Productized Notes: Using Data to Set Product Strategy by Justin Bauer
If you are expecting that data will set you up for a good product strategy, you are wrong. It’s the combination of art and science that leads towards creating a successful product. At Productized 2018, Justin Bauer from Amplitude brings these two worlds together. This talk summary will help you understand how to use vision, strategy and results to win in the product-led era.
HISTORY LESSON
It’s the combination of the art and the science that leads to a great product. The following curve represents eight years of growth of the Internet.
The second curve demonstrates how long it took Battle Royale game to get to 100 million users on IOS.
The numbers are quite impressive. It demonstrates how industries change. Justin claims that this change is not just happening in gaming. It’s happening in every single industry where the companies are creating innovative experiences that their customers love. What can we learn from these companies so that we can bring this to our own industries?
First, these companies are product-led. Justin defines three things that every product-led company does.
1) Vision. They create clarity using a clear and measurable North Star.
2) Strategy. They integrate behavioural science into their decision making processes.
3) They hold themselves accountable to results.
Let’s look at each element separately!
VISION
No strategy exists without a vision. You need to know where you’re going. It’s all about clarity. There are lots of definitions of what vision is. Justin suggests the following:
Vision is the measurable world that we want to create.
Let’s unpack this definition with “the world we want to create.” Justin uses a cartoon character Fire Mario as an analogy to the user onboarding in the world of product. We’ve got three elements here. First, there is a little Mario and all his deficiencies that represent your customer. Then, there is the flower which represents the product that you are building. Finally, we have Fire Mario and all the incredible capabilities that he has.
When talking about the product vision, many companies talk about the flower. Yet, product vision is a little Mario, our customer, and what he or she wants to become.
To understand how it works in real life, let’s use Spotify as an example. How does Spotify describe their product vision?
Give people access to all the music.
Spotify gave people access to listen to any music they like in a completely legal way. Now, people don’t need to worry anymore about big torrents and illegal downloads.
This is a great description of a vision. So what does vision and fire Mario have to do with that? The data is not going to tell us what to do, it’s not going to be the single answer. First, understand your visions of where you are going and only then use data to help you get there.
Let’s go on the other side of the vision statement. What is the measurable world that we want to create? On the measurable side of the next framework is the concept of the North Star.
The definition of North Star is the leading indicator of future success. It’s about how we go from our vision to deliver impact.
There are three things you want to do to create the North Star.
- Define the game that we are playing.
- Create a measurable North Star that aligns with our business outcomes.
- Choose the input metrics that are leading.
What Game Are You Playing?
- Attention. This is all about trying to get your customer to spend more time within your application. Some examples of the North Stars can be the things like the time spent engaging with content, number of stories view, number of subscribers, etc. Examples: Facebook, Netflix.
- Transaction. That is when you’re actually trying to get somebody to make a purchase/ a transaction within your product. The example of the North Stars here will be a number of purchases and searches completed, seats upgraded. Examples: Amazon, Walmart, eBay.
- Productivity. This is all about tasks success. The examples of the North Stars here are going to be like records created, messages sent, queries completed. The example companies are the B2B companies: Slack, Amplitude.
Effective North Star
To make your North Star effective, take these three things into account.
1) Make sure it is an accurate reflection of customer value.
2) Align it with your product vision.
3) Make it a leading indicator of revenue.
STRATEGY
A strategy is a path to deliver on the product vision. Setting up the North Star helps you think through what your strategy should be.
Every North Star can be broken down into four different components.
- Breadth, the number of users who are doing the critical action.
- Depth of engagement within that critical event.
- Frequency, how often do they do that action
Efficiency, how quickly do they go through that loop and kick it off again.
Justin backs this division up with the examples from Spotify and Netflix and how they use behavioural science.
Behavioural science is about understanding what is the outcome that you’re trying to drive.
In behavioural science, first you need to identify what are the leading indicators. Then, you need to define what are the input metrics into those leading indicators. If you have this understanding of your product, strategy becomes a lot easier.
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RESULTS
How do we measure results? It’s all about accountability. The whole purpose of results is to objectively measure if you’re on the right path after setting the vision and the strategy.
OKRs not KROs
Here are the three tips that help you use the OKRs in your organization.
1) The first is to recognize that they’re called OKRs and not KROs for a reason.
2) The second is you should know the difference between input, output and outcome metrics.
3) Finally, benchmark your OKRs based on the game that you are playing.
Product Charter
At the end of his presentation, Justin Bauer puts this all together into the product charter. Here are the steps:
1) Set a vision for clear understanding what your North Star metric is.
2) Define strategy and integrate behavioural science into how you make decisions.
3) Hold people accountable to the results.
Make sure that you are testing hypotheses rapidly and doubling down on the winners!
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Hand-drawn Sketch of Justin Bauer’s talk
Watch Justin Bauer’s PRODUCTIZED talk:
Access Justin Bauer’s PRODUCTIZED presentation on SlideShare:
About Justin Bauer
Justin Bauer is VP of Product at Amplitude, where he has led the company’s product vision and strategy for the past 3 years. In that time, Amplitude has grown total paying users by more than 10x and become the leading product analytics platform worldwide. Prior to joining Amplitude, he was the founder/CEO of Rivalry Fantasy Sports, before it was acquired in 2015. He has also held leadership positions at Booz Digital, McKinsey and is an alum of Stanford GSB and Carleton College.
About Productized Masterclasses
The Productized Masterclasses are 2 days of hands-on masterclasses and insightful keynote speakers. On 27 & 28 May you’ll enjoy 4 masterclasses of your choice, get practical tips, and network with your peers. Come and meet Dan Olsen, Kandis O’Brien, Radhika Dutt, Ken Sandy, or Daniel Zacarias, among many others and get ready to be inspired to learn more about Enterprise Product and Consumer Product! SAVE THE DATE — MAY 27–28 2021
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Check out the video recap from our last edition.
