Episode 158: Turning the Tide with Mauricio Monico's Lessons from eBay, Facebook, and Google
In this episode of the Product Thinking podcast, host Melissa Perri is joined by Mauricio Monico, Chief Product Officer at Wish. Join them as they discuss marketplace dynamics and turnaround strategies. They deep-dive into Mauricio’s extensive product management expertise and wisdom gained from his previous roles with Microsoft, eBay, Facebook, Google, and various startups. They also touch on Mauricio’s time with Indigo Ag, a company focused on agricultural sustainability, during a big turnaround.
You’ll hear them talk about:
11.37 - 13.28 - A turnaround can happen when there is a shift in the marketplace. In eBay’s case, they were thriving. They were the talk of Wall Street, until Amazon caused a significant shift and couldn’t be ignored anymore. The first instinct is to copy; you’ve seen a strategy come along and dominate the space, so you want to copy it. Instead, eBay had to find its unique value proposition through effective communication and steering the company into a clear direction and focus on the correct verticals. Clarity of communication is key in turnarounds.
15:32 - 23.09 - Anticipating difficulties and marketplace dynamics are key challenges during a turnaround. Shifting the business model, like at Indigo Ag, requires immersion, testing and quick decision making. The marketplace can throw an endless range of challenges, such as taxi unions opposing Uber. Indigo Ag needed a business model shift, to move from a first party grain buyer to a market place. They did this by applying e-commerce market dynamics for the benefit of the farmers and the grain buyers.
42.34 - 48.11 - A turnaround is not simply copying the other company’s strategy, which caused the market shift. Too many companies get sucked into copying what worked for others, rather than focusing on how they can differentiate and accentuate their unique strengths. What’s interesting is that a mixture of both is necessary. Learning from each other is a core practice, but you don’t want to always be two steps behind.
48.11 - 53.01 - The core question is “When is the right time to commit to a turnaround?” It often begins with the realization: we’re in trouble. That's a no-brainer. But actually admitting that is the hard part. Everyone wants to be winning. Even after admitting you’re in trouble it can be hard to tell people. The next step is prioritization, which problems need to be done? From his time with eBay, Mauricio learned there can be hundreds of problems that need solving. The trick is focusing on the problems that would ruin the company if they aren’t solved and learning to live with the other problems that can be sorted later. In a turnaround you need to make the clear decision of “not doing it now” and focusing on life and death decisions.
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Melissa - 00:00:01: Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary-pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is the Product Thinking Podcast. Here's your host, Melissa Perri.
Hello, and welcome to another episode of the Product Thinking Podcast. Today, we're talking all about turnarounds and what it's like to lead a turnaround as a product leader. I'm thrilled to be joined by Mauricio Monaco, who is the Chief Product Officer at Wish. Mauricio has worked at all of the top companies, Microsoft, Meta, eBay, and Google, before joining Indigo and then Wish. I really enjoyed this conversation, and he's got some really great stories about how he's led turnarounds and all different styles of turnarounds, and I hope you're going to enjoy it. But before we jump into talking with Mauricio, it's time for Dear Melissa.
In this segment, I'm answering all of your burning product questions. And if you have a product question for me, please go to dearmelissa.com and let me know what you're thinking about. Also, we always prioritize the voicemails, so if you want me to answer them quicker than the other ones, please leave me a voicemail and let me hear your beautiful voices.
All right, let's go to the phones for today. There's a difference between idea management and backlogs. I do not like adding all the ideas that people come up with throughout the organization to a backlog. And that's not really what a backlog is meant for. Backlogs are the place where you put work that you know you're going to get to or things that you know you're going to experiment around. It should be the way that you can park something that's not going to be worked on right now, but also not keep a whole list of everything that could possibly be without validation. So I like to keep my backlogs a little quieter because what happens is if you put everything in there, you could end up with a backlog. You can end up with an icebox. Like I vividly remember cleaning out my icebox that was like my backlog's backlog. That had something like 10,000 tickets in it of things I was never going to go through, never going to do, all of that stuff. That's just kind of wasteful, right? We don't really want to do that because we don't want to create more mess. So when we talk about idea management, what's different about that? Is that it's a place for people to submit things that could potentially be worked on and then a place for you to also go there and validate if it's something we're going to do or if we shouldn't be doing it. That is something that is good, that works with our strategy. And the way that we think about idea management and product operations too, is not just a parking lot, but it's a way to get the right information back to the right teams. So if somebody's submitting something from sales and saying like, hey, customers are really asking for this, or this is something that I came up with that I keep hearing about, it goes into the idea management flow. It should be tagged with something that allows you to get it to the right team. And then you as a product manager would glance at it and say, oh, that's something that we're never going to do, write back like this doesn't go with our strategy, or it's not something that we're going to do and delete it, right? That's totally valid. And have that transparency back to that person that's never going to progress to anything. Or, hey, actually this aligns with something that might be coming up in an initiative or something that we're working on.
I'm going to pull it in here. I won't promise that we're actually going to do it, but now I might add it to my backlog or into a new folder or something where I can keep it and look at it when I'm actually going to go and start to evaluate strategy. It's also a way for the rest of the organization to look at what you've done. For example, maybe you've gone out there and done experiments and found out that that idea just didn't work. And there's a lot of data around why it didn't work. In the idea management area, you can actually write back to those things and say, we tried this, it didn't work, or there would be a record of it, right? People could see if their ideas have been tested already or what has happened. So it's not the same thing as a backlog. It is a place where people go and park ideas or submit ideas, but you do want to be open to allowing people to do it. The thing is, if it doesn't match your strategy or match where the company is going, you need to get rid of those right away. They should not be hanging around in some kind of icebox backlog type system forever. And if product ops is going to create that and help manage that experience, it takes the pressure off you for figuring out how that should actually operate, right? And how all that stuff should go. So product ops is really coming in and saying, you know, this is how the idea management works. Here's the flow. Here's the status. Here's where you can enter stuff but it's like a commitment to having to do absolutely everything that was submitted. That's not the idea behind it.
