vostok launch by richard terry (1978)

Product Management for Founders

How to define your first product

Earlydays
5 min readAug 1, 2013

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There are four major milestones in an early life of a new product. You start with a fake product, a description of features in benefits of something nonexistent. Just words and pictures. Use it to validate demand and learn what should be in version one.

The second step is internal release. A barebone version you can show to friends and a few customers. Get feedback and fix mistakes.

Then there is a public release. Normally, you start without much publicity, like a technical opening of restaurant. After addressing most common complaints, you can start a promotion campaign.

Finally, there is time for product iterations, until the company reaches product-market fit and your first revenue target.

Action steps

  • Define functionality of your first release
  • Define product-market fit moment for your product. What is a concrete calendar date this moment may happen? Can you make it happen earlier?

Fake version

When you have an idea, your first step is to sell it. You only need a product description and visual materials (photoshop, paper sketches, wireframes) for the first few sales. Product visualization can be a landing page, a sales proposal sent by email, or a face-to-face conversation.

The first prototype is only build from words and pictures.

There are three objectives at this stage:

  1. Evaluate the idea. Is it good enough to make it real? Or should you continue opportunity search?
  2. Get a list of people/organizations who are most likely to become first customers. Collect money from pre-orders.
  3. Chose functionality for version one. Create a list of all features that were discussed, sort them by priority and decide how many should be in the first version. The simpler the first release is, the better.

Do you need to build the first version to achieve these objectives? Most likely, no. You start with a description of potential product and ask: “Would you buy it?” Some say “yes”, some say “no”. You only need an actual product when most people say “I really need to try it in order to decide”.

Internal release

Customer story. Write a story about a customer using your product for the first time. Ten to fifteen sentences. This is your ultimate guide to product functionality. Cut out everything that is not in the story.

Minimum features. Creativity is boundless. It is easy to imagine many details of your future product. It feels that everything is important. This feeling is deceptive. Postpone everything to future updates. Keep features to the minimum. Ask around. What else is secondary? How else can you simplify the first release? You should learn feature priorities from customer interviews and pre-sales experiments.

The first iPhone came out without apps, front camera, and was not supporting 3G internet. It was still called revolutionary.

Be better at something. Focus on creating one super happy customer at the start. One customer can come from a single feature. But this feature should be good enough. For version one, quality is more important than functionality. Do not try to be perfect, just be better than alternatives at something for someone.

If you are not embarrassed by the first version of your product, you’ve launched too late. — Reid Hoffman, LinkedIn

Get feedback and fix mistakes. Reserve half the time for product testing and corrections. Does your product solves the problem you were working on?

Public release

Soft launch. Start slow, without much advertising. Get the first truly happy customer and earn the first dollar. Collect customer reviews and endorsements. Are people excited? Is the product ready to be promoted? Or is it not working? Should you go back and build something different?

One truly happy customer can grow to thousands. But a thousand of unimpressed visitors leads to nowhere.

Promotion campaign. If the first signs are promising, start a promotion campaign. Go to press, social networks and mailing lists. Involve opinion leaders.

First public feedback. Listen a lot. Classify all suggestions into version 1.1 (improvements) and 2.0 (new functionality). Focus on improvements first. Do not rush to new features.

Instagram was resisting adding Android version for a year and half.

Product-market fit

Once the product is on the market, improve it every day. You need to hit several objectives to get to a “We’ve made it!” moment.

Niche leadership. Establish your product as a leader in a well-defined segment of some product category. Your key qualities should be clear, valuable, and true. If you promise to be “the site with largest number of doctor reviews in the city”, then get the largest number of reviews. Define the metrics of competition and win in these metrics. Compete on things that drive customer choices.

Revenue target. Hit your revenue targets. Reach breakeven or a point when new outside funding is available.

Customer love. Ask your customers: At the scale from 1 to 10, how likely are they to recommend your product to their friends?

Illustration by CheckMarket

Your net promoter score is the share of promoters (9-10) minus share of detractors (1-6). You start to grow organically when this number is above 60%.

Another signal of customer love is when your product enters best-of-the-year rankings (“conference of the year”, “restaurant of the year”, “productivity tool of the year”).

Time, money, and love

Measure customer reaction at every stage. If the customers are not excited, you better go to previous stages and rethink the product functionality and value proposition.

If you spend over half of all resources before the public release, you risk to run out of money before getting the product right. Always have enough runway for second (and third) attempts. Time to launch is typically a third or a quarter of time to product-market fit.

Example scenario. You have cash for 6 months. Spend two weeks on selling different fake products, chose one that has more customer interest. Spend two weeks for internal release, another two weeks for public release. Customers are not impressed, but suggest a different product instead. Spend another month for second attempt. Now the first reaction is promising and you still have three and a half months for product iterations.

This article is a part of Earlydays, an open guide for first-time entrepreneurs.

Written by Yury Lifshits — yury@yury.name@yurylifshits

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