5 product management frameworks used by billion dollar companies

5 product management frameworks used by billion dollar companies

Product management frameworks – creating repeatable success

Many of today’s most successful companies, like Amazon and Spotify, have reputations for consistently delivering great products. That doesn’t happen by accident. Those companies often have clear frameworks for how they manage and build products. Those product management frameworks give teams a repeatable way to improve upon and build their products consistently.

Without a product management framework, repeating the process that built the last great product would be really difficult. Think about baking a cake. If you follow a recipe, you’ll have a good chance of making a delicious cake. You may even have it memorized and can keep making great cakes on your own. But if you want to run a bakery with various workers (bakers, buyers, cashiers, etc.), you need that recipe to keep churning out wonderful cakes to have a great bakery.

If you want your company to build products like those you see from Spotify, Amazon, Shopify, and more, you need to use a product management framework.

We’ve researched the product management frameworks from five successful companies to find out how they consistently create great products. These frameworks give you repeatable guidelines on how you should do product discovery, prioritization, and execution.

1. Experimentation: Spotify tests and measures to deliver an exceptional experience

Spotify is perhaps well known for its autonomous “squads.” Squads consist of six to twelve employees who have the freedom to work in whatever way suits them best. That allows different groups within the company to work on the projects that make the most sense for them.

Even though these squads are autonomous, they’re highly aligned. Each squad has a leader, whose goal is to align the squad behind one mission. Each mission focuses on one part of Spotify’s product.

product management framework Spotify
Source: Spotify

Technically, this allows for small, frequent, and decoupled releases. Each team or squad can focus on their specific goal without disrupting the work of others.

This organizational structure also gives way to Spotify’s experimental approach of iterating and delivering a great product experience. Their focus is not only to deliver a great product but to do so at minimal risk and operational cost. Given the size of their user base, poorly designed features can lead to painfully negative consequences.

They follow a model of Think It, Build It, Ship It, Tweak It.

  • Think It: During discovery, teams research ideas, validate problems, and experiment with concepts. This is a “high risk” stage meaning that if they released something without this vetting, the probability of unhappy customers could be high.
  • Build It: During this stage, teams develop their MVP. They test this MVP on a small subset of users to capture feedback. They also spend time assessing the quality of their code and design.
  • Ship It: When shipping features, Spotify operates with a limited blast radius. They’ll release a new feature to a small set of Spotify users. Then, they monitor how those people use that feature. If the feature is a success, they’ll roll it out to the entire user base. If it’s a failure, they go back to the drawing board.
  • Tweak It: This is the longest stage of the cycle. Teams spend a lot of time evaluating the data and making tweaks and adjustments to the product or feature. They also fine tune the operation to reduce cost and optimize for performance.

2. Working backward: Why Amazon starts by focusing on the finished product

Amazon approaches product management by “working backward.” A former GM of Amazon, Ian McAllister, explained this approach in a Quora thread.  Amazon starts any new product by explaining precisely what they hope customers and the media will say when they get their hands on it.

Amazon doesn’t start by outlining a new product’s intended features or capabilities. At this point, they focus on the customer reaction they’re hoping to elicit.

When a product manager has an idea for a new product or product feature, they write an internal press release that announces the finished product. No one may have done any development on the idea at this stage.

The press release focuses on a customer problem and how the current solution doesn’t solve that problem. From there, they explain how the proposed new product will blow away existing solutions.

These press releases aren’t just a rough draft of an idea; product managers have to iterate on them until they clearly explain how the product will help a customer. Andy Jassy, Amazon’s head of AWS, has gone through as many as 31 drafts of a press release before presenting it to anyone.

If a product manager can’t write a convincing press release, they scrap the idea. The general rule is that if the press release is hard to write or difficult to explain, the finished product likely won’t succeed. Amazon wants all of its products easy to understand and simple to use. With those goals, it should be easy to write a press release that makes sense even without the finished product.

Once the leadership team approves a press release, the product team uses it as a roadmap for development.

3. Two equal parts: Typeform’s two-part framework emphasizes product discovery

Typeform uses a two-part product management framework. The first half focuses on product discovery, which Typeform considers to be crucially important. The second half of their framework focuses on delivery.

product management frameworks typeform

Discovery consists of identifying problems, brainstorming solutions, and validating solutions with a testable product.

Once a feature clears Discovery, it moves to delivery, which is made up of three more steps: scope, execution, and measurement, and iteration.

