Category Archives: product management

INSPIRED: How to Create Products Customers Love

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Marty Cagan is founding partner of the Silicon Valley Product Group, a consulting firm that helps companies with their product strategy. Prior to that he held product roles at EBay, Aol, Netscape among others. He is a well respected product thinker and several of the ideas in this book can also be gleaned from his insight blog on the SVPG website.

I had bought this book over a year ago as it was one of the highly recommended books for new PMs, but it sat in my Kindle until I finally got around to it recently. I concur with the advice about this book being an excellent read for new PMs, it covers an incredibly broad range of topics.

There are more than 40 (short) chapters in this book, so it’s impossible to talk about them all, but here are the parts that resonated the most with me.

Importance of product design – Even though the author was a platform product manager, much of the book is targeted towards products which have a UI and therefore there is a lot of advice on the importance of designers. He recommends doing away with PRDs in favour of high fidelity prototypes that can be tested on actual users.

Startup vs Large companies – Startups that are still trying to find product market fit are places where the emphasis is on getting things out of the door. They learn by shipping and mistakes are accepted. By contrast, large companies have a lot to lose by shipping an ill thought out feature and are much more risk averse and detail oriented.

Leadership by objective and roadmaps – This management style advocates giving people a goal and letting them figure out how to achieve it. Marty advocates a similar approach to road mapping. Leadership comes with a central theme and then rather than features, gives individual teams a set of goals and lets them decide what features to ship in pursuit of that goal.

Role of emotion in purchasing decisions – In the enterprise the dominant emotions are greed (If I buy this, I can save money or time) and fear (If I don’t buy this, I will lose to my competitors). In the consumer space, the emotions are more personal – pride, greed, love, lust etc.

Platform product management – There are three user personas a platform PM has to consider 1) Developers 2) Business head of the developers, and 3) End users. A common error is to think that since developers are the most important as they use the platform to create apps for end users. However, the reality is that the end user and the business head are much more important.

This resonated with me as it was a mistake that I made. It can be hard when your passionate development team comes up with lots of ideas on how to improve the development experience. You give in only to realise later that they didn’t really make a difference to the key objective of the product.

2016: Year in Review

It’s the start of a new year, so it’s time to reflect a bit on 2016 and look at what went well and identify where I can improve.

Reading

My target in 2016 was to read 12 books and to write about the ones that I found interesting. Writing about what you have learned improves your ability to retain information. I also get outside my comfort zone of self-improvement books and explore biographies and history. In 2016, I managed to read a total of seven books (and write about three).

  • Seven Habits of Highly Effective People by Stephen Covey
  • Deep Work by Cal Newport
  • The Elephant Complex
  • The Startup of You by Reid Hoffman
  • The Hard Thing about Hard Things by Ben Horowitz
  • Steve Jobs by Walter Isaacson
  • Don’t Make Me Think by Steve Krug

For 2017, I am planning to retain my target of 12 books. More than the number of books, I want to use the knowledge in them to become better. This is a hard goal to measure but important nevertheless. Another target is to read more about emerging trends and understand them – for 2017, I plan to read about Artificial Intelligence.

Writing

I had neglected this blog from mid 2015 to mid 2016 at which point I had resolved to start again and get to 12 blog posts for 2016. I managed half that number and stopped just three months after I began. The blog received a total of 500+ visitors this year which was about a 50% drop from last year.

The main factor that limited my blogging  was that I wanted to get serious about investing and the scene in India is very different than in the USA. Hence, I spent a considerable amount of time reading and researching the topic. It took nearly three months before I settled on a strategy and I should have more time going forward.

In 2017, I am targeting 18 blog posts. In addition to the PM posts, and the book summaries, I plan to start adding in a few posts about my travels. I visited Sikkim, Udaipur, Agra, Bali, and Sri Lanka this year and plan to visit many more in 2017 so that should add to the number of blog posts.

Career

2016 marked my first year as a Product Manager and was fairly eventful. My team launched our first big feature (We started development in 2015, but did not ship until early 2016), expanded in size, and began an agile transformation. I plan to write more on my learnings as a PM this year.

