Episode 8: Dear Melissa - Answering Questions About Internal Products and Prioritization
In this Dear Melissa segment, Melissa answers subscribers’ questions about pragmatic versus ideal product management, internal product management, and determining how to build products for a two-sided marketplace.
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Q: Do you think there should be a difference between ideal product management and pragmatic product management? [0:59]
A: In my book, I write a lot about ideal product management, [which is] what we should be doing. But in practice I know that you can't always work this way, and sometimes you have to make a deliberate decision not to because it's in the better interest of your business… [However] sometimes you have to make a deliberate decision that says, “We have to make an exception here and we have to go a different way.” But the problem is if your exception becomes the rule and you are always making exceptions for why you can't do ideal product management. That's when you get into trouble. [1:17]
Q: What kind of metrics are you looking at when customer-based internal users are forced to use the software? There's no LTV, CAC, revenue models, or any of the normal user metrics in B2C or B2B. [7:38]
A: When you're building an internal product, you have to remember that there's always value to them, and the trick to figuring out what the right metrics to use for success are or what the right metrics to measure are is getting back to that value. Everything in our business comes back down to cost and revenue and internal products could do either one of those. [7:58]
Q: We're building a product for renters, our end users, and landlords, our customers. I'm struggling with prioritizing whose problems to solve first. Is it better to build for our paying customer first, or do we build as fast as possible for renters but risk more turnover with the landlords? [14:03]
A: The way that you figure out who to build for first is [by identifying] who [runs] the highest risk of not using [your product]... who's the riskier party to bring on board. That's where you should spend most of your time. You should build both but spend less time on the one for the safest party and come back to work on it when you’ve built a strong product for the riskiest one.
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