Simone Cicero

Hello everybody, welcome back to the Boundaryless Conversations Podcast. On this podcast we meet with pioneers, thinkers and doers and we talk about the future of business models, organizations, markets and society in this rapidly changing world. Today I’m alone, I’m hosting this episode, but still I’m so excited to have a true legend of product thinking, a discipline that as loyal listeners will know, has become key tenet of how we think about organizations and structured businesses and so on. So welcome to the Banders Conversation podcast to Teresa Torres.

 

Teresa 

Thanks for having me. I’m excited to be here.

 

Simone Cicero

Thank you so much, Teresa. So, you know, Teresa is a widely known authority, author, speaker, coach, who promotes structured and sustainable approaches to what she calls, and many others have learned to call continuous discovery. Teresa, your work has been centered around the idea that teams need to infuse their work with customer input daily and you coached hundreds of teams, hundreds I would say, of teams at companies of all sides, early stage startups, global enterprises in a variety of industrial contexts and I think you changed the way countless teams work daily through your product or academy, your books, your continuous discovery habits book and your writing on the blog and so on. 

 

So first I mean, there is a lot of stuff that people can read from you on the internet or listen. So I would like to focus with you today on the implications that your work in general, continuous discovery, has in relationship to organizational structure, team structures, product design, product portfolios. So especially interested in exploring as things scale or in general, as things evolve, how these habits or practices infuse the organizational structure.

 

So as a first maybe opening question, you can help us maybe frame a few key aspects that sustaining these continuous discovery in an organization entails. So maybe we can start from the small, like a small organization, and maybe you can go, you know, towards bigger organizations and how things scale, maybe a good lens to look into this.

 

Teresa 

Yeah, I’ll say, I think the heart of this is how do you structure your organization so that each cross-functional product team can be an empowered product team? And I think it doesn’t change that much from small to large. Obviously, the complexity goes up from small to large, but I think the underlying principle is exactly the same. So one of the things that I look at, so an empowered product team is starting with an outcome.

 

Ideally, we want one outcome for each team. Each team should have its own outcome, so it’s not seven teams with the same outcome. It’s not one team with three outcomes. I think in an ideal world, if you have five teams, you have five outcomes. If you have one team, you have one outcome. So then I think that a big part of getting the team structure right is really understanding what are the right outcomes. And one of the things that I teach is to start with your…

 

Let’s look at this at the product level, and then we can kind of expand up to the product portfolio level. But at the product level, every product has a business model. Even if it’s a free product, there’s still a model that where there’s a model that’s where it’s supporting value for the business in some way or another. So most products, we sell them, they have a revenue model. We can start with that revenue model and generate what I call a revenue model formula.

 

So what are the variables that contribute to you growing revenue? For each of those variables, we can look at what are the inputs into that. This is helping us sort of enumerate our business outcomes. And then if this is for a single product, we can look at what are the behaviors in the product that in turn drive those outcomes. And then depending on how many teams we have, we can break those down even further. So let me give a real world example of this. If we look at a company like Netflix, their revenue model is a subscription model. So they’re looking at a very simple formula. It would be the number of subscribers times how much money they spend each month times how long they stick around. Right? So that’s customer acquisition times average monthly spend times retention, which really is giving us lifetime value. For each of those I have inputs. What drives customer acquisition? Well the number of visitors to our website times the conversion rate. What drives average monthly spend? Probably something like engagement with premium features. So now as we look at engagement with the premium features, now we’re getting into a behavior that’s occurring within the product. That’s something a product team can directly influence. Even on the visitor’s side, product teams influence visitors. We think of that as a marketing metric, but lots of product teams influence search engine optimization or SEO traffic.

 

Right, so we can start to look for what are the behaviors in the product that drive those business outcomes. Those are gonna be our product outcomes. If we have three product teams, we might have three outcomes. So we might say one team is gonna focus on increasing traffic through things like SEO, one team is gonna focus on increasing engagement with premium features to drive upsells, and another team might focus on increasing viewing engagement or increasing satisfaction to drive retention.

 

If we have three teams, we’re done. Each team has their own outcome. They’re empowered. They can each run a continuous discovery process. They have to coordinate their boundaries, but they are all empowered to kind of go after their outcomes. Now, as the company grows, if I have 40 teams, the process is exactly the same, but I have to keep deconstructing those outcomes until I get to a point where each team has their own outcome.

