How Product Managers Drive Growth with Analytics & Agility

When I shifted my career to product management, it was pretty difficult to explain my job to my family and friends. I have been thinking about this for a long time. If I want to summarize the role, I would say that the purpose of a product manager is to build a sustainable business model.

But how do you build a sustainable business model?

Simple, answer this question:

What do my customers want and how can I make money from it?

The question might seem simple, but the answer is far from that.

How do I know what my customers want? How do I know if they are willing to pay for my product? And how much are they willing to pay?

Well this is a good start, you are asking questions!

Try answering these questions. At first, your answers will not be accurate because, well, you are basically making assumptions!

But...

This is a good start to forming hypotheses.

As a product manager, you need to quickly validate two main hypotheses.

• The value hypothesis: You assume that the product will deliver enough value to your customers that they are willing to pay for it.
• The growth hypothesis: You assume that there is a big market for your product and that it is NOT only valuable to a small group of early adopters.

Remember, many products fail because there is simply no need for them in the first place.

You can't start validating after building a fully fledged product, you need to come up with some clever ways to test your assumptions.

It could be as simple as a Figma prototype that you use in user interviews to collect feedback and observe real users' reactions to your product, or, it could be a well-designed landing page that highlights the benefits of your product and encourages users to join your waiting list.

These experiments will help you understand if there is an actual demand for your product before developing it.

BML Loops

This is not a one time thing that you will do and hit a home run, but rather the beginning of a very practical framework.

BML stands for Build, Measure, Learn.

After validating your hypotheses with feedback collected from user research, you gain a better understanding of the problem you are trying to solve.

Now, you have some solid insights on what you should build.

You should showcase your product to customers quickly by creating a basic version that provides the core value, known as MVP (Minimal Viable Product).

BML Loops and Agile Methodologies (Build)

Incorporating the "Build, Measure, Learn" framework into agile methodologies is a natural fit that amplifies the iterative nature of agile development. Agile methodologies emphasize adaptability and responsiveness to change, which aligns perfectly with the continuous and validated learning achieved by the BML approach.

BML loops integrate smoothly into sprint cycles, viewing each sprint as a chance to create a small and measurable product increment, gather feedback from stakeholders or end-users, and incorporate those learnings into the next iteration. This iterative process fosters rapid experimentation and evolution of the product, enabling you to validate assumptions, mitigate risks, and, deliver value to customers more effectively.

By embracing BML within agile methodologies, you can cultivate a culture of continuous improvement, innovation, and, customer-centricity, driving the success and sustainability of your products in the long run.

Building a Comprehensive Analytics Strategy (Measure & Learn)

Before you start the development of your product, you need to work on your analytics strategy, to prepare for the Measure step.

Your analytics strategy should include:

1. Questions You Are Trying to Answer: I usually like to have questions that cover all the customer journey stages, for instance:

1.1 Awareness (Acquisition)

• What are the top channels driving traffic to our product?
• What is the customer acquisition cost (CAC) across different channels?

1.2 Consideration (Acquisition)

• What are the most viewed pages or features on the website?

1.3 Conversion (Acquisition)

• What is the conversion rate for new users?
• Which onboarding steps have the highest drop-off rates?

1.4 Loyalty (Retention)

• What are the common characteristics of our most engaged users?
• What are the most adopted features?
• What is the usage frequency for all features?

2. Goals You Are Trying to Achieve: One of your core goals should be identifying your users aha moments.

Aha moments occur when users perceive the unique value of your product and commit for the long run.

Others goals could be:

• Enhance user engagement and retention.
• Optimize the onboarding process.
• Increase conversion rates.
• Increase the visibility of some products to improve feature adoption.

3. Metrics You Have Prioritized: Tracking every event in your product can seem like a beneficial approach to gather comprehensive data and insights. However, there are several reasons why this might not be the best strategy;

• Data Overload: Collecting data from every single event can lead to an overwhelming amount of information. This makes it difficult to identify what's truly important. The sheer volume can obscure meaningful patterns rather than revealing them.
• Performance Impact: Implementing tracking for every event can slow down your application. This happens because the tracking code itself uses resources, and the transmission of data can increase the load on the network and servers. This might negatively affect the user experience, leading to slower response times and increased latency.
• Cost Implications: More data means higher costs related to data storage, processing, and analysis. Analytics software providers such as Mixpanel, typically price their services based on the volume of events being monitored. Consequently, the more events tracked, the higher the cost.

Embracing the Pivot

Now that you have built your MVP, measured its outcome, and tracked your users' behavior, you are still not gaining the traction you desire, despite multiple attempts to enhance your product offerings.

Your initial hypotheses don't seem to be valid, what do you do?

You pivot!

A pivot occurs when a you fundamentally change a core assumption about your business model. This could involve altering the product, switching target users, changing the revenue model, or even adopting a new business strategy altogether. The essence of a pivot is adaptation—when the existing assumptions no longer hold true, new hypotheses must be developed and tested.

The Challenge of Deciding to Pivot

Despite its potential benefits, the decision to pivot can be a daunting one. Many startups face internal resistance to making such significant changes, especially if the current path has required substantial investment of time and resources. There's a natural tendency to stick to the original plan, hoping for eventual success. However, ignoring the signs that suggest a need for change can lead the company into a state of stagnation, or what is often referred to as becoming a "zombie" startup—one that exists but isn't thriving or evolving.

The Role of Pivot Meetings

To effectively manage and facilitate necessary pivots, it is advisable for startups to hold regular pivot meetings. These should ideally be conducted once per month and involve key stakeholders and decision-makers. The agenda of these meetings is straightforward:

1. Review Current Data and Metrics: Examine all relevant data accumulated from various sources including customer feedback, sales figures, market trends, and, competitive analysis.
2. Assess Performance Against Goals: Compare current performance against the strategic goals and OKRs that were set. This assessment helps determine whether the business is on track or deviating from its intended path.
3. Identify Potential Pivots: Discuss potential areas of change. This could mean refining the product based on user feedback, targeting a different customer segment, adjusting pricing strategies, or even redesigning the marketing approach.
4. Make Decisions: Decide on whether a pivot is necessary and, if so, outline the next steps for implementing these strategic shifts.

Benefits of Regular Pivot Meetings

Holding these meetings regularly ensures that the company remains agile and responsive to its internal metrics and external market forces. They foster a culture of honesty and openness about the business’s progress and challenges. Moreover, regular reassessment helps prevent the inertia that can lead to becoming a "zombie" startup.

Conclusion

The role of a product manager is pivotal in navigating the complexities of building a sustainable business model. Through the integration of BML loops within agile methodologies, product managers are equipped to foster a culture of continuous improvement and responsiveness. This approach not only ensures that products evolve in alignment with customer needs and market demands but also emphasizes the importance of adaptability through regular pivot meetings.

Pivot meetings serve as a critical tool for evaluating the viability of current business strategies and making informed decisions about necessary adjustments. By regularly assessing performance against goals and reviewing relevant data, teams can avoid the stagnation associated with "zombie" startups and maintain momentum towards innovation and growth.

The journey of a product manager involves constant learning and adaptation. Embracing the challenges of pivoting, when necessary, ensures that the business remains dynamic and competitive. Ultimately, the strategic agility facilitated by these practices empowers product managers and their teams to deliver products that not only meet but exceed the evolving expectations of their customers, driving long-term success and sustainability.