Field Guide

Field Guide

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Introduction

Product

Quick iteration with real users is critical to building a valuable consumer product. First, you need to understand if a real market pain exists by talking to real prospects and testing a prototype in realistic market conditions. Good foundational work in early product testing will help inform your MVP, build toward a successful product launch, and set you up for hypergrowth going forward.


This chapter will help you build a product that fills a real need in the marketplace and how to build product for long-term traction.

Chapter Authors

Andy Johns
Andy Johns
Andy Johns
Andy Johns
Sarah Leary
Sarah Leary

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Finding Product-Market Fit
Sarah Leary
Start module

Finding Product-Market Fit for Consumer Products



As Co-Founder of the hyper-local social network, Nextdoor, I’m often asked about the early days and how we came up with the idea. Was it like a bolt of lightning that struck unexpectedly, or the result of many failed attempts? When I’m talking with fellow entrepreneurs, they often ask a more pointed question: “How did you find product-market fit?”


Savvy entrepreneurs know that finding product-market fit is essential for building a successful business. I like to think of product market fit (PMF) as the unique product solution that addresses a missing gap in the market. The most attractive markets are large and hard for others to enter, creating an opportunity to build a meaningful and defensible business. The hardest part is finding the “fit” in a previously hard-to-solve space, but that's where the greatest business opportunities are found. 


While the “idea” and the product-market fit (PMF) for Nextdoor are not precisely the same, they both were shaped by the struggle to find product-market fit at Fanbase, an earlier company I co-founded. Fanbase’s failure led to a hard pivot and our team’s search for a better way of launching products. It was a two-year journey of frustration, but the lessons we learned eventually paved the way for the successful launch of Nextdoor. 


While each startup's journey is unique, I believe the PMF journey can broadly be broken down into five steps. The sequence matters, or you’ll find yourself doubling back again and again. Taking these steps early to validate the market appetite for your product can dramatically increase your odds of success. 



Here are the five steps that can help you build a transformative product for the market:

1. Validate your hypothesis

To start on the entrepreneurial journey, you need to have a unique insight about the market. Where is the gap? Put it into words. Force yourself to write it down. What has to be true for the market to want what you need? A good hypothesis should include the following: 

  • Who is the target customer?
  • What is the unmet need?
  • Why aren’t their needs being met today?

For Nextdoor, we believed that neighbors had lost touch with each other and wanted a more convenient way to connect with each other about what was happening in their neighborhood. 


Key takeaway: Writing down assumptions allows for clarity with yourself, your co-founders, and teammates. It’s important to write your hypothesis with clear who, what, and why statements. What’s the benefit for your target users? Follow-up by sharing your hypothesis with others and get their feedback. The feedback you’ll get is worth way more than the risk of someone stealing the idea. 


2. Test product assumptions with users

It’s so easy to get excited about an idea and want to just start building. You may feel competitive pressure or assume the market opportunity is fleeting. But that would be a mistake. As my Partner Andy Johns likes to say,

“It’s not first to market, but first to product-market fit that matters.”

First, you should test your product assumptions with users and validate if your proposed product resonates with users. Be humble enough to know that your product assumptions are not 100% right and that the smart move is testing your proposed solutions before you dive into building. 


These tests should be fast and cheap. You should be able to change directions within days, if not hours. Some example tests methods include: 

Never outsource the work or short-change the face-to-face interactions with customers. The personal interactions with customers are where the golden insights lie. I did nearly 100 interviews and 1:1 sessions with our early users at Nextdoor. Those meetings provided an endless number of product and Go-To-Market insights. Understand who likes your product and why. Where is the “Aha” moment where users get excited and can’t wait to use your product? Look for strong and clear signals. The most actionable feedback will not be subtle.


At Nextdoor, we spent about six weeks doing online surveys, meeting with neighborhood leaders, and showing people crude wire-frames and mock-ups. Based on those interviews, we materially changed the focus of the product and narrowed the scope to the most essential features. This saved us months, if not years, of wasted work. It also helped us understand who the true believers and early champions of Nextdoor were going to be. These people were critical in building the Nextdoor community. When people saw the neighborhood map and understood who was on the network, there was a clear “Aha” moment and the whole concept came together for them.