 

And there’s a few different ways we can do this. If I’m Netflix and I’m a global company, I might break up my teams by region. So I might say one team is gonna focus on upsells in North America, another team is gonna focus on upsells in Europe, et cetera, or I might break down the outcomes by steps in the customer journey. So one team might focus on reducing the time it takes to find something to watch, another team might focus on creating a great viewing experience.

 

Both of those drive overall engagement, right? So I can keep deconstructing these outcomes based on the number of teams I have, with my goal being I want every team in my company to have their own outcome and to be empowered.

 

Simone Cicero

It’s really interesting because we have been discussing a lot about how to build product-centric organizations. Where do you typically put the P&L? And I find this conversation around P&L very related to the question you raise around value and being able to understand the value that you generate as a team. You said it can be money, but it can also be revenues, but it can also be some metric that influences the revenues later on, I would say, in the cascading of things. 

 

So what’s your take, or based on your experience, because there is a lot of talking now, and we are big proponents at Boundaryless of trying to infuse more P&L into the team structures so that they really become accountable to a metric that is basically finding their own customers and building their own.

 

product, value proposition. So what is the role in your experience of P&L and how you prevent essentially stratification of too many layers of value that at the end of the day is very hard to understand if you’re really building customer value and things maybe end up optimizing for the wrong metric.

 

Teresa 

I think the mistake people make is they start at the product outcomes level. So they just look for what are behaviors in the product that creates value for the customer and they start there. And that we do want to look at behaviors that create value for the customer, but not all behaviors that create value for the customer also create value for the business. And that’s where we run into trouble. So I like to start with business outcomes. So we’re guaranteeing that what we’re working on is going to create value for the business And then we can derive the behaviors in the product that create value for the customer and drive those business outcomes. 

 

And so I don’t think every product team needs to have P&L responsibility. We have a lot of junior teams that may not be ready for that. We might have 20 teams that work on the same product. Sharing a P&L across 20 teams is really messy, but I do think every product team needs to know how the product outcome they’re driving in turn drives a business outcome. And then as long as they have that gap, then the collection of teams is gonna have P&L responsibility because they’re all gonna be contributing to a business outcome.

 

Simone Cicero 

Mm-hmm. And to continue on this line, so the question for me that comes right after is, you know, how do you control or in general strategize around different business outcomes and especially as you know the portfolio element grows. I’m very interested in understanding about your experience in terms of also building, for example, taxonomies or ways for teams to understand in a system of products what piece are they building and how they can maintain their autonomy, but inside a bigger picture of, for example, I don’t know, let me make an example that is more tangible. If you have a product that maybe has, I don’t know, like HubSpot, for example, with five hubs, one enabling layer, and then you have partners and modules and then database compatibility and so on. So how do you manage to maintain coherence in our portfolio products and at the same time give each team its own accountability, business outcome mapping and have it coordinated?

 

Teresa 

Yeah, so let’s talk about HubSpot as an example. So I’m assuming with HubSpot, I can buy any of those products individually, I can buy them together and they interoperate and there’s some advantage to using more than one of them. Is that correct? Okay.

 

Simone Cicero 

Yes, from my understanding I think you can buy any of the hubs separately, yes.

 

Teresa 

Okay, so if I’m a team working on one hub, my business outcomes are gonna be around the revenue model for that hub. But the thing is, that’s not the whole picture because I’m sure HubSpot has models around if you buy one hub, how likely are you to buy a second hub or a third hub? I’m sure some hubs are better at driving that second or third sale than other hubs, right? So our revenue model gets a little bit more complicated.

 

We can start with the simple version, which is number of customers, times how much they spend for our hub, times how much they stick around, right? They’re a subscription business, so it’s a lot like that Netflix example. But there’s another layer to it, which is what percentage of our customers add a second hub. Right? So it’s not just the revenue that our product generates, it’s the revenue that our product generates by being in this more complex ecosystem. But I think the underlying mechanics are the same.

 

We’re still starting with a revenue model formula. We’re looking, we have some complexity in our formula because we’re calculating the revenue our product brings in, but we’re also calculating the revenue that another product brings in because we acquired the customer, right? But there’s ways to model that. So that’s the first thing, like from an outcome standpoint, I think we can model that easily in our outcomes. I think there’s another layer to this, which is…

 

As I’m building, I can’t build in isolation of the broader platform. So I have constraints as I’m driving my outcomes. I don’t wanna drive my product outcome in a way that negatively impacts another product. I don’t wanna satisfy an opportunity, a customer need in a way that makes it harder for an adjacent product to satisfy the same customer need. So when we’re looking at the portfolio level and platforms and multiple products in a platform, now we just have a more complex environment and we gotta take into account the constraints. And this is where I think it’s critical that the leaders are communicating a strong vision and that vision communicates the constraints within what we’re working in. And that leadership team is doing a really good job of communicating – Here’s how each of the hubs are instantiating that vision. And here’s how that’s creating constraints for each of our teams. So just because we’re empowered doesn’t mean we get to do whatever we want, right? We’re empowered to reach our outcome within the constraints of the vision and the strategy and the portfolio of products.