So I found it very valuable in organizations, especially ones where you may have a lot of in-demand stakeholders who expect you to basically jump and do everything they submit to basically go back and communicate to them like, nope, this is not going to happen or this is going to happen. And it's not clouding up your backlog of things that you know need to get done or things that actually pertain to your strategy. It's one of those things where if it doesn't work with our strategy, it does not come in, right? It does not come into our way of working. It's not just getting added to a really long backlog. Backlogs should be discreet and finite about the things that you're actually going to build and release. They should not be long lists of parking lots for people's ideas. That's the difference between them. All right. I hope that helped. Thank you for submitting your question to Dear Melissa. And again, if you have a question for me, go to DearMelissa.com.
Now it's time to talk about turnarounds. Did you know I have a course for product managers that you could take? It's called the Product Institute. Over the past seven years, I've been working with individuals, teams, and companies to upscale their product chops through my fully online school. We have an ever-growing list of courses to help you work through your current product dilemma. Visit productinstitute.com and learn to think like a great product manager. Use code THINKING to save $200 at checkout on our premier course, Product Management Foundations. Hi Mauricio, welcome to the podcast.
Mauricio - 00:06:18: Thank you so much, Melissa.
Melissa - 00:06:20: So you have worked at a lot of companies that people would kill to have on their resumes. And now you're the chief product officer of Wish. Can you tell us a little bit about how you got into product management and what led you to Wish?
Mauricio - 00:06:32: Yeah, absolutely. So I actually am one of those that started from the engineering background. I started on eBay. Actually, a startup that got acquired by eBay. Then I was one of eight engineers. I didn't even know what PM was. We didn't have any PM. And then I got contacted by Microsoft about a role that they had. And it was on SQL Server, a very technical role. The way that they explained it, it sounded like an architect kind of role. And I joined. And I joined. I finally figured out what a PM was. I was not very happy with this for the first three months or so. But after that, I realized the kind of scope you can have and the kind of breadth you could have and how you multiply your impact. And it became something that obviously I became very passionate about it because I have been doing this for like too long. I spent time on Microsoft as an enterprise PM, which is a very, very different role than the traditional consumer PM. I went back to eBay as a PM at this time, like leading the creation of the business to consumer selling team, which was they acquired a few startups and they wanted to kind of build this as part of their core ecosystem. Then did international growth for Facebook, which was a very unique experience when you get into this really high growth consumer experience. Went back to marketplaces like Google, building Google Shopping Express. And finally decided that I wanted to do something. I wanted to do something a little bit more from the ground up and joined a few startups and finally ended up at Wish, which is where I am right now.
Melissa - 00:08:00: So it seems like you like marketplaces too.
Mauricio - 00:08:01: I love marketplaces. They enable a level of scale and a level of growth that you don't see in many other solutions.
Melissa - 00:08:09: They also kind of complicate it too, because you're dealing with two sides of things. How do you think about like balancing both sides of those marketplaces when you're building?
Mauricio - 00:08:16: It's a very good question. And nowadays, they're not even balancing two sides. They're balancing multiple sides, three, four sides. Like in the case of which we have logistics, in some cases now you're getting the creators as one of those parts of this marketplace. How do you match a creator to a product, to a seller, to a consumer? And then have that matching process in place. But on the end of the day, this varies on a marketplace-by-marketplace perspective. Like Uber growth and how do they manage the balance between riders and drivers is very different than how Airbnb does that, right? Because if you just put your house for rent, there is not a lot of damage if you don't get a lot of guests on the very beginning. And you can be a little unbalanced and grow the guest side a little later. Now with Uber, if you don't get enough rides, you're going to move into something else. You're going to find another job. It's not going to be meaningful for you, right? So some of those have very different requirements in terms of what you actually, how closely together you have to balance that out. E-commerce. On the very beginning, it was very much like Uber. You had to kind of balance those two sides very well together. eBay was like very much in that ecosystem because back in those days, you would be selling on eBay and eBay only. There wasn't this multi-marketplace thing. So if you're not getting any sales, you give up on that platform, right? Nowadays, you see marketplaces as almost like an advertising tool. Like you're putting your product on every single marketplace and then you see which products actually work for those marketplaces or not. And you optimize them then for some products and others for other products.
Melissa - 00:09:49: It's an interesting strategy to think about too. And eBay is a really good example because I think they were probably one of the first companies to start to feel that pressure of the competition coming out there. And you and I were talking a little bit about how when you were there, they were going through a turnaround. Can you talk us a little bit through what was happening at eBay at the time? Why were they turning around? What were the pressures there?
Mauricio - 00:10:13: Yeah, of course. So there were a few things happening at that time. Like eBay was like the darling of mall streets around 2004 or so. Like that's around the time I joined. Like stocks are growing like crazy. The company was growing like crazy. And there was a little bit more pressure. I'll prove a little bit more. And we're seeing Amazon on the side and kind of seeing them as like this bookstore that's unprofitable day in and day out. And really, really ignoring them. Right. To the point that we couldn't anymore. And what I saw was very much this, which is, and again, I was a lonely PM at that point. Not very, you know, involved in the strategies of the company. But the view that I had at that point is that, hey, we saw a strategy that works really well. We need to figure out a way to literally copy what they're doing and do the same thing. It took a while for eBay to understand that, hey, like we have an actual different value proposition. We're not Amazon. We're not going to be Amazon. If we try to be Amazon, we're just a few bigotry. We're not going to be Amazon. We're not going to be Amazon. All the infrastructure investments that they have done over time. Right. And we needed to kind of focus on what are the verticals that actually works for us. Are we a mobile first or not environment? Which, by the way, mobile is a huge driver for eBay to kind of finish the turnaround. And the focus on the right verticals, the right inventory, and how you're buying the right inventory, rather than just trying to copy the warehouse ecosystem that Amazon had, was key to get eBay into the right path.
Melissa - 00:11:41: So when you were a product manager at eBay, right, you're not making these choices. You're hearing about them. You're observing. Like, what was your take on how things were happening? Like, what do you think they did well to communicate? What do you think they may not have done so well to communicate? And how did you kind of perceive it playing out?
