How to Create Products for Growth by Dan Olsen at Growth Hacking Summit

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

http://www.slideshare.net/dan_o/presentations

https://twitter.com/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


http://www.amazon.com/Lean-Product-Playbook-Innovate-Products/dp/1118960874/

The 3 Phases of Your Product


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


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?


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


Iden=fy highest ROI idea

Design and Implement

Analyze How the Metric Changes

Brainstorm Ideas to

Improve Metric


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


View Each Metric as a Gauge


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


Friendster Growth Hacking Case Study


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


•  Which metric has highest ROI opportunity?


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





Active Users

Prospective Users

Invite Click

Succeed


Conversion rate

Don’t Click

Fail

Invites per sender



Users







Active Users

Prospective Users

Invite Click

Succeed


Conversion rate

Don’t Click

Fail

Invites per sender



Users


= 15% = 2.3

= 85%


The Upside Poten=al of a Metric

0

100%

Registra=on Process Yield

85%

Max possible improvement

0.15 / 0.85 = 18%



0

100%

0

100%


% of users sending invita=ons

85%

15%


0.15 / 0.85 = 18% 0.85 / 0.15 = 570%



0

100%

0

100%

0

?



Avg # of invites sent per sender

2.3

85%

15%


0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%


Is anyone feeling a sense of déjà vu

right now?


0

100%

0

100%

0

?



Avg # of invites sent per sender

2.3

85% 15%


0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%


Metric B Bad ROI

Metric A Good ROI

Metric C Great ROI

ASer Launching Address Book Importer…






Questions? @danolsen olsensolu=ons.com slideshare.net/dan_o leanproductplaybook.com Book: bit.ly/leanplaybook

https://twitter.com/danolsen

http://olsensolutions.com

http://www.slideshare.net/dan_o/presentations

http://leanproductplaybook.com

http://www.amazon.com/Lean-Product-Playbook-Innovate-Products/dp/1118960874/