 

Simone Cicero 

And with constraints you mean for example like a product taxonomy, something like that.

 

Teresa 

Give me an example of what you mean by a product taxonomy.

 

Simone Cicero

Like, you know, for example, as we said for HubSpot, there is this idea of hubs, right? So the idea that you kind of describe the domain of products you’re building, you start to say, you know, this is a platform, this is a product, this is a component, that’s an infrastructure, these are the vertical hubs.

 

Teresa 

Yeah, okay. Yeah, so constraints could be the language we use to describe our products. It could be the design systems we’re putting in place to make sure that the user interface is coherent across the products. It could be APIs where we’re all agreeing how we’re going to integrate across the hubs. It could be pricing constraints. We’re all going to follow a similar pricing strategy, right? It’s somebody is thinking across the portfolio to create coherency across the portfolio and that could come in a lot of different flavors. Depending on how the company has defined, this is what’s gonna be uniform across our platform, this is what we’re gonna allow each hub to define themselves.

 

Simone Cicero 

Yeah, that’s fantastic, you know, because it resonates a lot with this idea of enabling constraints that our listeners can dive in by listening, for example, to the podcast episode we had with Alicia Juarrero and this idea that, you know, innovation can be generated only if you really set these constraints in complex systems, otherwise you have, you know, chaotic behaviors, right? So I think that’s very, very important and interesting and I want to underline for our listeners that you spoke about constraints.

 

in a way that is very wide. And also, for example, I was surprised to, surprised, I mean, I was inspired to hear you talk about constraints in the form of APIs we need to use or pricing models. So not just sitting down on the board and say, you’re building this, you’re building that, but also, this is how you price the stuff. This is the kind of basic APIs, I don’t know, identity or something like that you need to call. So I think that’s really, really interesting.

 

So one question for you that you do a lot of, besides the theory that you do, you do a lot of practice, right? You really work with teams at scale. So my question for you is, how would you, what are the lessons learned in terms of letting these teams work together without relying too much, of course, leadership has a role, but you cannot have people going around and policing everything that happens in the system. So.

 

What are the artifacts that, for example, in a complex organization with three products and 20 teams, how can you ensure that these teams use the same language, communicate in the proper way, or are always sure of what the others are doing? For example, we use a lot of visual portfolio techniques like mapping and so on. What are your suggestions in terms of, and playbooks or something like that, what are your suggestions in terms of how you coordinate across teams?

 

Teresa

I think there’s three key elements to this. I think the first is your leadership has to set the strategic context. All of the teams have to understand what the company vision is, what the portfolio level vision is, what each product level vision is, and the constraints that come with that. So leadership has to say, our products are all gonna use the same language, our products, we’re gonna use a design system to keep the interface coherent. 

 

Like at the leadership level, there has to be support and accountability for what parts have to be the same, what parts get to be different. And that’s, it sounds trivial, but it really is missing at a lot of organizations. A lot of teams move to empowered teams and they get chaos. And because they think that empowered teams means teams get to do whatever they want. That does not, when we let teams do whatever they want, that does not lead to good products, right? And that’s not the intent of empowered teams.

 

We’re empowering our teams to reach their outcomes within the constraints of the strategic context. So they can only do that if they have that strategic context. So that’s the first thing. I think the second thing is we have to teach our teams how to be empowered teams. So we have to teach them how to do continuous discovery well, how to test their ideas, how to interview customers, and how to iteratively improve their products within the constraints they’re given.

 

And then I think the third thing we need to do is we need to create rituals so that those teams are sharing across each other. Because whenever we’ve empowered teams, we have to navigate and negotiate the boundaries between the teams. And so those rituals could be as simple as we get together every two weeks and we just share out what we’re doing. It doesn’t have to be a meeting. It could be we all have Slack channels or blogs that we’re posting to continuously and we’re reading each other’s stuff so that everybody’s aware of what other people are working on and what’s adjacent and what might be impacting other things. I know years ago,Scott Berkun wrote this book, My Year Living Without Pants, and it was about his year at Automatic. Automatic is a completely remote company, and the way that they make it work is they use WordPress. Every team has a blog where they post updates about what they’re working on and what they’re doing and what they’re learning, and every team follows every other team’s blogs. So they don’t have to have meetings about this.

