Building The Right MVP – Balancing Plumbing VS Value

In the previous blogs I discussed specific approaches one could take to develop product hypotheses, and then get a MVP – Minimum Viable Product – out in the market to rapidly test and learn from the feedback.  This is consistent with the lean product development framework so you can decide whether to persevere or pivot. There is one caveat though – when do you decide to pivot, and how do you know that it’s time to pivot? 

It’s an arduous process that product leaders have to go thru to make the right choices. Lean does not mean less work!

Here is a checklist that may come handy as you prepare to release your MVP.

1.       MVP definition – Strike a balance between value and plumbing features

In order to make a right choice whether to persevere or pivot it’s important that the product leaders carefully define MVP by balancing value and the plumbing that is required for a successful operation of the product. A poorly designed user experience to install or update the product (plumbing features) may lead to a negative customer feedback which could, mistakenly, be interpreted as ‘customer not seeing value in the product’.  Product leaders must identify a list of all the core plumbing features, such as, product installation, updates, remote diagnostics to analyze a potential cause of product failure, and subscription management etc. to ensure that these are in place to not only debug field issues, but to also learn about how customers use the product. It’s important to strike a right balance between value and plumbing features so that metrics measurement post MVP is not negatively influenced by poor plumbing. This is always a hard decision as product leaders must balance between what’s table stakes and what adds value to the product.

2.       Measuring value creation

Consider the following key areas to measure value creation as outlined in The Blue Ocean Strategy to build your own checklist:

·         Reduce – What pain points are being reduced significantly more than the industry standard? Example, can your product identify a mobile security risk in real-time and mitigate?

·         Eliminate – What process steps or redundant technologies can you eliminate?  Example, can your customers save extra steps to do a secure online commerce transaction? Can your product eliminate the use of existing/ traditional products and technologies and still deliver the customer outcomes?

·         Enable – What new capabilities does your product enable? Example, ability to take pictures from your phone and to share instantly with your social network.

·         Raise – What value you can raise above industry norms? Example, IT risk management in real-time. 

Metrics measurement must be designed to capture targeted value creation. This will help product leaders to make informed decisions about potential improvements needed to deliver on expected customer outcomes. It will also help decide whether it’s time to pivot.

3.       GTM Checklist:

It’s of paramount importance that the product leaders pay a great deal of attention to GTM plans for a MVP so that the feedback and metrics can be interpreted with a greater degree of accuracy. Absence of a well thought out GTM would lead to ad-hoc decisions based on the flavor of the day. In such cases, one sample could lead to a highly inaccurate interpretation resulting into a GTM strategy that is changing every day. This is something that must be avoided. 

GTM plans for MVP, unfortunately, don’t get the needed attention as, often, the product leaders are challenged to demonstrate instant success after the release of MVP.  Most of the executives forget the fact that MVP is still about testing product hypotheses and refining the product strategy.  The temptations to see a quick economic success of a MVP may prove detrimental to the overall success of the organization. This temptation, potentially caused by a lack of GTM planning and a proclivity, caused by strong confirmed biases, for an early success, soon after the release of MVP, leads to premature spending of expensive dollars very early on in the product life cycle. In the process, product leaders are left with less money for a real launch of the product when the product is truly ready for the prime time.

Here is a simple checklist that one can use to build a solid GTM plans to test MVP:

1.       Existing customer opportunity – Could you sell this to the existing customers by enabling key outcomes they care about?

2.       New customer opportunity – What new segment of the customers would benefit from the product? For example, a company with a focus on mobile security may look at segments of the market where mobility and compliance are of prime importance.

4.       Key partners – Who are the key partners that we need to integrate with in order to deliver expected outcomes? What is the strategy to establish those relationships?

5.       Key channels – How do you sell your product to target customers?  What’s the channel to deliver the product to the customers?

6.       Key resources – Do you have needed expertise and resources to support the GTM model?

7.       Business model – What is your business model? There are several aspects that the product leaders need to consider. For example, is the product going to be a platform that would enable collaboration of several stakeholders and eco system partners to create value for the target customers? Or, is it going to be a Freemium model, where a set of baseline features would be available to all, and one pays for the premium options? Calculate cost and revenues for your business model(s). Validating business model is one of the key requirements as one takes a MVP to the market.

8.       Key factors that may influence product adoption – Look for the following key influencers – Technology, Regulatory changes, Switching costs, Substitute products and services.

A good planning and execution helps product leaders to manage lean product development process effectively. ‘Lean’ is not a short cut to success; it helps rapidly build the products that customers want. Success of lean product development approach requires strong leadership, ability to evangelize and gain a cross functional alignment, finding a right balance between plumbing and value features, and establishing a well thought out metrics measurement to interpret market feedback correctly!

Building Products By Leveraging Outside-in And Inside-out View

In the previous blogs, I talked about leveraging customer outcome driven approach supported by lean product development model to build products that customers want. This approach can be significantly complemented by leveraging key strengths of the inside-out strategy development.  Inside-out view allows the product leaders to recognize and appreciate the velocity of changes to determine the pace as in certain situations incremental change is more realistic than wide-ranging and deep-seated change. It also enables them to determine distinctive capabilities and skills essential to be successful in delivering products goals.

