Paradoxes in Scaling a Startup

I ran into this video a few weeks ago and have been meaning to share it. It is a short interview from Professor Mohanbir Sawhney, from Northwestern University’s Kellogg Business School.

In the video, Professor Sawhney talks about how when a company starts it needs to be opportunistic. This phase is when a company is trying to find a business model that works – called product/market fit in the lean startup approach. This involves a lot of discovery, building hypotheses, and testing.

This brings me to my favorite quote from the interview,

You have to stay opportunistic to start with but if you stay opportunistic, you die.

At some point, you must find a product that works for a specific market and become laser focused on it. This what Professor Sawhney calls moving from being opportunistic to strategic.

Essentially, you need to place your bets on the table and stop looking at other games.

From a product perspective, this is the phase where you really need to focus on what you are building and who you are building for. This is the point when it becomes crucial that you start saying NO as often as possible to “opportunistic” features that don’t fit your strategic focus (see this most excellent video from Intercom’s Des Traynor, Product strategy is about saying, “NO”).

Check out the full video of the discussion below:

(As a side note, I owe a big thanks to Professor Sawhney for convincing me to go into product management. Until I took his technology products class, I was flirting with the idea of a career in management consulting. Thankfully, his class convinced me that I wanted to stay in technology and work on building products for living!)

Why I Won’t Use Your Product

(excerpt from my ProductCamp Austin presentation in Feb.)

That’s great that the product you are building is cost effective/innovative/game-changing but the fact of the matter remains, I already have a solution in place for the problem you are trying to solve. Even though it might not be the best, I am not only use to my current solution but it is part of my routine. It just doesn’t matter.

If you have hopes of dislodging this solution, you have to do so in a way that is not slightly better but has a difference that can be measured in magnitudes.

Ben Yoskovitz, author of Lean Analytics, has a great quote on this topic:

Most products don’t hook people because they don’t provide enough value–they’re missing that unique thing that solves people’s problems 10x more effectively than the alternatives.

In order for your product to be adopted there needs to be a path to help users make the transition. You can have the best product in the world but if users can’t figure out how to adopt, they still won’t use it.

A perfect example of this is the Nest thermostat. With a focus on design and self learning, Nest makes managing your home’s heating and cooling easy and cool. But think about how many consumers installed their own home thermostat before the Nest? I bet it was close to 0%. If the makers of Nest were going to get consumers to use their product, they were going to have to get over the installation wall.

So how did they find out what the issue was and how to best fix it?

They studied existing thermostats on the market and installed hundreds of them to figure out how to make it as simple as possible. From MIT’s Technology Review,

Fadell and Rogers have made sure that at every stage of installing and operating a Nest thermostat, you discover that potential problems have been solved for you. When you attach the device to a wall, there’s no need to drill holes or use plastic anchors to hold any screws. Nest’s engineers reviewed every screw on the market and then invented their own, with wide-spaced threads that can bite wood or powdery drywall without making it crumble.

Change doesn’t happen by accident. Plan for it or don’t be surprised when it doesn’t happen on its own.

Ready to learn more, here’s some great books on the topic:

Let mek now if you have a good one to add to the list!

 

The Product Manager’s Quick Reference

I am presenting today at Product Camp Austin on the topic of thinking big and small as a product manager.

I will be posting slides shortly but wanted to provide reference links. These are a selection of articles and books that I would highly recommend for all product managers to read, save, and read again.

 

About Products – A Few Things I Think I Think

Inspired by David Lee’s post, I put together a list of current topics that I have found thought provoking. Hopefully, you will find some of them useful too.