 

Most companies are not that good at remote work and they have meetings. So we can do it that way too, right? But the key is there has to be rituals in place for teams to be aware of what is everybody else doing so that they’re aware of who their adjacent teams are and they’re managing those boundaries.

 

Simone Cicero

And in terms of communicating the vision, what are artifacts like, you know, in terms of information architecture, or what kind of tools can a leadership team use to ensure that they communicate the product vision and the taxonomies, the structures and so on? Is it just documents or what is in your experience that can help convey, let’s say, this message to the teams?

 

Teresa 

I mean, we’ve seen this happen in a lot of shapes and forms. So I’ll highlight some famous examples of this. From a vision standpoint, the original Dropbox video where it was not about the product, it was about the benefits of the product, going anywhere, having access to your files. That’s a great vision video. Very high level, but great vision video. It tells everybody this is the end goal we’re trying to get to. 

 

In the design world, we see most bigger companies now have design patterns, design libraries, design systems. We’re seeing Figma really invest in supporting this way of working. In the engineering world, we’re seeing the growth of microservices and APIs and teams interacting with each other’s stuff through APIs. At the more individual product level, it could be ahead of product defining a common language, like you said, a common taxonomy across the products. 

 

Here’s the thing, I don’t think there’s like one set of artifacts that’s the set to use. I think depending on the maturity of the company, the size of the company, the maturity of the leadership, how much the leadership cares about coherency, how fast the company is growing, if you’re a high growth company, you probably don’t have time to put this stuff in place before everything is breaking, but you’re trying to.

 

So I think the key is that I like to look at, rather than prescribing things, I like to look at what’s the underlying principles that we can aspire to instantiate. So here I would look at, as a company, where do we need consistency and coherency to support our overall vision? And how do we communicate what needs to be consistent and coherent, but also make it easy in day-to-day practice to put that in place. 

 

So let me give an example of that. Let’s talk about analytics. We want consistency and coherency in the way that we collect data across our product. We could define a data model that everybody has to abide to. That’s the rules we’re putting in place. But even if we have the rules, anybody who’s ever done this at any company knows not everybody follows the rules and it quickly becomes a hot mess. So we could put into place a practice whether that’s a data team that signs off on all the data collection methods, and they’re responsible for the coherency, or we could use a tool that constrains how we collect data, and that’s responsible for the coherency, right? We see the same thing with design patterns and design libraries. We could create a design library, and the design team is responsible for making sure everything is coherent with that design library.

 

Or we could use design tools that limits designers to just those tools. Right? So there’s lots of ways to do this. I think the key is the company has to look at what needs to be coherent and consistent. What are the rules we’re going to put in place? How do we make it easy for our teams to follow those rules day in and day out?

 

Simone Cicero 

And maybe a more like reflection question for you also more about you know what’s happening in general in terms of trends and modifications to the markets. What’s your perception in terms of how much is really important to be coherent as a brand, as an organization? So you know pondering you know maybe on one side maybe having some kind of incoherent messaging to the customer but on the other side keeping your capability to really innovate and look into new options. 

 

How do you, essentially how do you ensure that good ideas, for example, are not lost because they don’t fit into the system or because the documents tell us we cannot do that or the constraint doesn’t allow us to do it. How do you ensure that we’re not too constraining for teams in a market that changes so fast and gives us new opportunities all the time.

 

Teresa 

Yeah, I think when I’m, let’s get at this like the team level. I’m a team, I’m working on outcome, I’ve identified opportunities, I’m trying to match solutions to those. I think when I’m working at that level, I think it’s okay to ignore my constraints for a little while. It’s a little bit of this idea of wild ideas in the design thinking world, or extreme users from the design thinking world.

 

I think there’s a part of the creative process where we want to ignore constraints and look for what’s the ideal solution. So that we’re not constraining ideation, we’re not limiting what’s possible in our world, and we’re really focused on what is the best way to address this opportunity. And then I think once we’ve identified the best way to address this opportunity, now we can pull back and say, okay, if we were to create this solution within the constraints that we see in our world, how much of the benefit of the solution do we lose? A lot of times it’s going to be none. It will work just fine in our constraints. There will be times where it doesn’t work, we have to break some of our own rules. And we see companies do this all the time. They break their own rules. They break their own design patterns. They change their language. And we want to be willing to do that when following the rules eats up too much of the benefit of the solution. Right? And if we find we’re doing that over and over again, now we need to start to question, do we have the right rules or right constraints in place?

