Dan Olsen, The Lean Product Playbook , @danolsen Room: C260 Everyone working on a new product is trying to achieve the same goal: product-market fit. Although product-market fit is one of the most important Lean Startup concepts, it’s also the least well defined. Dan Olsen shares the top advice from his book The Lean Product Playbook, including the Product-Market Fit Pyramid: an actionable model that breaks product-market fit down into 5 key elements. Dan also explains the Lean Product Process, a 6-step methodology with practical guidance on how to achieve product-market fit, illustrated with a real-world case study.

1. A Playbook
For Achieving
Product-
Market Fit
DAN OLSEN
NOV 12, 2015

2. My
Background
Educa/on
n Engineering
background
n Stanford
MBA
n UX
design,
web
and
mobile
coding
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,
MicrosoM
n Organizer:
Lean
Product
&
Lean
UX
Meetup
Silicon
Valley
I
will
post
my
slides
at
hOp://slideshare.net/dan_o
Copyright
©
2015
@danolsen

3. What
is
“Lean
Startup”
all
about?
n Ar/culate
hypotheses
n Iden/fy
fastest
way
to
test
n Keep
scope
small:
minimum
viable
product
(MVP)
n Test
with
customers
n Learn
and
iterate
n Achieve
product-­‐market
fit
Copyright
©
2015
@danolsen
Sounds
easy,
right?

7. That’s
Why
I
Wrote
a
How-­‐To
Guide
For
Achieving
Product-­‐Market
Fit
hOp:///ny.cc/LPP

8. What
is
Product-­‐Market
Fit?

9. The
Product-­‐Market
Fit
Pyramid

10. The
Product-­‐Market
Fit
Pyramid

11. The
Product-­‐Market
Fit
Pyramid

12. The
Product-­‐Market
Fit
Pyramid

13. The
Lean
Product
Process

14. The
Lean
Product
Process

15. The
Lean
Product
Process

16. The
Lean
Product
Process

17. The
Lean
Product
Process

18. The
Lean
Product
Process

19. The
Lean
Product
Process

20. The
Lean
Product
Process

21. Copyright
©
2015
@danolsen

22. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

23. Transporta/on
within
100
miles
of
my
home
Soccer
Mom
Speed
Demon
Carry
kids
&
gear
Safety
Fuel
economy
Go
fast
Looks
cool
Makes
me
look
cool
Target
Customer
Has
Dis/nct
Needs
High-­‐level
need
Target
Customer
Detailed
needs
Ideal
Product
Soccer
Mom
Speed
Demon

24. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

25.
n Russians:
pencil
n NASA:
space
pen
($1
M
R&D
cost)
Example
n Ability
to
write
in
space
(zero
gravity)
Problem
Space
vs.
Solu/on
Space
Problem
Space
n A
customer
problem,
need
or
benefit
that
the
product
should
address
n A
product
requirement
Solu/on
Space
n A
specific
implementa/on
to
address
the
need
or
product
requirement
Copyright
©
2015
@danolsen

26. Problem
vs.
Solu/on
Space:
Product
Level
Problem
Space
(user
benefits)
Solu/on
Space
(product)
TurboTax
TaxCut
Pen and
paper
Prepare
my taxes
File my
taxes
Check my
taxes
Maximize
deductions
Reduce
audit risk
Copyright
©
2015
@danolsen

27. Problem
Space
Problem
vs.
Solu/on
Space:
Feature
Level
Copyright
©
2015
@danolsen
Save time filing
taxes
Save time
preparing taxes
Maximize my
tax deductions
Check my
return
Reduce my
audit risk
Help me
prepare taxes
Empowerment/
Confidence
Save Time
Save Money
Tax Interview
Wizard
Audit Risk
Analyzer
Tax Return
Error Checker
Tax Data
Downloader
Electronic Tax
Return Filing
Tax Deduction
Finder
Solu/on
Space

28. Group
Exercise:
Customer
Needs
n Think
about
Airbnb
n Focus
on
the
problem
space
n What
customer
needs
does
Airbnb
address?
Copyright
©
2015
@danolsen

29. Priori/zing
Needs:
Importance
vs.
Sa/sfac/on
Importance
of
User
Need
User
Sa/sfac/on
with
Current
Alterna/ves
Compe//ve
Market
Opportunity
Low
High
Low
High
Not
Worth
Going
AMer
Copyright
©
2015
@danolsen

