Dan Olsen "How to Create Your Product Strategy" at the 2018 NYC Product Leader Summit

I'm Dan Olson and I'm really excited to be here today to talk with you about product rata G and share some advice my background I used to be a product leader into it a while ago I've been her Park leader at startups I've been a founder of a start-up as well but for the past nine years I've been consulting at companies and product management to help them improve their products and deliver a good product strategies and since it's very rare to get a group of product leaders together like this right super rares doesn't really happen I thought this would be an appropriate time to share one of the most closely guarded product management secrets with you guys if you promise not to share it too broadly there's actually a product management motto I don't know if you guys know it or not it's kind of similar to spider-man's mod does anyone know spider-man's motto with great power comes great responsibility the product management motto it's similar but it's just a little different it's basically with great responsibility comes no power and we're all laughing but we're crying a little bit deep down aren't we guys you know and as product managers were responsible for so many things right and as product leaders one of the things we're responsible for is product strategy and I just want to start out with a couple of questions you know basically does your company have a prokta - raise your hand if you feel like your company has a product strategy yeah when I talk to non leader audiences the number of Hounds is a lot lower I'd see the next question do you feel good if I raise your hand if you feel good about your company's product tragedy I won't look okay cool well when I do this quiz a lot basically a lot of people aren't happy with it and so that's one of the reasons I wrote the book the lean product playbook I'm actually going to be giving away through copies today so if you want just tweet we're giving we're doing raffles for for the event also just tweet with my handle and I'll grab three of the best tweets and and then give the books out and yeah but that's why I wrote that book and so that's what I want to share some advice and you know why is it that so few companies feel good about their product strategy why do you guys think it's hard yes it is hard they don't know what it is that's right anything else execution is easier that's right generalize fear uncertainty and doubt okay cool fun all right cool I think there are a lot of you there are a lot of reasons in the obviously it's complex but I think there are two main reasons I think the first is there's a focus on the short-term we have to deliver today's objectives this week's objectives this month's objectives this quarter if we're lucky to think about the quarter right there's just that natural it's like a black hole the gravitational pull of the short-term and the tactical is there and can dominate everything if you let it the second reason is a lack of a good framework someone said it's hard you know they don't necessarily you know I went to business school it's not like there's some class in products as you would say this is how you do it this is how everybody does it right so those are the two main reasons that I see when I when I work with companies and so I'm gonna try to address those two points and give you some tips on how to do it on your own what is strategy that's the other thing someone says don't know what it is what is strategy mean to you what's your definition of strategy yeah what's worth doing in the long term yeah great plan to achieve a vision all right cool one more Michael Seto I know you thought about this one a lot when a cold call you all right cool cool yeah what are you trying to call tries man yeah it's hard it's a little fuzzy and gray right some of the key points that I think you're planning for how you're going to win someone said your plan you know how you're gonna get to your vision for how you're gonna win in the marketplace I think it needs to be informed by competitive analysis it's not done in a vacuum it's deliberately about looking at the long term versus the short term and it's about looking at the big picture and one of the one of the metaphors that I really love here is big rocks were sustained who's heard of big rocks versus an before right okay cool for those of you that haven't heard I saw this it's from seven Habits of Highly Effective People he has someone come up and they've got like this glass beaker from chem lab and he's got like some rocks and some pebbles and some sand he's like please fill the beaker and the first time the person fills a beaker they put the sand in first and then they put the pebbles in and then they try to put the rocks in but there's just not enough room because the pebbles in the sand have taken up all the room right and then he says do it again this time put the big rocks in first and lo and behold she puts the big rocks in first then the pebbles then the sand in all fits this is no trick going on it's the same stuff why does this matter the sand is all those little things that come up right the meeting the email the bug the customer requests the big rocks are the big strategic things are important and this applies thing a lot of this is done as far as your life to not just at work or product strategy or product roadmaps the big rocks and the millicent here is unless you make room for the big rocks the sand will overwhelm everything right especially in agile environments agile is really good at shipping sand every two weeks right every two in fact I worked at a start-up in the one there was one junior developer he did all the but he would crank out like 50 buck fixes I'm like her the Sandman cuz he would do that I call him the sand man right but again who's looking out for the big rocks at the end of the year if we look back and we haven't done these things are we gonna be regretful so be