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customers would consider Touch ID valuable. Touch ID offered a new alternative to the traditional way of unlocking your iPhone and logging in to the App Store to make a purchase. Touch ID is better because what matters to customers when they're authenticating is how convenient and how secure it is. Usually, there is a tension between those two customer benefits, with more convenient authentication mechanisms being less secure (and vice versa).

      Most iPhone users will tell you that they unlock their phones quite frequently, often multiple times per day. Because people value their time, reducing the time it takes to unlock is a clear benefit. iPhone users value security, too. They don't want unauthorized people to be able to access their phone, especially if it is lost or stolen. With a four-digit passcode, the odds of someone guessing your passcode are 1 in 10,000. According to Apple, the odds that two fingerprints are similar enough for Touch ID to consider them the same is 1 in 50,000 (and it's much harder to try different fingers than it is to type in different numbers).

      Touch ID makes authenticating much quicker than having to enter an unlock passcode or App Store password. It's also more convenient because users no longer have to worry about forgetting these passcodes.

      Because Touch ID clearly saves time, is more convenient, and is more secure than the previous solution, the iPhone team could be confident that customers would consider the feature valuable, even without explicitly validating it with them. However, if Apple didn't test Touch ID with customers, it still ran the risk of some unforeseen negative consequence. It's worth pointing out that Apple does test their products internally with their employees (who are often a good proxy for customers). This internal testing tactic where you use your own product is called “dogfooding.”

      That being said, Apple isn't perfect. For example, customers were not happy with a product “improvement” that Apple made with the power button on the 2013 MacBook Pro. In the prior version of the laptop, the power button was located away from the keyboard keys, was smaller, had a different color, and was inset, all of which made it difficult to press by accident. When users pressed the button in the prior version, a dialog window would appear, providing options to restart, sleep, or shut down their laptop, along with the option to cancel any action. But Apple decided to change the power button design for the 2013 version: they made it look like the other keys and incorporated it into the keyboard (in the upper right, where the eject key used to be). The new power button was placed right next to the “delete” key as well as the key that increases the sound volume, both of which are used frequently. As a result, users started accidentally pressing the power button (and then had to click the cancel button).

      To add insult to injury, Apple's subsequent operating system update – OS X Mavericks – changed the behavior of the power button. When the power button is pressed in Mavericks, you no longer get the dialog window with its various choices; instead your computer goes right to sleep. The combined effect of those two changes (moving the power button and changing its behavior) resulted in frustrated users whose laptops would suddenly go to sleep unexpectedly. Usability issues such as this are easy to identify through customer testing – even with a small number of testers.

      Let's compare these two Apple examples. In the case of the Touch ID, there were clear benefits and no unforeseen risks arose. In the case of the power button changes, what were the intended customer benefits? It's unclear what they were. Perhaps the new power button design addressed internal company objectives related to aesthetics or reduced cost. Regardless, the button's new design and behavior resulted in dissatisfaction for customers. It's true that customers aren't going to lead you to the Promised Land of a breakthrough innovative product, but customer feedback is like a flashlight in the night: it keeps you from falling off a cliff as you try to find your way there.

      Using the Solution Space to Discover the Problem Space

      Customers are also not likely to serve you their problem space needs on a silver platter. It's hard for them to talk about abstract benefits and the relative importance of each – and when they do, it's often fraught with inaccuracies. It's therefore the product team's job to unearth these needs and define the problem space. One way is to interview customers and observe them using existing products. Such techniques are called “contextual inquiry” or “customer discovery.” You can observe what pain points they run into even if they don't explicitly mention them to you. You can ask them what they like and don't like about the current solutions. As you form hypotheses about the customer needs and their relative importance, you can validate and improve your hypotheses using these techniques.

      The reality is that customers are much better at giving you feedback in the solution space. If you show them a new product or design, they can tell you what they like and don't like. They can compare it to other solutions and identify pros and cons. Having solution space discussions with customers is much more fruitful than trying to explicitly discuss the problem space with them. The feedback you gather in the solution space actually helps you test and improve your problem space hypotheses. The best problem space learning often comes from feedback you receive from customers on the solution space artifacts you have created.

Problem space and solution space are an integral part of the Product-Market Fit Pyramid, as shown in Figure 2.1. Your product's feature set and UX live in solution space – they're what customers can see and react to. The other three layers of the pyramid live in problem space. The important interface between problem space and solution space occurs between your value proposition and your feature set. It is, of course, within your control to change your feature set and UX as you like. Unlike customers and their needs, which you can target but can't change, value proposition is the problem space layer over which you have the most control.

Figure 2.1 Problem Space versus Solution Space

      As Dave McClure of 500 Startups said, “Customers don't care about your solution. They care about their problems.” Keeping problem space and solution space separate and alternating between them as you iteratively test and improve your hypotheses is the best way to achieve product-market fit. The Lean Product Process gives you step-by-step guidance on how to do that. Let's jump into the first step of the process: identifying your target customer.

Part II

      The Lean Product Process

      Chapter 3

      Determine Your Target Customer (Step 1)

      You begin the Lean Product Process by identifying your target customer, which is the bottom layer of the Product-Market Fit Pyramid. The problem space benefits you're going to identify pertain to a specific customer segment. Different customers will have different needs – and even those who have the same needs can have distinct views on their relative importance.

      Fishing for Customers

      Many companies have launched products without any explicit discussion of the target customer. Sometimes, a company will introduce a product with one target customer in mind but end up attracting a somewhat different customer segment. Matching a product with its target customer is like fishing. Your product is the bait that you put out there and the fish that you catch is your target customer. Sometimes you catch the type of fish you were going after and sometimes you catch a different type of fish. You can develop hypotheses about your target market, but you won't truly know who your customers actually are until you throw your hook into the water and see what kind of fish bite. Once you have a product or a prototype to show customers, then you can gain clarity about the target market you're attracting.

      Of course, your bait can attract more than one type of customer. For example, Quicken was designed so that individual consumers could easily manage their household finances. But it was so easy to use that small business owners started using it to manage their companies' finances. To the Quicken team's surprise, they had caught a second type of fish with the same bait. Through customer research, Intuit discovered that almost a third of Quicken users were using it to track the finances for their business. So Intuit developed a new Quicken Home and Business version of their software to better address the distinct needs of small business owners. This discovery about their target market also led Intuit to launch QuickBooks,

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