Building for Users vs. "The Business"
Resolving a product manager's faustian bargain
First, a fake apology (sorry not sorry):
I thought I would do this column weekly. I’ve managed 2 in two months. This isn’t because I’m busy. I’m not working at all (although I’m open to consulting gigs starting in November). It’s because I’m having a lot of fun. I spent 2 weeks rock climbing, kayaking and trekking in Ladakh, I took 3 trips to Uttrakhand, I wrote a few new songs, I’ve played a ton of basketball, I’ve had a lot of wine and looked at a lot of art. I’ll go back to being a nerd herder next month, but this summer has been great. I recommend you find your own meandering if you get the opportunity.
The Weekly Monthly Held Strong Belief:
One of the toughest decisions in product management is optimizing for user love vs. optimizing for the financial realities of the business.
Shouldn't we always focus on user success and the results will follow on their own? Yes! But no, not really.
At its core, prioritization is risk mitigation. There are dozens of frameworks to make this process more objective. But they are only effective if we know what we are solving for. This post will help you answer that question.
This article (like the rest of this blog) comes from coaching sessions I do with tech leaders. If you’ve got a product engineering leadership question you’d like to bounce around with me, I do free sessions every week month for this newsletter. Just fill the form.
Jumping in.
Background:
Sourav Sarkar is the principal product manager at an early stage ed-tech company focusing on special education training for teachers.
The company is early stage and venture backed - went through a pivot last year and is rebuilding.
The current customer base are schools which were mostly acquired through professional / personal networks. Now is a crucial time to find PMF and expand.
The question:
How do we decide between internal products to help with sales and operations and projects to improve the end-user experience?
What have you tried so far?
I used the Kano model to prioritize the insights drawn from inputs I got from my CEO and sales team. I'm still negotiating with my CEO that the product team should spend more effort talking to customers(school authorities), and end consumers(teachers).
The CEO is supportive of this, but is pushing for more projects to drive revenue (like sales and marketing systems), even though it means not prioritizing the needs of our users. How do we strike this balance?
What would a great solution look like to you?
1. A better discovery process where we can prioritize the problem (insights) the right way, and decide what to build next.
2. Install product thinking in the team, the team only thinks on the line of a small feature(and not customer problem) as they didn't have the exposure in the product thinking.
Session notes:
All prioritization is risk mitigation. Given that, it’s important to realize there is no right answer, there are just smaller and bigger risks and the ones we can afford to address now vs later.
Marty Cagan of the Silicon Valley Product Group posits there are 4 Big Risks.
value risk (whether customers will buy it or users will choose to use it)
usability risk (whether users can figure out how to use it)
feasibility risk (whether our engineers can build what we need with the time, skills and technology we have)
business viability risk (whether this solution also works for the various aspects of our business)
In most organizations, prioritization starts with a spreadsheet of mismatched ideas from the CEO and others in the company, and then they are stack ranked. That’s like taking a bunch of answers and then trying to figure out which question to ask.
It will lead to a convoluted strategy where we’re doing a little bit of everything. Early stage startups are probably broken in all four ways Cagan highlights above, but don’t have time to do a little bit of everything.
Instead, I find it helpful to identify the Big Risk we care about the most, and then start generating bets which can de-risk it.
Examples:
R1: If we don’t improve the retention and NPS of educational experiences, teachers and principles will not tell educators in other schools. Our business is too low margin to rely on advertising so this will cause our CAC to go too high. [Value risk]
R2: Joining zoom calls and contributing to discussions is hard for many teachers given tech skills and equipment, this leads to a substandard experience for the entire class which hurts retention and word of mouth [Usability risk]
R3: Building an integrated learning environment would help drive outcomes, but requires more engineering resources than we can afford [feasibility risk]
R4: If we don’t increase our revenue to X, we will struggle to raise enough money to execute any of the above points. Also, without net-new customers from GTM efforts, we may not be doing reliable customer research. [Business viability risk]
In this case, R4 is the biggest risk. Does it directly address the needs of their users? No, but it’s still the biggest risk to the product/business.
I know this is an unpopular take, and many entrepreneurs will claim they “don’t build for investors” and many more VCs will claim “We trust our teams to think long-term.” But, having been on both sides of that table, I can say with a high degree of certainty that both these claims are the exception not the rule.
There’s nothing wrong with this. For the VC, they are also managing risk. Your failure to increase revenue quarter on quarter will make it harder for them to attract additional investment to the company.
Wrapping up and other ideas:
I hope this short post helped you think about the false dichotomy between user-centric and business-centric features. All prioritization is simply risk mitigation and your job as a PM in a startup is to measure the quantum of risk in any given area and execute until it is no longer the number one thing that will kill you.
If there’s anything you’d like to share on the above or additional questions you want to dig into, please leave a comment below and/or fill out my free coaching session form.