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1-Page Summary of The Lean Product Playbook
“Product-Market Fit”
To create a better product, begin by defining what your target customers are looking for. Then develop a solution based on those needs. The guiding principle should be achieving viable product-market fit, which is determining how well your product meets market needs. For example, if you’re creating an app, then you want people to like it and buy it.
“The Product-Market Fit Pyramid”
There are five different aspects to the product-market fit pyramid: 1) targeting consumers, 2) meeting unserved needs, 3) creating a value proposition, 4) making the product’s feature set; and 5) tracing the user experience.
The steps of the product-market fit pyramid echo some of the steps in the lean product-creation process. Successful product developers climb layer by layer, aiming for a better solution than their competitors. For example, Intuit realized that customers wanted visible checkbook balances and traceable payments, so it created a user experience that made them happy.
The Lean Product Process
When developing a new product, follow these six steps:
1. “Determine Your Target Audience”
To better understand your customers, start by creating a profile of them. Who are they? What do you know about them so far? You can’t really figure out who they are until you actually talk to some of the people in that audience and find out exactly what their needs are. Until then, it’s just an educated guess based on assumptions.
Segment your target market by looking at the demographics of potential consumers, like their age, location and education level. Consider psychographics – what people believe in and where their interests lie. Evaluate behavioral attributes – what they typically do with products like yours and how often. Take a needs-based segmentation approach to look at concerns that relate to the group’s needs for your product or service.
Create personas by selecting attributes from your different customer segments. A visual persona is a description of the persona that includes a name, photo, and sketch of his or her needs and interests. Personas should be realistic so they can help your team make decisions.
2. “Identify Underserved Customer Needs”
Use the target audience hypotheses you created earlier to create a statement of your customers’ specific needs. You can do this by saying what they want or need, and when they will get it. For example, “As a professional photographer, I want to easily upload pictures from my camera to my website so that I can quickly show my clients their pictures.”
To create the most value for customers, you need to figure out which of your goals is the most important. Then, use a satisfaction-versus-importance chart to see how well each goal will be received by customers and determine which one is going to give you the greatest return on investment in terms of customer happiness. Use Kano’s model that differentiates between three types of customer needs: essential, performance and excitement.
Delighters are unexpected benefits that bring customers great satisfaction.
“Performance needs” is a term that describes the elements of a product or service customers look for. Customers who are satisfied with one aspect will want more benefits in their purchase.
A “must-have need” is something that doesn’t necessarily make a customer happier, but makes them more frustrated if it isn’t present.
3. “Define Your Value Proposition”
In order to create a product that is different and better than its competition, you need to identify your product’s value proposition. This means that it needs to be both different from the competition and valuable in some way. You can’t satisfy everyone, so you have to decide which customers are most important for your business. Steve Jobs said once that “innovation is saying no to 1,000 things.” Therefore, you should focus on what’s essential for your business – not everything else. Think about how well your product fits with the market right now as well as how it will fit into the future. For example, Pure Digital created an excellent Flip Video Camera because it was able to differentiate itself from other video cameras by being small enough to carry around easily (a delighter) while also offering high-quality videos at a low price point (a benefit). However, when Apple released its new iPhone 3GS in 2009 with video capabilities built into the phone itself rather than requiring users purchase an additional camera like Pure Digital did with their Flip Video Camera line of products; this meant that they were no longer offering something unique or special compared to their competitors’ products and therefore lost out on capturing more market share within this niche marketplace segment over time.
