Gone are the occasions when the sketch on a serviette out of your lunch was sufficient to safe your organization Collection A funding. Within the present economic system, traders are far more rigorously evaluating the place they’ll make investments their capital.
For those who handle to catch their consideration, eventually within the course of your complete firm goes to bear a due diligence. For those who’re a software program product firm, your product and it’s growth will obtain plenty of consideration. Consideration that may be utterly new and overwhelming to any product chief.
Throughout spring 2022, we went via the precisely such analysis and we efficiently secured $40 million in progress capital. And since there’s little or no info on-line about what you may count on from such a course of, I’ve determined to share our expertise. On this article, I write about what inputs had been required from us through the very detailed product analysis, my advised define, and my suggestions and finest practices for every half.
Even when your group shouldn’t be looking for an funding in the intervening time, having a transparent understanding of the areas described on this article (and even higher, having them documented) is — in my view — completely needed for any current or aspiring product chief.
Let’s dig in.
Objective: In beneath half-hour showcase your product’s distinctive worth proposition, key capabilities, and circulate to individuals who doubtless haven’t seen it earlier than. And who will doubtless get entry to the demo surroundings later for deeper exploration.
Proposed define: Begin really outdoors of your product and put together 2–3 intro slides. Clarify the demo settings and what are the primary subjects that you simply’re going to cowl. After which dive straight into your demo surroundings.
My suggestions: Go gradual and keep away from frantic clicking round. Use a cursor highlighter. Describe what you’re doing, spotlight the primary worth factors, and don’t be afraid to pause and summarize the previous couple of steps. Do not forget that that is doubtless the primary time your viewers sees the product in better element. And don’t overlook to report it — it will probably turn out to be useful later.
Objective: Reveal how do you concentrate on the way forward for your product. Showcase that you’ve plan lasting longer than subsequent 6 months. Present confidence in your product’s longevity and nice future.
That is an important a part of the due-diligence course of that may be delivered by you as a product chief.
That is the place you need to be assured and shine. Don’t underestimate this half beneath any circumstances.
Prompt define:
- Product roadmap inputs — What has affect over your product roadmap? What are the inputs and qualifiers?
- North Star metric — What’s the single metric that finest captures the core worth that your product delivers to your prospects?
- Lengthy-term imaginative and prescient & differentiation— What’s your plan to win the lengthy sport? How do you intend to face out within the crowded market? What’s your technique? What’s your distinctive worth proposition in the long run?
- Product core values/pillars — What are the core ideas your product stands on?
- Roadmap outlook — A visible overview of your roadmap. This actually relies on you and the way do you’re employed along with your roadmap. Do you have got a function primarily based roadmap? Theme or OKR primarily based? Now, subsequent, later? Showcase it right here. In all instances, it is very important put issues into time perspective. And you’ll make sure, that this slide is the place all stakeholders pays consideration probably the most.
- Particulars on the product initiatives — Whereas itemized timelines are nice for visualization and placing issues into (not solely time) perspective, they inform solely half of the story. That’s why I like to recommend to dedicate a number of slides for added rationalization of the objects out of your roadmap. It doesn’t must be exhaustive rationalization, however don’t depart an excessive amount of room for misinterpretations.
My suggestion:
Pay additional consideration to this portion of the due-diligence and inform your product story — the place you’re coming from, what you wish to obtain, how you intend to get there and what’s important in your success. For those who don’t know the right way to construction your pitch, I like to recommend this text from Andy Raskin.
Objective: Showcase the maturity of your product growth group by explaining the steps a person product enchancment goes via from the thought to the discharge.
Further feedback: That is the second most necessary a part of the product due diligence because it exhibits how wholesome your product growth is. Don’t underestimate this half. Furthermore, very doubtless you’ll want to mix your inputs with these out of your friends on the Engineering facet of your product group to supply a holistic view.
Prompt define:
- Product necessities strategy — How, when, and the place do you accumulate product necessities? Is there any methodology in place? Any specialised software program? How do you analyze the necessities and share them with the remainder of your group? How are the necessities remodeled into growth duties?
- Product group — How does the construction of the product group appear to be? What are the roles and the way do they cooperate? How many individuals are fulfilling these roles?
