What Happens After Product Launch?

Marcel Putina at UXDX Community: Amsterdam. Video: https://www.youtube.com/watch?v=bRGsbXVNBzE

Readable transcript: edited from the recording's captions for readability (fillers and false starts removed, punctuation and section headings added). Wording is the speaker's own. Timestamps are positions in the video. Names marked [?] could not be verified against the audio.

Background: from HitFox to Savedo to DEGIRO

[00:00:09] Hello everyone, my name is Marcel. Today I'm going to walk you through a few of the learnings and a few of the discoveries I and my team have been part of. I went sort of with this presentation because I've been told it's a very mixed group, so you would have different ranges of people, from early people in their career to very experienced ones. So I wanted to come here with a set of philosophies, with a set of principles, how to approach things, and put sort of a mirror in front of you and ask: are you A/B testing the 40 shades of blue, or are you actually focusing on what matters? So I'm just going to try to talk about what matters.

[00:00:59] All right, so without much delay. Currently I'm a product owner, product manager at DEGIRO. It's an online broker, top three biggest broker in Europe. I will touch briefly on how they do things there. Previously I started working briefly at LG, then joined HitFox Group, where we were building companies. It's a company builder, so it was focused on online advertising and big data. One of the companies that emerged was Savedo, which was a marketplace for fixed-term deposits.

[00:01:42] Basically it was about connecting German savers, this was in Berlin, connecting German savers with banks abroad all across Europe, so they could have access to higher interest rates on fixed-term deposits. Fixed-term deposits are the things where you put your money in the bank for 12, 24, 36 months and they give you a percentage, and that's kind of safe and all those things. So we launched our first fintech company being an advertising company builder, and then we realized that's not quite the culture to do fintech companies, so we went and built another company builder, which was FinLeap. And then I stayed with Savedo for almost four years. I was the second person joining the company, and then the company got acquired by a competitor, so I came to Amsterdam. So this is my background.

Idea: state the problem clearly

[00:02:41] Today I want to look at product-market fit and what it actually means, what it stands for in its real essence, and whatever we're trying to get to the market, so basically bringing it into the world. It can be a new product, it can be a new company, sort of a startup, it can be a new service that you're trying to bring. These ideas apply to all of them. So you have an idea, then you sort of try to think whether the idea is great or not, or if you've lived it yourself, and then you try to come up with a prototype of what would be the minimum thing you would deliver to the customers. You launch it, you learn something, you gain some traction, and then you grow. Fairly simple, except that it just takes a lot of iterations to go through this.

[00:03:43] So let's start with the idea. An idea in itself is not just something that came from you because of a higher force and now you're on it and everything. An idea is something that is a real problem. So the best way to think of a real problem is to understand what are you building exactly, and why. Most people get this wrong because they don't understand what exactly they are trying to solve, and why are they trying to solve that, why are they exactly the person to be solving that specific problem.

[00:04:26] Then, can you state the problem clearly? Can you speak to someone in a clear sentence about the problem that you're trying to solve? Can you explain the thoughts behind it? Most people get it wrong. If you find yourself delivering a one-pager essay on what the problem you're trying to solve is, you're doing it wrong. So try not to do that. Try to be very simple in terms of what you're saying, in terms of what you're building, or the problem that you're trying to solve, because that comes first. The idea is nothing but just a mirror of the problem.

[00:05:01] Have you experienced this yourself? Most of the time it's really, really good if you have experienced the problem yourself. Most of the founders I've met, most of the people in UX, and product people, and people in engineering, have never experienced the product themselves. We had one company at FinLeap that was trying to do a project related to mortgages. We had our UX people and a few engineers go and apply for a mortgage, just to test how that feels, just to get into the process. They were just posing as actually applying for a mortgage at a real bank. So that's the level you should be feeling yourself, you should be understanding the problem hands on.

[00:05:52] Who is your customer? You should always be able to answer who your customer is. There is nothing more foolish, in a way, than to think that you're building it for everyone. So you're not building for everyone. Most of the time you're not doing it for everyone, unless you're Google and you build Google. But yeah, you have to pick your market, you have to know your customer, you have to know what their real problem is, you have to describe in really good words who they are.

