Welcome to

Product School!
MODULE 3 - UNDERSTAND CUSTOMERS & PROBLEMS
Agenda

WEEK 1 WEEK 2 WEEK 3

Course Introductions Understand Customers & Problems

Validate an Opportunity Hypothesis
Instructor & trainee Intros Competitiveness, primary & secondary activities, customer
Effort vs. user value, A/B testing & customer interviews
journey maps

Introduction to Product Management

PM skills, goals & methodologies Create an Opportunity Hypothesis Define Product Requirements
Qualitative & quantitative methods, setting goals PRD, MVP & roadmaps

Set Product Objectives

User personas, metrics & use cases

WEEK 4 WEEK 5 WEEK 6

Start Building Develop Your Product II Get Hired

Design processes, product vs. design & sketching MVC, API design & team management Retrospectives, public speaking & resume reviewing

Develop Your Product I

Market Your Product Deliver and Present
Development methodologies, engineers & product, design
Channels, messaging & insights Capstone Project
patterns
 Agenda Accelerated

DAY 1 DAY 2 DAY 3 DAY 4 DAY 5

Strategy & Discovery Research & Define Design & Develop Launch Present

Create an Opportunity Hypothesis Start Building

Course Introductions Market your Product Deliver & Present
Qualitative & quantitative methods, Design processes, product vs. design
Instructor & trainee Intros Channels, messaging & insights Capstone Project
setting goals & sketching

Get Hired
Introduction to Product Validate an Opportunity Develop Your Product I Retrospectives, public speaking &
Management Hypothesis Development methodologies, resume reviewing
PM skills, goals & methodologies Effort vs. user value, A/B testing & engineers & product, design patterns
customer interviews

Develop Your Product II

Set Product Objectives Define Product Requirements MVC, API design & team
User personas, metrics & use cases PRD, MVP & roadmaps management

Understand Customers & Problems

Competitiveness, primary &
secondary activities, customer
journey maps
Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Module 3 > Section 1 > Industry Disruption Model

Industry
Disruption Model
Module 3 > Section 1 > Industry Disruption Model Unmute and Share Estimated time: 10 minutes

Instructor-Led Q&A:
The Model

1. Where do I start?

2. When to think of ideas versus opportunity?

3. When do we start building?

4. What comes after that?

5. How does it all come together?

Module 3 > Section 1 > Industry Disruption Model

Michael Porter’s Threat of

New Entry
Five Forces of Competitiveness

Why is it important?

● To understand how to be successful in the

industry. Supplier Competitive Buyer
Power Rivalry Power

Threat of
Substitute
Module 3 > Section 1 > Industry Disruption Model

To understand the model let’s frame it

in the context of Uber:

● Suppliers

● Buyers

● Competitive Rivalry

● New Entry Threat

● Substitutes
Module 3 > Section 1 > Industry Disruption Model

Threat of
Suppliers New Entry

● Develop a strategy with a distributor

that favors cost

● Determines costs Supplier Competitive Buyer

Power Rivalry Power
● Uber: Suppliers = Drivers

Threat of
Substitute
Module 3 > Section 1 > Industry Disruption Model

Threat of
Buyers New Entry

● Bargaining leverage

● Price Sensitivity
Supplier Competitive Buyer
● Uber: Buyers = Users of Uber Power Rivalry Power

Threat of
Substitute
Module 3 > Section 1 > Industry Disruption Model

Price sensitivity

1. Brand identity

2. Quality

3. Incentives = Customer Acquisition Cost

Module 3 > Section 1 > Industry Disruption Model

Threat of
Threat of new entry New Entry

● Drive market share away: This can be from

lower prices or new use cases

● Uber: New Ride Share Supplier Competitive Buyer

Power Rivalry Power

Threat of
Substitute
Module 3 > Section 1 > Industry Disruption Model

Threat of
Substitutes New Entry

● Replace with an alternate product

● Uber: Waymo
Supplier Competitive Buyer
Power Rivalry Power

Threat of
Substitute
Module 3 > Section 1 > Industry Disruption Model

Industry competitors

Cost Leadership Differentiation Focus

Involves a company that can produce A strategy in which a company A strategy that enables a company to
and sell its products and services at a distinguishes its products and value dominate a niche segment of a market
much lower cost than its competitors proposition to consumers in a unique that was underserved or address an
through supplier partnerships or way that competitors can't match. unmet need of an existing customer
production advantages that yields an segment.
opportunity for reduced pricing.
Module 3 > Section 1 > Industry Disruption Model