Mauricio - 00:11:57: It's interesting because when you're there just listening to like our strategies, our priorities, and here's what we're going to do. I'm going to invest in this warehousing system. Then we're going to do some shipping coming from all products coming from China. And on the end of the day, after all the investments, if you actually stop and think about it, like when you're listening to that story, you see, okay, so we're going to do all that. And then we're assuming that one, Amazon is going to stay exactly as they are right now. And then two, when we finish this, we're going to be a little bit worse than Amazon, right? So we're not actually competing. We're not bringing our value to it. So a lot of the times you get that feeling that people, if they're not explaining themselves well, because they probably, they're much more senior than I was at that point. They probably had their reasonings. But what you take away is like people that are down to that level, they're looking at the basics. Like they're basically looking from a consumer perspective, right? And trying to understand how does that work? And how does that strategy make any sense? And if you can't explain that, if you can't explain why the priorities for this year versus the priorities of last year, and why we're investing in the consumer selling versus the business seller now, why this whole thing is connected to this turnaround, and why it's important to do this first and then the next thing next, people just assume that you don't know what you're talking about. And there was that huge assumption, especially in the world of changing CEOs. We went from MAG to, I think it was data at that point. And you still try to kind of create some trust in that leadership, and you just can't connect. So it's very important to kind of think about like, without the knowledge that you have, all the strategic meetings you have, all the advisors you have received information from, all the different competitive analysis analysis that your team has done. Why? In a way that the lowest level PM can actually understand and therefore optimize to the same thing that you're optimizing.
Melissa - 00:13:50: I had a similar experience when I worked at a startup as well, where we were doing this thing where we were copying everybody else out there who was doing we were doing e-commerce as well. And it was the time of the big fab boom in New York City and everybody was doing flash sales. So we were copying all the flash sales, doing that. And then we started pivoting more towards Pinterest because Pinterest came out and it was really big. But all these things started to happen and it felt like we were just copying, copying, copying. And then one day, we were building this thing that we were pretty excited about. I was building out this whole backend system to be able to manage things a little bit better on e-commerce. And the company went through a massive layoff. We just walked in and a third of the company got let go and we did not know it was coming. And then we were told, oh, stop. The project that you're working on, we're going to refocus you on this. And it felt like such a spur of the moment. But throughout that whole time, to the rest of us, none of this was ever explained why we were doing these things. So I'm sitting there as a product manager going, I just went through all of this push to get people to listen to customers, introduce experimentation, go out there. And now we're building things. I'm just being told, don't go do that. Just go build this thing that I told you to build. And it was such a harsh, cut and dry type thing. And I thought it was such a missed opportunity for the leadership to say, hey, we realized we're going down this wrong path. And this strategy is unsustainable. And if we actually take a step back, there's an opportunity for us over here instead of trying to do this stuff that's not going to get us. And it was interesting because I kept in touch.
It was still my favorite team I've ever worked with. And they were super smart people. But I kept in touch with them. And years later, my boss was like, oh, yeah. Actually, the experiments you ran were the thing that started us on this pivot. And here's these emails that led to where we are right now. And I was like, you never told me. I would have stayed. I ended up quitting because I thought, oh, they don't know what they're doing. Let me get out of here. But when I see it all in hindsight, I'm like, oh, it makes so much sense to go together. But none of it was communicated to us at the time. So people's morale was so low. And it just felt like, what are we doing? Why are we doing this? Which I think is a really interesting perspective for a lot of team-level product managers going through these turnaround-type scenarios. So you've been in this situation multiple times with turnarounds. As a chief product officer now, what do you think are the most critical things to do when you're approaching a turnaround or when you're deciding to reset things?
Mauricio - 00:16:18: Yeah, absolutely. And by the way, like your story is one of those things that I always keep on the back of my mind. Because one thing that I realized that even at the leadership level, when you think you're being very clear about why you're doing what you're doing, it turns out that not many people actually hear. Or it turns out that you're not that clear. And it turns out the repetition is actually a huge portion of it. The amount of times that I thought that I made myself tremendously clear, like the story was there to be seen, that people could understand the whys and people didn't. Even when I'm trying to do the right thing, it was just incredible. But I would say that there is a few things. Like talking again about going through this turnaround and what are the important things to do. And I think the number one thing is a little bit of clarity on why you need to turn around. What exactly are you turning around from? Are you just trying to grow again and you're not growing anymore and you don't know why? You're trying to figure that out. Or did you cause this to yourself? Are you going through a retention? Is it a Why you need to turn around? Like, what is it? What is that definition? And what is the definition of the activity? The turnaround? Is it now I have a retention that's above this number. Now my daily active users are above this. Now. My GMP is above that. You need to kind of understand what it means when you got out. Or am I the number one on this market? Like, what is it? And I think to many people's heads, those questions are usually not really well understood. And therefore, you have to have clarity in your own heads first about what you are turning around from? What does it mean to actually have finished that process? So that you can actually communicate this to your team, drive that clarity to the team and drive the excitement towards where you're going. Because otherwise people do exactly what you did. Like them, they lose faith in that company's ability to achieve what they actually aim to achieve.
Melissa - 00:18:24: And it's such a good point, like leading really with intent. So it's like, what's the turnaround going to be? So after eBay, when was the next time you experienced a turnaround? And how would you kind of classify why that turnaround came about too?
Mauricio - 00:18:37: So after eBay, I spent some time at Indigo Ag. It's a company here in Boston. It was one of those things that I left Google looking for a very mission-driven or reactive company. And this company had an amazing, amazing mission. They still exist. They still have a very amazing mission. And their mission was really twofold. One part of that was enabling farmers and grain buyers to transact in a much better way and improve the profitability of farmers because most farmers are actually not profitable. They are subsidized by the government. And to make a living, you need a lot of help. And the second portion of this is that it turns out that a huge chunk of carbon emissions and carbon retention can actually be helped by farming. If you do farming in a specific way, you actually get carbon inside the soil again. And you keep it there. If you do it this way. It's probably one of the most, and I'm not an expert on this field, but I guess it's one of the most scalable ways of basically retaining the carbon within the earth rather than letting it go to the atmosphere. And the process is simplistic enough. There were ways that you could actually do this using computer vision through satellite images. And the company was really aiming to do that. But the way that they figure out that they would enter that market is by becoming a grain buyer themselves. Just so that they could actually provide farmers with some financial incentives on how to trade on commodities, how to have insurance on their farms, and so on and so forth. Because they needed to take possession of the grain in order to enable those kinds of services. What happened is that they wouldn't do anything with those grains. They wouldn't sell to a distributor or anything like this. They needed to sell to a real grain buyer later on. And those real grain buyers started to see them as a threat, as somebody that eventually would just take over the whole thing. And they would be bad. Like, it's the new technology company.
