[On Demand] Product Management Webinar: Value-Driven Growth

[00:00:00] Janna Bastow: So welcome everybody. Come on in. I’m glad to have you all here. This is the Product Expert Fireside Series that we run here at ProdPad. Today we are joined by Dave Martin, who we’re going to introduce soon.

He’s going to be talking about his book, The Product Momentum Gap, and probably a series of other things as well, because we always take them. These things off beast as, with these the, this, the series of webinars we always have a focus on the experts that we bring in bringing in their excellent insights from their mix of experiences.

Today is going to be a focus on the content and learning and sharing. Today is going to be recorded, so you will get a copy of this that you can share for, keep for yourself or share around with your colleagues. You will have a chance to ask questions, you will have a chance to use the chat, so make use of all that.

Get in there and introduce yourself now if you haven’t already. We have a bunch of past talks that have been recorded as well. So this is the last one of the year, but we’ve been doing them every month throughout this year as well as in past years. So there are dozens of these, and there’s a mixture of presentations from product experts as well as firesides like we’re doing today.

Before I kick off and introduce Dave, I want to just tell you a little bit about ProdPad, the tool that we build here. ProdPad was built by myself and my co founder Simon Cast when we were product managers ourselves. We just needed something to help keep track of our big chaotic backlog of ideas and experiments and customer feedback, and something to help us take care of our roadmaps that everyone is asking to see.

And nothing existed. So we started building it. And so what we realized was that ProdPad was this tool that would help give us control and organization over our product management processes and gave people transparency into the product management process. And it creates this single source of truth for all those product decisions.

So we started sharing with other product people and now it’s used by thousands of product teams around the world. It’s a tool that you can try for free. We’ve got a free trial as well as a sandbox version of ProdPad. And what the sandbox version is is preloaded with example data. So you can see how Now- Next-Later roadmaps and OKRs and experiments and ideas and feedback all fit together in a product management space so you can try it out for yourself, move things around and see how it works for you.

And our team is made up of product people. It was founded by a couple of product people. You might know us as a couple of the founders behind Mind the Product. And we’ve also hired and surrounded ourselves with product people. So whenever you get a chance to chat to us, let us know how you’re getting on with your trial. Let us know how you’re getting on with your account. I know that there’s a lot of good ProdPad users in our audience here.

So say, hi, thanks for all your support. And for anybody new to it, jump in, give it a try. We’d love to get your feedback. We’re product people ourselves. So we’re constantly learning and iterating from your feedback. I want to give a little shout out to something that our team has built recently, which is a tool to help you clear that chaos that you have in your existing product backlog.

How many of you have a big messy Jira already. This is one of the biggest problems that we come across that people have, they’ve got this Jira that’s just been stuffed full of tickets. So what we have is this ability to connect to your Jira and then import that mess. And then once it’s in ProdPad, we have an AI assistant that will help you clean it up.

We’ll help you figure out what’s what in there, help you deduplicate, merge stuff, figure out what you need to archive, figure out what needs to be. Pushed on to development to be built what needs to be put on the roadmap. What needs to sit aside for a little while you can use AI to check alignment with your product vision.

You can, some of those things are going to just be like little one liners that aren’t ready yet. So you can use AI to generate specs. And you can also use ProdPad to visualize your whole backlog in one space to say which of these things are actually impactful, which of these things are quick wins, which of them are time sinks.

And so you can use ProdPad to make sense of your product backlog that you’ve imported from Jira so that you’re basically clearing that chaos. We’ve done a demo video of it, so check out that link at the bottom, prodpad.com/clear-the-chaos. That’s a bit of a mouthful, isn’t it?

But check it out or just jump into ProdPad and give it a try. You just need to hook up the Jira integration, which is a few clicks and you can import it yourself. Claudia just sent a note she posted this just to hosts and panelists, but she said tried it this week. It’s so amazing from the product perspective.

Thank you for that note, Claudia. I really appreciate that. So on that note I want to move on to our product expert for the day and start chatting about the actual subject. Today we’re going to be talking to Dave Martin and now Dave and I go way back. I actually used to work with Dave at a previous startup when I was a head of product and Dave, you were the director of product, I believe.

Some title like that. Yeah, some titles. One of those, it was one of those chaotic step startups where titles didn’t matter. But, we were in their sleeves rolled up and getting stuff done. But I learned a ton from Dave. This is early on in my career when I was still figuring out what good product management looked like.

And I credit a lot of my learning from Dave and looking up to him he was also a great shit umbrella, right? Really good at managing the execs and managing the different stakeholders and taught me a thing or two about how to empathize with different stakeholders. Not just the users. I came from a user point of view but he’d actually come from a business point of view and had a more well-rounded experience.

So I learned a lot from him in that period. And so today he’s a seasoned leader in the world of product management. He’s got a passion and lots of experience in transforming teams. He empowers leaders to break free from the shackles of order taking and stakeholder battles. And I know he does this because I’ve seen him do it.

In person, he’s the founder of RightToLeft and what he does there, he facilitates innovation. He helps with customer satisfaction, helps teams with market growth. He basically enables product teams to solve real problems. So he advises and coaches people on becoming outcome focused leaders and fostering cultures that allow product teams to flourish.

So with that, I want to introduce Dave. There’s a lot more that he’s done not least he’s just released a book that he’s written with Andrea Saez who worked with us here at ProdPad as well. You might remember her it’s called The Product Momentum Gap. So we’re going to be talking a bit about that today.

But I want to introduce Dave and say a huge thank you for joining us today. Hi, Dave. Everybody say hi. 

