Product-Market Fit Consultant and Executive Product Mentor
Everyone knows startups need to move fast. It is often part of their advantage against larger and more traditional companies. But what does moving fast really mean, and why is it that important anyway? To answer this question we need to break speed down to its various meanings and treat each differently, as well as holistically where they all converge. Here is the detailed breakdown as well as tips to increase each type of speed.
As part of the work on my product leadership book, I’m interviewing product leaders in successful companies and primarily those who were there from the get-go and can tell the full story of the product and the company (since no product is successful on day one). In these interviews, a number of people mentioned how important speed was for their success. I heard quotes like “we knew what we needed to do and we needed to do it fast”, or “speed was one of our core values”.
On one hand, it sounds trivial — everyone knows that a startup needs to move fast. But I needed to dive deeper into it: why is speed actually that important? To answer this question, we need to first understand what people really mean when they say ‘speed’ because not all speeds are alike. Here are four types of speed that are important to startups — each in its own right.
The whole idea behind lean and agile is that you can’t know everything on paper, and you have to meet the market to truly understand what’s going on. I couldn’t agree more, and have seen it numerous times — there are so many things you learn when you let the rubber meet the road. Assumptions that you made and turn out to be wrong, or at least not 100% accurate. New obstacles that you couldn’t have foreseen but you must overcome to succeed. Market trends and competition from angles you didn’t think of.
All of that exists in the market and in your work with your potential and current customers. However, the fact that the information exists out there or in people’s heads doesn’t mean that you have access to it or that you understand it. To truly move fast you must make sure that you are getting these insights as quickly as possible, and not just when they land on you.
To do that, make sure you understand the assumptions that you were making and get back to them on a regular basis (at least monthly for strategic ones) to see if they still hold. Note that many times they won’t be wrong, but they won’t be fully accurate either. Accuracy is important here, especially when it is in foundational areas, for example, the value proposition of the product and how your customers perceive and experience the problem it comes to solve.
Once you have new insight from the market, you need to decide what to do with it. This also takes time, and some companies make decisions faster than others. In a world with so many unknowns (and that’s the nature of almost every decision you need to make in product), eliminating this uncertainty can take a long time, and usually, it doesn’t really go away, it can only be reduced. There is a fine balance between making the right decision, having it backed by data, and moving fast enough so that you don’t pour the baby with the bathwater.
The key to making faster decisions is to remember that not deciding has its cost too. It often seems like waiting with the decision has no implications, but it is rarely so. Note that it doesn’t mean that you must make your decisions without waiting for anything and anyone, in many cases due diligence or a deeper analysis are truly needed. The idea here is to understand that you are constantly managing risk, and risk resides on both sides of the equation: there is risk in deciding too fast, and there is risk in deciding too slow. When you see it like that, it is much easier to find the sweet spot where the marginal certainly that will be gained by additional research isn’t worth the wait.
Some companies have a culture that fosters decision-making only in consensus. This is generally a bad practice, but there is only so much you can do about it as an individual. A great start would be to communicate the decisions in the language of risk management. If done right, it can allow you to still involve everyone in the decision, but you can get people to agree that it’s not worth delaying the decision anymore even if they don’t agree with the decision itself. It usually is a specific part of it that they don’t agree with, and if you create the proper mechanisms to eliminate the risk in case you are wrong, it will be much easier for people to agree to move forward.
This is often the most common interpretation of speed, simply because it is the easiest to see and measure. It is the most tangible form of speed, and also usually the heavier part of the process so focusing on improving it should yield great results.
When you look at the speed of delivery, I encourage you to go beyond the plain speed in which R&D delivers high-quality software. While there is usually much to do there, I want to take you to the next level of it: how fast can you deliver the right product? Of course, to do it well you must master all three types of speed mentioned up until now: you must deliver fast your product into the market so that you can gain quick insights, make your decisions quickly and deliver the next version of the product accordingly as fast as possible, to learn and fine-tune it again.
You can improve each and every one of those speeds separately, but if you focus on the speed of delivery of the right product, there are also other things that you can do: trade-offs between scope and speed would be made differently if you understand that your goal now is to learn, not to sell, for example. The more you understand what is the goal of everything you do, the more ways you will have to make sure your goal is intact while other constraints are also met.
This is one of the topics that the participants of the upcoming CPO Bootcamp are going to practice throughout the program, as it is foundational to great and successful product leadership.
This is the trickiest form of speed, but perhaps the most important one. All the types of speed mentioned above are focused on how fast you can move, on your effort. This one focuses on your impact, or how fast you can deliver results.
By results here I mean business results first and foremost, although this point of view can be applied to other types of results as well. Speed of impact can be seen in how long your sales cycle is, how big and healthy your funnel is, and how fast the business grows in its bottom line.
If you think about how the stock market evaluates companies, it always comes down to sustainable growth. The same goes for funding rounds — VCs look at your revenue, and also at the time it took you to get there.
As important as revenue growth is, note that it is very risky to start focusing on the speed of impact too soon. If you are still in the discovery phase to figure out what is the right product that your customers really want and are willing to pay for (AKA before you have product-market fit), you should perfect yourself in the former types of speed to get to the market fast and learn everything you can. In terms of impact in this phase, you should be working closely with your customers and make sure you achieved the initial impact (a number of happy paying customers, AKA problem-solution fit). Once you know how to get to happy, paying customers, and you have demonstrated that you can do it consistently and repeatedly, then it’s time to increase the speed of impact. Doing it too early will actually harm your ability to make a larger impact since you will be working in too many directions simultaneously.
To increase the speed of impact there are two things you can do: the first one is to have a solid product strategy that clearly articulates your product’s unique value proposition and business viability. This is important not only for product development but also for marketing and sales to be able to bring the right customers and many of them, and this is one of the things that the participants of the upcoming CPO Bootcamp will learn how to do.
The second thing you can do to increase your speed of impact is to start thinking about it in larger orders of magnitude since it would reveal other modes of operation. For example, let’s say you are able to sell to your target audience repeatedly but each sale takes a few months. With this in mind, you might set a stretch goal of 50 new customers for this year. To challenge yourself, ask what it would take to get to 500 new customers instead. You might find out that there are ways to get there that you didn’t think of previously. For B2B companies, it often means moving to product-led growth which is a whole different way to conduct business.
📖 My free e-book “ Speed-Up the Journey to Product-Market Fit” — an executive’s guide to strategic product management is waiting for you at www.ganotnoa.com/ebook
Originally published at https://ganotnoa.com on March 10, 2021.
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