5 Simple mistakes that could kill your product

You can crunch CAC and LTV and MAU and DAU all you want, but there are simpler explanations for why your product may be underperforming.  Noodle on these simple ideas with respect to your business or product.  Hope it helps!

1. Not going where the people are - 

I was among the early members on sites like Producthunt (member # 2921) and theGrid.io (was founding member 16207).  Grid is an AI-based website builder, and is touted as an evolution/revolution in how websites are built.  I agree, but I later realized that for a website to matter you need eyeballs.  And to get that today, you don't build your own website.  You post on Facebook or Instagram or Twitter.

If you are a single dude wanting to find a girl, you don't go to a bar full of dudes.  You join a yoga class full of single ladies.

So, I asked for my money back, and decided I didn't need an AI-built website.

Certainly, team Grid.io is building value, as I'm sure AI will better optimize clicks and impressions and replace many human SEO/SEM consultants.  That said, the technology might be better applied in helping people share on existing platforms.  Or perhaps it can help optimize SMB marketing.  For example, Buffer has become a successful tool first and foremost because people wanted an easier way to post on Twitter and share on social media.

2. Going where it's too crowded - 

Going where people are is a truism.  That's not to say go where the crowd is.  If you show up where all the cool kids are, the problem is you might look like a loser.  At any given four-year term, there's only one President of the United States (POTUS) no matter how talented and smart you are.

Remember #1.  I'm not saying go to an empty pond where you can be king.  But, for the love of God, don't try to be another big social network.  Apart from being annoying, you'll get crushed by Facebook and Google.  So, to be clear, I'm not advocating Blue Ocean Strategy.  Going for an uncontested market either makes you a visionary or a fool.

(Apparently, don't do as I do, but do as I say.  I should be blogging on Medium and Quora, not here.)

3. Differentiate or die - 

Which brings me to marketing 101: differentiate or die.  As the world gets more crowded and user time more scarce, you need to be remembered.  Out of sight, out of mind.  Which is why Hollywood stars know that any publicity is good publicity.  Worst thing is for people to forget who you are.

What are you doing to stand apart from your competition in the minds of your customers?

What are you doing to emotionally connect with your users?

I think one reason StartupDigest was/is so successful compared to other startup events lists is because it's memorable at many dimensions.  It achieved this partly by using local, human curator, who could express the relevant and important startup themes to the audience locally.  You couldn't do that with one global curator.  And even if you could, people appreciate knowing someone local, so you always lose that edge.  (Of course, the offset is cost, but the local curators were volunteers.)

4. Missing the feedback loops - 

This is just another away of saying don't build myopically.  Often, one piece of the puzzle is related with another, with another, with another.  And understanding how that little flame burns will either enable you to build a bonfire or end up flaming out.

With so many tools available to streamline communication (e.g. Slack) and process flows (e.g. Git), this should not be a big problem for most teams.

5. Not minding the culture - 

And building on that last point, it all comes down to your team.  Your processes and good communication will determine how effective your team can work.  But, ultimately, it's your team culture that makes or breaks your team and your product or your business.  It's the most important of the nodes in your feedback loops.  Mess up the culture, and everything else will fall apart.

No need to repeat stories of scores of startups that grew too fast, messed up its culture, and imploded across many dimensions of its business - Homejoy, Fab, WebVan, et al.

I'm hungry, and what I learned about startup investing: Is it time to eat?

It's not quite noon, and I'm hungry.  I debate whether to drum up a scramble and scour my fridge.  I'm not impressed; supplies are low.

There's a taco joint, a cafe, and a Whole Foods all within a five-minute walking distance (I'm lucky to be in a very central part of San Francisco).  But, I'm in middle of something.  Plus, I want to try something new.  Something convenient.

A meal from SpoonRocket is $10 bucks (including delivery and tips) and promises a fast delivery.  But what really gets me to submit an order is the humor.  Step 3 is "put on your pants."  Hey, how did you guys know?  (I wonder if I would be instructed to put on my skirts if I were a woman.)

I get a two minute warning text almost immediately, so I walk out to the curb.  A minute later, a SpoonRocket delivery truck pulls up, I grab a boxed lunch and I get back to my kitchen.  What did I have?  Grilled chicken apple sausage with BBQ chipotle sauce.  The meal was decent; the speed and convenience was superb.

Motivated by the positive experience and the promotion, I share the referral code on my social media and email a few friends.  My friends will get $10 bucks off when they make their first order.