It's the Amazon for the retails. They were very scared of it. So they blacklisted Indigo in a way that buying grains was no longer an option because they wouldn't be able to sell that later on. So when I joined, I really joined knowing that was going to be a turnaround kind of situation. Which is, they needed to get the company to move from a first-party grain buyer to a something else. And that something else just happened to be a marketplace, right? Because, again, you're not buying a product and selling. You're being this data pipeline that connects grain buyers to farms. And that was one of those stories that it became very clear what the problem was. The problem was that the farmers are taking a lot of value from this. Grain buyers were not. So it became competition to the grain buyers. In order to turn around, it was not a market fit. It was not a value proposition. It was not a marketing kind of thing. It was how we did it. And the how we did it, it turned out that if we actually applied even e-commerce marketplace dynamics to this whole thing, you would get a lot of gain for both the farmer, even beyond what they had initially, and the grain buyer that now has a tremendous amount of data, including traceability data, that allowed them to say, like, where did that grain come from? Which kind of practices were applied? They were carbon neutral kinds of practices where they didn't use enough or they didn't use more than X amount of water. And they were able to sell that to the distributors of life, Walmart included. So that you could actually say this product used 10% of the water they would traditionally use. So this product actually had this much carbon credit associated with that and so on and so forth. So it was one of the situations in which the problem was clear. And it was more like, what are the types of solutions that you can put in place in order to kind of drive the same market value, but in a way that the market was balanced?
Melissa - 00:22:26: So this was kind of like a, almost like a business model shift.
Mauricio - 00:22:29: It was a business model shift.
Melissa - 00:22:30: Okay, that's interesting. Do you think there was, to me, I'm thinking about this, I'm like, how did they not anticipate that the grain buyers would get mad earlier? Do you think there was a way to preempt that or there was nothing we could do? It just surfaced because of these things. What would you suggest people do, I guess, if they're starting to think about these types of dynamics or companies like that to kind of preempt those things?
Mauricio - 00:22:51: I think that they came extremely well-intentioned. They were like a half-packed company. Like a lot of them were still, like a lot of the people that were hiring there. It was probably one of the most different places I've ever worked at. Because you worked at Google, you worked at Facebook, you work at eBay. Like you kind of, like most people are coming from the same profile, the same background. Over there, like most people I worked with, from engineers to product managers to anybody, were coming from either their agriculture business or they worked on their own somewhere, like the nonprofit for some reason. You know, they're very, very mission-driven kind of people. So I wasn't there before, I can tell you for sure. But what I think it got to is this. They look into the options they had to build something that would allow them to provide the farmer with the initial hook. And the initial hook was the hedging of their grains for a spectacular low price. They were extremely competitive on that. And in order to do that, there was a regulation that forced them to buy those grains. And honestly, they expected the grain buyers would just leave the story and move on, you know, which is okay. But they became very trapped by it. And I don't know if you could have predicted. Maybe they could have done some contracts or something that would actually put them at peace. By the time that the whole thing happened, it was already too late for negotiations.
Melissa - 00:24:13: It's interesting too, because it reminds me a little bit about, you know, the Uber situation and then the taxis kind of coming out of nowhere, right? And being like, oh, you can't do this. We have a taxi union. There's medallion things. And it kind of gets into when there's so many different people involved, they weren't necessarily a marketplace, but some of those marketplace dynamics you were talking about, how do you anticipate a lot of that ahead of time? And is there something in there, I guess, that says like these types of dynamics help lend you to being a marketplace? Like that might be the best way to set it up. How do you know?
Mauricio - 00:24:46: So first of all, when you're thinking about marketplace, what marketplaces usually give you is scale. It basically allows this data pipeline to enable both sides to scale and both sides to become much bigger. And the number of people involved goes astronomical. In the case of Uber, it's the same exact thing. You have a lot more Ubers than you ever had taxes. And in the case of e-commerce, it's the same thing. You get this variety of merchants rather than two or three retailers that used to play ball. Everybody else is like the addition to the mall. But when you're in a marketplace, you have just as good of a chance as the JCPenney. I like even though they have a lot more space. So I think that the way to look into this is like when we're looking to this, this agriculture business. The number of farmers is very finite. And you can't grow because it's deserved. There's a physical limitation to that. The number of grain buyers is actually also very finite. And it requires an amazing amount of investment in order to become a grain buyer. So when you look into that ecosystem, it's not one that lends itself that well to marketplace. Marketplace is not the, oh, this is a marketplace ecosystem. Because you're not trying to scale either one of the sides. They're very difficult to move. It requires billions to become a grain buyer because you need a train station on the end of the day to carry grains and all that stuff. So marketplace is not the first solution that will come to mind to anyone.
Melissa - 00:26:10: Interesting. Yeah, that's really interesting how that evolved out of there. You came in to this, you knew the turnaround was going to happen. What did you kind of do first to make sure that, you know, it sounds like the decision had been made to turn around. What were you doing, right, leading this, trying to look at the scope of what we had and what we had to become? How did you think about your strategy and like where you needed to really concentrate there?
Mauricio - 00:26:33: The way I looked into this, and by the way, I was coming from Google where you pitch something and you're pitching that for a while before it actually really becomes reality. And I'm joining this company that had a huge amount of investments in an area that honestly I knew nothing about. Because agriculture was not my bread and butter by any means. So the way I looked into this is like what I'm going to do on the very first 15 days is that I'm going to immerse myself into this and try and understand as much as I possibly can. Not what's being told to me, but what are actually the problems here? I know that there was the grain buyer problem that was obvious. That thing was fact. The things that were less fact are what exactly do farmers value in this relationship? Would they be willing to consider multiple grain buyers or they would actually always sell to the same grain buyer? Who controls, who makes the decision? Is it the farmer? Is it the co-op? Is it the grain buyer? Who leads that? Because whoever leads. That's the answer point we had. And if we're not solving the financial hedging problem, what other problems could we solve that would be just as meaningful? Because we knew that financial hedging, we needed to take ownership of the grain. And that was going to be out of the equation at this point.
