5 Practical Tips for Applying the Lean Product Process to Build Great Products with Dan Olsen

Welcome to the latest issue of the Product Management Learning Series - a series of live streaming events and newsletter articles to help you level up your product career! ??

?For our 12th installment, our speaker was Dan Olsen . Dan is a product management trainer, consultant, and author. His passion is helping others build successful products that customers love. Dan works closely with CEOs and product leaders to build strong product teams. Dan teaches in-depth, highly interactive private training workshops tailored for each client’s learning objectives. His clients include Google, Facebook, Uber, Amazon, Box, and Walmart. Dan is the author of the bestseller The Lean Product Playbook and lives in Silicon Valley, where he founded the monthly Lean Product Meetup in 2014, which has over 11,000 members.

If you missed the event, you can watch the full event recording here.?

Dan kicked off the session by covering the basics of the 6-step Lean Product Process:

1. Determine your target customer

2. Identify underserved customer needs

3. Define your value proposition?

4. Specify your MVP feature set

5. Create your MVP prototype?

6. Test your MVP with customers?

We focused on the first 3 steps during our session.

Below are the main takeaways from the conversation I had with Dan:

Product managers should focus on defining the problem space before starting to build.

He called out the importance of separating problem space from solution space. Dan defines problem space as 'the need or benefit that the product should address' and where product managers should focus. The solution space on the other hand is defined as a ‘specific implementation or design to address the customer need.’ Dan mentioned that since product development teams live in the solution space, it’s natural for Product Managers to gravitate towards solutions, oftentimes without completely understanding the problem. When operating only in the solution space, it is possible to miss the underlying customer problem or need that you are trying to solve for in the first place and validate that it is indeed the right problem worth solving for.?

Dan cited an example of Henry Ford and the creation of the car. Prior to cars existing, with most individuals getting around on horseback, many customers might have just asked for a faster horse to get more quickly from point A to point B. However, in this example, and in Product Management more broadly, it is important to realize that the faster horse would just have been a solution, while the underlying problem was getting between two places faster. It is the job of the Product Manager to define who the customer is, and what their problems are that are worth solving, just as Henry Ford did with the creation of the car.?

Dan discussed how one of product management’s main responsibilities is to define the problem space for their team. Dan shared how he would define the problem space for TurboTax. At the most fundamental layer, users care about being able to file their tax returns confidently while saving time and saving money. When you have a robust problem space definition, you find that most solution ideas can be mapped back to these fundamental needs.

Peel back the onion to get specific on who your customer is and what their needs are.

Dan shared the metaphor of peeling an onion to get deep and discover who your customer really is and what their needs are. Dan mentioned that usually the thoughts or ideas you have for your product are like the outer layer of the onion. An example of this would be initially saying your target customer is a millennial. While offhand this sounds like a specific definition, when you think about it more deeply you realize that not all millennials are alike. Dan discussed that if you think about most products that have been really successful, it's because they peeled the onion and got really clear on who their target customer is.

Dan shared his Importance vs. Satisfaction framework for prioritizing which customer needs to target. It’s best to identify and focus on needs in the upper left quadrant where the biggest opportunities live: focusing on the needs that are important to the users but are not yet well satisfied by the current solutions available.

Use the Kano model to define your product’s value prop and stand out from competition.?

The Kano Model is an approach to categorizing needs and features based. The model has three categories: must-have needs, performance needs, and delighters. With performance needs, more is better. Fuel efficiency is a performance benefit for cars. Must-have needs are “table stakes,” they don’t create satisfaction by being met, but they avoid customer dissatisfaction. For example, seat belts are a must-have feature for a car. Delighters are like “bonuses”, people don’t expect them to be there but having a delighter or a wow feature can create a lot of positive satisfaction. By classifying your feature based on the type of needs it meets, PMs can better determine the feature impact on customer satisfaction.?

