how to make sure your product rocks
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Talk to SSE Labs on best practices in product management, UI design, and metrics.TRANSCRIPT
Copyright © 2010 YourVersion
Dan OlsenDan OlsenCEO, YourVersionCEO, YourVersionJuly 21, 2010July 21, 2010
How to Make Sure YourProduct Rocks
Copyright © 2010 YourVersion
What IWhat I’’m Coveringm Covering
What is product management?
Understanding customer needs
Prioritization and maximizing ROI on engineering resources
UI Design & Ease of Use
Using metrics to optimize your product
Will post slides to slideshare.net/dan_o
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My BackgroundEducation
BS, Electrical Engineering, NorthwesternMS, Industrial Engineering, Virginia TechMBA, StanfordWeb development and UI design
19 years of Product Management ExperienceManaged submarine design for 5 years5 years at Intuit, led Quicken Product ManagementLed Product Management at FriendsterPM consultant to startups: Box.net, YouSendIt, EpocratesCEO & Cofounder of YourVersion, startup building “Pandora for your real‐time web content”
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Quick Poll of Audience
Product stageProduct live to public
Private beta
Alpha
Powerpoint or napkin stage
Consumer vs. B2B
Engineering, Marketing, PM, Designer
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What is Product Management?
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Product Management isCritical Link in Value Creation
Market• Current customers
• Prospectivecustomers
• Competitors
Product Management
Development Team
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A Process View of Product Management
BusinessStrategy
ProductStrategy
BusinessObjectives
ProductObjectives
ProductDevelopment
Service/Support
Market/Sell
LongTerm
ShortTerm
“Inbound”Product
Management“Outbound”
Product Management
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Team Roles & Interactions
ExternalExternal
InternalInternal
InterfaceInterfaceProduct
ManagementUIUI
DesignDesign
EngineeringEngineering QAQA
Marketing/Marketing/SalesSales
SupportSupport
ProspectiveCustomers
ExistingCustomers
Listening to customers
Engineering
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Product Management’s Job:A Successful Product
Be the expert on the market and the customer
Translate business objectives and customer needs into product requirements
Be the clearinghouse for all product ideas
Work with team to design & build great product
Define and track key metrics
Identify, plan & prioritize product ideas to maximize ROI on engineering resources
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Dan Olsen, CEO, YourVersionDan Olsen, CEO, YourVersionOO’’Reilly Web 2.0 Expo SFReilly Web 2.0 Expo SFMay 6, 2010May 6, 2010
Lean Product Management for Web 2.0 Products
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What’s So Great about “Lean”?What’s wrong with being not‐so‐lean?
Startups are at risk until they’re profitableFunding cocoon only lasts so longLimited resourcesTech markets move fastTime is the real enemy“Time is the scarcest resource and unless it is managed nothing else can be managed.”‐ Peter Drucker
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What’s the Formulafor Product‐Market Fit?
A product that:Meets customers’ needsIs better than other alternativesIs easy to useHas a good value/price
Simple, right?It’s easy to understand conceptually what we want to achieveHOW to achieve it is the hard part
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Understanding Customer Needs
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Russians: pencil
NASA: space pen($1 M R&D cost)
Example:Ability to write in space (zero gravity)
Problem Space vs. Solution Space
Problem SpaceA customer problem, need, or benefit that the product should address
A product requirement
Solution SpaceA specific implementation to address the need or product requirement
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Problem Space vs. Solution SpaceProduct Level
Problem Space(user benefit)
Solution Space(product)
TurboTax
TaxCut
Pen and paperPrepare
my taxes
File my taxes
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Problem Space vs. Solution SpaceFeature Level
Problem Space(user benefit)
Solution Space(feature)
Gmail importerMake it easy
to share a link with my
friends
Allow me to reuse my
email contacts
Design#1
Design#2
Design#3
DesignPreview with checkboxes
User can edit before import
#1 No No
#2 Yes No
#3 Yes Yes
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How Do You Prioritize User Benefits and Product Features?
Need a framework for prioritizationWhich user benefits should you address?
Which product features to build (or improve)?
