Did you know that 72% of all new products do not meet their revenue goals? Most new products fail. And start up companies have the odds stacked against them. In fact, 75% of new businesses fail or cannot achieve a significant adoption in the market.
Many companies, large and small, make critical mistakes when it comes to building and managing products. That's why Lean Product Management was created.
Lean Product Management is a management methodology that follows the entire lifecycle of a product. This modern style will help you to be an effective product manager in the complex 21st century. In this article, we will introduce you to Lean Product Management and teach you how to apply these concepts today.
This article at a glance:
- What is Lean Product Management?
- Understanding a product's lifecycle
- How to apply Lean Product Management today
What is Lean Product Management?
Lean Product Management is a modern leadership style that follows a product from idea to launch. This methodology is an evolution of many years of product development.
As we know, products don't really increase value for customers or businesses. 21% of products fail to meet customer's needs. Even at companies like Microsoft, Amazon and Netflix, the failure rate remains between 50% and 70%.
Clearly, we are using the wrong organization, structures, and processes.
Modern companies are changing the way they lead so that value can flow rapidly to the market. Lean Product Management is the solution in the modern, digital era. Lean Product Management is an evolution of management that focuses on best practices, lifecycles, customer satisfaction, and the tools of Lean Startup and Behavioral Economics.
A lean product manager must curate excellent customer experiences and scalable business growth by blending vision, strategy, and implementation.
Simplified: Lean Management is about getting products to the market faster by using a product that delivers more value to your customers. Lean Product Management ensures that a product is successful throughout its entire lifecycle.
What does Lean Product Management entail?
Lean Product Management is not just one thing but a collection of processes and techniques. The following principles and tools are used to ensure that a product is successful at every stage of its lifecycle.
Lean Startup
Lean Startup is a key part of this modern methodology. Lean Startup is a movement that emerged in Silicon Valley in the early 20th century. Most startups begin a product idea before ever speaking with prospective customers.
The Lean Startup method purports that to succeed in product development, you must change your perspective away from valuing the product to the actual business model.
This approach to managing helps get a desired product into the market faster and with less uncertainty. These methodologies are implemented for customer development, measuring success, and learning about a product at every stage.
Product Ideation
Another key part of Lean Product Management is ideation. This is a collection of processes that focus on how a product will be received by potential customers. It is concerned mostly with exploration and identifying solutions to customer problems.
In-depth exploration of the market and customers is crucial. You need to know what your customer's needs are before you can develop a product. This aspect of Lean Product Management, then, is all about one question: how will our product add value to a customer's life?
Market Analysis
Lean Product Management includes evaluating if a product fits in a current or future market. Managers survey potential customers to gain feedback, do continual research on trends, and wholly understand competitors.
This aspect of Lean Product Management focuses on critical thinking and thoughtful analysis. This is where Lean Product Management differs from traditional styles. Rather than simply pushing a product, a lean product manager knows when to stop, slow down, or change direction.
Product Strategy
Lean Product Management is all about strategy and encourages innovative, flexible strategies. Lean product managers are willing to carefully push for new approaches based on their research and analysis.
This aspect of Lean Product Management is also about scaling. A good manager understands the scale of a product's team and future outcomes. This requires a leader to implement the right techniques at the right time based on how well a product is performing.
Understanding a product's lifecycle
Any product follows a product lifecycle. Product lifecycle represents the time when a product is first conceived to when it's no longer relevant in the market. Lean Product Management focuses on every stage of this cycle. Every decision should depend the stage of a product in its lifecycle.
A lean product manager must always have two things in mind:
- What stage of the product lifecycle is a product at?
- How does this relate to their business model?
There are many models to explain the lifecycle of a product. We will be using Ash Maurya’s model, which breaks down a lifecycle into three phases:
- Problem-solution fit
- Product-market fit
- Scale
1. Problem-solution fit
The goal of this phase is to identify your target customer and their specific needs or problems. There are two big questions to consider:
- Is there a customer problem worth solving?
- Do we create a solution for that problem?
In this phase, you will discover your target customers and what their unmet needs are before investing in developing a solution. This stage involves building an effective product through research, measuring quantitative data, and exploring new tools that yield better results.
2. Product-market fit
The goal of this phase is to identify which market is the right fit for your product. The right market fit also includes room to scale and grown. This is arguably the most important milestone in the life of a product.
In this phase, you will quantitatively verify that you are delivering monetizable value to a given market. There are three big questions to consider:
- Is there a viable market for this product? (validating viability)
- Is the market profitable? (traction)
- Can it be built at scale? (feasibility)
These questions cannot be properly addressed without first understanding your product's purpose from the Product-solution fit.
3. Scale
The goal of this phase is to grow and scale a product to continue offering a viable solution to an evolving market. There is no one right way to do this. However, we have two recommendations for this phase:
- Before considering scaling, you must prove a product-market fit with data.
- Recognize that your business model is never finished. Incremental innovation is essential for staying relevant in the market.
Many companies try to scale too quickly. Your growth goals must be realistic. For example, your team must be big enough for continuous technical improvement, and your business model must already be adaptive to infrastructural change.
How to apply Lean Product Management today
Now that we understand Lean Product Management, you may be wondering, but how do I actually apply this? As a Product Manager (PM), it's important to recognize that change begins with you, but it will be slow. Here are three things you can implement today:
Increase transparency: Having more visibility across your team will aid with understanding a project's lifecycle and identify blockers or delays. This discovery process can be aided with all kinds of software or cloud-based tools. Consider implementing processed-based changes, such as new tracking software.
Focus on prioritization: This will help you better understand what stage a product is at so you can better adapt. It can also offer insight into what the customer prioritizes. Perhaps time is being wasted developing tools that do not add to the overall product-solution fit. Are you trying to get the something out as soon as possible? Or are you focused on the highest value?
Pay attention to flow: You can use metrics to gauge how long it takes for an idea to be tested and adapt the flow of work from there. Flow should always point towards the right product in the right market. So, pay attention to where flow is not efficient for these goals. You may need to adjust requirements so that work flow points to better products and faster results.
Lean methodologies will help your team get value to the market faster. At a time where market competition is intense and fast, it is critical to use these modern management methodologies. Becoming a modern, efficient leader will require a shift in your perspective.
If you are ready to get a strong foundation in these concepts, check out Educative's course Lean Product Management. You will learn modern product management techniques that will help you bring products to the market quickly. You’ll start by understanding the mistakes that your team is making and understand how to solve them through practical examples.
By the end, you will have the foundations in place to bring products to the market that solve problems and are built for the long haul.
Happy learning!
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