Product Velocity

What is Product Velocity? 

Product velocity is a measure of how quickly a Product Team can bring an idea from concept to launch. It’s an indicator of how fast things move from the discovery to the launch phase of the Product Management Lifecycle. 

However, the concept of product velocity is more than just putting out a feature as quickly as you can. The key thing about product velocity is that you want to make sure that the idea you’re working on aligns with the broader product strategy. That it fits in with your overall goals and aims. 

If you’re looking to improve product velocity, your goal shouldn’t be to rush products out the door. That’s just a feature factory. Yes, you want to be able to move quickly to prove the return on investment on the feature, but you want to make sure that those features serve a purpose and drive the product forward. You’ll only achieve return on investment if the feature successfully achieves its intended outcomes. 

Think of product velocity as momentum with meaning. It’s more than just going fast, but going fast in the right direction. That’s what velocity is in science after all: 

Velocity = displacement/change in time

Or put more simply (for anyone that failed physics): velocity = speed + direction. There’s no point moving fast if you’re not going anywhere – or worse, going the wrong way. You can spin the propeller of a plane super fast, rotating hundreds of times a second, but it’s not going anywhere without the control of a pilot adding the thrust. 

So, having good product velocity doesn’t just mean you’re working efficiently, but also that you’re making progress that adds value to your product. To improve product velocity, you’re walking the tightrope between quick execution and thoughtful prioritization.

Why is product velocity important? 

Wanting to have high product velocity is an important goal for a Product Manager and your wider team. The pace at which you can launch features influences the impact, relevance, and success in your market. By having a consistently high product velocity, you can get features live faster, keeping your product competitive and responsive to user needs. 

It’s not good for a product to drag its heels. If you’re taking a long time to make any progress, you may miss market opportunities, waste resources, and give other stakeholders itchy feet, wondering ‘What the hell’s taking so long?’ 

Product velocity is a focused, well-measured pace. It’s not a flat-out sprint in the first 100 meters of a marathon – that’s going to tire you for the rest of the race – it’s a mature pace, with you going as fast as you need to go. This is important, as it avoids the pitfalls of excessive speed that leads to poorly made features.

Need more reasons to see why product velocity is important? Check out this list: 

• Faster time to market: Increased product velocity allows teams to bring features and products to market more quickly, allowing businesses to respond to market demands and capitalize on emerging opportunities.
• Enhanced customer feedback loop: Higher velocity allows for quicker iterations based on good customer feedback, leading to more effective adjustments and improvements that better align with customer needs and pain points.
• Competitive advantage: Companies that can rapidly innovate and release new features gain a significant edge over competitors, helping to attract and retain customers, especially if you’re in a fast-paced market.
• Improved team morale and productivity: A culture that emphasizes product velocity encourages collaboration and efficiency, often resulting in higher team engagement and job satisfaction as teams see the tangible impact of their work.
• Better resource utilization: Focusing on product velocity ensures that resources are used well, minimizing wasted time and effort on less impactful projects while maximizing the delivery of valuable features and enhancements.

How do you calculate and measure product velocity? 

Product velocity is more than just an idea, it can also be a metric you can measure to see how you and your team impact the speed of outcomes. Granted, there’s no formula to get a measurement of product velocity per se. BUT you can have a look at things like the percentage change in time taken to reach a desired outcome.

By looking at how the percentage of time taken to a certain outcome changes and hopefully improves, you can get a sense of how high your product velocity is, and how it compares to previous periods. This allows you to see what’s working and figure out new ways to tighten your process.

Here’s the formula:

Hmm, looks a bit wordy, doesn’t it? Well have no fear, let’s decipher this a bit more and go into what this all means:

1. Potential time to outcome without your efforts: This is an estimate of how long an outcome would take before you’ve made any changes to the process or how you go about developing a new feature. Ideally, you’ll have real data for this, such as the time it took you in the past to launch a product before introducing a new, time-saving initiative. If you haven’t got any previous data, you can use an industry average to get started. 

