Building a Valuable, Usable and Feasible Product

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Most of what I write in this blog is applicable to software products especially in the consumer space, but it can be generalized to other types of products as well.

What do you need to build a great product? Obviously you need an idea first.

Let’s say you stumbled upon an unmet or unstated need in the market. Or you have an idea, which can meet the needs of customers better than current products in the market. This product could be differentiated by its unparalleled user experience or by its decrease in price. If you remember from my earlier blogs, I said that buyer utility is value perceived by the user minus the price. You can increase the buyer utility by either increasing the value and keeping the price the same or providing the same value at a reduced price. Decreasing the price involves decreasing the cost. You decrease the cost by increasing the operational efficiencies, which requires innovative ideas. For example, Dell reduced the cost of desktops and laptops by using build-to-order approach, which reduced the inventory cost by adopting just-in-time inventory. By delivering computers directly to consumers it was able to save on the channel cost (retailers). Both of these savings were passed on to consumers in the form of reduced price.

Good, so now you have an idea. So how do you go about building a product? The first thing you want to do is validate the idea. Who do you talk to? The obvious choice would be to talk to friends and family. What if they do not like the idea? Do you drop the idea? Even if you friends and family do not think it is a great idea, you should still pursue it further, because they might not be your target customers and hence, might not have the appreciation for the need your product solves. You want to make sure you validate your idea with your target customers. If you are in the Silicon Valley you can find them all over the place in meet-ups or coffee shops. There are literally hundreds of entrepreneurs and innovators/early adaptors all over the place in Palo Alto, Castro and SF. They are more than willing to listen to your pitch, bounce ideas off of and be the guinea pigs for your beta version of the product. You also want to do feasibility study to make sure the product is something which can be built within reasonable time and budget.

Now that you have validated the idea, what’s next? This is the most important step in your journey to building a great product and eventually a great company. You need to select co-founders. It is rare that you will have all the skills to build the product and also manage the business side yourself. And as the saying goes, two heads are better than one. There is no simple answer to this question. The first thing you want to do is conduct a honest assessment of your own skills. What are you good at and what skills do you lack. This will help you decide on the complimentary skills you want to look for in a potential co-founder.

My personal preference is three co-founders with complimentary skills, so that there is a tiebreaker.

1. If you are not a rock star engineer yourself, the first person you want to look for is a technical co-founder who is great at writing code.

 

2. You also need a world class Sales/Marketing (depending on whether the product is consumer or enterprise) guy who can sell. I have seen many great products fail in the market because of a messed up marketing strategy or an incompetent sales executive.

 

3. Finally you need a creative designer

 

You want to make sure that everyone in the company is writing code, designing, or selling/marketing the product. You don’t want employees working as support staff at such an early stage of the company.

You need to especially pay close attention to who you select as your co-founders. You are going to go through everything together. You want to make sure your co-founders have the grit to stand with you. The gender of your co-founder is also something you should look out for. You are pretty much going to go through the same roller coaster of marriage except the sleeping together part. You are going to have good days together along with the bad. Being a founder takes a lot out of you and you need your co-founders to carry you through the highs and the lows as you would for them. If you cannot stand the person outside of the office, he probably should not be your co-founder.

Next you want to hire 2 or 3 developers/designers who will be working closely with your technical co-founder. These are what you call employees zero. You are looking for people who have the mindset of for working in startups. If you are in the bay area, this will be easy to find. People who want to work for startups are generally hoping to one day be entrepreneurs themselves. They understand the uncertainties of the startup world and are glad to work for lower salaries but higher equity for the potential upside in the event of an exit. These are the people who make companies like Google and Facebook possible.

When hiring designers you want to hire someone who is mastered in both visual design and interaction design. Interaction design is about tasks, functions and information flow. It maps the user model to the system model using the interaction model. They create what you call wireframes.

 

Once the interaction design is complete and has gone through a few rounds of usability testing, you are ready to start engineering. Visual design and engineering (development) in parallel.

Visual designers add color and emotion to the wireframes. They add the look and feel. Visual design is a creative process and hence more for the kind of people you will work with will be different from the engineers. Most of these Visual Designers do not even have a college degree, or even if they have one, it is not that critical.

 

The product you build needs to valuable, usable, and feasible.

While you are building a product, you want to start working parallel to the go-to-market strategy. If your product caters to enterprises, you want to start the customer development process in parallel. For a consumer product you want to conduct usability studies along with product development. It is important to constantly recheck the interaction design with the target customers so that you are constantly building a usable product.

