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- đ±5-Bit Fridays: Why people buy your product, what pineapple pizza can teach us, reaccelerating growth in tough times, 5-anti lessons from Elon, & 20 AI tools for productivity
đ±5-Bit Fridays: Why people buy your product, what pineapple pizza can teach us, reaccelerating growth in tough times, 5-anti lessons from Elon, & 20 AI tools for productivity
Edition #19
đ Welcome to this weekâs edition of 5-Bit Fridays. Your weekly roundup of 5 snackableâand actionableâtakeaways from the best-in-tech to help us become better builders. Catch up on our other editions here, or our main deep dives here.
Happy Friday, friends đ»
If you missed this weekâs company analysis, we looked at How Bumble Grows: A masterclass in building a consumer product, with concrete lessons on finding a hook, reaching & acquiring customers, and making sure you keep them.
This was a super fun one to write. Not only does Bumble have an epic growth story, but we also unpack The Business of Dating and even take a peak into what the future of dating apps might look like with AI. Donât miss it. đ
Otherwise, letâs get right to it.
Hereâs what weâve got this week:
If you enjoy todayâs roundup and learn anything new, feel free to show your support by hitting the heart button, subscribing, and if any Bit in particular strikes you â maybe even giving it a share. Thank you! đ
Why people buy your product
This could well-be in the wheelhouse of one of the most important questions PMs, founders, and marketers need to know.
Having a user base and seeing it trend up and to the right is wonderful, but if itâs happening for underlying reasons you donât fully understandâŠthis is like having a golden goose on your farm that youâre never able to catch. If that analogy makes any sense?
Knowing the problem you solve for peopleâAKA your productâs Job To Be Doneâis an important part of this question. It helps you understand in what context people have a problem, what theyâre expecting, and what their motivation is to solve it.
But, itâs only part of the puzzle in understanding why people buy your product. This is because most problem statements, be those user stories or JTBD, tend to lean towards being very functional.
In a deliberately simple example: JTDB: When I am redecorating my room, I want to be able to get a nail into the wall, so I can hang a picture.
So, a company goes out, creates a hammer, and sells it to people pitching that itâs great for hanging shit around their house. Theyâve built the perfect product guided by their JTDB and people are buying it. No issues. But, what is it about hanging pictures that really matters to someone?
When we moved into our apartment and I got myself a mini Milwaukee set, I got all the functional value in the world. But, I also felt empowered, like I didnât need a TaskRabbit, and the world of DIY was mine for the taking. I touted it, proudly lent it out when friends were tasked with hanging stuff, and felt like I was part of a community of people who fixed their own things. I even (regrettably) tried my hand at plumbing. đ·
Much more lies beneath the surface of why people choose to be paid subscribers to your product, and why they remain loyal.
Luckily, (Growth @Substack, and author of ) has written an excellent piece on this as part of a larger series on CLV. He focuses on what these less obvious reasons are, and how figuring out what yours are can help you with:
Identifying your core audience â those most likely to buy your product;
Focusing on how to add new customers that are like your core audience (and better budget any efforts aimed at chasing more peripheral audiences);
Concentrating on how to deliver more value to your core audience;
Deciding which extra benefits to give paid subscribers (or even higher-priced, super-fan subscription tiers).
So, what are the reasons?
Reid points to this chart of the âelements of valueâ from an HBR article.
This pyramid stems from Maslowâs hierarchy of needs:
Maslow argued that human actions arise from an innate desire to fulfill needs ranging from the very basic (security, warmth, food, rest) to the complex (self-esteem, altruism).
Similarly, the elements of value pyramid [has] the most powerful forms of value at the top. To deliver on those higher-order elements, a company must provide at least some functional elements required by a particular product category. But many combinations of elements exist in successful products and services today.
As Reid says, âProviding some âfunctionalâ value is table stakes, but getting to higher-order value can unlock superb retention, a higher willingness to pay, and revenue growth.â And reflecting on his experience working on Crunchyroll (an Anime streaming platform), he crystallizes this perfectly:
For Crunchyroll, we always lagged behind larger streaming services on the functional stuff: discovery and personalization were inferior, the site and apps were a bit dated, and key parts of the product (e.g., video player, subscribe flows and payments, search and navigation) were passable at best. But we did quite well on some of the higher-order elements of value (e.g., badge value, nostalgia, affiliation/belonging, self-actualization).
Rather than hopelessly competing on functional aspects, we instead focused on strengthening our bond with fans through various efforts:
By focusing on deepening our bond with fans (vs. competing on functional aspects), we were able to grow Crunchyroll far beyond anything we imagined.
