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CONFIDENTIAL PRESENTATION | PAGE1
Product Management 101:The Search for Product-Market Fit
Jeff BussgangGeneral Partner, Flybridge Capital
Senior Lecturer, Harvard Business School@bussgang
April 2013
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
CONFIDENTIAL PRESENTATION | PAGE3
Context for My Perspective
• General Partner at Flybridge Capital, early-stage VC firm in
Boston/NY, current fund: $280M70+ portfolio companies; seed and Series A focused
• Senior Lecturer at Harvard Business School
• Former entrepreneurCofounder/Pres. Upromise (acq’d by SallieMae)
VP at Open Market (IPO ‘96)
• Author: Mastering the VC Game
CONFIDENTIAL PRESENTATION | PAGE4
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 beyondresources you currently control
- HBS Professor Howard Stevenson
Relentless FocusNovel/Innovative
Resource Constrained
CONFIDENTIAL PRESENTATION | PAGE5
Customer Development
Customer Developmentvs. 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
CONFIDENTIAL PRESENTATION | PAGE9
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
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CONFIDENTIAL PRESENTATION | PAGE10
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
CONFIDENTIAL PRESENTATION | PAGE14
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
ConceptBusiness
Plan/CanvasLessons Learned Scale
Do this first instead of scaling(or raise seed round to test hypotheses…rigorously)
Test Hypotheses
Source: Steve Blank
CONFIDENTIAL PRESENTATION | PAGE16
Should You Always Nail ItBefore 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
CONFIDENTIAL PRESENTATION | PAGE17
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)
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
CONFIDENTIAL PRESENTATION | PAGE19
Product Management 101:The Search for Product-Market Fit
Jeff BussgangGeneral Partner, Flybridge Capital
Senior Lecturer, Harvard Business School@bussgang
April 2013