- Product growth course of — How are product necessities remodeled into the ultimate product? What’s the lifecycle of a person product goal? What are the phases? When do totally different roles take part within the course of? What methodology/strategy is utilized? What’s the product group’s manner of working? How do you handle product backlogs? How do you handle product upkeep?
- Finish-to-end practices & High quality administration — How do you strategy product releases? What does your CI & QA pipeline appear to be? How do you strategy QA in your product group? What’s your (automated) take a look at protection? What’s the stage of automation in the entire course of?
- Defects & Buyer Escalation strategy — What’s your challenge/incident escalation and determination course of? How do you categorize and strategy the decision of product points?
My suggestions: Every group has a distinct strategy to their software program growth, but they’ve many issues in frequent, so the satan is within the element — deal with what makes you stand out, what are you doing in a different way, and what have you ever realized that works for you. You don’t want to clarify what Scrum is. You don’t must showcase your JIRA venture construction. Attempt to use visualizations at any time when doable (after-all one image is value a thousand phrases) as a substitute of prolonged texts.
Objective: Present a fast performance overview of your product. Typically occasions will be joined with the architectural overview (Engineering due diligence).
Proposed define: One slide visible of your product’s total logical construction (performance areas). Then spotlight your prime 3–5 most necessary options.
My suggestions: Hold it easy. You don’t want to enter a lot element, however present hyperlinks the place individuals can discover extra info if wanted. Make it work on 5 slides or much less.
Objective: Showcase which you could holistically have a look at your product and its growth group, that you simply perceive the place it may be improved and what provides you a bonus out there.
Prompt define: Don’t attempt to squeeze every little thing into one slide as some templates recommend otherwise you’ll create an unreadable mess. As a substitute have one slide for Strengths, one for Weaknesses, and many others. Separate the 2 SWOTs into two information, don’t combine them collectively.
My suggestions: For every class decide solely the highest 3 objects. That’s greater than sufficient. Then for every merchandise present further context fairly than having them as a listing of ambiguous bullet factors.
Objective: Showcase maturity of understanding your consumer base by explaining who’re the primary customers and what are their motivations to make use of your product.
Prompt define: Hold it easy. Briefly introduce on a number of slides the primary personas, their classes, and illustration in your product. Then ideally mix this along with your particular person personas “overview” into one package deal.
My suggestions: A pleasant visible illustration of your key personas goes a good distance. Give attention to their objectives, motivations, and frustrations fairly than on their demographic info.
Objective: Once more, showcase your maturity of understanding your consumer and base by presenting their journeys with key worth moments (= moments after they understand worth).
Prompt define: This half is closely influenced by whether or not and the way you have got your journey captured. In our case, it was one slide with the visible of the journey and two slides with explanations of our key worth moments.
My suggestions: The content material of this half relies on how you have got your consumer journey captured — do you wish to current a number of journeys for various personas or mix them into one? My suggestion is to with simplicity over accuracy (element), however not at the price of creating nonsense.
Objective: Showcase the maturity of your product design strategy by explaining the function of the design & analysis group in your group.
Prompt define: Once more, preserve it easy. Showcase your Design & Analysis group group, their principal roles, and duties. Clarify the way you strategy Person Testing and Analysis and spotlight among the analysis initiatives. You must match inside 10 slides.
My suggestions: You’d be shocked however many organizations don’t think about product design and analysis as necessary. That is your distinctive alternative to point out that your product group is mature and data-driven.
That’s it. That’s what labored for us and helped us to safe the capital. Nonetheless, do not forget that in your case the required info is likely to be totally different as every investor and their strategy to the due-diligence course of is totally different. All the time tailor your displays to their necessities.
Nonetheless, it is very important take into accout throughout the entire due-diligence course of that you’ve often just one shot to make impression. Don’t waste it! Although it looks like plenty of work to organize every little thing, make it depend. Spend money on good visuals. Get skilled assist with the slides, in the event you want one. It would repay.
And even in the event you’re presently not elevating progress capital, it’s good to have the aforementioned info documented someplace in your group. They’re not solely a terrific on-boarding useful resource and so they’re generally required for varied certifications (reminiscent of ISO), but additionally their preparation will power you to consider your product group’s strengths and weaknesses.
Lastly, let me know within the feedback if I missed one thing necessary — one thing that was required from you or one thing that made an impression. Let’s share the data!