Importance vs. SatisfactionImportance of user need (problem space)
Satisfaction with how well a product meets the user’s need (solution space)
Opportunity =High Importance need with low Satisfaction
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High Importance + Low Satisfaction =Opportunity
Impo
rtance of U
ser N
eed
Impo
rtance of U
ser N
eed
User Satisfaction with Current AlternativesUser Satisfaction with Current Alternatives
CompetitiveMarketOpportunity
LowLow HighHigh
LowLow
HighHigh
Not Worth Going After
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Importance vs. SatisfactionAsk Users to Rate for Each Feature
98
8784
8679 847055 80
7280
75
4150
55
60
65
70
75
80
85
90
95
100
40 50 60 70 80 90 100
Satisfaction
Impo
rtan
ce
Recommended reading: “What Customers Want” by Anthony Ulwick
BadBad
GreatGreat
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Kano Model: User Needs & Satisfaction
User SatisfactionUser Satisfaction
User DissatisfactionUser Dissatisfaction
Performance (more is better)
Delighter (wow)
NeedNeednot metnot met
NeedNeedfully metfully met
Must Have
Needs & features migrate over time
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Is the site up when I want to use it?
Is the site fast enough?
Does the functionality work?
Does the functionality meet my needs?
Olsen’s Hierarchy of Web User Needs(adapted from Maslow)
Customer’s Perspective What does it mean to us?
Uptime
Page Load Time
Absence of Bugs
Feature Set
Usability & Design
Decreasing
Dissatisfaction
Increasing S
atisfaction
How easy to use is it?
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What is Your Value Proposition?
Which user benefits are you providing?
How are you better than competitors?
Competitor A Competitor B You
Must Have Benefit 1 Y Y Y
Performance Benefit 1 High Low Med
Performance Benefit 2 Low High Low
Performance Benefit 3 Med Med High
Delighter Benefit 1 Y ‐ ‐
Delighter Benefit 2 ‐ ‐ Y
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Prioritization and Scope
Customer value is only half the equation
How much engineering effort will it take?
Need to consider value and effort (ROI)
Ruthlessly prioritize: rank order
Be deliberate about scope & keep it smallIt’s easy to try to do too much
Strategy = deciding what you’re NOT doing
Break features down into smaller chunks
Smaller scope → faster iterations → better
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Prioritizing Product Ideas by ROIPrioritizing Product Ideas by ROI
Investment (developer‐weeks)
Return (V
alue
Created
)
Idea C
Idea B
Idea D
Idea A
Idea F
1
1
2
3
4
2 3 4
?
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Have to Prioritize Across Multiple Dimensions At The Same TimeCu
stom
er Value
Custom
er Value
TimeTime
Customer Customer UnderstandingUnderstanding
Functionality
Quality
Ease of Use
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UI Design & Ease of Use
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User Benefits vs. Ease of Use
Q: If two products equally deliver the exact same user benefits, which product is better?A: The product that’s easier to use“Ease of use” provides benefits
Saves timeReduces cognitive loadReduces frustration
UI Design can be differentiatorOlsen’s Law: “The less user effort required, the higher the percentage of users who will do it”
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The Design Gap at Many Startups
Define Design Code
Product Mgmt Engineering
Product Mgmt Engineering
Product Mgmt Engineering
PM Eng
EngPM
UI
Level
2
3
4
5
Engineering1
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The UI Design IcebergThe UI Design Iceberg
VisualDesign
InteractionDesign
InformationArchitecture
ConceptualDesign
Recommended reading: Jesse James Garrett’s“Elements of User Experience” chart, free at www.jjg.net
What most people seeand react to
What good product people think about
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Elements of User Interface Design
Consists of Three Distinct Elements:Information Architecture
Structure and layout at both site and page levelHow site is structured (sitemap)How site information is organized (site layout)How each page is organized (page layout)
Interaction DesignHow user and product interact with one anotherUser flows (e.g., navigation across multiple pages)User input (e.g., controls and form design)
Visual Design“How it looks” vs. “What it is”, often called “chrome”Fonts, colors, graphical elements
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Information Architecture
Documents usedSitemap
Show how sections of website are organized
Show major navigation patterns
WireframesShow the layout of components on a page
Does NOT focus on visual designBlack & White
No graphics
Templates for overall website and individual pages
Tools: Visio, OmniGraffle, Axure, Powerpoint, Word, Excel, Photoshop, Balsamiq, WriteMaps, whiteboard
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Information ArchitectureSitemap
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Wireframe
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Interaction Design
Documents usedFlowchartCombination of Wireframes & Flowcharts
Tools: Visio, OmniGraffle, Powerpoint, Photoshop, whiteboardMay build prototype using HTML, jQuery, Ruby on Rails, Flash, or paperUsability testing can help find problems
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Flowchart showing conditional logic
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Visual Design
Documents usedMockups (aka comps)
Tools used: Photoshop, Illustrator, Fireworks
Designer may also deliver HTML & CSS version (with no back‐end code)
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Visual DesignUI Spec
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Visual DesignSpecifying Color Palette
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Learning from Customer Feedback
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Iterating Your Product Vector Based on User Feedback in Solution SpaceProblem Space
(your mental model)Solution Space
(what users can react to)
Help userbook travel
Help userplan travel
Customer Feedback
Mockups / Code
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What Are You Getting Feedback & Learnings About?
