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  1. title: How to build great products
  2. url: http://www.defmacro.org/2013/09/26/products.html
  3. hash_url: 20bd9530c329bff4c43c1dcbd1b896f2
  4. <p>If you believe
  5. that <a href="http://www.defmacro.org/2013/07/23/startup-lessons.html">sales
  6. fix everything</a>, it follows that most startups fail because they
  7. don’t ship a great product in a growing market before they run
  8. out of money. Assuming you’ve picked an explosive market, how do
  9. you go about building a great product?<sup>1</sup></p>
  10. <p>Building great products is hard, but the difficulty is greatly
  11. exacerbated if you have no good model for analyzing products and
  12. features. Without a model you’re left with a never-ending stream
  13. of feature ideas and half-informed shots in the dark. Some people can
  14. pull this off because they start out with a phenomenal product
  15. intuition. But most people aren’t blessed with this superpower
  16. on day one.</p>
  17. <p>I started out with terrible intuition (and didn’t even know
  18. it). Over the past three years I looked at our user metrics every day,
  19. creating a feedback loop to train my brain on what makes a good
  20. product. Eventually I got quite good at predicting the impact of any
  21. given feature, so I started thinking of a model that captures the
  22. essence of what I’ve learned.</p>
  23. <h1 id="the-three-bucket-model">The three bucket model</h1>
  24. <p>The most important aspect of product management is categorizing
  25. features into three buckets: gamechangers, showstoppers, and
  26. distractions. When I first started building products, all features
  27. looked roughly the same. Over time, I formed the three bucket model
  28. and now my mind automatically slots every feature into one of these
  29. buckets.</p>
  30. <p>Here is an example. Suppose you are building a new mobile phone. It
  31. has to be able to call people, or no one will buy it since it
  32. wouldn’t be much of a phone. But the reverse isn’t true
  33. — having voice calls won’t make anybody buy your phone
  34. because every other phone already does that. So for your mobile phone
  35. product, voice calls are a showstopper.</p>
  36. <p>On the other hand, suppose your phone could project videos onto a
  37. surface. No other phone does that, so this feature could be a
  38. gamechanger that excites a lot of consumers. Alternatively, it’s
  39. possible that most people won’t care about it at all, in which
  40. case it’s just a distraction.</p>
  41. <p>This example gives you three buckets to categorize any given feature:</p>
  42. <ul>
  43. <li><strong>A gamechanger.</strong> People will want to buy your product because of this feature.</li>
  44. <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>
  45. <li><strong>A distraction.</strong> This feature will make no measurable impact on adoption.</li>
  46. </ul>
  47. <p>Empirically, successful products have one to three gamechanging
  48. features, dozens of features that neutralize showstoppers, and very
  49. few features that are distractions. Your job is to build an intuition
  50. about your space to be able to tell these categories
  51. apart. That’s still pretty subtle (is a built-in phone projector
  52. a gamechanger or a distraction?), but at least this model gives you a
  53. plan of attack.</p>
  54. <h1 id="resource-allocation">Resource allocation</h1>
  55. <p>If you had infinite time, you could ignore these categories and
  56. blindly iterate on the product until it resonates with the market. But
  57. your time is finite. The longer you take to find a great product, the
  58. more likely you are to run out of cash, squander morale, or miss the
  59. market moving under your feet. Modeling product management in terms of
  60. the three categories is extremely valuable because it allows you to
  61. treat product management as a resource allocation problem.</p>
  62. <p>If you put any effort into distractions, you’re wasting
  63. resources. That much is obvious.</p>
  64. <p>If you’re doing more showstopper features than you absolutely
  65. need to, you’re wasting resources. Lack of copy-pasting on the
  66. first iPhone might have been a showstopper for some people, but Apple
  67. correctly determined that enough consumers would still buy the
  68. phone. There was no need to delay.</p>
  69. <p>If you put more effort into any given showstopper than the absolute
  70. minimum you can get away with, you’re wasting resources. The
  71. first iPhone had pretty bad voice quality, but it was good
  72. enough. Most people were willing to live with it. It made calls, and
  73. it wasn’t terrible. Improving the voice quality by another 10%
  74. would have made little measurable impact on adoption.</p>
  75. <p>If you’re doing more than three gamechanging features,
  76. you’re wasting resources. Empirically, few disruptive products
  77. are good at a dozen things. Shipping gamechanging features
  78. is <i>hard</i>. Three is probably the most you can get away with, and
  79. even that is a stretch.</p>
  80. <p>Finally, if you don’t pour enough creative energy into any given
  81. gamechanging feature, you’re wasting resources. If a
  82. gamechanging feature doesn’t absolutely blow people away,
  83. it’s not much of a gamechanger — it’s just a
  84. distraction. In this category you can’t go half way.</p>
  85. <p>You can get away with making some mistakes. Very few products
  86. absolutely nail this on launch. But most first time product managers