If you are building an enterprise product, you want to create a consumer advisory group from your target prospect companies. This group can help you not only provide valuable feedback during your product development phase but they can also be the pilot customers and can act as an initial reference. Your sales representative should be driving these efforts and his primary responsibility should be to find pilot customers who are wiling to try your product before launch once the beta version is ready. These volunteers are aware that your product is not yet mature and might have bugs that still need to be worked out.

If your product is a consumer focused product like a mobile, then you want your marketing person to start developing a go-to-market strategy and also start working on the product marketing. They need to start blogging to evangelize the product while it is being built and the problem it solves. They need to differentiate current solutions in the market and figure out why they are sub-par. They need to start building relationship with the bloggers who can cover the product during launch. They need to create social media handles and start creating buzz to increase the products WOM (word of mouth).

 

While a product manager is essential to defining the product, it is generally the combination of three co-founders who fill the role of a product manager in the early stages of a startup. Eventually as the startup pickups, the CEO or interaction designer fills the role of a product manager. Once the company starts moving from the introduction phase to the scale phase, the CEO needs to focus a lot more on sales, operations, and making sure customers are happy. This is when you generally hire a dedicated product manager.

Always be learning - A life lesson by Bruce Lee

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Like every Indian growing up a small town in southern India, I grew up watching Bruce Lee movies. Bruce Lee was the greatest and most influential martial artist in modern times and his life story has been an inspiration for generations. As an Asian, you can’t not know who Bruce Lee is. All his life has been about capturing his internal demons and conquering one goal after another. Coming from modest means, he achieved world fame both as a martial artist and as a movie star. The level to which he developed both his body and his mind in the pursuit of martial arts was simply incredible.



Bruce Lee started out with huge goals in life and achieved so much in his short life that he definitely has some motivational life lessons we can learn from.

“Use only that which works, and take it from any place you can find it.” – Bruce Lee

As a kid growing up in a small town, he was a great inspiration of what you can achieve if you put your mind to it and are willing to learn. You are either living or dying and if you choose to be living, you need to be constantly learning. I took up Martial Arts at a very young age of 9 and pursued it for 6 years. Those 6 years were the toughest form of training to develop one’s body and mind and they helped me learn dedication, commitment, pursuing goal relentlessly, constantly learning new techniques, and not to be a superior fighter but to be a disciplined disciple.



My advice would be to always be open to the lessons around you no matter where they come from. Everything in life can teach you something if you are open to receiving the lesson. An 18 year old taught me more about myself in the last 3 months than I could learn in the the best of schools.

Every person has good and bad in them, but they can definitely teach you something. You cannot just restrict yourself by saying you areonly going to learn from a person who you view as only good. Even great scientist and philosophers have some bad in them if you look close enough, which does not mean you should not learn from them. You take the good with the bad and learn what you can from the person.

Product Management Approaches - New Product vs. Existing Product

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I wanted to compare and contrast the product management approach for a new product vs. an existing product. As a Product Manager, you need to be conscious of which phase your product is at in the product life cycle.

If you are taking up a new job, then it is critical that you keep track of the stages of your product as not all product management approaches will fit to all types of products. Also, different Product Managers are good at different product management approaches.

For a new product the following steps generally take this logical order:

Opportunity Discovery ==> Opportunity Assessment ==> Opportunity Validation ==> Product Discovery ==> Product Validation ==> Finalize Metrics (KPI) ==> Execution ==> Go-to-market strategy ==> Launch ==> Post-Launch Assessment

Opportunity discovery occurs mainly through ideation, where you explore various ideas, but often the founder in a startup or other senior executives in a large company tell you what you need to explore. You are mainly trying to find a customer’s needs, which are either stated and unmet or unstated needs, which your company can solve by bringing a new product to market.

In the Opportunity Assessment phase, you evaluate the product idea to decide whether it has any legs. You want to achieve something quick, instead of writing a long MRD document. For more coverage on the topic you can read renowned Silicon Valley Product Management thought leader Marty Cagan’s blog here. The goal of the opportunity assessment is to evaluate if the company should pursue the idea and if the answer is yes, then assess what it will take to succeed.

During the Opportunity Validation step you are validating your hypothesis with the target customer. If the target customer is not excited about the opportunity, then the necessity of the product is not genuine enough that the customer will eventually pay for a solution.

In the Product Discovery phase you are quickly iterating through various solutions to meet the customer’s need. In this phase you develop a rapid prototype, which you can present to customers for confirmation. In the Product Validation phase, you present the prototype and gain valuable feedback for further refinement.