Problem Space(your mental model)
Solution Space(what users can react to)
CustomerUnderstanding
(needs & preferences)
Feature Set
UI Design Messaging
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What Can Solution Space ObjectsCan You Test with Customers?
Range of solution space options:Wireframe: low‐fidelity graphics
Mockup: high‐fidelity graphics
Prototype: interactive graphics or code
Alpha product: production code
Graphics usually quicker/cheaper to change than code
Goal is to gain learnings quickly
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Ramen Usability
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The Value of User Feedback Sessions
Critical to talk with customers 1‐on‐1Gain better understanding ofCustomer needs and problemsIssues with your feature set, UI, messagingWhat alternatives customers are using,pros & cons of each, customer preferencesQA: use cases & bugs you haven’t seen
Really a “user learning” sessionMake test as real for user as possible
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“Ramen” User Feedback for Startups
Anyone can do it!
Ingredients:Solution‐space product/mockup to test
1 customer (with laptop if testing code)
1 desk
1 person to conduct the session
Pen and paper
Optional note‐taker and observers
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Typical Format for Customer Session
5 ‐ 10 min: Ask questions to understand user needs and solutions they currently use30 ‐ 50 min: User feedback
Show user product/mockupNon‐directed as much as possibleWhen necessary, direct user to attempt to perform a specific task
5 ‐ 10 min: Wrap‐upAnswer any user questions that came upPoint out/explain features you want to highlightAsk them if they would use the product
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Dos & Don’ts of Conducting Usability
DoExplain to the user:
Their usability test will help improve the productNot to worry about hurting your feelings“Think Aloud Protocol”
Ask user to attempt the task, then be a fly on the wallAsk non‐leading, open‐ended questionsTake notes and review them afterwards for take‐aways
Don’tAsk leading questions“Help” the user or explain the UI (e.g., “click over here”)Respond to user frustration or questions (until test is over)Get defensiveBlame the user
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Usability Case Study: Travel Sites
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Usability Case Study: Travel SitesConsider 3 major travel sites
Expedia, Travelocity, OrbitzAll 3 try to provide same user benefits
Easily find flights that match your scheduleEasily find the lowest price flights
UI Design differences make some betterCase study: round trip from San Fran to NYC
Want to find best combo of price and airports3 possible airports for each city9 possible one‐way airport combinations81 possible round‐trip airport combinations
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Expedia:Only One Airport Combo at a Time
•• Have to Have to manually manually check all 9 check all 9 comboscombos
••3 clicks to 3 clicks to change airportchange airport
••Then wait for Then wait for new resultsnew results
••24 clicks +24 clicks +8 page reloads 8 page reloads to see all 9 to see all 9 comboscombos
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Travelocity:Can Select which Airports to Include
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Travelocity:Can only view results 1 combo at a time
•• Clicking button brings up Clicking button brings up results for this comboresults for this combo
••Problem: browser Back Problem: browser Back button loses other button loses other airports!airports!
