Time To Build
By now everyone that reads these articles is aware that our industry has entered yet another one of its down cycles.
Most of the companies I know of and work with have had at least some level of staff reduction, and have worked to bring down their spend.
Some have a sizable war chest because they raised funds when it was easy, and were conservative about their spending. Many weren’t so careful about their spending, and some are in real trouble.
The good news is that there are still lots of good jobs out there for those that find themselves suddenly without one. But many people are naturally stressed from the change, especially those that had to leave a company and a manager they felt fortunate to work for.
But apart from the lives that have been disrupted, I can’t help but observe after so many years in the industry, and witnessing so many of these cycles, that very often the best products come from companies during these down periods.
Others have observed this too. Much harder of course is understanding the reason.
More than a few CEO’s over the years have told me that “the easiest problems are the ones they can solve with a check.” I don’t know if that’s something taught in business school or something, but that statement has always rubbed me the wrong way.
My personal theory is that this belief contributes to many failed product companies.
It’s not that they necessarily have too much money, but the lack of financial constraints means that they sometimes believe they can overcome the difficult problems (especially that pesky problem of getting to product/market fit) by spending heavily on sales, marketing, customer success, and the one that bothers me most of all, acquisitions (more about why acquisitions so often go so very wrong in an upcoming article).
Of course there are some businesses which are focused on unit economics from very early on, and in this case extra spending doesn’t do too much to obscure the underlying reality of the situation.
But as most of you hopefully know, there are a great many business strategies in our industry that legitimately defer their focus on profitability. Many of the best products in the world wouldn’t exist without leaders that understood the benefits of this strategy.
But I’m suggesting that too often that excuse is used to mask the underlying reality that the product is not where it needs to be.
In any case, when the money dries up, the product deficiencies become plain to see. And that’s precisely where many companies find themselves today.
When the product is inadequate, it makes marketing difficult and costly, it makes sales not only slow and expensive, but the sales organization is too often forced to do unnatural acts that rarely end well, and the poor people in so-called customer success are more accurately punching bags for unhappy customers.
Which is why, with a nod to Marc Andresseen’s 2020 essay It’s Time To Build, I am encouraging all of these companies that do not yet have the products they need to sustain their business, to focus their energies on building.
Since many of these companies have not a single dollar or day to waste, I want to remind them that what’s hard about product is not so much figuring out what problem to solve, but rather, coming up with a solution that is demonstrably better than the alternatives, that users and customers will switch to your offering.
Once you have established product/market fit, then by all means invest in marketing, sales, and customer success. But I promise you that you’ll find those investments producing a much greater return for you. And most importantly, you will finally have happy customers.