When I started my role, I fancied myself as a PM who would take on a design and business specialisation. This was primarily due to my interest in UI design and human psychology. However, my role was in the API and Developer platform team and this has led to me enhancing my technical skills. Technical PMs are definitely underrepresented among PMs and there is a growing demand for them, but I have not decided if that’s the path that I want to take.

In 2017, one area that I want to focus more on is my managerial/leadership skills. This is an area I had not given much thought to in the past, but as the team has grown and I move into a more senior role, it will become more important.

My average PM workday at Freshdesk

PMmemeA question that one can always expect from a prospective Product Manager is – so what’s an average day like?  This post is my attempt at answering this question.

7:00 AM: The alarm goes off and I get out of bed half an hour later.

8:00 AM – 9:00 AM: Hit the gym to workout. I try to workout three times a week. If I’m not working out, I go out for a walk and get some physical activity before it gets really hot.

10:00 AM: Leave for work. I don’t have a car, so I call for an Uber or Ola (Ola is the Indian competitor to Uber. It isn’t as cheap as Uber, but the sedan class of cars have wifi, which allows me to check emails while I ride to work. I live around 5km (3 miles) and it usually takes me about 20 minutes to get to work.

10:30 AM – 12:00 AM: I reach work and grab a cup of tea and check my emails, Twitter, and check my to do list for the day. This is not the most productive time of the day for me, so I try to keep it for light/shallow work such as reviewing the roadmap, collecting metrics, making notes etc.

12:00 AM – 2:00 PM: At 12, my team has our daily standup where we talk about what we did yesterday and what we plan to do today. Along with the PMs and engineers, we also have the PMM and QA attend this meeting. The QA at Freshdesk is organised as a functional unit i.e there is one QA team across the company and involving them in the standup is a great way to ensure that there are no communication gaps. Post standup is usually a productive time for me and I try to avoid meetings and distractions.

2:00 PM – 3:00 PM: I have a late lunch. Most days, I will head over to our cafeteria for the (free) lunch, but there is a food court downstairs with additional options that I will head to once a week. After lunch,  a fellow PM and I go for a quick walk. On my return, I usually spend a few minutes reading the day’s newspaper.

3:00 PM – 5:00PM: I try to keep most meetings in this time period as most people in the office are usually present at this time. Most days I usually spend 1-2 hours in meetings.

5:00 PM – 7:00 PM: This is another productive block of time for me, so I will use it for work that requires my full attention such as research, PRDs etc. Right now, I’m helping write the technical documentation for the APIs and the app framework.

7:30 PM: I spend the last few minutes of the day tying up loose ends and then I leave work at around 7:30 or so and I reach home by 8.

8:00 – 11:00 PM: At home, I cook dinner and relax. I will watch TV, play games, or do read interesting articles online. Occasionally (1 time a week), I will have a few small things from work to take care of, but most days are free.

11:00 PM: I turn off all screens at this time. I had pretty bad insomnia that improved after I  started limiting my caffeine and screen time, so I try to be disciplined about this. I will usually read a book until I feel sleepy. Right now I am reading “The hard thing about hard things” by Ben Horowitz and I will post my thoughts soon. I usually turn the lights off before 12.

Summary: I used to be really bad at answering the average day question when I first began working. This was because there was no average day – I was overloaded and did whatever came up. This resulted in me focussing a lot on what Cal Newport calls “shallow work” such as answering emails or solving support tickets. However, the deep work (research, PRDs) did not get enough attention. Recently, I have gotten better at recognising my productive times during the day and reserving them for work that adds the highest value.

Latest Updates

It’s been a really long time since I last posted but I promise to post more regularly (at least once a month) from now. I began the Oxford Comma once I began my MBA at the Said School of Business, Oxford. My main motivation was to provide the information that I had found missing when I was an applicant and I also wanted to improve my writing. However, once I left, there wasn’t anything I could add to the blog and more than a year has passed since I last posted.

