Product Strategies for Building a Successful Consumer Internet Company
2021 started with a bang for Apxor, as we had renowned business, product and strategy expert Ankur Warikoo with us for our first open discussion of the year. Ankur shared his expertise and experiences around the topic - “Product Strategies for Building a Successful Consumer Internet Company”.
Ankur Warikoo is the founder of Nearbuy. He is also a mentor for first time entrepreneurs. Currently, Ankur is spending time taking courses, especially for startups, demystifying what it is to startup and also deglamorizing as how startups are not as cool as they seem to be from the outside. He is also giving talks at universities, for executive coaching classes, and spending time with entrepreneurs one-on-one helping them not to make mistakes that he made. You can reach out to him on his twitter handle @warikoo for advice.
Our seasoned host Akhila Nageswaram (@akhilately) started the webinar by talking about Apxor and then introducing Ankur Warikoo to the guests. Ankur Warikoo expressed his extreme satisfaction in while using Apxor for his latest product, he said " I am a very happy customer of Apxor and they have tremendously helped us in visualizing our customer journeys in a way I could never have imagined. I am happy with the great work Apxor has been doing."
Here are a few excerpts from the session.
On MVP and the understanding the need for pivoting
Akhila: When is the right time to Launch a product? Is it Art or Science to come up with the first version of a product quickly ?
Ankur: “In the startup world, there is this concept of MVP or minimum viable product. That's a good way of thinking about things. The way that I think about it is, what's the bare minimum product that you can ship out to bring out the key hypothesis of your business. Which are:
Are you able to solve for the very core offering that you have built your product for the customer?
Are there enough or more customers reacting favourably to this version of your product?
Do you have a semblance of economics, coming in profitably through this MVP itself?
So this MVP can take multiple shapes and forms. For instance, when we were running Nearbuy, the MVP frankly was, just get the best deals in the city, out in front of the customer. There were no reservations involved, there was no fancy walkthrough, there were no pretty pictures, there were no grand testimonials. There was simply - here’s a restaurant, here’s a spa, here’s a salon, and we are offering a great deal, we are hoping that you know about the place already so that we don’t have to sell to you, all that we have to do is tell you that hey, the place that you usually go to, a place that you like, its running a great discount for a limited period of time. That’s it. That was the MVP.
Today when you look at the avatar of Nearbuy, it's so much more and it's a lot more complex as a product. But to ship out that first version of the product, took us a lot more effort. But what we were testing was 1) is deals as a core proposition working? 2) are customers reacting favourably to it? 3) is the economics of getting a deal and selling it working for us? And once we could prove that then we could add-on add-on and add-on to make it a great product eventually. Almost all businesses start with the same basic functions and make sure they cover these three aspects, and that's what the MVP is.
Akhila: Once the MVP is out and assuming it is not giving the desired results, when should one realize the need to pivot? Is there a good approach to decide when a founder has to persevere with the idea or pivot?
Ankur: Most entrepreneurs fall in the trap that you should never give up. The way that I think about it is this way. Whether it is a B2B product or a B2C product, whether it is a tech product or a non-tech product, but you are able to sell to the customer in a manner that you make money at a transaction level, which is called the unit economics of the business, you should continue persisting. And then you may not be making as a business, because you have fixed costs, salaries, server costs etc, but at a transactional level you are still making money. And if that is there, you should not consider pivoting from the business. Also, if you may not be making money at a transactional level, but you are growing insanely, there are lots of customers who love your product, and they are bringing back more customers, then you know you could be in the right path.
So you map these into a 2 * 2 matrix and I love to see the world as in 2 * 2 matrices, in the X-axis is the unit economics (positive or negative) on the Y-axis is Growth (Not happening or Happening) you should only and only pivot if you have negative unit economics and not having growth. Because then you know that there is something wrong. The writings on the wall and you know that you are beating down the wrong bush.
Pivoting today has become very fancy. I always encourage people to think about what a pivot means. Pivot means you have a central hook and you are moving around that. Ask yourself one main question, if I have to give this entire company for free, but I get to keep one thing, what would that one thing be, and more often than not, that is what you should be pivoting to. So if you choose to pivot, you must pivot to what you have built, used and understood... (Ankur added example of what he would do if he were to give away Nearbuy and keep just one thing/aspect from the entire product)
Balancing the feature development act
Akhila: Building ‘parity’ features - the ones that customers expect as they are with competitors vs Building differentiators, how should companies balance the act ?
Ankur: Customers always know intuitively whether the product they are using serves their needs or not. They might not be great at articulating how it serves their needs, but they just know it. If you are serving the core needs of things the product should offer and the customer wants, and suddenly you find that there is one feature you don’t because of which your customers are going to a competitor, then mostly that feature was also part of the core offering because there is never a reason why customers will move away.
Humans in general don’t like change. For people to switch, though the switch may be materially no cost, it’s still psychologically a cost. The main reason for this switch is only because someone else is offering them a thing they care about.
