Dan Martell - How to Make the BEST Product

00:00:00.000 This is how you build product that people pay you for,

00:00:04.260 trip over themselves to pay you for it without breaking the bank.

00:00:08.500 See, I've been building software companies now for 20 years.

00:00:11.760 I buy software companies, I coach some of the world's top CEOs,

00:00:16.060 and I've learned over the years, spending tens of millions of dollars

00:00:19.120 on engineering teams, product managers, you know, all the tooling,

00:00:23.120 the fancy Kanban boards, project management, you know, simulation software,

00:00:27.500 All of that, it really comes down to these five core principles

00:00:30.920 that if you implement into your product process

00:00:34.140 will help you build innovation from insights you learn from your customers

00:00:38.140 that will continue to keep you competitive.

00:00:40.740 You don't listen to this.

00:00:41.960 I know we're going to end up failing because you won't have product marketing.

00:00:45.540 I'm not even being dramatic.

00:00:46.880 You literally maybe have some traction today

00:00:49.040 and then you're going to hit a ceiling

00:00:50.420 where there's more people flying out the door

00:00:52.460 than you're able to bring in

00:00:53.780 and you're going to get frustrated and you're going to give up

00:00:55.800 and you're gonna decide to either shut it down

00:00:57.520 or sell it for pennies.

00:00:58.960 This is how we do it.

00:01:02.900 Number one is define your product vision.

00:01:05.300 See, a lot of founders, maybe this is you,

00:01:07.400 or maybe you're a product manager

00:01:08.660 and you work with a CEO founder,

00:01:10.560 is they have the vision, but it's up in their head, okay?

00:01:13.920 My rule when I coach CEOs is you need to communicate

00:01:18.080 where you wanna be in 18 months clearly.

00:01:20.540 We're talking like high level roadmap

00:01:23.140 so that the rest of the team can make decisions

00:01:25.280 that's aligned with where you want to go, your vision.

00:01:28.540 See, if you've got a team, even if it's six people,

00:01:31.080 like every day they wake up to make the product better,

00:01:33.800 to fix bugs, to talk to customers,

00:01:36.420 and if you don't give them any direction,

00:01:38.700 then essentially you're hoping

00:01:40.720 that they see what you've never put out visually

00:01:44.240 and execute against that.

00:01:45.560 It's why a lot of CEOs get frustrated

00:01:47.580 when their team make decisions,

00:01:49.160 they're like, why did you do that?

00:01:50.840 You didn't define your product vision.

00:01:52.780 You didn't sit down and actually describe,

00:01:55.660 this is the problem that we're gonna solve.

00:01:57.780 This is the customer segment we're solving it for.

00:02:00.420 Here's our unique perspective on how we're gonna solve it.

00:02:03.900 And we're gonna get everybody aligned with this.

00:02:06.540 Meaning every person in the company

00:02:08.240 is gonna be pulling on the rope in the same direction.

00:02:11.340 Because if everybody's pulling on the rope,

00:02:13.400 but they're pulling in different directions, guess what?

00:02:16.500 You make no movement.

00:02:18.320 And very few companies have a detailed definition

00:02:21.980 of their product vision that they can use continuously

00:02:25.160 every week in their product meetings

00:02:27.100 to let everybody know, hey, remember guys,

00:02:28.920 we're going over here and this is the problem we're solving

00:02:31.400 and this is our unique perspective on the problem

00:02:33.860 and these are the customers we wanna serve

00:02:35.640 and anytime the sales team brings in people

00:02:37.500 that don't look like those customers,

00:02:38.520 can we ask them to stop?

00:02:39.900 And anytime the marketing team puts together

00:02:41.540 a marketing program that attracts people

00:02:43.480 just because they get cheap leads

00:02:44.800 but it doesn't get our best fit customers

00:02:46.400 or ready to pay customers, we ask them to stop.

00:02:49.440 All of this will allow you to just get better,

00:02:52.260 leaner and faster if you have

00:02:54.320 a clearly defined product vision.

00:02:56.140 Number two is create a roadmap.

00:02:58.440 See, some of you guys have maybe never built software before,

00:03:01.480 it's your first time, maybe you've tried it in the past

00:03:03.940 and you know, a lot of entrepreneurs

00:03:05.840 have this like Steve Jobs complex.

00:03:07.480 They're like, I know what the customer wants

00:03:09.580 and they're wrong and if I listened to them

00:03:12.460 I would just build a faster horse.

00:03:14.040 All this craziness, okay?

00:03:16.420 A product roadmap is very simple.

00:03:18.880 it's over the next short term,

00:03:21.060 typically six months, maybe nine months,

00:03:23.760 you can tell your team, this is our priority.

