Advisor Case Study: The Business Value of Operational Tools

The following is adapted from Build What Matters.

When I was on Ben’s product team at Opower, my goal was to increase our margins as we prepared for the IPO. My squad was called “SaaSy Ops,” a nod to the fact that we wanted to drive down the personnel costs of operating our product so we got the same valuation multiples as other SaaS businesses when we went public. We did this by automating tasks that our product operations team had to do manually because the product didn’t support them.

One of the manual tasks we automated was the selection of energy-saving tips shown on the back of Home Energy Reports. I spent my first month or two just observing how the team curated these tips using complex logic and a set of spreadsheets that were manually loaded into the database right before millions of Home Energy Reports were generated each month. It took hours for a team of three or four energy efficiency marketing experts to do this every few weeks—time they could have spent on other work to encourage energy efficiency at home.

In the end, our squad collaborated with our internal users and built what we called Automated Tip Targeting (ATT) to automatically choose personalized tips for every report. We codified a lot of the rules the tips team had informally been using and built a feature toggle to turn on ATT by client.

We thought we were done after training the tips team on how ATT worked and how to enable it, but the tips team wanted to be sure that ATT would choose the right tips for the right user given a specific set of conditions (e.g. what tips would go to a user with electric heat in Boston in October). We built a feature to project which tips would be chosen for a given user type over time. The result? The tips team felt much more comfortable turning on the feature, and that drove adoption.

For me, the key lesson was that building operational tools for internal stakeholders should be approached like you would a building product for a customer or external user.