Cost leadership

A company that can produce and sell its ● Economies of scale

products and services at a much lower cost
● Operational efficiency
than its competitors via supplier partnerships
or production advantages. ● Cost-saving technologies
It can involve: ● Sourcing inexpensive materials
Module 3 > Section 1 > Industry Disruption Model

Key takeaways

Porter’s Five Forces of Competitiveness

● Suppliers

● Buyers

● Competitive Rivalry

● New Entry Threat

● Substitutes
Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Module 3 > Section 2 > Value Chain Assessment

Value Chain
Assessment
Module 3 > Section 2 > Value Chain Assessment Primary activities Secondary activities

Porter’s Value Chain Model

Firm infrastructure

MAR
Human Resource Management

GIN
Technology Development

Procurement

GIN
MAR
Marketing
Inbound Logistics Operations Outbound Logistics Service
& Sales
Module 3 > Section 2 > Value Chain Assessment

To understand the model,

let’s frame it in the context of Blue
Apron

● Primary Activities
● Support Activities
Module 3 > Section 2 > Value Chain Assessment

Primary activities

Considered involved in the development, sale and

adoption of the buyer as well as sales assistance.

1. Inbound Logistics

2. Operations

3. Outbound Logistics

4. Marketing & Sales

5. Service
Module 3 > Section 2 > Value Chain Assessment

Primary activities

Considered involved in the development, sale and

adoption of the buyer as well as sales assistance. Activities associated with receiving, storing,
and disseminating inputs to products
1. Inbound Logistics
EXAMPLE
2. Operations Transporting the raw fruits/vegetables/ meat
for a blue apron meal
3. Outbound Logistics

4. Marketing & Sales

5. Service
Module 3 > Section 2 > Value Chain Assessment

Primary activities

Considered involved in the development, sale and

adoption of the buyer as well as sales assistance. Activities associated with compiling the source
material into a final product.
1. Inbound Logistics
EXAMPLE
2. Operations Packing up the food ingredients into units to
match the receipts
3. Outbound Logistics

4. Marketing & Sales

5. Service
Module 3 > Section 2 > Value Chain Assessment

Primary activities

Considered involved in the development, sale and

adoption of the buyer as well as sales assistance.
Activities that distribute the product to the
buyer/consumer physically or digitally
1. Inbound Logistics

2. Operations EXAMPLE
Distribution of food through the postal system
3. Outbound Logistics

4. Marketing & Sales

5. Service
Module 3 > Section 2 > Value Chain Assessment

Primary activities

Considered involved in the development, sale and

adoption of the buyer as well as sales assistance. Activities with building awareness that
facilitate the purchase or download of the
1. Inbound Logistics product

2. Operations EXAMPLE
Commercials, mailing campaigns
3. Outbound Logistics

4. Marketing & Sales

5. Service
Module 3 > Section 2 > Value Chain Assessment

Support activities

Support activities are the functions that support the

primary activities that deliver value to customers.

1. Procurement

2. Technology Development

3. Human Resource Management

4. Firm Infrastructure
Module 3 > Section 2 > Value Chain Assessment

Support activities

Support activities are the functions that support the

primary activities that deliver value to customers. The business function of purchasing source
materials used in the “Sourcing” value chain
1. Procurement flow

2. Technology Development EXAMPLE

Finding the farmers for the food
3. Human Resource Management

4. Firm Infrastructure
Module 3 > Section 2 > Value Chain Assessment

Support activities

Support activities are the functions that support the

primary activities that deliver value to customers. The business function that supports the
ongoing innovations of the product.
1. Procurement
EXAMPLE
2. Technology Development Online ordering from customers, and
predictive demand forecasting of meals
3. Human Resource Management

4. Firm Infrastructure
Module 3 > Section 2 > Value Chain Assessment

Support activities

Support activities are the functions that support the

The business function in determining how to
primary activities that deliver value to customers.
hire, retain, train, and compensate employees
at the company.
1. Procurement

2. Technology Development EXAMPLE

Intensive training and development program
3. Human Resource Management for employees

