How PM’s mind works…
Sometimes people asked me about how PM thinks in every step along the way. It could be starting with new products, creating a value prop or developing new set of features. I enjoy these conversations but just in case I can’t speak with you directly, let me share my mental process.
In order to make it easier, I will split the process in 3 main steps. They could look like sequential steps, but later I will explain why they happen all at the same time:
- Understand the problem of the users (or the job to be done) & seizing the opportunity
- Look for the product market fit
- Scale up / evolve
Let’s analyze each one of them with tasks and knowledge involved
- Understanding the problem of the users (or job to be done) & seizing the opportunity:
1. A) Understand user problems is key to detect new opportunities. You need to use both qualitative and quantitative tools. 121 Interview is the best tool to get the most information from the customer and/or the market at this stage (Knowledge needed: Qualitative research methods but try first with the 5 whys)
1. B) Quantification and seizing is also needed to understand how many people/companies have that problem and how much are they willing to pay (Knowledge needed: Market sizing)
1. C) Assets analysis is also key. You need to understand which of your assets are going to give you competitive advantage from competitors. Company can own key assets or built them, but it must be clear which assets you rely on. For instance: It could be current users of the company, or team previous experience solving with similar problems. (Knowledge needed: Business strategy) - Looking for the product market fit
Best strategy is to be able to try different solutions or even value propositions until you find the one that resonate with the customer segment. Key element is to try and learn as fast as possible. There are methodologies to do it like design sprints or Spotify approach DIBB framework (Data-Insight-Belief-Bet)
Main problems are a) at this stage is to decide when to stop because solution resonates (don’t worry you will know when it happens!) so you have to move on, and b) How you get funded to do as many iterations as required. So you need to be really smart betting and learning taking into account the budget. (Knowledge needed: Business & Tech strategy) - Scaling up / evolving
Once you find the right product market fit, the value prop and the solution resonate with the user. Then it is time to scale up. You need to work to reduce friction all over: Reduce friction selling & onboarding / integrating, reduce friction getting back the users to the product right where they want, reduce friction doing what customers want to do with the product, etc. Business KPI’s start to skyrocket when you reduce friction (DAU, stickiness DAU/MAU, CAC, Churn reduction, etc.)
So you have a really nice product already with millions of users… Now, what? Business evolution. It could be, same product in other verticals/industries or product evolve in the same vertical. You could do vertical or horizontal integration to reduce business risks. But remember, growth is a sempiternal necessity and your product has to react to that. (Knowledge needed: Business & Tech strategy)
You need to understand this is not a step by step process (Only it will be if you really start from scratch). Once that you already started, it happens everything at the same time. For instance, let’s think about Spotify, you may think Spotify is ONLY in the scaling up scenario, and they are, but they force themselves to discover new user needs like how they come up with the idea of Spotify running. Some part of the value prop is getting info about new customer problems meanwhile other part of the value proposition, that is already resonating, is trying to scale up.