[00:06:31] And then, the best ideas actually sound pretty bad. The analogy for this was when Airbnb was pitching their Air Bed and Breakfast company, because that was what it was called at that time, and they were pitching it to all kinds of investors, and Marc Andreessen said that it's the best worst idea he has ever heard. So that's the level of thinking you should be having around your idea and about the problem you try to solve.

Prototyping: solutions, not the one idea

[00:07:13] Prototyping is nothing but the reflection of that problem. So you're understanding the problem very well, now you're ready to craft the solution. So you're not really delivering a product, and that's where a lot of people get themselves confused into different things, because they get married to one idea. They come up with an idea and then they're like, oh my god, that's the idea I want to implement, I'm excited about it, I have a vision about it, I know where it's going to lead, that's amazing, let's bring all the team around the table and I'm going to pitch it and we're going to be running the world. Most of the time it's not like that. Most of the time you should think in terms of solutions. So you have this solution, that solution, you have that solution. They're all fine, they all have a chance to be tested, they all have a chance to be experienced.

[00:08:12] So when you create a potential solution, when you think about a potential solution, you need to be really asking yourself what is the job that people are trying to do. I've been very fanatic about this question, to the extent that people in the company already know how to answer my questions. So I've put it in their mind. They come to me with a problem, they say, yeah, this is not working, or I need that, or can you build that, and I'm putting them through iterations of questions just to get to the actual thing they're trying to solve. And sometimes it's different with different people in the organization. Somebody learned it, somebody didn't. And then somebody comes to you and says, hey, can you do that for me, and you say, what is the problem with you? Oh no, no, I know what you mean, I'm actually, I just need that. So it's just funny. But with customers it's completely different.

[00:09:17] So if you are thinking of a perfect experience of that problem that you're trying to solve, you need to find the cornerstone of it, what's the minimal kernel that you need to start with that will actually solve or alleviate most of the pain. And then, if you think about it, you should always be thinking in terms of, is this solution that I'm building a good substitute? Because most definitely the problem is already being solved in some form. Most people want to go from point A to point B. They don't want to be necessarily taking a taxi. When I commute I'm not thinking about the mode of transportation I'm going to take, unless I have another criterion that I need to choose outside of my bike. But the goal is always to get from point A to point B. The goal is not to ride an Uber. So most of the good companies, they understand this thing.

[00:10:19] Talking to users and software quality, they correlate very much. There's multiple pieces of research done on that, you can read it up. So having the engineering team, having the design team, having the product team all together talking to users often and often. I think there was an indication that everybody should talk to the customers at least five hours every six weeks. So that's the level you should be thinking at. Am I getting enough exposure to the customer? That's the minimum target that you should be hitting.

[00:10:57] And then one very important learning: you're not a lottery ticket. Let's face it, nobody is. So you are going to get it wrong. We're all going to get it wrong. So it's good to have that mindset, it's good to let it go, just to feel like, yeah, whatever, we're going to test that solution. If it really works, if the customers respond well to it, we're going to give it a shot. If not, we're going to try something else. Don't get married to your ideas.

Learning: monetize early and pick a North Star

[00:11:29] So you've had an idea, which you stated in the form of a problem. Now you sort of have a potential solution that you're trying to solve it with, and you're trying to learn. You've put something out there, a prototype, in front of the people and they are using it. So how do you know that the problem is actually solved? How do you know if the MVP actually delivers on what people need?

[00:12:06] One of the good indicators is, are you monetizing? Are you earning money? And you should be earning money as early as possible. The companies and the people and whatever you're trying to put out there: if you're not earning money, you're lying to yourself, because if you're planning to earn money later you should be earning money now. So if you're trying to build a product for B2B, get a contract signed, get a letter of intent, get something. You should be comfortable with knowing that when you build it, somebody will use it.

[00:12:37] If you're building B2C there's a bit of a tricky thing, because you're going to tell it to the customer, and most of the customers are going to be very nice with you. They're not going to tell you your product sucks. So what will happen is, they'll be like, yeah, that will be so cool, I'm going to use it. And they use it while it's free, and then you ask them, hey, can you pay, whatever, nine euro a month for this, and they're like, no, look, it's too much for me, I don't really need it that much. So that is the type of exercise. If you put people through monetization, that's actually a very good filter for you to know you're actually solving the problem. If people put money out of their pockets, you are solving the problem. So that's a very good indicator to follow.