••Have to go through Have to go through ‘‘Change SearchChange Search’’ process =process =9 clicks + 4 page reloads 9 clicks + 4 page reloads for each combofor each combo
••72 clicks + 32 page loads 72 clicks + 32 page loads to see other 8 combosto see other 8 combos
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Orbitz:Binary choices to include nearby airports
•• Good news: all combos Good news: all combos appear in resultsappear in results
••8080‐‐mile radius might mile radius might include airports I doninclude airports I don’’t t want (3 for SFO, 5 for NYC) want (3 for SFO, 5 for NYC) but turned out not to be but turned out not to be an issuean issue
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All 3 Travel Sites have Identical“Airline vs. Number of Stops” Price Grids
TravelocityTravelocity
OrbitzOrbitz
ExpediaExpedia
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Options for Sorting Flight Results
Website
Can Sort By Expedia Travelocity Orbitz
Airline Y
Departure Time Y Y Y
Arrival Time Y Y
Travel Time Y Y Y
Price Y Y Y
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Summary Comparison of Travel Sites
User Benefit Expedia Travelocity Orbitz
Ability to include other nearby airports Yes Yes Yes
Flight Results Sorting Options Med High Low
Ability to pick specific nearby airports
High(by changing)
High(can pre‐select) Low
Ease of trading off airport combos vs. price Low High Med
Ease of seeing results for multiple airports Med Low High
Airline vs. Number of Connections Price Grid Yes Yes Yes
Overall ability to easily find best airport combo Med Low High
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Getting Quantitative:Optimization Using Metrics
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Approaching Your Business as an Approaching Your Business as an Optimization ExerciseOptimization Exercise
Given reality as it exists today,Given reality as it exists today,
optimize our business resultsoptimize our business results
subject to our resource constraints.subject to our resource constraints.
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Profit = Profit = RevenueRevenue ‐‐ CostCost
Unique VisitorsUnique Visitors x x Ad Revenue per VisitorAd Revenue per Visitor
Impressions/VisitorImpressions/Visitor x Effective CPM / 1000x Effective CPM / 1000
Visits/Visitor x Visits/Visitor x PageviewsPageviews/Visit x Impressions/PV/Visit x Impressions/PV
New VisitorsNew Visitors + Returning Visitors+ Returning Visitors
Invited VisitorsInvited Visitors + Uninvited Visitors+ Uninvited Visitors
# of Users Sending Invites x Invites Sent/User x Invite Conv# of Users Sending Invites x Invites Sent/User x Invite Conversion Rateersion Rate
Define the Equation of your BusinessDefine the Equation of your Business““Peeling the OnionPeeling the Onion””
Advertising Business Model:
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( SEO Visitors + SEM Visitors + Viral Visitors ) x Trial Conve( SEO Visitors + SEM Visitors + Viral Visitors ) x Trial Conversion Ratersion Rate
Paying UsersPaying Users x x Revenue per Paying UserRevenue per Paying User
New Paying UsersNew Paying Users + + Repeat Paying UsersRepeat Paying Users
Previous Paying Users x ( 1 Previous Paying Users x ( 1 –– Cancellation Rate )Cancellation Rate )Trial UsersTrial Users x x ConvConv RateRate
Profit = Profit = RevenueRevenue ‐‐ CostCost
Equation of your BusinessEquation of your BusinessSubscription Business ModelSubscription Business Model
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How to Track Your MetricsTrack each metric as daily time series
Create ratios from primary metrics: X / YExample: How good is your registration page?Okay: # of registered users per dayBetter: registration conversion rate =
# registered users / # uniques to reg page
DateUnique Visitors
Page views
Ad Revenue
New User Sign‐ups …
4/24/08 10,100 29,600 25 490
4/25/08 10,500 27,100 24 480
…
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Sample Signup Page Yield DataSample Signup Page Yield Data
Daily Signup Page Yield vs. TimeNew Registered Users divided by Unique Visitors to Signup Page
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1/31 2/14 2/28 3/14 3/28 4/11 4/25 5/9 5/23 6/6 6/20 7/4 7/18 8/1 8/15 8/29 9/12 9/26 10/10
Dai
ly S
ignu
p Pa
ge Y
ield
Changedmessaging
Added questionsto signup page
Started requiringregistration
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Identifying the Identifying the ““Critical FewCritical Few”” MetricsMetrics
What are the metrics for your business?Where is current value for each metric? How many resources to “move” each metric?
Developer‐hours, time, moneyWhich metrics have highest ROI opportunities?
Return
Return
InvestmentInvestment
Return
Return
InvestmentInvestmentRe
turn
Return
InvestmentInvestment
Metric AMetric AGood ROIGood ROI
Metric BMetric BBad ROIBad ROI
Metric CMetric CGreat ROIGreat ROI
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Google Analytics
•Unique visitors
•New vs. returning
•Pageviews
•Time on site
•Top referrers
•Top geos
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Measuring Key Conversions:Conversion Funnel
•Tie user actions to business goals
•Instrument key steps in user flow
•See where users are dropping off
•Quantify improvement from changes
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Survey resultsImportance & SatisfactionNet Promoter Score
Survey.io“How would you feel if you could no longer use Product X?”
