How to Get To The Only Thing That Matters

By Christian Dahlen & Oana Olteanu

The only thing that matters for a new startup is to achieve product/market fit. Product/market fit has been achieved when the minimum viable product (MVP) has beta quality, is used in a similar way by ten customers, and the customer acquisition process is repeatable and scalable. For startups, building an MVP first has become commonly accepted practice. Increasingly, the methodology is finding its way into large companies where it can be equally applied to new products and to new versions of existing products.

It is the product owner’s job to pick a problem to solve, figure out how to solve it, and to understand how much the solution is worth to potential customers. The way to go about it is to create a product which sells to many customers and is delivered with the minimum amount of resources - the MVP. Ben Horowitz states that ‘Good product managers crisply define the target, the “what” - as opposed to the how - and manage the delivery of the “what” ‘. As soon as enough software is built to address that crisply defined ‘what’, release. As the old adage goes ‘if you are not embarrassed by your first release, you have waited too long.’

Product owners have been advised to listen to the ‘voice of the customer’ to build the MVP, and all product and customer development will magically take care of itself. In reality, the implied single voice of the customer often is a cacophony from many stakeholders, and distilling an MVP is not as much of a no brainer as it would appear at first. Building an MVP as opposed to just a minimal product is a continuing struggle, and getting to product/market fit often requires the product owner to make multiple iterations over several quarters:

• Should my first customers be visionaries or tech enthusiasts?
• How many customers do I need to talk to?
• What type of feedback should I prioritize?
• Do I need to talk to both the users and the buyers?
• How can I efficiently interact with my early customers?

The road map is clear: a product owner and her team need to push beyond just one customer and remain steadfast in their discovery of a viable product - the ‘what’.

First up: How to pick the right customers.

Many thanks to Allen Bannon, Manny Cortez, Chris Hallenbeck, Ryan Nichols, Karl Christian Roediger, and Riley Scott for providing input and feedback to this series of blog posts.

Photo credit here

How To Run A Hyper Growth Company - Free Advice From The Coach

Update: Bill Campbell passed away on April 18, 2016, at the age of 75.

Successful startups undergo significant changes as they approach an IPO. Increasingly late stage funding rounds put management teams under even more pressure to grow faster and faster. However, these expectations often overwhelm the capabilities of the founders and their teams. And while the preferred startup narrative is a rocket like ascent from launch to success, the reality consists of blow-ups and misses.

The Coach is an almost mythical authority in Silicon Valley when it comes to dealing with those situations. Bill Campbell was on the boards of both Loudcloud/Opsware and Netscape and has been a long serving board member at Apple. He is frequently mentioned in Ben Horowitz’s book 'The Hard Things About Hard Things'. He is a self-professed operator and has been a CEO at Claris/Apple, Go, and Intuit.  Kleiner Perkins Caufield & Byers brought him in to advise the founders and CEOs of Google, Zynga, Twitter and many others on how to improve company operations.

There is no substitute for working with the Coach. Unfortunately, there is no documented methodology, but are four valuable lenses the Coach has repeatedly and successfully applied, and which form a logical combination - staff alignment, business plan, team meetings, and operating reviews. Here are some of his insights as told by others.

The Staff Alignment

It was Bill Campbell’s idea to gather a few key Googlers together and hammer out a set of the young company’s corporate values.                             Steven Levy - Inside The Plex

Rather than simply focusing on whether a manager has achieved his financial goals - which can lead to short-term thinking - Campbell gives equal weight to four areas. The first is traditional: performing against expectations. But then he looks at management skills, working with peers, and innovating. If you aren't good at all those things, you aren't good. CNNMoney - The Secret Coach

I push hard on innovation and best practices. In the absence of true innovation, there’s no excuse for not knowing where the best practices are. And a lot of best practices can come as tweaks that will make a practice more innovative. I give high grades to anybody who knows exactly what’s going on in the industry and can adapt to this quickly. McKinsey Quarterly - Inside Coaching

The Business Plan

Campbell next initiated a strategic planning process for [Intuit]. Intuit’s VMOVA (vision, mission, operating values) effort had set the cornerstone for strategic planning by identifying the company’s values and missions. Campbell built on these to codify and energize strategic operational thinking. In the middle of each quarter, Campbell held an off site at which each manager submitted a business plan with numerical goals and reviews performance against these goals. Business leaders presented quarter-to-date results and objectives for the next quarter; at each meeting leaders had six weeks’ performance data for the current quarter and six weeks to plan for the next one. Each manager could change key variables - staffing, expenses, direct-marketing spending, tech support, and so on - before the quarter began. ...Over a period of time, Campbell’s meetings generated a perpetual quarterly plan. Inside Intuit, Suzanne Taylor and Kathy Schroeder

The Team Meetings

My contention today is that that if a month is 20 working days, you’ve got to spend a day doing nothing but reviewing projects. A whole day, with the whole management team, so that we can clean up those projects, clean out the ones that aren’t going to be good, and take the bodies that are recovered and put them on the projects that look like they have the best prospects. McKinsey Quarterly - Inside Coaching

These management planning offsites [...] unified the company. ...Campbell valued the social as much as the strategic elements of the meetings because he knew that stronger relationships would improve teamwork and business results. After a few quarters, he had a management team working effectively together, both formally and informally. Suzanne Taylor and Kathy Schroeder - Inside Intuit

The key skill is not in convincing people of your point of view with rational arguments, but, when circumstances require, in build a feeling of consensus in the face of uncertainty or adversity. Bill’s strength was his ability of select a straight course through the swirling darkness, then create a deep emotional reserve in his team that drives them to victory, even when defeat seems inevitable. he metered out sufficient time for open discussion, then closed debate with a fatherly decision that all were expected to accept as their own, in the service of the greater good. Jerry Kaplan - Startup: A Silicon Venture Adventure

One of Bill’s first acts as CEO was to establish a kind of corporate rhythm, a weekly sequence of meetings by which the company shared information and made decisions. This organizational pulse started on Monday morning at nine-thirty with ‘estaff’ - a meeting of the executive staff, where large issues and strategic initiatives were discussed - and ended on Friday at four-thirty with the ‘comm’ meeting, where the entire company gathered to communicate new, make announcements and give demos and awards. estaff started as late as nine-thirty because Bill, who usually arrived at the office around six, liked to spend the early morning talking to the East Coast, before people there went to lunch, and meeting privately with any employee who had a problem that couldn’t be solved through normal channels. Following the comm meeting was a ‘beer bust’, with drinks and munchies, a Silicon Valley tradition that Bill had followed since his Apple days. Jerry Kaplan - Startup: A Silicon Venture Adventure

The Operating Reviews
   

He instituted monthly operations reviews, in which senior managers provided updates so that Campbell could help set goals and track revenues and expenses. Cook welcomed the discipline in these monthly reviews, which harkened back to the quantitative analysis and metrics he’d introduced to marketing. Suzanne Taylor and Kathy Schroeder - Inside Intuit

I care about the ones that care a lot about operating values, that care about durability and lasting value. I’m not interested in ‘quick in and out’. McKinsey Quarterly - Inside Coaching