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

Summary

Dan Olson, a seasoned product leader and consultant, shares the 'with great responsibility comes no power' product management motto, emphasizing the challenges product managers face. He discusses the importance of long-term strategic planning over short-term objectives and introduces the Product Market Fit Pyramid framework to guide product strategy. Olson also highlights the significance of focusing on customer needs, using the Kano model to analyze competition, and identifying unique differentiators for a product's success.

Takeaways

• 😀 Dan Olson, a former product leader and consultant, shares his expertise on product strategy and management.
• 😎 The product management motto is a twist on Spider-Man's: 'With great responsibility comes no power', highlighting the challenges faced by product managers.
• 🤔 Many companies lack a clear product strategy, leading to dissatisfaction among product leaders.
• 📚 Olson authored 'The Lean Product Playbook' to address the difficulties companies face in formulating effective product strategies.
• 🔍 The focus on short-term objectives often overshadows long-term strategy, creating a 'black hole' effect on planning.
• 💡 A lack of a good framework is a primary reason companies struggle with product strategy, as there's no standardized approach taught in business schools.
• 🗣 Strategy is defined as a plan to achieve a vision, informed by competitive analysis and focused on the long term over the short term.
• 🏆 The 'big rocks' metaphor is used to illustrate the importance of prioritizing strategic, large-scale initiatives over smaller, day-to-day tasks.
• 🚫 Strategy also means saying 'no'; it's about focusing on a few key areas where a product can truly excel rather than trying to be all things to all people.
• 💡 The Product Market Fit Pyramid is introduced as a framework to guide product strategy, emphasizing the importance of understanding customer needs and the market.
• 🔄 The Kano model is recommended for analyzing customer needs and satisfaction, categorizing them into must-haves, performance benefits, and delighters.

Q & A

Who is Dan Olson and what is his background in product management?

Dan Olson is a product leader with a background in being a product manager at startups and a founder of a startup. For the past nine years, he has been consulting with companies on product management to help them improve their products and deliver effective product strategies.

What is the product management motto that Dan Olson shared, and how does it differ from Spider-Man's motto?

The product management motto that Dan Olson shared is 'with great responsibility comes no power,' which is a twist on Spider-Man's motto, 'with great power comes great responsibility.' The difference highlights the irony that product managers have a lot of responsibility but often lack the direct power to make things happen.

Why did Dan Olson write 'The Lean Product Playbook'?

Dan Olson wrote 'The Lean Product Playbook' because many companies and product managers do not feel good about their product strategy, and he wanted to provide guidance on how to improve and create effective product strategies.

What are the two main reasons Dan Olson identifies for companies struggling with product strategy?

The two main reasons are a focus on short-term objectives that can dominate everything if let unchecked, and a lack of a good framework for developing product strategy, as there isn't a standard class or method universally taught in business schools.

What is the 'big rocks' metaphor that Dan Olson uses to explain the importance of focusing on strategic priorities?

The 'big rocks' metaphor comes from 'The 7 Habits of Highly Effective People' and illustrates the importance of addressing the most important strategic tasks (big rocks) first. If you fill your 'jar' with the small, less important tasks (sand and pebbles) first, there won't be room for the big rocks.

What does Dan Olson suggest is the best definition of strategy?

Dan Olson's favorite definition of strategy is that it means saying no. It's about focusing on the most important aspects and rejecting the good ideas that do not align with the strategic vision.

What is the 'Product Market Fit Pyramid' framework that Dan Olson discusses in his talk?

The 'Product Market Fit Pyramid' is a framework that Dan Olson introduces to guide companies on how to achieve product-market fit. It involves understanding the target customer, identifying underserved needs, and building the product with a clear value proposition, functionality, and user experience that resonates with the market.

How does Dan Olson define 'problem space' and 'solution space' in the context of product strategy?

In product strategy, 'problem space' refers to the customer problems, needs, or benefits that the product should address. 'Solution space' refers to the specific designs or implementations meant to address those needs. Dan Olson emphasizes the importance of focusing on the problem space rather than jumping to solutions.

What is the Kano model, and how does Dan Olson recommend using it to inform product strategy?

The Kano model is a theory of product development and customer satisfaction that categorizes needs into three types: performance benefits (more is better), must-haves (basic requirements), and delighters (unexpected features that create high satisfaction). Dan Olson recommends using the Kano model to analyze customer needs and determine a product's unique differentiators.

Can you provide an example of how Dan Olson uses the product strategy grid to analyze Uber's initial product strategy?

Dan Olson uses the product strategy grid to analyze Uber's initial strategy by identifying the must-haves, performance benefits, and delighters that Uber aimed to provide. He points out that Uber's strategy was to offer a service that was faster, cheaper, nicer, and safer than traditional taxi and car services, focusing on unique differentiators such as instant booking and real-time transparency of the car's location.

