The 3 Stages of Product Evolution for Startup Founders (Part 3)
This is the third and final part of a 3-part series about the foundations of great product management for start ups.
If you haven’t already — it’s highly recommended to read parts 1 and 2 for context.
Stage #3 — Becoming Irreplaceable
Time to Focus on Your Design
Once you’ve achieved your initial client base and positioned your product in a purposeful way — you are now able to take the last stride towards setting the rocket ship of a company you are building on its way to the moon — becoming an irreplaceable component of your target audience’s lifestyle.
This is a very rigorous and data driven process during which you focus more than anything on how your product is designed and how that design fits like a glove to the needs of your target audience.
This is where you focus almost completely on the persona (i.e — the type of user you wish to serve — according to its characteristics) — which is why it’s incredibly important to have a clear validation on the market and value from the prior two stages.
It’s time to delight your customers into never wanting to let go of your product — or at least being extremely disappointed if they have to.
If you do it correctly, instead of having to sell — people will be beating down a path to your door in order to get your product until you won’t be able to even meet the demand.
Yes, This Could Be Referred to as “Product-Market Fit”
If it wasn’t clear from what I wrote before, I hate the jargon used in the industry today (to the point I think I’ve grown an allergy to it) — but succeeding in this stage is probably what is best worthy of the definition of “Product-Market Fit” (though I’m sure many people reading this are angrily thinking about why I’m wrong and PMF is something completely different, which would prove my point as to why all these terms are pretty useless).
Reason why I bring this up is that a lot of great content about how to achieve or optimise “Product-Market Fit” is out there, and usually when it refers to this process it’s fairly good.
One of the favourite pieces I’ve ran into in this aspect is Superhuman’s Rahul Vohra’s article about how they “Built an Engine to Find Product-Market Fit”.
In the following paragraph, I highlight my key takeaways from Rahul’s article as a great example of a process that allows you to focus on what would matter to your target audience. And it goes without saying — I highly recommend you read the entire article!
The Superhuman Engine to Find PMF
According to the article, they employ a process during which they get feedback from their users which helps them to segment them into 3 categories, based on how disappointed they would be if they couldn’t use their product — very disappointed, somewhat disappointed and not disappointed (if polling your users isn’t a good fit your kind of product try to quantify this in a different way, for example by the use of metrics of usage analytics).
The desired indicator for PMF is to get to a point where 40% of the users would be very disappointed by not using the product.
They then use a four-step process for optimizing PMF:
Step 1: Segment to find your supporters and paint a picture of your high-expectation customers
Find out what are the personas to which your product mattered the most and focus only on them while sifting the others.
Step 2: Analyze feedback to convert on-the-fence users into fanatics
Ask (or analyse the usage data from) those who would be very disappointed not using the product and those what would be somewhat disappointed to find out what it is they liked about the product.
For the users who would be somewhat disappointed and resonated with the main benefit the would be very disappointed indicated — ask for ways for improvement as they are the ones who are on the fence and can be pushed to the correct side.
Step 3: Build your roadmap by doubling down on what users love and addressing what holds others back
Split the road map in half for each of the desired outcomes — putting more focus on the main benefit the would-be very disappointed users indicated and improving the issues that were indicated by the group of users who were considered to be on the fence.
Step 4: Repeat the process and make the product/market fit score the most important metric
Make the metric of having at least 40% of your users very disappointed if they have to quit your product your north star.
This is of course just one example of how this process can be managed.
The point is to relentlessly make your product awesome for the people you’ve made it for in the context you’ve already built for it and in the market you already have presence in.
As with the prior stages, doing this immaturely could be a very bad thing — as you might double down on things that would make little difference.
However — completing this stage successfully in the right timing should be the thing that will launch your company into rock stardom in your market and get your growth to become exponential.
Is That It?
Sort of. At least for you treating your company as a start up.
Steve Blank, one of Silicon Valley’s most well known entrepreneurial educators, and one of its most active opinion leaders — defined startups in a conversation with Forbes in the following way:
“A startup is a temporary organization designed to search for a repeatable and scalable business model.”
This is a great way to look at startups since if you made it to the phase in which the operation of the business turns to scaling a proven and optimised business model rather than the search of such a business model you can congratulate yourself — you have graduated from being a startup, and this statement goes far deeper than you think.
Your focus now will be on things such as building a robust tech stack that can supply the demand, a sales organisation that can turn labour into immediate cash and a customer success team that can support the field. You will have to instil and preserve company culture, make sure the company finances are in order and that you stay well funded. These, and so many other things which you’d be responsible for would really make you look back longingly at the time you had to bootstrap your company.
You must always revisit your Strategies (and perhaps even your Vision) and make sure the Design and Execution are driven by them, as well as always consider your current and future positioning and how well your product fits into your audience’s needs. The practices described here are a good foundation to lay down so when you grow your company, managing its products will be much easier.
Final Thoughts
First of all — if you’ve gotten this far, I commend you and would like to thank you so much for the time invested in reading this post. It means so much to me as promoting proper product management practices are something I feel very strongly about.
The main benefit of adopting this approach is being able to apply the right leverage at the right place and time in order to move your product forward — as the center for your business.
If you fail to understand exactly what stage you’re in — you could very easily (as mentioned before in a few examples) do the right things — but at the wrong time; you could scale your company, before you know if the product you’re building is actually relevant, you could invest a lot into your marketing, just going after people your product is wrong for, or worst — invest so much into tech and design which very few people will actually use.
Taking this approach requires commitment and discipline and can’t be the result of a one-time effort or workshop. You need to periodically and out loud, preferably on paper, think about where you are in the evolution of your product and communicate this with the rest of your team. You should be data driven and extremely sincere about how people really feel about your product and what it means to them.
For these reasons, it’s vital to have someone responsible for doing this — whether it’s one of the founders who’s in charge of Product, a full time Product professional or even a consultant hired to advise you part time. But someone (preferably an experienced expert) needs to be committed to it.
If you want to learn more and / or in need of product consulting services, you’re more than welcome to contact me.
