Product Management
Product Management Framework for SaaS: How to Build Great Products
Ben Horowitz recommends built the great product first. I think nobody wants to argue with that. Everyone knows how it’s important for creating a great product for SaaS startup. But there are a lot of poor solutions on the market. Creating a fantastic product is still hard. It requires strong skills in engineering, marketing, project management skills.
In Kepler Leads I created AAS Product Management Framework which is helping us for building products in Aworker and Kepler Leads. Hope that it will help you too.
AAS Framework works for SaaS companies with existing products, not for startups at the idea stage. If you need to improve your current application, AAS is a useful tool for it.
The framework consists of 9 steps and 3 main stages. AAS is an acronym of crucial product management stages:
– Audit
– Analyzing
– Strategy
Audit stage
Creating new features is an obvious way of making your product greater. After all, that seems pretty clear to many product managers. The more value we add for our users, the better our product will be. However, if you take a step back and looks at how people really use your product, it quickly becomes clear which way you should choose for product development.
Understanding what’s going on in an application gives you many insights for improving the software. That’s why right product development starts with a review. You should know what your users doing inside the app are.
Step 1. Get the data for the product audit
To do an audit, you should get data of features used in your application. How often people use your features? What features do they use?
These are two main questions at this stage. You can obtain the data from SQL or analytical tool if you use it.
In the upper right quadrant, you see the features which most people use in their workflow. These features give your users more value than others. It’s the core of your product. At least people think so.
In the lower left quadrant, you see the features which use a small number of people. These features are the weakest on your product or the most unknown for your users.
Step 2. Leave only actual features to understand real feature usage
Exclude all administrative features like the login, signup, filling the profile, etc. We need to analyze features which attract people to use the application.
Step 3. Rank the features and do product audit
You can create a table with the priority order, or you may build the graph. You should understand what’s the amount of users using each feature.
Here is an example of how it could be:
After understanding real feature usage, you can go to the next stage. This step is crucial for defining the ways of developing your product.
Analysis stage
With all the data on the table, you can think about the future. You have three ways for product development:
1. Improve a feature;
2. Kill a feature;
3. Create a new feature.
At this stage, I recommend to focus on improvements and killing features. After that, you might think about creating new features.
I want to pay attention to this issue. The massive risk in creating new features that this process is never finishing. You want to create feature #1. Done. After you are deciding to build feature #2. Your engineers did it. Now its turn for new fantastic feature #3… One morning you will have understood that you created Swiss Army Knife. If you’re not Microsoft or Google creating ‘swiss army knife’ products is not the best strategy for a startup.
That’s why you need to create a balanced strategy for product development. You should clearly understand what people doing in your product are and why. Many times improving existing features give more value to your customers than creating the new ones. Why? Usually, people don’t use more than 50% of the features on the app.
I don’t want to say they startup must not create new things. They should do it. But with limited resources and times, each startup should understand the focus clearly and how they can create more real value for customers. There is no right decision. But the wrong choice can be a cause of serious problems for a SaaS company.
Let’s look at average feature usage.
Despite our wishes for creating ideal feature usage the most startups have this picture. It is a combination of popular, good and poor features. Usually, this graph shows several robust features and all the rest.
The frequency of using depends on the type of the product. Social media application suggest that people are using it each day. At the same time, in a payroll application, people may log in once a month.
We define features by the number of people using it at a certain period of time:
– Popular features. These are the features used by 80%-100% of people.
– Good features. 20%-80% of people using it.
– Poor features. Fewer than 20% of users used these features.
Step 4. Improve popular and good features
At this stage of analyzing you should focus on popular and good features. Think about how you increase feature usage.
How can you improve it? There are 3 ways for improvements:
1. Make a feature better to simplify the process of using it;
2. Increase frequency of use a feature;
3. Make it to more people can use it.
Improving popular features (80%-100% of using) should do very carefully. The strong change of key features can break down the workflow, and your users may go away to another app. Making it better is a good way for improvement a popular feature. You are working with things which all users like. Make it more comfortable or more convenient, so every time a user gives benefits of using it.