4. Firm Infrastructure
Module 3 > Section 2 > Value Chain Assessment

Support activities

Support activities are the functions that support the

The business function that consist of but not
primary activities that deliver value to customers.
limited to finance, accounting and government
affairs.
1. Procurement

2. Technology Development EXAMPLE

Google's culture is characterized by a relaxed,
3. Human Resource Management open, and inclusive environment

4. Firm Infrastructure
Module 3 > Section 2 > Value Chain Assessment

Value Captured ($$$) –

Cost of Creating that Value ($$$)

= Margin
Module 3 > Section 2 > Value Chain Assessment

In general…

1. Value mapping helps to align owners of each

component and to align interdependencies

2. For example, in our Blue Apron framing - if

the goal is margin, each farmer-to-distributor
needs to see the impact
Module 3 > Section 2 > Value Chain Assessment

Amazon value chain example (Power of

linking to maximize margin)

Firm infrastructure

MAR
Human Resource Management

GIN
Technology Development
Personalized customer recommendations engine / Web hosting

Procurement
Negotiation power

GIN
Marketing & Sales

MAR
Inbound Logistics Operations
Outbound Logistics Amazon Prime
Vertically Rapid order dispatch Service
Distribution network Easy returns
integrated suppliers AWS
Affiliate relations
Module 3 > Section 2 > Value Chain Assessment

Key takeaways

1. The value chain mapping system

2. Primary & secondary activities

3. Porter's value chain framework

4. Cost structure
Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Module 3 > Section 3 > Technology Strategy

Technology Strategy
Module 3 > Section 3 > Technology Strategy

Types of PMs

General Technical Customer-Focused Project-Focused

It is the main focus of this These are highly technical, These favour customers, but AKA a project manager;
course - these PMs are the sometimes focused on your customers may also be someone who owns the
most flexible. infrastructure, usually have technical (e.g. developers, schedule instead of focusing
an engineering background, internal engineers). on the overall plan & goals.
and have little to do with
design/outward-facing work.
Module 3 > Section 3 > Technology Strategy

Basically…

You should know enough to understand and ask basic

questions to make an informed decision that impacts the end
goal of the team.

Someone said “You should speak the language even if you

don't code”.
Module 3 > Section 3 > Technology Strategy

What is technology strategy?

The set of underlying software frameworks,

programming languages, and software services &
platforms that your product is built on top of to launch
and deliver to end-users
Module 3 > Section 3 > Technology Strategy

Why should you care?

Because it impacts your end goal on: ● Flexibility: How easy is it to extend or migrate
to new technology over time?
● Velocity of product Development: Using
Wix/WordPress versus a homegrown solution ● Cost of developing and maintaining your
using Angular/React/PHP/JavaScript. product: Does the technology you use have
fees and maintenance costs? Are you hosting
● Scalability of the product: Is the technology
in-house or through a vendor?
used for the MVP going to scale for 100k users
or 1M users? Does it leverage existing modules ● Engineering team growth: Are you using a
of your platform/infra? mainstream technology that has many
developers or a niche?
Module 3 > Section 3 > Technology Strategy

Common stacks to consider

WEB FRONT-END STACK

WEB BACK-END STACK

MOBILE FRONT-END
Module 3 > Section 3 > Technology Strategy

Common stacks to consider

WEB FRONT-END STACK

● UI
● Local Business Logic
● Analytics WEB BACK-END STACK
● Database
● Server Infrastructure
● Server OS
MOBILE FRONT-END
● UI
● Local Business Logic
● Crash Report
Module 3 > Section 3 > Technology Strategy

Common stacks to consider: Netflix

WEB FRONT-END STACK

● UI - HTML
● Biz Logic - Node.js WEB BACK-END STACK
● CI/Testing - Jenkins
● Google Analytics
● Code Repo - GitHub
● Program Lang - Java
● Database - Amazon
MOBILE FRONT-END ● Server Infra - Amazon
● Stack ● Server OS - FreeBSD
● UI Kotlin / Swift
● Video Decode - VP9
● Crash Report - Firebase
Module 3 > Section 3 > Technology Strategy

Case study

Scale a US online streaming platform to international ● What is the incremental cost of launching a
markets new market after the first market?

