A Product Market Fit Show | Startup Podcast for Founders
00:26:30 · Pablo Srugo, Scott Stevenson
[00:26:30] S1: I didn't even know you could build something for Word to be honest. I don't have any plug of Word? [00:26:35] S0: Yeah, it wasn't very popular at the time. Our developers cringed. They're like really we're going to deal with these messy Microsoft APIs. This doesn't sound like fun. That spikiness and that contrarian is part of what helped us have this big lead on the market. We knew how hard it was to even get them to go to a web app. That was crucial. The other thing we learned is you have to be able to explain what your product is in a five second GIF. If you can't, it's like no one has the attention span for it anymore. We knew it had to have that element where you have a five second video and someone's like, holy cow, what is this? We knew it had to work with bespoke documents and we knew that the time to value had to be zero. That's a huge pattern that we still use today when we launch new things is no one has time for configuration controls, setting things up anymore. It has to be, you turn the thing on and it immediately works. These things became very important to now even as we launch new features, these attributes become really important aspects for how we evaluate new features and their potential fit. If you get those right, you see actually the usage charts, which most of the time you don't.
00:27:39 · Pablo Srugo
[00:27:39] S1: I mean, this is the interesting thing and there's this broad concept like you make your own luck or however you want to talk about that. You had actually two things. One is spend a lot of time with your customers who really understood them and how they worked, but also effectively build a machine that was really good at acting on a new idea and trying to figure out delivering something really quickly and trying to figure out if there's true pull. All those things had been done for years when this moment happened and so it makes sense that it worked out in the way it did.
00:28:12 · Scott Stevenson
[00:28:12] S0: I think there's one way I would compress all our insights into a framework that I would say has enabled us to create these PMF moments way faster now than we could back then. The big thing, and this has been this amazing breakthrough on our team in terms of how we decide what to build next and how to replicate these moments; not every four years but every three or four months. There this framework we call basing the next features you build based on pattern matching, not based on verbal reasoning. I think this is how we screwed up so much and how many companies screw up and how I think you can make really good bets. What I mean by this is, when we first started we used verbal reasoning to explain what we're going to buy. Lawyers want to make more money, therefore, we're going to give them a store. These sorts of little simple narratives are so contagious at the board level, at the founder level, at the company level. That little phrase I just said, lawyers don't care about efficiency. They want more clients, therefore, we're going to build them a store. It's so easy to build these little narratives that are super powerful and super contagious and to go all in on them because everyone thinks they sound reasonable. We learn over and over again that actually that thing is actually really bad because the world is way more hyper-dimensional than that. There are way more characteristics about a feature that will determine whether it's successful or not. We learned that the form of the feature, whether it's in Word or not, actually matters more than almost the product itself, because If you're building a web app for lawyers, sorry, you already lost the game. Whether that story makes sense, doesn't matter. There's so many other characteristics. The characteristics we look at are like, is it zero time to value? Can it be explained in a five second GIF? Does it require zero habit change? Is it already in the workflow? The other characteristic we have is did someone on our team actually build this based on their own inspiration in their own time? That's a huge thing that we've noticed is almost everything that we've built that was really successful, someone was actually just inspired to go and hack on, on their own outside of our normal development cycles.
00:30:07 · Scott Stevenson
We have 16 of these characteristics and we've learned that by instead doing pattern matching against a whole bunch of attributes, we can be way more successful. I think this applies in investing too. I think you're a pattern matcher and investors get that like, oh, I'm going to invest in this cobalt mining company because they have a contract with Tesla. If you invest in a story like that, you're just going to end up piling on with a bunch of retail investors who have this very contagious story that's really compelling and then there's this big spike and bubble and bust thing on that stock.
00:30:47 · Pablo Srugo
[00:30:47] S1: I think that's huge because the problem that you described is exactly how it happens. This is just how almost every product idea, feature idea comes alive. You have a story and by the way, most founders are actually quite good at telling stories. The hierarchy you are, the better you are at telling stories and the better you're at convincing yourself and others, and so the stories make a lot of logical sense. They're overly simplified because they have to be and they miss a lot of the nuance. This new approach of pattern matching across characteristics that you have worked – in your case, obviously you had done enough features to have a sample size to say these are the ones that work more and these are the characteristics they had. You probably could start with some first principles around things like zero time to value, easy to communicate, probably apply broadly. If you think about your customer set, you probably can come up with some other ones. That's really helpful even at the outset. Let me ask this, how do you come up – just to make sure that I understand it, do you still – because humans think more in verbal logical reasoning than they do pattern matching, is that still what you use to come up with an idea but then you use pattern matching to test the idea or are you somehow able to use just a characteristic framework to come up with ideas in the first words?
00:32:10 · Scott Stevenson, Pablo Srugo
[00:32:10] S0: Yeah, that's a good question. I think ideas can come from anywhere. They can totally come from the verbal reasoning. The characteristic framework is the gut check on validating could this actually work? Ideas can come from stories totally. They can come from all sorts of weird places. You also need stories to motivate a team. A team is not motivated by staring at a spreadsheet of numbers. [00:32:32] S1: To be clear, it's not like you have a framework where you have these characteristics and you're somehow able to go from that to, oh, maybe this feature will work or do you, because that's hard and unintuitive? [00:32:42] S0: Yeah, no, we don't use it for idea generation. It's more so we have a list of 50 things we could do, how do we rank which one to actually do? Yeah, but it's tough. We have to be good storytellers. I always call the storytelling power as this dark magic and you have to be very careful because it can screw up your own radar if you use it in the wrong way. [00:33:03] S1: The worst part of being a good storyteller is you believe yourself. [00:33:06] S0: Yeah, exactly. I have become more skeptical of simple stories though generally as like, because they're so contagious and because people rally around them so quickly those are the ones where I apply the framework more intensely because I'm like, okay, hang on, this is it.