So it was very much trying to really validate down to the basics. What are actually the problems that we had? What are some of those dynamics? And then IT8 into options. And you have to think like it's one of those things that my assessment at that time. I'm going to be able to kind of move away, but not too much because they had reasonable investment into it. It's not, let's change the company completely. But I was very surprised at their leadership ability to just listen, look at the options, make decisions extremely quickly. I'm talking weeks and give us the go ahead to kind of change exactly, as you said, the business model of the company. So the way that we did this, the model that we had was to bring in reasonable amount of capital into the company because we're making money. And we're making money into those financial hedges. So we needed to kind of test our way in, in order to say, this is going to be a pivot that's going to work. And usually when you think about consumers, you're thinking, Hey, let's change the color of this. Let's change the position of that. And it can easily AB test your way through like, are the hypotheses you had valid? And is the solution you put in place actually moving you towards the direction you want to go? In that case, it's a very different ecosystem. We did a bunch of studies around who were the decision makers into this whole thing. We came to the conclusion that the co-ops were the decision makers. And then we did a very simple test. I grabbed a team of 10 people between PMs, designers, and engineers. Most of the company didn't even know that was happening because they were focused on the legacy. And it was a 1,000-people company at that point. The sales teams, everybody was still like, nothing of this is happening. Because honestly, if we change this, what is the sales team? They're going to be very different. The engineering team would actually be very motivated on working on whatever they were working on right now.
So we almost created this invisible 10-people team. We called it ACORN and it was like the beginning of something new. And we created, in a matter of a month, a prototype that we could put on the hands of co-ops. And basically see if the co-op would be willing, one co-op, to share with at least 100 farms. And they had thousands of farms on their hands, but at least 100 farmers. And see if the farmers would actually use the app directly rather than call us to trade. And once they trade, we would actually add some additional values like, hey, here's the carbon credits. If you do X, Y, Z, water reduction premiums. And here's some transportation solutions that we can put on top of everything else. But we wanted to kind of at least understand, would that be enough of a value for one co-op to adopt it? And then two farmers to actually use the app, which was a question. Because on the old model in which we're buying the grains, they all would call our customer support. We had an app. Nobody would use it. Like we had a little dashboard that would say how many people was on that. One, two. And I'm coming from a place in which I'm looking at billions. So I see one or two people using the product they were actually having. I was like, that's a problem. And we're trying to see at least 100 farmers actually using that product and we did things like in a matter of two months and two months was very solid.We had farmers using that and we had grain buyers actually accepting that transaction. So the flow was established. Definitely a smaller market than we had before, but it was a flow that we can actually grow from. So on that case, that transition, that turnaround is much more of a pivot. But the value proposition is still the same. It was a business model pivot, but it was a turnaround from like the mission perspective.
Melissa - 00:31:20: That's really interesting. One of the things that you just brought up made me think of this question. I've seen a lot of companies too, when they go and they approach a turnaround, sometimes they try to do it on a full company level. And I've been brought into places where they're like, we need to turn our company around and become product-led. And they're doing that at the same time as trying to build something drastically different from a product perspective too. They have not figured out the strategy. They haven't figured out which way do they want to go, but they go and they tell the whole company they're doing this thing. And then I've seen other cases like you talk about where you take a small team out, you test it, you iterate, and then you go and announce it to the rest of the company. What have you found works from a perspective of how you communicate the turnaround and then execute on it? Do you find that it was better to start with that small team and what were the pros and cons of that, I guess? And then and how do you go from that to lend the of company know what's going on.
Mauricio - 00:32:18: So this heavily depends on the model of the company and the situation of the company. On the case of Indigo, it was a, so first of all, it was not a consumer solution. It was like a B2B ecosystem. I get a B on one side being farmers and the other side grain buyers, right? And the second thing is that it was a well-established company. It was a reasonably large company, a thousand people in it, that had very specified roles, that had revenue coming for that specific product. And even though we knew that that product at the end of life, like at one point, people wouldn't be buying those grains anymore. We couldn't just stop. We couldn't just say, hey, like a thousand people, just let's not do anything for now. Because what are the sales team going to try to do? It was too complicated to try and make a big announcement. Hey, we're going down this direction. Follow me. Because it would take a while for the company to be able to do that. So in certain cases, you have no choices other than let legacy do what it's doing. Make a very small batch. Because honestly, like there is a rule of thumb that 80% of this time, those small batches are going to fail. We just were lucky enough that we did enough of our homework at the very beginning to minimize our risks. And it was not like a consumer batch. It was people we could talk to, which also minimizes the risk. And we landed this really well. But there was a really high chance that that thing was not going to work. And they were going to actually have to go through the next test and the next test. And at that point, you needed to keep the company alive somehow. Right? So doing the announcement is a very different story. Now, there are situations in which, and this is the situations that we actually had a wish, in which you have to kind of recognize, hey, we have X, Y, Z problem. Right? And those are the reasons why we're not growing as fast, but we're actually shrinking. And therefore, this is going to be our top two priorities moving forward. And we need the entire company's help to go make that happen. Right? That's a very different model. That's the model we took a wish. It's not a small team that's like, hold on, everybody, this is the priority now. And this is the reason. Right? It really depends on the situation you're in.
Melissa - 00:34:22: Are you eager to dive into the world of angel investing? I was too, but I wasn't sure how to get started. I knew I could evaluate the early stage companies from a product standpoint, but I didn't know much about the financial side. This is why I joined Hustle Fund's Angel Squad. They don't just bring you opportunities to invest in early stage companies, they provide an entire education on how professional investors think about which companies to fund. Product leaders make fantastic angel investors. And if you're interested in joining me at Angel Squad, you can learn more at hustlefund.vc/mp. Find the link in our show notes. So with Wish, when you came in there, what was the situation there and what type of turnaround did you have to do?
Mauricio - 00:35:01: Wish is a very interesting place because I actually, a long time ago, I used Wish at one point. Like, I'm not the demographics for Wish. The best way to think about this is that we have very low prices on products that are usually about your passions, about your hobbies. They're not products you need. They're products you like to have. They could be a bunch of gadgets for your kitchen. They could be, you like fishing, there's a bunch of gadgets for fishing or baking and things like this. So Wish was in a situation that they had grown, especially through COVID, but they grew in a little bit unsustainable way, which meant that with the growth, our time to door became very ineffective. We're bringing those things from across the world and it takes a little while. We didn't scale our logistics with the growth that we had. We also did not scale our ability to grow our merchants and our merchants grew uncontrollable, which then caused a meme. I don't know. I don't know if you ever saw the meme on the internet, which is the meme that, you know, what I bought on Wish and what I actually got from Wish. And it was usually a joke with something extremely different. It was not quite that bad, but it was not great either.