2. Actual time to outcome with your impact: This is a measure of how long it actually took for you to reach the outcome – like the launch of a new feature – with your input. 

So, essentially with these two things, you measure the difference between an older development process and your newly improved and more efficient process, seeing how much quicker you are. To work out this percentage improvement in time taken, you take this estimated time, subtract it from your actual time, and then divide that number by your estimated time frame again.

Still not making sense? Alright, let’s use a real example. Say, before your Product Team introduced a new way to prioritize features – such as a Product roadmap tool like ProdPad –  it took you 12 weeks to release a feature. But, with this new change, you managed to do it in 8 weeks. Sweet, that’s a much higher product velocity, and in terms of percentage improvement in time, it looks something like this:

12-8
—     x 100= 33.3% 
8

This means that you’ve improved product velocity by 33.3%. Nice. 

Measuring improvements in product velocity with this formula helps keep the focus on outcomes, not just output, ensuring that speed aligns with strategic goals and meaningful progress.

Having this measurement in your back pocket is great when presenting to stakeholders to prove the ROI of Product Management and your processes. Want more tips on proving ROI? We’ve got a whole ebook that can help you showcase the wonders of Product Management, and why it’s good for your business.

What’s the difference between product velocity vs sprint velocity?

While both these terms are interested in the pace at which things happen when developing a product, they measure two different things in Product Management:

• Product velocity is a broader metric that captures the rate at which a product moves from ideation, discovery, validation, build, and launch while staying aligned with strategic goals. It’s not just about completing tasks quickly. It helps teams evaluate whether they’re making real, impactful progress.
  
• Sprint velocity, on the other hand, is a narrower metric used specifically in agile product development to track how much work a team completes in a single sprint (usually measured in story points or completed tasks). It’s a short-term measure of team productivity and is primarily used to plan future agile sprints, set expectations, and assess consistency in task completion.

In short, sprint velocity helps teams understand their capacity within a sprint, while product velocity is about the overall pace across the entire Product Management lifecycle and progress toward meaningful product outcomes. 

What influences and improves product velocity? 

Just like how a more powerful engine and better acceleration will make you go faster in a car, many things can influence your product velocity. If you and your team can work on these elements, you’ll be able to deliver value quicker – just like a pizza delivery driver working to get your pie to you in time. 

Here are some key elements you should think about if you want to improve your product velocity: 

Vision and goals

Having a clear product vision will allow your team to work at pace without going off track, improving your product velocity. Knowing what you’re working towards, and the best key performance indicators you need to track to monitor success, can help you deliver the right results in an efficient way. 

Team alignment

Siloed and dysfunctional teams are not going to be working at their full capacity. Without a good cross-functional and product team structure, you’re going to experience bottlenecks and holdups, impacting delivery. Plus, some misalignments can lead to misunderstandings and wasted work, slowing things down. 

Work on fostering a good cross-functional team by having regular meetings and involving other teams in your process, be that through giving them visibility of your product roadmap or by including them in your team in the form of product squads. 

Prioritization

Improving your decision-making on what to move on next will help you boost your product velocity, giving you the ability to work on the right thing quickly. Effective prioritization ensures the team works on high-impact tasks rather than getting bogged down in low-value features.

You can improve your prioritization by using a good framework, be it RICE scoring, affinity grouping, or buy-a-feature – there’s a lot to choose from. 

Feedback loops

The core aim of product velocity is to make something of value – getting customer feedback can be a huge factor in helping you do that. If you’re not getting regular feedback from customers, you’ll struggle to develop a product that’s right for them.

Improve product velocity by making continuous learning and iteration a key part of your process, to help you validate ideas and product direction. Engage with customers and stakeholders regularly, through surveys, interviews, and even CAB meetings to understand where to focus attention on and stay efficient. 

Technical debt

If left unchecked, technical debt can accumulate over time, which can take up your development team’s resources. Instead of being able to ship new features, time is spent fixing older issues and code. 

