The 4 Stages of 0->1 Products

This was first published on my mailing list The Looking Glass. Every week, I answer a reader’s question.

Photo by Wesley Chan

Q: In all my past roles, I’ve worked on products that were already mature, where my job was to support further growth by making iterative changes. I recently changed roles into a team that’s essentially starting from scratch, creating new products. While I enjoy how there are fewer constraints, it’s daunting to imagine to long road ahead. What are your tips for designing 0 to 1 products?

Successful 0->1 products — ones that create valuable new intents for people at scale — don’t arrive into the world fully-formed. Like humans, products go through different life stages. You don’t use the same tactics and process to nurture a product that is just getting started as you do one that is mature and scaling.

By giving names to the different stages of product development, knowing what stage each project is in, and understanding what matters the most in that stage, you can improve your chances of building products that have meaningful impact in the world.

Stage 1: Define your People Outcomes

A people outcome is a point of view about what should be different about a target audience’s behavior, understanding or sentiment if your proposed product is wildly successful. Before pixels get specced or code written, start by defining a clear vision for your product that is grounded in what people need and want.

To define the right people outcomes…

  1. Identify the People Problem you’re trying to solve. A people problem is a need, issue or opportunity articulated as someone on the street might understand it (not “retention is low” but rather “people are bored and uncomfortable on airplanes.”) Good people problems identify what people want to do in their daily lives and pinpoint what is broken or unsatisfying about their current solutions. Validate that your problem is both a real problem and the right problem that your company should care about. What existing behaviors, workarounds, research or data tell you that this is a problem? And is it a surface problem (“I need to order food from my phone”) or a root problem (“I need to eat here and now”)?
  2. Define an initial target audience. Who needs your product the most? For whom is this problem so big that they’d actually be willing to do something about it? Understanding how your feature can eventually apply to a large population is great, but successful products start with a small audience of early adopters, get them to love it, and expand to more people over time. Who are the first 1,000 people who are going to love your product?
  3. Describe what people will do differently if your product is wildly successful. What will be the change in people’s behavior or perception if your product takes off? What mental model or use cases do you hope your early adopters will have with your product? If you were going to run a marketing campaign to your target audience, how would you pitch your product’s value?

Stage 2: get Product-Market Fit

Getting to product-market fit means building and iterating on your product until it achieves your intended people outcomes. The key in this phase is to define good hypotheses and get to conclusive results on those hypotheses as quickly as possible.

To work efficiently towards product-market fit…

  1. Create a focused MVP for a target segment. Pick the first 1,000 people who are going to love your product, and design an end-to-end experience that you believe will be great for them. Picking a narrower audience means that you can be more opinionated and extreme in the prominence and flow of your designs. Your MVP must actually be a minimum viable end-to-end experience. If people are unaware of your feature, don’t understand how or why they should use it, or find it too slow or buggy, you won’t actually get a conclusive learning on your product hypothesis. At the same time, don’t waste time on differentiators that won’t actually make or break the success of your product, like inventing new types of buttons or tabs (versus standard components).
  2. Define bold success metrics that ensure your intended people outcomes. Your success metrics should speak to whether your product is proving as valuable as you had hoped. A good example is “Retention of people using Feature X flattens out at 30%” and “people using Feature X share 3x more than before.” A bad example is “X people are using Feature X in 3 months” (volume metrics like that can be moved up or down with top-of-funnel tactics, like advertising, so they are not as useful in this stage.) Always include retention as something you look at because it speaks to whether your product is valuable enough for people to come back to. Because you are targeting a narrower segment of people to start, you should also aim for big step-function changes in that group’s behavior (think 2–3x sharing rather than a 5% increase in sharing), and clarity and high positive sentiment within that group (learned through qualitative research).
  3. Assume you will learn; don’t assume you will ship globally. In this stage, the goal is to validate that the product works extremely well for a segment of people OR take away a clear lesson about a product hypothesis — both are great outcomes. This mentality is useful for two reasons:

Not shipping does not mean you’ve failed: in 0→1 development, it’s unrealistic to expect that every hypothesis we come up with will be correct. Teams that execute well and come quickly to a deep understanding of why a particular hypothesis didn’t work out should be rewarded, even if the recommendation they give is to pivot or shut the project down. If you assume everything we try must ship, then we will only try conservative, incremental ideas.

Preventing premature optimization: don’t worry about getting your product neutral on revenue or time spent before you’ve demonstrated it’s valuable. It’s also not important at this stage to figure out how your product should work with another speculative product idea (because who knows if either are what we want yet?). That’s what the next phase is about. Also don’t assume anything existing in the product is off-limits to change, lest overconstrain your product too early.

Stage 3: Reconciliation

Congrats, your product now has Product-Market fit for a segment of people! Now is the phase where all the constraints we threw out in the earlier phases get reconciled before your product launches to a broader audience.

Reconciling your product means…

  1. Optimizing the tradeoffs in the broader ecosystem. We’ve all been there. Your product seems to be awesome for sharing, but tanks revenue. Or in your efforts to make sure your target audience was aware of your product, you invented a new entry point that another team isn’t cool with because it doesn’t scale. Or your product adds 20% to app size. Or your product does a similar thing to what some other team is testing, and it’d be confusing to launch both. This phase can feel tough and grinding, and likely involves lots of data digging, hard work, and cross-team discussions, but it’s critical to remember that people don’t see your company as a collection of products and orgs, they see it as one holistic experience. When you don’t reconcile well, your product starts to feel more complicated and confusing. The good news is that if you’ve followed the steps up until now, you’ve validated that your product works really well for a segment of people, which should create momentum to help fit it into the broader product.
  2. Having an opinion on whether the product is net positive for the company. It’s important that new products increase the overall size of the pie, not just make your slice of the pie larger. If the product is cannibalizing activity from other products in the app, are those tradeoffs are net valuable for people? Does this product unlock future option value or provide a platform that we’ll be able to build on over time? If not, the responsible thing to do is to reevaluate rather than push for global launch.
  3. Making it a high-quality experience: Because the “Product Market Fit” phase meant moving as quickly as you can, you may have cut corners in the development process when it comes to craft and polish. Your designs are rough, your buttons don’t quite align, you have misspellings, the page takes longer to load on average, your hacked-together code produces bugs, etc. Now that you’re in the reconciliation phase, it’s time to pay your dues and build things the right way.

Stage 4: Growth

Growing your product means understanding what changes will make the product valuable to more people, and more valuable to the people who are already using it. This is where teams tend to want to start but you should only be here once you’ve gotten the past three stages. So how can you bring more people into your funnel?

A successful growth model…

  1. Has a story for how to expand to new segments. Who do you think are the next 1,000 users of your product? Who are the people who you think could benefit from the product but aren’t using it today? What features do you need to add to the product in order to make it more valuable for them? The process of expanding to a new audience can feel cyclical, and like going back to Step 1 where additional work may be needed to get to PMF for a new segment.
  2. Has a story for how to increase depth of engagement. What changes would make the product more valuable for the people who are already using it? What does the waterfall look like from when people first use the product to when they’re regular daily users?
  3. Continues to monitor the effectiveness of your funnel. As you broaden the number of people who are going through the funnel, prove that your funnel continues to work. Are you seeing increased drop-off rates at a certain step?

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