Pivot Product Hits | June Edition
When is a Product not a Product? When it’s a feature….
For a product to be successful, there must be a reason why competitors can’t just copy it, says Walter Frick in HBR.
In Summary: The biggest story in product right now is Facebook’s all out war on Snap, mainly via Instagram. One by one it has shamelessly copied stories, lenses, camera effects and filters.
The fact that Snap have struggled to define a clear point of differentiation is a textbook example of why your product needs to be more than just a bunch of features.
The way you make money with a social network is through network effects. The more users you have, the more valuable the platform becomes. If so, Facebook will beat Snap every time. Seven months after Instagram launched Stories, its version had more daily users than Snapchat.
Execution isn’t a strategy. Only time will tell if Snap has one.
How to make people love your Product (by focussing on the Journey)
People place a higher value on products they have helped to create. Products designed by IKEA and LEGO are great examples of this, says Anton Nikolov.
In Summary: The IKEA effect creates a strong bond between user and product. The effort that users put into completing a product leads to greater affection for it.
But making things too easy doesn’t necessarily make the experience better. People need to be emotionally invested in the process, not just the end result. It’s the act of creating something oneself that increases perceived value.
To hit the sweet spot, product developers need to create a product in which the level of effort is low but the perceived contribution is high. This is how product habit (and brand loyalty) are created.
The (very hard) problem of new Product adoption
Adopting a new product requires us to change our behaviour. And with behaviour change comes resistance.
In Summary: Daniel Kahneman’s experiments have shown us that we don’t evaluate new product’s rationally. Instead we weigh up what we think we’ll lose against what we’ll gain. And we really hate to lose things we have already. In fact, we overvalue our existing products by a factor of 3.
Whatsmore, product developers tend to overvalue the benefits of their creations. This leads to what John Gourville has dubbed ‘the 9x Problem’: a mismatch of 9 to 1 between what product developers think consumers want and what consumers actually want.
To counter the 9x problem, product managers need to understand Bob Moesta’s ‘Progress Making Forces’ model and ask “What current activity will this new product replace?”
11 Essential Laws of Product Development
There are dozens of ways of building a product or a particular feature. Not all of them are created equal, says Founder Equity’s Sean Johnson
In Summary: Sean has helped build dozens of products and listened to pitches for hundreds more. In the process, he’s observed specific patterns that can increase the chances of success.
From the importance of having a product that’s 10x better and nailing your onboarding to knowing your product’s ‘Core Experience’ and building notifications that enhance it — these principles can help make your product part of the small percentage that succeed.
What does it means to be a ‘Product-First’ company?
Product-first companies have confidence in what they’ve built and offer a low barrier to entry. They trust that the right people using their product will purchase, says Elie Khoury.
In Summary: In contrast to those that are ‘sales-first’, product-first companies have a clearly defined mission that guides their decision making. Creative thinking, collaboration and a thirst for disruption permeate the organization.
Instead of shaping the product to appeal to high-paying customers, product-first companies say ‘no’ to things that don’t align with their core value proposition.
As a result, product-first companies tend to be loved! There’s no immediate pressure for users to become customers which builds trust and loyalty. Growth is generated by cultivating a user experience that turns users into customers and customers into promoters.
What does ‘Product-led Growth’ mean?
Product-lead growth companies realize that paying customers are an extension of the sales and marketing team, says Openview’s Ashley Minogue.
In Summary: Your product is a key form of marketing, so should incentivise others to use it by ensuring the experience becomes increasingly valuable as more of your peers sign up. This idea is core to products like Slack, Dropbox and Typeform — three classic product-led growth companies.
Brand messaging should resonate with the end users whose lives are improved by your product. The goal is to build an army of champions that will drive change in their organizations.
What good Product retention really looks like
High retention is a decisive factor in achieving strong profitability. But for most companies rates of customer churn are appalling, say Sean Ellis and Morgan Brown in their new book, Hacking Growth.
In Summary: In this excerpt, Brian Balfour highlights how retention breaks down into 3 phases: initial, medium and long-term.
Initial retention rate is a measure of the immediate ‘stickiness’ of your product. It might be as short as a day for a mobile game, or a week or two for a social network.
In the middle phase, the core mission for retention is to make using your product a habit. Users don’t need to be prodded to return because they’ve incorporated the product into their routine.
In the long term, product and growth teams need to insure the product keeps offering customers more value, by constantly refreshing its perception as a must-have.
Featured Product Event
Product Strategy and Jobs to be Done in London!
Product people in the UK may want to check out the first ever visit of Alan Klement (author of ‘When Coffee and Kale compete’) and Eric White to London later this month. Alan and Eric are in town for a whole-day workshop on Jobs to be Done and product strategy.
This is happening on 21st June at the uber-cool offices of King, developers of Candy Crush, in Soho. Tickets are moving fast so get your swerve on…
Product Quote of the Month
Go for growth, says HBR’s Michael Mankins.
Originally published at Pivot Product Hits.