Key takeaways: Spending extra time refining the idea with a small group of invested users will save you months of work. It can also lead to moments of insight based on user frustrations and hard-to-articulate needs that are more easily understood face-to-face. These insights often inspire nuanced solutions that can differentiate your product from others. It will also help you identify your true diehard users who will be the foundation of your business.


3. Prototype your MVP in the real world  

After weeks of high-touch research, resist the urge to start building the full-feature solution. You might have some good feedback, but you are still developing your concept. Instead, focus on validating your proposed product solution in more realistic market conditions by building a simple prototype. You'll iterate on it before you get it right, but you need the minimum viable product (MVP) to test your assumptions and continue learning. The goal is to get answers to a few key questions about the product before you decide to build a company around it. Often founders mistake the “Viable” in MVP as meaning the easiest version of the product for the engineers to build. Rather, the goal is to create the minimum product that sparks delight with users. MVP should really stand for Minimum Valuable Product. Why should the users care if there isn’t something delightful about it?


For Nextdoor, we built a simple prototype for one neighborhood to test the likelihood of neighbors to converse with each other. We stripped away functionality and tested one hypothesis at a time. At first, we just wanted to see if neighbors would have anything to talk about if we brought them together online. That first prototype we built was embarrassingly crude, but after only four weeks we had a working prototype. Within a few weeks of release in our test neighborhood, we knew that neighbors had a lot to say and share with each other. We then tested how neighbors would invite one another. From there, we moved on to test how they wanted to define their neighborhood. Once we tested those questions with one neighborhood, we expanded to five more neighborhoods and validated the initial feedback and the market potential.  


We continued this prototype and learning process for several months as we added a few new neighborhoods each week. We made a point of launching these neighborhoods across the country to get a broad set of feedback. I knew we were finding product-market fit one day when we had about twenty neighborhoods and took the service down for an hour to upgrade a database in the middle of the day. Within 10 minutes, I started getting emails and phone calls from concerned users who were unable to access the service. They needed Nextdoor—now!


At Nextdoor, we used user testing and customer support feedback to calibrate member delight and product-market fit. Over the years, people like growth leader Sean Ellis, have developed a simple survey designed to measure and track an objective score to measure and track product-market fit. I wish we had used something like this to calibrate our progress during this testing phase. It probably would have saved us time. 


Key takeaways: There is no substitute for real people using your product in real life scenarios. The key is to quickly prototype a MVP to validate your product assumptions and confirm user delight. Don’t throw more engineers at the problem. Instead, limit the scope to answering the 1-3 essential questions. If you have multiple questions to answer, isolate each variable and test them sequentially. In this area, I believe small, nimble teams have a big advantage—constraints force trade-offs and drive innovation faster. Find a way for the team to track progress with some objective measures. It will help keep the team aligned and motivated.


4. Codify your detailed personas

Just as products need in-market testing, I believe we must also test user segmentation and messaging. Fortunately, this usually can happen in parallel while the engineering team is building the initial product. 


For Nextdoor, the marketing team went to work testing messaging through surveys, interviews, and digital campaigns. Luckily, we also collected a lot of information about our Founding Members, the first users who started their own Nextdoor neighborhood and invited their fellow neighbors to join. As part of the product sign-up flow, we required each Founding Member to complete an application about why they wanted to start their own neighborhood. That information helped us understand our earliest users and develop our personas. It was an essential way to align our growing team and be precise about who we were targeting in the early days. 


These personas guided our product strategy, helped us build the roadmap, develop marketing messages, prioritize partnerships, and optimize sign-up flows. Most importantly, it empowered everyone in the company to prioritize and say no to work that didn’t directly help our selected personas be successful on Nextdoor. Avoid trying to please everyone with too many personas. Personas are another way of saying: "Here are all of the people that we are NOT going to serve.”