After I graduated, I was looking for Product Management roles and I started a new blog to catalogue my experiences learning about the role. However, once I got a job, that blog started to be neglected as well. I intend to make more PM and career themes posts but I didn’t really want to maintain two separate blogs. In addition, I also wanted a blog to share my travel experiences and other musings.

Long story short, I plan to convert The Oxford Comma into my personal blog and make posts from all the aforementioned categories here. I have already merged all the posts from my PM blog into this blog. I plan to rename the blog name and domain accordingly.

Thoughts on Uber’s Surge Pricing

A few weeks ago, the following tweet popped up in my timeline.

By now, everyone is probably familiar with the mechanics of Uber’s ‘surge pricing’. When the demand for taxis increases, the price of a taxi ride spikes. The company claims that higher prices encourage more drivers to get on the road. It also rations taxi usage by ensuring that only those who really need the taxi immediately and are thus willing to pay higher prices, continue to use it while others wait for the demand and supply to balance each other out.

The economic principles behind surge pricing are widely accepted by economists, which begs the following question – why don’t more companies adopt this pricing model to boost revenue? The answer as Megan Mcardle points out is that raising prices during periods of high demand is usually very unpopular with consumers who feel like they are being exploited. This is reflected in the sentiment behind the tweet at the top of this post. This negatively impacts the reputation of the brand and thus companies will usually forgo the short term boost in revenue in order to prevent the long term loss of reputation. Uber itself has faced tremendous criticism when it has (automatically) raised prices during natural disasters or emergencies.

So why does Uber unabashedly continue to persist with its aggressive surge pricing algorithm? I believe that one of the reasons is that its business model enables it to use it as a competitive advantage. Uber is a platform business, with taxi drivers on one side of the platform and taxi riders on the other. Most businesses fight over customers, but platform businesses have to fight over the suppliers (taxi drivers) as well. As Ben Thompson points out in this brilliant article, the fight over drivers is much more consequential than the one over riders, as having more drivers will enable Uber to lower the average wait time for a rider, which will attract riders to the service. The wait time is of course directly related to the number of available taxis on the road, which explains the mad rush to sign up drivers.

So how do you get drivers to sign up, especially when they have a choice between competing services? Like most other humans, drivers too will choose the company that they think will enable them to earn the most. Now read the tweet at the top of this post one last time, but this time, put yourself in a taxi driver’s shoes. Would you prefer to work for a company that paid you a base rate that remained constant at all times or one that gets raised aggressively during periods of high demand? The choice should be apparent, which explains why Ola was forced to abandon its initial stable pricing model and introduce peak pricing earlier this year.

Advertising revenue on LinkedIn and other ‘meet’ platforms

Earlier this month, the professional networking site LinkedIn, released an impressive earnings report for the fourth quarter of 2014. Revenue for the quarter was $643 million, an increase of 44% from the fourth quarter of 2013. It wasn’t just the top line numbers that impressed, all segments of the business grew at a healthy pace.

  • Talent Solutions – Revenue earned from recruiters who pay a fee to access the database of professionals on the site. This accounts for 57% of LinkedIn’s revenue.
  • Marketing Solutions – Revenue earned from the advertising that is on the site. This accounts for 24% of total revenue.
  • Premium Subscriptions – Revenue earned from premium subscriptions. Accounts for 19% of total revenue.

This post is going to focus on the second revenue stream i.e. Marketing Solutions. But first, a little background information is required. In my social networks class, Profession Piskorski divided social networks into either ‘friend’ platforms or ‘meet’ platforms. Friend platforms such as FaceBook help users develop closer relationships with their existing network. Meet platforms such as LinkedIn or dating sites help users broaden their networks by introducing them to new people.

From a business model perspective, there is one key difference between the two. If a friend platform is successful, you spend more time on it i.e if everyone you know is constantly on FaceBook updating their status or uploading pictures or messaging, the more interesting content there is for you to see hence and the more likely you are to visit the site. On ‘meet’ platforms, the more successful the platform is, the less likely you are to visit. For example, if you are successful in meeting someone on a dating site, you stop using the site. For this reason, ‘meet’ platforms typically derive their revenue from subscriptions whereas ‘friend’ platforms tend to rely on advertising.

