Product Development 101: Designing & Optimizing the DNA of a Killer App
Posted October 2, 2008
In his opening words Dave McClure tells us that the online medium is different than any other because we can measure user behavior in real-time. Now add to the mix the speed at your which your competitors are innovating, and the question becomes how you can build that killer app the right way quickly.
Dan Olsen convincingly argues that rigorous application of quantitative analysis helps to:
1. Create value for your business
2. Create value for your customer
3. Optimize UI Design.
Launch, Learn, Iterate.
Metrics should give you valuable insight at each iteration of the product development cycle and show how product changes make an impact on your business. For example, you can watch how the number of registrations changes as you modify the registration process or massage the design of the registration page. Survey questions may cause larger dropout, while forced registration may increase signups.
This type of feedback loop helps test your opening hypothesis. In general, you hope the metric goes up, but what is more important is that you learn from each iteration.
Un-actionable high level metrics can be broken down into actionable pieces. For example, nothing can be done with Proft = Revenue - Cost. Break it down, however, and you will find many actionable variables (see the slides).
Even seemingly fuzzy indicators, such as customer satisfaction, can be measured indirectly when you understand your business thoroughly. Customer value can be equated to customer satisfaction, and this can be measured by the number of users (which should be increasing) and how frequencytly they visit.
Gone are the days of lengthy PRDs and MRDs. Today we are working with a more agile process that requires you to be nimble and fast. Use metrics guide the development of your product and business.