  87. break all of these rules all the time, probably because they’re
  88. not aware of them. Break these rules at your own peril. The fewer
  89. mistakes you make relative to your competition, the better. Every
  90. mistake can be incredibly costly. Make too many and someone else will
  91. run circles around you.</p>
  92. <h1 id="craftsmanship">Craftsmanship</h1>
  93. <p>The trickiest part of building products is learning how to tell the
  94. difference between the categories and knowing when a given category is
  95. full. Is a built-in phone projector a gamechanger or a distraction? If
  96. it’s a gamechanger, is it big enough to attract sufficient
  97. demand, or do you need another gamechanger? If you invented the
  98. technology to increase voice quality by 50%, does that become a
  99. gamechanger or is it still just a showstopping feature? How about
  100. 200%? How many showstoppers do you have to neutralize to build a
  101. compelling phone?</p>
  102. <p>I have no idea what the answers are for the mobile phone market, but
  103. in my area, unstructured data, I can look at any given feature and
  104. tell which category it falls into quite easily. Sometimes I’m
  105. wrong, but that’s ok. I just have to be wrong less often than my
  106. competitors.</p>
  107. <p>The best way to build this intuition is to talk to a lot of
  108. people. Talk to potential users. What do they think? Talk to people
  109. who tried to build a product in your space and failed. What can you
  110. learn from their failure? Talk to competitors. How do they approach
  111. the problem? Talk to engineers in big companies. What can they tell
  112. you about the state of technology? Talk to other entrepreneurs in
  113. adjacent spaces, investors, journalists, grad students, professors,
  114. even the naysayers. The best way to get a sense of taste in a given
  115. space is to inject yourself into the industry and talk to as many
  116. people as you can.</p>
  117. <h1 id="buyers-stakeholders-and-pundits">Buyers, stakeholders, and pundits</h1>
  118. <p>The sooner you can learn about the history of the space, the state of
  119. the technology, the opinions of potential users, and the direction of
  120. your competition, the sooner you can form a coherent view of the space
  121. and develop a unique vision for your product. But be
  122. careful. It’s easy to start taking advice from the wrong people.</p>
  123. <p>Suppose you’ve decided to design your mobile phone in a form
  124. factor of a walkie talkie for construction workers, and you’ve
  125. determined that the best way to sell it is to construction managers
  126. top-down. If you talk to construction workers, they might be enamored
  127. by beautiful icons and an unusual color scheme. You might determine
  128. that the unique design of your phone is a gamechanger. But ultimately,
  129. it’s the construction manager who’s writing the check. For
  130. the construction manager, a beautiful design is nice, but it
  131. isn’t a gamechanger. It doesn’t help him run the business
  132. any better than he did before.</p>
  133. <p>For complex business sales, you have to pay attention to all the
  134. parties and make sure all the stakeholders are satisfied. Are the
  135. construction workers strong influencers on the manager’s
  136. decision? If so, spending time on a unique design might not be a bad
  137. idea. If not, you might be wasting your time.</p>
  138. <p>It’s true even for consumer products. If you’re designing
  139. a luxury phone and pricing it above every other phone on the market,
  140. do your customers have to convince their spouse? Do most families make
  141. shared decisions about buying luxury items, or do people splurge on
  142. luxury items independently? If they have to convince their spouse, can
  143. you add a feature to make it easier? Find out!</p>
  144. <p>Beware of noise. Learn the difference between your users and people
  145. who are just commenting. Everyone you talk to will have an
  146. opinion. Early on it can be tempting to design a product based on
  147. feedback from industry pundits. But a feature is only a gamechanger if
  148. the person signing the proverbial check recognizes it as
  149. one. Otherwise, it’s a distraction. Industry pundits can be
  150. extremely useful for understanding the state of your field, but
  151. they’re rarely the ones to buy your product. If you design your
  152. product around their feedback, you’ll find that there is nobody
  153. to buy it in the end.</p>
  154. <p>A corollary of this is that you can’t design a great product
  155. unless you live, eat, and breathe like your users do. You need to
  156. know <i>exactly</i> who your user is, what their problems are,
  157. how <i>they</i> perceive your product, and who helps them make buying
  158. decisions. Your intuition has to mirror how the customers will
  159. perceive your product. Categorizing features is only useful if
  160. it’s a good predictor of your actual users’s
  161. response. Otherwise, you’re just wasting time.</p>
  162. <h1 id="aggregate-gamechangers">Aggregate gamechangers</h1>
  163. <p>There is a subtlety to the model we haven’t discussed so
  164. far. Some features aren’t sufficiently impressive on their own,
  165. but become gamechangers in aggregate. For example, suppose you design
  166. a unique set of icons for your phone. Is that a gamechanger? Probably
  167. not. What about a unique color scheme? It doesn’t seem like a
  168. gamechanger either. How about a unique family of phone cases?
