at startups. Since leaving Intuit, I've spent a lot of time working at and with startups.
For years now, I have consulted to numerous companies, helping them apply Lean principles to create successful products. I take a hands-on approach in my consulting: I work closely with CEOs and their management teams and also get in the trenches with product managers, designers, and developers. I usually serve as interim VP of Product for my clients and am often the first product person on their team.
I've tested and refined the advice in this book while working with a wide range of companies. My client list includes Facebook, Box, YouSendIt (now Hightail), Microsoft, Epocrates, Medallia, Chartboost, XING, Financial Engines, and One Medical Group. I've found these ideas applicable to all my clients, even though they vary in size from small early stage startups to large public companies and span a variety of vertical industries, target customers, product types, and business models.
I enjoy sharing and discussing my Lean Product ideas with as many people as I can. I regularly give talks and workshops and post my slides on SlideShare at http://slideshare.net/dan_o/presentations. I also host a monthly Lean Product meetup in Silicon Valley, which I invite you to check out at http://meetup.com/lean-product. The audiences in those forums have also helped me hone the guidance provided in this book with their questions, suggestions, and feedback.
Who Is This Book For?
If you are interested in Lean Startup, Customer Development, Lean UX, Design Thinking, product management, user experience design, Agile development, or analytics, then this book is for you. It will equip you with the “how-to” manual you need, and provide a step-by-step process you can follow to ensure you're building a product that customers will find valuable.
This book is for:
• Anyone trying to build a new product or service
• Anyone trying to improve their existing product or service
• Entrepreneurs
• Product managers, designers, and developers
• Marketers, analysts, and program managers
• CEOs and other executives
• People working in companies of any size
• Anyone who is passionate about building great products
The guidance in this book is most valuable for software products. However, it is also relevant to other product categories such as hardware and wearables, and even nontechnical products. The guidance in this book is also applicable to a wide range of business contexts, including business-to-consumer (B2C) and business-to-business (B2B).
How This Book Is Organized
The book is organized in three parts. Part I, “Core Concepts,” explains the foundational ideas of product-market fit and problem space versus solution space.
Part II of this book, “The Lean Product Process,” describes each of the six steps of the process in detail, devoting a chapter to each step. Part II also includes chapters on:
• The principles of great UX design
• How to iteratively improve your product-market fit
• A detailed, end-to-end case study using the Lean Product Process
Part III, “Building and Optimizing Your Product,” provides guidance that applies after you have validated product-market fit with your MVP prototype. It includes a chapter on how to build your product using Agile development, which also covers testing, continuous integration, and continuous deployment. In addition, it contains two chapters on analytics, which describe a methodology for using metrics to optimize your product and include another in-depth, real-world case study.
Writing this book has given me the opportunity to share the ideas, lessons learned, and advice accumulated over my career with a broader audience. My experience has been informed and influenced by my mentors, colleagues, and many other people passionate about sharing ideas and comparing notes on the discipline of building great products. Our field continues to evolve, with new ideas emerging all the time. That's why I'll use the companion website for this book, http://leanproductplaybook.com, as a place to share and discuss those new ideas. I invite you to visit the website to read the latest information and contribute to the conversation.
Part I
Core Concepts
Chapter 1
Achieving Product-Market Fit with the Lean Product Process
Product-market fit is a wonderful term because it captures the essence of what it means to build a great product. The concept nicely encapsulates all the factors that are critical to achieving product success. Product-market fit is one of the most important Lean Startup ideas, and this playbook will show you how to achieve it.
Given the number of people who have written about product-market fit, you can find a range of interpretations. Real-world examples are a great way to help explain such concepts – throughout this book, I walk through many examples of products that did or didn't achieve product-market fit. But let's start out by clarifying what product-market fit means.
What Is Product-Market Fit?
As I mention in the introduction, Marc Andreessen coined the term product-market fit in a well-known blog post titled “The only thing that matters.” In that post he writes, “Product-market fit means being in a good market with a product that can satisfy that market.” My definition of product-market fit – which is consistent with his – is that you have built a product that creates significant customer value. This means that your product meets real customer needs and does so in a way that is better than the alternatives.
Some people interpret product-market fit much more broadly, going beyond the core definition to also include having a validated revenue model – that is, that you can successfully monetize your product. For others, product-market fit also includes having a cost-effective customer acquisition model. Such definitions basically equate product-market fit with having a profitable business. I believe using “product-market fit” as another way of saying “profitable” glosses over the essential aspects of the idea, which can stand on its own.
In this book, I use the core definition above. In business, there is a distinction between creating value and capturing value. In order to capture value, you must first create it. To be clear, topics such as business model, customer acquisition, marketing, and pricing are critical to a successful business. Each is also worthy of its own book. This book touches on those subjects, and you can use the qualitative and quantitative techniques in it to improve those aspects of your business. In fact, Chapters 13 and 14 discuss how to optimize your business metrics, but the majority of this book focuses on the core definition of product-market fit and gives you a playbook for how to achieve it.
The Product-Market Fit Pyramid
If you're trying to achieve product-market fit, a definition alone doesn't give you enough guidance. That's why I created an actionable framework called the Product-Market Fit Pyramid, shown in Figure 1.1. This hierarchical model decomposes product-market into its five key components, each a layer of the pyramid. Your product is the top section, consisting of three layers. The market is the bottom section of the pyramid, consisting of two layers. Within the product and market sections, each layer depends on the layer immediately beneath it. Product-market fit lies between the top and bottom sections of the pyramid.
