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- title: How to build great products
- url: http://www.defmacro.org/2013/09/26/products.html
- hash_url: 20bd9530c329bff4c43c1dcbd1b896f2
-
- <p>If you believe
- that <a href="http://www.defmacro.org/2013/07/23/startup-lessons.html">sales
- fix everything</a>, it follows that most startups fail because they
- don’t ship a great product in a growing market before they run
- out of money. Assuming you’ve picked an explosive market, how do
- you go about building a great product?<sup>1</sup></p>
-
- <p>Building great products is hard, but the difficulty is greatly
- exacerbated if you have no good model for analyzing products and
- features. Without a model you’re left with a never-ending stream
- of feature ideas and half-informed shots in the dark. Some people can
- pull this off because they start out with a phenomenal product
- intuition. But most people aren’t blessed with this superpower
- on day one.</p>
-
- <p>I started out with terrible intuition (and didn’t even know
- it). Over the past three years I looked at our user metrics every day,
- creating a feedback loop to train my brain on what makes a good
- product. Eventually I got quite good at predicting the impact of any
- given feature, so I started thinking of a model that captures the
- essence of what I’ve learned.</p>
-
- <h1 id="the-three-bucket-model">The three bucket model</h1>
-
- <p>The most important aspect of product management is categorizing
- features into three buckets: gamechangers, showstoppers, and
- distractions. When I first started building products, all features
- looked roughly the same. Over time, I formed the three bucket model
- and now my mind automatically slots every feature into one of these
- buckets.</p>
-
- <p>Here is an example. Suppose you are building a new mobile phone. It
- has to be able to call people, or no one will buy it since it
- wouldn’t be much of a phone. But the reverse isn’t true
- — having voice calls won’t make anybody buy your phone
- because every other phone already does that. So for your mobile phone
- product, voice calls are a showstopper.</p>
-
- <p>On the other hand, suppose your phone could project videos onto a
- surface. No other phone does that, so this feature could be a
- gamechanger that excites a lot of consumers. Alternatively, it’s
- possible that most people won’t care about it at all, in which
- case it’s just a distraction.</p>
-
- <p>This example gives you three buckets to categorize any given feature:</p>
-
- <ul>
- <li><strong>A gamechanger.</strong> People will want to buy your product because of this feature.</li>
- <li><strong>A showstopper.</strong> People won’t buy your product if you’re missing this feature, but adding it won’t generate demand.</li>
- <li><strong>A distraction.</strong> This feature will make no measurable impact on adoption.</li>
- </ul>
-
- <p>Empirically, successful products have one to three gamechanging
- features, dozens of features that neutralize showstoppers, and very
- few features that are distractions. Your job is to build an intuition
- about your space to be able to tell these categories
- apart. That’s still pretty subtle (is a built-in phone projector
- a gamechanger or a distraction?), but at least this model gives you a
- plan of attack.</p>
-
- <h1 id="resource-allocation">Resource allocation</h1>
-
- <p>If you had infinite time, you could ignore these categories and
- blindly iterate on the product until it resonates with the market. But
- your time is finite. The longer you take to find a great product, the
- more likely you are to run out of cash, squander morale, or miss the
- market moving under your feet. Modeling product management in terms of
- the three categories is extremely valuable because it allows you to
- treat product management as a resource allocation problem.</p>
-
- <p>If you put any effort into distractions, you’re wasting
- resources. That much is obvious.</p>
-
- <p>If you’re doing more showstopper features than you absolutely
- need to, you’re wasting resources. Lack of copy-pasting on the
- first iPhone might have been a showstopper for some people, but Apple
- correctly determined that enough consumers would still buy the
- phone. There was no need to delay.</p>
-
- <p>If you put more effort into any given showstopper than the absolute
- minimum you can get away with, you’re wasting resources. The
- first iPhone had pretty bad voice quality, but it was good
- enough. Most people were willing to live with it. It made calls, and
- it wasn’t terrible. Improving the voice quality by another 10%
- would have made little measurable impact on adoption.</p>
-
- <p>If you’re doing more than three gamechanging features,
- you’re wasting resources. Empirically, few disruptive products
- are good at a dozen things. Shipping gamechanging features
- is <i>hard</i>. Three is probably the most you can get away with, and
- even that is a stretch.</p>
-
- <p>Finally, if you don’t pour enough creative energy into any given
- gamechanging feature, you’re wasting resources. If a
- gamechanging feature doesn’t absolutely blow people away,
- it’s not much of a gamechanger — it’s just a
- distraction. In this category you can’t go half way.</p>
-
- <p>You can get away with making some mistakes. Very few products
