Escaping the Build Trap: How Effective Product Management Creates Real Value

by Melissa Perri

A good mission explains why the company exists. A vision, on the other hand, explains where the company is going based on that purpose.

I find that the best thing a company can do is to combine both the mission and the vision into one statement to provide the value proposition of the company — what the company does, why it does it, and how it wins doing that.

Table 13-1. Marquetly’s strategic intents Intent Goals Expand into the enterprise business. Increase revenue from currently $5 million a year to $60 million a year in three years. Double revenue growth from individual users. Increase revenue growth from 15% YoY to 30% YoY from individual users.

Options are your bets, as Spotify would call them. They represent the possible solutions that teams will explore to solve the product initiative.

Product initiatives set the direction for the product teams to explore options. They tie the goals of the company back to a problem we can solve for the users or customers.

The product vision communicates why you are building something and what the value proposition is for the customer. Amazon does this particularly well by creating what they call Press Release documents for every product vision. These short (typically a page or two) notices describe the problem the user is facing and how the solution enables the user to solve that problem.

The product vision emerges from experimentation around solving problems for users. After you validate that the solution is the right one, you can grow it into a scalable, maintainable product. But you need to be careful not to make the product vision too specific.

The chief product officer (CPO) is responsible for setting the direction and overseeing the product portfolio. Having a philosophy for how your products or services help your company reach that vision in the near term or long term is key. To get there, the CPO answers these questions for their team: How do all of our products work as a system to provide value to our customers? What unique value does each of the product lines offer that makes this a compelling system? What overall values and guidelines should we consider when deciding on new product solutions? What should we stop doing or building because it does not serve this vision?

It’s not that you don’t have time to innovate; it’s that you are not making time to innovate. To find that space, you’re going to need to say no to some things.

Those were our three choices: Acquire more individual users. Retain existing individual users better. Create new revenue streams for existing individual users.

Marquetly Product Initiatives

Initiative 1 We believe that by increasing the amount of content on our site in key areas of interest, we can acquire more individual users and retain existing users, resulting in a potential revenue increase of $2,655,000 per month from individual users. Options to explore Easier and faster ways for teachers to create courses Feedback loops for teachers on areas of interest for students Outreach to new teachers who can create courses in areas of interest

You can get out of the build trap by understanding and applying problem-solving and experimentation techniques like Marquetly’s team did here to find what it should focus on. This is the product management process, and it starts with the Product Kata.

After we have set the goal, we begin walking through the Product Kata. We ask ourselves the following: What is the goal? Where are we now in relation to that goal? What is the biggest problem or obstacle standing in the way of me reaching that goal? How do I try to solve that problem? What do I expect to happen (hypothesis)? What actually happened, and what did we learn?

Understanding the direction Problem exploration Solution exploration Solution optimization

You can easily turn a vanity metric into an actionable metric by adding a time component to it.

Think of it as a funnel (Figure 16-1): users finding your product is acquisition; users having a great first experience is activation; keeping users returning to your product is called retention; users recommending others because they love your product is referral; and, finally, users paying for your product because they see value in it is revenue. Put it all together and you get AARRR — Pirate Metrics. Get it?

HEART metrics measure happiness, engagement, adoption, retention, and task success.

You can learn more about HEART metrics in Rodden’s article, “How to Choose the Right UX Metrics for Your Product.”1

But it’s important to have metrics at every level of strategy, including the product initiative and option, so we can tell whether we are successful along the way.

Whatever your metric, it’s important to have a system of metrics, not just one, to guide product decisions. It’s easy to game one metric when it’s your singular focus.

Whatever options it explores to increase acquisition, it should be sure to keep watching the retention rate of those users and should make sure it doesn’t fall below a certain threshold. I call the system of two metrics that balance out each other mu...

That is why we also need to measure leading indicators like activation, happiness, and engagement. Leading indicators tell us whether we’re on our way to achieving those lagging indicators like retention. To determine the leading indicators for retention, you can qualify what keeps people retained — for example, happiness and usage of the product.

