The Lean Product Playbook: How to Innovate with Minimum Viable Products and Rapid Customer Feedback

by Dan Olsen

The main reason products fail is because they don't meet customer needs in a way that is better than other alternatives.

startups “fail because they never get to product-market fit.”

the Product-Market Fit Pyramid, breaks product-market fit down into five key components: your target customer, your customer's underserved needs, your value proposition, your feature set, and your user experience (UX).

The Lean Product Process consists of six steps: Determine your target customers Identify underserved customer needs Define your value proposition Specify your minimum viable product (MVP) feature set Create your MVP prototype Test your MVP with customers

“Product-market fit means being in a good market with a product that can satisfy that market.”

your product meets real customer needs and does so in a way that is better than the alternatives.

A market consists of all the existing and potential customers that share a particular customer need or set of related needs.

Different customers within a market choose different solutions to meet their needs.

A product is a specific offering intended to meet a set of customer needs.

Viewing product-market fit in light of this model, it is the measure of how well your product (the top three layers of the pyramid) satisfies the market (the bottom two layers of the pyramid).

To achieve product-market fit, your product should meet underserved needs better than the competition.

It helps you articulate and test your key hypotheses for each of the five components of product-market fit.

Minimizing rework is a key tactic for eliminating waste.

The goal of the process is to achieve product-market fit as quickly as possible. Quick but rigorous thinking that avoids or reduces rework helps achieve that goal.

Solution space includes any product or representation of a product that is used by or intended for use by a customer.

In contrast, there is no product or design that exists in problem space.

Whether it's a customer pain point, a desire, a job to be done, or a user story, it lives in problem space.

having a clear understanding of the problem space (devoid of any solution space ideas), allows for a wider range of creative solutions that potentially offer a higher return-on-investment.

This example highlights another advantage of clear problem space thinking: having a more accurate understanding of the market in which your product is really competing.

market is not tied to any specific solutions that meet those needs. That is why you see “market disruptions”: when a new type of product (solution space) better meets the market needs (problem space).

We were trained to first focus on “what” the product needed to accomplish for customers before getting into “how” the product would accomplish it.

The “what” describes the benefits that the product should give the customer—what the product will accomplish for the user or allow the user to accomplish. The “how” is the way in which the product delivers the “what” to the customer. The “how” is the design of the product and the specific technology used to implement the product. “What” is problem space and “how” is solution space.

This internal testing tactic where you use your own product is called “dogfooding.”

Such techniques are called “contextual inquiry” or “customer discovery.”

The best problem space learning often comes from feedback you receive from customers on the solution space artifacts you have created.

“Customers don't care about your solution. They care about their problems.”

Different customers will have different needs—and even those who have the same needs can have distinct views on their relative importance.

You define your target customer by capturing all of the relevant customer attributes that identify someone as being in your target market.

In such cases, it is useful to distinguish the economic buyer—the decision-maker who controls the budget and writes the check—from the other stakeholders involved in the decision-making process.

Technology Adoption Life Cycle

Innovators are technology enthusiasts who pride themselves on being familiar with the latest and greatest innovation.

Early Adopters are visionaries who want to exploit new innovations to gain an advantage over the status quo.

The Early Majority are pragmatists that have no interest in technology for its own sake. These individuals adopt new products only after a proven track record of delivering value.

The Late Majority are risk-averse conservatives who are doubtful that innovations will deliver value and only adopt them when pressured to do so,

Laggards are skeptics who are very wary of innovation.

it is very difficult to gain traction with the early majority.

Personas should fit on a single page and provide a snapshot of the customer archetype that's quick to digest,

One of the easiest ways to tell that a product team is starting with the solution space is that instead of articulating customer benefits, they list product features.

benefit conveys value, which means it's doing something for the customer.

Finally, many of the benefits speak to increasing something that's desired

This makes the benefit very clear and often enables you to objectively measure the performance improvement your product is providing.

Customer Discovery Interviews

Good questions in here.

The implication of the hierarchy is that a higher-level need doesn't really matter unless the more basic needs below it are met. As you explore the problem space for your product, you will likely encounter similar hierarchies.

As entrepreneurs, product managers, developers, and designers, we love to spend our time coming up with cool new feature ideas and designing great user experiences. However, those items sit at the top two levels of the pyramid of user needs. First and foremost, the product needs to be available when the user wants to use it. After that, the product's response time needs to be fast enough to be deemed adequate. The next tier pertains to the product's quality: Does it work as it is supposed to? We then arrive at the feature set tier, which deals with functionality. At the top, we have user experience (UX) design, which governs how easy—and hopefully how enjoyable—your product is to use. As with Maslow's hierarchy, lower-level needs have to be met before higher-level needs matter.

Importance is a problem space concept, separate from any specific solution space implementation. For a given customer, different needs will have different levels of importance.

Satisfaction is a measure of how satisfied a customer is with a particular solution that provides a certain customer benefit. It indicates how well that solution meets their needs. Different products will have different levels of satisfaction for the same customer, and the same product can provide different levels of satisfaction to different customers.

There is not much point in pursuing low importance ideas, regardless of the satisfaction level, since they just won't create enough customer value.

The upper left quadrant is high importance of need but low satisfaction with current solutions. Customer needs in this quadrant are important but underserved. As a result, they offer excellent opportunities to create customer value.

Incremental innovation occurs when you make minor improvements that add small amounts of customer value with each new version of your product.

A disruptive innovation such as Uber can emerge from an upper left quadrant opportunity where there was low satisfaction with a high importance need.