Dan shared a few examples of delighters in the products and services he uses, including the DoubleTree hotel chain that gives out cookies to its guests when they check in. Another example of a delighter is Spotify that changes the graphic for its progress bar to a lightsaber when you listen to Star Wars music on its platform. Dan also discussed that these delighters can change over time, an example of this would be the GPS in cars. When GPS first came out it was a delight to have in cars, however, with GPS so readily available on our phones it is no longer that way.??

With the Kano Model in mind, Dan recommended using the Kano Model categories to populate your Value Proposition Grid to identify how your product will stand apart and win over the competition. The point of this exercise is to identify your unique differentiators: the performance benefit(s) and unique delighter(s) in which you plan to invest.

Go beyond your must-haves, include at least one performance benefit, and ideally one delighter to create a winning MVP.

Dan mentioned two mistakes that he often sees when teams launch their MVP. The first mistake is launching the bare bones that includes only the must-haves. To avoid this mistake it is crucial that the MVP has the must haves, and it needs to have at least one performance benefit, and ideally, it also has one unique delighter. These are your product’s “special sauce”. By only including must-haves in the MVP, the product will not create enough value for the customer.?

The second mistake is essentially the opposite, overscoping. This often happens when a stakeholder sees their pet feature not included in the MVP scope (for example, feature P1A or feature P3B in the slide). Although the schedule impact is rarely discussed, when an additional feature is added to the MVP, the release will be delayed. Unfortunately, teams often receive requests from multiple stakeholders for multiple pet features, compounding the problem. The requests from stakeholders often come from good intentions, but are basically akin to throwing more spaghetti at the wall so that we have a higher chance that something will stick. A strong product team should have enough knowledge and conviction to identify and stick with a right-sized MVP.

Use the Importance vs. Satisfaction Matrix to identify priority opportunities to optimize an existing product.?

Dan shared that the Lean Product Process can also be applied to optimize an existing product. Dan re-emphasized the need to align (and re-align if needed) on the target customer and their underserved needs. When it comes to ideating which features to build, Dan shared two methods leveraging the Importance vs. Satisfaction Matrix. The first method is to take a quantitative approach and survey existing users to map out which feature is of high importance but low satisfaction on which the team should focus (see an example below).

The second method is taking a qualitative approach by mapping out user needs on the Importance vs. Satisfaction Matrix to see which needs have a shorter line to the upper left quadrant (i.e., closer to the highest “opportunity” zone), and prioritize the one(s) with a shorter line as larger opportunities to create value. So in the hypothetical example below, for Turbotax, saving time was the highest priority opportunity, followed by improving confidence, and saving money was not a high priority opportunity because users are already satisfied with the current solution.?

?? View the original slides shared by Dan during our talk.?

Additional gems from Dan:

?? Whoop, a wearable that monitors your sleep, recovery, and daily effort around the clock to deliver actionable insights on how you can optimize your performance, is one of Dan’s latest favorite products.?

?? Dan shared that US Navy Admiral Hyman Rickover, an entrepreneur who was responsible for creating nuclear-powered submarines, is one of his inspirational leaders. One of Dan’s other inspirational leaders is his General Manager (GM) from Intuit, who showed him best practices in product management, business management, and people management.

?? Dan mentioned to check out his book, The Lean Product Playbook, and some of his other talks, especially a recent talk he did on Best Practices for Enterprise Product Management found here. If you're in Denver, please check out Dan's in-person public workshop there on Sep 21 here. To learn more about Dan's Lean Product Meetup group and join for free here. You can learn more about Dan and subscribe to his email newsletter at https://dan-olsen.com.

?? Special kudos to Andrew Altschuler for drafting this article.

Next up,

• September 23: [Special Edition] Breaking into AI Product Management with Marily Nika
• October 7: Use Behavioral Economics to Design Better Products with Kristen Berman
• October 14: Building Subscription Products & Becoming a Thought Leader with Robbie Kellman Baxter
• October 21: Content Creation & Product Community Building with Felix Watson

More sessions to be added soon… subscribe to stay tuned!?

Learn more about the Product Management Learning Series and view past recordings here.