product management at early stage of company lifecycle

Product management at early stage of company lifecycle.Alex Astapenka, Product Mondays #1 - Introduction to Product Management

Sep 7, 2015

Questions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 1

Alex Astapenka Intro

1. several years of project/delivery management in EPAM Systems and Oxagile

2. Caspowa.com - cloud service for websites performance acceleration

3. CTOcast.com - the most popular Russian podcast about people and processes in IT

4. Kidster.by - offline club for real:) kids in Minsk


Core assumptions


— Please ask questions here bit.ly/ctocast— You may think of Product/Feature as a Startup

— I've never worked as a hired product manager

— I've used major part of things I will talk about but not all


CPS

— Customer: who are you’re going to sell to

— Problem: you've found real pain they have

— Solution: they are ready to pay for your solution enough money to keep your service growing


Business Model Canvas


http://bit.ly/ctocast1Questions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 7

Run Experiments to Test Your BMC Hypothesis

— Talk to potential customers and verify that they have the problem you’re trying to address

— Create a landing page and drive traffic through 1 or 2 channels

— Generate discussions with the people that signed up


Art of interviews


How to find and engage interviewees?

— Say that you are building solution which will make this particular industry heaven

— Pretend that you're from agency which runs industry survey

— Pretend that you are a blogger/journalist

— Run Industry-wide podcast or blog "This Week in your industry"

— Use CTOcast and a platform for Customer discovery:)Questions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 11

Define who is your customer and what pain does she have?

— Run yourself at least 1/2 of all interviews

— Speak like with a friend

— Look for patterns in responses after each 8-10 calls

— Define hypothesis beforehand and write them down in BMC

— Record all calls and make notes during the call

— Script is just a roadmap, feel free to go deeper in Questions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 12

— Mark the most interested interviewees as potential early adopters

— Promise to follow up after we will come up with some sort of viable solution (mvp)

— Ask if they have any colleagues that can refer

— Ask for an intro to someone they know that might be interested in what you’re working on.

— DON'T pay interviewees


Validate solution


— Real User testing

— Set goals and monitor metrics

— Surveys

— ask existing users of a product how they would feel if they could no longer use the product

— NPS (net promoter score) - how likely your users are going to refer a friend


Iterate and keep BMC versions


A chio blia esli net?


Pivot! but...

— Don't throw the baby out with the bathwater

— Be Antifragile!

— Structure the company's narrative around product failures.

— Identify new opportunities that fit your company and the market.


Product-market Fit (PMF)satisfactory number of people are ready to pay for your solution


5 Facts about PMF

1. Achieving PMF doesn't happen overnight

2. It is not obvious for everybody on the market event

3. You can easily loose PMF

4. Run even faster after PMF --> Competitors will copy you very quickly

5. It's a right time to hit accelerator


Gut feel


No PMF

— The customers aren’t quite getting value out of the product

— Word of mouth isn’t spreading

— Usage isn’t growing that fast

— Press reviews are kind of “blah”

— The sales cycle takes too long, and lots of deals never close.


Yes PMF

— The customers usage is growing just as fast as you can add more servers

— Money from customers is piling up in your company checking account

— You’re hiring sales and customer support staff as fast as you can.

— Investment bankers are staking out your house.


Data driven is better

(SaaS experience)


Collect and visualize data properly

Chargify or Recurly+Chartmogul or Kilometer.io


Cohort analysis


What to track?

— ARPA (Average Revenue per Account per month)

— Net MRR Churn rate (including MRR expansion)

— LTV

— CAC

— LTV: CAC ratio

— Months to recover CAC

— Customer Engagement ScoreQuestions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 27

Net MRR Churn rate =

(Churn MRR - Expansion MRR)/Previous months MRR


LTV =

ARPA * Gross Margin % / Customer churn


CAC =

Sum of all Sales & Marketing expenses / Number of new customers


LTV: CAC ratio >=

3


Months to recover CAC

CAC / (Avg MRR per customer*Gross Margin%)

<=12


Customer Engagement Score =

(w1*n1) + (w2 * n2) + … + (w# * n#)

Services: gainsight.com | totango.com | bluenose.com


How to get MAX of your development vendorbonus track


Engineering:

— implement modular architecture (or even micro-services)

— do not outsource core development

— have CTO/core team in-house


Processes:

— define, follow and adopt Agile processes

— fixed budget approach with "flexible" scope

— 1-2 weeks iterations with strong commitments on scope to be delivered

— everyday involvement

— remove all impediments before start of iteration

— ongoing prioritizationQuestions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 36

User Story requirements:

— Business Value

— Preconditions

— Acceptance criteria

— Main flow

— Alternative flow

— Non-Functional requirements

— How to DemoQuestions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 37

Definition o Done

— Functional Backwards Compatibility

— Documentation

— Tests (manual functional, automated functional, unit, integration, static, legacy)

— Bugs

— Review

— How to close USQuestions: bit.ly/ctocast -- Twitter:@aaliaksandr --- CTOcast.com --Caspowa.com --Kidster.by-- Level: 101 38

Questions?

bit.ly/ctocast

Caspowa.comCTOcast.comKidster.byTwitter: @aaliaksandrBR, Alex Astapenka