 

Simone Cicero 

And do some kind of incubation processes help in, maybe you can say, new ideas, they don’t need much permissions, you can basically explore, and then as long as, as soon as you start to say, I want to bring this inside the product portfolio, or I need money to do some technological development, for example then you start to ensure the constraints. So is there a dual dimension on these kind of system or products? One is more like the language you speak, the constraints we have in terms of user experience, and another one is more like the stage of evolution of ideas that go through this framework.

 

Teresa

I don’t like to think about things in stages because I like to think about things continuously. So if I’m an empowered product team, I’m doing continuous discovery and continuous delivery. What that means is that I’m working on one small opportunity at a time. So an opportunity is an unmet customer need, pain point, or desire. I’m looking for how do I closely match a solution to that need, looking for how do I fully address it. So when I’m first exploring solutions, I don’t care about constraints. I’m really My primary goal is how do I fully satisfy this solution or this opportunity? Once I’ve started to find an idea that could work that I think has a lot of value, our customer, I’m getting feedback from customers that it’s desirable, that it’s usable, it looks like it’s feasible. Now I wanna start to get into will this work in my organizational context? So now I need to account for the constraints of my vision and the constraints.

 

It’s not this simple. I might take into account the constraints of the vision when I’m choosing my target opportunity, but as far as like coherency, I’m only considering, I like to consider that after I’ve determined how do I deliver value against this opportunity? So once I have a handle on this would be valuable, now I wanna look at, okay, I have to make this play nice with everything else we have. So how do I modify it to play nice?

 

I may not need to modify it at all. And a lot of times I won’t have to modify it at all. And I don’t have a constraints problem. There will be times where maybe I have to modify it and maybe I have to change the language to make it consistent. And that language in this context makes it more confusing and it doesn’t deliver as much value. Now I have to look at, is it worth breaking the rules to get the value that I need from this? Or can I get enough value and be consistent?

 

So I don’t look at it as phases. I look at it as I’m iteratively evolving an idea to get it to closely match the customer need that I’ve identified. And as I’m doing that iteration, I have constraints that I have to pay attention to. And there’s gonna be times where I wanna push the boundaries on those constraints. I might wanna use my own language. And when I need to use my own language to get the value that I need, that’s when I need to go have a negotiation with whoever owns that taxonomy or whoever owns that design system, or whoever owns that API, and push those boundaries. And I think that’s a good thing, because if I’m the owner of that taxonomy, and I’m constantly being pushed on the language in the same way, that’s feedback that I need to evolve that language.

 

Simone Cicero 

It’s like putting customer insights before product vision. That’s more important to get the customer insight and then we see how we address it in the product portfolio or beyond that. It’s a bit like this if I get it well.

 

Teresa 

I think a good analogy is to think about it as we have two puzzle pieces. One puzzle piece is the customer need and one puzzle piece is the solution. And we’re shaping the puzzle pieces to be a good match. So we shape the need by learning from our customer and really understanding what is this customer need. That’s shaping that puzzle piece. And then as we iterate on the solution, we’re trying to match it so it locks tightly.

 

Simone Cicero 

Yes, definitely. So I wanted to touch, let’s look back into maybe more like a startup problem that I’m seeing a lot of time now that I’m advising some startup companies that in the past, we were used to a landscape where most of startups were told to be very focused on their own product. And now I’m seeing a lot more opening having multi-product startups, for example, and seems like we are kind of evolving towards, especially as we move into B2B space, there is a much more need for startups and in general product companies to be multi-product very soon, very fast, and with much more adaptability than in the past. 

 

So my question for you would be like about, if you can talk about how in terms of product development, the startup product development, when and where to look potentially for extending the product and if you have any suggestion in terms of how to manage from a startup product perspective, new insights that come from the customer that can push maybe the company to kind of fork the product efforts into two different products or two different aspects of the same product. So in startup context, how much is consistency important, when and where to look for new opportunities to expand the product?

 

Teresa 

I don’t think there’s one answer to this question. It’s going to depend a lot on context. I think what’s happening here is there’s competing strategies that startups have to decide which path they want to take. So one strategy is we’re going to go really niche and we’re going to solve a problem really well, and we’re going to be the best in breed at that problem. Another strategy is we’re going to go wide, and we’re going to be the platform that solves something end to end.

