Thread by @PawelHuryn

As a PM, your main goal is maximizing customer value.

But many a few know how to prioritize ideas with ease.

There are two popular ways of doing this.

Here's everything you need to know:

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Approach 1: Opportunity Score by Dan Olsen

When thinking about value for the customers, we’d like to understand:

- How well is the customer’s need served today?

- What is the opportunity to create new value by addressing that need?

- How much value did you create?

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In his book, The Lean Product Playbook, @danolsen suggests a brilliant way of answering these questions.

You start by asking the customer about the importance and satisfaction with the ability to achieve specific outcomes.

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Start by asking the customer about the importance and satisfaction with the ability to achieve specific outcomes.

Next, we map the answers to a scale of 0 to 1.

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How well is the customer’s need served today?

The assumptions are simple:

- The more important an outcome is for the customer, the more value they get.

- The more satisfied a customer is, the more value they get.

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The current value the customer gets can be represented as a blue area below:

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What is the opportunity to create new value by addressing that need?

The assumptions are simple:

- The more important an outcome is, the more value we can create.

- The less satisfied a customer is, the more value we can create.

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This potential value, known as the Opportunity Score, can be represented as the yellow area below:

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How much value did you actually create?

The value created after the release can be represented as a green area below:

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I love Dan’s approach because it’s simple, easy to understand, and intuitive.

Dan has also shared an official template to visualize what is the Opportunity Score for different parameters: docs.google.com/presentation/d…

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Approach 2: Opportunity Score from Jobs to be Done

An alternative Opportunity Score from Jobs to be Done can be expressed like this:

Opportunity Score = Importance + MAX(Importance - Satisfaction, 0)

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The results are often visualized as:

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Selected rules based on the Jobs-to-be-Done book:

- Opportunities > 15 represent extreme opportunities
- Opportunities > 12 represent high opportunities
- Opportunities > 10 represent solid opportunities
- Opportunities <= 10 are appropriately served or overserved

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Opportunity Score by Dan Olsen vs. Opportunity Score from Jobs to be Done

You might think the two formulas differ significantly.

So, let’s look at them using the same scales and axes for Importance and Satisfaction.

I multiplied scales and results in Dan’s formula by 10:

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Conclusion?

Both approaches yield similar results where it matters the most: for the underserved needs.

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In my new post, I share specific questions and templates, and discuss other critical aspects:

- JTBD calculations
- Number of customers affected
- Assessing business value
- Questions you should be asking
- The recommended, simple approach

productcompass.pm/p/prioritizati…

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Regardless of the formulas, as a Product Manager, focus on the bigger picture, not just the numbers in "Excel."

(17/17) Especially when performing Continuous Product Discovery, it’s way more important to immerse yourself in customer and business context, look at the data, ask the right questions, and apply common sense.

Hope that helps!

P.S. I also highly recommend you: amazon.com/Lean-Product-P…