Product Management Notes¶
If you’re starting an online business there are dozens of things you should probably know. You are required to be a polymath and able to bring together disparate ideas from a range of disciplines to execute your vision.
I’d recommend reading The Learn Startup by Eric Ries to get started but you should also have interest across various other fields such as computer science, business, economics, psychology & behavioural economics.
I’ve collated some of my notes here to help me learn things as I go along.
Checkout this playlist on GV channels, it contains everything you need for product management.
- User stories
- As a <role>, I want to <goal/desire> so that <benefit>
- Value proposition
- What benefits are you providing?
- How are you better than competitors?
- How do we know we’re adding value to users lives?
- Growth Engine
- Through what engine will be acquire new customers.
- Product Market fit
- Meets customer needs
- is better than other alternatives
- is easy to use
- has a good value/price
- At least 40% of users saying they would be “very disappointed” without your product
- Arbitrary, but defined after comparing 100 startups
- Those that struggle for traction are always under 40%
- Steps to achieving Product Market fit
- Understand under served customer needs
- Define your products value proposition
- Build wireframe/mockup
- Get user feedback
Frameworks can help with the planning and execution of products. Below are some of the commonly used frameworks for product management.
Acquisition, Activation, Retention, Referral, Revenue
Use the HEART framework to find the right UX metrics for your product.
Happiness, Engagement, Adoption, Retention, Task Success
- Marketing Mix
4P’s of Marketing
Product, Pricing, Promotion, Place
- 5 Why’s
From Eric Ries Lean Startup the 5 whys.
Ask why 5 times to get to the root of the issue (toyota manufacturing bugs)
Impact vs Effort (High Impact for Low Effort = Yes, Low Impact for High Effort = No)
Weighted scoring - Apply points to each criteria and than score them
Kano Model - Requires more research for understanding
- Porter 5 Forces
Threat of New Entry
Threat of Substitute
Power of Suppliers
Power of Buyers
Strengths, Weaknesses, Opportunities, Threats
Product Analytics & Metrics¶
Metrics are numbers that measure the effectiveness of your business.
In a start up company, you have to have focus, and you should focus on the one important metric that matters for the task at hand.
This is specific to your business and could be one of any of the following.
- Acquisition metrics
- CPA - Cost per acquisition
If your CPA is higher than your LTV, then your in trouble.
- Conversion metrics
- Trials / Conversion = Conversion rate
How many get to “Get started” step 4/4 - 14% How many get to “Get started” step 2/2 - 86%
- Engagement metrics
- Page views
- Unique Visitors
- Returning Visitors
- Registered Users
- Time on site
- Daily Active Users (DAU)
- Cohort analytics to track engagement for new/old users over months (Slide 47)
- Design changes to facebook’s deactivation page accounted for 1 million people not leaving
- Satisfaction metrics
- Net promoter score - Score = % Promoters - % Detractors
- Emergent Metrics
- “Once a user has 5 friends - they become active users”
- Average Revenue per Customer
- Innovation accounting
Determines whether your experiments are productive or not.
- Set the baseline MVP
- Optimize the MVP
- Pivot or Persevere
- Vanity metrics
“They make your competitors feel bad and don’t tell you anything about the company”
- Google analytics (there will always be something up and to the right)
- Anything you read on tech blogs
- “Google plus hits 10m users in 2 weeks”
- “GroupMe is now sending one million texts a day”
- What metrics matter?
Facebook - 150,000 users, little revenue
- But 75% of users visits once or more per day
- Within one month of launching on campus, can acquire 90% of students
Value hypothesis - How do we know we’re adding more value to our customers lives?
Growth hypothesis - Through what engine will we acquire new customers?
- are Actionable
- can be Audited
- are Accessible
Eric Ries’s Three Engines of Growth¶
Eric Ries’s Three Engines of Growth
Viral - Make people invite friends (metric: how many do they tell, how fast they tell)
- Metric: Viral coefficient
- Positive growth looks like: Viral coefficient > 1
Sticky - Keep them coming back (metric: do I get customers faster than I lose them)
- Metrics: New Customer Acquisition (NCA), Customer Churn Rate (CCR)
- Positive growth looks like: NCA > CCR
Paid - Revenue, spend money (metric: cost me less to acquire than I extract from them)
- Metrics: Lifetime Value (LTV), Cost per Acquisition (CPA)
- Positive growth looks like: LTV > CPA
You can also add 2 more - Empathy (First) and Scale (Last).
Dave Mclure - 5 metrics to track - AARRR¶
Acquisition - User visits
- Users come to the site via multiple channels.
- Blogs, facebook, adwords
- High volume channels
- Low cost channels
- Best performing conversion channels
Activation - User Registers
- Users enjoy first visit: “happy user experience”
- 10-30 seconds on the site, 2-3 pages, 3 clicks
- A/B Testing, landing pages
Retention - User comes back
- Users come back, visit multiple times
- Email - automated, lifecycle, +3, +7 +30 days
Referral - Friend of user signs up
- Users like product enough to refer others
- Don’t do viral marketing until your product is up to scratch, people talk (bad press)
- Email, links, blogs, widgets, word-of-mouth, facebook, twitter
Revenue - User pays for something
- Users conduct some monetization behaviour
- Figure it out
The ultimate measure of progress in any startup is rate of validated learning
How do you prioritize?
