Category: Startups

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Product Management Startups

Desire-friction mismatch

Today

This reminded me of something: for ten years now, I have dealt with or advised founders about desire-friction mismatch.

Founders often assume that because they have built a particular product that a certain defined market segment desires – ie because they have achieved product market fit, that their numbers should now take off.

It doesn’t always.

PMF is an important milestone. But achieving it doesn’t tell a founder how motivated the average person in their market segment is. It doesn’t tell them how their promise tips the stakes for average would-be customers.

At a certain level of friction, customers’ desire to start using your product won’t be enough. They’ll sigh and move on.

At this point, a founder needs to engage their product person. To take whatever minimum viable product that got them to product-market-fit and iron the wrinkles out of the customers experience. These wrinkles exist as a result of compromises made – rightly – to speed up the initial go-to-market.

But now the founder needs to invest in the product so that it’s simple to understand and easy to get started with for the larger-than-earlier numbers of customers to come.

Unfortunately, it’s at this very point that a founder’s attention and investment turns from product (and tech) to sales and marketing in an attempt to acquire customers at a larger scale than during the PMF phase. To now look for sustainable, efficient acquisition/distribution channels.

What can happen – and too often does – is that a startup spends more (money, time, attention, emotion) in acquiring lots of new leads and sending them down a signup flow where the friction outweighs their desire to get through it.

When numbers don’t ramp up as quickly as expected, the founder is now unsure about the product-market-fit itself. They think about what they got wrong. Maybe they revisit it. Maybe they have the product people make cosmetic changes to the product trying to communicate the value proposition even more loudly (too often by adding more text/visual clutter).

In this case the problem isn’t that customers don’t get the value proposition. They do – the team’s now past the PMF milestone. But they don’t have the motivation to deal with the friction that the still-early product presents – not every product is as important to people’s lives as play-to-earn games like Axie are to people in the Philippines.

Being able to diagnose if it’s lack of PMF or desire-friction mismatch is often what makes the difference between an excellent startup’s post-PMF journey taking off, and sputtering.

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Product Management Startups

Why don’t founders value the initial go-to-market?

I was recently asked

I can’t seem to understand why GTM (go-to-market) isn’t something that founders prioritise – is it cognitive friction? Is it a blind spot?

From my experience operating and advising early stage startups, here’s what I think is the answer:

I think it’s that in the early days of any company, in the pre-product-market-fit phase, the product and go-to-market are intimately connected. Unless you have a product with a captive market or captive IP (both rare), you need to develop and market the product in tandem. The marketing (or sales) head and the product head need to collaborate as peers. In fact, as one.

This doesn’t sit well with most founders. They usually have a clear idea of the product they want to bring to market. It’s why they set up the company in the first place. For many, it’s a chip on their shoulder, for instance they are now creating something they were not allowed to in a previous job. Consequently there’s a clear build phase where, as someone said about Steve Jobs, the only market research is looking into the mirror every day.

In turn, this means that by the time the product is ready to be taken to market, the founder is invested not just in the idea, but in its initial manifestation. The person in charge of go to market is given a fait accompli and told to sell it. The founder is confident it’ll sell because in their minds they’ve built the perfect version one.

If the startup is lucky, this approach’ll find traction. Usually, it doesn’t.

Finally, making things worse, because how invested the founder is in the product by now, they expect it to sell, quickly. And so they expect the try-learn-improve iteration phase to be dramatically shorter than it should be. That leads to a phase of short term, tactical fixes that usually doesn’t result in cracking go-to-market channels and positioning – or any learning at all.

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Startups

Out-capitalised, out-executed

I read an instructive Twitter thread about how one startup that focused on organic growth and profitability was out-executed by another that decided to raise a lot of money at the beginning.

Usually these stories are about one startup using its money to unfairly subvert the other. In this case, the startup that raised capital, Asana, was simply able to market better, hire better, build better, and eventually even design better.

Today the startup that wanted to grow organically, the ‘right way’ operates as a slimmed-down cash-conscious team out of India; the other is Asana, the well-known, now-public company.

I have seen this play out up close a few times. When a new market opens up, speed is everything. And capital buys you, above everything else, speed.