mindful of the big rocks my last point on strategy is my favorite definition is it means saying no right it's easy to say yes to everything you may have I'm not gonna pick on interpret well we'll pick on enterprise sales teams right they go out they talk to a client it's like hey the client goes the prospective client goes it's your product can have future oh yeah it's gonna feature a just sign the contract oh yeah they come back hey guys we got a bill feature a we signed it they go to the next line he is it gonna have feature B oh yeah I don't they say yes to everything that's what they're incentivized to do right so that's not strategic that's the opposite being strategic in the my book I have a lot of Steve Jobs quotes one of the ones I really like is he has one on this topic about focus and saying no and he says people think focus means saying yes to the thing you're trying to focus on but that's not what it means it means saying no to all the other good ideas that are out there that you could be doing and his quote is innovation is saying you know do a thousand things I modified a little bit to say strategy means saying no basically right so that was the first thing the second part is the lack of having a good framework and so that's what I want to address in the last part of my talk and close out with a couple of examples and I like to tie it in with product market fit and in my book I have a framework called the product market fit pyramid that I want to walk you through real quick because a lot of people talk about part market fit but there isn't a lot of good guidance out there on how to achieve it and that's basically what my book is a guide on how to achieve it and the key framework is a product market fit pyramid I like to think of the market as these two layers basically it all starts with the target customer whose life are you trying to make better who you trying to create value for and everything builds like a real pyramid builds on top of that the next layer up is for that customer what are their underserve needs and those two together form the market and if you look in a marketing or economics book it'll say a market is a group of people that share a set of common needs that's the market and you don't really control the market you can target which one you want to go after well you control as the product decision layers which are these three your value proposition which hopefully builds on underserved needs if we're doing a good job which is hey how is our product going to be better different than the products that are out there and meet their needs better the next level up is what's the functionality it's going to convey those customer benefits and that's where MVP comes in and then finally what's the user experience that brings that functionality to life for the user and product market fit is just hey all the decisions and assumptions and execution we're doing in the top three layers how well did they resonate with the market and in this framework product strategy lives right here right how are we going to be-better different how are we gonna meet those customer needs in a way that's better and different than the other substitutes even it's not a direct competitor alright so we're going to need to be focusing on customer needs a lot of times you'll see product roadmaps or park strategies and they frankly have feature speak in them right there's solution based and it's really important to focus on the customer problem the customer need there's a famous quote about a hole well basically people don't want a quarter-inch drill they want a quarter-inch hole right the drill is a solution the hole is the problem and so I'm a big proponent of staying in the problem space and thinking about customer needs the problem space I kind of alluded this with a hole but to go more into it it's a basically a customer problem need or benefit that the product should address so if I say hey I want to make it easier for people to share photos with their friends that statement is in the problem space in contrast solution space is a specific design or implementation that's meant to address that need and if the next thing I say isn't by the way my friend could in an app to do that that app would be in the solution space or if I said hey my designer friend did a mock-up for it that mock-up would be in the solution space and it's really easy we live in the solution space to fall into that trap and a lot of times you'll see energy restore on your roadmaps it's solution feature centric right and you want to focus on benefits not features if you find your team focused on solutions and features a trick to get them to go back as why you know the JIRA store maybe hey add a drop-down well why do we want to have the drop-down oh so the user can select their city ok well let's write it that way the drop down might be the best way there might be a better way basically so I want to share an example from Intuit where I used to work we got problems based on the left solution space on the right I used to work on Quicken but one of our other big products is TurboTax it competes with another software product tax cut which is also in the solution space the idea is you want to have clear tight mapping between problem and solution space for those of you that use term who's used TurboTax err few people yeah what is it what is it what does it do for you what's the what's the benefit that it gives you why do you like it easy self-guided quick file my taxes efficient convenience I got you one word answers my people are being concise anything else cheap right so I just did that real quick I got like eight or nine different answers were they consistent no they weren't some were kind of consistent but I got cheap I got easy I got self-guided right and if I asked everybody I'd get like probably a hundred answers that's the thing about the prompts because it's very messy it's hard to make sense of let's just forget about it and