And also the perception that you're paying more for shipping and sometimes reality, honestly, that you're paying more for shipping than you're paying for the products itself. So when you looked into that company over the growth that they have gone through, you look internally, look at a product, look at the customer feedback, look at your XR. The problems are very obvious. And also the thing. That's interesting. That gives, we talked about competitors at the time that I joined the macroeconomics was actually not that bad. Like, uh, digital ads, it was starting to kind of get expensive, which was a problem for, for wish, which, you know, when you have, when you're selling very low priced items and it takes so much to bring a user to your site. That can be a problem. But as far as competition goes, you think of Amazon, you think of eBay, you think of others. Yes. They're e-commerce sites, they're marketplaces as well, but they were not truly competitors. People are not making decisions between wish and Amazon. Wish had its own demographics. It's a little bit older, a little bit more regional, even though we're in like, at that point, I think a hundred, a hundred different countries. Our demographics was actually very separated. We're not head to head to Amazon, like very different value propositions. Very different levels of commodities that you would see. And also very different levels of products, right? Those products usually don't do well on Amazon. Amazon is a very much, you search for a product, you know, you need. You want to get this, like this, this earbuds, like you're going to search for it. I wish it's going to be things that you didn't even know existed. It's a new product that in the past would have to take years of go-to-market funding to kind of make it mainstream. But I wish like we actually had a model to help you discover products. And because we knew your interests, we were able to say, hey, you're going to like this product. I'm going to put it in front of you. And the more people bought it and the feedback grew, that product actually got more attention, so on and so forth. But it was a very like discovery-based experience that really didn't compete against anyone.
So you look at AliExpress, for example. Very similar types of products, very similar logistics issues. But they were also very much like eBay, very search-driven. They were like, we're the only ones playing on Discovery Shopping at that point. So at that time, it was clear that the problem for Wish, like the turnaround for Wish, was like, we didn't pay attention to the basics of the marketplace. We need to put some health into it. And we need to basically save our brand reputation from the mistakes that were made in the past. And this was going to, how do we make sure that we're vetting our merchants? The first thing that I did when I joined the company, like two weeks in, we closed the marketplace from new merchants. And we said, we're going to do an invitation only. That basically means that the business development team is going to bring merchants they have vetted and they're very confident about them. And we introduced a bunch of capabilities to say, How are we going to know who the customers are, making sure that they're fully identified, introducing merchant risk, introducing seller standards, and what are the rules of the game? Meaning, we want merchants to ship their products in less than 24 hours. If you don't ship a product and the user never receives that product, here are the penalties. It's the product is significantly not as described. Here are the penalties. And we introduced like stylish standards into the ecosystem. We really focused on that very first year on the three primary problems. Product quality being the first one. The second one being time to door. In some places, like on average, it would take almost a month to get people their products. Once we introduced the ship the product within 24 hours, and we introduced a lot of innovation, our warehouses to combine those products and sent those products to the final customer. We took that 28 days, 30 days, down to 10 days in some places and 15 days for the majority of our markets. And in some markets in which like import customs is like very complex, like Brazil, around the 20 something days, right? So it was very much of what are the core issues of the company? Can we revive it from itself? So we basically stopped trying to do it was not a growth minded place. There were very many issues we have to fix in order to be able to continue to grow and retain the users you're going to acquire through that.
Melissa - 00:40:27: That's interesting. So like, it feels like to me, when we were talking about Indigo, that was very much like a business model shift, which feels more like the thing we were doing was working, but we kind of overextended ourselves. And we didn't like to focus on some of the things that were going to help us win. So we were declining because of it. And instead, we need to really drill down on here's the strategy that's going to help us win. And just focus, focus, focus there instead of like spreading ourselves too thin.
Mauricio - 00:40:54: But that's episode one of Wish. That's year one. So you're 100% right. And year one is exactly that. We did this and it was actually work. We saw the improvements on NPS. NPS went from minus four to 36. Our refund rates, I don't think I can quote the numbers because we're a public company, but it went from very high to below industry standards. It was ridiculously high to below industry standards. And obviously, we could see retention moving in the right direction with the improvements that we're making. We could see our adverse transaction values, like the number of products in a basket, people actually giving us a chance and buying multiple products from us and not seeing shipping as an issue anymore because now we have this flat rate shipping that allows you to buy as many products as you want for one flat fee. And you could see that moving. And then you got into phase two, which is when we actually started to have very, very heavy competition. At that point, I think the best way to look into this is that we're playing alone on an initially small market. Nobody cared. The market started to grow. As their market grew, other players started to kind of do very, very similar things. We got several companies competing. Like we, in Latin America, we had a company called Shopee that basically did exactly the same thing we did, but they paid attention to those basics a lot earlier in the process. And more recently, we had. TenMu, which is a subsidiary of a company in China called Pinduoduo that, honestly, if you look at their app, like the very first version of their app was almost like a carbon copy of our experience, like the same types of products. But they kind of took the playbook we took in the beginning, which is like a very aggressive growth approach. And it's spending a tremendous amount of money on advertisements, right? For very similar products.
And a lot of times on prices that are just that far or below what we have. That's the realization that, hey, if we're going to have a competitor like this, it's paying as much as they do. We're going to lose market share continuously to the point that it's not sustainable anymore. And we need to kind of figure out a way to have a differentiated value proposition. And that's the journey that we're in right now, which is really focused on not just so much like you need this product or you discover this product that you didn't even know existed, but more focusing into your interests, your desires, your hobbies, and connecting that into a much richer experience of all the products that come together to make that a reality and having the right content, the right videos, the right text, every media that's needed for you to understand why you're buying what you're buying and the richness associated with that. You know, if you are into espresso making, like what are all the different tools to do the distribution and all that good stuff or whatever your hobby is, we built models that no longer just rank the right product for you, but models that actually understands their interests and actually. Rank the right basket for you, right? So that you can have a much more cater experience.