What sets Typeform’s framework apart is its unique approach to MVPs. They don’t have just one version. Instead, they break the MVP into three parts:

  1. Earliest testable product – The testable product is the fastest way to get data on an idea. So as not to spend too much time developing an MVP, the earliest testable product might be something as simple as a fake door test.
  2. Earliest usable product – A “usable” product is an actual product that early adopters will use without being incentivized. At this stage, the product has baseline functionality and may lack “delight,” but the purpose is to collect data and feedback. Typeform is trying to figure out whether it’s worth putting more hours into developing the full product.
  3. Earliest lovable product – This is the product that customers will love. They’ll tell their friends about it and are willing to pay a premium for it. It’s still not 100% finished, but it’s the closest thing to a finished product at this stage.

Breaking down your MVP into bite-sized pieces will help you get feedback and data during every step of the process. That way, you can use a much more measured and testable approach to delivering something your customers want.

4. Customer obsession: How GoGoVan’s fixation on customer problems is a big advantage

GoGoVan was Hong Kong’s first unicorn. Their current approach to product management comes from their obsession with finding customer problems.

GoGoVan structures its product teams into one of nine business objectives. Each team works on a single objective, which allows employees on each team to get a deep understanding of their goals.

They structure product discovery based on three pillars: user interviews, sales interviews, and usage data. Product managers spend a lot of time talking to users and listening in on sales calls. Their goal is to get the most in-depth understanding of their users as possible. They also mine usage data to see where inefficiencies exist. They use all this information to develop the best solution to address each problem area.

Once they’ve identified problems and potential solutions, GoGoVan prioritizes which features will have the highest impact on their users.

Before they start building anything, GoGoVan puts themselves back into the customer’s shoes one more time. They review their potential solutions to try and understand if it’s the simplest solution possible. Once they’re satisfied that they’ve found a simple solution, they still don’t start building anything. There’s one more step to go, and it’s crucial.

Before GoGoVan spends any time building a product, they define success metrics, which must link back to the single objective for their team. Defining these metrics avoids any instant reflex reactions when the data starts pouring in.

At this point, GoGoVan pushes the solution into development. Once it’s finished and rolled out to users, they circle back and review the success metrics. If the product feature isn’t hitting them, it’s back to the drawing board.

5. Growth: Why Shopify’s growth framework takes products to new heights

Shopify uses multiple frameworks and different structures across many of its teams. The most interesting is the product growth framework. Its goal is to grow the adoption of a product, not just build it. Shopify’s GM, Sylvia Ng, developed this framework.

The product growth framework has eight steps:

  1. Stage your company – First, you need to understand the stage of your company and your product. Are you trying to find product/market fit? Are you trying to launch an MVP? Whatever it is, define it. A lot of companies dive into product growth without identifying their stage.
  2. Know your strategic goal – This is another one you have to define ahead of time. What’s your goal for your product? Are you going after profitability, new users, or something else? Articulating this ahead of time will help you identify what your product needs to do to drive growth.
  3. Model the funnel – What’s the process that users will take to start using your product? Are they going to be existing or new users? These are questions that a model will help you answer. Modeling your funnel will also help you understand what areas you need to improve on to really grow your product.
  4. Define your north star metric – You need a metric to help you understand whether you’re headed in the right direction. Your north start measures progress immediately, or at least incrementally, and may differ slightly from your overall strategic goal.
  5. Create a prioritization grid – Get input from everyone working on this project about what features they think will create the most significant impact for your users. Everyone on your team is going to have different ideas about prioritization, which is why it’s essential to hear from multiple people.
  6. Set targets – Targets aren’t goals or deadlines as they’re simply milestones to complete in the near term. They help keep your team on track and working toward your north star metric and your strategic goal.
  7. Work on execution – Efficient execution enables every step of product growth. You need to work with your team to create an efficient process for all phases of product development—from prioritization to delivery.
  8. Develop a multidisciplinary team – Your team needs skills in product, engineering, design, data, and marketing. That doesn’t mean you need one person dedicated to each task, but your whole team should cover these fundamental skills.

Following this framework will give you a repeatable way to grow your product. Sylvia used this framework at several companies, which means it’s easy to adapt, and you can use it at your company.

Consistency is the key to great products

Consumers might notice if you create one great product. But if you never do it again, they’ll forget about you and move on to the next thing that comes along.

Consistently putting out great products builds your brand, which creates not only customers, but also advocates and evangelists. It’s one of the reasons Spotify, Shopify, Amazon, and the others are so well known. They consistently deliver great products. Product management frameworks will help you deliver products like many of today’s successful companies.

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