Some founders try to optimize for multiple personas to expand their market opportunity. However, this is a big mistake. This is also common among first-time founders who think this is what investors want to see. It is not. It’s much more powerful to have a narrower set of users who love your product vs. a broader set of users who kind of like it. Successful companies are built on products that have a diehard group of users who love a product so much that they will tell others about it. Don’t be afraid to narrow your focus and deliver an exceptional product. You can build on that success later.


Key takeaways: Personas are a handy way to get everyone in the organization aligned around who the target audience is. The more specific you are with your defined personas (name, background, photo, description of usage), the more helpful they will be. Focus on a few personas and over-deliver in terms of a great product for those users.


5. Launch and learn! 

With each step of the process, you should be gaining confidence that you are on to something special based on the feedback from your target users (i.e. your die-hard fans). Ideally, you are measuring the level of enthusiasm for your product in the market. Still, there is no bright line that will tell you that you are ready to launch. Even after months of testing, many founders hesitate to launch. There is always a long list of things that haven't been built yet, but don’t let perfect be the enemy of the good. There comes a point where broader usage is necessary to continue learning. If fact, if you have followed these steps, launching might be the best way to continue to learn. 


One signal that can help you know that you are ready to launch is when customers are clamoring for the product and want to tell others about it. If you have been successful in finding product-market fit, there should be demand from the market asking for the product and wanting broader usage. In fact, your users should need the product and be demanding that you launch it. And if you have gone a step further and quantified the level of interest, then you should see a strong base of users (40% or more, according to Sean Ellis' research) who can’t live without your product. 


For Nextdoor, the clear sign to launch was when friends of friends started asking if they could bring Nextdoor to their neighborhood. Not only did these users depend on Nextdoor, but when they told others about it they wanted it too. That was a strong signal that we were a product people wanted and needed. 


With that support, we picked a date and ran furiously to get everything ready for a big press launch and broader usage. But three weeks before launch, we kept hearing feedback about needing faster methods for new users to verify their address. We debated adding the functionality after launch, but ultimately decided to delay launch by three weeks to add a phone-based method for address verification. We felt like we needed the best registration flow possible to make the most of the one-time launch event. With more than twenty national press articles, we were glad we took the three weeks to implement the change and help us leverage our national launch to accelerate growth.


Key takeaways: When users are clamoring to share your product with others, it’s time to launch into the market. Even if there are shortcomings in your product, you need to pick a date and go for it. The launch will galvanize a team to work towards an explicit date. But don’t be foolish and rush the process if market feedback suggests you need to build something to make the most of the launch. Recognize that the launch event is just another step in your refinement of the product. If you’ve targeted a big market, you will have many product-market fit moments ahead of you. This process can and should be used continuously to gather feedback and hone the product.


I put together this Core Hypothesis and Personas Worksheet, which you can use to kickstart your own process.


The overarching mindset I encourage founders to embrace on this journey is to have “bold opinions, weakly held” at the start. Great entrepreneurs have an insight (or “opinion”) about how the world should work better and then must go out to the market to pressure test that opinion until they get it right. To do that, an entrepreneur needs to be confident enough to form a new opinion, but also humble enough to know they have blind spots that they must uncover and address in order to build something valuable.


There will always be the risk of failure when launching something new to the market. The beauty of this quest for product-market fit is that you can dramatically improve your chances of success with these pre-launch steps that help uncover the nuanced needs of the market. And that can make all the difference between success and failure.

Product Management
Andy Johns
Start module

What Makes for a Good Product Manager?

Over the course of my career, I’ve worked on product at Facebook, Twitter, Quora, and Wealthfront, and have advised dozens of other companies on the role of growth and product. Now, as an investor at Unusual Ventures, I get exposure to an even broader collection of companies, and the product cultures within them. Despite that exposure, there is a lot about the role of product that I still don’t understand. But what I can say for sure is that there are as many philosophies on the role of a product manager (PM) as there are letters in the alphabet. And we’re nowhere near getting to a point of agreement on the basic question of, “What makes for a great product manager?”