If the target customer does not resonate with the product, then either one of the following is true:
· You are talking to the wrong user
· Your solution/product does not meet the user’s need
· The necessity is not valuable enough for the user

The first two reasons are fixable, but if you have stumbled upon a need, which is not critical enough for the customer to either use/pursue a solution or pay for it, then you are better off abandoning the idea.
After the product validation phase, you need to define product by using business metrics, with which you can measure the success of the product in the market. Defining success metrics is a separate blog topic in and of itself so I will skip past it for now.

Finally, you need to develop the product. You must create the go-to-market strategy and launch the product. After launching the product you need to measure the product performance against the metrics you have created earlier. It is important to continuously compare against those metrics and iterate on the product features until you are moving the needle on your metrics.

Each of these phases are important individually and are based on where the product is in its life-cycle (development, introduction, growth, maturity, decline), you might be involved in one or more of these activities.

Compare this to the product management approach you will adopt for existing products where you analyze the usage, develop metrics, and build features to meet business goals. Most of these metrics (business or product) will revolve around acquisition, conversion, and retention. Engagement features are part of the retention metrics.

For an existing product the following steps make logical sense:

Usage Analysis ==> Create Metrics (KPI) ==> Execution ==> Launch ==> Post-Launch Assessment

While taking up a new job, it is critical for you to know which product you are going to lead (new vs. existing) and what stage of its life cycle it is at. These two dimensions will help you choose the best product management approach for the given situation. In this blog we covered the differences in Product Management approaches between new and existing product. I will address the differences in product management approach for a product at various stages of product life-cycle in future blogs.

Model Thinking – The Fox and the Hedgehog

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Someone I love once told me that I overthink everything. Ironically, I started overthinking about why I overthink. After a lot of thought I realized that I try to fit every problem into a model for analysis. Models help me structure my thought process, and help me question my assumptions and communicate my analysis. Most of my thought process is spent in trying to fit the prevailing problem to an existing model, whether it is the Game Theory model, Wisdom of Crowds model or Markov Processes.

“Essentially, all models are wrong, but some are useful” - George E.P. Box

Models do not give you nicely packaged answers. Nor are all the models always right. They help you structure your thought process and help you find a solution. I started studying more about formal models in a course I took from University of Michigan on Coursera by Scott E Page. Scott is the Director of Center for Study of Complex Systems. I read a few of his books, one of them being Complex Adaptive Systems. In this book, I found the concept of Hedgehogs vs. Foxes to be intriguing. This concept seems to coincide with the manager vs. leader arguments I find in literature that I studied in the leadership class during my short stint at National University of Singapore.. In Complex Adaptive Systems, the concept I speak about talks about how the Fox knows many things but the hedgehog only knows one major thing. I focused on analyzing my thinking process and where I fall on the scale of fox/hedgehog. It is interesting to analyze who you are, so that you can stop trying to be who you are not.
 


If you analyze the three circles of the Hedgehog concept, it basically talks about analyzing your passions, your skills and what can give you economic satisfaction and then choosing something, which is the intersection of the three. I wrote another blog on “Anything Worth Doing is Worth Over Doing “which talks a little more about passion and how there is a feedback loop between passion and skills.
 


Philip Tetlock’s book "Expert Political Judgment", talks about idiosyncrasy and how erroneous 'expert' judgments about future events can be. Hedgehogs use only one model, while foxes use many informal models, as shown in the picture below. Isaiah Berlin (social and political theorist, philosopher and historian of ideas, "thought by many to be the dominant scholar of his generation") said, that Hedgehogs have just one, powerful response to a threat: they roll themselves into a ball, and present spikes to possible predators. Foxes, by contrast, draw on many different patterns of general understanding, making mistakes along the way without ever committing to a grand strategy; they have no single response to challenges. These differences between the expert and the generalist are what Tetlock used to name the two ends of the dimension of distinctive 'thinking styles' for future oriented complex problems. His book shows that one of these cognitive styles is superior to the other in predicting events and adapting to new information.
 


People with Hedgehog cognitive style are what I call “single minded people”. They like simple models, which are decisive and result in binary verdicts and are easily replicable. They don’t like multiple scenario models each with a different probability. They need established, uncontroversial models, which have examples of having succeeded in the past. They need approval of their peers and resist any argument contradicting the model. They basically need a sense of closure and finality in order to feel happy.
Foxes on the other hand do not commit to any one model and prefer to calibrate their insights based on many different perspectives. They adapt quickly to unexpected events and are tolerant to the idea of being challenged on what they believe to be true. They thrive in the face of uncertainty, and continuously adjust their responses, rather than sticking to a simple preset plan. Hedgehogs flourish in an environment with minimal uncertainties, while Foxes thrive in chaos.
 


