How we approach product discovery

In just over two years, former VP of Product Alberto Barcelos helped position Taxfix as a company at the vanguard of thinking around product management. In this article, Alberto explains the innovative approach he brought to the role and how effective product management means much more than just ‘management’.

The field of product management has grown exponentially in recent years. Small businesses, fast-growing start-ups, and mature companies are all growing increasingly aware of the product manager’s power to help achieve their goals. However, because it is a relatively new discipline, the role of a product manager can vary dramatically from business to business.

Depending on the company, product managers can find themselves pigeonholed as taskmasters, financial planners, or product brainstormers. It is only natural for product management candidates to wonder how much freedom they will have to shape product direction in any given company. How does my role relate to that of my team? How much ownership will I have? Will I be told, ‘build this, tell me when it’s done?’

Here at Taxfix, the role of the product manager is about empowering teams to fulfil ambitious goals by providing business direction. Such direction is set through the company’s systematic use of product discovery to safely and effectively catalyse growth. For me personally, it is a process that is informed by my background in both engineering and innovation, a career path that has proven to me the importance of using hypothesis-driven market analysis as a guiding light during vital periods of growth and expansion.

Driving growth leaps

Though our core product in Germany, tax filing, has underpinned much of the success of Taxfix thus far, we are entering a new stage of exciting expansion. These growth leaps are being driven on several fronts, including new markets and a next generation of ‘additional services’ that are capable of further revolutionising tax filing in Germany.

For example, a recent YouGov poll found that 47% of respondents admit to feeling overwhelmed by the prospect of filing a tax return. Furthermore, more than half of respondents aged 18 to 24 confess they are afraid of making crucial mistakes within their tax returns. This is precisely the type of problem we hope to solve. Tax is a notoriously complicated subject, and our customers naturally have a lot of questions along the way. New service offerings allow us to provide even better support to our customers throughout what would otherwise be a confusing journey. Two such additional services are already in beta testing and we’re looking forward to rolling these out officially in the coming months. By innovating and testing new service offerings, we hope to further demystify the complexities of tax — ensuring that everyone can file for a refund with confidence.

In our international markets, we are looking to replicate our success in Germany, where we have helped customers claim back more than one billion EUR in combined tax refunds. The mission now is to roll that out across Europe and beyond. As with Germany, each new market also requires a wide range of internal products, such as a tax platform through which changes to tax regulations in each market can be reflected in the core product in real-time. Our internal products also include tools to support Taxfix’s marketing and operations teams. These ensure our consumer products end up in the hands of potential customers and that we serve every customer in the best possible way. At each stage of product development, product managers guide the way through product discovery.

But what insights are successful growth leaps based upon?

Product managers at Taxfix typically look to gain insight into four factors to ensure a good product-market fit:

We see product discovery as the means by which product managers explore these four subjects and drive product direction.

Structured product discovery: shedding light on growth

The challenge of product discovery is to engage with new growth avenues when many of these elements are changing.

For example, when you move into a new market, you have new customer segments, a new product, a new competitor landscape. Suddenly, in this market, you have different considerations for distribution, marketing requirements, and governmental regulations that threaten to push your costs sky-high. Product discovery should be about finding answers for all of these problems and making clear to your team and stakeholders what the company is dealing with.

Whether we’re introducing a new product line or taking our first steps into a new market, our product managers start with the process of hypothesis-driven structured product discovery. Put simply, our methodology involves applying a scientific approach to business intelligence by identifying assumptions concerning product-market fit and transforming them into hypotheses which we can then research, test, and validate.

The product management team’s task is to list and prioritise these hypotheses and collate evidence that allows us to validate and attribute greater confidence to them, turning hazy assumptions into actionable convictions. On any single project, a product team might be working with dozens of interrelated hypotheses. The challenge is to ensure the whole package of knowledge works.

Building knowledge is an iterative process. At Taxfix, we explore these possibilities with small research loops to target different hypotheses–usually spending two weeks to a month on each. The research itself can take many forms:

• Surveys or direct conversations with customers.
• Competitor research.
• Interviewing experts to gain specialist advice.
• Using prototypes to gauge customer interest.
• Even building the final product and monitoring impact.

Our product managers have the freedom to choose whatever avenue of product discovery they need to create new hypotheses and validate them. We first define the hypothesis table and then the research method before running research loops to gain the insights we need.

However, a wise product manager will bear in mind that no product discovery cycle can give you a 100% clear picture. You can only speak to so many customers, and you can only run so much research before you eventually have to make that leap. Inevitably, you have to make it with partial information. But such a scientific approach keeps us product managers honest about what we know and what we don’t know during a growth leap and reminds stakeholders of the difference between assumptions and validated facts. By using structured product discovery and channelling your efforts into shedding light on those hypotheses that represent the greatest potential risks to your business, product managers can signpost the most optimal product direction to ensure steady growth and the fulfilment of business goals.

Ensuring freedom of ideas

The hypothesis board should be used in every meeting. If anyone has ideas, they are matched against the hypothesis board, and we interrogate the evidence on which this idea is based. In my experience, there’s no better way of getting reliable information.

Product managers at Taxfix are empowered to drive product direction as long as they stick to these principles. We never say: “We’re going to do this because I believe it.” Instead, a product manager understands that every opinion is a hypothesis. You can run market research to determine what works and what doesn’t, but the opinion of an executive is no more valid than that of any other member of the team.

A product manager is a facilitator who works in tandem with the wider team to establish the best direction for the product. You are the person who understands your product line, your market, your customers, and your competitors. The use of hypothesis makes the whole process evidence-based, and the thing that sets Taxfix apart is that we live by this idea. From the smallest product lines to the running of whole country-wide markets, we make no distinction. We’ve set an intentionally high bar for establishing product direction and communicating it.

The approach is also inclusive. As far as we’re concerned, every idea can be reformulated as a hypothesis and validated or disproven through the product discovery process. Paradoxically, we use rigorous structure in such a way to ensure and encourage freedom of ideas throughout the whole company hierarchy. Few companies foster such a working environment; instead, it is common for product managers to become project managers executing a strategy defined by someone else. At Taxfix, we believe we’ve defined the role of a product manager to an industry-leading standard. By systematising how we set product direction, we empower our teams to do what they do best.

Interested in joining our Product Organisation? Explore our open positions.

Thank you, Alberto Barcelos and Samuel Flannagan for bringing these insights to life.