[00:13:16] Measure one North Star. I think this has been a very widespread concept, used at Facebook in the early days. They have always said you should get on Facebook and then you should invite friends. So the number one thing you should have done is to invite friends. That was their North Star and that's what mattered, that's what the entire company knew about. So not user growth, but finding your friends, growing your network. Because the bottom line was, if you go to Facebook and there are no friends, you're not going to look at your newsfeed empty without your friends' content. It's not going to be as sticky. So that was the whole learning, that was their North Star. So find your North Star, find your thing that everybody in the company knows. Everybody in the company should know what it is, where to look it up, how to measure it, how it is impacted, all those types of things.

[00:14:15] Until now you're pretty much only doing really problem, solution, and you're learning in that solution. There is no marketing yet. You're still very intimate with the customer. You're giving the customer something, he's using it, you have a small user base, you're rapid prototyping, you're going through the cycles and you're trying to get to that statistic, you're trying to measure that statistic, and you're trying to know whether it's actually working.

[00:14:44] That's one of the very important learnings we've had, because most of the time you have a crew of people, especially in a company builder, and then everybody starts having opinions. So you've got a head of marketing and you've got that PR person from there and you've got whatever other person from there, and they all have amazing ideas, and everybody says, oh yeah, let's measure the click-through rate of whatever campaign. Somebody says, oh no, we should actually measure the actual purchase when the click happens, and whatever. Pick a North Star. Usually it should be around money if you're planning to monetize anyway. Otherwise, if you're monetizing with ads, then you have to have sort of a concept of engagement, engagement should be that thing that you're measuring. Otherwise it should always be about money, because otherwise you're lying to yourself.

[00:15:36] One very important aspect to look for when you are trying to launch, when you're trying to learn from the product, is: are the users misusing your product? Is there any pattern? Are you talking to somebody and he says, yeah, I don't really want that thing, I want it this way? Those are the types of patterns you should be looking for, because they can indicate the direction where you should take it, back into the prototype phase, into the idea phase, and reiterate, and then deliver another product or another version of that product or solution. Because that's how you know people actually want it.

Pivot versus iterate

[00:16:22] Pivot versus iterate: what does it actually mean? Iteration is everything you do between idea, prototype and launch. You go through those relentlessly until you actually feel it, and I'm going to talk about how it feels when you get product-market fit. Pivot means you're either changing the scope of the problem, so you're saying that problem that I thought of, I'm no longer going to work on it, or you're changing the customer, so you're saying I'm going to solve kind of the same problem but for a completely different target group. Everything else you're doing, you're iterating solutions, so you're trying one solution, second solution, third solution. That's iteration. The other one is pivoting.

[00:17:01] You need to build a team. That is a product improvement engine. The team needs to be so good that they are always being promoters of this mechanism that you're trying to build. It should work like a machine. It shouldn't be any other way. It should be very predictable in terms of what you're doing next. And whatever number of iterations you think you're going to do here, multiply by 10. That's a good indicator of the amount of work you need to go through in these stages.

[00:17:42] And by the way, in terms of timelines, I don't know how you feel about what is a good timeline to actually get to product-market fit. 18 months. So 18 months, 18 to 24 months is a good indicator of actually hitting it. So the more you stay below the level, the more you stay in the garage, with a small team of people, you're iterating very, very well until you hit that nerve of what the customer is actually trying to solve. That's when you know you've reached product-market fit. That's when you can actually go to the next phase. That's why I put traction and growth a little bit separated.

What learning is not

[00:18:21] So we've spoken about what learning means, and just a few things about what learning is not. Learning is not features. Learning doesn't mean, oh, let's build another feature. Learning means testing, so you're actually putting it out there, you're running a test. Learning means you don't get caught by shiny object syndrome, so you don't see a new thing and you're like, oh, it feels like I've learned something lately, Google just launched that, or Netflix just did something, let's do it as well. Almost never works.

[00:18:59] Following somebody else's source is not learning. Those are the things you should always try to avoid. That's not learning. Following analyst opinions, sales team requests or support team requests, those are the things that usually will derail you from actual learning, because learning means talking to the user, getting intimate with the user, being very hands-on with the user. And competitive me-too features, so those guys did it, I want to do it as well.