To make sure you have enough data to act on, it’s important to implement tools that make it easy to measure these things. This is one of the first things every company should do — implement a metrics platform. Amplitude, Pendo.io, Mixpanel, Intercom, and Google Analytics are all data platforms. Some, like Intercom and Pendo.io, also implement good customer feedback loops, because they provide tools to reach out to customers and ask questions. Having a metrics platform implemented, whether it’s homegrown or third party, is essential for a product-led company because it enables product managers to make well-informed decisions.

Product managers are often spoken about as the “voice of the customer,” yet too many of us are not getting out and talking to customers as much as we should.

In fact, Giff Constable wrote an entire book, called Talking to Humans, that can walk you through how to do just that.

Problem-based user research is generative research, meaning that its purpose is to find the problem you want to solve. It involves going to the source of the customer’s problem and understanding the context around it.

Companies often confuse the building to learn and building to earn. Experimentation is all about building to learn. It allows you to understand your customers better and to prove whether there is value in solving a problem. Experiments should not be designed to last for a long time.

I wrote down their problem statements, did research with them, experimented around offerings, and started to deeply connect with the way they worked. We used concierge experiments, concept testing, and lots of prototyping. I even learned that it was easier to do this work with my users because they were in the same building as me.

“This is a build, partner, or buy decision,” she told me. “We can either build a service, by hiring video editors full time or freelance. We could build software that does video editing ourselves. Or, lastly, we can buy a video-editing technology that is user-friendly and embed it into our teacher platform. The last one is the best, margin-wise, but there is risk that the teachers won’t be able to use it. I have to research what is out there.”

Table 18-1. The Product Kata for Marquetly’s team Current state What to learn? Next step Expected Learned Published course rate is 25% and second course rate is 10%. What problems the teachers are facing when creating courses? User research: 20 teachers Understand the biggest problems. Trouble transferring courses, importing content, audio options, pricing recommendations. Published course rate is 25% and second course rate is 10%. What is the biggest pain point for getting content into the system? Work with 20 teachers to upload content into the system. Come away with top issues that are taking the teachers the longest. Video editing is taking teachers too long. Published course rate is 25% and second course rate is 10%. Do most teachers have a problem with video editing? Survey to test for scale. Out of 100 teachers, most have issues with video editing. 90% of teachers say video editing is their biggest hurdle, upwards of 2 months of time spent. Published course rate is 25% and second course rate is 10%. Will taking away the video-editing work for teachers cause them to launch their school? Concierge experiment: conduct video editing for them. Out of 14 teachers, 10 courses will be published within a month. 12 teachers had published by end of the month, needed guidance on creating good videos. Published course rate is 75% for experiement, still 25% for general population. Will teachers use a video-editing software successfully so we can scale? Onboard 40 teachers to soft...

Story mapping and North Star documents are two ways to help teams find alignment around the vision.

A North Star document explains the product in a way that can be visualized by the entire team and company. This includes the problem it is solving, the proposed solution, the solution factors that matter for success, and the outcomes the product will result in. North Stars are great for providing context to a wide audience. They should be evolved over time, as you learn more about your product. It’s important to note that this is not an action plan — it does not include how the team will be building the product. That is where story mapping comes in. Story mapping helps teams break down their work and align around goals. As Patton says, “Its purpose is to help the team communicate about their work and what needs to get done to deliver value.” Christa’s team used story mapping to think through all the factors needed to deliver a successful solution. This included breaking down each desired action from the user standpoint.

In his book, The Principles of Product Development Flow, Don Reinertsen talks about the importance of Cost of Delay in prioritizing work. He calls it “the one thing” that should be quantified. Cost of Delay is a numeric value that describes the impact of time on the outcomes you hope to achieve. It combines urgency and value so that you can measure impact and prioritize what you should be doing first.

“Version 2 is the biggest lie in software development.” This mentality always leads to the build trap.

When you have success criteria set for the launch, you can use them in the Product Kata and repeat the steps we went through in this section: set the direction with your success criteria, understand what problems are standing in the way of you reaching it, and systematically tackle them through experimentation.

