How Do You Know When You’re Ready to Grow?

I started my career not in product management, or software development, but in music.  My love of music and music technology led me early in my career to New York City’s music scene, as I sought a life producing and mixing rock bands.  I worked with a lot of young bands, many of which the world never really heard of. But I also had some exciting projects, including producing Chairlift’s debut album and their career-defining single “Bruises” that was featured in an iPod commercial.  I also worked closely with Suzanne Vega on her acclaimed Beauty and Crime record, as well as recording and mixing the indie darlings Yeasayer.

I had many great moments working with these incredible musicians, but one that has always stuck with me was my time working with Suzanne Vega.  She has an incredible distinctive voice, and it has served her well on the many amazing songs she has written over the years. When we first started working together, I went to her apartment, to an extra bedroom she had set up as a little home studio, and I recorded her singing on some demos she was writing – just a cheap microphone into a laptop running Garageband.  The first time I hit record was the first time I heard her sing without any effects, studio tricks, or through a PA system at a club. And with everything stripped away, the sound of her voice in that little home studio through this cheap microphone was just purely … her. It was a great moment, after working with so many musicians who tried so hard to have a certain contrived sound, her sound was her voice and no matter how you dressed it up, the underlying distinctive qualities were still there.

I often remember this experience in my second act as a product lead.  It’s a reminder that until you have created a core product that provides a great benefit to its users, nothing else really matters.  There is so much pressure in a startup to grow.  But it’s important to challenge whether the core product, stripped away of all of its eye candy, branding, and ancillary features, really delivers a benefit to an audience that is willing to pay for that benefit.  If your product fails that challenge test, it’s not a reason to quit your job and find another product! It’s a challenge to think about the improvements to your product in context of its core benefit.

Like most of us in product, we live at the intersection of lots of needs and opinions.  There is always someone with an opinion on a solution to a problem that doesn’t really exist.  But many people just accept at face value what the product is, and what kind of audience you are building that product for.  And so from this position their needs to achieve business goals are often based on these potentially flawed assumptions. Until your product is incredibly mature (which doesn’t just mean you can run profitable Facebook ads on it), you should be striving to improve the benefit the core product provides, and not simply adding features to solve problems.  

So how do you know if you’re improving your core product, versus just adding features?  This may not seem as obvious as it sounds in the early days of a startup. I wrote about this previously, but at Homer we made the mistake of copying our competitors too much, and not improving the product benefit of teaching kids to read.  We added a feature to reward a child for completing a lesson, expecting the feature would improve engagement. In reality, we should have spent more time improving the lesson – both for efficacy and for engagement.  

To help separate if what you’re building is an improvement to the core product or a feature to amplify the core product, first define the goals of your core product.  For Homer at that time, the core product’s goals was to teach a child to read. It was only after challenging some of our current thinking did we acknowledge this truth.  The product provided this benefit to the parent who was willing to pay for this benefit. Any investment we made to the product to better achieve this goal I would consider an investment in the core product.  However, investments in everything around that – how to sign up new users, how to maximize revenue, meta-features that live around the core product – these are all about amplification, augmentation, and growth.  Lighting a growth fire under a core product that is not ready to grow is like launching a spaceship into space without oxygen tanks. You may get there, but you’ll die pretty quickly.

How do you know if you’re ready to grow?  How do you know if that core product is good enough?  Usually you don’t have the opportunity to perfect that core product and pick a point in time where you ramp up the paid spend.  It is never that simple. But when you are debating with your CEO, or your investors, or whoever else is pressuring you to build growth features, back it up with some data.

1. Define the job your product is doing 
2. Measure for what percentage of your new sign-ups it is performing that job 
3. For that cohort of users, what is the willingness to pay?
4. What is the cost of acquiring a user who meets this threshold?
5. What percentage of this cohort repeats the job?  How often, and over what time period?

The metrics are going to be a little different for every product depending on its industry, medium, and business model.  But the idea is to zero in on a particular segment of users who are not just using your product, but who are actually experiencing the core benefit of the product.  If your product is a music streaming service, the core benefit is likely not “streaming music” – that is table stakes functionality. The core benefit is probably something more like helping a user find a new song they love, or a new artist they follow.  

In a new product, there is so much data and so much noise to parse through as you search for truth beneath all the layers of data.  But there is also the subjective nature of the process – the art within the science – where, like listening to a horrible rock band, you just know when it is not working.