The document discusses three key product challenges for entrepreneurs before hiring a product manager: 1) seriously listening to the market through extended customer interviews to understand needs rather than selling, 2) thinking about product value from the customer's perspective in terms of return on investment rather than features, and 3) considering the whole product experience beyond just the core features. It emphasizes the importance of deep customer understanding and focus on customer ROI for pre-revenue startups.

1. Three Product Challenges for Pre-Revenue Entrepreneurs Rich Mironov Agile Entrepreneurs July 15, 2010

2. About Rich Mironov Veteran product manager/strategist Business models, pricing, roadmaps “What do customers want?” Agile meets business Repeat offender at software start-ups “Product Bytes” blog since 2002 Mentor capitalist

3. Product Challenges for Founders Agenda What product managers do Three product challenges for founders (before you hire a product manager) Seriously listening to your market Customer-side ROI Whole-product thinking An organizational map

4. Product Management Executives Development What Does a Product Manager Do? strategy, forecasts, commitments, roadmaps,competitive intelligence budgets, staff, targets market information, priorities, requirements, roadmaps, MRDs, personas, user stories… Field input, Market feedback Mktg & Sales Markets & Customers software Segmentation, messages, benefits/features, pricing, qualification, demos…

5. Avoid Post-Course Corrections When NASA wanted to put a man on the moon, they planned a series of mid-course corrections…

6. Product Challenges for Founders Agenda What product managers do Three product challenges for founders (before you hire a product manager) Seriously listening to your market Customer-side ROI Whole-product thinking An organizational map

7. Selling & Listening Can’t do both in the same meeting Selling turns off prospects Defensive, waiting for the catch Unwilling to give you key information It’s all about you As soon as you pitch your product, open-ended discussion stops Can you listen (= shut up) for 20 minutes?

8. Are You Selling or Listening? You are selling when you… Do most of the talking Anticipate objections Plan your arguments Understand the material Have a goal for the meeting You are listening when you… Ask open-ended questions Take notes Repeat for clarification Use silence Expect to be surprised

9. Extended Interviews Get inside their heads 30+ minute in-person interviews Open-ended questions Record session if possible Ask about… How their business works What they name things What keeps them awake at night (pain) Current solutions, alternatives, shortcomings, competitors Natural units of work Unstated requirements How they justify spending (ROI)

10. Discovery vs. Theories Markets are complex and surprising You learn about the world from customers far from your office “What’s the pattern?” “Who are the outliers?” “How would a customer fit us in?” Rule of thumb: you need 8 to 20 in-depth interviews to start seeing patterns Your initial theory is always wrong

11. You Have Time to Be Strategic “Urgent” versus “Important” Truly understanding customers and markets will save an entire product cycle Customer language and stories make selling easier Postponing market analysis may cost you the company

12. Product Challenges for Founders Agenda What product managers do Three product challenges for founders (before you hire a product manager) Seriously listening to your market Customer-side ROI Whole-product thinking An organizational map

13. Prospects Don’t Care About You Your products don’t matter Your costs don’t matter Customers don’t allocate budgets for you Purchase approval is hard You have to do your customer’s thinking for him How will he justify spending money?

14. Start with Customer’s View Customers buy most products to make money or save money How do they describe value? Quantify it for them They won’t spend time to fully analyze your product Assume you can capture a fraction of value B2B: often 5% to 15%

15. Hard Cost Savings Example “By using our tech support knowledge automator, you can reduce your support time per call by 30%.”

16. No Hand-Waving Allowed!

17. Telling the Pricing Story Whywill customers buy? Tell a story in customer’s own language What’s the natural unit of exchange? How do they derive value? What does the competition do? Don’t expect them to think for you Test, trial-close, get your hands dirty

18. Product Challenges for Founders Agenda What product managers do Three product challenges for founders (before you hire a product manager) Seriously listening to your market Customer-side ROI Whole-product thinking An organizational map

19. You Sell Piece Parts Your product fits here Customers make our products into solutions We like to over-simplify their complicated world

20. Whole Product Exercise Watch a real customer install your product What does he need? License keys HW/SW dependencies Unsecured online access Re-configuration of related products Oracle sys admin rights Special knowledge Contracts, business docs

21. Have Someone Try An Install Recruit an outsider Provide only product materials No hints, no help Watch, listen, learn Can you… Program your DVR? Read a cell phone bill? Synch calendars?

22. Product Challenges for Founders Agenda What product managers do Three product challenges for founders (before you hire a product manager) Seriously listening to your market Customer-side ROI Whole-product thinking An organizational map

23. The Minimal Organization CEO/Founder Here CTO/ Founder Strategy and market thinking live in the founders’ heads

24. Handful of Employees CEO/Founder Here Solution advice CTO/ Founder Devs (2) Strategy and market thinking still live in the founders’ heads Good time for fractional help clarifying market problem, targets, dead-simple messages

25. Expanded Organization CEO/Founder CTO/ Founder Mktg Sales CFO HR/office Prod Mgmt Dev (4+) Product Manager should be employee #15 or earlier Does Marketing or Engineering think more strategically?

26. In the Start-Up Lifecycle…

27. Q&A

28. Contact Information +1-650-315-7394 rich@mironov.com www.mironov.com/articles/ feeds.feedburner.com/RichMironovProductBytes @RichMironov www.linkedin.com/in/richmironov