Melissa - 00:44:13: What I like about this journey that you're talking about with Wish is it kind of goes back to, I think, what you were talking about at eBay earlier, where they kind of took the approach at the beginning to just go copy all their competitors. And it feels like when you looked at this at Wish, you said, let's double down on what we do well and fix that and get our baseline going. And now it's about differentiation. And I feel like so many companies, instead of thinking about differentiation, they think about copying when it comes to strategy. And I think when they look at competition, instead of thinking about how we're different than competition, they just go, what are they doing? What's winning for them? How do you look at that competition? Where do you decide those are things that we need to pull from them? Or these are things where we really should go in a different direction and make our own value proposition that's not like them? How do you balance that and not get sucked into the copying?
Mauricio - 00:45:00: Usually a mix of both. Like on the end of the day, like we should be learning from our competitors on a day-to-day. Like even in the case of not direct competitors or we haven't looked into how they do things and we have seen like those are best practices that we should probably be applying. For example, you get more of the retail world and how do they do merchandise. And we actually, because we had zero merchandise and you go to Wish and we had like a feed of products and that's it. There was nothing else. Like we're not trying to tell like what is, we're not trying to influence the marketplace. We let the machine do it. So some of those things we kind of look into what are the competitors doing? Does it make sense for us? How are they doing marketing? How are they doing growth? Is there some, is there an idea that they have that's actually better than what we're doing right now? But this is all fair and game and they do the same thing. We made a change on our landing page for ads.
Two weeks later, a competitor had exactly the same experience. So that dynamics exists and that's fine. That's something that we should learn from each other. What becomes kind of difficult is when you think that the only way to win is by doing exactly what they're doing and try to just be two steps behind on whatever strategy they're taking. Because at that point you have zero chances of winning. Like you need to understand exactly why would people come to you? What is your differentiator? And yes, if they're doing something extremely well that actually helps you towards that differentiator, do it. Right? Like on the case of Wish, initially we had all our products being completely marketplace driven, just going from the merchant's hand to our warehouses to get combined and then shipped to our users. One of the things that we saw that was actually very valuable was, hey, we should have a portion of them, a portion of those strategic products, their own warehouses, they're actually checked, meaning they actually meet the requirements of the listings and they help us set the tone on how fast some of those products can actually be delivered. So some of those things we said, you know what, that's worth investing, but that's not what's going to differentiate us. That's just what's going to keep us up to par into certain things. So it's definitely a mix of both, but you can't just be just sucked on following whatever strategy they're taking and copying a few weeks later.
Melissa - 00:47:08: When you're the chief product officer and you're looking at like your portfolio and how to distribute people right around these tasks, what are you doing to make sure that like 90% of people aren't just doing the copying pieces, right? Like, and you're doing, you still like got some people doing the value, you know, differentiation. Like, how do you balance that?
Mauricio - 00:47:29: So what we have done at Wish is that we do a quarterly planning. And every quarter, we create what we call our top-level initiatives. And we have five top-level initiatives. Sometimes we have four if we're trying to be very focused. And on those five top-level initiatives, we're going to have owners from both PM, engineering, UX, marketing, if that's the case, having a very clear understanding of what is the goal, what are the metrics we're trying to achieve, what are the problems we're trying to solve, and what are some of the priorities for that TLI. And inside those TLIs, the top-level initiatives, sorry, inside those, you're going to have a set of goals and owners for those goals as well. So on a quarterly basis, we're kind of addressing what are the priorities for the company. And yes, as they're building those priorities, they might see, you know what, if I'm responsible for conversion from ads, I have seen a very good idea. I might actually copy that. As long as that's driving the metric that you're actually after, solving the problem that you're actually after, that we already defined the priorities. So that's an absolutely fine way of doing it. But then we're going to have some of those initiatives that are doing things that nobody else is doing. So you can innovate by looking to different industries that have done similar things. But obviously, like the associated amount of people working on this, they can't be copying. They are working on a new concept for the company that will actually give us a certain advantage over our competitors. So the way I look into this is that it needs to be a good mix. So top down, I mean, here are the priorities. Here's how we're distributing the resources. And bottoms up and allowing a lot of innovation, how you actually solve that. Like we're not dictating the how, we're dictating the roles we're going after.
Melissa - 00:49:11: So you've been through all of these turnarounds now. You're at Wish. Looking back in hindsight, I feel like I really would love your perspective on this. I've seen a lot of companies, right, who need to turn around. And they're afraid of committing, right? Or they commit too late. And sometimes it is just too late. I think Envision is a great example of a company that's struggling right now because they didn't do it fast enough, right? Things just came out and they weren't looking at the writing on the wall. And now it's in decline. And it used to be one of the biggest companies out there for UX and for product managers to use. How do you look at commitment? And when is the right time to commit to a turnaround? When is it too late?
Mauricio - 00:49:51: I think there is multiple facets to that question, which is there is two parts of commitment. Like one is the commitment of, hey, I'm going to acknowledge to either the entire company or part of the company that we have X, Y, Z problems. And we have to focus on that. And then acknowledgement that, hey, we're in trouble. Here are the problems. Let's figure out a solution for that. There is obviously a lot of like when you do that, you tend to lose a lot of credibility with people. You might actually have retention issues because especially up to two, three years ago, every company is up and to the right. And you just want it to be winning. Like most people working on tech, they don't want to be the underdog. They want to win. So that acknowledgement is difficult. And then there is the portion, when is it too late to do that acknowledgement? I think that there is a variety of different ways to look into this. Like one of those is when you actually believe that your mission no longer can achieved by doing what you're doing and you need to kind of change that. Or you think that there is a reasonable risk to this.
Like, for example, even Facebook, when they, and I was not there when that happened, but like when they saw Google Plus coming in, they acknowledged before any remote possibility that that was a huge threat to Facebook. And they said, everybody, we're going to go into a war room and we're going to stay here until this is resolved in order to kind of build the tools that would allow them to compete. Right. They overreacted a little bit in hindsight, but you never know. At that point, they were doing what they felt was best in order to kind of take the actions as soon as you possibly can in order to continue your leadership or continue whatever position you had on the market. But I think that actually is a, that question is a little bit easier. There are several signals and there are several ways that one can look into it and say, I can acknowledge this now. The real question is, will I have the guts to tell people? But the thing that's actually harder is like, once you tell here what the problems are, it's putting this into practice of prioritization. Like, what am I not going to do? Because that is a priority. In hindsight, actually looking at my own history at Wish, like I joined only the merchant logistics teams and it was a huge amount of gaps, a huge set of problems.
