The Surprising Fastest Path to Product-Market Fit

marketfit.com [email protected]

@A_Albert

Your Fastest Path to Product-Market Fit

Presentation copyright © 2016 Alan Albert All rights reserved

Alan Albert

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You

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your problemsas a product manager

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C O N T E N T

ADVISORYCONTROVERSIAL IDEAS

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Product Management Marketing

Development Customer Service

Manufacturing Design

Quality Assurance Strategy

CEO

B2B Products & Services B2C Products & Services

Startups Bootstrapped

Venture-funded SMB

Fortune 500

Cognitive Psychology Computer Science

$1B

Advisor Investor Director Chair

Databases Personal productivity Business intelligence

E-commerce Financial services Social networking

Education Knowledge Management Home Grocery Shopping

Online security Real estate software

Video software Scheduling software

Process Control Non profits Publishing

Brick & mortar retail Personal computing Enterprise software

SaaS / Cloud computing Industrial technology

Software development UI / UX

Information architecture Input / output devices

Mobile devices Corporate strategy

Corporate partnerships Marketing automation Online marketplaces

Pricing strategy Consulting services

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Alan Albert marketfit.com

[email protected] @A_Albert


Strategic Services for Measurable Growth

MARKETFIT

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Alan Albert marketfit.com

[email protected] @A_Albert


Strategic Services for Measurable GrowthMARKETFIT

Advisory Services Consulting ServicesMarket Research Pricing Strategy

Innovation Strategy

Corporate Strategy Product Strategy

Marketing Strategy

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Agenda

State of the Art Customer Values

Maximum Value Proposition

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Cute Friendly Soft Fur Fetch Potty Trained

$20

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Asking customers if they like your product is like asking “is my puppy cute?”.

@A_AlbertMarketFit.com

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Credit: Eric Ries

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IDEAS

BUILD

PRODUCT

MEASURE

DATA

LEARN

Credit: Eric Ries

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Learning starts too late

Waterfall

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IDEAS

BUILD

PRODUCT

MEASURE

DATA

LEARN

This is the expensive part This is the important part

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IDEAS

BUILD

PRODUCT

MEASURE

DATA

LEARN

Learning starts too late

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Measuring how customers react to your idea won’t tell you what they really care about.


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Why build before you measure?

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Why do Lean companies build first, then measure? What if we measured first?


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Disprovable Hypothesis

Collect evidence aiming to disprove it.

Scientific Method

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Vague Hypothesis

Collect evidence that supports it.

Lean gone rogue

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If you’re working to validate your hypothesis, you’re doing it wrong.


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no one uses our product

Product Death Cycle

ask customers what features are missing

build the missing features

Credit: Andrew Chen

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Iterating to add new features won’t suddenly make people want your entire product.


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>80% Fail

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If the Lean approach was were truly scientific, shouldn’t the failure rate be less than 80%?


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Why fail faster? Why not find a way tosucceed sooner?


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5 Day Design Sprint

1 2 3 4 5day

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5 Day Design Sprint

1day

who are the users what are their needs what is the context competitor review formulate strategy

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You can’t gain understanding of your customers by talking to your co-workers


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? ? ?? ?

? ?

? ?

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?

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“People don’t buy what you do; people buy why you do it.”

–Simon Sinekwhy

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WHATHOW

WHY

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Lean starts with your idea — the what — aiming to discover the why. Why not start with why?


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Func

tiona

lity

Time

Market Need

Sustaining Innovation

Disruptive Innovation

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What makes a product disruptive? Disruptive products appeal to a different set of

customer values.


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Customer Values

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Values = motivations

goals concerns emotions

what people care about the “why” that makes them buy

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PRODUCT

VALUES

FEATURES

BENEFITS

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PRODUCT

VALUES

FEATURES

BENEFITS

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Customer Values Define Product Value

Product Alignment with Your Customers’ Values

100%

0%

-100%

Value of Your OfferingNegative Maximum

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Top 20 Reasons Startups Fail

Credit: CB Insights

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Top 20 Reasons Startups Fail, Unrelated to Values

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Top 20 Reasons Startups Fail, Related to Values

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Values hard to change trigger emotion discoverable measurable

You can easily change ideas

products or services markets or segments

positioning and messaging

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Customer values are discoverable, measurable and quantifiable. Why skip this step?


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80%NO Optical Drive NO Ethernet Port NO Media Card Slot NO replaceable battery ONLY 1 USB slot SLOWEST processor

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For those who dream bigSurprising style, advanced tech

Feels fast and looks coolImpressive efficiency

Unrivalled luxuryUnrelenting performance

Penchant for powerDemands attention

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precisely what you need in places you want to go

for business or play best available rate guarantee

comfortably familiar rooms free Wi-Fi

convenient dining always included

explore the world discover local experiences

sense of belonging community and connections

sharing

unique accommodations trust & safety

more affordable

support neighborhood businesses increase local tax revenue

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Market SegmentGeographic

Demographic Behavioural

Psychographic Occasional By Benefits

Cultural

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New definition of Market Segment: Customers who share the same set

of strongly held values.


