The Product Organization (HR)

When Steve Jobs returned back to Apple in 1997, he famously cut the product line by 70% down to 2 desktop devices and 2 portable devices!

Rule of thumb: If you can’t explain it and choose for yourself, then surely your customers wont!

• Don’t put dollars behind scaling to scale until you’ve completed value proposition discovery.
• Don’t put dollars behind marketing until your communication is so simple that everyone understands.
• Often we overcomplicate stuff that no one really understands.

Avoid phrasing decisions as binaries. Reality is nuanced. Hence, it is better to phrase decisions as “We want to do X while maintaining or growing or reducing Y.”

Any new, and better way of doing things is technology.

Why it matters: Technology allows you to do more with less.

How: Technology has never been an automatic feature of history. We have to build it.

Footnotes:

• Zero to One

Constructive criticism and argument makes the world better. Yet, productive arguments are scarce, because they depend on shared constructs of reality.

Switching costs is a Competitive Differentiation when customers face significant time, money, or effort barriers to move away from your product and service. This can result in customer retention and recurrent revenue, protecting the company from competition and contributing to its long-term financial health.

You don’t need to invest in building a product team when the value builders — Editors, Engineers, Designers, Chefs, Data Scientists, etc. — in your company can directly serve tangible value to your customers.

• In print newspapers, the editorial team, along with supporting teams, themselves can decide the content strategy, report, write, design, and place the stories on the newspaper.
• Similarly, if you are running a media operation on a social platform — Substack, YouTube — then it is unlikely that you’ll need Product Manager. Editors themselves can manage it with the support of an IT guy who can set things up for them.

In more sophisticated (and scaled up) products and businesses, the value creators — Editors, Engineers, Designers, Chefs, Data Scientists, etc. — struggle to navigate the complexity involved in delivering value to the customers directly. In such, you require a product team. Building, scaling, and refining Internet Products, Artificial Intelligence, etc. while is table stakes, is also extremely complex.

Additionally, as the system grows, it becomes more complex. and complexity slows down execution.

Bad decisions add cognitive load to the organization without providing value to the user. Examples include:

• Bad HR policies.
• A business leader within the organization wants the website or app of his business unit to look different. The user does not care.
• Building a confused organization structure/hierarchy. The user does not care. For example, the Twitter Fail Whale image had birds flying in different directions.
• Choosing a sub-optimal stack because developers in that stack are more cost-effective to hire.
• Building a low-trust work environment

“Low margin businesses (eg many media biz) often create an internal culture of ‘survival of the fittest’, where different divisions compete, viciously, to eke out another 0.5% profit. Makes digital transformation even harder…”

– Alex Watson, Ex Head of Product at BBC.

Always put the big rocks (most important things) into your roadmap first else they will never get done.

“A principal is an owner. An agent works for the owner. The principal’s incentives are different from the agent’s incentives, so the owner of the business wants what is best for the business and will make the most money. The agent generally wants whatever will look good to the principal.”

– Naval Ravikant

Specialists build labor and judgment in one field across years, which in turn leads to information asymmetry. Then there are generalists.

Why it matters:

• We live in a disruptive and ever-changing world. To stay ahead and innovate, you need specialists to identify and execute on which bets and trends are likely to succeed.
• It is easier to train specialists to become generalist managers but not vice versa.
• Long term, it promotes a culture of excellence because specialists can mentor and nurture other specialists by investing in high-potential people.

In contrast:

• When in leadership positions, generalists talk strategy and big picture. They give high-level directives and then withdraw. They are neither interested nor trained in the nuances of the trade.
• Specialists realize that to grow they need to become generalists and they give up on building labor and judgment.
• Eventually, the whole system fills up with generalists and the system loses its ability to make bets. There is a lack of middle management that can truly roll up its sleeves, obsesses over details, and convert strategy into tangible action.

The potential harm that arises from taking action or implementing a specific decision or strategy. For example, launching a product without conducting proper market research.

The opposite of this is omission risk.

The risk associated with inaction—failing to take appropriate or necessary action given a specific circumstance or duty—can have detrimental consequences. Take, for instance, the world of finance. If an investor neglects to diversify their portfolio, they significantly heighten their exposure to losses during an economic downturn.

The opposite of this is commission risk.

Complexity bogs us down. The more you have to keep in mind before doing something, the slower you’ll go.

Why it matters:

• This complexity and commission risk can cripple companies, leaving them open to disruption.
• It also slows down onboarding new staff and moving existing staff across projects or departments.
• Failing to remember everything can result in ‘Commission Risk’ – inadvertent omissions that lead to more work and unintended consequences.

Product Manager, not Product Owner, should always be on the lookout for secrets, hidden insights and unique perspectives that can fuel Competitive Differentiation. The key is to uncover anything that enables you to deliver superior value or consume fewer resources.

Why it matters: Information asymmetry helps you to identify opportunities and stay stand head of competitors.

The details: These treasures may take the form of exclusive Proprietary Technology, strategic supplier relationships, unparalleled user experiences, cutting-edge Artificial Intelligence algorithms, untapped markets, or game-changing partnerships.

Product management, like leadership, can’t run on extractive practices. You can’t demand constant innovation without nurturing your team and improving processes.

Imagine running a company like the British in India, pressing for constant productivity with no regard to the system’s state. Just as they demanded the same tax regardless of harvest yields, ineffective leaders expect results without considering team morale, resources, or the business environment. It’s not sustainable.

Don’t simply extract from your system – invest in it, respect it. Remember, you can’t keep squeezing a lemon and expect unlimited juice.

If left unchecked, the amount of entropy in systems keeps rising.

As a company grows…

“… a scaling-up of a software entity is not merely a repetition of the same elements in the larger size; it is necessarily an increase in the number of different elements. In most cases, the elements interact with each other in in some nonlinear fashion, and the complexity of the whole increases much more than linearly.”

– Frederick P. Brooks from No Silver Bullet, 1986

Why it matters: Complexity slows down execution.

How: With company growth comes an increase in:

1. The count and diversity of sub-systems, teams, software, and their nuances.
2. Interactions across all these elements.

Remember this: On January 7, 1997, at Macworld Expo, then Apple CEO Gil Amelio discussed how MacOS has evolved on an outdated architecture.

Samarth Bansal: Statistical inference lies at the heart of scientific inquiry and not knowing its fundamentals means one can not fully participate in understanding what’s really going on.

Related: Track the product, Product Analytics Manager, Shape the product