Defining Bets ๐ŸŽฏ

In product management, bets represent calculated investments of time, energy, and resources to achieve meaningful outcomes. They help teams focus on solving the most impactful opportunities while aligning with the product vision and strategy. This section explores how to define bets, prioritise them dynamically, and reduce risk through discovery.


What is a Bet?

A bet is a structured assumption about how to achieve a desired outcome. It combines:

  1. A clear opportunity (customer problem or business need).
  2. A hypothesis for solving the problem.
  3. A plan for validation and delivery.

Bets are not fixed; they evolve as teams learn through continuous discovery.

๐Ÿ’ก Pro Tip: Think of bets as a portfolio. Balance high-risk, high-reward bets with lower-risk, incremental ones.


Components of a Good Bet

A good bet should:

  1. Target a Clear Opportunity: Solve a validated customer problem.
  2. Align with Strategy: Fit the broader product vision and goals.
  3. Include a Testable Hypothesis: Be specific and measurable.
  4. Balance Risk and Impact: Aim for maximum value with manageable risk.

Steps to Define a Bet

1. Identify Opportunities

Use discovery techniques like:

  • Customer interviews to uncover pain points.
  • Opportunity Solution Trees to map opportunities.
  • Data analysis to identify trends.

Focus on opportunities that align with strategic priorities.


2. Formulate Hypotheses

Every bet starts with a testable hypothesis: We believe that [action/feature] for [user segment] will result in [desired outcome] because [assumption].

Example:

  • We believe that simplifying the onboarding flow for new users will increase activation rates by 20% because users currently find the process confusing.

3. Prioritise Dynamically

Instead of rigid frameworks like RICE or ICE, consider dynamic prioritisation:

  • Nesting Bets: Break larger bets into smaller, actionable ones.
  • Assess Risk and Confidence: Use a โ€œRisk Listโ€ to identify design, distribution, and adoption risks.
  • Consider Drivers and Constraints: Focus on bets that align with critical goals while managing dependencies.

4. Validate Through Discovery

Discovery is essential for refining and validating bets.

  • Start Small: Use prototypes or MVPs to test assumptions.
  • Iterate Quickly: Adjust based on user feedback and data.
  • Focus on Learning: Prioritise gathering actionable insights over delivering features.

๐Ÿ› ๏ธ Tools to Use:

  • Prototyping: Figma, InVision
  • Feedback: UserTesting, Hotjar
  • Analytics: Amplitude, Mixpanel

Common Mistakes to Avoid

  1. Focusing on Output, Not Outcomes: Define bets around desired outcomes, not deliverables.
  2. Over-Complicating Prioritisation: Avoid rigid prioritisation frameworks; focus on alignment and risk reduction.
  3. Skipping Discovery: Bets without discovery are high-risk gambles.

Conclusion

Defining bets is about aligning strategic goals with validated customer insights. By focusing on opportunities, testing hypotheses, and iterating through discovery, teams can make informed, impactful decisions that drive product success.