When you tell a target segment you’re thinking about their problem, when they realise that you’re the one that’s doing something about it, you build up mindshare and – importantly – trust.

That means you can get away with a pretty basic product that chips away just enough at their problem. Now that you have actual customers to understand the problem in detail, your product can get better quicker, and that leads to more customers, which sets your flywheel in motion.

Capital is the biggest determinant of whether that flywheel’s going to spin for your product or for your competitor’s.

End note: In the same thread, the writer describes situations in which an organic-growth approach has a shot at working:

Also read the Jan 2020 post on the possible sunset of the Capital as Moat model. This makes the opposite point to this post, but it’s for a very different stage of a company:

The Capital as Moat model
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Startups

What it does, not what it is

There’s much to like about this post by entrepreneur David Sacks. Titled ‘Your startup is a movement’, draws comparisons between successful startups and successful political campaigns – having been written around the time of the 2020 USA presidential election campaign.

One section that’s stayed with me, though, is articulating the problem. This part hit home:

Many founders are like bad politicians — they are “policy wonks.” They just want to talk about their features. I’ve got news for you: Nobody cares about your features. At least not yet. First people need to understand the problem you’re solving. Then they need to understand your solution. Only then will they be interested in your features. 

I’ve been guilty of this more often than not – and not always in the context of startups. Because I’ve understood the problem landscape, I think that merely describing a solution will make its merits and demerits self-evident to someone who’s given this a lot less mindspace – which is all my prospective customers.

Finally, my rational mind rebels against this even as my common sense knows this to be true:

As marketing guru Christopher Lochhead has pointed out, if you speak more articulately about the problem than anyone else, people will assume you have the solution. 

(Featured Image Photo Credit: Daniel Frank/Unsplash)

Categories
Product Management Products and Design Startups The Dark Forest of the Internet Wellness when Always-On

Failure to empathise

On a new feature in Slack via which anyone on Slack can message any other Slack user, across companies:

When Slack introduced the feature today, it hadn’t implemented any features that can help someone who gets harassed. There is no block button or built in mechanism to report the message to Slack or your company’s Slack administrator.

https://twitter.com/44/status/1374737695444901891

Slack reacted:

… “we received valuable feedback from our users about how email invitations to use the feature could potentially be used to send abusive or harassing messages. We are taking immediate steps to prevent this kind of abuse”

– Slack Says Letting Anyone Message Anyone With Few Limits Was ‘a Mistake’

This is a failure to empathise, a rather basic failure when designing products. Gmail took off in its early days in large part because it decimated spam. That is a fifteen year old lesson. Twitter’s issues with harassment and spam are an ongoing lesson.

At Slack’s scale, one should expect product managers to consider the potential for harassment. For information overload. For ambiguity. For bias.

If Slack – or any other company – consciously builds and promotes its products to be used by organisations of all sizes, across all industries, globally, they cannot also dismiss or discount these as incovenient or unnecessary.

These considerations will slow down design and development, they will make the product somewhat less agile and they will increase monetary costs.

That’s the price of making a product that widely available.

You expect that with the increase revenue from this scale, you hire the best product, design and engineering talent to build efficiently while also considering everything above.

(ends)

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Life Design Product Management Startups

Authenticity

Mundane as it sounds, that’s the most powerful motivator of all, not just in startups, but in most ambitious undertakings: to be genuinely interested in what you’re building. This is what really drives billionaires, or at least the ones who become billionaires from starting companies. The company is their project.

One thing few people realize about billionaires is that all of them could have stopped sooner. They could have gotten acquired, or found someone else to run the company. Many founders do. The ones who become really rich are the ones who keep working. And what makes them keep working is not just money. What keeps them working is the same thing that keeps anyone else working when they could stop if they wanted to: that there’s nothing else they’d rather do.

That, not exploiting people, is the defining quality of people who become billionaires from starting companies. So that’s what YC looks for in founders: authenticity. 

– Paul Graham, “Billionaires Build”

This is actually harder than it sounds. Authenticity is rare. If we could assume that everyone we met was authentic, navigating personal, professional and other spheres would be a lot less stressful for most of us.