 

Historically, we’ve seen a lot of startups go niche. It took a long time to build products. And then what happens is that you are prone to disruption. So a classic story of this is Slack. Slack was definitely, and I think still is, the best in breed product in their class. But Microsoft was able to fast follow. Microsoft has very broad distribution across organizations. And they were able to take a huge bite out of Slack’s market share. Did Slack do the wrong thing? Not necessarily. During the time that Slack was building,

 

It was hard to build a product. It took time to build a good product well. I think what we’re seeing in the landscape now is it is getting much easier and faster to build products. So for a startup to build more than one product is now feasible. I don’t think 20 years ago, it was feasible to build multiple good products quickly. And that was a death knell for a startup. I also think there’s another factor to take into account. Are you bootstrapped or are you venture backed?

 

If you’re bootstrapped, you’re probably not going to build lots of products because you need to get to revenue as quickly as possible. And the way to get to revenue quickly as possible is to niche down and to create a ton of value for somebody who’s underrepresented in the market. If you’re venture backed, you have time to build lots of products. Now, I can just throw that out and a hundred people could listen to this and pick apart everything that I just said, because there’s always exceptions. Right. The context is going to matter.

 

So I can’t say you should always do A, you should always do B, you should always do C. I can’t even say in this situation you should always do A, and in this situation you should always do B. I think the thing to know, it is true, if you niche down, you will find customers sooner, because you’ll be able to meet their needs better. It’s also true if you have wide distribution, if you solve a lot of problems for an organization, it’s gonna be easier. That’s gonna give you a huge distribution advantage. We see that with Microsoft. Both of those things are true. So as a startup, we have to come up with a strategy that accounts for both of those things. 

 

Some startups are gonna choose to go, like 37Signals is a very successful startup that has one or two or three products. They started with one, right? In fact, in the early days, they started with a lot. They churned through products until they found Basecamp. Right, Basecamp was not their first product but it was their first runaway super successful product. They do have other products, but they’re not going wide like Microsoft is going wide, right? Now is 37 signals as successful as Microsoft? Of course not, they’re not trying to be. They’re not venture backed, they don’t need to be. It’s also not as simple as saying if you’re venture backed, you absolutely should go wide because we still see companies that are venture backed that have had a lot of success that didn’t go wide.

 

But we can also look at markets like if we look at Uber and Lyft. Uber grew fast. They both were single product companies. Uber was way more aggressive in their growth than Lyft was. Uber pretty much won the market in most cases, even though Lyft was first with peer to peer, so you could argue Uber should have gone faster, did exactly the right thing. I don’t know. Both companies are struggling to make money, so I’m not sure either one of them did the right thing, right? Like until a company is successful without venture capital, I don’t think we can evaluate their strategies. 

 

Now with Uber and Lyft, we can look at Uber went into Uber Eats, that probably saved them during the pandemic, whereas Lyft is still struggling coming out of the pandemic, right? So like Uber looks like an argument for going wider and Lyft looks like an argument for going against niche.

 

But neither company is really thriving without venture capital or public money. They’re not profitable. I don’t think either one of them is profitable yet. Uber might be getting close. I can’t remember. Right? So it’s hard to say. It’s hard to say. I don’t think there’s a right answer here.

 

Simone Cicero 

Yeah. But in general, we can say that becoming multi-product is easier. So maybe you want to pay attention to new opportunities that show up. And I know, for example, you said bootstrapped companies may want to go niche. But at the same time, a bootstrapped company needs to listen to potential monetization opportunities that are coming up. Because maybe you start with a product idea that is not really monetizing very well as expected and maybe something new coming up and it really shows a very good potential to solve a customer problem or enable a certain customer behavior that can be more lucrative. 

 

So I think you said that, you need to be more context-alike, but in general, from what I perceive from you, multi-product approaches are becoming more viable. So they should be on the table when you build startups as well.

 

Teresa

Yeah, it should be. It is easier now to build multi-product companies. That is true. I think that is, I think most people would agree with, it is easier to build products now than it was 20 years ago. I think the challenge is, and this is a, I don’t know the right answer because I think there’s one strategy that might be better for winning the market. There’s another strategy that might be better for having happier customers. My bias is always gonna be happier customers, but we live in a venture backed world where if you’re not a billion dollar company, you’re a failure. And if that’s your world, you might have to focus on winning the entire market. Here’s the thing. I’m not yet convinced that you can quickly get to multiple products and do really well at those products. So I’m not convinced that as a startup, you absolutely should add your second, third, fourth, fifth product in like, let’s say your first five years because it’s gonna be really hard to do all of those things well, unless you raise a lot of money. And even if you raise a lot of money, you’re adding a lot of complexity. So if you’re a young founder and you don’t have a lot of experience, that complexity is gonna be really hard to manage. Now I’m gonna couple that with, we are seeing examples of startups that had a lot of success early on, and they’re struggling because a competitor came in and went wide before they did.