Now, compare this to the theory of Managers vs. Leaders in the corporate world and you will see a lot of overlap. The concept of “targets and accountability” was made by and for Managers, who embody the characteristics of Hedgehogs. Leaders on the other hand, thrive in an uncertain environment much like the fox. Situations like a new product/business or there is a crisis, which needs to be handled by thinking outside the box. Managers are good at following the process that has already been laid out by leaders or improve the process for achieving efficiencies once the business has reached a certain level of predictability or a crisis has been resolved. Managers are good at “keeping the lights on” and will succumb if put in a novel situation or crisis for which they do not have direct experience dealing with.

In Silicon Valley you find three types of people:
1. People who work for large companies
2. Entrepreneurs who begin startups
3. People who work for startups

The first type is what I call Hedgehogs, for they need the predictability and stability of large companies to go about their life securely. They cannot handle waking up in the morning with the uncertainties that come with the world of startup companies. They serve a purpose as these large companies are doing what you call incremental innovation rather than cutting edge invention or innovation. Intrapreneurs are an exception to this, but that is a topic for another blog. Entrepreneurs are Foxes who thrive on the uncertainties of the startup world. They cannot stand the routines of working in a large company, and trust me they will go crazy. People who work for startups are somewhere in middle in that they are closer to Foxes but for various reasons, including lack of opportunity or a great idea of their own, they choose to work for a startup. Most of these guys do eventually end up creating their own start-up.

While Foxes are actively looking for opportunities to address complex problems and are always ready to jump onto the next big thing, Hedgehogs will not be able to recognize an opportunity even when it is presented to them Sometimes, even when explained about the opportunity and rewards, they will analyze the risks associated with it and choose to continue on the conservative path.

Unfortunately the world has become too complex for the Hedgehog’s style and we need Fox-like outlooks to deal with today’s problems. The problem with the Fox’s style is that it does not come with a neat, closed model, defined goals, and easy metrics like the Hedgehog does. It requires gradual iterations to move forward. The fox’s approach responds to new information, continuously re-calibrating and adjusting to the changing circumstances and eventually leading to a superior outcome. Today’s knowledge economy requires Fox-like approach and they intern will create the conditions for the future Hedgehogs to thrive. So, where do you fall on the Fox-Hedgehog scale? How do you deal with complex and uncertain situations? Do you use one style over the other or you use the combination of them based on the situation?

VP of Product Management or VP of Engineering? Reporting structure

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I always get asked whether the Director of Engineering should report to the Vice President of Product Management or if the Director of Product Management should report to the Vice President of Engineering. There is a third option which is more prevalent in the Silicon Valley:  Product Management and Engineering has its own parallel organization. I have personally struggled with this question a lot as I have navigated through my career.

Product Management is all about the WHAT of the product whereas Engineering is about the HOW. Product management is responsible for defining the product both in terms of its form and its function. Form is fundamentally user interaction design and visual design whereas function is a prioritized feature list which delivers the necessary value to end user. Another way to put it is that Product Management is central for defining a valuable, usable and feasible product. Engineering, on the other hand, is responsible for creating architecture and building/developing the product. It requires an ability to figure out the implementation of the architecture on the product and have the operational excellence to deliver a quality product on time with the given resources. You could say that Product Management is more strategic while Engineering is more operational, however both involve creativity.

A VP of Engineering will not have appreciation for the product management functions and will reduce them to requirement managers, if product managers report to them. Similarly, a VP of Product Management might over-emphasize the product definition aspects, focusing mainly on customer features while ignoring the engineering, technical debt/architecture challenges. Also a VP of Product Management will rarely command the respect of engineers - especially in Silicon Valley.

I think there is no one right answer, but I strongly believe that there is a need for an alternative option:  a new position called VP of Product or VP of Product Development. I would advocate for both the Director of Engineering and the Director of Product Management to report to the VP of Products. The requirements of an applicant to fill this position could come from an engineering or product management background, but I highly suspect that someone who has never delved in engineering could ever be successful in this role. The ideal applicant for this role would be someone who has experience in the engineering field and then later migrated to product management. I think that at least 5 years in engineering and an equal number of years in product management would allow a person in this position to have the technical depth to lead an engineering team while also have the necessary training to think strategically about market positioning. The VP of Products would allow for a middle ground that could command the respect of both the functions and would result in delivering a better product.

I have started seeing this role being defined as above in various technology/internet companies in the last year. I am hoping this trend will catch on and will lead to better products. I will write more about this in future blog posts.

S-curve and personal life

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S-curve is a sigmoid curve in mathematical terms, but we are not here to talk about mathematics. I have come across the s-curve while studying various domains including marketing, strategy, mathematics, and philosophy. This is a concept I have been intrigued by for a very long time.

