🛠️ The Product Person - Issue #1
Summary: Y-Combinator CEO Michael Seibel on building products (1 hour long video)
|Anthony Diké||Nov 6, 2019|| 10|
I chose this video instead of an article because I’ve gotten asked about the knowledge progression of the content. So I figured I’d start with the basics for the first newsletter then dive into specific aspects of building product in the following newsletters. This is one of my favorite videos ever about product, hope you enjoy this summary:
The Essential Mindset for Building Products
🧩 The Problem
Know the problem clearly
The best sign that you know the problem that you’re solving is if you can clearly state the problem in 2 sentences or less. You want to be certain that the problem exists before building anything. A good, fun analogy for this: playing fetch with a dog. You, the dog, cannot fetch something that doesn’t exist. Simple as that.
Know who has the problem
You also want to know someone that experiences the problem. Because, the people who experience the problem can give you a clue to how to solve it. Ideally, you experience the problem yourself. Then you can just talk to yourself. More than you already do anyway.
The problem must be solvable
It’s cool that you want to cure all cancers and find eternal youth. But, if we’re sticking with the dog-fetching analogy, it’s pretty difficult to fetch something that’s thrown into outer space. Narrow down the problem by asking simple question such as “who needs this?”, “why do they need this?”, “which moments in the day/month/year do they need this?”, etc. It’s possible that you’ll reach the conclusion that you can’t even solve the problem, and should just move on.
👤 The Customer
No, everyone cannot be your customer
Yes, Google and Facebook are products that “everybody” uses. However, at their starts, no one used them. Just like everyone else, those products had to find their ideal first user/customer. For Facebook, college students. For Google, the hipsters that weren’t using Yahoo.
Know your customer & communicate often
Don’t approach product building like you would writing a creative novel. Where the product is just birthed from your imagination. Know who your ideal customer is and get feedback from them as you’re building. If your ideal customer is someone like you, then talk to yourself. They may even save you the time and money and tell you that their problem has already been thoroughly solved by someone else.
The intensity & frequency of their problem
A solid way to tell if you’re solving a worthwhile problem is to perform an “intensity and frequency analysis”. This basically checks for 2 factors: how intense the problem is for your customer and how frequent they have this problem. In general, low intensity + low frequency is bad. And high intensity + high frequency is good.
Let’s use Uber as an example. The problem of being at point A and wanting to get to point B is a high intensity problem. So intense, that you probably bought a $20,000 vehicle to help you solve that problem. And for frequency: how often do you move more than a mile or walking distance? Happens almost everyday.
🕵️♂️ The Solution
How to tell if your product solves their problem
Build and launch quickly to your customers and let them tell you if it does the job. Because, the longer you take, the more likely your customer/the problem will drift and the more you burn. Remember, products aren’t paintings. They are meant to be useful. And if no one is using it then, by definition, it’s useless.
Getting feedback from the right customers
Identify bad customers early on. Feedback from bad customers can lead you in the wrong direction. A few easy examples: your friends & your investors. They’re usually only using the product because they know you/they’re being nice.
If your product didn’t exist, whose life would be harder? Who would be out of business? Those are the type of customers you want early feedback from. Generally, the higher you price your product, the higher the quality of the customer. Why? They were “desperate” enough for your product to jump over the obstacle of a higher price.
📊 The Metrics
How to set up metrics
Without a way to know whether your product is being used or not, you’re essentially flying blind. And although it’s tempting to track many things, track an essential few.
Establish a KPI— a number that you religiously track that reflects how well your product is doing. KPI should almost always be one of two things: Revenue, if you’re planning to charge money, or a usage-based metric like DAUs, if you’re never going to charge money. Revenue or Usage.
Establish a few key submetrics that act as levers to move your KPI. For example, if you’re a product like TikTok then your KPI is most likely DAUs and your submetrics can be three things: new users, users retained, and volume of content created. You can’t directly control DAUs but you can directly control the submetrics that move your KPI.
How to move your metrics
The way you move the metrics is to have your customers use your product.
Release early and often
Allow your product to be used
Talk to your customers to get feedback (Is it solving their problem?)
Iterate (Improve your solution based on feedback)
Rinse & Repeat.
You can watch the full video of the YC Talk here.
Thanks for reading the very 1st issue of The Product Person 🛠️ Keen to hear your thoughts on twitter. So be sure to @ me. I 💛 feedback. See you sometime next week :)