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Episode 39  |  15:27 min

38: Product Managers, CEO’s, And A Book Preview

Episode 39  |  15:27 min  |  10.12.2016

38: Product Managers, CEO’s, And A Book Preview

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This is a podcast episode titled, 38: Product Managers, CEO’s, And A Book Preview. The summary for this episode is: If you liked this episode, we bet that you’ll love our blog content. blog.drift.com/#subscribe Subscribe to never miss a post & join the 20,000+ other pros committed to getting better every day. --- This week on Seeking Wisdom, we’re talking about why David doesn’t agree with the phrase “product managers are CEO’s of their products” -- plus a quick book preview and a salute to our friends at MailChimp. Here’s the link to the MailChimp story in the New York Times that we mentioned about their revenue and growth: http://www.nytimes.com/2016/10/06/technology/mailchimp-and-the-un-silicon-valley-way-to-make-it-as-a-start-up.html?_r=3 PS. In a few weeks we’re launching our first book -- and just like all of our content at Drift, it’s going to be 100% free. If you’re on our email list at Drift, you’ll be the first to read it (all about the customer-driven revolution and why it’s the only way to build a business today). Be the first to know right here: go.drift.com/newsletter Come hang out with us at seekingwisdom.io and on Twitter @seekingwisdomio. Follow David (twitter.com/dcancel) and Dave (twitter.com/davegerhardt) on Twitter.
If you liked this episode, we bet that you’ll love our blog content. blog.drift.com/#subscribe Subscribe to never miss a post & join the 20,000+ other pros committed to getting better every day. --- This week on Seeking Wisdom, we’re talking about why David doesn’t agree with the phrase “product managers are CEO’s of their products” -- plus a quick book preview and a salute to our friends at MailChimp. Here’s the link to the MailChimp story in the New York Times that we mentioned about their revenue and growth: http://www.nytimes.com/2016/10/06/technology/mailchimp-and-the-un-silicon-valley-way-to-make-it-as-a-start-up.html?_r=3 PS. In a few weeks we’re launching our first book -- and just like all of our content at Drift, it’s going to be 100% free. If you’re on our email list at Drift, you’ll be the first to read it (all about the customer-driven revolution and why it’s the only way to build a business today). Be the first to know right here: go.drift.com/newsletter Come hang out with us at seekingwisdom.io and on Twitter @seekingwisdomio. Follow David (twitter.com/dcancel) and Dave (twitter.com/davegerhardt) on Twitter.

Dave: All right. I'm ready.

Speaker 2: Are you ready?

Speaker 3: Born ready.

Dave: Okay. All right. So today on Seeking Wisdom, we are going to talk about a topic that is surely to get you fired up. It is this whole idea that product managers are the CEO of their products.

Speaker 3: Oh boy. Here it comes. I'm ready. Damn, my blood pressure just went up.

Dave: Yeah. All right. Hit me with it. You've said this before. I think one time I said to you like," Well, yeah, product managers or CEO." And you just were like," No."

Speaker 3: Hell no, the CEO is the CEO. That's it.

Dave: All right. Tell me, you had a good line about this. So tell me, first of all, tell me why do you think this is something that people think about?

Speaker 3: Hmm, good question. I don't know where it stems from because I've encountered it many times in the past, so I'm not sure what the idea here is. But I've heard many times this idea of like," Oh, you're the mini C. Product managers are mini CEOs, or they're the CEO of the product or something like that." And my reaction is always saying," No, they're not. The CEOs the CEO. The product manager is a product manager. It's not the CEO of the product or the mini CEO." Right. And because it's totally different, they don't have the same responsibilities. Their job are nothing alike. And so I don't know where this analogy comes from.

Dave: I wrote down what you said in this tweet. You said," The CEO has authority. The product manager has none."

Speaker 3: Exactly. Boom. I said that?

Dave: You said that.

Speaker 3: Damn, that was good. Yep. That's it.