- absolutely nail this on launch. But most first time product managers
- break all of these rules all the time, probably because they’re
- not aware of them. Break these rules at your own peril. The fewer
- mistakes you make relative to your competition, the better. Every
- mistake can be incredibly costly. Make too many and someone else will
- run circles around you.</p>
-
- <h1 id="craftsmanship">Craftsmanship</h1>
-
- <p>The trickiest part of building products is learning how to tell the
- difference between the categories and knowing when a given category is
- full. Is a built-in phone projector a gamechanger or a distraction? If
- it’s a gamechanger, is it big enough to attract sufficient
- demand, or do you need another gamechanger? If you invented the
- technology to increase voice quality by 50%, does that become a
- gamechanger or is it still just a showstopping feature? How about
- 200%? How many showstoppers do you have to neutralize to build a
- compelling phone?</p>
-
- <p>I have no idea what the answers are for the mobile phone market, but
- in my area, unstructured data, I can look at any given feature and
- tell which category it falls into quite easily. Sometimes I’m
- wrong, but that’s ok. I just have to be wrong less often than my
- competitors.</p>
-
- <p>The best way to build this intuition is to talk to a lot of
- people. Talk to potential users. What do they think? Talk to people
- who tried to build a product in your space and failed. What can you
- learn from their failure? Talk to competitors. How do they approach
- the problem? Talk to engineers in big companies. What can they tell
- you about the state of technology? Talk to other entrepreneurs in
- adjacent spaces, investors, journalists, grad students, professors,
- even the naysayers. The best way to get a sense of taste in a given
- space is to inject yourself into the industry and talk to as many
- people as you can.</p>
-
- <h1 id="buyers-stakeholders-and-pundits">Buyers, stakeholders, and pundits</h1>
-
- <p>The sooner you can learn about the history of the space, the state of
- the technology, the opinions of potential users, and the direction of
- your competition, the sooner you can form a coherent view of the space
- and develop a unique vision for your product. But be
- careful. It’s easy to start taking advice from the wrong people.</p>
-
- <p>Suppose you’ve decided to design your mobile phone in a form
- factor of a walkie talkie for construction workers, and you’ve
- determined that the best way to sell it is to construction managers
- top-down. If you talk to construction workers, they might be enamored
- by beautiful icons and an unusual color scheme. You might determine
- that the unique design of your phone is a gamechanger. But ultimately,
- it’s the construction manager who’s writing the check. For
- the construction manager, a beautiful design is nice, but it
- isn’t a gamechanger. It doesn’t help him run the business
- any better than he did before.</p>
-
- <p>For complex business sales, you have to pay attention to all the
- parties and make sure all the stakeholders are satisfied. Are the
- construction workers strong influencers on the manager’s
- decision? If so, spending time on a unique design might not be a bad
- idea. If not, you might be wasting your time.</p>
-
- <p>It’s true even for consumer products. If you’re designing
- a luxury phone and pricing it above every other phone on the market,
- do your customers have to convince their spouse? Do most families make
- shared decisions about buying luxury items, or do people splurge on
- luxury items independently? If they have to convince their spouse, can
- you add a feature to make it easier? Find out!</p>
-
- <p>Beware of noise. Learn the difference between your users and people
- who are just commenting. Everyone you talk to will have an
- opinion. Early on it can be tempting to design a product based on
- feedback from industry pundits. But a feature is only a gamechanger if
- the person signing the proverbial check recognizes it as
- one. Otherwise, it’s a distraction. Industry pundits can be
- extremely useful for understanding the state of your field, but
- they’re rarely the ones to buy your product. If you design your
- product around their feedback, you’ll find that there is nobody
- to buy it in the end.</p>
-
- <p>A corollary of this is that you can’t design a great product
- unless you live, eat, and breathe like your users do. You need to
- know <i>exactly</i> who your user is, what their problems are,
- how <i>they</i> perceive your product, and who helps them make buying
- decisions. Your intuition has to mirror how the customers will
- perceive your product. Categorizing features is only useful if
- it’s a good predictor of your actual users’s
- response. Otherwise, you’re just wasting time.</p>
-
- <h1 id="aggregate-gamechangers">Aggregate gamechangers</h1>
-
- <p>There is a subtlety to the model we haven’t discussed so
- far. Some features aren’t sufficiently impressive on their own,
- but become gamechangers in aggregate. For example, suppose you design
- a unique set of icons for your phone. Is that a gamechanger? Probably
- not. What about a unique color scheme? It doesn’t seem like a
- gamechanger either. How about a unique family of phone cases?
