Digital Product Management - Summary
Digital Product Management - Summary
Digital Product Management - Summary
CUSTOMER DISCOVERY:
1. Building the right product is a process: 1) Discovery, 2) Validation, 3) Creation & 4)
Building.
2. Personas tend to fail at recognising what users need, while Job Stories capture
situations, motivations and the expected outcomes.
3. Discovery is about filling your Opportunity Tree and value map canvas. It should be a
snapshot of who your users are, and what stands in your way of opportunities to get to
the outcome.
4. Speaking with users leads you to pains, gains and jobs, (opportunities), which you want
to match to your pain relievers, gain creators and products/services to answer those
jobs (solutions).
CUSTOMER VALIDATION:
1. An MVP, more than a barrier to product scope, is a learning process
2. Lack of prototyping and testing is the major cause of product failures (and consequently
company failures)
3. Prototypes are the best tool to accurately assess risk, and its fidelity needs to be
adjusted at how deep this assessment needs to be
4. Prioritization is the hardest but most necessary step in the product process, and
ultimately is about balancing impact and effort.
5. Your solution and experiment process leads to the right MVP
Types of products:
- Ecommerce (Zalando, Alibaba, Amazon): “The activity of buying or selling of products
on online services or over the Internet...”. The digitalization of your “shopping mall”
à 20%-50% Margins, Transactional business, GMV main metric
- Marketplace (Airbnb, uber, ebay) : “type of e-commerce where product or service
information is provided by multiple third parties, processed by the marketplace
operator”. The digitalization of connected supply and demand
à 3%-15% Take rate, Commission business, Transactions main metric
- Social product (Instagram, linkedin): “online platform which people use to build social
networks or social relations with other people who share similar traits and interesses”.
The digitalization of communication
à 50-90% Margins, Advertising business, ARPU/Utilization main metric
DPM Summary
- Saas Product (slack, salesforce): software licensing and delivery model in which
software is licensed on a subscription” The digitalization of services; !! highest margins
à 80%+ Margins Recurring revenue business MRR/ARR main metric
- Hardware product (Tesla, Apple watch): When hardware is the core manifestation of
your product and experience. The commercialization of physical technology
à 10%-30% Margins High value transaction Sales main metric
Venn Diagram:
!! Connecting the right process with the right product
!! Living within the opportunity space and the solution space
The product team: “Every product begins with the people on the cross-functional product
team. How you define the roles, and the people you select to staff the team will very likely
prove to be a determining factor in its success or failure.”
1. Understand value
1.1 Research on the company, products and ecosystem e.g. Google research
1.2 Understanding the opportunity/problem (User Empathy) e.g. Interviews
...the regard that sth is held to deserve; the importance, worth, or usefulness of something.”
How is Uber changing the standards of the transportation industry? - (for Customer)
REDUCE CREATE RAISE ELIMINATE
Why does this matter? The relationship between product areas is to de-risk.
DPM Summary
3. Understand Users
à Understanding the user and the problem in Depth
1.CUSTOMER DISCOVERY:
- understanding your customers, their problems, their preferences & buying behaviour
1. Customer profiling: Do interviews to map the opportunity space (e.g. uncover jobs
pains, gains) à identify opportunites
2. Prioritize opportunities (gains: essentiality; pains: intensity; jobs: importance)
3. Translate Customer profiles into opportunity solution tree
the problem
Pain Relievers
- How your product alleviates pains for
users
- How you intend to eliminate or reduce
the pains your customers are feeling when
facing the problem
Products and Services (and Features)
- Products, services and features your product offers Pain relievers
- What your product does that delivers gains and relieves pains
Job stories
Situation(When) Motivation (I want to) Expected outcome (so I can)
DPM Summary
Explorative Interviews
● 5 steps
1. Ask questions that help uncover jobs 2. prioritising jobs - Ask how important?
3. Ask questions that help uncover gains 4. Prioritising gains: Ask how essential?
5. Ask questions that help uncover pains 6. Prioritising pains - Ask how intense?
GAINS
JOBS
solutions
PAINS
• ● Understanding gains:
o ○ Unexpected gains: Beyond customer expectations
o ○ Desired gains: Gains users would love to have.
o ○ Expected gains: Basic expectations from solution
o ○ Required gains: Without this, product doesn’t work (for the user
• ● Understanding pains
o ○ Functional: Something that doesn’t work
o ○ Social: Something that makesv me look bad
o ○ Emotironal: Something that makes me feel bad
• ● Understanding jobs
o ○ Functional: Completing a specific task
o ○ Social: When they want to look good against others in society
o ○ Emotional: When a use seeks a specific state of feeling, emotional state
Jobs:
● Helps to understand the motives of people in specific moments, not generalized to a target
group
● Job Stories:“I am (moving to another city),Iamtryingto(findanewapartment),but(it is hard to
find something affordable) because (online platforms scam you) which makes me feel
(insecure)”
Job Analysis
○ High Level Job (f.e. Book a suitable apartment)
○ Smaller Jobs (Search for apartments + manage communication)
○ base level Jobs (research on platforms, define price level, define area, contact
landlords, dont miss emails, answer to emails)
○ base level jobs ( knowing local standards, knowing what i want, building up trust
for landlords)
2. Pull à If I get a new mattress, I can sleep better. I’ll be in a better mood at home and at
work.”
3. Anxiety à“What if the new mattress turns out to be just as bad as the old one? I can only
try it out for a few moments in the store.”
