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Hackernoon logoTips for Product Managers to Improve ROI by@pranavambwani

Tips for Product Managers to Improve ROI

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@pranavambwaniPranav Ambwani

Product Manager @ Internet Brands

Minimum viable product (MVP) is minimum but creates the maximum value. You’ll learn the most about your customers after you first launch your product, which is the MVP.

You should use this opportunity to learn and iterate on your product. This will help exponentiate the value you’re delivering to customers.

Return on investment (ROI)

For the amount of dev and design resources you’re investing how much are you getting back?

Try to think about all resources (money, people, time, etc.) that you’re investing in a project and the amount of value that the effort is returning for the customers as a result.

The time value of shipping

The earlier you ship your product, the more valuable it will be to your customers.

Your product today is worth more than what it will be tomorrow. The concept is similar to that of inflation in assets wherein prices rise with inflation over time, meaning that one dollar today will buy less stuff in the future.

Similarly, the time value of shipping is a simple idea: delivering customer value today is worth more than delivering it tomorrow.

If you choose to deliver value later, you need to account for inflation in customer expectations, which means that your product will need to be better to compensate.

First-principles

When you need an innovative solution to a complex problem, you should break the problem into its fundamental constituents. Then, reconfigure those parts to build your solution.

Inversion i.e. working backward

Most of us start at the problem statement and then explore solutions.

When working on a problem, envision the ideal customer experience, and work backward to figure out what you need to accomplish those goals.

Not to say that working backward is a better way of approaching problems, but that it offers a different perspective.

Speed vs. Quality

When making trade-offs between speed and quality, you should ask yourself two questions:

How important is the problem I’m trying to solve (pain vs. pervasive)? How correct is my solution?

The importance of the problem and correctness of the solution will eventually determine when to prioritize what.

Although speed and quality are not mutually exclusive, they are inversely related.

The law of diminishing returns

In economics, diminishing returns refers to the decrease in the incremental output of a production process as we increase the amount of a single factor of production while keeping all other production factors remain constant.

When applying this theory to Product, as you continuously focus on improving the same feature, the amount of value that you create for your customer will depreciate for every unit of effort.

As you invest more effort and time into a feature, the delta will approach zero, and the value that a customer gets will ultimately plateau.

Flywheels i.e. recursive feedback loops

Flywheels help visually represent states where elements of your business feed off of each other to accelerate growth.

In a flywheel, each element drives the next, and improving any element can accelerate the flywheel, accelerating the growth of your business.

If you’re managing a flywheel, you should do everything to keep it spinning in a positive direction because it’s equally powerful the other way.

The Eisenhower Matrix

A classic framework that I recently stumbled upon is the Eisenhower Matrix, which can help effectively prioritize tasks.

The matrix can help you decide whether something is worth doing, and if so, when.

There’s no methodology for using these mental models. If you try to use these as a checklist, you’ll end up confused and frustrated.

Instead, see how you can establish connections with the rest of your mental models. Such an approach will allow you to form a web of networked thoughts that can help communicate the ideas behind complex decisions.

As you accumulate more models through experience, the better you’ll get at using these in any problems you encounter as a product manager.

Also published on: https://uxplanet.org/mental-models-for-product-managers-ad637b136fac

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