 

Right? Both of these things are true. So I’m never gonna say you absolutely should go wide as fast as you can, because I think it’s gonna lead to a lot of crummy products. But there is a truism that if you wait to go wide too long and somebody else comes in and is able to do it, they are gonna eat your lunch. So this is like, there’s not an answer here. Your strategy has to balance both.

 

Simone Cicero

Right. Maybe last topic before we jump into the breadcrumbs. I wanted to ask you, in the transition we are witnessing, which is pushing more power to the customer instead of the organization and the product. I mean, especially what’s happening with AI and no code, which is making it very simple for customers to self-customize the product. 

 

So there’s a lot of user innovation toolkits around, so people can use products in a very configurable way. They can plug stuff into each other. And so there is, I think, I perceive this shift of power from the company, the product team, into the hands of the customer. So in your perception, how is this impacting customer continuous discovery and in general product design, product thinking?

 

What are your impressions in terms of if you project this over the long term, especially now that generative AI wrappers are coming from all over the place and we expect generative AI to come over the top to many products, to let us kind of configure and customize and integrate on their own, on our own case, on our own single, let’s say, need that we have as a consumer, as a customer?

 

What’s your impression in terms of how this is gonna impact all the world of product thinking and discovery and all the things that you do daily?

 

Teresa

I hope that we’re hitting a point where, I’m gonna call it personal technology, is more prevalent. So what I mean by personal technology is, I have an individual need in my business. I don’t wanna use a platform to solve it. I wanna use no code tools, or stitch together no code tools to solve it. So let’s just talk through an example. Today I could use Salesforce to be my hub spot to be my CRM. I’m giving HubSpot all my data they’re going to manage, I’m going to, I’m limited to the features and tools that they build. That’s the world today. And if I’m looking for a CRM, there’s a dozen players I can look at. There’s probably 400 smaller players. And I’m trying to find a company that matches my needs. In a personalized technology world, instead of looking for a CRM that already exists, I might look for a database tool and a front end mobile app tool and a front end web tool where I can build my own CRM that exactly matches my needs. I don’t know if that world is very different from where we are today. So like, let’s say I choose to use Airtable as my database and I choose, I’m not really that familiar with the front end no code tools, but I pick, yeah, I pick bubble to be the front end. Is that really that different from me, from Salesforce being my vendor? It’s not, like Airtable is still my vendor, right? So, I don’t think from the consumer standpoint very much changes. Airtable still has to do discovery and understand who, what their customers need, how they want to use it. Bubble still needs to do discovery and understand my needs and how I want to use it, just like HubSpot had to do. What’s different is how the world is being sliced. So HubSpot is slicing it as a horizontal, we’re gonna go after everybody who needs CRM.

 

Versus I don’t know if horizontal is the right analogy here, but they’re going they’re taking a slice of the world where we’re going after CRM. Airtable is slicing the world differently. They’re saying we’re going after databases They wouldn’t actually say databases, but that’s close enough, right? Bubble is saying we’re going after front-end ux. So I think I think the way we’re carving up the world is changing I would not go as far as saying that we’re not going to have that CRM slice. I think there’s going to be plenty of companies where what HubSpot is doing as a CRM is good enough. I think there’s going to be other companies where they want to use these builder tools to create their own. But I don’t think the discovery on these tools is going to change at all. I think they just, how they’re slicing their customer and their value proposition to that customer is changing a little bit.

 

Simone Cicero 

Yeah, that’s, I mean, if what you just said, to some extent, plays out in the future, that’s going to be a massive change. You know, lots more generally software, much less kind of specific solutions. You know, I was thinking when you were talking, I was thinking to, you know, what happens when my customer is a generative AI model. It’s very hard to think about your customer as some kind of wrapper and integrator function or agent that needs to use your software. I’m thinking of, at the moment I’m building a product and I’m really struggling to understand should I think about the customer that uses the product or maybe should I think about this product being integrated in countless other products, it’s an OrgTech product, so it’s really conducive to be integrated into other stuff. And it’s really challenging for product thinking, to think about how your product is gonna be used, either as a wrapped into an experience coordinated by a generative AI agent, or maybe as more like traditional setting where you can to some extent communicate your own visual of the world to the customer, your own ontology to the customer and it’s really confusing at the moment I think for product designers.