00:03:27.040 Most importantly, it tells your customers

00:03:29.340 what you're gonna build and what sequence, right?

00:03:31.640 My favorite thing to do is actually ask customers

00:03:33.740 for feedback on kind of product feature enhancement,

00:03:37.040 and then map that feedback to the thing I'm gonna go build

00:03:40.200 that when I launch it,

00:03:41.280 because it's part of the roadmap and everybody knows,

00:03:43.160 I then tell the customers it was their idea, okay?

00:03:46.200 like sneaky deaky trick,

00:03:47.940 that could transform the way you create raving fans.

00:03:51.380 You can't do that if you don't have a product roadmap, okay?

00:03:54.400 It's different than a vision, a roadmap is shorter,

00:03:57.220 and it just lets everybody know

00:03:58.840 this is what we're focusing on right now,

00:04:01.040 this is what we're gonna focus on next.

00:04:02.880 All your crazy ideas, dump them into this category of stuff,

00:04:07.480 and then every time we sit down to talk about

00:04:09.760 what we're gonna work on next,

00:04:10.860 we can pull from there to figure it out,

00:04:13.300 prioritize it, have a different process for it,

00:04:16.080 but a roadmap is a critical tool

00:04:18.420 that the best software companies out there

00:04:20.820 know how to manage and communicate

00:04:23.400 to the rest of their team.

00:04:24.760 Number three, create cross-functional teams.

00:04:27.960 See, most companies that struggle

00:04:29.700 with really great product,

00:04:31.480 it's because they have an engineer

00:04:33.220 that's maybe in some other part of the world

00:04:35.180 and they're writing code and every once in a while

00:04:36.920 they throw stuff over the fence.

00:04:38.640 And then you're like, okay, now we gotta test it

00:04:41.300 and we play with it and we find all the bugs

00:04:42.860 and then we like send it back over the fence

00:04:44.920 and hopefully they fix it.

00:04:46.160 My philosophy is to create pod structures.

00:04:49.000 And a pod structure is very cool

00:04:50.660 because it allows a group of people

00:04:53.580 to have everybody they need to actually ship working code.

00:04:57.700 See, if you have like,

00:04:59.020 oh, well this is a person that does the customer stories

00:05:02.460 and then that goes to a designer

00:05:04.540 and then that goes to an engineer

00:05:06.380 and then the engineer needs to talk to their CTO

00:05:09.080 to figure out like,

00:05:10.140 how does this get built into our infrastructure?

00:05:12.360 That's where the breakage happens, right?

00:05:15.000 Whereas most of the best software companies in the world,

00:05:18.200 the Facebooks, the Googles, the Amazon,

00:05:19.640 they use a pod structure, Scrum talks about this,

00:05:23.360 Agile Development talks about this,

00:05:25.060 where they can talk to the customer directly,

00:05:27.680 take that feedback, put together a product spec,

00:05:30.780 build it in-house, be responsible for it.

00:05:33.480 My favorite example is this is HubSpot,

00:05:36.200 where they would do, I don't know what they called it,

00:05:37.940 but essentially show and tell.

00:05:39.480 So every two weeks, they would invite

00:05:41.480 all the different pods to show their work.

00:05:44.200 Now, here is the criteria.

00:05:45.720 You couldn't show unless it was actually in staging.

00:05:49.080 Couldn't have been clickable prototypes.

00:05:51.160 It can't be ideas.

00:05:52.680 If you want to demo on these show and tell days,

00:05:56.080 you have to have working product in staging ready to go

00:05:59.700 that everybody's like, that's amazing.

00:06:01.660 Ship it to production, right?

00:06:03.100 And just allowing this process

00:06:05.320 of continuously upgrading and refining

00:06:07.440 so there's no bottlenecks.

00:06:08.900 I mean, most people don't know this,

00:06:10.320 but companies like Shopify, Facebook, and many others

00:06:13.940 ship to productions hundreds of times per day.

00:06:17.260 They've built their infrastructure

00:06:18.800 where if somebody has an idea

00:06:20.160 and they have the time in that day,

00:06:21.680 they can literally write the code, change the thing,

00:06:24.720 submit it, it gets approved, shipped to production.

00:06:27.540 There's no release schedule.

00:06:29.280 There's no like, oh, this is our quarterly release.

00:06:31.980 If there's a bug, they fix it, it's gone.

00:06:34.500 And the only way to do that

00:06:35.560 is if you have cross-functional teams.

00:06:37.700 Number four is you've got to monitor progress

00:06:40.240 and metrics, okay?

00:06:41.700 So at the end of the day,

00:06:42.960 it's not about lines of code that matter.