  1. I think Clay Christensen’s Milkshake Marketing should be required watching. 
  2. If you are focusing on a SMB SaaS product, read Tomasz Tunguz’s article on the subject. When it comes to a successful SMB offering Tom is spot on when he writes, “The most successful SMB SaaS products typically offer a 2 step value proposition: an initial value proposition to the end user and a longer term value proposition to a manager/decision maker.”
  3. If you have not read the book, Positioning: The Battle for Your Mind, stop right now and go get it.
  4. At some point when building a new company, you have to move from building a product to acquiring customers. Seth Levine writes about the importance of focus during this stage. Seth says, “The important shift here isn’t the shift in hiring more sales people or more marketing people, it’s the shift to recognizing the most important thing is to get more customers. If the whole organization is thinking about this, including engineers, I bet you would come up with a variety of ideas and priorities to meet this. And instead of just the sales guys thinking about sales, you involve the whole team.”
  5. If I had a nickel for every book that was published in the last year about innovation, I would have a lot of nickels. HBR has a good article explaining why more organizations can’t seem to find a way to change - “Companies pay amazing amounts of money to get answers from consultants with overdeveloped confidence in their own intuition. Managers rely on focus groups—a dozen people riffing on something they know little about—to set strategies. And yet, companies won’t experiment to find evidence of the right way forward. “
  6. I think it is worth paying attention to how you can Engineer Serendipity. You never know what you are going to get.
  7. If you are working on a freemium product, learning about your customers is hard. There is a big difference between all the feedback you are going to get from the free users on your site and the select few that are willing to pay you money.
  8. How many times have you heard, “Make it simple”? Probably not enough. David Lieb writes about minimizing cognitive overhead and how if you want to make things simple, sometimes you need to make your users do more – “Minimizing cognitive overhead is imperative when designing for the mass market. Why? Because most people haven’t developed the pattern matching machinery in their brains to quickly convert what they see in your product (app design, messaging, what they heard from friends, etc.) into meaning and purpose.”
  9. Want more engagement? Create a movement - “In a digital and social age, pipes are less important. People are the channel. You don’t own or rent them. You can’t control them. You can only serve and support them.”
  10. Just when you think you have found every useful site there is on the net, you run into a couple of more worth checking out - 100 Websites You Should Know and Use.

Finally, I  put together some thoughts on developing new products and the challenge of trying to tackle two markets at the same time. If you want to check it out, it is on the On Product Management blog.

gaping_void_you_cant_have_it_all

Dear Product Managers, You Can’t Have it All

 

I love this cartoon from Hugh MacLeod (GapingVoid). It is so simple but at the same time, so powerful.

There are lots of ways you could interpret this message but I have been thinking about it in the context of product development.

More often than not, you don’t have the time or resources to tackle everything. This means as a product manager, you have to make some tough choices of what not to do.

Great products (and companies) intentionally leave out features that some customers find unacceptable. While this means that some customers won’t buy their product, it means they can focus more on the ones that will.

I also ran across another example that I think really highlights the point of intentionally making decisions not to do something. Doc Searls’s new book, the Intention Economy, has a great overview on the grocery chain Trader Joe’s (a company that has been historically very private about its operating strategy).

Here are some of the things that Trader Joe’s says no to:

  • No ads, sales, loyalty cards, etc. No gimmicks.
  • No trade shows. They don’t chase the latest fashions.
  • No muscling suppliers. Instead they partner to offer the best product at the best price.

Most importantly they say no to selling a lot of products. They don’t try and sell every type of food item. They don’t sell electronics. They don’t sell toys. They just focus on selling “innovative, hard-to-find, great-tasting foods.

Trader Joe’s have consciously made the decision to try to not sell everything under the sun. This allows them focus on adding “unconventional and interesting” products that keep customers delighted and coming back for more.

Stick with Hugh’s advice and pick your sliver well, my friend and your customers will reward you.

 

Cartoon Credit:  GapingVoid

product is the center of marketing - seth godin

The Circles of Marketing and Making 1+1 = 3

product is the center of marketing - seth godin

Seth Godin’s Circles of Marketing

I am behind with my weekly blog post this summer but wanted to share some amazing thoughts on product marketing and telling your story.

Seth Godin recently put together a post that should be required reading for marketers. In the post, the circles of marketing, Seth writes,

And the innermost circle is the product or service itself. When the thing you sell has communication built in, when it is remarkable and worth talking about, when it changes the game–marketing seems a lot easier. Of course, that’s because you did the marketing when you invented the thing, saving you the expense and trouble of yelling about it.

Not a bad way to easily explain the definition of marketing and why product is so important.

So, after reading Seth’s article, I planned on talking about the power of baking story into your product. Instead, I recommend you watch this short video interview of Ken Burns, the famed documentary maker. The interview is on the craft of story and cinema but has some powerful insights for marketers. Quoting Ken on the subject of using stories to influence and drive change,

The common story is 1+1 =2. But all real genuine stories are about 1+1=3….Truth is we hope is a by-product of the best of our stories. And yet there are many different kinds of truth. And an emotional truth is something you have to build.

Here’s the video and the link to the full article on his 1+1=3 story telling approach:

You are a Startup Marketing Failure so Now What?

Chris Dixon wrote a post last week titled, The default state of a startup is failure, that I think is a must read for startup marketers. Chris shares the following ideas around building something new,

On the flip side, first-time entrepreneurs often fail to realize that when you build something new, no one will care. People won’t use your product, won’t tell people about it, and almost certainly won’t pay for it. (There are exceptions – but these are as rare as winning the lottery). This doesn’t mean you’ll fail. It means you need to be smarter and harder working, and surround yourself with extraordinary people.

While aimed at entrepreneurs, I think there is an important take away here for startup marketers as well.