This is a challenge for sites such as LinkedIn that would like to get additional revenue from advertising. However, LinkedIn was initially seen as a place that you went only when you were looking for a job. Thus even though many users created profiles on the site, few visited regularly. This brilliant article details how LinkedIn addressed this issue by essentially turning itself into from a social network into a media platform. The entire article is worth reading but the key passage is the one below.

To get things started, the company launched LinkedIn Today in 2011 as a way of enticing professionals to log in every morning to catch up on industry news. The following year it signed up “influential thought leaders” to provide occasional commentary. Last year, the company bought Pulse, an app that focuses purely on content, and which the company would like professionals to check for a quick update on news relevant to them. And now, it runs a content behemoth that drives the internet’s manicured hordes to business publications around the web.

The strategy certainly seems to have paid off with advertising accounting for 24% of revenue in the most recent quarter as opposed to 22% a year ago. However, the company is not resting on its laurels. It plans to scale its B2B advertising revenue to one billion dollars by 2017 having acquired B2B marketing platform Bizio for 175 million USD last year. The company also recently launched its own ad network to allow companies to identify which LinkedIn user is visiting their site. If successful, this strategy could act as a template for other ‘meet’ platforms to make a play for a share of the lucrative online advertising pie.

Book Summary – Influence by Robert Cialdani

Influence by Robert Cialdini is widely considered to be a classic on the subject of human psychology. Released in 1984, the book has sold over two million copies worldwide. The book was initially written as a means of explaining the psychology behind common sales tactics, but is relevant to a far wider audience. I found the book enjoyable to read and have no hesitation in recommending it to anyone with an interest in human behavior.

The book focusses on the following six principles of influence.

1) Reciprocation

Humans are hardwired to reciprocate favors, gifts etc. Hence when someone offers us a free sample we may feel obliged to buy something even if that was not part of the original plan. For instance, companies will often send you sample offers or try before you buy schemes to exploit this tendency.

Failure to acknowledge this principle can result in bad design. For example, I sometimes encounter software products which demand that I register before I can use them and before they have proven their value. In some cases it is unfeasible to provide the service before I have registered, but in many cases it is not and in those cases, I am left with a negative impression of the product and often look for alternatives.

2) Commitment and Consistency

Once you state something in public or put it into writing i.e once you commit, it is hard to deviate from it as you feel the pressure to be consistent about it. This is the psychology behind bait and switch deals i.e. once you have committed to the idea of making the purchase it is hard to switch even after the terms of the sale change.

You can also use this tendency in a positive way. For instance, write down your goals and principles to strengthen your commitment to them. Written commitments are stronger than verbal commitments as it takes more effort to make a written commitment. In general, the greater the effort to make the commitment, the stronger the effect it has on the person making it.

3) Social Proof

One means that people use to determine what it correct is to to find out what other people think is correct. For example we use social proof to determine at what speed to drive on a highway or what to do with an empty popcorn box in a theater. Bartenders salt their tip jars with a few dollar bills to simulate tips left by prior customers. Companies use testimonials and phrases such as “best selling” or “fastest selling” to convey the impression that everyone else likes the product.

Companies prominently display the number of FaceBook ‘Likes’  that they have for this reason as well. Whenever I encounter a company that I am unfamiliar with, I usually feel more confident about their quality or service if several of my FaceBook friends have ‘liked’ them.

4) Liking

People tend to respond more favorably to requests from people who they like. E.g. Tupperware parties, Campaign volunteering by locals vs non locals. Factors that influence likability include physical attractiveness, similarity (personality mirroring), compliments (People like getting them) and Contact and Cooperation (People like those that they come into contact with frequently, but only in a cooperative setting and not a competitive one).

5) Authority

People respond to requests from authority figures. The authority figure does not even have to be real. E.g. Actors playing doctors in drug commercials. Other symbols of authority such as titles, and uniforms are also effective in generating responses from people.

