The one thing you have to expect as a product lead
This article is part of my series to share experiences I’ve been through with my team as a product leader. If you didn’t read the former articles I recommend to do read them first.
As a product lead, you should expect to be wrong. If you want to be a happy product lead make sure that the ones you work together with, or you work for, expect the same from themselves. Or the other way around. If you or you leaders believe you know upfront what the market and your customers need and you believe you just have to build it entirely you are more or less doomed.
I recently talked with a founder about his new startup. Of course he knows for sure that it will be a great success. He told me that he raised initial money, created a business plan and did all the designs. Now an outsourced engineering company will build the product. This story is so common. He was proud that he achieved this within only 6 month. When I asked how many paying customers he already has he was confused. Even after 6 month there was no paying customer. There was no customer at all. An example why early money is not always as good as we believe it is. Without investors you would have more pressure to prove that your business will work. With the money in your pocket you start to tend to poor decision-making.
Let’s imagine he would consider himself to be wrong upfront. He has this idea but he starts to think about why it wouldn’t work. An approach I like to use in this case is going backwards. What has to be true to have a first paying and happy customer. After a few minutes you will realize that one of the initial challenges is to find someone who wants the problem, you try to solve, to be solved. Even worse this potential target group also has to be aware of your product. When you have no idea how to target the right people. Why should you invest money in building something they will never see? This is why expecting to be wrong, and to prove it, is so important for decision-making.
As mentioned in the book “Why your startup is failing” written by Henry Latham. A recent Statistic Brain study on startup failure rates found that 70% of U.S. companies failed after 10 years, increasing to 90–95% for startups who fail to meet their initial projections, according to Professor of Management Practice at Harvard Business School, Shikhar Ghosh.
In that study, when company leaders were asked to list the main reason for business failure, they were grouped as follows:
1. Lack of focus
2. Lack of motivation, commitment, and passion
3. Too much pride, resulting in an unwillingness to see or listen
4. Taking advice from the wrong people
5. Lacking good mentorship
6. Lack of general and domain-specific business knowledge: finance, operations, and marketing
7. Raising too much money too soon
Lathman brings it to the point when he summarizes all to one thing: poor decision-making. It lies at the heart of every failed feature. Of every failed product. Of every failed company. Hiring the wrong person: poor decision-making. Failing to focus on the right things: poor decision-making. Being too proud to listen & adapt when our strategy isn’t working: poor decision-making. Building a product nobody uses & failing to find product-market fit: poor decision-making. Sometimes catastrophic bad luck may strike, sure. But it’s rare.
The likelihood of making bad decisions is especially high when you think you already know the answer to everything. You have an idea or you got a feature request and immediately jump into the solution space. You spend time, money and human resources on building the thing, you know exactly it will work. Surprisingly after release you see that it doesn’t work. Usually what happens next is adding just the missing feature and the next feature and so on. We all saw this in one or the other way. And all because we couldn’t even think about what it would mean to be wrong. That’s why I’m advocating so much to make “being wrong” your and your teams default expectation.
I mentioned the 90% — 95% failing startups and what went wrong. Now let’s focus on the opposite. Do you know a successful startup which started by building all ideas and than released to the real world?
The true and common stories behind the great product companies are always the same. They expected to be wrong. Then they focussed on testing their value proposition and validating their value hypothesis. They found their product market fit.
“It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong” — Richard Feynman, American theoretical physicist
Dropbox started with a simple video show casing their non existing product to convince early adaptors. Zappos delivered shoes online by purchasing them on the next best retailer around the corner and sending them to their customers. Facebook tested their ideas on one campus first. We all know those inspiring stories but somehow believe we don’t need to test first. Because being wrong is not our default.
“Keep the focus on minimal product. [..] your job as product manager is not to define the ultimate product, it’s to define the smallest possible product that will meet your goals.” — Marty Cagan, SVPG, Author Inspired and Empowered
What Marty describes in his book “Inspired” is core to product development. All your ideas or the ideas from people you work with should be considered as wrong by default. Than do the minium you need to learn if your assumptions are wrong or the other way around. When Marty says “meet your goals” he’s not talking about the ultimate goal you have in mind. It’s about the current, simple and small goal of knowing you are wrong or not. This is what a true MVP is build for. To generate the learnings you need to know if you are wrong or not.
I know there are copy cats out there building what worked for others. If your companies goal is to get aquired and to make fast money it could work. At least if you are better than all the other copy cats.
Being wrong is something you will experience much more then being right. This is nothing bad. The opposite is true. Being wrong generates valuable learnings. Those will lead you to a working product, customers will love and you can make business of.
You could ask why am I focussing on being wrong. Isn’t it the same to say you want to prove yourself right before you proceed? Psychologically it isn’t. You’ll be constantly trying to prove what you believe, instead of trying to refute it. To prevent this try to disprove your assumptions. To make this more explicit a simple example:
“We believe that [customer] will subscribe to monthly [service].”
“We believe that [customer] won’t subscribe to monthly [service].”
Another nice side effect is the simple idea that you handle your own expectations and disappointments much better when you already expect to be wrong. The moment you realize something is working and you are not wrong will be even more exciting then.
If you need some inspiration on how to validate high impact business ideas I recommend a nice podcast a good friend recently recommended to me. I enjoyed listing and learning from it a lot.
I hope this article will help you in some way. As always I’m happy to hear about your own beliefs and experiences.