Make sure to regularly include addressing technical debt in workflows so that it doesn’t become a massive task that slows things down. Doing so will help you keep a strong product velocity and ensure your upcoming releases are high-value. 

Use retros

To move forward, sometimes you need to look backward. You’ll struggle to improve your product velocity if you don’t take stock and see how your previous efforts have affected things – that’s why it’s so important to track and measure it. 

By seeing how the time to output has changed, you can analyze past processes and come up with ways to improve. Agile retrospectives, team check-ins, and metrics analysis can uncover insights that help make you better.

Automation 

One of the biggest benefits of automation is that it can speed up a lot of manual tasks, giving you more time to work on your features and get it shipped quicker. Automation can be used to help with testing, monitoring, analysis, and way more. 

An effective usage of AI tools can help you improve your product velocity. Take a look at the ways in which ProdPad’s powerful AI Assistant can automate your backlog management, your feedback analysis, writing up your specs, user stories and more, and even help with your ideation. 

ProdPad can also do a lot of the heavy lifting for you in terms of managing your admin through automation rules that you can set and forget, freeing up more time and helping you move faster. 

What are the mistakes people make about product velocity? 

Product velocity can be a confusing idea, with people getting all mixed up on what it should be and mean. The biggest issue is that many think of it as pure speed – getting things done as quickly as you can, even if that includes cutting corners. 

This is a big mistake, as it can lead to the development of poor, unfinished releases. Remember, product velocity is speed combined with direction. Here’s a few things people get wrong when they think of product velocity:

1. Speed over quality: Many teams prioritize how quickly they can deliver features without adequately assessing their quality. This focus on speed often results in technical debt and bugs, leading to poor user satisfaction. It’s crucial to balance velocity with the need to practice data driven Product Management through thorough testing and quality assurance to ensure that the product not only moves quickly but also meets user expectations and standards.

2. Neglecting direction: Product velocity isn’t just about speed; it’s also about ensuring the team is moving toward the right goals. Without a clear vision or well-defined objectives, teams can rush to complete tasks that may not align with the overall product strategy, wasting resources and effort. Ensuring that everything on your product roadmap is liked to a OKR and specific outcome can help focus strategic direction while maintaining velocity.

3. Misunderstanding metrics: Teams often rely on superficial metrics, such as the sheer number of tasks completed, to gauge productivity. However, this can be misleading. It’s essential to evaluate the impact of those tasks on user satisfaction and business goals. A better approach is to measure outcomes, such as user engagement and retention, rather than just output, ensuring that the work being done contributes to the product’s success.

4. Inadequate feedback loops: Regular reviews and retrospectives are vital for continuous improvement. Without these feedback mechanisms, teams may miss opportunities to learn from past experiences and refine their processes. Implementing structured feedback sessions allows teams to assess what worked, and what didn’t, and how they can enhance their workflows, leading to improved velocity and effectiveness.

5. Assuming uniform velocity: Teams often assume that velocity will remain consistent when working on different features. However, factors such as team dynamics, the complexity of what you’re building, and external market conditions can significantly affect how quickly a team can deliver value. Recognizing that each project may have its unique challenges and adjusting expectations accordingly can lead to more accurate planning and a better understanding of the team’s capabilities.

Product velocity: Speed with direction 

Product velocity is a vital metric that goes beyond mere speed; it embodies the thoughtful balance between rapid execution and strategic alignment. It’s not just about how quickly features are launched but ensuring that each release adds meaningful value to the product and resonates with users. By prioritizing product velocity, teams can navigate the complexities of market demands while delivering features that truly enhance the user experience.

Ultimately, improving product velocity means embracing a culture of continuous improvement and open communication, where every team member is committed to the collective mission. 

To support you with this, why not try ProdPad? Our reporting tool gives you insight into things like the average number of days across your workflow stages, helping you to pick out bottlenecks and find solutions to fix them. Using this feature is a great way to measure and improve your product velocity. See how it works in our preloaded, sandbox environment!