3 ways Product Managers can leverage data
Last week, I spoke at a “fireside chat” at Amplitude’s Product Analytics Summit in Santa Monica, California.
The audience: Product Managers, Engineers, and Data professionals — a trifecta that I collaborate with day in and day out at Shopify.
Here are the three main takeaways (and the only fire) from my talk:
🔥 To influence decision-making, you need both ART and SCIENCE. 🔥
That killer data point, that you spent hours and days digging through the data warehouse for? It’s not enough.
I often hear the question: “How can I use data to convince my leadership to give me the resources to build XYZ?”
Or this: “My company is not data-driven enough. I presented my dashboard with my killer data point last week, and then Executive X told an anecdotal story about a random customer interaction, and totally derailed my point!”
If you want to sway a room of executives, stakeholders, and your peers, then you need more than just a killer data point (the science).
You need a story (the art).
Storytelling is an art. Instead of jamming your charts and dashboards down everyone’s throat, help your stakeholders understand the underlying forces that have come together, from many different angles, to create a situation where data point A has come to be the case.
Instead, I think the right question to ask should be: “How can I own the entire narrative, and incorporate data to make it more powerful?”
🔥 To generate ROD, first define your unit of output. 🔥
Data is an asset. And every asset should generate a “return on data” (ROD).
But how?
I work with my data team in two ways, depending on which data skill set I’m working with:
- Product Analysis: The unit of output from a product analyst’s work is a product roadmap decision, e.g. reprioritize to build product feature D first, before product feature A.
- Data Science (a model): The unit of output from a data scientist’s work is a prediction, paired with a confidence score.
To help product analysts and data scientists do their job, I always make sure to provide three inputs:
Input 1. The business problem statement— what objective are we solving for
Input 2. Domain knowledge — is there some unique quality about the problem space that could have implications about analytical scope, feature engineering, etc.?
Input 3. Prioritization — how important is this output, compared to the other outputs that we have on our roadmap?
The nexus between product and data is increasingly important, but often overlooked. The more we understand each other, the more ROD we generate, and the more we will succeed with our customers.
Speaking of customers…
🔥 Your “North Star metric” = your CUSTOMER’s North Star. 🔥
Without fail, on every product roadmap and strategy document, you will invariably arrive at a section called “KPIs”.
Sometimes, you will see product roadmaps with lists of 5–10 KPI metrics, or more. But we all know that multi-objective optimization is hard. It’s too hard to manage, and it puts your product at risk.
So, naturally, it’s important to define your “North Star metric” and stick with it, stick with it, stick with it.
Because you are accountable for your North Star metric, this will influence your overall product decisions, engineering solutions, and design strategy. And it will also influence all of the micro-decisions and marginal tradeoffs that happen everyday, both explicitly and implicitly, and ultimately become your product itself.
If your North Star is your CUSTOMER’s North Star, then you have a winning formula. Easy, right?
This requires deep thinking about the thing that deeply motivates and, in some cases, identifies your customer.
At Shopify, our North Star metric is each merchant’s Gross Merchandise Volume (GMV) — that’s it. Sales.
What should I write about next? Please comment below with A, B, C, or other.
A) Trusting the black box: How to implement machine learning models as a Product Manager
B) A few left turns: How I went from an Environmental Studies undergraduate major, to a Product Manager at a tech company
C) Belly of the beast: What I learned by moving to Bentonville, Arkansas and working at the Walmart Home Office
