Scaling to $20MM Series: Optimizing your Product Org
Scale.
For founders, this is either something for which you excitedly yearn or it’s keeping you up at night. In a world in which most boards and investors aren’t exactly patient, most really need to get it. And while there are plenty of startups who have figured it out, others are being challenged to operationally manage it, such as growing too fast without the proper organizational foundation. Or simply burning cash inefficiently.
The good news is that there are lots of different ways to achieve scale. But that’s also probably the bad news. To that point, by observing those entrepreneurs that have been able to smartly navigate it, we’ve come up with a starter checklist of activities that we’ve seen founders and employees do as they scale beyond $10 million in annual revenues.
Now, as this article warns to not copy Spotify, some of these items may not apply to your company. Instead, use this checklist to better define your approach and find out what works specifically for your company.
How To Optimize Your Product Operations
First, one thing all successful startups have in common is that they have demonstrated product-market fit. Basically, what they are offering seems to be coveted by a sector of the market. Chances are you know that you have product-market fit, because customers seem to find you organically, tend to stick around and even refer other customers to you. And while the revenue numbers may not be huge, you are seeing substantial sales growth every year if not every quarter. Generally, this starts with being a product-driven company, with the good ones continuously trying to disrupt themselves while also moving fast and not trying to be perfect.
So how do you become product-driven? Start by doing these things…
LISTEN.
One of the most underrated skills. Product-driven organizations continuously collect feedback from customers to inform product development and improvements.
- If you’re a B2B provider, mine feedback from your customer support staff, sales crew, account managers, and anyone working directly with customers.
- For direct-to-consumer companies, also look at support tickets, website response forms, and social media DMs.
- Add a feedback link to get direct end-user input if your site or app doesn’t already have one,
- Form an advisory committee of customers. For B2B, this has benefits beyond the product side, as they feel more engaged with your business and will be outstanding advocates for your company. For B2C, end-user panels are ripe with excellent feedback and new ideas.
- Conduct market research to understand market trends and competition. What you are doing today may not make sense in a year. Or even six months. Blockbuster and MySpace were their market leaders then poof. In this spirit, if you’re currently in a strong market position, imagine how you would disrupt yourself. What would scare you if a competitor came along and offered X? A great book on this subject is former Intel CEO Andy Grove’s book, Only the Paranoid Survive, which along with this Business Fitness post explains how success breeds complacency which breeds failure.
- Conduct usability testing with every major release and especially pre-release products. Even something as low-fi as paper prototyping can generate valuable feedback.
DEPLOY FEEDBACK LOOPS
It’s not enough to simply listen. You also need to communicate back, even if it’s simply acknowledging the feedback.
- Employ automated response vehicles to ensure that every inbound message is appropriately responded to.
- Frequently communicate new product enhancements and future roadmap items. If you feel these could be competitively sensitive, put them behind a client portal and/or push them out as part of a monthly release email or newsletter.
- Invest in a Product Marketing function. They operate in the intersection of product development, customer service, customer success, sales, and marketing, and are responsible for both collecting information and are skilled at communicating out to both customers and the wider market.
BE CLEAR WITH PRODUCT OWNERSHIP
Most founders tend to already be product-driven as generally they started up their company with a solution and a vision. However, especially for founders who are also the CEO, continuing to wear the product hat is a sure way to stunt scalability. Instead…
- Empower someone else in the organization to own Product. I know, easier said than done, as the product is probably your baby as the founder. This doesn’t mean letting go of the vision but rather entrusting someone else to execute and eventually make the tough decisions in evolving a product that needs to adapt to customer needs. If you’re trying to be both the CEO and the chief product officer, you’re going to fail and more pragmatically, it’s not a good look when reaching out to investors .
- Adopt and stick to a product development methodology. Most tech-based product teams utilize some form of Agile (nobody does it exactly by the book,) and Agile means something different for pretty much every company. While this should be its own blog post, in short, you should:
- Identify your northstar. What does the aspirational version of your product or service look like.
- Then use that to do a gap analysis. What is missing from your current product or service?
- Take the gap analysis and compare it to what you learned above in LISTEN to prioritize what you should do first. Chances are you already have a backlog of ideas but you can’t realistically do everything. Be focused on what will drive the biggest impacts (value) most efficiently (level of effort.)
- Collaborate within your organization to ensure alignment, especially with your engineering team, making sure everyone is being realistic with the level of effort that may be required. Keep in mind the old saying, you can do anything, but you can’t do everything. Totally applies here.
- Develop and maintain a longer-term product roadmap (12-18 months) that’s organized and prioritized by high-level themes. Use it to guide product development, organize product releases and communicate direction.
- Create and maintain a backlog of every potential idea in the form of a user story, issue or task. Applications like JIRA are ideal for this, but other project management tools like Trello, Asana or even Notion can be programmed to manage these workflows.
- Invest in proper Agile story writing training. Or at least read up on it. Communicating and grooming requirements effectively can be a lost art and when not done well creates a lot of rework and eventually bugs.
- Don’t skimp on QA. If you release any sort of product and it doesn’t work well, it reflects poorly on both the service and the brand. And then you end up spending engineering cycles on re-work which is literally a waste of time.
- Frequently iterate. Especially with cloud-based software or SaaS products, you don’t want to wait until it’s perfect. Now, like with the previous checklist item, you don’t want it to be clunky, but rather minimally viable. Or as someone else once said, minimally delightful.
Okay, not exactly a short list, but I’m guessing it’s also not a comprehensive one. If so, let us know and good luck scaling!
About the Author: Over the past 15 years, Joe has built and led numerous technical product management groups, leveraging his extensive operating experience to deliver impactful products that delight customers. As an 82i partner, Joe leads 82i’s Product & Operations practice with a mission to help growing startups smartly scale.