Building a product from 0 to 100 in only 4 stages

In previous roles I worked on products that already existed, and my job was to help them grow and continue. Recently I joined a team that had no product and wanted to build something entirely new from scratch. Managing a mature product is very different from managing a product that does not yet exist. Below we talk about building a product from zero. In practice the product manager is responsible for building the product, but how they do it matters a great deal.

Successful new products—products that create value at scale for their audience—did not arrive fully formed. Like people, products pass through stages of a life cycle. In product-management processes for this kind of product, you cannot operate the way you would with a mature product.

Naming the stages of product development helps you understand where the product stands and identify what matters most.

Stage 1: Define the human outcomes of the product

Human outcomes are what your target audience receives after using the product. Before you start visual design or write any code, you need a clear product vision that reflects what people need and want. Building a product without a real understanding of the results it has on everyday life can put the product’s position at risk.

So what should you do to define the right human outcomes?

1. Identify the problems you want to solve for people. A human problem is a need or issue people on the street already know, and if you talk to them about it, they understand it. Common, real problems are things people want to do in daily life but cannot currently solve. First try to test the truth of this problem in people’s real lives. Also consider how far your company wants to go in solving it and how deep it wants to go. What existing behaviors, work processes, research, or data show that this problem exists? Is it a surface problem (“I want to order food with my phone”) or a root problem (“I want to eat right here, right now”)?

2. Choose a primary target audience. Who needs your product most? For whom is this problem large and painful enough that they will take a step to solve it? Understanding how your product could affect a large population is great, but successful products start with a small audience of early adopters and aim to build something those people love. Then they widen the audience. Building a product without knowing who it is for is like building a high-quality display for people who cannot see. Who do you think the first 1,000 people interested in your product will be?

3. Imagine your product is highly successful. What do users do with it that they do not do with other products? As the product grows and spreads, what change in behavior or mindset appears in your users? What mental model do you expect early customers to have when they use the product? If you were designing a marketing campaign, how would you present the product’s value?

Stage 2: Product–market fit

Reaching product–market fit means building and pivoting until you see the expected outcome from your users. To build the right product that can fit the market, you need initial guesses and hypotheses. The key is defining good hypotheses and finding answers to them as quickly as possible.

To move toward product–market fit you can:

1. Build an initial MVP focused on your target segment. Find the first 1,000 people you think will like the product and create a complete end-to-end experience for them. The more tightly you define this audience, the more precise and suitable the experience becomes. If early users cannot find a feature you added, cannot understand how to use it, or the product is slow and full of bugs, you will not be able to test your hypotheses. So follow MVP fundamentals as closely as you can.

2. Define success metrics that show how you expect users to perform. Your success metrics prove whether your work is succeeding or failing. Of course things do not always go as expected, and you will see ups and downs. A good example: “The return rate of users who use feature X is 30 percent, and people who use this feature share their experience with others three times more than before.” (Volume metrics like this one move easily up or down as you increase advertising, so they are not a good choice at this stage.) Always treat return rate as a case where the user comes back because of the value you deliver. Because you are working with more specific segments at this stage, expect changes to behave like step functions (instead of a 5 percent increase, look for 2x or 3x).

3. Always assume you are here to learn, not to ship a product to the whole world. At this stage the goal is to validate that the product works well for one audience segment, or that some of your hypotheses are wrong. Both are useful outcomes because there is a lot to learn. This mindset helps in two ways:

• Not shipping is not failure: In 0-to-1 product development it is unrealistic to expect every hypothesis to be right and produce a positive result. Teams that look for why their assumptions were wrong should be encouraged, even if the result is a full change of direction or stopping the project. If everything we built had to work, we would only need to build and keep going.

• Avoid premature optimization: Until you can clearly present the value the product creates, do not worry about a weak revenue stream or time spent in the product. You also should not worry about comparing the product with similar products in the market. That is what the next stage is about. Building a product, especially technology products, is very different from constructing a building. Do not assume that whatever entered the product can never change.

Stage 3: Refinement

Congratulations: the product has reached product–market fit for a specific audience segment. Now, before you present it to a larger audience, bring in all the constraints you ignored in earlier stages.

Refining the product means:

1. Optimizing trade-offs in the ecosystem

We have all been in the situation where the product is ready to share and attract an audience, but it does not produce the revenue we expected. Or you are sure the target audience is happy, but you have put something in the product that the team believes cannot scale. Or the new product adds 20 percent to the current app’s size. Or the product does almost the same work as another team, and shipping both is confusing.

This stage is somewhat hard and requires gathering a lot of data, a lot of effort, and sometimes cross-team work. Always remember that people do not see your company as a collection of products; they see one experience. When you have not refined well, the product gets more complex and confusing every day. The good news is that if you followed the previous stages well, you should have validated that the product works for a specific audience segment, which helps you get ready to grow.

2. Checking whether this product is profitable for the company

One important reason to ship new products is to grow the company’s share of the market. If this product weakens other parts of the portfolio, you need to weigh the value it offers in return. Does it create other value in the future, or does it prepare a framework you can use over time to create value? If not, instead of pushing to build this product, you should re-examine and make the right decision.

3. Creating a high-quality experience

You may have implemented some parts of the product with less care, especially while looking for product–market fit. The UI is not implemented precisely, buttons are not aligned under a consistent framework, there are typos, pages take longer than the average standard to load, and so on. Now that you are in the refinement stage, it is time to make what you built the way it should be.

Read more: Good product manager, bad product manager

Stage 4: Growth

Product growth means understanding which changes make the product more valuable to more people, especially people who already use it. This is the stage many teams want to start from, even though they must complete the three stages before it. So how can you bring more people into the product funnel?

A successful growth model…

1. Has a plan for expanding into new segments

Who are the next 1,000 users of your product? Who could benefit from the current product but still does not know about it and does not use it? What new capabilities do you need to add to make it more valuable for those people? Expanding into a new market segment can consume a lot of energy and resources. You may even have to start again from stage 1 for the new segment.

2. Has a plan for increasing user activity with the product

What changes increase value for current users? What differences and similarities exist between first-time users and people who use the product daily?

3. Continuously reviews the effectiveness of the product funnel

As more people use the product, the funnel becomes clearer. You should always review the effectiveness of this funnel and conversion rates, especially when you see a sharp drop at one stage.

An article by Julie Zhuo, VP of Product Design at Facebook

To read more articles on product discovery, click here.