how to create products for growth by dan olsen at growth hacking summit
TRANSCRIPT
How to Create Products for Growth
DAN Olsen
August 4, 2015
Copyright © 2015 @danolsen
My Background n Educa=on
n Engineering background n Stanford MBA n UX design, web and mobile coding
n Experience n Led Quicken Product Management at Intuit n Led Product Management at Friendster n CEO & Cofounder, TechCrunch award winner YourVersion n Product consultant: Facebook, Box, MicrosoS n Organizer: Lean Product & Lean UX Meetup Silicon Valley
Slides at hUp://slideshare.net/dan_o TwiUer: @danolsen
n Win a signed copy of book n Tweet about this webinar n Include @danolsen n Can include screenshots of slides you like
n Hashtags: n #growthhacking n #leanstartup n #prodmgmt
n bit.ly/leanplaybook
Copyright © 2015 @danolsen
The 3 Phases of Your Product
Copyright © 2015 @danolsen
BEFORE Product-‐Market Fit
AFTER Product-‐Market Fit
BEFORE your product is live
Phase 1
AFTER your product is live
Phase 2
# of Customers
Time 0
lots
Phase 3
The 3 Phases of Your Product
Copyright © 2015 @danolsen
BEFORE Product-‐Market Fit
AFTER Product-‐Market Fit
Growth
Mainly Quan=ta=ve
BEFORE your product is live
Phase 1
Test hypotheses, gain confidence before building
Qualita=ve
AFTER your product is live
Phase 2
Improve product-‐market fit
Qualita=ve & Quan=ta=ve
Goal:
Methods:
Phase 3
Qualita=ve vs. Quan=a=ve Qualita=ve Interviews, User Tes=ng
Quan=ta=ve Analy=cs, A/B tes=ng
Oprah Spock
Phases 1 & 2: The Product-‐Market Fit Pyramid
Phase 2: If you could only track 1 metric to measure your Product-‐Market Fit,
which metric would it be?
Copyright © 2015 @danolsen
Reten=on Rate n Reten=on rate tracks what % of your customers are s=ll ac=ve over =me
~80% never use app again
Curve eventually flattens out
Improving Reten=on Rate Over Time= Increasing Product-‐Market Fit
Phase 3: ASer Product-‐Market Fit
Copyright © 2015 @danolsen
Iden=fy highest ROI idea
Design and Implement
Analyze How the Metric Changes
Brainstorm Ideas to
Improve Metric
Copyright © 2015 @danolsen
Lean Product Analy=cs Process
Iden=fy What Your Metrics Are
Measure Metrics Baseline Values
Evaluate Metrics Upside Poten=al
Global Level
Metric Level
Select Top Metric
Learn & Iterate
SEO Visitors x Conversion Rate + SEM Visitors x Conversion Rate + Viral Visitors x Conversion Rate + … + Visitors from Channel N x Conversion Rate
Paying Users x Revenue per Paying User
New Paying Users + Repeat Paying Users
Previous Paying Users x ( 1 – Cancella=on Rate )
Trial Users x Conv Rate
Profit = Revenue -‐ Cost
Equa=on of your Business: Subscrip=on Business Model
Copyright © 2015 @danolsen
View Each Metric as a Gauge
Copyright © 2015 @danolsen
Minimum Possible Value
Maximum Possible Value
Current Value
Iden=fying the “Cri=cal Few” Metrics n For each metric: Where is the needle now? n How much can we move the needle? Revenue impact? n How many resources will it take to move the needle?
n Developer-‐days, money n Which metrics have the highest ROI opportuni=es?
Return
Investment
Return
Investment Re
turn
Investment
Metric A Good ROI
Metric B Bad ROI
Metric C Great ROI
Copyright © 2015 @danolsen
Friendster Growth Hacking Case Study
Copyright © 2015 @danolsen
Improving Viral Acquisi=on of New Users
Case Study: Op=mizing Friendster’s Viral Loop
Active Users
Prospective Users
Invite Click
Succeed Don’t Click
Fail
Users
Registration Process
Copyright © 2015 @danolsen
• Which metric has highest ROI opportunity?
Case Study: Op=mizing Friendster’s Viral Loop
Active Users
Prospective Users
Invite Click
Succeed
Invite click-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• Mul=plied together, these metrics determine your viral ra=o
Users
% of users who are active
Registration Process
Copyright © 2015 @danolsen
• Which metric has highest ROI opportunity?
Case Study: Op=mizing Friendster’s Viral Loop
Active Users
Prospective Users
Invite Click
Succeed
Invite click-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• Mul=plied together, these metrics determine your viral ra=o
Users
% of users who are active
Registration Process
Copyright © 2015 @danolsen
• Which metric has highest ROI opportunity?
Case Study: Op=mizing Friendster’s Viral Loop
Copyright © 2015 @danolsen
Active Users
Prospective Users
Invite Click
Succeed
Invite click-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• Mul=plied together, these metrics determine your viral ra=o
Users
% of users who are active
= 15% = 2.3
= 85%
Registration Process
The Upside Poten=al of a Metric
0
100%
Registra=on Process Yield
85%
Max possible improvement
0.15 / 0.85 = 18%
Copyright © 2015 @danolsen
The Upside Poten=al of a Metric
0
100%
0
100%
Registra=on Process Yield
% of users sending invita=ons
85%
15%
Max possible improvement
0.15 / 0.85 = 18% 0.85 / 0.15 = 570%
Copyright © 2015 @danolsen
The Upside Poten=al of a Metric
0
100%
0
100%
0
?
Registra=on Process Yield
% of users sending invita=ons
Avg # of invites sent per sender
2.3
85%
15%
Max possible improvement
0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%
Copyright © 2015 @danolsen
Is anyone feeling a sense of déjà vu
right now?
The Upside Poten=al of a Metric
0
100%
0
100%
0
?
Registra=on Process Yield
% of users sending invita=ons
Avg # of invites sent per sender
2.3
85% 15%
Max possible improvement
0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%
Copyright © 2015 @danolsen
Metric B Bad ROI
Metric A Good ROI
Metric C Great ROI
ASer Launching Address Book Importer…
Copyright © 2015 @danolsen
ASer Launching Address Book Importer…
Copyright © 2015 @danolsen
ASer Launching Address Book Importer…
Copyright © 2015 @danolsen
Questions? @danolsen olsensolu=ons.com slideshare.net/dan_o leanproductplaybook.com Book: bit.ly/leanplaybook