Free Food

In fact, a few days earlier, my roommate had sent me an email, subject "free food."  I was invited to try Munchery and claim a $10 credit.  Whereas SpoonRocket's tagline is "Good Food Fast," Munchery promises "wholesome meals from the best chefs in town."  I guess I'll eat free tonight.

While at it, I decide to take advantage of promotions by Sprig ("Dine on Demand") as well.  And to fill up on my low running fridge, I try out Instacart.  After placing an order of groceries from a local Whole Foods (yes, the one that's three minute walk away), someone shows up in the evening with a bag of groceries at my door.  Call me a bit old fashioned, but I oddly feel obliged and sorry for the gentleman who delivered the grocery bag.  Is this how millionaires live?  Someone shops your groceries for you and cooks your meals for you.

Insight Into Food Startups

This foodscapade taught me quite a bit about this food startups.  For one thing, I began to be more attentive to the space.  It turned out one of my friends worked for a team that delivers corporate catered meals.  He was paid $25 per hour to pack food.  Not bad.  But, what did I really learn, though?

1. Logistics as core UX - These companies all have to get the logistics right.  Food startups have to assemble the food, manage perishable ingredients, and deliver on time.  These companies were more like Amazon than they were like LinkedIn; more analogue than digital.

2. Engagement model - Sprig's CEO Gagan Biyani often speaks in public about growth hacking.  I once watched him give a presentation about Sprig's user lifecycle.  It shows a feedback loop consisting of "before the buy -> first purchase -> repeat purchase -> referral."  The referral leads to another "before the buy" cycle.  My own story above reflects this business model.  And this gives you an idea about where key drivers and costs of the business are.  What is the drop off from first purchase to second?  From second to third?  What are some things that can go wrong?  Try out the service once or twice, and ask your friends, and you can gain a grasp of these metrics.

3. Expensive customer acquisition - And speaking of the repeat purchase to referral, this is an expensive way to acquire new customers.  Remember that free meal I had?  Well, it wasn't really free.  It's coming out of investor's pockets, and reflects the competitive pressure and pressure to scale quickly.  By contrast, consider Intercom.io.  When I click to download a 'free' e-book, I'm asked to share 2 emails to get the free book.  That friction will lead to something less than 100% conversion, but that's a much cheaper way to build virality in my book.

4. Huge market - So, with logistics as a constraint, and expensive costs, why all the fuss about food delivery services?  Well, as a friend of mine likes to say "I'm pretty good at eating.  I do it three times a day."  And so does hundreds of millions of others.

For me, taking the product or the service for a drive and a little digging helped me put my arms around the business.  For food startups, if I wanted to learn more about the team of executives, I would expect to see some logistics or operational excellence experience: someone from Amazon or Walmart, perhaps.  I would also be keen to pay attention to emails or promotions to assess whether the team can efficiently retain a new customer.

In general, when customer lifetime value (current value of all future purchases by that customer) exceeds the cost to acquire the customer, the business is making money.  Take Munchery, for example.  It took $10 to get me to try it.  If I spend more than $10 down the road (and I did), they come out ahead.  The more profitable customers a business has, the more valuable the business becomes.

Finally, these food startups have different goto market strategies and different market constraints.  For example, if Munchery limits itself to providing food by local chefs, expanding to new cities may challenge greater logistical complexities.  By contrast, a template model of assembly simple food in a kitchen and delivering could be repeated much more efficiently.

Have fun investing!  And don’t go hungry!

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Practical Personal Happiness and Success Tips

I hope you had a great weekend!  I published a book on how to be happy and successful in your daily life.  The book isn't about tech or product management, but I wanted to share the news with you!  It is available on Amazon.

How To Be Happy: 12 Powerful Steps to Boost Your Confidence, and Live a Happier Life Now

I wrote this book for you to share tips I have applied to move forward when life seemed at a standstill. 

I will show you how to be happy with 12 powerful, yet simple actions you can take. 

How To Be Happy by David Kim

It will be available for a FREE kindle download for the next few days, and I would love it if you downloaded free of charge and read over it.  Also, for your sign-up on BetterAndHigher.com, you'll receive a FREE audio download to Tip #8. "You Say Yes, I Say And."

And, if you like it, then would you please consider leaving me a good review (i.e. five star review) about the book?  Thank you ever so much!

3 Book Recommendations to Help You Earn Respect from Software Engineers

Technical Background Needed?

Companies like Google are notorious for preferring technical product managers.  (How dare they forgo your talents just because you don't have a C/S degree!)