6) Scarcity

Scarcity increases the attractiveness of a product. E.g. Limited engagement, limited stock etc etc. When the scarcity is a result of direct competition i.e. others are buying the product and hence there may be few left, the attractiveness is increased even more.

Thoughts on FaceBook and WhatsApp

Last week, it was revealed that WhatsApp had brought in revenues of around $10 million USD in the first half of 2014. This begs the question – why would Facebook spend $18B on a company that is on track to earn only $20 million dollars this year? At its current value of over $200B, FaceBook is currently valued at around 17 times its annual revenues, a valuation that would imply that WhatsApp is worth approximately $340 million dollars. When companies make acquisitions, they typically have to pay a premium of around 20% over the market value (40% if the acquirer is a private equity firm). So what makes WhatsApp so valuable that FaceBook was willing to pay such a huge premium?

Historically, companies have made acquisitions for one or more of the following reasons

• To exploit ‘synergies’ i.e one company has a good product, the other has great distribution, hence joining forces results in a situation that is beneficial to both
• To take advantage of tax benefits i.e the rumored deal between Yahoo and AOL
• To diversify and achieve seasonal balance i.e. a company that makes snowmobiles might acquire a company that makes beachwear to ensure that revenues are stable throughout the year
• Defensive – to prevent competitors from acquiring the company
• To expand their business by gaining access to new markets, customers etc.

With WhatsApp, it’s likely that the last two factors were the most important. The last thing that FaceBook would have wanted is for a competitor such as Google to get its hands on WhatsApp’s users. Furthermore, it has been noted that many of WhatsApp’s users were in countries such as India (It was the leading messaging service in India when it was acquired) and maybe it was really a means of expanding FaceBook’s user base. Or perhaps it was a means to reach the fickle teenager segment of the market which is not taking to FaceBook in the same way as other age groups have. These are all good reasons, however it is likely that there were additional factors that were in play.

In my Social Networks class, Professor Mikolaj Piskorski made the point that the frequency of posting on FaceBook decreases as the network size increases. This makes perfect sense if you think about it. Imagine that you are in a room with a few close friends. It’s likely that you will feel comfortable discussing nearly any issue with them. Now imagine that your family (parents, siblings) joins in. The conversation is likely to be slightly more guarded. Next imagine your co-workers and your manager join in. You now have to think very carefully about what you say as everyone can hear you.

I started using Facebook in 2004. At that time, it was only accessible to those in the United States with university email (.edu) accounts. Privacy controls did not exist (everyone in the University had full access to your profile) and yet, users shared content freely as they knew that the only ones viewing what you had posted were other students. As FaceBook opened up access to everyone, people started to become more cautious about what they posted. Photos that showed students drinking and partying were hastily removed as parents and potential employers were granted access to the site and users became much more careful about what they posted.

This is a huge problem for a company such as FaceBook. People visit Facebook several times a day because they expect to see updates from their “friends”. If people are posting less and the updates are less frequent, the time spent on the site will surely drop. One can still post status updates and photos and limit them to specific friends, but this process is unintuitive and tedious and there is always the danger that a friend will share a post with someone that it is not intended for. Furthermore, The less content you post on Facebook, the harder it becomes for the company to serve well targeted ads to you (FaceBook also tracks your behavior on other websites through cookies, the ‘Like’ button, and FaceBook Connect. This data is then used in order to show you relevant ads when you return to FaceBook).

It is likely that the acquisitions of WhatsApp and Instagram were aimed at alleviating this problem. In smaller groups, people are much more likely to revert back to the behaviors of the early FaceBook users. This is certainly true for me – I post much more frequently on WhatsApp than I do on FaceBook. Recently FaceBook relaunched Atlas, which is an advertising platform that will enable it to use the information it has on users to show them relevant ads on third party (non FaceBook) sites. Though the company currently does not scan and use the information from your WhatsApp messages to show you ads, that could very well change in the future and may represent a potential source of revenue that would justify the huge price paid for WhatsApp.