27 Jan Mitigating Early Product Risk
Over the past month, I’ve focused on my growth in product during the span of the last few years. This led me to reflect on my initial days as a product marketing manager and internalize where we succeeded but also what we could have done better. From those thoughts, I’ve tried to put together a basic framework for mitigating risk in those formative days, weeks, and months.
These ideas are certainly not definitive or complete but I do hope it provides a relatively good structure for your initial thoughts about your product or business. The journey of product building only increases in complexity the further you get from day 1, having a process early creates habits that pay dividends in the long run.
Frame the problem
Fall in love with the problem, not the solution. Research it, talk to users, and become immersed in the problem before building the solution. It’s impossible to build a good product if you don’t understand what problem you are trying to solve. However, just like in economics there is a diminishing point of return on data and research. Nothing replaces feedback from the market.
When founders have an empathetic understanding of a market and they are connected to the problems they are solving, it’s a more ‘mature’ approach to a starting a startup. People tend to forget that your company is your first product, and you have to be intentional about building your company before it’s ready to really grow and scale. — Hunter Walk
Whether the problem is lack of energy choice, expensive diagnosis of a chronic illness, or unacceptable access to higher education, your solution to the problem will change over time. Yet, the product will only succeed if it solves a real problem for its users.
While admittedly a bit biased, this is where the best product managers are able to leverage extensive industry / business knowledge. It is important to have a grasp on which markets will be best for the initial launch, the partnerships that could allow for rapid expansion after traction, and the message that will resonate with customers.
Speaking of messaging, never underestimate the power of storytelling. Whether you are looking for users or investors, the product should be easy to understand and resonate with your audience. Empathize with the needs of the customer and show them you solve their problem.
Execute the go-to-market
If real estate is all about location, the go-to-market is all about execution.
Once you’ve researched the problem, it’s crucial to put a timeline in place for getting the product to market quickly.
Simply put, great execution is entering to market in the shortest amount of time possible with a minimal product that solves the problem. As my teammate Jonathan Crowder likes to say, “viable” is part of MVP. Bad execution is a lack of speed to market and inability to apply learnings from market once it has launched.
To achieve the necessary speed in our go-to-market, we broke up the B2B product launch into small sprints. Our goal was to get into the market as soon as possible. As a marketplace in a highly regulated space we looked for a market where the regulation was lowest and where we could generate the supply-side quickly.
Another criteria which we held in high regard for prospective partners (the supply) was the ability to service other markets quickly when we expanded. This strategy paid off almost immediately as the demand for the marketplace exceeded our early expectations and we were able to quickly answer the demand in additional markets where the completion was low.
On that note, if you are fortunate enough to gain traction it is important to understand why. Don’t over celebrate the early returns. This lack of understanding led me to champion a few features that eventually were built and not needed. Which leads me to….
Measure and evolve
The power of incentives and unintended consequences have always influenced my strategic business decision making. I firmly believe that what you measure determines the actions you’ll take and those actions will effect something you don’t anticipate.
It’s important to define these metrics before hand, otherwise you’ll shape them to your narrative or change them to ones that shed your product in a more favorable light.
A little over a year ago, the team at Andreessen Horowitz published two blog posts on startup metrics (32 metrics total; part 1 and part 2) that everyone looking to start or run a company should read. Here are the ones specific to product:
M-O-M Growth (if you have a seasonal business, Y-o-Y is just as important)
REVENUE (per user, repeat customers, margins are all critical)
It’s likely that one, or all of these metrics will shed light on issues with your product / business along the way. The important part is working feverishly to improve them as quickly as possible, don’t prolong the problem by refusing to accept the results.
When beginning to improve the product, don’t fall into the trap of making too many changes to the baseline user path at once. Early on it’s likely you have too few resources to measure and then act upon several changes immediately. Focus on the changes you believe will impact your metrics.
As you scale, your capacity for complexity grows but be aware, the increase in infrastructure will tease you to attempt to make more changes than can be accurately assessed resulting in assumptions that might not be true. Adding complexity too quickly often keeps products from success.
There’s no 100% right way to build or launch a product. However, having a repeatable problem solving structure is important for achieving the desired results at scale. Pick a strategy that will allow you to remove emotion from the process and make decisions that are objective and rooted in data. Stay grounded in this approach and the results will follow.