Yet, if you look under the surface, you'll find many exceptions.  For example, take a look at Google product manager Kamila Staryga, who used to run the (now defunct) Google Helpouts.  She does not have a computer engineering background.  Her prior career background was with companies like GlaxoSmithKline and Procter & Gamble.  

Lest you think this is an exception, take a look at Serena Keith.  Serena is heads product at Lovely, a mobile apartment hunting app (acquired by RentPath).  Serena graduated college in 2008 as a social studies major.  Then, she worked a handful of jobs in non-technical roles.

So, What's Going On?

You could assume that Serena or Kamila simply relied on their industry expertise and strategic prowess.  Perhaps you're right.  Or, you could give them the benefit of the doubt.  Perhaps they really studied up on technical matters.  People like Serena worked really hard to overcome their technical deficit to earn the trust of the mobile and web engineers on their team.

I have seen this humanist-turned-technologist narrative play out first-hand with people like Shanely.  Shanley used to work at Heroku, an uber-engineer kind of place.  The engineers there told me first-hand that when they worked with Shanley, they had no idea she was not from a technical background.

Meaning, basically, you get there by taking time to learn.  Big surprise!

Take Action and Read Up!

So, this is the part you've been waiting for.  Book recommendations that closes the technical knowledge gap.  That's right, you got to earn that respect from your engineering team. There's no free lunch, my friends.

I found a few books on Leanpub that should be worth checking out.  Best of all, they have a nice satisfaction guaranty.  So, hop to it and beef up your technical library!

        

Growing Agile: A Coach's Guide - This book is a collection of our workshops that will help you run similar workshops to create agile Release Plans. 

Inceptions, Starting a Software Project - A professional software craftsman has many tools under his belt. Many are technical in nature, but many others are considered soft skills. This book focuses on one such soft skill; The Inception Workshop.

Talking with Tech Leads - A book for Tech Leads, from Tech Leads. Discover how more than 35 Tech Leads find the delicate balance between the technical and non-technical worlds. 

Lending Club Borrower Accelerated Payment Teardown

Lending Club

The Lending Club is a peer-to-peer lending juggernaut. It is "the world’s largest online marketplace connecting borrowers and investors." The company recently went public (December 2014).

Earlier, I wrote about a key competitor: Prosper.com, and its 1-click borrow flow.

Scenario

Let's say you're a borrower with a $4,000, 36-month term loan on Lending Club. Your monthly payment is $130.47 (Figure 1).

Figure 1

Problem Summary

What happens if you want to pay off your loan faster, or wonder what happens if you change the monthly loan payment amount? How would you approach this problem as a product manager?

Possible Solutions

First of all, as a product manager, your job is not to do the user-interface (UI) design work.  You have design experts who would be insulted if you thought you could do their work for them.

Rather, your role as a product manager is to explain what the goal of the feature is: explain the benefit to user and to the business, and help the team understand why it's important.

That said, I don't have a designer, so by way of communicating, I'm going to share a few screenshot mockups to illustrate a few possible solutions to the problem.

When possible, you want to think in terms of common design patterns.  Be creative, but not too creative.  A common UI-pattern for changing prices is a slider (think Kayak).

Slidebar

In figure 2, I borrow Kayak's price slider to let the user perform a "What If" analysis on the summary page.

The bordered box and the fonts clarify to the user that the loan term has not changed.  This is simply a what-if calculator for informational purposes.

An alternative to leaving the UI as is, would be to make this kind of calculator a pop up, or placed on the side navigation bar (below the referral incentive, for example).

Figure 2

Payment Spinner

Perhaps another way to solve the problem and keep the UI clean would be to add a spinner to the Next Payment line.  In figure 3, you can see the up and down spinner, and next payment dollars in brown font.

It goes without saying that the amortization calculator in the backend would adjust the due date accordingly.

Figure 3

FAQ Approach

Now, I am not a Lending Club product manager, and therefore do not have a broader view of the problem and its impact.  Let's suppose I have access to customer support calls, and this happens to be a frequently asked question, and something that is not yet automated.

The best first approach to this problem might simply be to provide the user more information (it'd be worth parsing some of those customer service calls) and provide a self-serve page explaining the impact.

All you really would need is a hyperlink that answers "Can I pay more?"

In figure 4, I visualize what this could look like.  I added a red dot with question mark as a way to create a common UI pattern within LendingClub site itself.  Whenever we find a common question, we can insert it within the default screen.  It acts as a supplement to the "Common Questions" already found in the side navigation bar.