Dave: Okay. Even beyond the whole CEO versus product manager thing, is in part of it because of your whole thought on being customer driven and what the product manager should be responsible for anyway, it's not just the actual role thing.

Speaker 3: Oh yeah. So yeah, to me, it's all about being as you've heard before being customer driven, that includes the CEO. But now we're talking about the product manager and the product manager is a tricky role, which I've talked a lot about in the past because it's something that is hard to define and is usually company specific. So everyone has their own little different definition of what a product manager does. But for me, a product manager is all about being the customer, the bridge to the customer. That doesn't mean that the rest of the company and the rest of the people that a product manager works for, only talk to the customer through the product manager, but the product managers should be focused externally on the customer and also internally on the internal set of customers. And that's what they're spending their time doing. That's very different than a CEO role, different level of authority. And when you build this structure, in my opinion of this idea of you have a CEO, then you have these mini CEOs or whatever you want to call them, then you're building the wrong kind of you're setting up the wrong incentives inside the company. You're setting up the product managers to want to play the bad version of the CEO, which is authoritarian... I can't say that word. Authoritative kind of role. And that's not at all what the product managers should be doing. They should be the servant of the customer, not the authority.

Dave: Right and so instead of saying like," This is our roadmap, this is where we're launching this thing, this is why we're building this thing." That's just a whole change in mindset of the two roles.

Speaker 3: Absolutely. And I think when people hear the idea of being a CEO, they think they need to put on their CEO pants. Okay. I'm going to put my CEO pants on now and I'm going to tell people what to do and this is what's being a CEO is, but we all know that's not true, at least not the good crosstalk

Dave: Yeah. And this isn't even just a product manager thing. I think this is something across the board. There's no such thing as a mini CEO or a CEO of X.

Speaker 3: Yes. Not at all. There's only one CEO and then there's your role, whatever your role is, maybe your role is the CEO or your role is something else. And the CEO also needs to be the servant of the customer and the servant of the team and the investor.

Dave: And this is something that we've talked about all the time, which is the whole accountability and transparency stuff that we talk about adrift like imagine operating in a world where there were four or five mini CEOs, who is in charge? crosstalk And everybody's responsible, nobody's responsible.

Speaker 3: That's it. I love that quote. And I had experienced in the past, which we've talked about, about coming into a situation where there were many CEOs and, and then we were going to organize them through having a product board meeting and all these mini CEOs came in and it was a complete nightmare. Right. Everyone, just like you said, when everyone's in charge, no one's in charge and it just led to lots of people with different agendas competing with each other, instead of being aligned with the customer, which is what we all should be.

Dave: Yeah. All right. So, that is product managers are not the CEO.

Speaker 3: Hell no.

Dave: Now one thing that we got to start plugging, because we're going to release it at the end of the crosstalk.

Speaker 3: What are we plugging?

Dave: You wrote a book.

Speaker 3: What?

Dave: And we're going to release it. That's what we're going to do.

Speaker 3: That's right. So should we tell them the title of the book?

Dave: Yeah, tell the title. Actually tell them what we were going to name it and then let's talk about the whole phrasing around that.

Speaker 3: The whole process, that's good. So for a long time, I thought about writing a book and because we get a lot of questions about how we organize companies, how we organize product teams, how we build things and I've always, at least for the last decade I have gone on about this customer driven way, right. Just what we were talking about earlier. And so people have asked me like," Is there a book? Is there something that I can read? Where can I learn more? I'm interested in this. Do you have examples?" And so I've been putting those together and we're going to release a book. The book was going to be called Customer Driven.

Dave: Yeah. Customer Driven something, right? Customer driven was going to be the main title.

Speaker 3: The main title. And I never... It's always what I've called. I never had thought about giving it a different title. And then this week I talked to Dave and I talked to Eric, who's helping me write the book and thought like," No, let's rename the book." We came up with a new title. Are you ready to hear the title?

Dave: Yeah. Hit the people with the title.

Speaker 3: The title is called Hypergrowth.

Dave: There we go. Right.

