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Building great products is hard. We're all familiar with the sobering statistics about the high percentage of new products that fail. For every Apple, Google, Facebook, and other success story you hear, there are countless failed products causing companies to shutter their doors.

Think of all the products you've used in the last year. How many of those products do you love? How many do you hate? How many can you even remember? If you're like most people, you actually love a very small number of the products you use.

If you've been on a team that has built a product that customers love, you know how great that feels. Passionate users can't stop raving about your product. Your business metrics are growing up and to the right exponentially. You're struggling to keep up with the high demand. Customers want and value your product.

But the unfortunate reality is that very few products are like that. Why is it so hard to build a product that customers love? Why do so many products fail?

Why Products Fail

Throughout my career, I've worked on and studied many different products. When I analyze the root causes of why products fail, a common pattern emerges. The main reason products fail is because they don't meet customer needs in a way that is better than other alternatives. This is the essence of product-market fit. Marc Andreessen of Netscape fame coined the term in 2007. In the same blog post he also contends, as I do, that startups “fail because they never get to product-market fit.”

The Lean Startup movement begun by Eric Ries has helped popularize the idea of product-market fit and the importance of achieving it. One reason Lean Startup has such wide appeal is because people know how difficult it is to build successful products. I am a strong advocate of Lean Startup principles.

Many people get excited when they first hear Lean Startup ideas and are eager to try them out. However, I've spoken with many of these enthusiasts who struggle to figure out exactly what they should be doing. They understand the high-level concepts, but don't know how to apply them.

This reminds me of many people who decide they want to get in better physical shape. They are highly motivated to start working out more. They join a gym. They buy new workout clothes. They show up to the gym raring to go – but realize that they have no idea what to do when they get there. What exercises should I be doing? What equipment should I be using? What's the right way to work out? They have plenty of motivation, but lack the specific knowledge about what exactly to do.

Why This Book?

I wrote The Lean Product Playbook to fill the knowledge gaps faced by many people who want to create a product using Lean Startup principles. This book provides clear, step-by-step guidance to help you build successful products. In working with so many product teams, I have witnessed the various challenges they faced and seen numerous examples of what worked well and what didn't. Over the course of this experience, I developed a framework and process for how to achieve product-market fit.

The Product-Market Fit Pyramid

The framework, which I call the Product-Market Fit Pyramid, breaks product-market fit down into five key components: your target customer, your customer's underserved needs, your value proposition, your feature set, and your user experience (UX). Each of these is actually a testable hypothesis. There is a logical sequence to the five hypotheses based on how they relate to each other, resulting in the hierarchy shown in the pyramid (see Figure I.1).

Figure I.1 The Product-Market Fit Pyramid

The Lean Product Process

After developing the Product-Market Fit Pyramid, I designed a simple, iterative process to take advantage of it, called the Lean Product Process. This process guides you through each layer of the pyramid from the bottom up. It helps you articulate and test your key hypotheses for each of the five key components of product-market fit. The Lean Product Process consists of six steps:

1. Determine your target customers

2. Identify underserved customer needs

3. Define your value proposition

4. Specify your minimum viable product (MVP) feature set

5. Create your MVP prototype

6. Test your MVP with customers

This book describes each step of the process in detail with relevant real-world examples. I also devote a chapter to share an in-depth, end-to-end case study of the process being applied.

A Comprehensive Guide

I wrote this book as a comprehensive guide because you have to get so many things right to build a great product. I cover a range of important topics in addition to the Lean Product Process. The book walks you through detailed explanations of UX design and Agile development. It also provides in-depth coverage of analytics and how to use metrics to optimize your product.

The Lean Product Process and the rest of the advice in this book come from hands-on experience and lessons learned throughout my career of building high-tech products – both successes and failures.

About Me

My background is a mix of technical and business skills that I began to develop when my parents gave me my first computer at the age of 10. I started my first business a few years later. I studied electrical engineering at Northwestern University and then started my high-tech career designing nuclear-powered submarines. While working, I earned a Master's degree in industrial engineering from Virginia Tech at night, where I learned about the Lean manufacturing principles that inspired the Lean Startup movement.

I moved to Silicon Valley to attend Stanford Business School and then joined Intuit, which provided an incredible post-MBA training ground in product management, product development, customer research, user experience design, and marketing. I led and grew the Quicken product team to record sales and profit. As I learned more, I had a growing desire to take what I had learned and apply it at startups. Since leaving Intuit, I've spent a lot of time working at and with startups.

For years now, I have consulted to numerous companies, helping them apply Lean principles to create successful products. I take a hands-on approach in my consulting: I work closely with CEOs and their management teams and also get in the trenches with product managers, designers, and developers. I usually serve as interim VP of Product for my clients and am often the first product person on their team.

I've tested and refined the advice in this book while working with a wide range of companies. My client list includes Facebook, Box, YouSendIt (now Hightail), Microsoft, Epocrates, Medallia, Chartboost, XING, Financial Engines, and One Medical Group. I've found these ideas applicable to all my clients, even though they vary in size from small early stage startups to large public companies and span a variety of vertical industries, target customers, product types, and business models.

I enjoy sharing and discussing my Lean Product ideas with as many people as I can. I regularly give talks and workshops and post my slides on SlideShare at http://slideshare.net/dan_o/presentations. I also host a monthly Lean Product meetup in Silicon Valley, which I invite you to check out at http://meetup.com/lean-product. The audiences in those forums have also helped me hone the guidance provided in this book with their questions, suggestions, and feedback.

Who Is This Book For?

If you are interested in Lean Startup, Customer Development, Lean UX, Design Thinking, product management, user experience design, Agile development, or analytics, then this book is for you. It will equip you with the “how-to” manual you need, and provide a step-by-step process you can follow to ensure you're building a product that customers will find valuable.

This book is for:

• Anyone trying to build a new product or service

• Anyone trying to improve their existing product or service

• Entrepreneurs

• Product managers, designers, and developers

• Marketers, analysts, and program managers

• CEOs and other executives

• People working in companies of any size

• Anyone who is passionate about building great products

The guidance in this book is most valuable for software products. However, it is also relevant to other product categories such as hardware and wearables, and even nontechnical products. The guidance in this book is also applicable to a wide range of business contexts, including business-to-consumer (B2C) and business-to-business (B2B).

How This Book Is Organized

The book is organized in three parts. Part I, “Core Concepts,” explains the foundational ideas of product-market fit and problem space versus solution space.

Part II of this book, “The Lean Product Process,” describes each of the six steps of the process in detail, devoting a chapter to each step. Part II also includes chapters on:

• The principles of great UX design

• How to iteratively improve your product-market fit

• A detailed, end-to-end case study using the Lean Product Process

Part III, “Building and Optimizing Your Product,” provides guidance that applies after you have validated product-market fit with your MVP prototype. It includes a chapter on how to build your product using Agile development, which also covers testing, continuous integration, and continuous deployment. In addition, it contains two chapters on analytics, which describe a methodology for using metrics to optimize your product and include another in-depth, real-world case study.

Writing this book has given me the opportunity to share the ideas, lessons learned, and advice accumulated over my career with a broader audience. My experience has been informed and influenced by my mentors, colleagues, and many other people passionate about sharing ideas and comparing notes on the discipline of building great products. Our field continues to evolve, with new ideas emerging all the time. That's why I'll use the companion website for this book, http://leanproductplaybook.com, as a place to share and discuss those new ideas. I invite you to visit the website to read the latest information and contribute to the conversation.