- It’s hard to imagine people buying a phone because of a pretty
- case.<sup>2</sup> But what if you put these features together? A
- unique design direction that combines a novel icon set, color scheme,
- and family of phone cases sounds like it might be a sufficient
- gamechanger to attract consumers.</p>
-
- <p>Features that become gamechangers in aggregate are dangerous for three
- reasons. Firstly, it becomes harder to tell what combination of
- individual features is and isn’t a gamechanger. Secondly,
- aggregate gamechangers are expensive — instead of making a
- couple of good decisions on a feature, you have to make dozens or
- hundreds of good decisions for a whole family of features. Thirdly, it
- makes it easier to convince yourself that if you add just one more
- feature, you’ll strike a gamechanger. Building great products is
- already difficult. Introducing a subtlety like this makes it even
- harder.</p>
-
- <p>Many products do succeed in exactly this way, but if possible, try to
- avoid it. If you have no choice but to resort to aggregate
- gamechangers, it probably means you’re working in a relatively
- mature market. Often, that’s ok, but it should prompt you to do
- some soul searching. Is it really worth being in this market, or does
- it make sense to find another one where you can innovate more easily?</p>
-
- <h1 id="product-mission">Product mission</h1>
-
- <p>Suppose you’ve developed product intuition to apply the three
- bucket model to your field. You can easily (and correctly) categorize
- features. You’re now ahead of most product managers. But
- you’re still not quite done. There are a few problems with this
- approach:</p>
-
- <ul>
- <li>If you’re categorizing features ad-hoc, it’s easy to make mistakes and then construct a rhetoric in your mind to convince yourself that you’ve done the right thing.</li>
- <li>While you’re building the product, you’ll have to be a part of every single decision because other people have no guidance.</li>
- <li>Your engineers will get frustrated, because they’ll think you’re pulling decisions out of thin air.</li>
- <li>Before the product is done you’ll have to convince many other people to help you — journalists, investors, potential hires, and customers. Convincing people is hard if you’re making decisions ad-hoc.</li>
- </ul>
-
- <p>A great way to get around these problems is to write down a product
- mission. Think of it as a function that accepts a given feature as an
- argument, and returns one of the three categories above. A good
- function definition is concise, understandable, and
- repeatable. Ideally after reading it, most people on your team will be
- able to categorize features themselves in the same way you would.</p>
-
- <p><a href="https://github.com/rethinkdb/rethinkdb/issues/1000">Here</a> is a humorous product mission we came up with for RethinkDB that worked surprisingly well:</p>
- <blockquote>
- <p><strong>Database tools should be indistinguishable from magic</strong><br/>
- Surprise and amaze people with developer tools for building real-time, data-driven web applications they could only dream of building, and bring sheer joy and simplicity to the process of building great software.</p>
- </blockquote>
-
- <p>On the surface these two sentences don’t say very much, but if
- you dig in a little, this product mission has surprisingly high
- information density. It tells people we’re building a
- database. It tells people we treat the product as a developer tool
- first. This resolves the tension between developer features (like the
- query language) and operations features (like monitoring). All of our
- gamechanging features revolve around developers. We treat operations
- as a showstopper. It explains what we expect our users to do with
- RethinkDB (build real-time, data-driven web applications). It gives
- people a sense of how far we’ll go on certain features (surprise
- and amaze). Being good enough for developers isn’t enough. These
- people spend many hours a day using our software — we want to
- make the experience <i>pleasant</i>. It suggests that we are willing
- to accept more complex implementations to make our users’s lives
- easier. It guides us to build features that let developers build new
- types of applications, not just the ones that already
- exist. It’s self-aware and leaks a healthy sense of humor we
- have as a team. This gives people a sense of who we are. We can test
- feature proposals against this product mission, and with a bit of
- additional shared knowledge it lets our team members independently
- categorize features in roughly the same way.</p>
-
- <p>It took us three years to understand what we’re doing well
- enough to come up with this product mission. If we’d had it on
- day one, it would probably have cut development time in half —
- maybe more. When you’re building a product, the mission should
- be the first thing you work on. If your mental model is good enough to
- write a product mission that inspires everyone in your company,
- everything else will fall into place.</p>
-
- <hr/>
-
- <p><em><sup>1</sup> I don’t mean to imply that picking a good market
- is easier than building a great product. In fact, the opposite is
- true. It’s far easier to get a handle on product management, so
- I decided to tackle this subject first. Aside from great products and
- market growth, there are also questions of distribution, economics,
- regulated markets, and other subtleties. But the number of early stage
- software startups that fail for these reasons pales in comparison to
- the number of startups that pick small markets or don’t manage
- to deliver great products on time.</em></p>
-
- <p><em><sup>2</sup> In practice it often turns out that people do buy phones because of unique colors or cases. But I’m ignoring this subtlety to focus on a larger point.</em></p>
-
- <hr/>
-
- <p><em>Thanks to Michael Glukhovsky and Michael Lucy for reviewing this post.</em></p>
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