Improving good features (20%-80% of using) is about increasing frequency of using or the number of people who use it. You can make two groups of users:
Group A: People who have used these features at least one time
Group B: People who haven’t used these features yet
You need to understand why they don’t use these functions. They used it one time and after stopped. Why they did it? Did they find the value? Or did they finish the process before getting their jobs done? Why must they use this feature?
Three methods can help you understand better these users:
– You can use event-based analytics for better understanding user’s behavior. More information about analytics tools you may find here.
– Or talk with them. Using in-app messages, you can send questions when they are in your app. Tools like Intercom allows sending the triggered messages different users group. Also, don’t forget about emails. You can send a personalized letter to the different target groups.
– 5 Whys Technique. You might build hypotheses why they don’t use it by asking the repeating question «Why?» five times. For example, Why they don’t use it? Because they don’t see the benefits. Why? Because they don’t understand how does it work. Why? Because our description is long and complex. Why? Because we haven’t integrated short and simple description in the app. Why? Because our engineers worked on bug fix and we published long description on the website only… Then you know how you can improve it.
Step 5. Kill poor features
Be comfortable to kill features which fewer than 20% of people use in their job. Hope that you don’t want to create Swiss Army Knife. I know how it is difficult to make a decision and kill something you are developed before.
Three reasons when we don’t kill poor features:
– It’s a new feature, and we haven’t created good marketing support for it.
– It’s an old feature, but we still haven’t created enough marketing support for it. But if after several marketing tests these features won’t become more popular, we will kill them.
– We firmly believe that this feature can do customer’s life better and other products cannot do it better. Vision is a very subjective thing, but sometimes it works.
How to kill feature?
You can remove something from the product or hide it in the user interface. In many cases, having warned your users about this step by email and you get feedback from people before feature removing. It helps you to take the final decision.
Step 6 (additional). Create New Features
When you want to create new features, think that most applications can sell only 20%-30% of their functions. People usually pay just for using 20%-30% of features. They don’t use all scope of the product. Think about Microsoft Word. How many features do you really use there?
There are always two extremes in software development. Bug fixing and creating new features. Feature usage audit and completely understanding your customers must show you the right way for development.
If you really understand that new feature can increase people’s value and you see how it complete your product then include this part in your product roadmap after the team’s approval.
Strategy stage
The strategy part consists of brainstorming, product roadmap, and messaging plan.
Brainstorming
This is a part of team brainstorming where the product manager provides a report of his/her analysis. You should discuss together what you want improving, killing, or creating. Create the brainstorm where each member can suggest ideas and don’t regret about it. Founders criticizing other members reduce the effectiveness of any brainstorm.
Step 7. Run a brainstorm meeting
The primary purpose of brainstorming is determining the final list of future features which you will improve, kill or create. Generate as more ideas as you can and identify the critical areas for your development. Collective thinking of the group helps to keep your team on the same page.
When you determined the final list of product development, it’s time to work with product roadmap and promotion strategy. Sometimes the main issue of the old features is not the value of these features. People don’t use these functions because they haven’t known about the old features or haven’t understood the benefit of using them. It’s mean that many startups have massive potential for improving customer engagement by creating the right promotion strategy of the features.
Step 8. Create the Product Roadmap
The product roadmap is a detailed visual summary that presents the direction of your product development. It describes your vision and strategy.
The agile development methods help to build useful product roadmaps. You can analyze product features based on how long is to create and how useful is something for your users.
The features with most values with less creating time are the most desired things for the team. But you must combine all types of elements to create a balanced plan. Put the high value and less time features between features with long development time to show traction for users. The features with a long period of development usually make significant progress or fix serious bugs in the product. But if you will develop something a long time, people can think that your product doesn’t evolve.
Here is an example of the product roadmap.
