Week 1: Problems, Opportunities, and Customers · Lesson 5 ·
Knowing where in its lifecycle your product falls will help you anticipate its needs. So in this lesson, we go over the tools you can use and the signals you can identify to determine where your product is at and what you need to be focusing on.
It's important to understand what stage of the product lifecycle your product falls into - conception, development, launch, growth, maturity, or decline.
Whatever stage you're dealing with changes your focus as a product manager. For instance, if the product is in its launch stage, your focus is on helping it to grow; if you're dealing with a mature product, you're looking for ways to spur more growth. Knowing what step you're at is going to help you look ahead to where you need to be. And knowing where you're going is, as it is in most cases, going to help you be a better product manager.
Some common signals that can help you determine a product's lifecycle stage:
1. Number of Sales - an especially fantastic indicator for one-time purchases. Are people actually buying it, whether it's a physical product or software.
2. Revenue - is the total number of sales multiplied by the product's price. But it can also be deceptive, because higher priced product sales don't necessarily imply growth.
3. Customers/Users - Customers are the people who buy your product, and users are the people who use your product. They can be one and the same (iPhone users bought their product and use them), but Facebook users didn't have to pay for the product they use. So looking at the number of users over time is a good way to track growth.
4. Rate of Growth - The percent of change from one period to the next. You can google the formula, but you have to pick the metric (the periods you're defining) you're tracking. It can also be misleading. If your user growth decreases, that doesn't mean you're declining. As long as you have positive growth, you're growing. When you have a negative percentage, that does indicate decline.