design stuff and code stuff and launch it right that's kind of the thing right if I had to come up with a high-level summary and that's the thing - it's like an onion the high level thing would be like hey it helps me do my taxes helps me to prepare my taxes the other person really helped me understand this concept at Intuit was Scott cook the founder and what he loved to do when he would have a group of product folks like this he'd be he'd like to quiz him and go hey who's the biggest competitor TurboTax and we'd all raise our hand so he'd pick us and we'd be like it's tax cut he's like no you're wrong it's pen and paper because more Americans are doing the tax with a pen and paper so competitors really mean substitutes how are people getting those needs met today and at the time more Americans were doing it that way our job as product teams are to like peel that onion this is to high level to be actionable so with your team what are all the different things we can do to help people with their taxes we can for example help them check your taxes instead of doing it by paper computers are great with numbers and math we can file them instead of going to the post office you can just push a button and file it online we can maximize your deductions by asking you questions right we can reduce your audit risk by analyzing your return these are just four examples and your goal is to like really flesh out that problem space and come up with what I call problem space definition this is kind of the mindset we want to have when we're thinking about our product strategy you'll notice that these are kind of written from a very in a kind of similar temp they all start with a verb an action verb because they're actually doing something to create value for the user right they're also written from the users perspective so check file maximize reduce they're written from the users perspective right kind of like good user stories they're not written from the the technology perspective or the company perspective that's a good way to know that if you see it following this template you're probably more in the problems based and if you're not you're probably not alright so once we've brainstormed all the possible means that we could address we want to basically figure out which ones are we gonna try to tackle and be the best at and this is where I like to apply the Kano model who's familiar with the Kano model here alright great so I actually studied this and lean manufacturing before I even went out to business course Silicon Valley and I really liked applying it and it also talks about kind of user needs and satisfaction so let me explain it real quick on the horizontal axis we have hey how fully does the product meet the need that we're talking about from not at all to fully met right and on the horizontal axis as a result of how much it meets that need how much customer satisfaction is created from completely dissatisfied to completely satisfied if that seems a little complicated Kano makes it super easy it breaks everything down into one of three categories the first is a performance this is probably the easiest to understand more is better like more the more the product meets this need the more customer value creates less is worse say I was shopping for cars and there were two cars that were pretty similar but then all sudden I realized one car had twice the miles per gallon of the other car all our things being equal I would pick that car because more miles per gallon is basically a performance benefit say we were doing microprocessor chip speed would be an example of that right so it's like how are you outperforming the competition basically the second one is a must-have now having a must-have doesn't actually make anybody happy you know yeah yeah the must-have but if you don't meet it then they are unhappy all right that's the definition of mush that must have is not because the executive or CEO said we must have this feature it's this definition based on customer input it's the one of the most misused terms but sticking with cars say I went into you know shopping for a new car went to the showroom I love the way the car looked I look at the spec sheet on the window love the specs then I peek inside and realize oh this doesn't have any seat belts I wouldn't buy it because seat belts are a must-have for a car be afraid of getting hurt or dying right but if car a has 5 seat belts and car be as hundred seat belts I don't say car B is 20 times better all right once I have one seat belt per person we flattened out that's must-haves the third is des lighters not having a delight or doesn't cause a problem because people aren't expecting it to be there but having a delight er can really create a lot of customer value and not today but think back to when the first cars came out with GPS navigation it was a delight er right before that we were all printing out Google Maps for MapQuest or getting lost and asking people for directions and then you know GPS came along and just putting where you're going it fundamentally changed how you got from point A to point B but as we know over time more and more cars got GPS navigation Garmin and TomTom came out with her add-on things and now we all just use our phone so this is not a static picture its dynamic and the needs and features migrated over time basically right so that today's the lighters become tomorrow's performance features becomes you know the next times must-haves basically and the rate with which that happens depends on the level of innovation of competition in your space but what we're gonna do to tie back up archaeology is categorize the needs that were going after in these three categories and we're gonna create a product strategy grid and there are four steps to that the first step is for I've kept it generic for your category one Perot lists out what are the must-haves benefits or the performance benefits what are the delight or benefits that's step one right and