Outlines

00:00

🎙️ Introduction to Product Management Secrets

Dan Olson introduces himself as a product leader and consultant, sharing his experience in startups and product management. He highlights the unique challenges product managers face, such as having great responsibility with little power, and the common dissatisfaction with company product strategies. Olson emphasizes the importance of a product strategy and poses questions to the audience about their own company's strategies, revealing that many are unhappy with their current approach. He introduces his book, 'The Lean Product Playbook,' which offers guidance on product strategy and mentions a raffle for the book on social media.

05:03

🤔 The Challenge of Defining and Implementing Product Strategy

Olson delves into the difficulties companies face in formulating and executing a product strategy. He identifies two main reasons for this challenge: a focus on short-term objectives that can overshadow long-term planning, and the absence of a robust framework for product management. He suggests that understanding what strategy means is crucial, defining it as a plan to achieve a vision by considering the long-term and big-picture view. Olson uses the 'big rocks' metaphor from 'The 7 Habits of Highly Effective People' to illustrate the importance of prioritizing key strategic initiatives over less significant tasks.

10:05

📈 Prioritizing Strategic Initiatives Over Urgent Tasks

Continuing the discussion on strategy, Olson stresses the importance of focusing on 'big rocks' or strategic priorities to avoid being overwhelmed by the 'sand' of minor, day-to-day tasks. He discusses the tendency in agile environments to prioritize short-term deliverables, cautioning against neglecting long-term strategic goals. Olson also emphasizes the need for product teams to be mindful of their strategic priorities, using anecdotes from his experience to highlight the consequences of not addressing these 'big rocks.'

15:05

🚀 The Importance of Saying No in Strategy Formulation

Olson introduces the concept of strategic choices involving the decision to say 'no' to certain opportunities in order to focus on what is truly important. He contrasts this with the natural inclination to say 'yes' to everything, especially in sales, which can lead to a lack of focus and strategic depth. Drawing on a quote from Steve Jobs, he argues that innovation and strategy involve not just saying 'yes' to one thing, but saying 'no' to many other good ideas to maintain focus and clarity in product direction.

20:07

🛠️ Framework for Product Market Fit and Strategy

Olson presents a framework for achieving product market fit, using the 'Product Market Fit Pyramid' as a tool to guide product strategy. He explains the pyramid's structure, starting with the target customer at the base and building up through underserved needs, value proposition, functionality, and user experience. The pyramid is designed to ensure that product decisions resonate with the market, with product strategy focusing on how to meet customer needs better and differently than competitors. Olson also discusses the importance of staying in the 'problem space' rather than becoming solution-centric.

🔍 Understanding Customer Needs and Differentiation

The speaker emphasizes the importance of understanding customer needs and using these insights to differentiate products in the market. He discusses the distinction between 'problem space' and 'solution space,' advocating for a focus on customer problems rather than jumping to specific solutions. Olson shares an example from Intuit, illustrating how defining customer problems clearly can lead to more effective product strategies. He also touches on the importance of mapping customer needs to product features and using the Kano model to categorize these needs, which can help in deciding where to focus efforts for maximum impact.

🏆 Creating a Winning Product Strategy with Unique Differentiators

Olson discusses the process of creating a winning product strategy by identifying and focusing on unique differentiators. He explains how to use a product strategy grid to analyze competitors and determine where to play offense by excelling in certain performance benefits and delighters. The grid helps in deciding which areas to compete in and which to avoid, ensuring that the product stands out in the market. Olson provides examples from Instagram and Uber to illustrate how these companies identified and leveraged their unique differentiators to achieve market leadership.

📚 Final Thoughts on Long-Term Strategy and Frameworks

In conclusion, Olson advises the audience to focus on long-term strategic thinking and not get consumed by short-term objectives. He encourages finding a framework that works for product strategy development and emphasizes the importance of understanding customer benefits over features. Olson also mentions his monthly meetup in the Bay Area for further learning and networking, inviting interested individuals to join and engage with top speakers in the field.

Keywords

💡Product Strategy

Product Strategy refers to a long-term plan that outlines how a product will achieve its vision and compete in the marketplace. It's a key theme in the video, as the speaker discusses the importance of having a clear and defined product strategy and provides insights on how to develop one. For instance, the speaker mentions that many companies lack a good framework for their product strategy, which is a central issue he aims to address.

💡Product Management Motto

The Product Management Motto mentioned in the video is a twist on Spider-Man's famous saying, 'with great power comes great responsibility.' Here, it's 'with great responsibility comes no power,' highlighting the paradox that product managers have many responsibilities but often limited direct power. This motto is used to introduce the challenges faced by product managers and leaders.