Anthony Ullwick recommends an attractive algorithm on how to create the best plan for features development, using importance and satisfaction.
This simple outcome-based algorithm consists of providing customers interview where people just rank the jobs they need to do on two criteria: how important it is and how it currently satisfies. You can uncover opportunity areas for product development using the simple formula:
Opportunity = Importance + (Importance – Satisfaction)
The higher the score, the more opportunities these features have.
Step 9. Create the Messaging Plan
You created the amazing product roadmap, and now it’s the time for tactics. Do you remember that people don’t use many features in your product because they haven’t know about them?
A lot of startups promote their features with announcements by email and an article on the blog. It’s not a good way of features promotion. Rather it’s a reason why people haven’t known information about your features as much as you want.
Firstly, you must understand the current amount of active users per day, week and month. If you can’t measure it, you can’t improve it. Define the number of users who login in your app and/or use the specific feature if you work on feature’s improvement.
Secondly, create message schedule in the different channels. You can use email, articles, social media, in-app messages, and all of them for promotion your features. But do it like a pro with a clear plan. Intercom claims that using in-app messages for feature promotion can increase users engagement up to 10 times. Using in-app messaging, you should create two target groups of your users. People who signed up in the app recently and old users. Maybe you need to exclude newcomers from this promotion and use the new version of onboarding for them.
Thirdly, check your onboarding process. Think about how you tell about a new feature for new users. You can add information on the website. But what else can you do? Maybe you need to update your onboarding. Tell why this feature or improvement make user’s job better. Focus on people’s value, not on the characteristics.
Fourthly, be consistent. Tell users about features step by step. If you create onboarding too complex with much information about all functions on the first day, people can understand nothing. Create a messaging schedule for onboarding with a timeline or based on the user’s behavior. Who cares about how to change the background in a project application if users haven’t created a project yet? At first step, you should show how to create a project. Then how to tasks and only after it thinks about design features. For example, you can create next onboarding in a project application:
1st day – how to invite team members, how to create project and tasks
3rd day – how to create timers and checklists
6th say – how to do integrations
11th day – how to change a background, etc
You must not tell about all the features on the first day. Make onboarding simple for newcomers. But the best impression for users what you can do is create onboarding based on their actions, not the time. If a user added the first project in your app, it’s time to show him/her how to create tasks there or invite colleagues. It allows to improve personal communication with users and increase retention. Does it make sense to send the message about checklist features if this user has already created several checklists in the project? It is better if you tell him or her about the function which the user hasn’t already used.
Activation is a crucial stage for each SaaS startup. Scott Belsky is an Adobe CPO, Behance co-founder claims that startups with strong growth must spend at least 30% of their resources on optimization the «first mile». The first mile is a first experience interacting with your product – especially in the first thirty seconds. It is the most critical yet underserved part of a product. In this article, I wrote more about activation.
Finally, you could think about UI. Maybe you can do interactions with app easier than it works in current time.
As a result of this stage, you must have a detailed strategy of how, where and when you will promote your features. You have the product roadmap, the messaging schedule for old users and newcomers, and updated onboarding.
Conclusion
Hope that AAS Product Framework helps you creating great software and systemize product management. We are using it in our products. Here is the summary of all steps:
Step 1. Get the data for the product audit
Step 2. Leave only actual features understand real feature usage
Step 3. Rank the features providing product audit
Step 4. Improve popular and good features.
Step 5. Kill poor features
Step 6 (additional). Create New Features
Step 7. Run a brainstorm meeting
Step 8. Create the Product Roadmap
Step 9. Create the Messaging Plan
Anton Cherkasov
https://aworker.io/Anton is a co-founder of Aworker, which is a blockchain platform for Recruitment. He is also a co-founder of Kepler Leads, is a lead generations software for eCommerce. Previously Anton has worked in Wildberries (#1 eCommerce store in Russia). He is falling in love with growth hacking and product management.