Figure 4

Stepping Back and Advocating for the User

It is the product manager's job to advocate for the user, and understand the business goals.  If the user wants to increase the monthly amount (in the slider example), it could be a signal of financial strength.  However, if the user wants to decrease the monthly payment, it could be a signal of some problem.  For the business, this presents an opportunity to deliver user delight, and at the same time mitigate business risk (for example, by providing pertinent information or options that mitigate default risk).

On the whole, I think there are other small improvements that can be made to the summary borrower screen.

For example, as a borrower, I really want to know what the overall amount of money I am paying is going to be, interest and all.  Rather than purely text-based rendering of that information, a progress-bar type of visualization could be much more effective (and would be relatively easy to implement).

And as a borrower, I might be confused to see the lenders of my loan.  Thus far, nothing in this space has shown me I have any incentive or useful interaction with the lenders.  It's a distraction, unless it were clearer to me what I am to do with that information (figure 5).

Figure 5

Testing, Revenues, Summary, etc

Let's suppose that the user actually wants to pay off the loan faster.  The first task is to work with the designers to design some possible solutions (as we did above).  Next,  we would want to consult engineering (or communicate to them) to ensure that the implementation is feasible within time or other resource constraints.  

I can say that all of the changes suggested above are mostly cosmetic, and would not take long to implement.  The thing is, you don't actually know a priori whether it is going to help or harm your business.   

Testing

You already know that I'm going to tell you you need to test.  Since the changes are relatively easy, I would opt for having multiple versions of possible solutions and running A, B, C tests in different markets and segments to see which ones perform the best.

Revenues

Moreover, for those borrowers accelerating payment, you want to convert that intent to a new call to action.  For example, "would you be interested in becoming an investor?"  Why not, you have money spare.

Here, Lending Club has a potential weakness.  Unlike on Prosper.com, on Lending Club, you need to create separate accounts to lend and to borrow.  Why?  Why can't I be both a lender and a borrower from the web product perspective (never mind the regulations for a second)?  The answer is, no reason at all!

As it is, Lending Club will need two separate email addresses from you for you to be both a borrower and an investor.

Figure 6

You might also like ...

If you enjoyed this product teardown, be sure to check out:

• Taking Assembly for a Test Drive
• Prosper 1-click borrower flow analysis
• Hotel Tonight Room price trigger
• Hierarchy of product love

Do you have articles or teardowns of your own to share?  Check out productmanagementfasttrack.com.

Prosper 1 Click Quote, Not Really 1 Click

Prosper P2P Lender

According to its website, "Prosper is is America's first peer-to-peer lending marketplace, with more than 2 million members and over $2BB in funded loans."

I've been a Prosper member for years, an early adopter since the first days before other competitors popped up.  I've also been a fan of Kiva.org (a similar, yet different kind of service where the loans are made interest-free to developing world individuals), where I have made over 100 loans.

1 Click Quote

I've only used Prosper as an investor, loaning out small micro-loans to various users - most of them consolidating debt, or paying off an auto loan, or borrowing money for home improvement.  I decided to see what it would look like to become a borrower.

I loved the simplicity of the trigger from the investor summary page, prompting me to consider borrowing a loan.

Figure 1

You are teased with a low APR, and big call to action "Get Rate" button.

Now, I'm already logged in as a user ... meaning my basic info is available.  Too bad, then, when I click on Get Rate, I'm routed to this page.

Figure 2

Prompting me to provide the purpose of loan and some other basic info.  It still like the clean UI, but my problem with this is, why make me repeat the same information?  (Figure 1 and Figure 2 essentially duplicate information).  Why make me do this?  

Further disappointment then, when I am routed to the next page, where I am told "Get a Custom Rate in 1 Click."  This is my 3rd click, so I feel this is bit mismatched from meeting expectations point of view.

Figure 3

Understandably.  Many of this has to do with the regulated nature of lending and borrowing industries.  Often, the business constraints are such, that the end goal is not the most streamlined user experience (UX).  Sometimes, it makes product sense to create some friction for the user.  That said, I think there's clearly a room for improvement in conversion and user experience here.

Anybody home?

As another example of UX issues I found with Prosper.  When I go to my investor profile page, I see something like this.  This is me (figure 4).

Figure 4

 What happens when I click on the "View" hyperlink?  I get a broken link.  Page Not found (Figure 5).  Which is not bad.  The page reroutes to the summary page shortly.

