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

by Melissa Perri

In many early-stage companies, concept testing is the way they get early sales or capital. This is how Dropbox got its first round of investment.1 When starting out, Dropbox had the hunch that the biggest issue it could solve for users was seamless synchronization of their documents across computers and the internet. The issue was definitely rampant, but the company had a difficult time pitching the solution to investors. When it explained how Dropbox worked, the investors dismissed it, citing a crowded market of similar tools. No matter how hard they tried to explain the solution, the investors just couldn’t picture it. So, the company turned to a solution experiment. The team put together a rough video, demonstrating what Dropbox could do. It had not built a demo or a prototype but instead used video editing to demonstrate what it would look and feel like to the investors. It felt like a real product demo, even though it wasn’t a finished product. When the investors saw it, they went wild. To them, it was magic. Dropbox was able to secure its funding and to validate that it was on the right path.