Speaker 3: So we wanted it to be less about customer driven, could be hard to explain. Customer driven to me is the how, right. And I wanted a title and had been thinking about a title that wasn't the how, but was really the why. And the why, as Simon Sinek would say, the why is the most important thing, right? So the why is hypergrowth. That's why you want to read this book because you want to learn about hypergrowth. And then you want to the how is through this customer driven way that we'll talk about in the book. And then the why this is happening now is because of the shift that we see at drift and many other companies see in the way that they're running. And so many of the companies that we see today that we admire today are customer driven and are customer focused and are built around the customer. That is a difference to us between an Amazon versus a Walmart, Airbnb versus a Marriott, right? The difference, a Tesla versus a Ford, right? The main difference is where they put the customer in terms of priority. And you see those companies that are closer to the customer are winning. And that is where we talk about in the book.

Dave: Yeah. And you've been doing a bunch of speaking and all these ideas have come up from different places. And that's kind of where we landed on the hypergrowth thing, which is think about... What's one of the company examples that you've been giving in your deck? Isn't Lego one example?

Speaker 3: Yeah. Legos. And so I gave a talk at Mind the Product in London. We'll put a link to those slides and the notes. And we talked about different examples of companies that weren't customer focused and then became customer focused. And one of them was Lego. And Lego, we all know what Lego is, right? We all played with Lego. We all love-

Dave: We all stepped on a Lego in the night.

Speaker 3: And yelled and loved Lego. But what the story is this transition that Lego in the eighties and nineties, went from a place where they got rid of their existing long- term designers that have been on the team, they replaced them with a bunch of great hot shot designers from all the top art design schools in the world. And then they sought out those designers thought they knew the job to be done. And to me, this might be a problem with the job to be done approach, right? Because it takes the customer out of the equation. It might be better than agile, but it still removes the customer and jobs to be done. Still in my mind is us saying that we know better. We know the job. The customer doesn't know the job. We know the job the customer should be doing where our approach and customer driven is know we are starting from the customer and reacting to the customer. Anyway, they thought the job to be done. The designers that Lego was to innovate that their customers, they believed, wanted more innovation. And so they went on and built a gazillion new models of Lego and kind of took it in a direction that was almost unrecognizable to the Lego customers. And what happened was they started to lose money. They lost$ 300 million in one year. The next year they forecast to lose 400 million and Lego, if you don't know, is the most profitable toy brand in the world, right? And so this is the most profitable toy brand in the world. They're only out done in absolute sales by Mattel with Barbie, but their profit margin is way higher than Barbie. So they're the most profitable. They went from losing 300 million, 400 million. They brought in a new CEO. The CEO said from now on, we're never going to design something without the customer being part of that process. And they began to talk to their customers and they found the thing that the customer wanted was not all of these new fangled innovations, what they wanted was simply to build. Right. That is why you wanted Lego. So they went back to their roots, got rid of a bunch of skews that they had created. And a few years later they were back to making billions of dollars per year, two and a half billion, I believe. And then a few years later then that a$ 5 billion dollars.

Dave: That's unbelievable.

Speaker 3: Yeah. Amazing. That is the difference. That's a transformation of going from, we know better than the customer, right. We know the job to be done. We are smarter than the customer to flipping into the other side, which we're talking about in Hypergrowth, which is no, we are not smarter than the customer. We are here to serve the customer and we are going to incorporate their customer throughout the life cycle of building the product.

Dave: I love it. Yeah. So, I mean, that is the best book sneak preview we could've got. You could take notes and transcribe that, but here's the deal, we're going to launch it and just like all of our content here at drift, it's going to be a hundred percent free. There's nothing to fill out, no forms to fill out. Nothing like that.

Speaker 3: crosstalk to give you my social security number?

Dave: You don't.

Speaker 3: Okay.

Dave: I'll take your credit card number.

Speaker 3: Okay.

