Do you really have a Product mindset?
Here’s how to tell
Most people doing tech today, whether they have a technical background or a business background, probably have a services mindset rather than a product mindset.
Not everyone of course, but I’m going to estimate a ~1:50 ratio of those in tech today who have never worked in a services business before (or services part of their product business), and thus, only they can claim NOT to have a deeply ingrained services mindset.
Why is this ingrained mindset important to understand when you are operating in the product world?
Mindsets
Have you ever heard of any of these kinds of mantras:
“The customer is always right”
“We are customer-centric”
“Passionate about customers”
“We are customer-centered”
“It is all about our customers”
“Customer satisfaction”
“First class service”
Yep, well not only have you probably heard all these things said before by your company leaders, but they are at the core DNA of ALL services companies.
The business model they are describing is literally built to be at the service of their customers, and thus, subservient to their customers’ needs — every single one of those needs as far as you can go for the customer (within the constraints of the specific business model, of course)!
OK, so isn’t this mindset also a good fit for healthy tech Product companies as well?
To put your customer first, to focus on your customers’ needs and struggles, no matter how small? To be “customer obsessed”?
Actually NO, no it isn't! and here’s why…
Priorities
Let’s rank the most important things to you for doing work inside a services company. Who do you put first in your business?
It might look something like this.
- The Customer
- Your Team
- Yourself
Your Customer is at the pinnacle of your focus and attention. They decide (and often dictate) what is of value to them and what they will pay money for, in some detail — to those providing them a service. As long as Your Team can deliver what they want, and they love it, you are in business.
In a product company, surprisingly, the priority is necessarily significantly different:
- The Product
- Your Team
- The Customer
- Yourself
Let’s not worry too much about the order of the last two points, it is not that important for this discussion.
The Product is at the pinnacle of your focus and attention. It is what decides what value customers could get from it. Your Team decides what generates that value, and how. As long as enough customers find the product desirable enough, you are in business.
OK, wait a minute! The product comes first? why is that? isn’t that a little arrogant?
Standard Products
The whole point of a product company (and the necessary business model that is built around that company) is to create a product (or products) that customers find desirable enough to use/buy. Ultimately, they (or some proxy for them) use the product in exchange for money in the purchase of that product.
The fundamental idea of a product company is thus to make and sell a standard product to as many users/buyers/customers as possible. The more the merrier, and there had better be more.
What is a standard product? A standard product is something that can be produced once, and that is generally useful to lots of people (in a market segment). Thus, for that segment, it has to be a generalized product. It has to be further generalized to reach multiple market segments. The more general it is, the more scenarios/situations/contexts people should be able to find use in it — in theory. So that many, many more people will use/buy it and pay for the research, development, and production of the product. Capital, without which, it would be too expensive to develop, produce and distribute that product for a smaller set of users/buyers/customers.
Let’s for a moment forget about how many is many. It depends on the price per unit and the size of the market of buyers. In general terms, no matter the ratio of those two things, enough capital has to be generated by the combination of them to pay all the people who research, develop, produce and distribute the product to all the users/buyers to stay in business for a long time.
A “standard” product, is standard because it has to fit the needs of many many more buyers than a “custom” product must. Thus the price of the standard product (to the buyer) can be kept far, far lower (orders of magnitude lower) than the cost to develop, produce and distribute a custom product.
And herein lies the ultimate reason why product companies cannot and will not put the needs of each and every customer before the needs of their product and company. If they did that, the result would be to develop, produce and distribute many, many more products, tailored for each customer. The cost structure of that kind of venture is very, very different than the cost structure of making standard products.
You know of millions of companies that do that already — very successfully. They are called services companies. They produce “custom” products for each and every one of their customers — we call them “solutions”. They are not “standardized products”, they are “tailored products”. Each and every one of them requires a ton of money from each customer to fund, and typically a ton of work to develop and produce for each customer. Typically, this process is long and very labor intensive for each one, tailored to the needs of that customer.
And we are not even going to go into the costs of supporting and maintaining those products here. Which also has to be standard in standard products, and tailored in custom products.
And as a result, the services company will never be able to mass produce their custom solutions, because of the cost and effort required to produce each and every one of them. No problem. But product companies are dependent on doing just that.
What am I Saying?
So, now you know what a standard product is, and you know that these are necessarily the focus that product companies have to prioritize over all other things, including their customers.
You also know that standard products cannot focus on the individual needs of every user/buyer/customer. In this respect, product teams do not respond to the whims of any customer.
You know why The Product comes first and the Customer comes some way after that for product companies.
To do otherwise is to make a services company. Or, as many large product companies do, create a services arm of their company for that sole purpose.
But, you might still be reeling at me about how customers are, and how people in product still need to stay “connected to their customers”, “test their product on their customers”, and “pay attention to the needs and struggles of their customers”. How the hell can you do that effectively if the customer isn’t at the absolute center of everything that you do in product?
What the hell am I saying then?
I am saying that your users/buyers/customers are super, super important to ensure that you build a desirable product for them, to keep your business afloat. They are the ones that keep your business in business after all — for sure.
I am saying that you should absolutely design and test your products on your users/buyers/customers to see if they are effective, not just assume that they are. And, I am saying to use that process to improve them to gain more traction.
I am also saying that you need to be expert and attentive to the needs struggles, pains and gains of your users/buyers/customers (collectively in your market segment(s)) and that those things should drive every step that you take in your product development. After all, the change in their behavior is the sole engine of adoption that drives everything in what you should be doing.
And, I am just saying, that you can’t listen to, and be so damn attentive to, any one of those users/buyers/customers, satisfying the needs of any one of them. Unless of course, it enhances your product for the whole market segment. Stop doing that — stop building a tailored product one customer at a time.
And start prioritizing and defending your product and its needs — for a whole market segment. Start defending your product team — they are, after all, the only ones who actually create all the value in your product — not your user/buyer/customers — they only get to judge it. Your Product comes first, your team second, and then later the customers’ demands on your company.
That’s all I’m saying, folks…!
Keep that in mind, when your leaders, managers, bosses, or investors try to tell you otherwise. They are probably confusing their built-in services mindset with the product mindset they need to adopt to help make your product great.