What product-market fit feels like

[00:19:35] Now, how does product-market fit feel like? It feels like everything is easy and everything you do actually works and you're a genius. Actually product-market fit feels more like this: people love you, rather than like you. So the sentiment you feel in the media or the sentiment you feel in the people's comments and stuff is more around the word love than the word like. Because if they give you love, they're supporting you, they're backing you up as a company or as a product.

[00:20:11] Product-market fit means you're talking to the user, and in the moment you're talking to the user you're just telling him something, and then, if he has a friend around, and in a B2C set-up you would see this often, he would say, hey, they just said they can solve that. So that type of analogy: when you see somebody saying they just told me they can solve that, it just means they really need that problem to be solved.

[00:20:46] There's a survey way of understanding if you've got product-market fit as well, so there's a scientific way to look at it. It basically asks, how would you feel if you could no longer use this product? And if 40 percent or more of the users say that they would feel very disappointed, you've got it. And then, the obvious one, recommendations, people recommending a product to other people. An NPS of more than 50 means everything's great, there are a lot of promoters for your business, a lot of promoters for what you do. Again, money: customers paying, a renewal rate. So he bought the first time, he's buying the second time, or he's renewing his subscription. That's a very good indicator you've got it, somebody's actually in with you for the second time.

[00:21:43] This is what product-market fit looks like. Most of the time you will have a percentage of active users, and you start at some point, and you have to measure it cohort-based. And you know you have got product-market fit even though it goes very low here, like 5%, if it flattens out, you know you've got it, because that means you will always have a user base that is there with you. If your retention curve looks like that, then you don't have product-market fit.

Growth strategies and market dominance

[00:22:18] Trying different growth strategies. So you've now got product-market fit, that feels great, everybody is with you, you get love, people use your product, they renew their subscription. So first build a great product, then test growth strategies. Which customers should you go after first? Low-hanging fruits, the easiest one you can access, the people you know. Try to convert them as customers and then see how they use it, and then build up from there. Don't try to create very extensive mechanisms and channels and those kinds of things. It's usually a good practice to test in small batches and small different iterations. The same way it applies for traction, just in marketing materials, as it applies for idea, problem, iteration.

[00:23:19] Then you can ask your customers where they can find more people like themselves. So you should closely listen to that, and you should iterate channels and the content in the following way. I'll just speed up a little bit because time is up. So talk to customers, listen to their problems and prototype quickly.

[00:23:42] One funny thing we've learned last week is that we put a bunch of banners in front of people, and the banners were saying, so we're an online broker, and we have a lot of exchanges we're operating on, and we had a banner which said 50+ markets, which stands for, we have a lot of exchanges, you have the exchange in Frankfurt, the exchange in New York, the Stock Exchange and all the exchanges around the world. And a panel told us that they thought it's for 50-plus people, so people older than 50. And you're like, how come? You're never going to think about those things, but that's what people feel. So iterating content, iterating with actual users, asking them how they feel about it, is a good practice to do. If it didn't work, go to point one.

[00:24:29] So your product is the chocolate, and the thing you're trying to do here is you're trying to wrap it in the best, most eye-catching way, so that you get users basically. And once you do that, once you've figured out what channels you're on and everything is working, you should scale aggressively, because there's probably a lot of competition already in that field who are trying to do the same thing. So you figured out the best way to do it, you've got a product, you should capture that market very fast. So you want to be the number one in the race to capture that piece of the market.

[00:25:07] And one good thing to think about, and to know your strengths basically, is also probably to reference this book. You want to achieve market dominance. There are several ways you can achieve market dominance. One is best price, best product, best overall solution. Best price means you are the Walmart, the Amazon, you focus a lot on logistics, you know your cost structure very well. Best product means you're the kind of Apple, you've invested a lot in R&D and that's the best product you deliver. And then best overall solution is pretty much the type of company which has a lot of personalized connection with you. So asset management, for very rich clients, they just do a very personalized thing for you.

[00:25:56] I will just sum it up here. So where we started: idea, prototype, launch, traction, growth. So the problem, solution, you should iterate. Usually iterate, test, and growth, and then you're up for profit. Don't forget, try to always monetize. You're not a lottery ticket. And optimize for learning. You always should be asking, what is the biggest unknown that, if I learned it today, it would change my course of action, so I would just choose something else. With this, yeah.