For example, reaching out to key engineers working on the product helps in many ways.  An informal lunch conversation with lead engineers working on the product would help develop a better understanding of the team’s capabilities and areas of improvements that you may not have even thought about.

As a product leader you want to process outside-in and inside-out view to shape your strategy. Such discussions with your engineering, web operations and tech support teams can provide an opportunity to refine the product strategy and road-map as you learn from this added insight.

Here is a simple checklist for processing inside-out views:

1.       Identify key players to mine their brain trust. 

• This will allow you to refine your product strategy, where needed, and provide a deeper understanding to synergize resources and capabilities.

2.       Determine training needs.

• The gaps that you need to help fill in order to achieve the product goals.

3.       Build informal networks.

• This will significantly enhance your ability as a product leader to gain buy-in and develop greater cohesion in support of the product program.

4.       Identify slingshot opportunities.

•  Explore how you can leverage core capabilities of the team to create slingshot opportunities or deliver product enhancements that you had not thought about before.

5.       Explore opportunities to improve product.

• Inside-out views can help improve product architecture, enhance user experience, and identify untapped capabilities of the product.  Additionally, one can proactively find contradictions and patterns to evolve new ideas to improve the product and increase its adoption within the target user-base.

The Art Of Product Management - Blending Quantitative Framework With How We Think

In my previous blogs I emphasized the importance of using a metrics driven framework to build a set of hypotheses, then test and develop the product using lean product development approach to deliver the outcomes that the customers value. 

Very often, interpretation of metrics becomes challenging as many stakeholders have their own confirmed biases and ‘gut feel’. Sometimes gut feels do matter but that should not be the reason why one should ignore what the metrics tell. So, the question for the product leader is how to interpret metrics to make the right choices while processing views of some of the stakeholders which are driven by confirmed biases?

While reading an excellent book (gifted to me by a good friend and colleague of mine), Thinking Fast and Slow by Daniel Kahneman, I learned several lessons that can be applied to making right product decisions.

Inspired by the book, here is my checklist to avoid pitfalls in interpreting the metrics while dealing with confirmed biases of your own or other stakeholders:

1.       Avoid jumping to conclusions

·         Generate enough data samples to develop metrics. This will help avoid the temptation to conclude something with very little repetition. We have a propensity to constructing a favorable interpretation of the situation with minimal information.

2.       Guard against confirmed biases

·         Some stakeholders are likely to look for confirming evidence, defined as 'positive test strategy' by Daniel Kahneman. As a product leader one must test the hypotheses by trying to refute them instead.

·         Watch for halo effect!

3.       Test the hypotheses by asking difficult questions

·         Make sure you gather metrics to test various hypotheses by asking complex questions (eg. Why would you use my product over what you already have? Will you buy the product if we deliver x outcome? What is my product’s Net Promoter Score?).

·         Avoid substituting a difficult question with an easier one.

4.       Avoid overconfident judgments

·         Do not depend on intuitions alone. Intuitions often deliver extreme predictions.

·         Be aware of situations where you are attempting to use a part of the feedback as a kernel to decide your future course of strategy. This could lead you down a wrong path.

The art is to blend quantitative framework analysis with how human mind interprets the data to make right product choices!

Developing Product For A New Market

Last week my wife asked me to read an interesting HBR article on Tri Sector Leadership (http://blogs.hbr.org/2013/02/why-the-world-needs-tri-sector/). This article talks about transferrable skills across business, government and non-profit organizations. Inspired by that, I believe, product leadership expertise should also cut across business domains, and a product leader must not be limited to developing products for a given industry only.

The question then is, as a Product Leader, where do you start and how do you develop creative product ideas particularly when you are dealing with an unknown environment?

Here is a simple checklist to work off of:

• Take top-down and bottoms-up approach with the customer outcomes in mind.
• What outcomes your end customers want?
• How can you enable
• Your customers to do an existing job better.
• Your customers to do new tasks not possible before.
• A new set of customers to do a job that others are already doing.
• What improvements/ values can you introduce over what’s currently available to them? Are there additional tools you can provide?
• What's the current economic model? Supply chain? Key constituents?
• What is the value creation by various elements of the supply chain?
• What outcomes can you enable for various elements of the supply chain?
• And, is there an opportunity to disrupt the business model? Can you disintermediate elements, which are not adding value, by bringing in more efficiency?
• What value would you create thru this disintermediation? Can you measure the impact in terms of cost, speed and convenience? Ultimate goal is to assess value creation for the end customers.
• How do you leverage new innovations to disrupt industry? Social networking, Crowdsourcing, Mobile, and others? 
• What elements of the supply chain need to be nurtured, destroyed or created? And, why?
• Understand the eco system – Identify key players which can enable customer outcomes, assess their motivation to participate in the supply chain, in other words, what’s the outcome they are looking for.
• Build hypotheses in support of your findings above, and test them using Lean Product Development Framework. Make ‘pivot or persevere’ decisions based on value and growth metrics.
• Execute on your winning hypothesis!