No matter whether you are building a new feature or optimizing one, the process is the same. Problem exploration might be on a shorter time frame if it’s around a smaller feature than a new product. The same goes for solution experiments: they might not be as robust as the ones Marquetly was running. But no matter what, you should always be diagnosing the problem and trying to understand how to solve it. This is how you build with intent and get out of the build trap. But, in addition to having a solid process and strategy, you need a company that supports good product management efforts. Christa’s team was able to succeed only because their environment allowed it to. They were able to talk to customers. The team was oriented around outcomes, and then the leadership team gave it the space to figure out how to achieve those outcomes. These are the marks of a product-led company. Process and frameworks get you only so far on your way to success. Culture, policies, and structure are the things that really set a company apart to thrive in product management.

The product-led organization is characterized by a culture that understands and organizes around outcomes over outputs, including a company cadence that revolves around evaluating its strategy in accordance to meeting outcomes. In product-led organizations, people are rewarded for learning and achieving goals. Management encourages product teams to get close to their customers, and product management is seen as a critical function that furthers the business.

You get what it means to see results, and you could see the benefits in aligning the strategy through the organization back to them. That is usually where companies get stuck in the build trap. They are not patient enough to see outcomes emerge, so they instead measure progress by the number of features shipped.”

We need a cadence of communicating strategy that matches our strategic framework. Remember our four levels of strategy: vision, strategic intent, product initiatives, and options. Each of these is on a different time horizon, and progress toward them should be communicated accordingly. Most companies I’ve worked with have a few core meetings to evaluate progress and to make strategic decisions from a product level: Quarterly business reviews Product initiative reviews Release reviews During quarterly business review meetings, the senior leadership team, made up of the executives and the highest level of the organization, should be discussing progress toward the strategic intents and outcomes of a financial nature. This includes reviewing revenue for the quarter, churn of customers, and costs associated with development or operations. The chief product officer (CPO) and their VPs of product are responsible for communicating how the outcomes of product initiatives have furthered strategic intents, like Karen did at Marquetly. New strategic intents can be introduced in this meeting, as older ones are coming to completion. It is not a place to prioritize new product initiatives or to go into detail on them. That is what the product initiative review is for. The product initiative review is another quarterly meeting that can be staggered with the quarterly business review on off months. This meeting is for the product development side of the house — CPO, CTO, design leaders, th...

Instead of thinking of roadmaps as a Gantt chart, you should view them as an explanation of strategy and the current stage of your product. This combines the strategic goals with the themes of work and the emerging product deliverables from it. To do this, the product roadmap should be updated constantly, especially at the team levels. This is why, at Produx Labs, we call them Living Roadmaps.

One great resource for determining how to set a roadmap is C. Todd Lombardo and Bruce McCarthy’s book, Product Roadmaps Relaunched.

Usually, our roadmaps consist of a few key parts: The theme Hypothesis Goals and success metrics Stage of development Any important milestones

Experiment This phase is to understand the problem and to determine whether it’s worth solving. Teams in this phase are conducting problem exploration and solution exploration activities. No production code is being created. Alpha This phase is to determine whether the solution is desirable to the customers. This is a minimum feature set or a robust solution experiment, but built in production code and live for a small set of users. These users understand that they are getting early access to a feature that might change or be killed, if it is not solving their problems. Beta This phase is to determine whether the solution is scalable, from a technical standpoint. Although not always needed, this is a good phase to reduce risk. This release is available to more customers than the Alpha phase, but is still only a smaller subset of the entire population, since we are still testing. At this point, we’ve proven that the solution is desirable to customers, so it is unlikely that this feature will be killed unless it is not technically stable. Generally Available (GA) This phase means that the solution is widely available to all of our clients. Sales teams can talk openly about GA products and can sell as much as possible to the target market.

To help distribute the work, we ended up implementing a product operations team, run by a chief of staff who reported to the CPO. The chief of staff created a very small team (two people) to help her streamline operations and reporting. They oversaw the cadences of strategy, found an analytics partner to set up tracking, and collected and organized the progress toward goals into reports for executives. This allowed the product people to focus on what they were good at, while product operations helped them to make informed decisions, by surfacing up those reports.