Key questions to ask: ● What is the additional infra cost of adding new
markets, can we change the architecture to
● Will the solution help us scale more markets
reduce this cost?
with ease?
● Can the current backend support multiple
● Can the same UI support different languages?
languages or CC?
Module 3 > Section 3 > Technology Strategy

Key takeaways

1. Factors to consider:

○ Velocity of product development

○ Scalability of the product
○ Flexibility
○ Cost of development and maintaining your
product
○ Engineering team growth

2. Major buckets in your stack

○ Front-end & back-end

○ Web and mobile
Module 3 > Section 3 > Technology Strategy

Time for a break

Stretch, breathe,
grab a drink

Estimated time: 5 minutes

Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Module 3 > Section 4 > Customer Development : New Customers

Customer Development:
New Customers
Module 3 > Section 4 > Customer Development : New Customers Unmute and Share Estimated time: 10 minutes

Instructor-Led Q&A:
New Customers

1. How can you validate if your idea has a product

market fit with new customers?

2. What are the best ways to acquire and sustain new

customers?
Module 3 > Section 4 > Customer Development : New Customers

Customer development

1. A way to validate if your customers are the right target

customers

2. A way to see if your customers have a need for your

product

3. An interview/conversation with customers

Module 3 > Section 4 > Customer Development : New Customers

Customer development is NOT…

● A focus group to get ideas/product vision

● A chance for customers to give you a wish list

● User testing for any designs

Module 3 > Section 4 > Customer Development : New Customers

Customer development

Have an idea for what you want to do next before

doing customer development because it will let you
focus your discussions with customers.
Module 3 > Section 4 > Customer Development : New Customers

Planning for interviews

Create an opportunity hypothesis so that you can focus

on:

● Which customers

● What goals they’re trying to achieve

● What pain points

Module 3 > Section 4 > Customer Development : New Customers

Customer development

Hypothesis-driven approach to understand:

● Who your customers are

● What problems they have

● How they are currently behaving

● What solutions they will pay for

● How they will buy solutions

Module 3 > Section 4 > Customer Development : New Customers

Mindset

Don’t assume that your ideas and intuitions are

correct.

Instead, try to poke holes in your ideas to prove

yourself wrong, and to invalidate your hypotheses.
Module 3 > Section 4 > Customer Development : New Customers

A key insight to think about is...

Product development
When & what can a
customer buy?

Customer development
Will they buy it?
Module 3 > Section 4 > Customer Development : New Customers

Example

It is common for a team to have dedicated user

research plans for immediate product needs.

It is helpful to do this exploratory research on just a

PM mock or concept to get a pulse before doing any
development investment.

Users' time is precious so you want to do this

judiciously, but it is super helpful, especially for idea
validation & fit.
Module 3 > Section 4 > Customer Development : New Customers

Key takeaways

1. Will they buy it?

2. Not a replacement for product development

3. Not product research

4. Added input to the product development life cycle

Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Identifying 3 Tiers
of Noncustomers
Module 3 > Section 5 > Identifying 3 Tiers of Noncustomers

Tier 3
“Unexplored”

Tier 2 “Refusing”

Tier 1 “Soon-to-be”

3 Tiers of noncustomers

Current Market
Module 3 > Section 5 > Identifying 3 Tiers of Noncustomers

Soon-To-Be

Individuals who minimally use the current market Tier 3

“Unexplored”
offerings to get by as they search for something better.
Tier 2
● Markets tend to be stagnant and development “Refusing”
and growth decline as the number of soon-to-
Tier 1 “Soon-
be noncustomers remain on the sideline. E.g: Wii ?
to-be”

● The key to unlocking this segment is to better

understand the commonalities to help
formulate the need of the noncustomers. Current
Market
Module 3 > Section 5 > Identifying 3 Tiers of Noncustomers

Refusing

Individuals who either do not use it for financial, Tier 3

“Unexplored”
connectivity, and/or accessibility issues
E.g: Tier 2
1. Current market offerings don’t meet Walkman “Refusing”
expectations or are beyond their means.
Tier 1 “Soon-
to-be”
2. The key to unlocking this segment is:

a. To better understand the pricing

relative to the competition
Current
Market
b. To evaluate the existing functionality
vs. consumer expectations
Module 3 > Section 5 > Identifying 3 Tiers of Noncustomers

Unexplored

Individuals that haven’t been targeted as potential E.g:

Tier 3
“Unexplored”
customers by any participant in the industry.
Tier 2
1. Largely due to the fact that their needs and “Refusing”
business strategic priorities haven’t been fully
Tier 1 “Soon-
aligned. to-be”

2. Market research on the trends and existing

expectations will require a shift in priorities
and/or building a small R&D startup within a Current
company to specifically go after these Market
opportunities.
Module 3 > Section 5 > Identifying 3 Tiers of Noncustomers

Key takeaways

Think about how you grow your customers

from the target customers you have today to
the ones that are:

1. Soon-to-be your customers

2. Refusing to be your customers

3. The unexplored market

Index > Session

Agenda

1. Industry Disruption Model

2. Value Chain Assessment

3. Technology Strategy

4. Customer Development: New Customers

5. Identifying 3 Tiers of Noncustomers

6. Customer Journey Maps

Module 3 > Section 6 > Customer Journey Maps

Customer Journey Maps

Module 3 > Section 6 > Customer Journey Maps

What is a Customer Journey Map (CJM)?

1. A CJM (sometimes called a user journey map or UX 3. Punchline:

map) is a visualization of a customer’s experience with
your brand, from awareness to purchase and beyond. An effective customer journey map is one that
promotes empathy and provides a clear vision for
2. Customer journey maps (CJMs) typically include touch improving customer interactions. There are no rules
points, customer sentiments, pain points, and actions, about what, exactly, a visualization of that has to
plotted in sequential order. The goal isn’t just to create look like !!
a timeline, it’s to encourage empathy and help
designers and stakeholders understand how their
customers’ needs and feelings fluctuate over the course
of their journey. With this shared understanding, teams
can better identify opportunities for innovation and
improvement.
Module 3 > Section 6 > Customer Journey Maps

Customer
Journey Maps

Customer Journey Maps create

a shared frame of reference
around the customer experience.
The key thing is that it helps
you develop empathy with your
audience.
Module 3 > Section 6 > Customer Journey Maps

SARAH

SCENARIO
Sarah is going to the movies.
She is excited to go out for
the night and will meet her
friend at the theater

EXPECTATIONS

Great movies
Friendly staff
Good seat
Module 3 > Section 6 > Customer Journey Maps

Why is it needed?
Module 3 > Section 6 > Customer Journey Maps

Objective: Furthers organizational

evolution toward customer-centered thinking

Customer Journey Maps

Distribute key customer insights in a

Identify specific areas of opportunity to
form that is both usable and easy to
drive ideation and innovation.
understand.
Module 3 > Section 6 > Customer Journey Maps

Customer journey maps

Customer Journey Maps

Backstage
Front-stage “what happens at the company,
“What the customer sees” & the experience of the
customer”
If you are interested in learning
more about Customer Journey
Maps, you can check out our
Product Leader Certification.

On-Demand Module 3: Product

Storytelling
Module 3 > Section 6 > Customer Journey Maps

6 Steps

1. STAGE 2. ACTOR 3. TIMEFRAME

Decide whether you are Define the main actor in your Define the timeframe of your
mapping the current state of a map. Is it a customer, map.
user or a target/aspirational employee or stakeholder? It
may be multiple, especially if
state that you would like to you have a marketplace.
reach.

4. DEPTH 5. TOUCHPOINT 6. CHANNEL

Define the perspective and A point of interaction between A medium of interaction with
level of depth. a person and any agent or customers or users.
artifact of an organization.
Module 3 > Section 6 > Customer Journey Maps > Exercise Unmute and share Estimated time: 110 minutes

Breakout Group Discussion:

Customer Journey Map
EXPECTED OUTCOMES
Create a Customer Journey Map for the
booking process of an accommodation ● Identify your target audience for your initiative. These
people are most likely to buy and get the most value
provider. Fully and clearly define the personas
from your initiative.
most likely to buy and get the most value from
your initiative: Who are you targeting? Who ● Create a shared frame of reference around your customer
experience with a customer journey map.
are you NOT targeting?

Customer Journey Map Template here.

Module 3 > Section 6 > Customer Journey Maps

Key takeaways

1. One purpose of a CJM is to identify innovation and

ideation opportunities.

2. CJMs also show how to deliver key value to customers.

3. There are typically 6 steps to a CJM.

4. It's important to develop empathy for our customers.

Q&A