Very disappointed, Somewhat disappointed, Not disappointed
User behaviorProspects sign up (high conversion rate)They keep using it (high retention rate)They use it often (high frequency of use)
Metrics to Validate Product‐Market Fit
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UI questions are never yes/no! (not binary)Should ask: “What percentage of users …?”UI changes impact your metrics
Impact can be positive, negative, small, largeSeek high‐ROI UI changes
Typical UI design question:“When using web pages, do users scroll down?”
‐ Yes‐ No
Approaching UI Design Analytically
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Case Studies:Case Studies:Translating Metrics Into ActionTranslating Metrics Into Action
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Case Study 1: Quicken BrokerageCase Study 1: Quicken BrokerageOptimizing Sign In/Registration FlowOptimizing Sign In/Registration Flow
100%
62.3%58.8%
50.9%
34.4% 32.7%
0%
20%
40%
60%
80%
100%
% of U
sers
% of U
sers
Sign in /Sign in /RegistrationRegistration
Account Account TypeType
Cash vs.Cash vs.MarginMargin
5 Partner5 PartnerPagesPages
3 Partner3 PartnerPagesPages
Biggest drop
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OpenAccount
Sign in
Account Selection
Register
56%
44%
Forget Password
Registration Process
45% drop off(20% of total)
36% overall drop off for this step
70%(32% of Total)
17% drop off (10% of total)
20% drop off(6% of total)
30%(14% of Total)
80%(26% of Total)
55%(24% of Total)
64%of Total
Mapping the Flow to See WhereMapping the Flow to See WhereUsers Were Dropping OffUsers Were Dropping Off
Change Password
83%(46% of Total)
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Redesigned User Flow Improved Redesigned User Flow Improved Registration Conversion Rate 37%Registration Conversion Rate 37%
37% improvement in conversion rate
ReleasedNew Design
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• Which metric has highest ROI opportunity?
Case Study 2: FriendsterCase Study 2: FriendsterOptimizing Viral GrowthOptimizing Viral Growth
ActiveUsers
Prospective Users
Invite Click
Succeed
Inviteclick-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• Multiplied together, these metrics determine your viral ratio
Users
% of users who are active
= 15% = 2.3
= 85%
Registration Process
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The Upside Potential of a Metric
0
100%
Registration Process Yield
0
100%
% of users sending invitations
0
?
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 = ?%
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Okay, so how can we improve the metric?
How do we increase the average number of invites being sent out per sender?
For each idea:What’s the expected benefit? (how much will it improve the metric?)
What’s the expected cost? (how many engineer‐hours will it take?)
You want to identify highest benefit/cost idea
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Case Study 2: FriendsterCase Study 2: FriendsterDoubled Number of Invitations Sent per SenderDoubled Number of Invitations Sent per Sender
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ContinuousContinuousImprovementImprovement
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Adding Metrics and Optimization to your Product Process
PlanPlan
DesignDesign
DevelopDevelop
BusinessObjectives
ProductObjectives
Prioritized Feature List
Scoping
Requirements & Design
Code Test Launch
Site Level
Feature Level
OptimizeOptimize Metrics & User Feedback
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Optimization through Iteration:Optimization through Iteration:Continuous ImprovementContinuous Improvement
Measurethe metric
Analyzethe metric
Identify top opportunitiesto improve
Design & develop the enhancement
Launch theenhancement
Learning
Gaining knowledge:
• Market
• Customer
• Domain
• Usability
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How to Make Sure Your Product RocksHow to Make Sure Your Product RocksCheat SheetCheat Sheet
Clarify problem space by iterating in the solution space & getting user feedback
Revise feature set, UI design, and messaging to improve product‐market fit
Ruthlessly prioritize based on ROI
Define equation of your business
Identify and track key metrics
Launch, learn, and iterate
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Great way to stay on top of your interestsReal‐time discovery engine
Discovers new, relevant content tailored to your specific interestsNews, Blogs, Tweets, Webpages, VideosBookmark and share via email, Twitter, FacebookWeekly personalized email digestFree iPhone appExtensions for Firefox, Chrome, Safari & bookmarklet
Launched at TechCrunch50, won People’s ChoiceCheck it out at www.yourversion.com
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How to Make Sure YourProduct RocksQuestions?@danolsen
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