Figure 5

However, look at a different Page Not Found message by another product - StackExchange.  There, you see clearly more humor.  It is a way of empathizing with the user.

"You didn't find what you were looking for?"

"We are sorry, let's see if we can at least make you smile while we help you."  That seems to be StackExchange approach (Figure 6).

Figure 6

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If you enjoyed this product teardown, you may also enjoy:

• Taking Assembly for a Test Drive
• Hotel Tonight Room price trigger
• Lending Club borrower teardown

And a product teardown is intended to help you become a more effective product manager by improving your acumen.  There's a whole lot more to this profession.  Check out this book:

Take Charge Product Management: Take Charge of Your Product Management Development

Keep on building!  Good luck!

Taking Assembly for a Test Drive

I have been taking the web product Assembly for a test drive.

Assembly is a platform for crowd-sourced web-based products.  A product for product development online.  Sounds like recursion!

It's got to be a dream for programmers and web geeks!

Product Description and Traction

Assembly is really interesting, just because you get to see what other people are thinking about, in a transparent way.  The product seems to have solid traction based on cosmetic review of the activity.  Here are some key observations about this product.

Coderwall Project bounties and contributors (from Assembly)

• Virtual - The projects are mostly virtual from around the world.  The landing page is filled with many approved and pending projects.  A large product like Coderwall has 100 contributors, although contribution follows a steep power law distribution (probably even more than 80/20 rule - meaning 5% do 95% of the work ... the nice thing is, they are paid accordingly). 
• Platform - The diversity of products is as wide as people's imagination.  Of course, what Assembly provides are the building blocks (see below) of a web product building.
• Revenue Positive - As far as I could tell, Coderwall is its most profitable product; based on 2014 payouts, it seems to have about $24K MRR with 86% profit margin.  Wow!
• Engineer Heavy - I've joined a few products and started one to test the default experience.  I don't have hard figures, but based on new people who sign-up to a project, the site is engineer heavy, followed by designers, followed by non-technical people.

What Are the Building Blocks of a Web Product?

One of the reasons Assembly interested me was that the product makes you think about what the building blocks of a web product development are.

https://assembly.com/discover

In essence, Team Assembly would have had to deconstruct the core elements of software development, and so doing, virtualized and abstracted a traditional coming together of a team.  Abstraction and virtualization are both long-term trends in the software-centric world.

So, apart from that interesting academic question, here's my hypothesis about what Assembly believes are core building blocks.

• Software engineers - Which is great, because a platform like this would be self-selecting to software engineers who are used to working "in the web."  Remote working is a norm in this community.
• Comprehensive communication - Communication is key in product management.  Many good vs. bad outcome can be traced back to good vs. bad communication.  Assembly uses Slack threads for each project you join.  Seems like a good solution.
• Project management - This seems to be a missing piece of the platform.  Teams likely will use a Trello board or Google docs outside of Assembly.  The communication threads are nice, but not sufficient for serious collaboration. 
• Version control - Assembly-built products are linked to Github repositories.  There is no separate bug tracking here, but can be managed through communication threads and pull requests.
• Incentives - I think Assembly's solution is particularly novel and effective.  I think it is very meritocratic, because coins are awarded based on contribution.  The overall model is very Silicon-Valley-esque. The founder holds the lion's share of initial coins, and if everyone maxes out the contribution efforts, the founder's holdings can be diluted down to 50%, and everyone else holding 50% ... unless founder herself is doing a lot of work and awards herself.  Apart from monetary incentive, the product also leverage's people's sense of curiosity and personal value. You can say, "hey, I'm only a designer, but I can add this little piece to the overall effort!"  And so on.  For many, I would say, money is a distant second or third incentive.
• Team Trust - This is another challenge.  Trust is really hard.  Most startup teams at least, fail because of bad founder selection.  Here, the process is just left up to the wind.

What else is important to building a good product?  Really, it is customers, and a good process to deliver what those customers want.  That's it.  If you don't have customers, things like project management, engineers, and everything else doesn't matter.  Only thing is, some startups start out with a hypothesis they can get customers, and start building.  But, in the end, you need customers.  Communication, version control ... don't get lost in the details.  

It's just tools and processes to serve the customer.

Assembly's mix of light-weight and mostly off the shelf tools is an interesting approach to discovering better ways to build for the customer.

You Might Also Like ...

Are you a product manager?  What's your philosophy and approach to building great products?

You might also like the following teardowns and meta talks on products:

• Hierarchy of product love
• Hotel Tonight room price triggers
• Prosper 1 Click - Not Really and 404