[00:06:53] Dave Martin: Hi, Jana. What a fantastic introduction. Thank you so much. I think the thing that I remember the most working together was this tool you put together on the side to help us do our jobs, which you eventually turned into ProdPad.

It’s been awesome being part of, observing the journey of both yourself and the business over all these years. And it’s awesome to be here now. So Yeah, 

[00:07:19] Janna Bastow: Absolutely. And thank you, Dave. You were the I guess you could say like an alpha user of ProdPad. You used ProdPad before it had a name, before we were willing to, before we had the guts to get it out there and show it to people that we didn’t know.

And I remember you standing there and saying, you should probably go do something with this. And I’m really glad I took that advice. And I’m sure there’s lots of other product people who agree with that. 

[00:07:39] Dave Martin: And 

[00:07:42] Janna Bastow: since that point in time, we’ve both taken leaps and jumps. You took the leap from being an in-house product manager to being a advisor coach.

Tell us about that leap. What led you to that? 

[00:07:56] Dave Martin: Thanks for asking, that’s a really interesting question that you asked a lot. I was my last full time job was Chief Product Officer at a company called TES. Some of you might know of TES, it used to be called Times Education Supplement. We also own something called THE, so if you’ve got any relatives or a teacher, they definitely know what TES is.

Especially in the UK, because they probably got their first and last job through, teaching job through TES. We did a lot of different things in our organization, but it was a private equity owned business and part of my job as a part of the executive team there was to I brought in to transform it from a transactional advertising business into a class into a SaaS business that sold subscription.

We did that journey. We built out a product team that didn’t exist when I left. It was a 30, 40 strong product function with marketing and data under the same umbrella. So 150 people worked for me in that business. And we did some new things that were a bit different, but at the end of the day, we managed to achieve the goal.

We transformed it. We built great software that really changed millions of people’s lives all over the world, because it was a global business. Really nice mission led organization with some amazing people who I’m still in touch with. And the. That when we sold it because that was the goal, if you’re private equity owned And you’re on the exec team the management team’s job is to build the business and sell it we successfully sold the company and when I we sold it I left and had that opportunity to stop and reflect and think about what I really need to do and my role in TES had changed from being you know once upon a time a product manager through to being a product leader and then in TES, while still being a product leader, I’ve become a leader of leaders.

All my staff had VP in front of their title. And, for me, for them to be, for me to succeed, I needed them to be successful leaders in their own right. And I realized when I left that was the bit of the job I started to really enjoy. That was the bit that made me smile. That was the bit that made me want to get out of bed, helping those guys do better.

And I’m in touch with all my old VPs and they’re all see something now doing phenomenally. They’re amazing and it’s that was the bit I enjoyed so I selfishly thought about what job could I do? I’m going to make a living and just do the bit I enjoy and not do the bits I don’t want to do and selfishly very selfishly the that turned that was being an advisor and a coach.

My favorite work is where i’m coaching other product leaders and founders, helping them be more outcome-led, helping them think about being more servient leaders, helping them set their teams up for success and develop. Great people who are going to do amazing things. Yeah, that’s why I, that’s why I’m doing what I do.

Cause it’s it’s the bit I enjoy the most. 

[00:10:46] Janna Bastow: Excellent. I love that. I love framing your career around figuring out what it is that you actually want to do and then getting rid of the stuff that’s otherwise filling up that time. So huge congrats on being able to get to that point. I want to back it up to something that you said there that that, that really sparked some interest because he said that you’re working at TES and you got them to the point.

They were they were transformed, which stands out to me because you hear so many companies going through a transformation, but you don’t hear of companies. Having been transformed, like being at the end of that transformation, so that’s actually a really unique point of view to be able to look back on that.

How did you know that it was transformed? What are the markers when you can say, we’ve done enough, it’s now at the point that we can step back? Or is it a constant transformation process? 

[00:11:35] Dave Martin: That’s awesome. I think it. It would be foolish, and I think it suggests that every business and every individual can always improve, do better.

We were in a place where our roadmap was mainly driven by outcomes. It wasn’t for the features, despite, the private equity backers who typically have a different viewpoint. They bought into that as well. So we’re from top down, focused on the outcome we’re creating for the customer. We’ve aligned our goals, the business goals, we’ve aligned how the business goal what we expected our customers value to have to be for their business to achieve our business goals.

So what customer value did we have to provide that would map to us getting more ARR? And we’ve gone that step further to understand what were the users behaviors that we’ve got to impact in order for those business goals to go up. And I think that’s. It’s actually in the book as well quite heavily we call It’s the value chain in the book and the thinking when you think about a product function any And I know we don’t like to use the f word, but we release features.

That’s actually what we do I know we spend a lot of time trying to not talk about features, but that’s what we do And when we release a feature or change one or get rid of one the what’s the impact? What’s the direct immediate impact and the direct immediate impact? On our customer is some user changes their behavior and the user and the buyer might be the same people.

My life has been mainly in B2B, not always, but mainly. So they’re often different people, but the user’s behavior changes in some way. They’re going to do something quicker, easier or faster. Hopefully, normally it’s one of those things. We can send more, send things more email, more targetedly. We can schedule quicker.

We’ve got more analytics on hand to make better decisions faster, whatever it might be. And that’s a behavioral change. We’ve changed the behavior of the user. That’s the direct thing our product does. So if we can articulate our product strategy and our planning around what’s the user behaviors we’re trying to change or modify in some fashion.

