Understand the Product and Set Goals

Next, we must take our understanding of the product and use it to set goals that connect it back to the mission statement. At a high level, we should use this framework step to answer the question: why does this product/feature exist for the company?

How to determine why a product exists

Many times, this depends on the type of business. If it’s a social media company like Facebook, most features exist to drive engagement on their platform. We want to focus on sales and revenue for a problem that relates to a B2C (Business-to-Customer) or B2B (Business-to-Business) model.

Let’s take the example of Netflix as a B2C company and return to the free trial acquisition problem. We should clarify that the free trial exists to acquire new users and engage them in the product to convert them to paying users. For Amazon, if we’re measuring the success of Amazon Prime, we want to understand that it exists to increase the number of orders that users make on Amazon, as well as the overall investment in the Amazon ecosystem.

For a marketplace business, such as Uber or Airbnb, the goals are usually to increase revenue, but with a focus on long-term retention, such as a user coming back to use the platform many times. Therefore, we want to look at metrics that increase the lifetime value of a customer, vendor, and all marketplace users.

Lastly, if the company is focused primarily on growing its business, as is the case for many startups, we need to prioritize growth as the main objective. A feature related to sharing, or not related to the company’s main business model, may focus more on growth, as it is an attempt to gain market share and traction.

Key questions to ask

• Why does this product/feature exist?
• List all of the goals of the product and company.
• What type of business is it? (Marketplace, B2B)
• How does the product/feature help the business? Does it increase users, retain users for longer, increase product usage, or directly make the user more money?

Answer (Facebook Events)

Facebook Events helps Facebook users connect with other users, so its goal is to increase engagement on the Facebook platform. This can specifically mean increasing the number of interactions among users and helping them find meaningful interests in different Facebook Events. Users can post pictures and posts in the event, list their availability, and allow users to find events that they would not have known about before.

Goals of Facebook Events

• Increase engagement and interactions between users
• Grow their users’ social network and friends