priori:ze  based  on  ROI   n  Define  equa:on  of  your  business   n  Iden:fy  and  track  key  metrics   n  Launch,  learn,  and  iterate   Copyright  ©  2011  YourVersion  
  55. 55. Best  way  to  stay  on  top  of  the  topics  you   care  about     Try  it  out  at   hPp://www.yourversion.com     Free  apps  for  iPad,  iPhone,   Android  phones,  Android  tablets   Copyright  ©  2011  YourVersion  
  56. 56. Ques&ons?   @danolsen   slideshare.net/dan_o   www.yourversion.com   Copyright  ©  2011  YourVersion