But it is also because authenticity is so rare that it is such a powerful signalling mechanism with go-to-market, customer engagement, and especially hiring. I have seen each of these first-hand.

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Audience as Capital Discovery and Curation Making Money Online Products and Design Startups

Rewarding affinity, not transactions

We’ve discussed before the increasing population of what I call CoCoCo – content → community → commerce, and what’s also been termed Linear Commerce.

Infinite reach, micro-brands and linear commerce – Part 1

Now, a recent Harvard Business Review article touches on this in the context of loyalty programs: “Want More Loyal Customers? Offer a Community, Not Rewards“

True loyalty is emotional and irrational and leads to customers feeling like they’re part of an exclusive membership group which then leads them to become loyal subscribers or consumer network participants.

as opposed to

some companies allow you to earn points for following them or writing a product review. This sort of bribery usually attracts the least loyal and least valuable audience — people mostly interested in claiming the reward not invested in the brand… [things like this] have more to do with an economic transaction than with true affinity for a brand.

I have been part of great communities, and they are everything that the first quote talks about. I’ve also seen such communities decline as the company behind the brand failed to convert this loyalty into commercial success. And I’ve seen referral rewards dressed up as loyalty programmes that ultimately attracted the sort of people the second quote describes.

At its core, the most influential customer-facing person at a brand need to be genuinely interested in engaging with customers and understanding what they want, in the context of the brand. Creating products and solutions does not automatically beget a community.

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Making Money Online Products and Design Startups

No-code gives founders superpowers

I’m working with a few founders, mostly first-timers, who are going about building the initial experience for their very first customers in an interesting way. Two short tweets:

When it comes to raising capital, being able to demonstrate traction with a few hundred or a few thousand customers quickly is extremely valuable. Ditto when hiring a team or even a technical co-founder.

When it comes to actually going ‘live’, the founder leapfrogs the usual build phase → market phase transition. The founder is both building and marketing simultaneously. It’s a much quicker road to product-market fit.

Finally, when it comes to the actual tech that the founder’s using, a no-code set of tools is typically built by startups building for other small startups. They’re well-thought-out: they make it easy to build visually compelling, data-heavy pages (Notion), they make it easy to ‘glue’ together disparate elements (Zapier, IFTTT), they make it easy to build and engage with an audience (Convertkit), they even make it easy to collect money from that audience (Gumroad, Memberful) – all are things that would otherwise require complicated signup forms, KYC, licensing/commitments, and complicated technical integration.

This tweet captures this dynamic well:

Categories
Startups Wellness when Always-On

Hustle and downtime

https://twitter.com/realbritchavez/status/1351570409469038592?s=20

Startup Twitter is a lot about constant hustle. There is hardly ever much said about self-care though (even when there is, it becomes competitive). At least at some point I hope there’ll be as much virtue-signalling by the same folks about downtime as there is for hustling.

Categories
Data Custody Privacy and Anonymity Products and Design Startups

Beautiful products that respect their users – where are they?

Why is it hard to find beautiful products that are respectful of their users’ privacy and are designed to last?

There’s such an opportunity for something that looks as good as the Nest, but doesn’t require two-factor authentication to replace. I didn’t want to call it dumb but beautiful, so let’s say “autonomous and beautiful” appliances and home devices. I still want it to be smart, but if you’re going to have the risk profile of a device that connects to the internet, it needs to be worth it, like Brilliant, Sonos, smart TVs, or connected cameras.

– Matt Mullenweg

One argument is that design talent is expensive, and that they work at those very companies whose idea of advanced equals internet connectivity.

Free/Open Source Software has disproved this for engineers. For over three decades it’s shown that the world’s best engineers can work on products that respect security, privacy and work independently of the Internet. It could be equally true of designers, and there are in fact well designed open source software products – take the Firefox browser or the KDE desktop environment or the NextCloud suite. One problem is that it isn’t mainstream yet.

The main problem, I think, is that great companies stay independent for shorter and shorter times. Nest was an independent company was less than four years from its founding to its acquisition by Google. That’s less time than you expect your thermostat to last. I have more to say on this but I’m organising my thoughts at the moment.