From his experience at Substack, he sees this all the time with writers as they naturally progress up the pyramid. Take (my personal favorite publication). He started out with content that informs (function) and shifted to higher-order values like belonging to a community and self-actualization. Iâm a paid subscriber, and would be even if none of his content was paywalled.
If you donât know what higher order values your product instills, the next step is to run an audience survey, speak to paying customers (and those users on the fence), and use your findings to think of some new ideas on how to deliver more value to your audience.
For more like this, checkout Growth Croissant for Reidâs experience-driven guidebook to growing consumer subscription businesses.
And rolling with this elements of value framework, one way to create an emotional connection is with a crazy idea that does something adventurous.
What pineapple pizza can teach us about building product
According to of :
The #1 reason why products fail is they lack traction. They donât strike a chord with anyone. They make no lasting impression.
If more products were more like pineapple pizza, more would have traction. Pineapple pizza is wild, controversial yet loved by a vocal niche.
The first people who put pineapple on pizza were pretty adventurous.
When I think of Pineapple, I think about Hawaii. Not Naples, Chicago, or New York â the pizza towns. When I think of Pineapple, I think of a sweet and sour tropical fruit, not mozzarella, tomato sauce or mushrooms â the pizza staples.
If you ask 100 people on the street if they like pineapple on pizza, youâll get an even amount of yes and no. Some people love it, some people hate it.
â Greg Isenberg, How to Build Adventurous Products People Love,
I really like this concept.đ
Itâs super simple, very sticky, and drives home an important takeaway: doing something different that stands out is better than just making the same-ole better. People are so over the same things being thrown at them again and again wrapped in different branding. As Greg probes, âCan you create a product that seems too crazy to work? Whatâs a product that blends two topics that go together in a way we havenât seen before? Can these products achieve the goal your community is trying to accomplish?â
And itâs not just a powerful way to think about the product youâre building, but also how to bring it to the world. How can your design, marketing and content strategy be bolder, more unique, and something people will talk about? More pineapple, less Margherita.
Different is better than better.
Reaccelerate: Finding new engines of growth in your business
Des Traynon, co-founder and Chief Strategy Officer at Intercom, recently gave a talk on how businesses should think about weathering the current economic climate, and also, how operators can actually find growth in it.
The high-level advice: find the parts of your business that are strong and invest in them. In other words, put more wood behind fewer arrows.
To get more tactical, here are my favorite excerpts from his talk: đ ïž
First, find out whatâs working
Your first job in doing this is to work out what is actually working. What is the strong part of your business? Whatâs working well? The reason you have to do this is that we all get a bit experimental during good times. We try shit that probably wonât work, and thatâs fine. We build stuff and see who comes to buy it. We donât necessarily think about the LTV/CAC, the CAC payback, or any of those measures. We just, generally speaking, widen the aperture and say, âLetâs try some stuff.â
And then, during bad times, we have to go and do the opposite. It is much more back to basics. Whatâs actually going to work? Where are the sure shots? How do we defend the existing business before we try and do anything else?
Youâve likely heard some garden variety of âWhen you stop growing you start dyingâ, from the writer William S. Burroughs. Applying that to what Des is saying; if you add shit to a good business, you get a shit business. This is the asymmetry of mediocrity. So, you need to go find the performers, double down on them, and spend less time (or cut out) the things that are not growing and adding complexity. Which Des dishes out some advice on:
This means looking vertical by vertical, with big customers or small customers: where do they come from? What product lines do they use? Do they sign up through your sales team or online? What features do they use? Which team in the company signs up? You have to slice and dice your business to find the healthy parts. And asking all these questions will help you see, âWhere are the parts of our business that we can reliably and sustainably invest in?â
Your best customers are the ones that you can sustainably acquire, that use your product deeply, not thinly, and that get differentiated value, stuff they canât get anywhere else. If one of these three things is not true, you struggle. If you canât get them, itâs hard to grow. If they donât use your product a lot, itâs hard to grow. If theyâre getting the same value they get anywhere else, youâre going to turn into a commodity product. And thatâs the challenge you have here.
Itâs about making your product perfect for your bullseye customer. And as Des says, once you have it:
DO
Ensure every function blank sheets their roadmaps and only takes inputs from target customers.
Adapt your entire customer funnel (sales, services, support, etc.) to ensure a world-class experience for them.
Ensure all your metrics/dashboards track the success of this type of customer.
Kill all activities that donât support the strategy, even and especially the âharmlessâ ones.