We then, and we mapped those to those customer values. So these are the behaviors we care about that will make the, help the customer get the value they want. And these are the values that will help us, our business growth. And we work across that sweet spot those where those three things and intersect then we’re having a huge impact on the business and by being transformed When we realized when I felt like hey, we’ve arrived as a product function in tez was when We were planning around those user behaviors with the exec team And leadership are all aligned that these were the behaviors product.

They’ve got to drive and the teams had whilst they all had clear purpose And we’re focused on clear parts of the journey, clear users and clear value propositions. Their OKRs were around those behaviors. They were focused and they had the autonomy to go and work out how to create those behaviors.

They weren’t, we weren’t dictating, Hey, you’ve got to build feature X. We were dictating, we need this behavior. You work out how the hell you create that. That’s your autonomy. You go figure that out. But this is the behavior we’ve got to see happening now in our from our customers from our users so I think that the fact that we got to that point and that Behaviors were the focus and the goal for the product function was one sort of Serious milestone.

I think the other was how tightly coupled we were with marketing and sales rather than being siloed, we’d reached a place where we created a go to market function to help with that sales enablement. We moved it out of product into sales at some point when we were happy that we got the function working.

That meant that there was this inherent strong connection between the two departments. And we got from a marketing standpoint, we put marketing managers in every squat. They were, they tended to stand up. They were part of the journey. They understood what the product problem, what the problem was we were trying to solve.

And part of helping product managers with that with some of the research as well because some of them are amazing researchers They understood the problem before we’d solved it so they could already start thinking about the marketing message because actually the feature didn’t matter The actual technical bit of what the widget was to solve the problem that didn’t really matter to the marketeer.

The fact that this was the problem the customer had and we were solving it. That’s what really mattered because no one really buys features. They buy the solution. They buy that. They buy the better, how it’s going to make their life better. So the marketeers were able to, we sped up time to market. We made sure because there was no delay between the feature being built and then marketing having to work out what the hell it was.

And it’s meant that the we are just more congruent as an organization because people were involved at the very beginning and we’re focused on the problems we were solving. And that helped sales as well. The go to market piece was all around the problem and consult, consultative or in some great sales consultants who helped with that journey.

The sales guys, they did an amazing job. So I think that’s where we realized it was all together. Of course it could improve. Of course it could be better from where it was, we’d arrived. 

[00:16:56] Janna Bastow: Yeah, that’s a really excellent insight. It’s also interesting that you called out features as this bad word, right?

The product managers don’t talk about, so we don’t want to be measured by, or we don’t want to be known as a feature driven, but ultimately that is the thing that we create, right? We change features, we add features, we take features away, but it’s. In order to drive change in behaviors or create value for the business.

And we have the way that you turn that on its head was to map out the value that you’re looking to create. And that sort of, I’m envisioning this like overlaying into which features or which changes need to be done within the business to, to achieve those value drivers. 

[00:17:41] Dave Martin: Yeah, that’s it. We had a, we articulated the,

and that’s actually what I feel

like your VCP. And that’s a term I stole from private equity. Our private equity owners wanted a business VCP. So it made complete sense to have a product version of this, a product lens of how we would do it. And, when explaining it to VC, PE investors, board members, it was easier to compare it to something they understood and saw a bit more frequently, which was marketing.

We don’t, when we think about our marketing counterparts, We don’t expect marketing to create a 12 month campaign plan and have exact detail of what the what the campaign slogan is gonna be and what the words and the campaign the advert might be in January when we want these commitments for the December Christmas campaigns.

. That’d be unheard of. It’d be crazy. And nor would we beat up marketing for changing that and deciding the campaign should be different or the word or the change, where they’re gonna place it, their channels, their mix. In order to get a better return on investment, we wouldn’t they’d be celebrated for making those changes But for some reason in product we managed to have too many teams managed to try and commit for 12 months exactly what they’re going to build with no clarity on why and then when they change their mind they get beaten up for it. And when you explain it that way and say actually you commit you have marketing commit to leads typically in the SaaS business its number of leads in our world.

We’re in product. We’re going to commit to behaviors how we do that will change. I’ll tell you, we’ll tell you how we might do it for the next three months, but we don’t really know how we’re gonna do it for the whole year. We just know that these are the behaviors we are that are meaningful and they’re the ones we’re gonna change.

And that really helped people get it and change people’s views. So the VCP lent, we had some value indicators that allowed us to just track those behaviors and they weren’t the most accurate tracking, but they’re good enough. They meant if they went up. If they went in the right direction, the behavior was going in the right direction.

And that allowed us to also throughout the year check strategy. So we could review our product strategy quarterly and look ah. Lead indicators, these behavioral indicators are going in the right direction. What’s happened to all those lag metrics? What’s happened to churn? What’s happened to acquisition?

Which, in a business like that can be a six, twelve month sales cycle. So they’re not going to change super fast. But we can see if our things, if our metrics are going in the right direction and the lag metrics aren’t, either there’s a problem somewhere else in the organization or our strategy is wrong.

And we can have that healthy conversation. 

[00:20:28] Janna Bastow: So you managed to take something that was typically quite undigestible to the execs at a PE company, which is working in this experimentation led outcome focused way and use language from other divisions, marketing in this case, to make it more digestible for them to get on board with.

Yeah. 

[00:20:50] Dave Martin: And use their language. Like I never called, but I never described product discovery as product discovery. It was always either risk management or due diligence. 

[00:20:59] Janna Bastow: Risk management or due diligence. Yeah. Okay. That’s 

[00:21:02] Dave Martin: their language. Yeah. If you spend all your day making investments. You do discovery work all the time.