The confusion surrounding expectations has always stood out to me as one of the most unique and challenging aspects about this role. If you ask an engineer what they want from a product manager, they’ll give you an answer from their perspective. Some might say, “I want them to do all the stuff I don’t want to do, like take meeting notes.” Others might say, “I want them to be proficient with SQL, so that they can pull data.” Or, “I want somebody with good design sense.” Then, if you ask a designer what they want in a PM, you’ll probably get a different set of answers. Same thing when asking marketing or an executive of the company. If you ask the PM themselves (or Twitter for that matter) what they think a PM’s job is, you’ll get yet another set of perspectives.

These completely different expectations make the PM job very difficult relative to most other positions because what makes for a great PM can’t be narrowed down to one or two objective measures. PMs have a broader set of definitions and expectations to live up to. If you view each of these expectations as a set of circles, the world’s greatest PMs are those who are very good at a combination of these overlapping expectations. For example, you may have a PM who’s really great at writing SQL queries, which might earn them the respect of an engineer. But they also need to be excellent at conducting customer interviews and reflecting the voice of the customer to really impress designers. Ideally, you’d find somebody with an overlap of these skills. A baseline set of expectations for a junior to mid level product manager might look like this:

To make things even more complicated, these expectations can also vary from company to company. Some companies don’t even want to have product managers. That’s how conflicted the industry feels about the product management role. However, at the risk of being too prescriptive, I’ve laid out my framework for PM skills development below.

Foundational Skills

In my opinion, below are the most basic set of skills that a Product Manager should master in order to establish their role within a team:

  • Create Requirements — They can create clear product requirements that satisfy the preferences of the engineers and designers they work with (i.e. it unblocks design and engineering). There are many different approaches to product requirements, so there shouldn’t be a religion around a particular style. What matters most is that design and engineering feel enabled by the requirements a PM produces.
  • Customer Feedback — They can bring together basic customer insights through customer interviews, reading customer service tickets, etc. They do an adequate job of reflecting the baseline expectations of the customer they’re building the product for based on an explicit set of requests from the customer (e.g. the customer says a part of the product is broken).
  • Data Insights- They have some basic data proficiency where they can look at the data related to their product and potentially use that data to make decisions. They will have working knowledge of data languages like SQL and know how to use popular business intelligence tools like Looker, Google Analytics, and so on.
  • Run Meetings — They can run effective meetings with the team. That includes setting the agenda and tracking action items. For foundational abilities, this does not include driving decisions within the context of product meetings as driving decisions is more common amongst senior product leaders. I’ll touch on this more in a moment.

From what I’ve seen, having this baseline set of skills means you can be average-to-good and generally command some reasonable amount of respect from cross-functional peers in engineering and design. Then there are the additional skills that separate a beginner PM with foundational skills from a more experienced PM with intermediate capabilities.

Intermediate PM

To be an intermediate PM, you also need to layer on the following skills on top of the prior set:

  • Customer Insights. Beyond collecting the plainly stated forms of customer feedback, this means deeply understanding the problems/needs of a customer and how that customer has historically solved those problems or met their needs. This PM can then diagnose how the product he/she is building will solve the customer’s unmet needs.
  • Basic Design Knowledge. Good PMs have working design knowledge so that they can distinguish between bad, mediocre, and good design. This predominantly comes down to UX fundamentals and not advanced topics like color theory. Does it require too many taps/clicks? Is the product copy unclear? Does it meet the stipulated customer needs? Is the cognitive load too high? Is the information hierarchy correct? These are the sorts of questions that a good product manager will ask when working through prototypes.

Exceptional PM

To be an exceptional PM, you must combine the previously mentioned skills with a few more skills. This person can operate at the executive level or be the product lead on the biggest, most important product initiatives within a company.