Dave: Okay. But here's the deal. We obviously need a way to tell you about the book. So all you have to do, if you're already on our email list at drift, and you'll be the first to find out. The easiest way to find out, go to our blog at the top, it says, get our emails. If you get our emails, you're going to be the first people to know about it. And I think we might just start releasing a couple chapters, a couple of weeks early.

Speaker 3: To that email group?

Dave: Yeah, to that email group. We'll give everybody a sneak peek at it there first. And yeah, we'll be talking about it more, but head over to our blog. And if you follow any of our stuff that we do at drift, you won't miss a book. I promise.

Speaker 3: And if I give you my email address, are you going to spam me?

Dave: No.

Speaker 3: Absolutely.

Dave: And all the emails come from me Dave, I reply to everybody. So if I send you something bad, I will reply back to you when you roast me for it. I promise.

Speaker 3: Absolutely.

Dave: Even though there's haters, which is fine. That's the difference between haters and people who are mad at me.

Speaker 3: I need more haters.

Dave: So anyway, oh, one other thing what's that let's give a shout out to our friends at MailChimp this week.

Speaker 3: Shout it out. Damn. All right. Let's all, if you have a hat on, take the hat off.

Dave: Take it off.

Speaker 3: We need to salute.

Dave: Yeah.

Speaker 3: Our boys at MailChimp.

Dave: Yeah.

Speaker 3: Salute to Ben, who runs MailChimp and the whole MailChimp team because this week they finally, there was a lot of mystery for many years. No one, because MailChimp, if you don't know is a private company or male camp is a private company. And so no one really knew what their revenues were. And this week there's an article in The New York Times, if you can't find it, just look at-

Dave: I'll put in the show notes.

Speaker 3: Yeah. Dave will put it on the show notes and they unveiled... Are you ready for this, Dave? You ready?

Dave: 100 million revenue?

Speaker 3: Come on, kid.

Dave: Two?

Speaker 3: Come on.

Dave: What was it?

Speaker 3: Last year, they did 260 million and their own track this year to end the year at 400 million. Damn. Those are some numbers. How many Bugattis is that?

Dave: I mean, that is like... Just Google other public company revenues. You'll get a sense for crosstalk.

Speaker 3: How big that is. A.

Dave: This article had everybody talking, it was-

Speaker 3: 500 employees, right? Half the number of most public companies that have half the revenue and 400 million revenue. Let's say that again, 400 million. You know what that is? 400 Bugattis. Okay. You got to get your Bugatti on.

Dave: So to bring this whole thing back, I just pulled up the article because I want to read this quote. This is the one that had us all thinking. At the time, MailChimp faced a host of larger and better capitalized rivals, including ConstantContact, which went public in 2007.

Speaker 3: And Dave worked there.

Dave: I worked there, but Mr. Chestnut said that MailChimp had a proximity to its customers that its competitors lacked.

Speaker 3: Wait Dave, rewind, say that one more time.

Dave: A proximity to its customers that its competitors lacked, which is why they were able to take down a publicly traded company in the same exact space.

Speaker 3: Would you call that hypergrowth?

Dave: I would call it hypergrowth.

Speaker 3: Would you call it customer driven?

Dave: I would call it$ 400 million hypergrowth.

Speaker 3: Me too. crosstalk Let's all salute. Pour a little bit out for Ben.

Dave: And one more shout out for our content. This is Ellis, who's our CTO here, he doesn't write a lot but when he writes, it's powerful. And so he's writing an article that is going to come out when you listen to this podcast next week. And it's about the difference between customer feedback from free users and paid customers.

Speaker 3: Damn, science.

Dave: Science. We got a lot of good stuff for you. Check it all out. It'll all be on the blog.

Speaker 3: Don't forget the blog, blog. drift. com. Go to the top. Sign up for the email newsletters. We're not selling you anything. It's all free. You're going to be the first ones to find out about the book and get free access to that book. And I know you're hiding and you still haven't given me a five star review. Let's get it.

Dave: Let's get it. One last sign up for the haters, unsubscribe.

Speaker 3: Unsubscribe haters.

Dave: We're out.

Speaker 3: See you.

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