You just call it something else. 

[00:21:10] Janna Bastow: Which makes sense. As product people, our job is to work with different stakeholders and speak their language and understand how to best communicate with them. And we tend to do a great job of that when we’re communicating with. So we do a lot of work with our teammates at our peer level and communicating with our customers, but we do a terrible job of it.

And a lot of teams communicating upwards and we try to talk to them, about how we’re creating customer delight and doing product discovery, and they don’t care, it doesn’t translate. So terms like due diligence or talking to them about risk management, these are really good golden nuggets that people can use to to get the, their point across.

[00:21:52] Dave Martin: Yeah it’s just we’re, you’re right. We’re really good at empathizing, side raising, but for some reason we frequently feel like because somebody is above us in hierarchy, we haven’t got to empathize with them, they’re in an entire position. So why should I empathize with that person? Or we feel like we’ve got to educate them because they’re a decision maker and somehow, get them on board with the cult of product management.

That never works. That’s never going to work. You’ve got to explain it in their language that they understand. And the details of how we do it, often, no, often that doesn’t need to be fully explained in detail, but the transparency of the data, that’s what matters. So we can show, hey look, we’re making these decisions.

This is how we’re doing it. This is the transparency of the information. So when we thought about that product VCP, we would regularly get a product manager to, to share to the whole exec. This is the decisions we’re making for the next quarter or for this month based on this evidence and yeah, it wouldn’t be this is the product discovery.

This is the experiment I ran despite the fact that’s what they were doing. It would be this is the evidence we’ve captured and boiling it down to a single table that was comprehensible to everybody that could help me. And this is the day of information. This is the conclusion. This is what we’re going to do to make this behavior go up or whatever it is.

So just making it simple. It’s not really that complicated to be honest. It’s pretty simple. We just perhaps get tangled up in the detail too much. 

[00:23:19] Janna Bastow: So Brody asked a good question here. Were there any challenges with adopting it? 

[00:23:26] Dave Martin: Hi Brody, I think I know Brody. I think I used to coach Brody. So good to see you Brody.

Nice to see you here. Was there any challenges in adopting? Yeah, I mean trying, there was enormous challenges in that particular organization. Probably best this doesn’t become the story of TES but there were we had to change some enormous things. We had to change some mindset things.

We had to change business units have to be merged together that, and that and the business of that size that the centralized product, for example, required some enormous organizational change beyond just product so that we’re all focused on the same problem space on a more detailed level.

I think probably some of the bigger challenges were the normal leadership challenges when there’s change, it’s easy as a leader to think hey, this is a better way of doing it and we’ve agreed it so job done but the reality is everyone’s just like I coach on leadership habits to try and get people to adopt better outcome habits and drive their own personal success further, the people go back to their default ways to their old ways really quickly and they forget why this is a better way and the real challenge is the same as all change management. It’s that continuously banging the drum, explaining why, until you’re, if you’re a leader and you haven’t explained the purpose and why so much that it feels like a broken record to you. And you’re just, I can do this in my sleep on auto, on an auto cue, then you aren’t doing it enough.

Cause that’s the level you’ve got to do it to get the message across. It’s about continuous, the challenges. being consistent and having the resilience to keep repeating the same thing again and again, because it will eventually drive everybody into the right place. 

[00:25:14] Janna Bastow: Yeah, absolutely. And this is the value of having a shared vocabulary around things and using the words that people look to, or that people can get on board with and creating a shared vocabulary.

Like you’ve created product momentum gap and things like this to help get people around this same concept that they can use amongst their teams to discuss where the problems lie and how to to close those gaps, for example. 

[00:25:40] Dave Martin: Yeah, definitely. Yeah. The book in the book, there’s probably two main pieces of vocabulary, the product, VCP and product value indicators.

They’re probably the two big things and they’re taken from my time at TES for doing, doing that firsthand, but since then, as a coach, I’ve helped probably 60 companies put this process in place, those tools in place and they’re all using them today as far as I know, some of them, I know of.

Been the feedback’s been phenomenal. Of the impact it’s had company wide aligning sales and product together and so things that surprised people that they weren’t expecting And that’s really why we wrote the book, the Andrew have been helping me write some blog posts and helping me I’m dyslexic.

I’m not the best writer so she was helping me craft those words and get them out and supporting me And she’s got great insight of her own from a product marketing perspective and we thought well, hey it’s there’s a lot of content here why don’t we put it in a book and try and get it get a make it more meaningful and get a bigger reach?

And help more people, you know my mission for RightToLeft and, why I do it, I said it’s, cause it’s the bit I enjoy, which is true, but I do have a bigger purpose than just, a smile every day. And the bigger purpose is there’s a stat from Pendo, which puts the fear of God in me.

There’s a stat from Pendo that says that 80 percent of all new features released either are rarely or never used. When you stop and think about that for a second, that really means that product management is failing miserably. If 80 percent of all new released features aren’t being used that’s 80 percent of all the R& D for product engineering was a complete waste of investment from a business standpoint.

It’s disastrous from a people standpoint, it’s even worse. I mean think of all the pain and blood and sweat and tears and effort that goes into some of that work. And then to think that it doesn’t even get used by anybody. What a waste of human effort. So my bigger mission personally is to help us stop that waste and get to a place where it’s not 80 percent.

Let’s improve that figure. We should all be, in my opinion, or anybody with the title product anywhere in their job title should be attempting to get to a better place with that figure. Collectively, and writing a book helped get the message broader. 