I've kept the generic so you can envision yours the next step is list a column for each of your key competitors and a column for your product the next step is you want to rate your competitors so you want to go through and rate them you know and you can just use high medium low if there are numerical things you could do like microprocessor speed or a number of seat belts or things like that could by all means use numbers but even just using high medium low is adequate and for things like must-haves into lighters you can just use yes or no right so in this scenario we have competitor a of course both people have the must-haves competitor a is the best at this benefit competitor B is the best at this benefit they're both so so at this benefit three and they have this one has a delight err right this is the backdrop upon which we want to determine our product tragedy and figure out how we going to be better at different we don't want to launch a me-too product we want to have a differentiated product strategy right so given this backdrop we might do basically something like this to figure out where are we going to play offense where we going to try to compete and win right back to my thing about the Steve Jobs coat we can't just go high high high high high we're gonna win everything right and sometimes I do workshops since some teams can't help themselves some teams pick two highs some teams pick 3 highs some teams pick for highs it's very telling to see how disciplined and focus they were in their product strategy so we can't pick everything so we might given this backdrop do something like this we might say ok yeah of course we're gonna have them must have we're not going to ignore performance benefit 1 but we're not gonna try to be the best at it either we're gonna say no and not worry about performance benefit 2 we're gonna let these guys be the best at that well we're gonna focus on is performance benefit 3 we're gonna try to be the best there maybe we've identified some underserved segments that really values that or maybe we have some cool technology ideas on how we can deliver a better customer value against that right and then we have our own idea for a delight err what matters the most from this framework is what's called your unique differentiators it's the performance benefits where you plan to be the best and your unique delight errs right and when you start seeing things through this lens you start realizing that wow I know a lot of successful companies it's very clear that they've got one performance benefit where they're the best and this delight er it's kind of like a one-two punch you don't have to have the delight er you definitely need the performance benefit but it's a very common pattern that you see so with that I want to actually go through two examples does anyone here used Instagram Yeah right everyone has so not think back not today but when Instagram came out there were tons of photo sharing apps that were out there right and yet they won what was it about them thinking through the Kano model lens what were their unique differentiators that let them win and dominate that space filters is filters a solution and feature is that a problem or benefit right so now we do the five why's what do filters do how does it create value for you make your photos look good right exactly so yes you're both right that was the benefit that's the feature that delivered the benefit excellent yeah what else synced to Facebook okay what else simple focus yeah share with community yeah I think a lot of them let you share I think other ones that you post to Facebook too but from a differentiation standpoint I'm not sure how much that was there were two other things there's one that was really important performance benefit that they did how did they outperform the other people hmm Facebook Graph okay what else speed to post exactly not now now we all have instantaneous 4G everything's cool back then we had slow phones slow networking literally it would take a few seconds and what it would happen is you do Instagram me but whoa my photo posted so quickly what happened it was noticeably faster they would post your photo and the way they did it is they did a hack where instead of waiting for you to push the upload button they said 99% of the time people gonna upload their photo let's just start uploading the photo instead of waiting for them to push the button but they still had the button there so it seemed like oh my gosh the time from when I clicked the button was amazing so I think it was a combination of good technical infrastructure compression and this little hack that let them do it faster there's one other little thing to this it's not as big a deal is you remember the aspect ratio of the photos on Instagram they were square because in the old day sometimes you take your photo like this sometimes you take like this and you post it and you know Stevens face is all small and you can't see it but when you do square you have to worry about that right let's go and take those comments that we said and put it into the product strategy grid right so here we have other photo sharing apps Instagram must haves we didn't say this obviously let me share my photos is a must-have that they all have to do performance benefit post my photos quickly like literally if you took a stopwatch and said how long does it take for Instagram how long does it take with the other one that's a performance benefit where they said you know what we're gonna be the best and then the delight er exactly as you said make my photos look good and I think there were two things mainly the filters that contributed to it but if you think about it forcing people Foursquare photos so that the aspect ratio always worked out was also there so that's a simple way of showing what you know I don't know that they ever created this an Instagram but this is kind of reverse engineering kind of in my mind what their product strategy was let's