Business Outcomes vs. Product Outcomes

When we talk about outcomes in product discovery, we’re focusing on 3 main types:

• Business outcomes: These are the big-picture goals that measure how well the company is doing. They might include things like increasing revenue, reducing costs, or expanding into new markets. Business outcomes show the overall success of the company, but they are usually results that we see after implementation, making it harder to use them to guide daily decisions.
• Product outcomes: These are more specific and measure how the product is contributing to the business’s success. For example, they might track how many users are engaging with a particular feature or how satisfied customers are with the product overall. They give the team real-time feedback, helping them make decisions that directly improve the product and, ultimately, the business.
• Traction metrics: These are specific measures that track the usage and adoption of particular features or aspects of the product. This might include how often a new feature is used, how quickly users complete a specific task, or the number of users who upgrade to a premium version. These provide early indicators of whether a product or feature is gaining traction with users.^[1]

OKRs (objectives and key results) and outcomes both help measure product success, but they work differently. OKRs are a way to set goals. An objective is a big, important goal you want to achieve, like improving user satisfaction. Key results are the specific, measurable steps that show you’re getting there, like increasing customer satisfaction survey scores by 10%.

Outcomes are the actual results that happen because of your actions. For example, if your objective is to improve user satisfaction, the outcome might be that more customers keep coming back because they’re happier with your service.

The key difference is that OKRs help you set and track goals, while outcomes show whether those goals made a real impact. OKRs are about planning what you want to achieve, and outcomes are about seeing the real-world results of those plans.

Outputs are what you create or produce. For example, if you build a new feature for an app, that feature is the output. Outcomes are the results or changes that happen because of that output. Using the same example, the outcome would be how the new feature affects users. It could make them happier, increase their usage, or help the business grow.

Focusing only on outputs means you’re just checking off tasks without knowing if they’re making a difference. But outcomes tell you whether what you've made is actually helping reach your goals. For example, you could release a new forum feature (output), but if it doesn’t increase user engagement (outcome), it may not be successful. Always aim to understand how your outputs lead to the outcomes you want.

Outcomes should connect directly to the company’s larger goals. For example, if your business goal is to grow revenue, a relevant outcome might be increasing the number of users who upgrade to a paid version of your product. By focusing on this outcome, you’re directly supporting the business goal.

This connection ensures that the work you do not only produces results but also contributes to the overall success of the company. It keeps everyone focused on what truly matters and helps prioritize tasks that have the most impact. Always ask, “How does this outcome help achieve our business goals?”

Setting reachable goals means defining objectives that align with both the product's potential and the company's broader goals, while still being achievable. For example, if your business goal is to increase revenue, a reachable product outcome might be, "Increase monthly recurring revenue by 20% over the next six months by launching a new premium feature that addresses the most common user pain points." This goal is specific, measurable, achievable, relevant to the business outcome, and time-bound (SMART).^[2]

By setting reachable goals that connect product outcomes with business outcomes, you ensure that the product team’s efforts are directly contributing to the company’s success. It keeps everyone focused on what’s important, encourages steady progress, and builds confidence as these goals are achieved. This also helps maintain alignment between what the product team is working on and the broader business objectives.

Choosing the right traction metrics is essential because they reflect real progress, while vanity metrics can be misleading. A good traction metric should show how a feature contributes to overall customer satisfaction and business goals.

To determine if a metric is valuable, ask: "Can we have a happy user who never does this particular action?" If yes, that metric might be a vanity metric.^[3] For example, a high number of shares on a social media button might look impressive. But, a better metric would be tracking how many users complete a purchase after using a recommendation engine, as this shows the feature’s real impact on revenue.

Focus on outcomes that span multiple features, such as overall conversion rates, which allow users to achieve their goals in their preferred way, ensuring the metrics reflect genuine value and success.

When setting outcomes for the product team, ensure these outcomes are within the team’s control. Problems arise when teams are given outcomes that require coordination with other departments, like marketing or customer support, or when the outcomes are tied to broader business goals that depend on multiple teams. This can lead to frustration, as the product team may feel powerless to make meaningful progress. For example, if a product team is tasked with increasing overall company revenue, this can be demoralizing because revenue is influenced by many factors outside the team’s control.

Instead, the goal should focus on something the team can directly influence, like improving user adoption of a specific feature. If the outcome truly requires multiple teams to achieve, make sure all relevant teams are aligned and working together toward the shared goal.

When measuring product outcomes, measure the value created for users, not just the actions taken. For example, instead of simply counting the number of features added (an action), focus on how a specific feature, like a personalized recommendation engine, increased user engagement by 25% or led to a 15% boost in repeat purchases (the value).

This helps avoid the trap of "busy work" where teams focus on completing tasks without considering whether those tasks are actually contributing to the desired outcomes. It keeps everyone focused on what really matters.

Pairing a sentiment metric with a behavior metric helps you understand how user feelings impact their actions and vice versa. For example, if users report high satisfaction with a feature (sentiment), you should check if they use it more often (behavior). Likewise, if users frequently engage with a particular feature (behavior), it’s important to see if this leads to higher satisfaction (sentiment).

This two-way pairing is crucial because it reveals whether positive feelings drive the desired actions, like increased usage or loyalty, and whether certain behaviors lead to improved satisfaction. By analyzing both directions, you gain a clearer picture of how your product influences user experience and can make informed decisions to enhance both user engagement and satisfaction. This ensures that you’re not just focusing on one aspect, but understanding the full relationship between how users feel and how they interact with your product.

Encouraging a learning mindset in your product team is crucial for long-term success. When you focus too much on performance, team members may start competing or avoiding risks, which can hinder collaboration and creativity. A learning mindset, on the other hand, fosters curiosity, experimentation, and growth. It’s about seeing outcomes as opportunities to learn, not just as targets to hit.

To encourage this mindset, set goals that promote exploration and improvement rather than just meeting specific metrics. For example, instead of only aiming for a certain increase in user engagement, encourage the team to test different approaches and learn what works best. Celebrate both successes and the lessons learned from challenges, emphasizing that every experience contributes to the team’s growth.