[00:28:03] Janna Bastow: And how are you seeing the best teams keeping track of what’s actually being used versus not used?

[00:28:11] Dave Martin: Interesting, because I see a lot of teams that are not doing it rather than the 

[00:28:16] Janna Bastow: best. Are there any best practices? Is anybody excelling in this space? Or is it still an untouched 

[00:28:22] Dave Martin: problem? As a coach, I get dragged into the teams that Not doing things so well. That’s 

[00:28:28] Janna Bastow: true. Yeah. You’ve got, you’re going to have a particular 

[00:28:30] Dave Martin: bias.

Yeah. But I think of some of the teams I coach, I’ve over the last few years, I’ve coached some product leaders in post IPO tech firms, or just about to IPO tech firms, places like GitLab and Contentful and Snyk and, and some of those teams do this really well. It’s really just down to, I think it’s down to having firstly, the right analytics tooling.

Whatever that preference might be, you know the right tools to give you the data And then secondly, it’s about interpreting that data and the best I think are the ones that are able to map that user behavior those adoption that adoption rate whatever it is map it to the customer value and really understand where it’s having that impact.

So I recall, I called it in the book, me and Andrea called it value indicators, but other teams will call it different things. It might be their KRs, it might be their KPIs, whatever it is, but it’s about users doing stuff. So effectively, it’s about adoption metrics of some sort making that the primary focus because, a product team, unless apart from some very rare things like an accounting package with an end of year report that.

You run once a year, apart from the rare things, the majority of effort that product teams build and output, they’re things that should be used on a regular basis. So we should, if they’re not, we’re failing and we’ve got to make that the primary focus. 

[00:29:56] Janna Bastow: Yeah. Otherwise, why are we spending all this time building them?

[00:29:59] Dave Martin: Yeah. Hopefully there’s one thing I’m certain of that if you release a feature and no one uses it, you created no value. Yeah, 

[00:30:07] Janna Bastow: there was a great talk by Paul Adams, who is at Intercom the the time and he was talking at this is a talk from, uh, Mind the Product Engage in Hamburg some years ago, I can’t remember the exact year, but I’ll put the link in the the transcript when we get it and he was talking about basically if you launch a feature and no one finds see it.

Did anybody actually, did you actually launch a feature? And he was talking about there’s all this effort that goes into launching the feature, post launch, you’ve got to make sure that sales is trained on it. You’ve got to make sure the support knows about it. You got to make sure that people are using it.

You got to make sure, all these things that happen afterwards, which just often don’t get touched. It was very telling take on product management cause we spent the rest of the day talking about what happens beforehand, all the discovery and, building up to it.

[00:30:53] Dave Martin: Yeah, I think that’s really interesting the point that and it depends on the different company which role it fits in whether Manager or some other job, but it’s that the reality is there’s got to be process and effort to downstream of the actual technical part of building the feature to make it a success and you know from my view this product should be involved in that product management should be involved in that process Then we’re not owning all of it, but they need to be involved in it. Yeah, for a start they wouldn’t get feedback and that’s how do we know how we’re going to know how to iterate and make it better?

But that process of making sure that go to market that sales enablement happens that business readiness. Making sure everybody’s aware of it. Make sure CS know how to you see us are trained and know about this thing. So they don’t look stupid on a phone call knowing usual sales understand not just what it is, but why we built it, you know why what was the problem itself not just what does it do and the rudimentary ability to click through it in the demo?

But the more important part of why we did this and what the actual problem is and if that communication isn’t coming from product, it can only come from product at least at the source It might be other people involved in a large company to disseminate it but it that information of why we built it.

That’s your original product discovery That needs to be interpreted for the rest of the company that if that doesn’t get out there That’s when you end up with sales teams selling it for the wrong reason or to the wrong people. Yeah, you know that’s when we end up with high churn or we end up with those annoying customer requests that come in, especially in B2B software of, I could close this big deal if we had X.

And that’s because they went and started pitching it to the wrong people. We never, we weren’t trying to solve that problem. 

[00:32:37] Janna Bastow: Yeah. So what are some of the common signs that organizations might be facing a product momentum gap, or maybe put in a slightly different way, who’s going to benefit the most from really absorbing and reading this book?

Yeah, 

[00:32:54] Dave Martin: cool. The book’s got, there’s two parts to the book, really. We describe something called the product momentum gap that we’ve labeled I’ll share exactly what I mean by that in just a sec. But there’s also then the second part of how to articulate strategy and execute product strategy using the product VCP and Everybody can benefit from the second part.

It doesn’t matter whether you’re a young startup I’ve worked with seed startups and they use this technique and I work with IPO companies and they use this technique So there’s everybody can benefit from that part But the first part that describes the product momentum gap, you’re not going to experience this if you’re a young seed business You’re going to experience this if you’re series A and upwards And the problem momentum gap specifically thinks about that point with that point after you’ve got your initial traction, and everyone talks about product market fit, the original traction, and we unfortunately talk about it like it’s binary, like it’s either on or off, Oh, I have product market fit.

It’s a really odd way of thinking about it. I prefer to think of PMF like a bell curve. People are familiar with the most. It’s a good way to think about it. Yeah. You think of it as a bell curve. Strength of fit is the vertical, the y axis, and along the bottom, the x horizontal, is that it’s the Market, people in the market, the breadth of the market.

So some very narrow niche of the market has the peak of market fit. So let’s say we sell to retailers. That might be small square footprint coffee shops that have the niche. They’re the niche who love your product and get the maximum. And as we go broader in the curve, the fit gets lower. As we get to the ends.

