Every great startup is a great product startup

Steve Crossan
Unreasonable Effectiveness
7 min readSep 23, 2019

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In recent months I’ve had many conversations on product thinking with startups and with colleagues at Atomico and Firstminute. Last week Siraj Khaliq posted a rallying cry for European Product Management. And prompted in part by conversations with Lina Wenner I’ve been thinking about a related challenge: getting companies to think of themselves as product-first.

Since I’ve been spending most of my time investing in and advising startups, I’ve noticed a surprising pattern: many don’t deeply embrace the fact that they are product businesses.

Of course most companies talk about the importance of product, but often product thinking isn’t embedded deeply in the company from top to bottom. I worry that not enough founders think about this when planning and building their company.

This may be a partial view (I spent a dozen years in product functions at Google and DeepMind), but to me the company is the product; it’s everything that matters. Whether you’re a consumer app or an API or a platform for computationally creating new widgets, you’re delivering value to a set of users. To do that in a scalable way you have to think of your business as a product.

Product is a process, not a static thing

Being great at product means being great at continuously making and improving products. The heart of it is a loop that many others have described in different ways; this is my version:

  • Make an informed guess about who the users are and how you can bring them value.
  • Build something as quickly as possible that brings them value, all the while trying to understand their world in as much detail as possible. Challenge yourselves to do this in weeks to months.
  • Get at least one user (preferably more) using what you’ve built, in their real workflow.
  • Measure how much value they are getting. This bit will take a lot of thought, and is likely to be very specific to the use case. That use case might be a messy workflow involving multiple people which is hard to measure. Nonetheless if you’re scrappy enough, you can find a way to get a handle on it. I know of one automation company that starts by videoing everything that’s happening on the factory floor and uses video analysis to measure how it can be improved.
  • Iterate until they are getting so much value that they can’t do without it. Sometimes this involves picking a different set of users, doing a related but different thing that is more valuable, or more scalable, or more impacted by your technology edge.
  • You know you’re getting there when your users are telling other people to use what you’ve built. You can also tell them (but wait until it’s awesome).
  • Keep making it better using the same process. Keep checking you’re measuring the right things. You want your users not be able to live without your product. If that’s not quite true yet, why not ?

The holy grail of ‘product market fit’ is the (temporary) outcome of this process — the process itself is much more important. If the company lives the process, product market fit will come. But it’s not a one-time event: it needs to be continually nurtured.

In the end you should *only* care about scalably creating real user value. Your fab technology or algorithm or data or team is a means to that end: if something else (especially something simpler) does the job better, you should embrace it. Many companies begin with a technical insight or breakthrough — and that’s often what makes new value creation possible — but if you get too wedded to it without finding those users and that value you’ll sooner or later run into trouble.

Warning signs to look out for

  • Your revenue comes mostly from proof-of-concept projects with potential customers. In fact, you probably want to avoid these kinds of projects entirely (especially with innovation departments of larger customers). I’ve lost count of the number of startups who have gone down this route and never emerged with a full contract, let alone a scalable product.
  • Your product sells well (you’ve identified a real need) but customers are not using it more over time. This can be an early warning for future churn. But if you identify this pattern quickly, you can find out why, and fix it.
  • Onboarding takes time and/or work from you and/or the customer. This can drift into customisation and service revenues. How could you make it so that the customer gets immediate, obvious value ?

It has to be in the DNA of the company

“The DNA of the company” is a bit of a cliché but captures the idea that this product process thinking needs to be foundational, and to run throughout the company from top to bottom. That’s because it has to be something that the company does every day — that’s the only way to get to these rapid iteration cycles.

This doesn’t mean that founders always have to be experienced product managers. But they have to be willing to become great product leaders.

This usually means that one of the founders needs to spend most of their time making the company great at product, and communicating its importance to everyone in the company all the time. Sometimes (especially early on) that means they themselves are doing product management, product design, or both. But they don’t have to be the ones doing that, as long as they are continually communicating who the users are, what the value is, and helping the company to shorten those learning cycles.

You can hire product managers, but you can’t hire DNA

Another common pattern, even for companies coming up to Series A or Series B rounds, is to hear ‘we need some help with product / we know we need to hire product / we know we need a user researcher’. That can sometimes be a warning sign; a lack of strong product market fit is one thing, but if the founders aren’t focused on product themselves that’s much more worrying (and will in turn make it hard to hire well in this area).

Above all, this is a plea for founders (at least one member of the founding team) to spend most of their time on product — including all of its different aspects:

  • Spending significant time with users in their real workflow
  • Thinking about the way the market is structured, and where your product fits in. For example I’ve seen companies go from thinking they will sell warehouse automation software to thinking they will run their own warehouses, because they will capture more value that way if successful, and end up in a more dominant position.
  • Thinking about the other tools in the workflow (or more generally, in the users’ life), and how you fit in (or better, replace them).
  • Working out how to measure how successful you’re being (really successful, not vanity successful), how to get that information as quickly as possible, and how to act on it as quickly as possible.
  • Frequently changing the product, testing how successful your changes have been, and pushing good changes to everyone.

Sure, but that’s not really my company

Be wary of giving yourselves excuses for why this doesn’t apply to your company. “It takes a long time to get into our kinds of customers.” “We have to educate the market.” “We’re not that kind of business.” “We’re an enabling technology, not a product.” If you’re thinking this way, it’s eventually going to catch up with you. Sometimes you can keep raising on the promise of your tech, or the market, or your natural charm — but in the end you do really want to build a great business, don’t you? Challenge yourselves to find ways to get value to users quickly. Think about it: if what you’re doing has value, you should be able to get someone to use it.

I’ve seen a lot of ‘long sales cycle’ / POC-first companies in the last 2 years, especially in industrial automation. But the very best of them had moved quickly away from that mode to create an offering that was obvious to the customer, created great value for them immediately, and was soon impossible to imagine life without.

They did this by relentlessly focusing on removing friction to that ‘aha’ moment. Back and forth on legals? Do away with them; give the solution to the customer for free to begin with. Takes a long time to install and program to the customers’ environment? Make it so an operator can start using it straight away with no programming or integration. (This is a very common pattern in disruptive companies. I know of one company that avoided the need to integrate its image classification software with corporate image management solutions by distributing a smartphone version by word of mouth among operators, who simply took pictures of what they saw on their screens). Especially in older industries, there often seem to be a whole series of such blockers — but that’s your opportunity. Relentlessly eliminating them one by one (or even better, end-running around them all) is your path to greatness.

Hmm. Sounds complicated.

The good news is product is one of those things that sounds hard but isn’t really. What feels challenging is that it’s a lot of different things, and your company needs to do them all the time.If it feels daunting, you can find good product coaches these days who can be there when you need them to keep you on track.

But the good news is that if you adopt the mindset, you’ll find that your organisation starts doing those things. You as founder don’t have to do all of them yourself, but you have to make a company that wants to do all of them (because when you get into the flywheel, it’s exhilarating for everyone).

Together you’ll start to wrestle something new and impactful into being, and if you keep doing it, and keep getting faster at learning, acting and learning again, the flywheel will start to pick up speed. Just don’t hide from it.

Thank you to Siraj and Lina for discussion, and to Suryansh Chandra of Automata, Jacob Haddad of AccuRx and Eleanor Warnock at Atomico for reading and commenting on earlier drafts.

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Steve Crossan
Unreasonable Effectiveness

Research, investing & advising inc in AI & Deep Tech. Before: Product @ DeepMind. Founded Google Cultural Institute; Product @ Gmail, Maps, Search. Speak2Tweet.