- Which user benefits should you address?
- Which product features to build?
Prioritization should be based on customer value.
- Importance vs Satisfaction framework
- Importance of user need (problem space)
- Satisfaction with how well a product meets the user’s need (solution space)
- Kano model
- A/B Testing
- Testing one thing at a time
- Multi-variate testing
- Changing several things at once to see which correlates with a result.
- Growth hacking
- Find a metric you want to change (engaged subscribers)
- Find all the things that correlate with that
- Test causality - test until you know which one has a causal relationship
- Optimize the causal factor
Healthy Living & Bio-Hacking¶
In any profession, you want to be functioning at 100%. Here’s some resources to help you achieve maximum mental and physical performance.
- Give and Take: Adam grant
- Clean Gut: Alejandro Junger - Adam grant
- Fat for Fuel: Alejandro Junger - Dr Joseph Mercola
- Head strong: Dave Aspery
- Fat for Fuel: Dr Joseph Mercola
- Practice mindfulness daily
- Focus on getting a good nights sleep (quality and quantity)
- Reduce stress to reduce telomere shortening
- Follow a mediterranean diet
A group that has something in common through their lifespan (month/week they joined)
Never look at users in aggregate (new users are more engaged)
- Correlated vs Causal
Correlated - Two variables that are related (but may be dependant on something else). (Ice cream & drowning)
Causal - An independent variable that directly impacts a dependant one. (summertime & drowning)
If you find the leading causal metric for a behaviour you want in your company, you can grow it at will, as long as you can change the causal factor
- Net Adds
- New Users - Churn
Objective & Key Results
Why use OKRS?
- Disciplines Thinking (The major goals will surface)
- Communicates Accurately (Let’s everyone know what’s important)
- Establishes Indicators for measuring progress (Shows how far along we are)
- Focuses Effort (Keeps organizations in step with each other).
How to set OKRS?
- Start ASAP in your business, good & bad habits form quickly
- Set Quarterly & Annually (Annual ones aren’t “Set in stone”)
- Personal / Team / Company OKR’s (Publicly available to everyone, inc the CEO)
- Max 5 Objectives with 4 key results
- One page best, 2 maximum
- Continue incomplete key results ONLY if they’re still important
- OKR’s are not a performance evaluation weapon
- Out of 100%, a 70% is a good, 40% is to low, 100% is to high (OKR was not set high enough).
- Objectives should be ambitious
- Key results should clearly make the objective achievable
- Key results are quantifiable & lead to objective grading, how much better? (metric)
- OKR’s are measurable
- 0.6 - 0.7 is your target for your OKR grade
Sample OKR #1
- Objective: Accelerate Blogger Revenue Growth
Key Results: [Grade - 0.7]
- Launch “Monetize tab to all users” [1.0]
- Implement AdSense Host Channel Placement Targeting to increase RPMs by xx% [0.3]
- Launch 3 revenue specific experiments to learn what drives revenue growth [0.7]
Sample OKR #2
- Objective: Grow Blogger traffic by xx% over organic growth
Key Results: [Grade - 0.45]
- Launch 3 features that will have a measurable impact on traffic [0.6]
- Improve Blogger’s 404 handling to extend time on site and pageviews per session on 404 sessions by xx% [0.3]
Sample OKR #3
- Objective: Improve Blogger’s Reputation
Key Results: [Grade - 7.2]
- Re-establish Bloggers leadership by speaking at 3 industry events [1.0]
- Co-ordinate Blogger’s 10th birthday PR efforts [0.8]
- Personally reach out to top xx Bloggers [0.8]
- Fix DMCA process, eliminate mistaken music blog take-downs [0.4]
- Get active on twitter [0.6]
- A pivot is a change in strategy based on learning from market feedback When? When each additional experiment leads to less progress
- Product Market Fit
- Product/market fit means being in a good market with a product that can satisfy that market
- Numbers and stats, hard facts, less insight, easier to analyze (large data sets)
Unstructured, anecdotal, revealing, hard to aggregate (data expressed in people, words and feelings around actions)
“Pot holes app was created, was used by rich people only, didn’t show pot holes in poorer areas”
- A slice across a cohort (high budget vs low budget user, repeat customers)
Quotes I come across relating to product management which I liked.
The vast majority of startup’s fail NOT because they couldn’t build a product, but because no one wanted the product.
—Steve Blank - The four steps to the epiphany
The vast majority of successful [startups] abandoned their initial plans and learned what would and would not work in the market.
—Clayton M. Christensen - The Innovator’s Dilemma
The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself.
Therefore all progress depends on the unreasonable man.
—George Bernard Shaw - Irish playwright
The whole is greater than the sum of it’s parts.
I like the last quote, A business is a great example of a “whole”, it’s the sum of the processes, values & people within that organization, which, once added together is greater than the sum of it’s individual parts.