Some of these ends might be furniture stores like DFS, which are huge, 100, 000 square feet shops, appointment driven sales, not checkout, completely different business. They’re still retail, and in somebody’s pitch deck that they’ve put retail and the TAM would have included all of these people.

But their product is a terrible fit for these guys and their products are great fit for these people so When we think about pmf that way as a linear thing recognizing that the market is linear and so is our strength of fit and that we have a super narrow niche where we’re really strong. What often happens is as soon as you start to scale and get more funding you hire more salespeople you hire more marketing and those guys they’re paid to go and close deals, obviously, and get more reach.

And naturally, it’s very easy for those people to cast the net wider. And we end up starting to sell to where it’s narrow. Where the fit wasn’t low and as soon as we do that we then end up trying to know with people that aren’t happy with the product or we end up with feature requests coming in that are must haves, but therefore the all these different places across that bell curve.

That’s super unhelpful I mean we could tack we could invest and fix a bunch of problems And all we’re going to do is lift the bell curve very little bit across the board we’re not gonna what we really want to do is make them top that peak. We’ll make that wider at the very top we want maximum product market fit for a bigger group.

We don’t want to just make our products slightly better for everyone. That’s really not helpful if we want to actually make more money faster sales cycles and longer loyal customers who spend more money. We need more of the top. We need more of them at the peak so the product momentum gap is where we’ve ended up accidentally acquiring and chasing a broader market that isn’t really the our PMF and where we end up and a lot of the pain points listeners and we’ll hear and suffer where churn is getting bigger sales cycles are longer products blamed by sales for deals not happening because we haven’t been able to make some random feature quick enough, and all those things that happen so often and then the hippo obviously comes in and wants to just direct that you build feature x because they can see the money for it and just want it. And they’re under pressure because they’re under pressure because the sales cycles are slower and the money’s slower and they’re missing their targets and we end up in that perfect storm of well, horribleness really and pain.

To avoid that, we want to instead expand strategically and carefully and focus on how we make that top of that curve broader. And that means understanding where our niche really is and then planning and discovering what niche is adjacent to it. It might be a very narrow niche what’s adjacent to it. And ensuring we have PMF for that and then incrementally improving our PMF so we get making the belker broader rather than just lifting it everywhere.

And that requires real high discipline on what your ICP is, what your ideal customer profile is. It requires clear alignment between sales and product. This is the people whose problem we’re trying to solve. This is the customer, this is the target customer, and it requires real understanding from prioritization that when that strategic, when that tactical revenue comes in the door, i.e. we can make a big ton of cash short term with this client, who’s nowhere near ICP, it requires the understanding and being able to articulate it. To the powers that be, to the people making the decisions. Why, what the opportunity cost is if we chase that. And the product VCP described in the book helps with that.

It helps you identify this opportunity is not on strategy. It’s not going to help any of those behaviours we said we were chasing. We can do it, and it might be the right thing for the business to do it they might help cash flow and they might be struggling with cash and, survival of the business, but that’s not a wrong decision, but from, but we need to make those decisions knowingly and not by accident.

And too often they’re made just by accident. So having the VCP helps you go, that’s a, this is a tactical decision. If we do it, we’re going to miss all this opportunity that we agreed upon. We can do that, but let’s all be able, let’s all know what we’re saying yes to before we throw the baby out with the bathwater.

[00:39:07] Janna Bastow: Yeah, absolutely. I love that bell curve as a way to visualize product market fits as opposed to a a check mark or a binary. And by the way, for the audience if you have questions, get them in now, rather than in the last flurry of minutes, like usual so jump into the Q and a section, get your questions in.

But in the meantime, dave for companies who like established companies, this is where the problem really comes because you’re a new company, then, quite clearly you say, this is what we’re building for. We’re just going to build these types of features and you can know not to get yourself into the problem where you’re building for everybody.

But if you’re an established company, a lot of these companies have had this problem where. They’ve taken on a feature here, a feature there. I talk a lot about the the agency trap where companies start acting like agencies, as in they do custom work for clients, as opposed to focus on doing discovery for that core center group that they should be doing.

And it seems really good and easy at first because it’s paying the bills and, it’s solving some problems for the short term, but it’s not really building up their, what their ultimate towards their ultimate vision and ultimately it’s not helping them hit product market fit for the right market.

What does a company do when they have this smattering of features that sort of solves something for everyone? They’re good for DFS, but they’re also good for a mom and pop shop. 

[00:40:27] Dave Martin: Yeah. There is a point, I think, but there is a point where, what I mean by that, there is a stage where you’ve got, depending on the size of the company, where it’s impossible for you to say no to some of the revenue anymore. And you’ve got revenue commitments that are high maintenance and cost as much to maintain so much to maintain and look after and keep running and they’re spread across that broad spectrum that it’s extremely hard to and they’re all custom that you can’t just acquire another and not set you’ve stopped being a SaaS business you’ve started being an agency like you say and the definition by the way so everyone knows you’re a SaaS company when you write a line of code and sell it to lots of people.

If you write a line of code for one person, you’re SaaS company. That’s my definition. And 

[00:41:19] Janna Bastow: it’s not just code. It’s actually worth pointing out that what you’re building as a SaaS company is a service, right? It’s software as a service. You’re providing a service and these customizations extend to your services.

So we’re talking custom terms of service as well. These are customizations just as much as your code are. So don’t fall into that trap of having a custom terms of service for every client as well that comes by because it’s very tempting and they’ll ask for it. 

