Product-market fit: one slice at a time

How do you minimize risk and progress past the initial validation stage without delaying value to the user and missing out on valuable feedback?

There’s a lot of talk out there about ensuring you’re building the right thing as a product leader. But there comes a point where you must build something, even though you don’t know 100% what it needs to be or if it will succeed. So, how do you minimize risk while progressing past the initial validation stage without delaying value to the user and missing out on valuable feedback? Enter the smallest functional slice.

The smallest functional slice is a minimal but robust piece of end-to-end functionality that proves something has traction. You can iterate on it and grow it into the final product or abandon it without too much loss. This sounds very similar to a prototype, except the goal isn’t to prove you can technically do it; it’s to hand it to users to get validation and feedback.

You may have heard this process described as horizontal vs. vertical slicing. A cake is the classic example used here. If the cake is the entire app experience or feature, vertical slices are the usable pieces of that experience. Horizontal slices are the individual cake layers, but they’re not yet usable; they lack an interface, are cumbersome, and will fall apart without the rest of the layers. Besides, who wants to eat a cake without icing?

Making a cake slice by slice and adding the icing to each piece is not a piece of cake (pun intended). But, in product development, unlike cake, you can deliver value faster when building products slice by slice. If this were indeed cake, I’d say, “Give me the largest slice,” especially chocolate. Since it’s a product, you need to cut feature scope as much as possible to have the smallest possible slice.

Here is a scenario based on actual conversations I’ve had through coaching product leaders and from my own experiences. I’ve left out the details to avoid outing one particular company, but hopefully, this helps illustrate how you can think about the smallest functional slice.

Scenario: A metrics dashboard for a commerce platform

The team of the commerce platform you’re working on wants to release a metrics dashboard for their premium users. Sales receive many rejections for not having metrics, affecting approximately 30% of potential sales. The prediction is that having a metrics dashboard will improve the close rate, bringing in new revenue from an untapped market segment.

You’ve already validated this idea with end users through customer interviews, surveys, and competitor research. However, there’s still some doubt that this feature will eliminate objections or if it’s just an easy out for customers who were never intent on switching.

Largest Slice:

Build a metrics dashboard. This includes a backend API to get all the data, a front-end dashboard with user access management, notifications, alerts, etc. You can simplify this by removing the notifications and alerts, but the core functionality is still a lot of work.

Smallest Functional Slice:

Using the existing data in our database, connect with a tool like Data Studio and extract that into a report for premium users. Embed the view of that report into their existing dashboard and manually (or automatically) run the updates for that report at an agreed-upon interval, perhaps daily.

Future slices

Now that you have your smallest functional slice, if things are going well and that feature has made the impact you anticipated, you can improve parts of it in future iterations. Here’s an example of the type of decision tree I’ve used before to move through solution iterations.

Iteration 2: validating what core set of charts and data users want access to. Once you’re confident in the data users want, you can start building out the APIs and continue to expand on the functionality from there, getting feedback from your test users along the way.

Update

The smallest functional slice is a great way to limit risk while delivering value early to your customers. However, this process can have some challenges and risks depending on your product organization's culture. Read the follow-up post, “The smallest functional slice, avoiding the stomach ache,” to learn more about changing your culture to support functional slicing and sell your teams and management on the benefits.