30. Crea/ng
Customer
Value
Copyright
©
2015
@danolsen
Importance
of
User
Need
User
Sa/sfac/on
with
the
Product
Low
High
Low
High
Area
=
Customer
Value
Created
Area
=
Opportunity
to
Create
Customer
Value

31. Users
Rated
13
Key
Features
in
a
Survey
Recommended
reading:
“What
Customers
Want”
by
Anthony
Ulwick
Great
Copyright
©
2015
@danolsen
Bad

32. Kano
Model:
User
Needs
&
Sa/sfac/on
User
Sa/sfac/on
User
Dissa/sfac/on
Performance
(more
is
beOer)
Delighter
(wow)
Need
not
met
Need
fully
met
Must
Have
Needs
&
features
migrate
over
/me
Copyright
©
2015
@danolsen

33. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

34. What
is
Your
Value
Proposi/on?
n Which
user
benefits
are
you
providing?
n How
are
you
beOer
than
compe/tors?
Must
Have
Benefit
1
Performance
Benefit
1
Performance
Benefit
2
Performance
Benefit
3
Delighter
Benefit
1
Delighter
Benefit
2
Copyright
©
2015
@danolsen

35. What
is
Your
Value
Proposi/on?
n Which
user
benefits
are
you
providing?
n How
are
you
beOer
than
compe/tors?
Compe5tor
A
Compe5tor
B
You
Must
Have
Benefit
1
Performance
Benefit
1
Performance
Benefit
2
Performance
Benefit
3
Delighter
Benefit
1
Delighter
Benefit
2
Copyright
©
2015
@danolsen

36. What
is
Your
Value
Proposi/on?
n Which
user
benefits
are
you
providing?
n How
are
you
beOer
than
compe/tors?
Compe5tor
A
Compe5tor
B
You
Must
Have
Benefit
1
Y
Y
Performance
Benefit
1
High
Low
Performance
Benefit
2
Low
High
Performance
Benefit
3
Med
Med
Delighter
Benefit
1
Y
-­‐
Delighter
Benefit
2
-­‐
-­‐
Copyright
©
2015
@danolsen

37. What
is
Your
Value
Proposi/on?
n Which
user
benefits
are
you
providing?
n How
are
you
beOer
than
compe/tors?
Compe5tor
A
Compe5tor
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
©
2015
@danolsen

38. Group
Exercise:
Value
Proposi/on
n Recall
our
discussion
on
Airbnb
user
needs
n Who
are
Airbnb’s
compe/tors?
n Think
about
how
Airbnb
meets
those
needs
beOer
than
alterna/ve
solu/ons
n What
are
Airbnb’s
differen/ators?
Copyright
©
2015
@danolsen

39. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

40. What
is
an
MVP?
Courtesy
of
Jussi
Pasanen
See
Aaron
Walter’s
book
Designing
for
Emo-on
Copyright
©
2015
@danolsen

41. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

42. The
UX
Design
Iceberg
Copyright
©
2015
@danolsen
What
most
people
see
and
react
to
What
good
product
teams
think
about

43. Geqng
Customer
Feedback
Problem
Space
vs.
Solu/on
Space
n Customers
CAN’T
ar/culate
problem
space
n Customers
CAN
react
to
solu/on
space
n That’s
why
you
need
something
tangible
to
show
to
customers
to
get
good
feedback
Copyright
©
2015
@danolsen

44. Product
Design
Ar/facts
Copyright
©
2015
@danolsen
Hand
sketch
Interac/vity
Fidelity
Interac/ve
Prototype
Sta/c
Wireframe*
Clickable
Wireframe*
Mockup
Clickable
Mockup**
*
Balsamiq:
balsamiq.com
**
InVision:
invisionapp.com
Live
Product

46. Itera/ve
Design
&
Test
Workflow
Copyright
©
2015
@danolsen
Hand
sketches
Interac/vity
Fidelity
Clickable
Wireframes
Clickable
Mockups
Live
Product
Test
Test
Test

47. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Copyright
©
2015
@danolsen

48. “Ramen”
User
Tes/ng
Session
10
-­‐
15
min:
Warm
Up
and
Discovery
n Understand
user
needs,
priori/es
n Learn
about
solu/ons
they
use,
likes
and
dislikes
30
-­‐
50
min:
User
Feedback
on
Prototype
n Show
user
mockup/product
n Be
as
non-­‐directed
as
possible:
like
you’re
not
there
n Ask
ques/ons
to
gain
understanding
5
-­‐
10
min:
Wrap
up
n Answer
any
ques/ons
or
issues
that
came
up
n Point
out/explain
features
you
want
to
highlight
n Ask
if
they
would
use
the
product
Copyright
©
2015
@danolsen