[00:41:48] Dave Martin: And customer service, your CS, your customer success team can’t help all these people.

Yeah. With all these different random requirements and needs. There is a point where if you’ve gone too far down the line, unravelling it. Because you can’t afford as a, if you haven’t got enough capital to just go forwards in the, in what pick a direction and go for it. There is a point where you can’t undo it.

You’ve gotten too far down the line. For a product person, it’s important, I think, for product managers to recognize where, that some companies are no longer and incapable of being a product business. They’re not, you’re not a product company when you’re at that point. Yeah. And they really shouldn’t be hiring product managers.

They should just hire project managers and be honest about it. And 

[00:42:31] Janna Bastow: it’s tough for the product manager who realizes that they’re in a company that are called a product manager, but they’re no longer a product manager. Or they never were a product manager. I know this cause I’ve been there. I, the first job that I got when I moved to London, I was hired as a product manager and it took me about a week to get this Spidey sense and I was asking around and realize I’m actually a project manager, aren’t I?

I’m just doing implementations of our, let’s admit it crap platform for. Clients that are sales team is sold several months in advance. 

[00:43:03] Dave Martin: That’s yeah, that’s it. And you’ll know it if you’re in that place, it’s pretty obvious. So I think that it’s quite a, you’ve got to have gone down the line a long way to fix it. It’s about going back to where is our future business going to be? If you’re an established business of this size, it’s probably around 3 4 million ARR. And the target is always, for some reason, we like random numbers.

The target will always be 10. How do we get to 10 million? If you’re a 15 million business, the target would be, how do we get to 100? We seem to focus on factors of, with an extra zero. But, if you’re, the question is going to be, where’s the next, in this example, where’s the next 6 million come from?

And that’s the strategic challenge we’ve got. And the focus there is then making sure. As a product leader or product manager that you’re helping the business find And identify the core customer and the core problems you’re going to solve that’s going to get you that next six million And bring it back down and refocus it.

You’ll still be serving these guys over here are no interest long term and once the if you find get that right and start service servicing that new mark that It’s an existing market, but if you really focus on that portion that where you can deliver high value And start to get the PMF high for them and then slowly expand the PMF out.

Those side, those others, over time will just fall away naturally. They’ll organically. Run their course and you won’t really mind, I can think of companies where I’ve worked where we’ve had that exact challenge You know some decent money some good, couple of million pound contracts But we’ve just done the minimum to keep them alive because it made good sense there was a cash cow and it’s pretty much celebrated when they eventually ran their life and left because they were no longer part of the bigger 100, 200 million vision.

They were a sundry item by that point. So I think the that’s really the thing. It’s about identifying focusing on the future and where that growth is going to come from I’m recognizing that it can’t come from a broad market the amount of founders and CPOs I work with for some reason I’ve obsessed with the market must be really we must have as many, it must be really big. And it’s if you’re going to try and solve this person’s problem and this person’s problem, that means your marketing spend is going to have to be double.

Because you’re going to have one message for this guy and one message for this guy. So for every dollar you spend marketing to this guy, you’re not spending a penny to market to this guy. Your CS people have got to understand both. They’re complete and how they use the product is probably completely different You’re all your costs and operations get bigger. And the reality is one of those was probably worth one of those markets one of those niches and it might feel narrow and uncomfortable. But normally that narrow and comfortable niche is still worth hundreds of millions of potential dollars. More than enough to get you to the next target rather than oh, I must play in a trillion dollar market and When you’re only really aiming to make 0.

01 percent of that trillion dollar just go after the niche speak to people solve somebody’s problem brilliantly where they recognize you’re their solution and that you’re going to get much quicker sales 

[00:46:14] Janna Bastow: Yeah, absolutely. Thanks for that. And David had asked a question, which I think he mostly answered there, which is how can we agency eyes as in?

How can we get out of the whole agency thing? You had some good points there around making a deliberate step away from. The wrong types of business and towards that more narrow gap, that is going to be reflective of the type of business that you need. I also wrote a an article and I’ve done some talks on this as well called Escaping The Agency Trap.

So I can send that round. I’ll include that in the show notes but include some tips around pricing. Differently for agency site to sell work and product work while you’re doing that transition. And just, how to have those tough conversations. Sometimes your team doesn’t even know that they’re acting like an agency, and it just needs to be called out.

You need to call bullshit on the way that your team is working and say, hey. You’re going to tank this business if we keep running it this way. So what do we do? David is clarified. He said my company is trying to grow our SaaS business using funds generated from customer software extensions with hopes that we can generalize what we build.

For them, for everyone, but the team spends more time building those extensions than working on the core product, which honestly, this is the the core problem that I see with teams. I’ve worked for that company too. There’s always that hope that there’s always that chance that one little thing that you’re working on, you can sell to a client and then you’re going to be able to resell to everybody.

But the chance that you have magically outsourced your discovery work to your clients, and then you can just. Turn it into more money for other clients is actually really small. You have to do the discovery work yourself and, you need to figure out what your core thing is and not just take those orders from somebody else.

Cause chances are, if they’re paying the bill, they’re over here in the bell curve, right? They’re not right here unless you’ve done that discovery work and you know that they’re right there at which point do the work, right? Cause you know that they’re in your core market, but if they’re over here.

And they’re paying for it then you are taking yourself off track. And this over here is not going to help you get more people in the middle. So I think Dave’s product momentum or product fit, market fit bell curve model is a really good way of framing that.

[00:48:31] Dave Martin: I love all the advice and I’ve seen you do that talk.