Consider this recent example, WhatsApp came up with the new privacy terms and conditions and very clearly stated the data could be used by Facebook for advertising purposes. WhatsApp is one of the fastest & simplest messaging apps. When you are in flight the minute you turn off your airplane mode, the first thing that you do when you land is to reach out to your phone and check your WhatsApp unread messages. But still what explains the fact that across the world, we are seeing a massive shift towards platforms such as telegram or signal. Why is that so?
What is built may not be the fastest but we are secure, we value our privacy. so clearly core offering has moved from not just being fast and people are like even if it takes seconds later, I am okay. I don’t want anyone reading my messages and I don’t feel comfortable that my content could be used to target me for whatever needs there is and that is a great example of something which may seem like a great feature or privacy is. Customers don’t move just for the heck of it, they only move when the core offering of why they have been using this product is not serving its purpose.
Hiring at early stages and Growth tips for early-stage companies to scale up
Data and its importance
Akhila: How should companies at different stages - early stage company , growth stage and unicorns - work with data?
Ankur: After the engineers who build the product, the first hire I would make would be data people. People who are objective, completely unbiased, who will call your bullshit out, who will help you build an intuition, but will always and always go back to data. The best investment we made in Nearbuy was building a DAS (Data Analytics and Solutions ) team.
Even in one of the businesses that I am running now, for which we use Apxor, the best investment we have made is after the first two engineers, we have hired a product analytics guy who has helped us see and visualize data in a manner that we could never have. We have spoken to a lot of customers, but the insights we continue to get from the data are so much richer than what we get from conversations with customers (notwithstanding the fact that they are also important). But the insights you get from data are more authentic.
Irrespective of the business you are in whether its B2B or B2C , its tech or non-tech, if you have a way of playing with data, which may not come naturally to you, and if it doesn’t come naturally to you, you have to even more so invest in that talent, and if it comes naturally to you, you should find someone who helps you navigate through it while you ask the right questions. But it is indisputable that having data as the core tenet to run your business is the only way to grow your business.
Akhila: The real pain with data and analytics is getting to insights that you can act upon. How do you ensure you get actionable insights from your data? For Ex: For most apps, sending push notifications is key to retaining them and if you look at top reasons for users uninstalling app push notifications will be on top - leaving marketers and product people confused on next steps with this insight. How to crack the code and get actionable insights ?
Ankur: I have heard this and would love to tell you - If you strangle it enough, data will tell you whatever you want to know. But if you strangle enough, data will also admit whatever you are blaming it for. I love this because data is this double edged sword. Data will only tell you what's happening.
So if there is a product manager who is responsible for revenue growth and is the owner of the consumer app and they start sending push notifications. The minute they say that sending push notifications drives up app launches and then leads to more discovery pages, which leads to increase in transaction pages, and finally leads to more revenue. So, they conclude more push notifications leads to more revenue. Everything seems to work great , however data is conveying something completely different. Push notifications just leads to more sessions and that’s it. Push notifications just lead to more sessions and more sessions lead to more revenue.
So your question should be should you use push notifications to drive more sessions? Or is there something within the product itself that should to drive more sessions organically. And here is why when you send push notifications, there is an 'x' percent of uninstall rate. Because there are people who would say, I don't want to receive so many push notifications, and they would start uninstalling. And you are not looking at that data, you are looking only at the data that supports your point of view.
Data analysts should never be responsible for solutions, they should be only responsible for coming up with synthesis and not what the analysis is leading to which solution. Solutions need to be based on the questions asked by the leadership or product owners. But if the data person comes up with the solution, it creates a conflict-of-interest scenario where the doer and checker is the same person. This is also one of the big traps many entrepreneurs fall in.
The leadership should be asking the data person to send an analysis of what happens when we send push notifications. Then the data person has the chance of synthesis and sending a report which could say push notifications lead to more sessions, but they also lead to more uninstalls, or more time outs, or more high server loads, whatever the case is. Then the leadership can think of a holistic approach to push notifications.
How should different teams work on data and what are different signals that teams should derive from data
On user research
Akhila: How can companies make user research it a part of product strategy, so that they develop user centric products?
Ankur: There are two folds, the world has moved into the point where customers are behind enough digital footprints for you to predict what is it that they wish to get from your product. That's frankly what we use Apxor for. There is so much data we generate on a daily basis that it becomes relatively easy for us without having a customer conversations to predict what customers want at least as cohorts or groups. We use lot of data to form the hypothesis, then we reach out directly to consumers to validate those hypotheses, through open ended conversations, which could be through surveys or focussed groups or one-on-ones or product walkthroughs.
I feel the mistake that people end up doing, is speak to the customers first. Unfortunately when they do that, they will be biased by what the customers will say. Customers will not necessary be representatives of everyone else, as you can only speak to some in one go. And when you go back to data, there is a conflict.
I love product strategy through a hypothesis driven approach, as it is immensely agile. It makes for very high levels of iterations, very high discipline of shipping regularly. You build those hypothesis using data and very quickly do customer mapping and validate and very quickly move ahead.
Ankur answered various audience questions.
Watch the full video to see the expert advice shared by Ankur to all the audience.
Hit the Subscribe button below, to get regular updates of our events.