💡Lean Product Playbook

The Lean Product Playbook is a book written by the speaker, Dan Olson, which provides guidance on creating a product strategy and achieving product-market fit. It is mentioned in the context of the speaker's attempt to help companies feel more confident about their product strategies, as he offers copies of the book to the audience and encourages them to engage with him on social media.

💡Product Market Fit Pyramid

The Product Market Fit Pyramid is a framework introduced by the speaker to understand and achieve product-market fit. It consists of various layers starting from the target customer to their underserved needs, value proposition, functionality, and user experience. The pyramid helps in identifying how well the product's decisions and assumptions resonate with the market, and it is a central tool in the speaker's discussion on strategy.

💡Big Rocks

The term 'Big Rocks' is a metaphor used to represent the important strategic elements of a product that should be prioritized. It originates from Stephen Covey's 'The 7 Habits of Highly Effective People,' where the speaker explains that focusing on big rocks (strategic priorities) before the small things (tactical distractions) is crucial for effective product management. The concept is used to emphasize the importance of focusing on long-term strategic goals.

💡Kano Model

The Kano Model is a tool used to categorize customer preferences into three types: must-haves, performance benefits, and delighters. In the video, the speaker uses this model to help product managers understand and prioritize customer needs when developing a product strategy. It's a practical approach to differentiate a product in the market by focusing on what truly adds value from the customer's perspective.

💡Customer Needs

Customer Needs are central to the video's theme as the speaker repeatedly emphasizes the importance of focusing on what customers need rather than what the company wants to sell. The speaker advises staying in the 'problem space' and thinking about customer needs before jumping to solutions. For example, he uses the quote about people not wanting a drill but a hole to illustrate this point.

💡Agile Environments

Agile Environments are work settings that prioritize flexibility and iterative progress, often used in software development. The speaker mentions Agile Environments to highlight the tendency to focus on 'shipping sand' or minor fixes and improvements, cautioning against losing sight of the 'big rocks' or strategic priorities in the rush to deliver short-term objectives.

💡Unique Differentiators

Unique Differentiators are the specific benefits or features that set a product apart from its competitors. The speaker discusses the importance of identifying and focusing on these differentiators in a product strategy. For example, he talks about how successful companies often have one performance benefit where they excel and a unique delighter that surprises and pleases customers.

💡Competitive Analysis

Competitive Analysis is the process of evaluating a company's competitors to understand their strengths and weaknesses. In the context of the video, the speaker suggests that a good product strategy should be informed by competitive analysis, helping to identify gaps in the market and opportunities for differentiation.

💡Execution

Execution in the video refers to the act of implementing a product strategy effectively. The speaker notes that while many companies struggle with defining their product strategy, execution is also a challenge. It is the process of bringing the strategic vision to life and ensuring that the product meets its intended goals and customer needs.

Highlights

Dan Olson shares the closely guarded secret of product management: 'With great responsibility comes no power', highlighting the challenges product managers face.

Olson emphasizes the rarity of gathering product leaders and the opportunity to discuss product strategy.

The importance of having a product strategy is questioned, revealing that many companies lack one or are not satisfied with their current strategy.

The 'Lean Product Playbook' is introduced as a resource to help companies improve their product strategies.

Two main reasons for poor product strategy are identified: focus on short-term objectives and lack of a good framework.

Olson explains the concept of strategy as planning for long-term success and winning in the marketplace.

The metaphor of 'big rocks' is used to illustrate the importance of prioritizing strategic initiatives over less critical tasks.

Agile environments are critiqued for their tendency to prioritize 'sand' (small tasks) over 'big rocks' (strategic moves).

The definition of strategy is discussed, with a focus on saying 'no' to ensure resources are allocated to the most important initiatives.

The Product Market Fit Pyramid is introduced as a framework for achieving product-market fit and developing a strong product strategy.

The importance of focusing on customer needs and problems, rather than jumping to solutions, is stressed.

The Kano model is applied to categorize customer needs into must-haves, performance benefits, and delighters.

A product strategy grid is presented as a tool for analyzing competitors and determining a unique value proposition.

Instagram's product strategy is analyzed, highlighting their unique differentiators such as filters and speed of posting.

Uber's early product strategy is deconstructed to show how they aimed to be faster, cheaper, nicer, and safer than traditional taxi and car services.

The importance of testing hypotheses about unique differentiators and iterating based on feedback is emphasized.

Olson invites attendees to a monthly meetup for further learning and networking in the product management field.

The presentation concludes with a reminder of the key points: long-term thinking, prioritizing big rocks, focusing on benefits, and using frameworks for strategy.

Transcripts

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]