  • Customer Innovation. This PM not only knows the explicit customer requests and has intimate knowledge of the customer’s needs, but can introduce new products or features that exceeds the customer’s expectations and innovates on the customer’s behalf.
  • Vision and Strategy. Exceptional PMs can also internalize founder-level vision for the company and turn that vision into an actionable strategy. They have the most keen line of sight into the series of products/features that need to be built to achieve the founder’s vision. And once they have the vision and strategy clearly understood and explained to their team, they can enforce great execution against the vision and strategy.
  • Broker Hard Decisions. The best product managers are those that can also drive a team toward making a high quality decision in a world of uncertainty. Foundational and intermediate PMs can arrange and run the meeting, but aren’t necessarily great at driving a product team towards a decision in difficult situations. The best PMs are those that everyone else in the room looks to when making a hard decision and they typically make the best tradeoff decisions given the circumstances.

As you can see, the requirements for becoming an exceptional product manager are high and numerous. Going back to the original venn diagram analogy, exceptional product managers need to have a lot of overlapping skills and each function within the company places particular emphasis on some of those skills. Engineers might assess a PM based on data proficiency and quality of requirements, design might assess based on customer-centricity and some degree of design thinking, while executives may assess a PM based on the ability to lead a product team through complex initiatives and fidelity of vision and strategy. Across the board, everyone is expecting a PM to be a good decision maker.

A Needle in a Haystack?

That said, it’s no surprise to me that I often hear founders gripe about how they can’t find great product managers. They often say they only come across average PMs. As part of that, I arm them with the above framework so that they can be more specific when it comes to critiquing the caliber of their product managers, in particular once they’ve adjusted their expectations for the level of seniority.

When I dig in more deeply, what they are really saying is that it’s very hard for them to find product managers with the exceptional PM qualities of customer innovation, clarity of vision and strategy, and ability to make hard decisions. Unfortunately for PMs, most founders expect them to have the skillset of an exceptional PM, regardless of their level of experience. This triumvirate of skills (customer innovation, vision and strategy, and ability to make hard decisions) is what I call “Founder’s Feel”.

For example, when Facebook was working on Messenger, it first started out as an integrated messaging app as part of the web client. One day, Mark Zuckerberg declared that it must be made a standalone mobile app and that Facebook users would be required to download it if they wanted to chat directly with one another. That wasn’t an obvious decision at the time, certainly to most of the rank and file employees, yet it was the correct decision given the pressure Facebook was feeling amongst a growing collection of competing messaging apps. Facebook was being unbundled by competing products so they decided to get ahead of it and unbundle themselves. This is the sort of decision-making that great founders make and, sometimes, exceptional product managers can make as well.

I’ll give you another example from my time at Wealthfront. We had just launched our mobile app and the number one source of customer feedback we were getting was that customers wanted to see their daily returns front and center in the mobile app. In other words, customers wanted to be able to log in and see whether their account was up or down relative to the previous day, and they wanted that front and center in the app. I remember telling our product manager at the time that we were never going to do that. The PM looked at me like I was an alien and kept repeating that customers were asking for the feature.

I explained that customers were asking for that feature based on what they thought Wealthfront was at that point in time, which was a tool to manage their investments. But what we were going to be a few years into the future would be their holistic money manager where we would handle their financial planning, banking, investing and so on. Holistic money management is not about showing daily returns because whether the market goes up or down 1% per day does not matter in the long run. Most customers were investing and planning for something several years or even decades down the road. I pointed out earlier that a great product manager understands customer feedback first and foremost. But an exceptional PM knows how to contextualize that customer need within the broader company vision and strategy, and then decide whether or not to implement what the customer is asking for.

Fast forward a couple years, we took daily returns and relegated it to a lower position within the app and put long-term financial planning front and center for the customer. Eventually, we saw that the savings of customers who engaged in that long-term financial planning feature went up by a double digit percentage. Sometimes, listening to explicit requests from the customer can lead you in the wrong direction, as would have been the case here.

Developing “Founder’s Feel”

So what does it take to develop “Founder’s Feel” in order to become an exceptional product manager? How does one go about building strong instincts around customer innovation, a vision for the future, and a knack for making high quality decisions that others don’t necessarily see? The bedrock of it is in knowing the customer better than anyone else.

