How do today’s most successful tech companies—Amazon, Google, Facebook, Netflix, Tesla—design, develop, and deploy the products that have earned the love of literally billions of people around the world?
Perhaps surprisingly, they do it very differently than almost every other company. In his book, INSPIRED, technology product management thought leader Marty Cagan provides readers with a master class in how to structure and staff a vibrant and successful product organization, and how to discover and deliver technology products that your customers will love—and that will work for your business.
Last week, we partnered with Silicon Valley Bank to host a conversation with Cagan, along with Thor Ernstsson, CEO of Alpha, and Steven Cohn, CEO of Validately. We covered a wide range of topics, from data-driven decision-making to navigating internal politics. Below are video highlights from the event, key takeaways, and a video of the unedited discussion.
Leverage cutting-edge tools and techniques
Cagan actually published the first version of INSPIRED nearly 10 years ago. The second version, published at the end of 2017, was itself “inspired” by all the ways in which product management has evolved in the last decade.
“There’s not a single page from the first edition,” Cagan exclaimed. “It’s all new because there are much better ways to talk about things.”
Throughout the conversation, a number of such themes emerged. For example, the process of validating assumptions has vastly improved. Product teams understand how to conduct unbiased research, dig deeper into problems, and assess whether someone actual demands a product, not just when they claim they would in a survey. There are also streamlined tools like Alpha to manage the experimentation process.
The most effective product teams iterate incredibly quickly, shortening the time from hypothesis to insight. In fact, companies formed recently typically have such processes baked into their DNA.
But not everything is sunshine and rainbows, according to Cagan, especially with regard to legacy organizations in mature markets. They’ve frequently struggled to adapt to these new tools and techniques.
“When I wrote the first edition, it was before lean was popular, before agile was popular, and we were still trying to convince people not to do waterfall. And now 10 years later, almost nobody – well a lot of them still do waterfall – but at least a lot of them don’t say that out loud,” he quipped.
Solve bigger problems
Stories and examples are a powerful way to communicate lessons, and Cagan brought a collection of them to the discussion. His most ‘inspiring’ was about how Netflix overcame an early struggle.
As many will recall, Netflix began as a DVD rental service. They had a massive catalogue including some new releases, but far more copies of older films. New releases were expensive to stock, so Netflix’s product teams had to find a way to keep users happy without creating too much demand for limited inventory.
“You could imagine that most teams would do a roadmap for like 10 years worth of work and they still wouldn’t get there,” Cagan said. “[Netflix] did amazingly rapid experimentation – this is where they came up with the queuing system, the rating system, the recommendation engine. They were all invented in the spirit of solving this problem, which amazingly they did in about three months.”
Netflix effectively shifted customer requests for new releases by manufacturing demand for well-stocked movies instead.
Many product teams don’t try to tackle problems this big. “I see everybody doing more experimentation now, which to me is good,” Cagan reflected. “But 95% of that experimentation is optimization and not discovery.”
He advocated for product teams to solve hard problems, like the one Netflix’s team tackled, rather than small tweaks and micro-optimizations. Ernstsson agreed, explaining how Alpha has seen many of the same trends from working with hundreds of product teams across the Fortune 1,000.
“One of the things I’d love to see over time, and I think we will, is the ability to tackle some of these bigger problems,” Ernstsson said. “At Alpha, we drive it down to hours so that you can run any question about any product to see if it’s worth it. But if you don’t have the culture to do it, you don’t have the permission to do it, and it’s not your job, you’re just not going to do it.”
You can only get so good without executives on board
While more than 80 attendees excitedly received signed copies of INSPIRED, Cagan said they’ll get limited value if they’re the only ones in the organization that read it. That’s because so many of the challenges that prevent teams from building great products aren’t incompetence or inability on an individual level. It’s inadequate leadership at the top, a culture that values the status quo, and risk averseness.
Cagan instructed attendees to try to make an impact on their organizations.
“You were all given a book when you came to this, but you can find the content for free on my website,” he said. “Give the book to the CEO. A lot of CEOs want to see [whatever you’re advocating for] in hardback and then they’ll pay attention…I can’t tell you how many times that happens, and then the CEO calls me up and says ‘How do we do this?’”
Cagan explained how he knows a lot of corporate executives who admire Netflix. The book explores many stories from such companies, which can spur executives to take action in a way any single data point or argument can’t.
“Give it a shot,” Cagan concluded.
Watch the full conversation below:
A special thank you to Silicon Valley Bank for hosting the event! SVB has helped and continues to collaborate with innovative companies and their investors in moving bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world.