Countdown of the top 10 episodes of the year

[00:03] Welcome to Lenny's Podcast. I'm Lenny, and my goal here is to help you get better at the craft of building and growing products. [00:09] Normally, I interview world-class product leaders and growth experts [00:13] to learn from their hard-won experiences building and growing today's most successful companies. [00:17] But today is going to be a very different and unique episode. [00:20] Launched this podcast about six months ago. We've done exactly 50 episodes at this point. We've also done over 2 million downloads since we launched. The podcast is a top 10 technology podcast across Apple and Spotify globally. And I believe there's about 40 to 50,000 subscribers or followers of the podcast across Apple and Spotify, which is all very exciting and kind of blows my [00:50] to look back at the 10 most popular episodes that we've done so far. So what I'm going to do is count down from the 10th most popular episode to number one and play a clip or two from that episode that I found to be most interesting or that's been the most popular. I've never done this sort of episode before. We'll see how it goes. I think it's going to be really interesting. If it's not, we will never do it again. And if it is, awesome. Either way, enjoy. We're going to get right into it after a short word from our sponsors. [01:20] Have you ever wondered what makes great minds tick? I'm Adam Grant, and on my new podcast, Rethinking, I'm trying to find the answers. Every week, I interview some of my favorite thinkers to learn how we can bring out the best in ourselves and others. I talk to death-defying rock climbers, Oscar-winning filmmakers, creators like Lin-Manuel Miranda, entrepreneurs like Mark Cuban, and thought leaders like Brene Brown. Find Rethinking on Apple Podcasts, Spotify, Amazon Music, or wherever you listen.

[01:50] Bye. [01:50] This episode is brought to you by Notion. If you haven't heard of Notion, where have you been? I use Notion to coordinate this very podcast, including my content calendar, my sponsors, and prepping guests for launch of each episode. [02:20] to using it in your personal life, which is another feature that truly sets Notion apart. The other day, I started a home project and immediately opened up Notion to help me organize it all. Learn more and get started for free at notion.com slash Lenny's pod. Take the first step towards an organized, happy team today. Again, at notion.com slash Lenny's pod. [02:47] - Welcome back, and let's kick off this countdown with the 10th most popular episode of the year, and that is with April Dunford. April is the author of Obviously Awesome, [02:56] She, in my opinion, is the smartest person in the world on positioning and how to figure out positioning for your product. [03:01] And here's April describing the five steps to figure out your product's positioning. Selah Jura. [03:07] a PM or founder that's ready to start figuring out their positioning for their product. [03:12] What's the first thing that you do? [03:14] I actually think the first step in a good positioning exercise is to really understand [03:19] What do we have to position against?

[03:22] So put another way, it's, [03:24] It's like saying, what do I have to beat in order to win a deal? [03:30] So in positioning work, we call this competitive alternatives. [03:33] Now, [03:35] How people mess up this first step is, I say competitive alternatives and they think competition. So things that look exactly like me. [03:44] But in B2B, we kind of have two sets of competitors. We have status quo, which is whatever the company is doing to attempt to solve the problem right now, even if it's crappy and not great. [03:55] Then there's if the company does decide they're going to buy something different, they usually make a short list. So it's whoever else lands on the short list. [04:04] So I need to be able to put a stake in the ground and say, I got to beat all that in order to win a deal. [04:10] Now, most folks will discount the status quo, but they shouldn't because in B2B, we lose about 40% of our deals to, quote unquote, no decision. [04:20] which actually means we lost to the spreadsheet, we lost to pen and paper, we lost to interns. And if we're not positioning well against that, we're never going to get the customer to come off of that. [04:31] So I got to win against status quo, but I also have to win if it's most of the time, if it's B2B, you don't just buy the first thing you come across. [04:40] You make a short list of alternatives and I got to win against those as well. So step number one, what am I positioning against? Once I have that stake in the ground, [04:49] then I can start thinking about what makes us different.

[04:52] so the easiest way to do this is okay this is what i have to position against what have i got [04:58] capabilities-wise, [05:01] that the alternatives don't have. [05:03] So feature function or even capabilities of the company, which could be, you know, pricing or professional services or other things that you've got, but also capabilities of the product. [05:13] What have I got that, that, [05:15] the alternatives don't have and i can make a giant list of these things [05:19] and then I can translate that stuff into value by going down the list and saying okay we have this great feature so what like why does a customer care about it what is the value that feature enables [05:31] and when I do that mapping over to value what generally happens is I end up with two or three value buckets or value themes. [05:41] and quite often [05:43] Those value buckets or value themes are different. [05:46] then what I would have gotten if I got all the smart people in my company together and said, hey, why does everybody love our stuff? [05:52] When I do it this way, I'm ensured that those value themes are differentiated. [05:58] and not just things that are generally valuable but any alternative could get it done so why are we even talking about it? [06:05] so in my mind that's kind of how we do it once i've got differentiated value then i can start thinking about well look [06:10] I could sell this product to any company that has this problem, but not everybody cares about this value the same way. [06:18] and so what are the characteristics of a target account that make them really really care a lot about that value?