The way I think of it is that you’re collecting unstructured data every time you have a conversation with a customer. It’s not structured like the data you retrieve from a database. Rather, you’re looking for structure (i.e. patterns) in the data that only becomes apparent once you’ve had enough customer conversations. For example, imagine that an insight from a customer conversation is a data point that you plotted on some nebulous graph, like I’ve shown below. Each time you have a conversation you collect insights and start plotting them into groups based on similarities/themes. Once you’ve had enough conversations, the themes start to cluster around common insights or customer needs.

Once you hone in on the clusters they start to make sense to you and “feel” obvious, especially after you’ve had enough conversations with a customer. In the below example, each cluster outlined in red could lead to a meaningful product decision.

Each time you talk to a customer, you capture unstructured data. If you have enough conversations with customers, that unstructured data starts to take shape in the form of extremely strong instincts around potential for customer innovation and product vision that seems less intuitive to others. That’s what “Founder’s Feel” is.

The founders of Wealthfront talked to hundreds of initial customers face-to-face and read most customer service tickets from the first couple thousand customers. Several years after founding the company, the founders continue to read customer service tickets and talk to customers face-to-face. When you compare their ability to make a decision in an uncertain environment vs. a product manager who hasn’t talked to any customers, there’s no comparison to be made. They have a “feel” for what to build (and not build) for Wealthfront customers that is unmatched due in large part to the sheer volume of unstructured information they have collected over many years while building the company.

Closing Thoughts

Returning to the original question: What makes for a good PM? The answer is it’s really complicated.

To start with, good PMs can navigate ambiguous expectations and can apply their skills based on the team’s needs. They know the different levers to pull depending on who they’re working with and can adapt accordingly. One thing that can’t be sacrificed is knowing what the customer needs better than anyone else. This means doing customer research, design testing, and diving into customer support tickets, spending time sitting with the customer support team, and so on.

If you’re just getting started as a PM, focus on building the foundational skills I outlined above. That’ll be the foundation through which your cross-functional peers see the value you add. With time and practice, you can hone the additional skill set I’ve outlined that can make you an intermediate or exceptional PM. But if you’re not good at the fundamentals to begin with, you’ll lose the respect and trust of your team and they might wonder, “What is this person’s job exactly?”

For senior PMs, you have to have the ability to broker decisions in situations where it’s hard to make the right call and drive alignment around the vision and strategy. In addition to that, you can weigh in on product decisions using some working design knowledge. I’m not talking about weighing in on square corners versus rounded corners. I’m talking about the overall flow of products, if the experience is clear or cumbersome, and if it meets or exceeds customer’s needs or expectations.

Finally, the rarest of PMs develop their own “Founder’s Feel” — i.e. a knack for making the best strategic decision that’s informed by a top rate understanding of the business, customer, and the market. They know how to work under uncertain conditions and get a sense of the bigger picture. Those exceptional PMs can translate the founder or CEO’s vision into a clear execution plan.

With all this in mind, though, my default position is that the vast majority of product teams are better off being led by a small group of cross-functional owners as opposed to the outdated notion of “the PM as the CEO of the product”. The most effective product teams are those where the leads on Product, Design, and Engineering (and sometimes other functions like marketing, customer service, and data science) are all mutually bought in to being experts at understanding the vision, the customer, and have shared ownership of the outcome. This means that a Product Manager should often defer to Engineering or Design when key decisions need to be made, specifically when those other functions are better fit to make those decisions. And that’s often the case! I would argue that a great PM also shows “Founder’s Feel” by referring to the right person in the room to make the decision.

In my experience, small group decision making typically leads to vastly better outcomes and if you have a true product leader, that person emerges naturally just like any leader does. There’s no explicit conversation about “who is in charge” of the group. Rather, they do such a good job that the peers around them see it, they know it, and there’s not a discussion about it. That person simply rises to the occasion. It’s the person that everyone in the room naturally turns to for the hard decisions and the mark of an exceptional PM.

Hypothesis & Personas Exercise

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Kickoff Meeting Template

Project Review Template

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Product Requirements Template

Customer Research Guide

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Everything starts with understanding your audience and building an MVP to match. Start with our guide for honing in on a hypothesis and iterating toward launch: Finding product-market fit.