Rajesh spoke recently at ProductCamp Austin about The Five Traits of a Product-Driven Company. Not only does he detail the common characteristics that these companies share, but he provides immediately actionable advice to help move your company towards being product-driven. The entire presentation is worth reviewing, but here are my top takeaways from each of the five traits and shortcuts to the corresponding part of the talk:
1. Puts product / UX closest to the customer.
It’s trite to say that product teams should be spending more time understanding their customers. Yet this is the number one thing product teams can do to increase their product’s impact. In this talk, Rajesh says that,
the biggest reason I hear from product teams [about not spending time with their customers] is that they don’t have time. I think the question to ask is can you delegate any decisions [to free up your time]? [13:30]
He suggests finding small wins like delegating decisions within a sprint to the functional experts on your team to free up extra time to understand your customers.
2. Addresses the needs of multiple customers with one solution.
This trait is at the heart of being product-driven. Instead of building bespoke solutions for each customer, a product-driven company focuses its efforts on building one product that will have the biggest impact on its target market. By focusing on the needs of your target market instead of each individual customer, your customers win by getting a product that is available quicker and is less expensive. Rajesh explains that “with a product-driven company, pricing should be way lower than a custom solution. Think about the analogy of going to IKEA and pulling something off the shelf versus commissioning a customer woodworker to build you a new bookshelf.” [09:01]
3. Uses technology to scale.
This trait underscores the importance of the partnership between the engineering and product organizations. Even the greatest product ideas fall short without the talented engineers who actually build the products that help your customers. Rajesh underscores the importance of leveraging technology to scale with the example of a lawn mowing company. At first, the company consists of a sole individual with a mower. As the number of customers for this company grows, there will be an inflection point where hiring more people with more mowers is less efficient than finding technological solutions. Ultimately this fictitious company can most effectively scale with a technological-driven solution like a fleet of robot-mowers.
4. Understands shifts in market demand / future customers.
Determining a product’s vision means not only understanding your customer’s needs today but also to understand what they’ll need in the future. Predicting regulatory shifts or changes in buyer pressures does not require investing in a crystal ball. Instead, product teams must actively seek out market research focusing on market trends and shifts. Further, product organizations should “walk a mile in your customer’s shoes” by subscribing to the same industry newsletters that fill their customer’s inboxes.
5. Succeeds by saying no.
As Steve Jobs famously explained, “innovation is saying no to 1,000 things.” Product-driven companies clearly define their market and confidently say no to solving the problems of the noisy customers outside of their target market. Rajesh points out that “it’s very important to be conscious of where the feedback is coming from and whether that customer or buyer was really part of who you were designing your product for.” [08:27] Rajesh also suggests that product teams “create a yes-no flowchart ... [for myriad decisions] like what types of feature requests, bugs, or operational issues do we actually accept and prioritize.” [20:30]
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