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The missing manual on how to apply Lean Startup to build products that customers love The Lean Product Playbook is a practical guide to building products that customers love. Whether you work at a startup or a large, established company, we all know that building great products is hard. Most new products fail. This book helps improve your chances of building successful products through clear, step-by-step guidance and advice. The Lean Startup movement has contributed new and valuable ideas about product development and has generated lots of excitement. However, many companies have yet to successfully adopt Lean thinking. Despite their enthusiasm and familiarity with the high-level concepts, many teams run into challenges trying to adopt Lean because they feel like they lack specific guidance on what exactly they should be doing. If you are interested in Lean Startup principles and want to apply them to develop winning products, this book is for you. This book describes the Lean Product Process: a repeatable, easy-to-follow methodology for iterating your way to product-market fit. It walks you through how to: Determine your target customers Identify underserved customer needs Create a winning product strategy Decide on your Minimum Viable Product (MVP) Design your MVP prototype Test your MVP with customers Iterate rapidly to achieve product-market fit This book was written by entrepreneur and Lean product expert Dan Olsen whose experience spans product management, UX design, coding, analytics, and marketing across a variety of products. As a hands-on consultant, he refined and applied the advice in this book as he helped many companies improve their product process and build great products. His clients include Facebook, Box, Hightail, Epocrates, and Medallia. Entrepreneurs, executives, product managers, designers, developers, marketers, analysts and anyone who is passionate about building great products will find The Lean Product Playbook an indispensable, hands-on resource.
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Building a great product is hard work because it's easy to get sidetracked. The essence of what you're trying to achieve is easy to describe – you're trying to develop a product which meets customer needs (which make up the marketplace) better than all other alternatives. You're trying to achieve great Product-Market alignment.
Throughout my career, I've worked on and studied many different products. When I analyze the root causes of why products fail, a common pattern emerges. The main reason products fail is because they don't meet customer needs in a way that is better than other alternatives. This is the essence of product-market fit. — Dan Olsen
The key to building a great product is to bring to market something which is a perfect fit to the existing needs of the marketplace. Great products add significant value for customers in a way which is demonstrably better than all other alternatives.
To visualize this, the Product-Market dynamic can be broken down into five layers:
The Market consists of all existing and potential customers which have the same need or set of related needs. It has two layers:
1Target customers – the total number of customers in the market or the total revenue generated by those customers.
2The underserved needs of those target customers – their current needs which are not being adequately met by the existing products or solutions.
Logically, when you identify a large group of potential customers who all have a common underserved need they are willing to pay to solve, you have a great market opportunity.
The Product is a specific offering which is intended to meet specified customer needs. It has three layers:
1The user experience (UX) – what it's like to use your product or service from the customer's perspective. The UX brings the product's functionality to life for the user.
2Product features – the functionality that the product provides. Most products have multiple features, each included to generate a specific benefit.
3Your value proposition – the set of customer needs which you aspire to meet with your product. Your value proposition encapsulates the value you provide to customers with your product.
Product-Market fit is a measure of how well your product (the top three layers) satisfies the market (the bottom two layers of the pyramid). Your target customers signal how well your product fits their needs by comparison with other options by whether or not they buy. To achieve Product-Market fit, your product should meet underserved needs better than your competition.
A great example of this was Intuit's Quicken personal finance software. At the time Intuit launched Quicken, there were already 46 personal finance products in the marketplace. Despite that, Intuit cofounders Scott Cook and Tom Proulx thought the existing products were overly complex and difficult to use. They formed the hypothesis a checkbook-based design would do well.
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