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Maximum Value PropositionThe New

The “why” that makes them buy

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PRODUCT MARKET

MESSAGE

PRODUCT -MARKET

FIT


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“Product-market fit is the only thing that matters.”–Marc Andreessen

40%Product-Market Fit

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Customer values exist independent of your product. Discover them independent of your product.


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Don’t build an MVP until you discover the Maximum Value Proposition. It’s your first MVP.


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Cognitive Biases Your worst enemy

>150 Biases

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Confirmation Bias We tend to search for, attend to and trust

information that confirms our beliefs or hypotheses

Wikipedia “List of Cognitive Biases”

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http://nyti.ms/22y5HEK

N.Y. / REGION

After Funeral and Cremation, a Shock:The Woman in the Coffin Wasn’t MomBy MICHAEL WILSON MARCH 21, 2016

After a long battle with cancer, Val-Jean McDonald, mother of eight sons, with morethan 20 grandchildren, almost as many great-grandchildren and three great-great-grandchildren, died on Dec. 18 at the age of 81.

Her funeral, 11 days later, attracted scores of mourners to Union Baptist Churchin Harlem: her sons, from Manhattan, New Jersey, Georgia, Texas and Australia;other relatives and friends; and people who had never met her but knew herchildren.

They all filed past the open coffin, seeing familiar remnants of Ms. McDonald’slife: a favorite pink blouse and white suit, and her finest jewelry.

“Why did they cut off all her hair?” a son, Errol McDonald, 57, remembersthinking. “Maybe it’s the cancer.” He bent and kissed her.

But sometimes children see what adults cannot. Adults rationalize. Children callit like it is.

“My 10-year-old son said, ‘Daddy, that’s not Grandma,’” recalled Mr. McDonald,a school maintenance worker in Manhattan. “I said, ‘Yes, that’s what happens,’” hetold the boy, explaining that people can look different in death.

The next day, the family attended Ms. McDonald’s cremation at WoodlawnCemetery.

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Credit: Strategyzer

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Gain Creator

Pain Reliever

Product Service

Job To Be Done

Gains

Pains

Credit: Strategyzer

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QUALITATIVE RESULTSVALUE FRAMEWORK

Why Buy?(Gains)

Why Leave Status Quo? (Pains)

Why Stay with Status Quo? (Retain)

Why Not Buy?(Refrain)

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Gain Creator

Pain Reliever

Product Service

Job To Be Done

Gains

Pains

Credit: Strategyzer

Bias

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Gain Creator

Pain Reliever

Product Service

Job To Be Done

Gains

Pains

x

xCredit: Strategyzer

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1 2 3 4 5

IDEAS

BUILD

PRODUCT

MEASURE

DATA

LEARN

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Discovering Values

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Value Discovery™

Research

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Value Discovery Research

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Value Discovery Research

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Typical Market Research Value Discovery

Tactical, one-time Strategic, long-term

Biased, self-justifying Valid, reliable

Interesting, not clearly actionable Relevant, immediately actionable

Time-consuming, expensive Time-efficient, cost-effective

Risky: might not be useful Low risk: useful by design

How is Value Discovery different?

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Validating the Minimum Viable Product

Discovering the Maximum Value Proposition

Starts with your ideaProblem hypothesis testingSolution hypothesis testingGoal is to validate your idea

Build minimum viable product

Starts with the customerValue discovery

Value measurementGoal is to gain empathyDiscover maximum value

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The importance of empathy

do more than solve problems

create products that intimately connect with your customers’ identity

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Structured, multi-step research framework

Focused on discovering and quantifying values

Designed to identify and minimize bias

Conducted by an unbiased researcher

Answer strategic questions based on data

What is Value Discovery Research?

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1:1 in-depth interviews

Small sample size

Structured sequence

Focused on understanding top values

Qualitative and quantitative

How does Value Discovery work?

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Learn, don’t proveAsk about their actions and thinking — not features

Sequence from general to specificAsk open-ended questions — no Yes/No or A/B choices

Encourage unexpected answers — no “leading the witness”Carefully phrase your questions in advance, to avoid bias

Get feedback to identify your biased questionsIn interview, drill down to what’s important to them — not you

Seek empathy

Value Discovery research tips

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Maximum Value Proposition for

Product Innovation Product positioning

Branding Road mapping

Market segmentation Product line extensions

Pricing

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Real Estate Financial Services

Value Discovery™ Research Case Studies

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Real Estate Financial Services

Long lists of detailed requirements Wireframes for MVP

Before Value Discovery After Value Discovery™

“If you believe that you’re the subject matter expert, then you’re doing it wrong.”