00:06:45.320 It's about, did the customer receive more value?

00:06:48.740 Did the code base get more stable?

00:06:51.380 Did our company achieve their KPIs or metrics we set out for?

00:06:55.880 You know, at the end of the day, business is very simple.

00:06:57.620 How many customers come in?

00:06:59.120 How much do they pay us?

00:07:00.280 How many people stick around?

00:07:01.900 Very simple.

00:07:02.720 I know some of you guys will be like,

00:07:03.940 oh yeah, well I measure this metric

00:07:05.540 and this metric and this metric.

00:07:06.600 It's like super advanced and nerdy stuff, which I love.

00:07:09.620 But I also know that at the simplest form,

00:07:12.180 if we can just instrument those different data points

00:07:15.460 and say, how many customers did we get in the last month?

00:07:17.560 Did they activate?

00:07:18.500 Did they pay us?

00:07:19.580 Did they stick around?

00:07:20.660 And then as you deploy new features,

00:07:23.300 see your product features should only be created

00:07:26.960 if they solve a problem,

00:07:29.140 if they improve one of those metrics.

00:07:31.380 You know, a lot of people have good ideas,

00:07:33.060 but when you say, well, how is this gonna help the business?

00:07:35.060 And they're like, well, it'll make our customers happy.

00:07:37.760 Okay, is it gonna keep more customers that are canceling?

00:07:40.880 Well, no, but it's gonna make the ones

00:07:42.280 that are staying more happy.

00:07:43.600 Okay, well, we've got, you know,

00:07:45.520 eight, nine, 10% of the people every month leaving.

00:07:48.400 Could we start with fixing those problems?

00:07:51.260 Could we pull the report,

00:07:52.660 what I call the customer cancellation survey,

00:07:54.580 and actually reverse engineer what are top customers

00:07:57.920 that we would have liked to have kept?

00:07:59.180 Why are they leaving and fixing those holes first? 0.82

00:08:01.800 Too often, people confuse activity with progress.

00:08:05.300 To me, the way we avoid this

00:08:06.700 is we instrument our code base.

00:08:08.800 Everybody monitors those KPIs that are important to us,

00:08:11.800 including speed and performance.

00:08:13.920 There's nothing worse than releasing new software.

00:08:16.560 I remember one time our team released

00:08:18.180 this big search engine change,

00:08:19.700 and it's like all these advanced search features,

00:08:21.540 and they were so pumped.

00:08:22.720 And then when I tested it out, it was three times slower.

00:08:26.380 It doesn't matter how cool your search is.

00:08:29.260 If it slows down the whole thing,

00:08:31.500 customers don't care about that. 0.88

00:08:32.800 Jeff Bezos says it best.

00:08:33.900 He goes, look, all I know in the future

00:08:35.940 is our customers will always want

00:08:37.140 cheaper prices delivered faster.

00:08:39.500 Think about that, cheaper prices delivered faster.

00:08:41.460 So if your thing makes the site faster,

00:08:43.240 if it makes it that we have more product inventory,

00:08:44.880 if it makes the price cheaper,

00:08:45.980 if it makes it faster to get to somebody,

00:08:47.880 those are all really good things you should focus on.

00:08:49.980 So monitor progress and the KPIs and metrics,

00:08:53.460 and that's how we create the baseline

00:08:55.400 for everybody else to make the product better.

00:08:57.300 Number five is iterate and improve.

00:09:00.060 See, when you get into larger engineering teams,

00:09:03.380 you will discover that many of them

00:09:05.280 have this thing called DevOps.

00:09:07.140 And DevOps is a department that allows the engineers

00:09:11.760 to request ways that the DevOps team

00:09:15.060 can make the writing of the software easier, better,

00:09:18.960 just faster for them to develop new features.

00:09:21.700 And one of my favorite examples is this feature

00:09:25.940 that Facebook has called Gatekeeper.

00:09:27.980 And what Gatekeeper does,

00:09:29.320 it allows you to deploy new features

00:09:31.440 but to focus on different demographics.

00:09:34.140 So if I wanted to test some new,

00:09:36.280 let's say I wanna change the color of the like button,

00:09:39.540 I can actually change it for everybody in Canada,

00:09:41.960 or even just 10,000 of our customers in Canada,

00:09:45.040 and it gate keeps it to just them

00:09:47.020 so that I can split test and test that change versus control.

00:09:51.540 See, it's hard to iterate if you don't create baselines.

00:09:54.860 You know, if you're Google, I don't know if you know this,

00:09:56.960 but YouTube, which is owned by Google,

00:09:59.220 their homepage, they have some customers

00:10:01.500 that are part of a control group

00:10:02.940 that they've never seen an ad on their YouTube videos

00:10:05.080 and they're not paying for YouTube Red

00:10:06.760 or Advanced or whatever it is.