If life and business could fit on a linear model, it would be an easy task to predict anything; everything would be so simple. Unfortunately this is not how it works. Cause and effect is not as simple as a light switch where the system reacts immediately.

Let’s first introduce the concept and then we can get into how it is applicable to personal life. Here is the generic form of the curve:

In the fermentation stage there is very little output for a large input. i.e: huge effort may yield only a little in the near future. This is the investment phase of the curve. In the Take-off phase, there is a large amount of output for very little incremental input. This is also known as the pay-off period. In the Stagnation phase, you have reached saturation and incremental output is relatively low compared to the of input.

This concept can be applied in many different fields. In the marketing domain, it explains the lifecycle of adoption of new technology or diffusion of disruptive innovations as shown below:

Diffusion or adoption is relatively slow at the outset but then enters the stage of hyper growth, which typically reaches saturation above 90 of addressable market.

In the innovation strategy domain it explains the performance improvement over time of given technology improvement initiative. It highlights that as you invest on improving the performance of a system, the initial gains are very low compared to the overall investment in R&D. However as time passes, it starts to payoff and the results are steep returns. This image below clearly highlights the time delay aspect of returns in a complex system:

An individual acquiring a new skill can be plotted on the s-curve as well. As show in the diagram below by Juan Mendez, moving up the personal learning curve can be slow at first as you attempt to gain expertise in your new domain. But with time it accelerates to a sudden mastery, this eventually slows down as you stop learning new things and stop enjoying the domain or as Juan Mendez puts it, when the thrill ride is over.

Similarly the s-curve can be plotted for individuals pursuing new goals. Eventually the thrill ride will be over. As you hit the saturation in your pursuits of new goals, you should jump on to a new s-curve. If you do not you still might be okay financially, but you might be less happy and your confidence along with your general well-being will take a hit. In my opinion this is what leads to mediocre existence. It is sad to see so many talented engineers in Silicon Valley fall quarry to this and end up working smaller jobs at large companies with only incremental growth in their careers.

As Saul Kaplan shares: “My life has been about searching for the steep learning curve because that’s where I do my best work. When I do my best work, money and stature have always followed.”

In summary, it is easy to plan life when things are linear which they could be if you want to lead an ordinary career. However the path to an extraordinary career and therefore, existence, is not-linear and our brain eventually requires the dopamine of the unpredictability. This picture makes a compelling case for how to navigate your career and personal growth. In closing, as Juan puts it: “Don’t be afraid. It takes courage to jump from one curve to the next. Staying in the comfort zone is easy, but greatness happens when you escape from it”.

Fear of failure - A motivator for success?

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I have preached in the past that fear can be the greatest limiting factor in a person's success. You might have heard that entrepreneurs, extreme sports enthusiast, and CEOs alike do not feel fear; this has to do with how they are wired. I personally live by the principle that if you feel fear, then you are going to be averse to taking any risks thereby limiting your success. It reminds me of a joke from the TV series Seinfeld - in which the airhostess, while closing the curtain to the business class section, gives an expression that fundamentally says, "If only you had worked a little harder."

I believe that the true road to success is not just the desire to succeed, but also the fear of failure. 

As I have entered this next phase in my life, I have become much more reflective of my personal philosophies and what made me succeed in some endeavors yet fail at others. I have been thinking a lot more about what motivates me to succeed. What makes me wake up every morning and keep pushing myself to go further? Part of what motivates me is the fear of failure. This makes me wonder, without the fear of failure would I have done everything I could to succeed? If you let fear stop you from pursuing a goal, then it is definitely a inhibitor. However, if it helps you plan and execute better, and motivates you to give 100% in order to succeed then fear can be a powerful thing.

Let’s say your fear for failure doesn’t motivate you enough to get you over the top, and you end up failing. Now what? It is your response to failure, which will eventually define you.  As a leader you are bound to fail eventually no matter how smart you are. If you have not failed then you have not pushed yourself outside your comfort zone. That said you then need to fight back. If one approach does not work, try another. Rather than letting failure stop you, let it prepare you better for the next battle. This will invariably lead you to greater success.

In my experience failure also helps you find out who your real friends are. I tend to test people in small ways. I ask them for help during a small crunch or rough spot even if I can handle it, just to see their response. You can judge a person's character and their dependability in this way. If a person is not available to provide a shoulder when you are down, will they really be there when you are going through a major crisis? The true strength of a relationship only gets tested in the face of strong adversity. Failure also teaches you empathy. It teaches you to be modest. It makes you realize that the most beautiful thing in life is when someone cares about you unconditionally.