49. Dos
&
Don’ts
of
User
Tes/ng
Sessions
Do
n Explain
to
the
user
n Feedback
will
help
improve
the
product
n Not
to
worry
about
hur/ng
your
feelings
n “Think
Aloud
Protocol”
n Try
to
be
a
fly
on
the
wall
n Take
notes
and
review
them
aMerwards
for
take-­‐aways
Don’t
n Ask
leading
or
close-­‐ended
ques/ons
n “Help” user
or
explain
the
UI
(e.g.,
“click
over
here”)
n Get
defensive
or
blame
the
user
Copyright
©
2015
@danolsen

50. What
Are
You
Tes/ng
and
Learning?
Problem
Space
All
your
hypotheses
Solu/on
Space
User
reac/ons
Feature
Set
UX
Design
Messaging
Copyright
©
2015
@danolsen

51. Itera/ng
Between
User
Tes/ng
Waves
Customer
Feedback
Mockups
/
Code
Copyright
©
2015
@danolsen
Problem
Space
All
your
hypotheses
Solu/on
Space
User
reac/ons

52. Problem
Space
Solu5on
Space
Copyright
©
2015
@danolsen

53. Persevere
or
Pivot?
Increasing
Product-­‐Market
Fit
Pivot
Product-­‐Market
Fit
=
Geqng
enough
data
to
validate
you’re
climbing
up
the
right
mountain
Copyright
©
2015
@danolsen

54. The
Lean
Product
Process:
Marke/ngReport.com
Case
Study
Copyright
©
2015
@danolsen

55. Marke/ngReport.com
Case
Study
n My
client
(CEO)
had
a
new
product
idea
n Team:
me,
CEO,
VP
marke/ng,
UI
designer
n Goals
n See
if
business
opportunity
exists
n Do
so
quickly
and
inexpensively
(no
coding)
n “Marke/ng
report” would
let
consumers
control
the
direct
mail
that
they
receive
n Analogous
to
credit
report
Copyright
©
2015
@danolsen

56. Mapping
Out
Customer
Benefits
Reduce
Junk Mail
Find out what
“they” know
about you
Money
Saving
Offers
Compare
Yourself
to Others
Social
Networking
Marketing
Report
Marketing
Score
Marketing
Profile
Save
Trees
“Marke/ng
Shield”
Concept
“Marke/ng
Saver”
Concept
Copyright
©
2015
@danolsen

58. Copyright
©
2015
@danolsen

59. Recrui/ng
Target
Customers
n Used
customer
research
firm
(panel)
n Wrote
screener
to
iden/fy
target
customers
n Work
full-­‐/me
n Fit
for
Saver:
use
coupons,
Costco
membership
n Fit
for
Shield:
use
paper
shredder,
block
caller
ID
n Offered
$75
compensa/on
n Scheduled
3
groups
of
2
or
3
people
for
90
min
n Moderated
each
group
through
the
mockups
Copyright
©
2015
@danolsen

60. Learning
from
First
Wave
of
User
Tests
Reduce
Junk Mail
Find out what
“they” know
about you
Money
Saving
Offers
Compare
Yourself
to Others
Social
Networking
Marketing
Report
Marketing
Score
Marketing
Profile
Save
Trees
Legend
Strong appeal
Some appeal
Low appeal
“Shield” Concept “Saver” Concept
Copyright
©
2015
@danolsen

61. Copyright
©
2015
@danolsen

62. Summary
of
Case
Study
n 4
weeks
to
validated
product
concept
n 1
round
of
itera/on
n Zero
coding
n Reasonable
cost
n Customers
willing
to
pay
$10/month
n Trimmed
away
non-­‐valuable
pieces
n You
can
achieve
similar
results
Copyright
©
2015
@danolsen

63. The
Lean
Product
Process
1. Determine
your
target
customer
2. Iden/fy
underserved
customer
needs
3. Define
your
value
proposi/on
4. Specify
your
MVP
feature
set
5. Create
your
MVP
prototype
6. Test
your
MVP
with
customers
Iterate:
§ Hypothesize-­‐Design-­‐Test-­‐Learn
loop
§ Improve
product-­‐market
fit
Copyright
©
2015
@danolsen

64. Questions?
@danolsen
olsensolu/ons.com
slideshare.net/dan_o
leanproductplaybook.com
Book:
hOp:///ny.cc/LPP