I was coming from like a marketplace perspective, but I like eBay had 20 something. Years at that point. So they're a lot more mature. And I would look into this like this 300 problems, which problems are we going to fix? And obviously there was like some of those that are obvious, but it is also others that we're not doing it exactly the right way. We should invest a little bit here. I should invest a little bit there. But in hindsight, that would have been much more drastic on my prioritization of I'm not going to invest a little bit anywhere. I'm just going to put everything I have onto those three major problems. Fix that. And after that, I can think about some of those things. They're not going to make it or break it. Like, would it be better to have a, you know, a reverse logistics solution? Yes. Would that save the company? No. You think from that perspective and you have something that actually would ruin the company if it is not done, then your prioritization becomes much more severe. And that's honestly like when you're in a turnaround, that's actually the real big problem, which is being able to say no to a bunch of things that you know for sure should be done. And you know, there is some problems are not doing it. But you need to make the clear decision of not doing it now. Right. And focus on the things that really are life or death kind of situations.
Melissa - 00:53:23: In these turnarounds too, I've seen like, especially with leaders, for example, who've been there before, like you're coming in and you're helping to lead this, but there's probably the CEO who's been there and other executives, right? And you have to change a lot of times your approach to how you've been doing things before. And I've seen the issue where some people don't want to let go of that. They don't want to change their whole approach, even if they know the company's in decline, even if they know these things are happening. And in theory, they're like, yes, please, like, let's do all these things that you're talking about. But then in practice, that's where it falls apart. How have you worked like as a member of the executive team to help get the rest of the executives on board with this new way of working or this new focus? And how do you kind of address those issues where some people don't want to let go of things that they did before?
Mauricio - 00:54:06: So I think on this case, I was actually very, very, very lucky. And I'll tell you why. When I joined Wish, I joined actually as the VP of product for Merchant Logistics. I had a CTO that was like recently hired from Google. They also had a huge amount of marketplace experience. The CFO was also recently hired to kind of help turn the company around. The CEO was a transitioning CEO because the founder had left. So everybody was coming in fresh, right? And everybody was coming in with, hey, I'm here to kind of help transition this company and help this company grow again. Everybody was making events at that point. And we don't have to fight the status quo. Like there's some status quo we have to fight because there are certain things that like, hey, this is bringing a lot of revenue right now. But it is affecting our retention. It's affecting those three problems. So like. Can we let go of this revenue? And those are some of the things that like it was. Yeah, it's like when you get like a CPO, CFO, CTO kind of talking, it is a very contentious problem. You have to kind of understand how you balanced it, how you test it, how you actually really see like the pros and cons of it. So there was a lot of discussions about how to do it. But there was everybody came with the spirit that whatever we did in the past needs to be changed. So we're going to go change. Right. And we didn't have that much of a fight in that perspective. We had a lot of conflicts in terms of how to do it, what matters, what are some of those things that can really move the boat. But fighting the status quo was not a problem we had, thankfully, both an integral and a wish. So I wish I had a better answer for you on that one. But it was unusual, fresh leadership in power.
Melissa - 00:55:47: That's good. I find for myself, when I've had to go into those situations, I learned a lot about making sure the executive team was willing to do exactly what you're talking about before even committing to coming in to help because I've ended up in situations where they said so, but once you got in there, they weren't ready to do it. And at that point, there's not much you can do, right? Like when you're trying to push, you're trying to push, you're trying to get them on board. But if, for example, if it's a CEO, it stops with the CEO. If they don't want to change, you can't really, you can't really do a lot there.
Mauricio - 00:56:16: I think one of the things that really helped us on those conversations is that we had really well established across us what are the problems that really mattered. And like, for example, the trade-offs between a 10% reduction in revenue against user retention and GMV was very clear to us. We knew where to put our forces against. Obviously, people had to believe that if you lost that 10% in revenue, you would actually gain, you know, whatever sale you were going to gain in order to kind of commit to it. But they're all willing to make the trade-off.
Melissa - 00:56:45: Yeah, that's such an important part. I think being able to bring it back and like fight about the strategy, not necessarily about the tactics. Like where do we want to put our dollars into our bets and where do we want to concentrate? So that's a really nice way to think about it. So closing thoughts here, if there is a product leader out there who is in the middle of a turnaround or about to embark on one, what would be your top piece of advice for them to kind of set them up to be successful here?
Mauricio - 00:57:12: It's like, it's what I started with, which is like, be very clear on what you're turning around from. It's like, it's very easy to use turn around just because you're not growing anymore, because you're shrinking or because something's happening. But you need to kind of understand, like, is it something you did? Is it the competitive landscape? Like, what are you turning around for? Are you just not a, you just don't have product market fit anymore. Like, there is no need for your company anymore. Like, what happened? So you can kind of understand what you're fighting against. That's the first thing you need to do. And then the second thing is to really focus on the strategy. And that's going to be very different for each company. Like, do you have something that's still producing revenue? Do you have a large company? Do you have something that you can spin on the last minute? Like, how do you drive the company, the overall company towards this new turn that you're making? And that's one of the, it's individual to every specific company. There are some methodologies to it. But at the end of the day, it's going to be very specific company by company based.
Melissa - 00:58:07: Great. Well, thank you so much, Mauricio, for being with us today. If people want to learn more about you, where can they find you?
Mauricio - 00:58:13: Of course, like I am mostly on LinkedIn. That's actually the majority of my social network. So if you go to LinkedIn and search for Mauricio Monaco, you'll find me.
Melissa - 00:58:23: Great. And we will put all of the links so that you can find Mauricio in the comments at our show notes at productthinkingpodcast.com. And I'd like to thank all of you listeners out there for tuning in again for another Product Thinking Podcast. We'll be back next Wednesday with another guest. And please submit your questions to dearmelissa.com so that we can answer them every single episode. We'll see you next time.