No one cares about your slick UX and new features. It doesn’t matter how great that data sheet is or how fancy your new logo looks. Your snazzy email marketing is going right into the spam folder and your web site traffic is a joke.

The fact that nobody cares about your product is something that you need to embrace. It needs to be something that you are not only aware of but also motivated by. You have a challenge in front of you but also the opportunity to do something really special.

Where do you start? Here’s my recommendation:

  •  Add marketing from the start - building a great customer experience doesn’t happen by accident. Plan to add “remarkable-ness” at the beginning.
Once you are finished, figure out what worked and get ready to start again. It’s an iterative process that’s never done.
That’s my take on how to get started. Anything to add?

Image Credit:  jcoterhals

 

The Product Marketing Podcast #13 – What is Agile Product Management?

start with the customer marketing podcast on product marketing and product managementIn this episode of the Start with the Customer Podcast, I am honored to be joined by Scott Sehlhorst, of Tyner Blain consulting and Saeed Khan, of On Product Management.

The topic of the call was agile product management. Since both Scott and Saeed have worked in waterfall and agile development environments, it was great to hear their thoughts on the what it means to be agile when it comes to managing the development of new products. This call went a bit longer than planned but overall I think it was a great discussion on the topic with a lot of examples and shared wisdom. We covered the basic definitions, how we got to this point, working with an agile development team, and how to operate in an agile business environment.

I hope you enjoy the podcast and would love to hear your feedback!

You can listen here:

or download from iTunes and from TalkShoe.

Show Notes:

Runtime: 53  mins

  • What does Agile Product Management mean?
  • Has Product Management has always been “Agile”?
  • The difference between being agile and constant change
  • The difference between shifting business tactics and business strategy
  • How product management works in an agile environment
  • Building an evergreen body of research
  • Adjusting your course – you’re not sailing to an island but a moving target
  • Don’t forget your business objective
  • The problem with the SCRUM definition of product owner
  • Getting customer input for startups
  • Managing customer input from large/enterprise customers
  • Balancing costs and benefits
  • The Waterline Principle

 

You’re Trying Too Hard

How Did You End Up Here?

There was a void in your roadmap. Your competitor launched a new product. You had extra budget that needed to be spent.

Whatever the reason, there was a gap and the pressure to fill was too great to resist.

The good news is that you responded by shipping. You got something out the door and made a big deal about it. Isn’t shipping always a good thing?

The bad news was the result.

Your customers response varied from “meh” to “yuck“. The market ignored you. Or worse, the market did respond with a “WTF?” and other questions of ridicule.

You’re Trying Too Hard

You should have delayed the launch when you realized it wasn’t going to happen. You should have killed the advertising when you realized it was all smoke and mirrors.

You should have said no when you realized the product wasn’t fully baked.


Product Design for a Price Point – Hitting on all Cylinders

Designing a product to hit a specific price point is not easy. It means that you have to operate inside a set of constraints and make painfully hard decisions.

Making these trade offs will result in some features not being included. These features may be ones that your customers will tell you are very important. These features also may be part of your competitors’ products. This is what makes it such an interesting challenge and a difficult task.

When you find the right balance, you can deliver a product that stands out in the market even though it has limitations (think of the Kindle Fire compared to the Apple iPad). Pick the wrong combination and you end up with a product missing features, out of price position, or both.

A few weeks ago, the WSJ ran a review of a sports car that I think highlights a good example of designing for a price point. From the start, the reviewer is aware that this car has had to make compromises compared to higher end sports cars. The reviewer notes,

If this car were built by, say, BMW, the designers would have packed the fender wells with no-profile tires and splendid 19- or 20-inch alloy wheels. Such footwear looks great and commands serious cornering grip.

However, the product designers made choices designed to create the best experience they could given the limitations of their price point. These choices helped to provide the perception of a better, “faster”, experience even though they couldn’t afford to install all the high-end bells and whistles.

The review continues,  noticing the impact of the design choices,

The BRZ, very much by design and very much in the style of the great Mazda MX-5, goes in the other direction, drawing out and exaggerating automotive cues that give the impression of going fast at wholly more sane speeds. One hugely affective cue is auditory: Thanks to resonator tubes pumping intake and exhaust sounds into the cabin, the BRZ snarls and burrs and howls like a garage-built retro rod, even when it’s accelerating away from a light like an ice-cream truck (0-60 mph in about 6 seconds)….The BRZ thus perpetrates a splendid and useful fraud on its buyers: a not-so-fast sport coupe that is an absolute riot to drive.

What a great lesson! Just because you can’t compete head-to-head with a competitor doesn’t mean you can’t find creative ways  to still provide a compelling experience for your target market.

 

 

Image Credit:  Klaus M