DONâT
Post-rationalise your roadmaps, e.g. âletâs finish off this project because itâll probably help them tooâ.
Let numerous exceptions and edge cases keep the old initiatives alive.
Celebrate successes that have nothing to do with your new refined plan.
Continue decisions/meetings/org charts that were predicated on the old plan.
What a goldmine of insight. đ
Now you can get to growing your business in one of four ways:
You might be thinkingâŠbut wonât doing these things just risk circling back to what we just aimed to reduce?
Yup.
They are hard, they are expensive, and they will necessarily involve adding complexity. Your job as founders is to make sure that the complexity is really profitable, not just another unhealthy lump of revenue. So, to put it another way, donât do this until you actually have a healthy base. Otherwise, youâre just piling shit on top of more shit, and it wonât work out.
He leaves us with four takeaways: đ
Friction is exponential, not linear. Adding more choices makes your business more complex.
Being everything for somebody, generally speaking, is better than being something for everybody.
You want as much cash as possible from as little code as possible. You donât want a massive product if you can avoid it. Itâs expensive to build, maintain, support.
Be aware of the asymmetry of mediocrity. A lot of you, when youâre tempted to grow your business, will be tempted to add things that arenât great to it.
5 lessons from Elon of what NOT to do as a PM
creates some of my favorite product/growth content on LinkedIn.
I thoroughly enjoyed a recent post of his on how Elon has given us PMs a nice reminder on how not to do our job.đ
1. Prioritize by user likes
Elon tweeted for feature suggestions and said he would prioritize by most likes and least work. This is also a common product strategy: build what the users ask for.
The problem is that users donât know whatâs best for the business. In the Venn diagram of business and user value, the best product features sit at the intersection.
Users donât know what those features are. You have to invent on their behalf. Start with a deep understanding of their needs, layer on whatâs only recently possible, then ship.
2. Pursue exec pet projects
The Twitter blue premium subscription has 300K payers. Thatâs just $29M yearly revenue in a multi-billion dollar business. Itâs meaningless.
And it would have been completely predictable if they analytically sized the project and did user testing. But instead of doing rigorous sizing or user testing to validate, Elon just went with his pet project.
This is a common tendency of junior PMs as well: please the VP. Itâs a mistake. The extra cycles to do dig into features with data & user research are worth the squeeze.
3. Set aspirational dates to ship
Elon chronically sets dates that the team misses by weeks or months (or years in the case of Tesla). For instance, the team rushed to ship Twitter Blue to hit his deadline.
But the rollout was a disaster, and they had to roll it back. People were impersonating companies and swinging stock prices. The final product didnât come out âtill months later.
Setting crazy dates stresses teams out and results in botched launches. Realistic timelines allow teams to ship quality features and maintain their sanity.
4. Ignore the revenue driver
The NYT reported Twitter advertising revenue is down from $5B/year to $3B. Thatâs an enormous 40% dip.
Elon ignored the core business of advertising. He fired the sales staff that maintained and grew relationships. Then, he offended many advertisers - prompting them to leave the platform.
That was exactly the wrong strategy. Great product work would have improved and nurtured the ad business first. A 1% improvement on 5 billion could have generated $50M - more than Twitter Blue.
5. Launch without experiments
Elon changed the default feed people look at from the algorithmic âfor youâ feed to the âfollowingâ feed. But the âfollowingâ feed is full of retweets and doesnât encourage discovery of new authors.
It could be a worse experience. But, because Elon didnât ship the change as an experiment, heâll never know.
Doing things blindly is worse than doing nothing at all. Shipping major changes that could easily get to stat sig in a few days to everyone is just lazy product work. Prefer the scientific method.
For more gems like this, give him a follow, or checkout his newsletter, .
And a short one to send you into the weekend.
20 AI tools that will level up your productivity
Zain Kahn, The AI Guy, recently put together a neat list of AI tools on LinkedIn. So, I thought Iâd share it.
After poking around, Promptpal is one of my favorites. As AI gets better and better, more of what we do is going to boil down to knowing how to ask the right questions. This could become a great repo for exactly that.
If youâre interested in staying in the loop with the rapid progress of AI and how we can use it best â like new tools, tutorials, and news, checkout Zainâs newsletter, Superhuman, for daily updates. âĄ
And thatâs it for this week! As always, thank you so much for reading and being part of How They Grow. If youâre new, consider subscribing and joining thousands of other PMs, founders, marketers, and operators.
Have a wonderful weekend, and Iâll see you next time.â Jaryd âïž
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