  169. It’s hard to imagine people buying a phone because of a pretty
  170. case.<sup>2</sup> But what if you put these features together? A
  171. unique design direction that combines a novel icon set, color scheme,
  172. and family of phone cases sounds like it might be a sufficient
  173. gamechanger to attract consumers.</p>
  174. <p>Features that become gamechangers in aggregate are dangerous for three
  175. reasons. Firstly, it becomes harder to tell what combination of
  176. individual features is and isn’t a gamechanger. Secondly,
  177. aggregate gamechangers are expensive — instead of making a
  178. couple of good decisions on a feature, you have to make dozens or
  179. hundreds of good decisions for a whole family of features. Thirdly, it
  180. makes it easier to convince yourself that if you add just one more
  181. feature, you’ll strike a gamechanger. Building great products is
  182. already difficult. Introducing a subtlety like this makes it even
  183. harder.</p>
  184. <p>Many products do succeed in exactly this way, but if possible, try to
  185. avoid it. If you have no choice but to resort to aggregate
  186. gamechangers, it probably means you’re working in a relatively
  187. mature market. Often, that’s ok, but it should prompt you to do
  188. some soul searching. Is it really worth being in this market, or does
  189. it make sense to find another one where you can innovate more easily?</p>
  190. <h1 id="product-mission">Product mission</h1>
  191. <p>Suppose you’ve developed product intuition to apply the three
  192. bucket model to your field. You can easily (and correctly) categorize
  193. features. You’re now ahead of most product managers. But
  194. you’re still not quite done. There are a few problems with this
  195. approach:</p>
  196. <ul>
  197. <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>
  198. <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>
  199. <li>Your engineers will get frustrated, because they’ll think you’re pulling decisions out of thin air.</li>
  200. <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>
  201. </ul>
  202. <p>A great way to get around these problems is to write down a product
  203. mission. Think of it as a function that accepts a given feature as an
  204. argument, and returns one of the three categories above. A good
  205. function definition is concise, understandable, and
  206. repeatable. Ideally after reading it, most people on your team will be
  207. able to categorize features themselves in the same way you would.</p>
  208. <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>
  209. <blockquote>
  210. <p><strong>Database tools should be indistinguishable from magic</strong><br/>
  211. 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>
  212. </blockquote>
  213. <p>On the surface these two sentences don’t say very much, but if
  214. you dig in a little, this product mission has surprisingly high
  215. information density. It tells people we’re building a
  216. database. It tells people we treat the product as a developer tool
  217. first. This resolves the tension between developer features (like the
  218. query language) and operations features (like monitoring). All of our
  219. gamechanging features revolve around developers. We treat operations
  220. as a showstopper. It explains what we expect our users to do with
  221. RethinkDB (build real-time, data-driven web applications). It gives
  222. people a sense of how far we’ll go on certain features (surprise
  223. and amaze). Being good enough for developers isn’t enough. These
  224. people spend many hours a day using our software — we want to
  225. make the experience <i>pleasant</i>. It suggests that we are willing
  226. to accept more complex implementations to make our users’s lives
  227. easier. It guides us to build features that let developers build new
  228. types of applications, not just the ones that already
  229. exist. It’s self-aware and leaks a healthy sense of humor we
  230. have as a team. This gives people a sense of who we are. We can test
  231. feature proposals against this product mission, and with a bit of
  232. additional shared knowledge it lets our team members independently
  233. categorize features in roughly the same way.</p>
  234. <p>It took us three years to understand what we’re doing well
  235. enough to come up with this product mission. If we’d had it on
  236. day one, it would probably have cut development time in half —
  237. maybe more. When you’re building a product, the mission should
  238. be the first thing you work on. If your mental model is good enough to
  239. write a product mission that inspires everyone in your company,
  240. everything else will fall into place.</p>
  241. <hr/>
  242. <p><em><sup>1</sup> I don’t mean to imply that picking a good market
  243. is easier than building a great product. In fact, the opposite is
  244. true. It’s far easier to get a handle on product management, so
  245. I decided to tackle this subject first. Aside from great products and
  246. market growth, there are also questions of distribution, economics,
  247. regulated markets, and other subtleties. But the number of early stage
  248. software startups that fail for these reasons pales in comparison to
  249. the number of startups that pick small markets or don’t manage
  250. to deliver great products on time.</em></p>
  251. <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>
  252. <hr/>
  253. <p><em>Thanks to Michael Glukhovsky and Michael Lucy for reviewing this post.</em></p>