7 things I learned talking to product leads at Box, Elastic, and Zendesk
Scaling enterprise product for the enterprise customer — what are the realities and challenges no one wants to talk about? At our 1 to 100 conference, I asked Gaurav, Chris, and Sam to be brutally honest about their experiences with various stages of growth. What were the big scale fails? How did the role of product evolve? How did they navigate product market fit? I invited them to be a bit contrarian and defy conventional product wisdom. And they did.
Below are my top quotable moments. But don’t take it from me. Full video of the panel is at the bottom of the article or you can listen to the audio via our podcast on iTunes.
1. Product market fit isn’t a point in time
GAURAV GUPTA, VP of Products, Elastic: I think obviously the hardest part of a startup is zero to 10 million in revenue. Getting product market fit is incredibly hard. This is why almost every startup fails, right? I think the next hardest part is going from 10 to 40 million in revenue. That’s because you’re at this juncture where you do have product market fit, but your sales folks and your working folks are saying: “Where are we going to go next?”
You need to make a decision. Are you going to go after different user? Are you going to be a platform and then build solutions on top of it?
You get into this jumble of this huge matrix of features and things you could do as a company. It’s at that point you’re making this critical decisions that actually impact whether you could be a billion dollar revenue company in the future.
2. Product FOCUS can be a bad thing
GAURAV (Elastic): “When I was a more junior guy at Splunk, I remember looking up at management saying, “Gosh, can we just focus? It feels like we’re doing a zillion things.” Now [at Elastic], I have my team telling me, “Why can’t we just focus on one thing. It seems like we’re trying to do everything.”
“One of the things I’ve learned is that actually focus can be a bad thing because at [10–40M in revenue] stage, you don’t actually know what’s going to hit.”
…for Splunk, it was this platform play that we could be a data platform for many things. It was only because we tried many different use cases and user types that we figured that out.”
3. Great product managers know how manage a founder :-)
CHRIS YEH, SVP of Product, Box: “Early on in our history we saw that Dropbox had a sync product. What we said was, “We should probably do one of those” and [Aaron Levie, CEO] is like, “That’s piece of cake. We just get a contractor to start working on it. We should be good.”
Four years of disaster later, we built our own sync product finally and got it into market. I cannot tell you how much we regret that decision early on. It was because we were moving really quickly…
The challenge of focus and then handling all of the inbound requirements that customers have, it’s just overwhelming for product teams when they’re really, really young, and it doesn’t help to have a founder who’s constantly moving back and forth.
Your product managers have to be great at managing a founder.
4. Zendesk found competitive advantage hiring outside the valley
SAM BOONIN, VP Product Strategy, Zendesk: Actually, we’ve had a relatively easy job in product of hiring. It’s a pretty open secret that something like 60% of our product development is outside of San Francisco. We have development centers in Dublin, in Melbourne, in Copenhagen and France and Singapore.
One way to hire really great talent is to go where Google and Facebook don’t exist or don’t exist at the same scale.
The second thing I think that we’ve done a good job of is creating a culture of product at Zendesk. We interview really well, we have some of our old time product managers and direction level folks who are the best interviewers I’ve ever seen in my career. Thank God they didn’t interview me when I came on board because I wouldn’t got the job.
5. Resist the leverage of big customers
CHRIS (Box): The problem with big customers is leverage. They have leverage on you because they might be a multi-million dollar customer versus a small business which might be paying you a few thousand dollars. The problem with leverage is that it warps your road map. You could look at features in Box, literally, and see that was Procter and Gamble, that was GE, that was IBM.
You have to resist making those decisions.
I think that’s the hardest thing about big customers. They try to exercise that leverage and then you’re walking a line because your product manager is like, “We can’t be jerked around like this. We’ve got to get focused, right?”
6. Successfully serving both SMB and big enterprise customers is tricky
GAURAV (Elastic): At Splunk and even now at Elastic where we have that conversation that there’s an opportunity to build a funnel at the low end, call it the SMB market or under 2,000 employees, and it’s extremely tough because the first thing that everybody says is: “Well, all we need to do is change the pricing and packaging and remove a few features and it’s an SMB product.” That never works.
First of all, it’s hard to remove those few features.. which ones do you remove? You forget that you have to build a new product for new customers. If it needs to be made to be easier to use, cheaper, easier to get started with… it’s probably a different audience.
Then the conflict that comes in when you’re fundamentally trading resources that would be building big features for the enterprise that drives a lot more revenue in the near term.
7. The “voice of the customer” is not corny
SAM (Zendesk): I think for my perspective, customer empathy is a capability that every product manager can learn and every product manager needs to work on. It’s very easy to sort of intellectualize the situation and make the right trade offs…I think as corny and stupid as it sounds, being the voice of the customer and really understanding the customer and her journey throughout the entire process is something I think can help guide the right type of decisions.
GAURAV (Elastic): I agree. One of the first things I tell product managers that come under my team is how important it is that they use the product. It’s hard to do in some of the areas, specifically enterprise software, but I force it on people. The reason that’s so important is that there’s only so much you can get by talking to customers. You need to go inside [the customer’s mind]. I ask product managers to do customer support for a couple of weeks.
You almost have to live the problem. What that allows them to do is actually filter through customer feedback and maybe see the big picture.
If they get ten feature requests, they might be able to then process those 10 feature requests and say, “You know what? Actually, all these customers are asking for the same thing in a different way. What we need to build is this application framework that allows them to build on top of us.”
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