Workflow: Document management Unified view of all documents

Prospect interest, but no commitment Seeking contractor to build MVP

Fewer requirements, simpler features Mockups illustrating “New MVP”

Dashboard: Deal management Different views for different roles

4 customer commitments $950k/year @ $50/transaction Investment to launch and grow

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Charity Marketplace


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VALUE DISCOVERY PROCESSVALUE HYPOTHESES | ALLManagement Reporting Separation Decision-support Allocation Privacy/Anonymity Control Guilt Scope Discovery Taxes Matching Fees Fundraising Community Gifting Kinship Social Trust

Manage all your charitable giving in one place Easy access to charitable giving activity (what you gave to, how much, when etc) Of Donating vs Allocating money to a charity Deciding what causes/charities to support Deciding how much money to allocate to which cause Keeping your information private and/or anonymous Over how much communication you want Feeling ok saying "no", due to better control over "yesses" The ability to give to any charity in Canada all in one place Discover opportunities to support causes you care about Simplified tax admin and tax filing The ability to double your donation (matching dollars) More $ to the charity due to low fees Fundraising together (via a giving group) Feeling a part of your group or company’s community Ability to send charity $ for your friends to allocate, to say thanks, support them, etc. Supporting friends & family (already on Chimp) Ability to show all your friends that you've donated Confidence that you're giving to a legitimate charity

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QUANTITATIVE RESULTSVALUE HYPOTHESES – ALLManagement Reporting Separation Decision-support Allocation Privacy/Anonymity Control Guilt Scope Discovery Taxes Matching Fees Fundraising Community Gifting Kinship Social Trust Automation

Manage all your charitable giving in one place Easy access to charitable giving activity (what you gave to, how much, when etc) Of Donating vs Allocating money to a charity Deciding what causes/charities to support Deciding how much money to allocate to which cause Keeping your information private and/or anonymous Over how much communication you want Feeling ok saying "no", due to better control over "yesses" The ability to give to any charity in Canada all in one place Discover opportunities to support causes you care about Simplified tax admin and tax filing The ability to double your donation (matching dollars) More $ to the charity due to low fees Fundraising together (via a giving group) Feeling a part of your group or company’s community Ability to send charity $ for your friends to allocate, to say thanks, support them, etc. Supporting friends & family (already on Chimp) Ability to show all your friends that you've donated Confidence that you're giving to a legitimate charity Ability to automate monthly charitable contributions

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Charity Marketplace


"Though Value Discovery Research, we gained so much knowledge about our target audience. We’re now planning to repeat this methodology for each of our market segments."

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English Language Centers


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Location Price

Language Recommendation

Safety Easy access to visas

Accreditation of courses Support for international students

Lifestyle Students from same country are studying there

Employment prospects Admission requirements

Scholarship and financial aid Other

Links with local institutions Performance in ranking/league tables

Transfer of credits policy

Industry Market Surveys

Factors of Importance in Language School Choice

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Location Price

Language Recommendation

Safety Easy access to visas

Accreditation of courses Support for international students

Lifestyle Students from same country are studying there

Employment prospects Admission requirements

Scholarship and financial aid Other

Links with local institutions Performance in ranking/league tables

Transfer of credits policy

Value Discovery™Industry Market Surveys

Confidence to communicate globally Enhance career opportunities Make friends and gain experience

Factors of Importance in Language School Choice


Price not a major factor

Learning English not the goal

Opportunities to connect after class Easy access to social activities Few students from my country No other country dominant

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Language School

Entire market experiencing decreasing volume, lower margins

Before Value Discovery After Value Discovery™

“Value Discovery uncovered startling insights you simply can’t get with traditional market research, yielding quick wins. We’re coming back for more.”

Considering reducing price and margin to remain competitive

Implemented simple changes to pricing model, timetable, marketing

Decrease in volume halted

50% increase in year-over-year profit

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Value Discovery™ Research Case StudiesMarketplace for short-term commercial real estate

“The research disproved our assumptions about user’s values just weeks before development started. It changed our entire product roadmap for the better.”

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The ROI of Understanding Values

Faster sales cycle More customers More revenue per sale More customer retention More referrals

Lower cost of development Lower cost of acquisition Lower risk of failure

Cost Savings

Revenue / Profit

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to youas a product manager

The Value of Understanding Values

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Market Problems

Win/Loss Analysis

Distinctive CompetenceCompetitive Landscape

Technology Assessment

Market DefinitionDistribution Strategy

Product Portfolio

Product Roadmap

Business PlanPricing

Build vs Buy

PartnersProfitability

Innovation

Positioning

Buying Process

Buyer Personas

User Personas

Requirements

User Scenarios

Status Dashboard

Marketing Plan

User EngagementUser RetentionProgram Effectiveness

Launch Strategy

Leadership

Lead Generation

ReferralsReferences

Sales Process

Collateral

Sales Tools

Channel Training

Presentations

Demos

Calls

EventsSupport

Staffing

OVERLOAD

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Value Discovery™

Value Proposition

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Value Discovery™

Value Proposition

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Value Discovery™

Value Proposition

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Design Process

Credit: Damien Newman

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Iterative Process

Unknown values Known values

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Unknown values Known values

Start here

Fastest Path

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Will you keep iterating, hoping for product-market fit? Or would you rather first discover why your customers buy?

?@A_AlbertMarketFit.com

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Thank You

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marketfit.com [email protected]

@A_Albert

Your Fastest Path to Product-Market Fit


Alan Albert

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Documents

The Surprising Fastest Path to Product-Market Fit