 

Teresa 

Yeah, so this goes back to the idea of like, should a startup focus on one product or multiple products? I personally prefer the niche model. I want, like, if we were to just talk about the ideal world, I wish that product teams, developers, focused on building the best product they could for a very specific problem. And like, if they get really good at that, they could tackle the second problem. I see product software gets really bad and we do lots of things at once. So like if I look at Slack and MS Teams, personally I think Slack is hands down the better product from a quality of software standpoint than MS Teams. The problem with what I’m saying is it’s probably better for the business to be Microsoft than to be Slack. So what I wanna see happen is I wanna see a world where we can find a better business model for the companies that are focusing on quality software. So like ideally, and I have personal experience with this, like I run an online course business, and I started on an online course platform that just did one thing. And over the years of using that product, they started to expand to seven other products that had nothing to do with me. And what happened over that time period is their course platform degraded and became totally unusable. And I had to spend six months of my life moving to a different platform.

 

Whereas I wish the way the world worked was somebody focused on course software and did a really good job of that, and somebody else focused on the community software and did a really good job of that, and somebody else focused on payments and did a really good job of that. And we’re getting this, like Stripe has solved the payments problem for most of the world, right? And we’re starting, but we’re in the messy middle of some companies are going broad, some companies are going verticals. It’s kind of a hot mess. I hope I don’t know how we’re going to get here. I don’t know what that magical business model is, but I would hope for consumers and for people that want to build quality software, we can find a way for businesses that niche down and create really high quality software for them to win. We’re not there. We’re not there right now.

 

Simone Cicero

Right, right. No, no, but I think, I think to, you know, paradoxically, maybe the Gen AI evolution can actually make it possible, because it solves a lot of composability issues. So you maybe, if you focus on your niche, then it will still be easy to compose with other products because of these tools can solve the ontological differences between two software. And so can help us as consumers connect multiple vertical niche specific products that work well in the thing they do with others that maybe do something else. 

 

So that’s to some extent what I perceive from your reflection. 

 

So last bit, Teresa, in the interest of time, we have just a few minutes. If you want to leave to our customers a couple of breadcrumbs where they, I mean, besides your own writings that we’ll find in the notes, anything that you believe they should be paying attention, writings, blogs, books, videos, whatever.

 

Teresa

Yeah, so first I’ll share my blog is at product talk.org. My book is Continuous Discovery Habits. Some of the other resources that I really like is Lenny Rachitsky is just creating amazing content in the product world. He has a sub stack Lenny’s newsletter and a podcast Lenny’s podcast. I think he has heads and shoulders better than most things that are out there. So that’s high on my list. Another resource that I recommend is the book Decisive by Chip and Dan Heath. It’s just all about what we know about decision-making research so much above what we do in the product world is decision-making. So I think that’s another great resource.

 

Beyond that Here’s the thing like there’s so much great content out there that I feel like it’s about Matching the content to what is most important to you right now. I think it’s really easy to fall into this like Edutainment world of like I’m just gonna consume consume, but I’m not gonna act on it

 

And so I think what I would recommend is rather than like going off and reading everybody else’s resources is just to be really directed in what you want to learn. So like given what I’m working on right now, I want to learn X. How do I find the best people that are writing about X? And the reason why I recommend Lenny’s content is he just does. He goes deeper than most people. And so like if you say if you say I want to learn about X who are the best people in X, you probably could just go search Lenny’s newsletter and find that. And then go read those people. So don’t just read their content on Lenny’s newsletter, but then go read their blogs and go listen to their podcast interviews. 

 

But I think the best thing to do from a breadcrumb standpoint is be really directed. Rather, a lot of us just read what’s in our social media feeds, right? So I think it can help to be directed. Start with, this is my learning goal, and then go find the best people on that topic.

 

Simone Cicero 

Teresa, thank you so much. We managed to pack so much insights in less than one hour. Really, thank you so much for having made the space in your agenda. I hope you enjoyed.

 

Teresa 

Yeah, thank you so much for having me. This was a lot of fun.

 

Simone Cicero

And for the listeners, don’t forget to check on the website boundaryless.io/resources/podcast. You will find Teresa’s and the other episodes we recorded already this year. And until we speak again, don’t forget to think Boundaryless.