June 18, 2020 –
Over the years I’ve picked up both successes and battle scars on the topic of enterprise product strategy. As a former product leader at Docker, VMware, and AWS I built and managed multiple enterprise products and teams, and now as a venture investor at Mayfield I assist and advise startups on product and go-to-market strategy. Recently I had the chance to share some of these experiences in a presentation and Q&A as a part of the Angular Ventures Insights webinar series. Here’s the full video for “Five Things I’ve Learned About Enterprise Product Strategy”, and below my key takeaways and slides.
1. Prioritization: The Power of Focus
Many founders and startup product leaders like to talk about their grand product vision, and then all the features they want to build to accomplish that vision. The truth is that most startups die of indigestion, not starvation. As a startup you have a limited set of resources you can choose to allocate, so there is an incredible power to being focused. Common failure mode: Early stage startup simultaneously building both SaaS and on-prem versions, despite the considerable product, ops, sales, and customer success team build-out + execution differences which end up overtaxing the startup’s resources. On the product side, the key as a startup leader is to prioritize building what is most important:
- A “critical path” value proposition (defined as a painkiller for the user that is so fundamentally important, the buyer can’t afford NOT to pay for it).
- Table stakes enterprise features (e.g. single-sign on, access control, audit compliance) needed to get the sale across the table–depending on size of customer.
- Domain specific features that drive real enterprise value for your audience (I typically bucket these as collaboration, piece of mind, and performance).
2. Empathy: Design for YOUR Audience
Empathy is the ability to put yourself in someone’s shoes, and feel what they feel–their pain, their hopes and dreams, their desires–and is fundamentally one of the most important traits in product. As I’ve written about before, empathy is important for an enterprise product leader to understand not only your own cross-functional teams (engineering, design, sales, marketing, etc.), but absolutely critical for building the right type of product for your specific audience. Take the analogy of space shuttles and bicycles:
- A space shuttle cockpit has a ton of buttons, and is highly customizable. But it is also high maintenance and requires a custom skillset with lots of training. By design, space shuttles have a high price tag and thus a very focused customer base.
- A bicycle “cockpit” has a very intentionally limited design and is highly accessible to most users. Bikes are low maintenance and easy to fix, have comparatively lower price tag, and thus have a much larger customer base.
When you think of your target user and buyer, are you looking to build a space shuttle or a bicycle? Sometimes adding more things doesn’t make it “better.” This doesn’t mean you should always be making bicycles. But take the time to empathize with your target audience, and whether they can use or afford a space shuttle in the first place.
3. GTM: If You Build It…They Won’t Come
There’s a belief in the world of tech that if you just build an amazing product, customers will come streaming in, and everything will be awesome–“If you build it, they will come.” The reality is that 99% of the time, distribution plays a critical role in ensuring the success of a company. Being a successful product leader means, paradoxically, going beyond product to deeply understand and leverage the value of go-to-market:
- Marketing: Understand the “value of value communication”–not just empathy for your user/buyer, but also how to effectively communicate the value proposition of the product, in the channels that the audience is most attuned.
- Sales: Understand the process by which your product is sold (self-serve, inside, direct), and empathize with your sales team on the frontline to see what is working within the product and value proposition, and what needs to be modified.
- Integrate Product with GTM: In a recent Mayfield fireside chat, Hashicorp CEO Dave McJannet encouraged startup founders to “deeply consider GTM as a part of the product building process.” This is usually assessed for bottoms-up, product-led GTM adoption (e.g. Hashicorp’s commercial open-source, Slack’s freemium SaaS), but with the right feature sets can also be done with top-down adoption as well.
4. Bottoms Up: The Hook and the Upsell
Bottoms-up adoption appears to many to be a dark art. Having managed and worked with startups that build bottoms-up products, I’ve written in the past about optimizing product strategy and teams for product-led GTM. I believe there’s a method to the madness, and I’ve since codified this method as The Hook and the Upsell.
The Hook is about first focusing on growing community adoption by:
- Solving a simple burning pain point (as opposed to a complex technical problem)
- With a lightweight method of insertion (e.g. a desktop tool or SaaS, usually free)
- For a large surface area of users (to increase community, virality, and sharing)
The Upsell is, after building a significant community base, monetizing by:
- Influencing the buyer to come you (via product features and marketing)
- By understanding their chief concerns (which are usually very different from users)
- And upselling a paid version of the community product (while minimizing friction)
This is a complex subject with multiple nuances; check out the video (~15:30) for more details and examples, and expect a future blog post which goes into more depth.
5. Top Down: Pierce The Noise
Top-down adoption is about understanding the priorities of C-level and exec buyers and differentiating yourself from the legions of other vendors competing for their attention. While rolodex relationships and GTM play a critical role, there are things you can do on the product side to improve your chances of piercing the noise:
- Get on the Exec Radar: Build a painkiller in the “Top 2” list of C-level priorities, and integrate with the existing product and talent ecosystem leveraged by the customer.
- Take Customers on a Journey: Build your product in a way that allows customers to gain initial value without making extensive changes on their side; then once they take the first step, show the long-term vision of how you will partner with them to transform in the future.
- Seeing is Believing: Build guided demos and hosted trials feature sets as a way of arming your sales team and helping customers themselves to quickly see the value of your product, reducing the time it takes to get a sale across the finish line.
That summarizes “Five Things I’ve Learned About Enterprise Product Strategy.” Expect some deep dives in the future on some of these topics, and you can find the slides below. I’m always happy to talk about startups and enterprise product strategy, so appreciate any questions or comments.