4. Attachment à I’ve had this mattress since college.”
1.CUSTOMER VALIDATION:
à Translating Jobs into features and build and test first prototype
à build your prototype and MVP; GOAL: match the value map with the customer profile
à Your MVP process is about going from experiments to your set of solutions that make
your first version
Prototype approach
Step 1: Make an observation
Step 2: Ask a question
Step 3: Form an hypothesis (or testable explanation) and make a prediction
Step 4: Test the prediction (!!! prioritize Solutions to test)
Step 5: Iterate (use the results to make new predictions or hypotheses)
DPM Summary
5 principles of prototype
1. The overarching (and if possible only) purpose of a prototype is to learn at a much
lower cost of time and effort. Prototypes need to be 10x “cheaper” than product-
versions of the solution.
2. The act of prototyping to think through the problem deeply. If you don’t dive deep and
uncover hidden issues, your prototype is lacking effort.
3. Prototypes should be developed in collaboration between product, design and
engineering.
4. Fidelity level needs to adapt to the purpose of the data you are gathering
5. Prototypes need to aim at discovering one or multiple risks (value, feasibility, viability,
usability)
MoSCoW Method:
Moscow, e.g., Airbnb: (Map solutions along must, should, could, wont have)
[R]ICE Framework
[Reach]: Number of people/events per time period.
Impact: How much this initiative will move the needle?
Confidence: How confident you are in your assumptions
Effort: total amount of time a project will require from all members of your team: product,
design, and engineering
DPM Summary
Product Vision
o inspiring picture of the future that you want to create
o it’s the “why” of your whole doing
o techniques
§ rally behind a commony enemy (uber, revolut, transferwise...)
§ “show” the future, stretching creativity, inspiring,
5 principles of Product Vision
1. Start with why
2. A big future: Think how the future should be, on your terms, as big as possible;
Don’t be afraid to think big
3. Flexible strategy: Be stubborn about it but flexible how to get there.
Product Strategy:
Requires strong product strategy (agile, iterating process)
1. Focus on outcomes, not outputs. Optimise for product outcomes
2. Don't build fixed roadmaps, leave space for uncertainty
3. Product strategy happens in the opportunity space, not solution space
4. Focus on one target market/persona/outcome
5. Optimise for alignment with business strategy, go-to-market, stakeholders
6. Obsess over customers, not competitors. What is happiness for them?
Business Models:
Ad-Based Revenue Model (large scale usage, specific targets). Eg: Facebook
Affiliate Revenue Model (content based, niche audience, transaction enabler) Eg:
GoDaddy
Transactional Revenue Model (direct sales of products). Eg: Amazon
Subscription Revenue Model (recurring value, pay for access). Eg: Netflix
Channel Sales (clear retail partner, agent with a mass audience). Eg: Warby
Parker
Freemium Model (In app purchases, trial and premium, paid tiers). Eg: Medium
Customer Segment Which customer segment delivers more revenue? And margin?
Which customer segment costs more to acquire?
Which segment sees more value in my product?
Which segment requires more relationship cost?
Customer How much revenue can I extract from investing in the relationship?
relationship How do you interact with your customer?
Channels What is the cost of acquiring a customer on each channel?
What is the average revenue brought by customers of that channel?
What is the LTV (lifetime value) generated by customers from that
channel?
How much it costs me (fixed and variable) to use a specific channel?
Value proposition How much value does each revenue stream each proposition generate? How much
margin?
Key activities What is the cost of executing the key activities to deliver the value proposition?
What is the value attributed to each activity in terms of revenue?
Key Resources How much it costs to acquire and maintain the resources to deliver value?
What is attributed in value to each resource?
Roadmapping:
Loyalty - “How likely is it that you would recommend our company/product/service to” a friend or
metrics colleague?”
Net - Studies show correlation with revenue evolution
Promoter - Simple approach, easily implementable, available at any stage, as long as you have
Score customers/users
NPS = % Promoters - % Detractors > 30 à good
NPS varies per industry: e.g. consulting (62), digital marketing (57);
Lowest: Internet/ telecom prociders
Important bc:<>
- Promoters are 4x more likely to buy again
- More likely to forgive a company
Poor experience:
- 89% more likely to buy from competition
- 22% more likely to cut spending
Functional MAU/DAU - Monthly / Daily Active Users, social metrics
metrics GMV | AOV - Gross Merchandising Value, Average Order Value, ecommerce/D2C metrics
Various LTV - Lifetime Value, repeatable purchase metric
CPA | CPC | CPL - Cost per acquisition/click/lead, acquisition funnel metrics
ARPU - Average revenue per user, B2C metrics
Contribution/Take rates - % of kept sales, net revenue/total sale, marketplace/ecommerce
Accounting metrics (Gross/Net Revenue | Profit, EPS...) - Overall company metrics
Sales - Individual units sold / transacted, commonly adapted to the industry/model (eg:
nights)
Retention Rate | Churn Rate - Retained and lost customers. SaaS/Subscription metrics
ARR/MRR - Annualised/Monthly Recurring Revenue, SaaS/Subscription metrics
Metrics by operating model:
e.g. Uber: Demand side: AW: average waiting time; %SU supply side: utilized supply
-> surge pricing
DPM Summary
Alignment
metrics
OKRs
Increase overall customer happiness
Launching strategy:
DPM Summary
Methods to cross the chasm between early adopters and early majority
1. Piggybacking
Targeting another platform with a similar audience can be a quick way to grow your marketplace.
the better Airbnb does, the better the complementary service platforms do, while Airbnb benefits
from the added value to its users.
“A low cost market entry strategy in which two or more firms represent one another's
complementary (but non-competing) products in their respective markets.”
EXAM:
6 fragen
Small CASE (half page, self written) of company that builds product à (6 question about
applying the frameworks we discussed about building the product)
UNDERSTAND VALUE
Reducing costs, creating value, raising value, eliminating costs
UNDERSTAND RISKS
UNDERSTAND CUSTOMER
1.CUSTOMER PROFILING:
LAUNCH
Define business model
Define OKR’s