00:10:08.080 They literally say, okay, well,

00:10:09.360 we have all these different experiments running

00:10:12.220 for us to feedback the learnings to the product teams

00:10:15.460 or the product managers so that they can decide

00:10:18.160 what's the best thing to move forward, right?

00:10:20.720 Too often, you know, people are in meetings

00:10:22.700 and product meetings and it's called the HIPPO,

00:10:25.420 the highest income person's opinion.

00:10:28.760 That's the most important.

00:10:29.880 It's like, who should we listen to?

00:10:31.660 Listen to the hippo, what's the highest income person's

00:10:34.600 opinion, the person who gets paid the most.

00:10:36.780 You know, it's the product manager, it's the CEO.

00:10:39.200 But my philosophy is listen to the customers.

00:10:41.640 I actually, at a certain point, the product is yours.

00:10:43.920 You have an opinion, you have a philosophy,

00:10:45.860 you have a point of view, it's opinionated software.

00:10:48.940 But as soon as you put it out to the world,

00:10:50.860 then all of a sudden it becomes theirs.

00:10:52.980 And you have to start working backwards from the customer.

00:10:55.700 So being able to move faster by creating tooling

00:10:59.940 that allows you to split test,

00:11:01.600 to create gatekeeping software,

00:11:03.240 to launch new features to a specific audience,

00:11:06.400 to learn to that.

00:11:07.620 I even had a friend once,

00:11:08.700 he built a new tab in the software

00:11:11.340 and when you click the tab, it was a survey.

00:11:14.140 It wasn't the feature, nothing was built.

00:11:16.100 It literally asked the person,

00:11:17.260 what did you expect to see when you click this tab?

00:11:20.540 Isn't that cool?

00:11:21.380 You don't even have to know what to build,

00:11:23.720 just ask your customers.

00:11:25.000 Then he took all that feedback,

00:11:26.100 looked at their answers and said,

00:11:27.200 oh geez, I didn't think of that.

00:11:28.560 we should build this pivot table concept for reporting.

00:11:31.160 Perfect, build it into the product.

00:11:33.260 That's how we improve our product.

00:11:35.320 To wrap it all up, I wanna share this with you.

00:11:37.460 This is a guy named Mark Newsome, okay?

00:11:40.580 He's friends with Johnny Eyes from Apple.

00:11:42.640 I heard about him because he was rumored

00:11:44.540 to work on the Apple Watch, okay?

00:11:47.000 This watch right here.

00:11:48.620 Why I have this is because this is his design journal, okay?

00:11:51.800 There was only a handful of these ever sold.

00:11:54.120 This thing is incredibly valuable and I bought it

00:11:57.640 because, and this is my invitation for you,

00:11:59.640 is become a student of design.

00:12:03.420 Become a student of product.

00:12:05.340 Become a student of emotional response to objects.

00:12:10.160 Mark Newsome not only designed the lounge chair,

00:12:14.580 to cars, to Louis Vuitton bags, to buildings,

00:12:18.220 to Apple watches, he is somebody

00:12:21.340 that I'm incredibly inspired from.

00:12:23.780 And for three or four years,

00:12:25.540 I went down the rabbit hole of just,

00:12:26.860 What does it mean to be a great product designer?

00:12:29.720 Okay, how do we have product vision?

00:12:31.700 How do we create roadmaps?

00:12:32.960 How do we create cross-functional teams

00:12:35.100 to design some of the stuff that he covers in this book?

00:12:37.560 That's my invitation for you.

00:12:39.460 Don't be just good at it.

00:12:41.780 Decide to be a master at it.

00:12:43.880 Go all in, surround yourself with people like Mark Newsome

00:12:47.400 and other world-class designers

00:12:49.120 to be inspired about how they think.

00:12:51.340 Because it's one thing to build software,

00:12:54.420 but it's another thing to build something so great

00:12:57.180 that other people copy you for, okay?

00:12:59.960 And I think that's the ultimate expression

00:13:02.820 of appreciation is do you see other people

00:13:06.220 in your industry steal or inspired

00:13:09.720 by some of your interaction designs or your workflows?

00:13:13.000 That's what I always strive to think about

00:13:16.040 when I'm designing products.

00:13:17.280 That's my invitation for you and as per usual,

00:13:18.940 I wanna challenge you to live a bigger life

00:13:20.860 and a bigger business and I'll see you next Monday.

00:13:24.420 We'll be right back.

Dan Martell - June 19, 2023

How to Make the BEST Product

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