What is the Product Owner accountable for?
From the Scrum Guide:
The Product Owner is accountable for maximizing the value of the product resulting from the work of the Scrum Team.
The important part to focus on here is - maximizing the value of the product. But how does the Product Owner know that they are really maximizing the value of the Product? Well, that is where Dan Olsen’s Product Market Fit and Evidence-Based Management from Scrum.org becomes helpful.
What is Product Market Fit?
Product Market Fit was a term coined by Marc Andressen. He states that Product Market Fit means having a product that is in a good market and satisfies the needs of the market.
Dan Olsen in his book “Lean Product Playbook” further elaborates on the concept of Product Market Fit. In Dan Olsen’s Product Market Fit pyramid there are 5 key components:
- The Target Customer
- The Underserved Needs of the Customer
- The Value Proposition
- The Feature Set
- The User Experience
The Target Customer
This is all about identifying who the end customer will be. The target customer can be segmented into many different categories and in different ways. For example - Are the customers - Buyers or Users? Or Who will be the early adopters and who would be the laggards and so on.
The Underserved Needs of the Customer
The customer needs are basically what the customer wants or values. Often customers might be able to articulate some of their needs while others need to be discovered. Understanding the pain points, the motivations, the activities of the customer helps in identifying the needs of customer. All of these are good starters but to really make the product standout it is important to identify which of these needs are not met adequately by the existing alternatives. Which needs are underserved.
The Value Proposition
The Value Proposition is typically how the product is going to meet the needs of the customers in way that no alternative does right now. Some people also term it as the Unique Selling Point. For example: My brother-in-law runs a bakery. There are many bakeries in the area. The value proposition for my brother-in-law’s bakery is - it specializes in sourdough breads.
The Feature Set
The Feature Set refers to functionalities that the product will provide to the end users. For example on movie ticket booking platform - selecting the movie, selecting the show, making the payment, generating the ticket, sending notifications; all become part of the feature set.
The User Experience
The overall experience of using the product encompasses the User Experience. It ranges from the simple look and feel of the product to its availability, performance, security and beyond.
From my own experience, as a developer back in the day I created an admin platform from where the users can manage their virtual servers. As naive as I could be I never imagined that a hacker will take a paid subscription of our service and then manipulate all other users because they could be easily identified the uid passed in the URL (facepalm). That was not a great user experience for our users as their servers were compromised. I learned my lesson the hard way.
In order to create a great product, the Product Owner will have to focus on all the different aspects of the Product Market Fit pyramid and address them individually.
Now, just creating the product is not important. It is also imperative for the product owner to understand whether the product creates the desired results/value/impact for the end users. This is where Evidence Based Management is needed.
What is Evidence Based Management (EBM)?
Evidence Based Management or EBM enables the Product Owners or anyone else who is interested to measure the real value created/delivered by the Product. From the Evidence Based Management guide:
Evidence-Based Management (EBM) is a framework that helps people, teams, and
organizations make better-informed decisions to help them achieve their goals by using
intentional experimentation and feedback.
The EBM guide explores the concept of measuring the value through 4 Key Value Areas and various metrics associated with those areas. The 4 Key Value Areas include
- Unrealized Value - What is the potential of the product to grow in a given market?
- Current Value - How is the product currently creating value for its customers?
- Ability to Innovate - Does the team/organization has the capability to create innovative and valuable products for the end user?
- Time-to-Market - How quickly can the team or organization deliver value to its customers?
How to use EBM with Product Market Fit
EBM and Product Market Fit work very well together. To understand whether a Product is Market Fit or not, having the right metrics in place will go a long way.
Here is a simplistic approach how I see the 4 Key value areas of EBM can correspond to the 5 components of the Product Market Fit.
Target Customer
The Key Value areas of Current Value and Unrealized value can be directly applied to understand the target customers. Knowing how the product is solving or not solving existing customer problems will give deeper insight into customers and potential customers.
Underserved Needs
Unrealized Value can help determine the underserved needs of the customers. Ability to Innovate can enable the product owner quickly create prototypes and validate their assumptions whether the underserved needs will be met or not. If not, then how to Inspect and Adapt.
Value Proposition
Again, Current Value and Unrealized Value will enable the Product Owners to establish a strong value proposition - how the product is going to address the underserved needs of the customers; how does this product is differentiated from existing alternatives.
Feature Set
Just as Unrealized Value helps determine the underserved needs of the customers; it also helps in determining the right set of features to be added to the product. One can say that the underserved needs usually become the feature set. Similarly, Ability to Innovate can help to define features that are “out of the box” and at the same time it can be used to identify what is stopping the product from becoming effective.
User Experience
Ability to Innovate and Time to Market are great to understand the impact of the product on the User Experience. Both of them go hand in hand. If the Product Owner focuses on adding innovative features to the product but takes ages to take it to customer then it is not going to create the desired impact.
Conclusion
Product Market Fit and Evidence Based Management can be great tools in the toolkit of the Product Owner. There is lot more to explore in the both the areas then I can cover in one article. I highly recommend going through the book “Lean Product Playbook” by Dan Olsen and “The Evidence-Based Management Guide” from Scrum.org.
If you need more help on either of them feel free to reach out to me.
P.S. You can also visit www.agilemania.com and explore more related articles or join a course.