1. CONFIDENTIAL PRESENTATION | PAGE1
Product Management 101:
The Search for Product-Market Fit
Jeff Bussgang
General Partner, Flybridge Capital
Senior Lecturer, Harvard Business School
@bussgang
April 2013

2. CONFIDENTIAL PRESENTATION | PAGE2
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

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Context for My Perspective
• General Partner at Flybridge Capital, early-stage VC firm in
Boston/NY, current fund: $280M
70+ portfolio companies; seed and Series A focused
• 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

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Startup
1. A team launching a new product under
conditions of extreme uncertainty
2. A vehicle for testing hypotheses about
such an entity
4
Entrepreneurship: the pursuit of opportunity beyond
resources you currently control
- HBS Professor Howard Stevenson
Relentless Focus
Novel/Innovative
Resource Constrained

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Customer Development
Customer Development
vs. Product Development
Concept/
Bus. Plan
Product
Dev.
Alpha/Beta
Test
Launch/
1st Ship
Product Development
Source: Steve Blank

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Old School Product Management
• Report to: Marketing
• Output: Requirements Documents
• Methodology: Waterfall
• Product lifecycles: Years
• Decision-Making: Opinion-Driven

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Modern Product Management
• Report to: CEO
• Output: Prototypes
• Methodology: Agile
• Product lifecycles: Weeks
• Decision-Making: Data-Driven

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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

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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
9

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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
10

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Crossing The Chasm

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

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Tools/Techniques
• Structured idea generation
• Business model generation
• Customer discovery process
• Focus groups
• Customer survey
• Persona development
• Competitor benchmarking
• Wireframing
• Prototype development
• Usability testing
• Charter user program
• A/B test
• Conversion funnel analysis
• Landing page optimization
• SEM/SEO optimization
• Inbound marketing design
• PR strategy
• Customer support analysis
• Product feature prioritization
• Sales pitch
• Lead qualification
• Bus dev screening
• Net Promoter Score
• Lifetime value vs. Customer
acquisition costs
14

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“Lessons Learned” Drives Scaling
Concept
Business
Plan/Canvas
Lessons
Learned
Scale
Do this first instead of scaling
(or raise seed round to test hypotheses…rigorously)
Test
Hypotheses
Source: Steve Blank

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Should You Always Nail It
Before You Scale It?
• That is, when is it ok to be a little “fat”?
• If you are in a winner take all market
• Deep customer lock-in / high switching costs
• Network effect businesses
• Capital is cheap
• Executive team knows how to scale
• Upromise example
• Series A: $34m (March 2000)
• Series B: $55m (October 2000)
• Launch service: April 2001

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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)

18. CONFIDENTIAL PRESENTATION | PAGE18
Additional 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

19. CONFIDENTIAL PRESENTATION | PAGE19
Product Management 101:
The Search for Product-Market Fit
Jeff Bussgang
General Partner, Flybridge Capital
Senior Lecturer, Harvard Business School
@bussgang
April 2013