I think I saw you do it at HubSpot’s offices. So well worth watching if anyone picks up the link, but on a tatty or some of the operators and decision makers technique that seems to really help is starting to get a money value cost value of a sprint. I’ve done this with a lot of teams. It seems roughly on average in the UK, at least a sprint costs 25 grand.

[00:49:02] Janna Bastow: A sprint cost 25 grand. Okay. Yeah, that checks out. We worked out something similar. A failed feature, a small feature, costs about 35 grand. So if you assume it’s a sprint in a bit, we worked it out. Yeah. So probably in the same order of magnitude. 

[00:49:18] Dave Martin: Every company can work out what, on average, what does a team cost them.

And then start putting money values on some of these conversations. Quite often some of this agency custom work. The problem is you’re operating like a SaaS business, but you’re doing the work like an agency. The business model and the funding for SaaS businesses, I’m going to spend a lot of money up front to build this thing.

We’ll sell it lots and lots of times. Yeah. A bit like making a movie. We’ll spend millions of dollars making the movie. Hasn’t made a penny until everybody starts watching it. Yeah. Same, it’s the same deal really, just on smaller scale and more, and we can do it incrementally. Thankfully they pay for the traders in that analogy.

But in the agency world, you’re paying for one thing, and you pay for that being delivered, but your accounting in the business, normally, in that example, isn’t counting for the cost to deliver that revenue in that one off mechanism. Especially when you’ve convinced yourself, oh, we’ll write it once and somehow generalize it for more, which never ever works, by the way.

There’s always going to be more cost to generalize it. I’m not saying it won’t be something you can generalize, but it’s not going to come free.

[00:50:25] Janna Bastow: Speaking from experience, that is so true. Or you just end up with lots of scope creep and it becomes, it was one thing and then it becomes this big thing. I’ve got some stories there.

[00:50:36] Dave Martin: Start putting a price on them. This thing we’re doing for this client, actually it’s taking us two sprints, it’s costing us 50 grand. How much was the contract how much was the value and the amount of times it’s negative the amount of times it’s when we sold it for 10 grand we didn’t realize it was costing us 50 grand to make it.

Yeah, that’s a real quick way to start getting rid of some of this nonsense. 

[00:50:57] Janna Bastow: Yeah, absolutely. So Claudia asked a question here. She said she loved the part about the importance of working together with marketing and sales, but what happens when the sales team is much more senior than the product team, and they have their own process with the product team that doesn’t have They have their own process, which the product team doesn’t have much luck affecting.

How can we adjust or convince them to work together? And this one’s a popular one because two people have given it a thumbs up here. 

[00:51:22] Dave Martin: Good question. When I coach product leaders, and that’s what I do all day. Typically talk about the fact that they need to spend 50 percent of their time focused on their team and 50 percent of the time focused with sales and CS.

If it’s a product leader, my, my spend, always spent personally more of my time with the other teams than I did my own team, ironically. That’s because my job was to agree to the wheels and make sure it would work They set all my job to set them up for success Is to ensure they’re well received and able to work with the rest of the business you know if you are a VP or product or you’re the most senior product person you need to be spending time with the most senior salesperson and I don’t care what the job title is.

You’re still the most senior product person It doesn’t matter if they see something can you or not you still should spend time with them and talk to them and try and cut through the hierarchy. Obviously, you can’t make the same decisions as they come and they don’t have the same power if they’re higher up the hierarchy. But you can you’ve got to be able to build a rapport with them and have build that empathy. So you can start to empathize with them, at the end of the day sales are focused on hitting their targets. They’re short term focused always unlike product who are often much more longer than we’re often thinking about what we’re building for next year. What we build now often the income will be next year not this year in some businesses different for where we’ve got, econ but you’re going to help that help empathize with their short term focus and help them recognize how they can win more if you can help them win more. They’re going to support you and support your ideas if you’re doing it just because it feels like the right thing to do for product because you’ve read it in a book even if it’s mine then don’t do it. You’ve got to do it because it’s the right thing for the support the business to find what find those winning things and if you’ve got a the other point I think is to recognize it doesn’t have that hierarchy whether it’s below up or sideways pretty much every conversation you’re in as a product manager is a negotiation literally every single time you’re really negotiating all day long.

That’s what you do because product if you think about building CPO. You’re the only C suite member who cannot deliver anything. They promise on their own you are anything your account before you literally can’t do it without another department. You can’t build anything you can’t release anything. You can’t sell anything.

It really doesn’t there’s nothing you can do none of the big things you can do without anyone else. Everyone else can, the CTO will still build something. You might get the wrong thing, but they’ll still build stuff. Marketing can still market something. Everybody can do their thing on their own.

You are the only one that can’t. So your job is to negotiate with them all the time because you’re pinching and borrowing their resources. You haven’t influenced them. If you have a reflect on your negotiation skills, and maybe spend some time working on that. Perhaps the best way to do that is to look up a guy called Chris Voss, who was the head of negotiation for the FBI.

And he’s written an amazing book called Never Split the Difference. He’s got a bunch of YouTube videos. They’re really easy to watch if you’re not a book reader. And start borrowing some of those tips and tactics that he has.

[00:54:39] Janna Bastow: That’s really good advice. Thank you for sharing that. Now, just conscious of time here. So we’re going to wrap up, but I want to say a huge thank you, Dave, for jumping in, sharing your insights today. And thank you everybody for jumping in with your your questions in your chat today.

Thank you everybody. We’re signing off here and we’ll see you in the new year’s.