You’ve set sail on your journey to build a world-changing product. You have charted your path, and you’re on your way to achieving your Vision. So you’ll eventually get to your destination, right?
Not so fast. In addition to having the right Vision, you also need to consider what factors influence your Sustainability as you pursue that vision, so you survive long enough to get there. Sustainability asks the pesky practical questions around “Do you have enough food and water to survive this journey? Do you have a crew? Is your boat structurally sound?”
Why is defining Sustainability so important? Because, just like you need a common Vision for the team to follow, you need to have a common definition of Sustainability so your team is evaluating decisions the same way you are. This helps ensure that everyone is aligned with the end goal in a way that helps you survive long enough to achieve that goal.
We shared this framework for decision-making in a previous post — it’s a simple 2x2 matrix to evaluate opportunities by looking at “Vision Fit” versus “Sustainability”. For example, an opportunity you’re evaluating that’s high Vision Fit and Sustainable is generally ideal. Something that’s going to help you survive but goes against your Vision is considered “Vision Debt”.
Sustainability is about identifying and mitigating the biggest risks that could shut you down. Your risks will evolve over time, but typically fit within these five categories:
- Technology/Operational Risk: The risk that we might not be able to invent key technology or solve operational issues (such as scalability) that are critical to our business model
- Legal/Regulatory Risk: The risk that we might get sued or otherwise legally prevented from operating
- Financial Risk: The risk that we run out of cash or credit to pay employees or suppliers.
- Personnel Risk: The risk that we will be unable to hire or retain key personnel
- Stakeholder Risk: The risk that a stakeholder with authority over my product will decide to shut it down
While all of these risks are important, not all of them are going to get you simultaneously. Depending on your scenario, one or two of these classes of risk might be nipping at your toes more than the others.
We recommend starting by identifying all of the risks you can name within each category. Then, come up with a single “Sustainability Statement” — a sentence or two that encompasses the gravest and most immediate dangers to your existence. This will work as the counterpart to your “Vision Statement” that you developed using the Vision Worksheet from the Radical Product Toolkit.
With both the Vision and Sustainability statements written, you’ll be able to better evaluate where strategic options lie on each “Vision” versus “Sustainability” matrix in your toolkit’s RDCL Strategy Canvas.
A format you can use for a Sustainability Statement is:
“Currently, the greatest risk to our product’s existence is that ___<greatest risk> ___.
If this happens, we won’t be able to continue operating because ___<consequences of risk >___.
This risk will most likely come true if ___<factors that increase/amplify risk>___ .
Some factors that could help us mitigate this risk are ___<factors that decrease/mitigate risk>___ .”
What Does a Sustainability Statement Look Like?
For a founder of an early stage company:
For products built by startups, the biggest risk is usually running out of cash (Financial Risk). If the startup is attempting to invent completely new technology, there’s also the possibility that you simply fail in this effort (Technology/Operational Risk).
For my startup Likelii, the risk that we couldn’t show product-market fit (and would thus be unable to raise additional funding) represented Financial Risk. The following is an example of a Sustainability Statement I would have written for Likelii:
- “Currently, the greatest risk to our product’s existence is that we may not be able to raise venture funding.
- If this happens, we won’t be able to continue operating because we won’t be able to pay our design and development contractors, whose work is critical to our ongoing operations.
- This risk will most likely come true if we fail to demonstrate traction through user growth.
- Some factors that could help us mitigate this risk are growing the user base quickly over the next six months, giving us time to seek funding before our cash runs out.”
For a product leader at a mid-size company:
Products inside mid-size companies often are less financially constrained than startups are, but face a full gamut of other risks.
Several years ago, I was working as a product consultant for a mid-size technology company. They had invented a new technology, but they had not yet proven that it could work at scale. It wasn’t clear if the company’s technology could ever meet the performance criteria required for their customers to derive real value from the solution.
The following is an example of a Sustainability Statement that a product manager at this mid-size technology company could have written:
- “Currently, the greatest risk to our product’s existence is that we may not be able to hit critical performance metrics.
- If this happens, we won’t be able to continue operating because we won’t have a product to sell that meets our target customers’ business needs.
- This risk will most likely come true if we fail to demonstrate performance improvements for existing customers and continue to sell against the same performance criteria.
- Some factors that could help us mitigate this risk are targeting different customer segments who have less stringent performance requirements while continuing to focus R&D efforts on improving these metrics rather than developing new functionality.”
For a product manager at a large company:
In a large company, the technology and operations are usually already proven, and there are typically people dedicated to mitigating other risks; for example, General Counsel (Legal/Regulatory Risk), and HR/Recruiting (Personnel Risk).
As in mid-size companies, actual Financial Risk is minimal — if your product is losing money, the company could always pull cash from its reserves or from other more profitable operations to keep paying employees and suppliers. You are not literally going to run out of money.
This doesn’t mean that your P&L doesn’t matter, of course; bad-looking P&Ls usually kill products in large companies by triggering a powerful but skeptical stakeholder to pull the plug (Stakeholder Risk). This highlights the importance of creating an environment where every team member’s definition of product Sustainability is aligned with the company’s as a whole.
When I was working at a large enterprise, our customers were cable companies with sales cycles measured in years. Our product addressed a key pain point, being much simpler and faster to use than existing products in the market. Our product effectively replaced multiple tools and interfaces that the end users were juggling, and this drove rapid adoption.
When the company was acquired by a much larger company, however, the new parent company had a similar product in their lineup. It wasn’t nearly as easy to use (and in fact required a large support staff dedicated to helping customers with basic tasks), but there was a large, politically-powerful contingent within the parent company that preferred their existing in-house solution.
The following is an example of a Sustainability Statement I would have written when I was heading up product management at that company:
- “Currently, the greatest risk to our product’s existence is that we lose executive sponsorship for our product.
- If this happens, we won’t be able to continue operating because our budget will be zeroed out and our team will be reassigned to other projects.
- This risk will most likely come true if stakeholders don’t value the importance of the simplicity and speed of our product, and we have not gathered political capital by driving sales into new accounts.
- Some factors that could help us mitigate this risk are cultivating relationships with stakeholders at the acquiring company and getting their support while growing sales over the next year.”
We hope this deep-dive into the concept of Sustainability helps you with your efforts in creating vision-driven products using the Radical Product Toolkit!
Share your stories and experiences as you use the Radical Product toolkit and craft your Vision and Sustainability statements. We look forward to hearing from you!