talk about one more example I love it I love using we reward examples when the company shares their information recently it was the 10th anniversary of uber cat of uber getting their funding and so one of their co-founders decided to post their first pitch deck which is really cool it's actually pretty long deck you know it I used also Airbnb as initial pitch deck which is only six slides they follow the traditional you know pattern ubers got tons of slides but luckily there's one slide that lets me extract what I want to do to have this discussion with you guys so it was actually used to be called uber cab and it was focused on you know high-end mercedes-benz you know black cars they had I don't worry they had blackberry iru blackberry users we got you covered for good you know that's how old this was back in the day right so it's called uber cab they obviously dropped the cab overtime and it was a next-generation car service the one slide that I focused on was this slide which has an amazing title user benefits right so I was like cool and let's just do this together let's do through the exercise step one who are their competitors from their slide cabs car services just two cabs and car server is super easy we got the columns we need for our grid cabs and car services right and what are all the customer problems or benefits that they call out safe yeah hmm cost fast there's a lot of words that they have in here right so they have that and then what they do is they then summarize in the next section they summarize they say faster cheaper nicer safer sounds like a cool tagline faster cheaper now for safer right that's like so you can imagine people walk around the company going we're gonna be faster cheaper nicer stay for like that's a good summary of kind of how we're gonna outperform the competition right so they've laid out everything we need to do to create their product strategy grid all right so let's do that real quick so again they said in I what I did is they said faster cheaper nicer safer I want to put it in problem speak let me quickly get a ride save me money give me a nice experience make me feel safe right those are the four things that they are stating right next thing let's put our competitors up there taxi car services in US and then we can go through and rate taxis and car services right so taxis you know car service you have to call in advance it's low taxis you can you can kind of call one maybe you can heal one that can vary a lot obviously in New York it's probably high it's easy to get one but in San Francisco it's low I'll tell you that um save me money obviously taxis are cheaper than car the limos nice experience you know obviously some taxis are fine but the car services are nice make me feel safer that that makes sense this is the backdrop and then what they did basically said okay this is where these guys are weak and each of our competitors is weak in a different area here's how we're gonna outperform them right we're gonna basically let people book a ride much more quickly the interesting thing if you read the nuances they didn't say they were gonna be cheaper than a cab initially they said we're gonna be cheaper than a limo all right so they're trying to give you like limo level performance with instant booking at a price that's cheaper than a black car because it really did focus on black cars first so they're not doing high give me a nicer experience and make me feel safe so that was basically their product strategy these things because those words focused on outperforming their performance benefits or features right if we pull it in the full or grid we throw in the must-haves obviously take me where we want to go as a must-have there's the performance section we just had and I think there are some DES lighters right I think the fact I was thinking about it the fact you can book without having to call someone is it des lighter right before that you literally had either hail a cab or call someone and say hey can I get a cab or can I get a limo now you can just do it on your own the other one I think which is huge is I can see where the car is I have transparency of how long it's gonna take and are they really coming here what's the guy doing where's he going you know that kind of stuff so I think those are some of the dividers and I'm sure we could flush out even more that's an example of it alright so in summary basically make sure you think about the long-term don't let the gravitational pull of the short-term consume your life right carve out time make room for those big rocks figure out where your big rocks are that at the end of the quarter end of the year you're gonna be regretful if you don't address those I didn't talk too much about it but obviously that base pyramid is about target market getting clear on who we're trying to make happy think in terms of benefits not features right problem space not solution space use the Kano model to analyze the competition looking through the lens of customer benefits to figure out your product strategy so you can get really clear on what your unique differentiators are and again especially if you're building a v1 product these are hypotheses and then you want to test and see how they're how it's going and iterate from there I run I just for those either in the Bay Area or make it out there frequently I run a monthly meet up there and I bring in top speakers like the kind of folks we have at our conference here I'm Marty Kagan coming on the 25th the second edition of his book inspired came out he's going to be talking about that so you can just go to meetup.com clean product if anyone is interested in going there's still some tickets left and you know you can reach me at Dan Olsen comrade Dan Olson and happy to take any questions that you guys have [Applause]

Channel: Spero Ventures

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Id: 11b2JdeHoGM

Length: 24min 37sec (1477 seconds)

Published: Mon Mar 05 2018