[06:25] If I do some deep thinking about that, that's going to be my definition of a really best fit customer. [06:31] And then the last piece of positioning, of course, is market category. And so [06:35] Again, a lot of people will just [06:37] start with market category and then try to back up, which I think is crazy because then we don't have anything, we don't have any way to judge the goodness of a market category. [06:46] But if I've got, look, [06:47] This is the value only I can deliver. These are the kind of people that really care a lot about that value. If I start thinking about positioning is like the context I position my product in, [06:59] then the best market category is the context I position my product in such that [07:05] This value is kind of obvious to these people. [07:11] This is my long-winded way of doing it. But this is the only way I know how to get positioning done. Next up is Crystal Wajia, who is a longtime chief product officer at Gojek. She's currently chief product officer at Kumu, and she's one of the smartest growth minds that you probably have not heard of. Here is Crystal talking about why most analytics efforts fail at companies. I want to shift a little bit to a post that you wrote that maybe is one of your more popular posts you wrote on the Reforge blog. [07:39] called Why Most Analytics Efforts Fail, [07:42] And I'd love to hear your broad overview of why do most analytics efforts fail? And then how do teams avoid this? Maybe what are like two to three things they can do? [07:51] Yeah, I'm actually pretty surprised at how much noise that has generated because

[07:57] I guess it came from a place of frustration where I kept [08:00] Telling people, [08:01] Bye. [08:02] you're doing this wrong, here's how you should probably be doing it. [08:05] But I think it resonated a lot with Fultz because [08:08] They recognize all of those symptoms, but they weren't sure why it was happening. So to say like, oh, this is the thing. Instrumentation is what's wrong. I think it's a very actionable thing. Like it's probably one of the most solvable problems out there. [08:22] It just takes some time and [08:24] mental model shifts to do it well. [08:27] So a lot of people look at tracking data as, [08:30] How do I track my OKR? How do I know if I'm going up or down? [08:35] but they don't use it to track or identify insights. [08:40] So I... [08:41] We'll use the example of using Twitter, [08:44] for [08:46] quote unquote news when in reality they're actually using Twitter for entertainment. [08:50] Do not treat metric gathering as entertainment. Like it's not there for you to be like, oh, [08:56] That's interesting. How novel. And then not act on it. [09:00] So real news is information that changes what you do in the real world. [09:05] And if you don't change what you're doing, what you are doing is just getting entertainment. [09:09] So, [09:10] Let's use that as a premise. [09:12] The next step in instrumentation is to look at the fact that measurements do not equate to insights. [09:19] A measurement would be an observation. It's a data point in your database. [09:24] So the example being, power users do four times more bookings

[09:29] is an observed fact. [09:32] because your transactional database obviously says that that is the case. [09:36] but it's on an insight because it doesn't have context. [09:39] It doesn't give you information that lets you act on it and better understand the problem. [09:45] So another example, [09:47] would be if i see my girlfriend hanging out with a guy i don't know that is an observed fact that you see in the real world [09:55] Your hypothesis could be that your girlfriend is cheating on you. [09:58] But the insight [10:00] The actual fact might be that she's not cheating on you, it's her cousin. [10:05] And now your insight is I am paranoid. [10:08] and I need to change my behavior to be less crazy. [10:13] So the insight will provide value when you have this why answered. [10:18] Why is this person doing this thing? [10:22] here's why and then you are going to act differently. [10:25] So, yeah. [10:26] For our purposes, if we look at [10:30] a good food user will transact and is more likely to use a voucher [10:35] That's a fact. That's an observation. [10:39] but it's not an insight. An insight would be something like, [10:43] GoFood users who are power users, [10:47] are more likely [10:48] to use a free shipping discount on a high gmv basket [10:53] versus non-power users. [10:56] And that actually tells you how to change your marketing approach. It tells you

[11:00] that in what circumstances does someone do this when it's a high gmd basket [11:06] give power users the ability to get a free discount [11:09] But do not do this for non-powered users because they won't convert any better than they normally would. [11:15] So that helps you change your marketing spend. [11:18] It helps you understand the decision points of power users versus non-power users. [11:23] The insight is [11:25] instrumenting properties into an event so that you can segment who is doing what behavior [11:30] and make some hypotheses, [11:32] On that. [11:34] Observation, [11:35] test that hypothesis and then you get [11:38] some causal representation of whether or not that hypothesis was right. The eighth most popular episode of the year is our very first episode with Julie Zhu. Julie was a longtime design leader at Facebook. She's now the founder of a company called Sundial. She also wrote the bestseller, The Making of a Manager. And her newsletter, The Looking Glass, was a huge inspiration to me that helped me start my newsletter. Here is Julie sharing her advice [12:08] Facebook, you made it sound like you just kind of like, "I joined as a designer, figured out design, became a manager." [12:14] Somehow you became VP of design, and it sounded too easy. And I'm curious what-- [12:19] That's like an insane trajectory for someone to follow. Do you have any thoughts or advice on what contributed to your success rising through the ranks that quickly for folks that are kind of just early in their career, maybe? Absolutely. And I want to make it really clear. I would say that like the first seven or eight years that I was at Facebook, I was like,

[12:36] every single week, I felt like an imposter. I had no idea really what I was doing. You know, the constant refrain in my head is like, well, do you really deserve to be here? Do you really know what's happening? You know, you don't, you're not really prepared for this job. You've never done this before. Like, what right do you have to be put in this situation and get to do what you do? Right. And that was really the constant refrain in my head. But looking back, you know, I think [13:06] years until I became a little bit more comfortable with that. You know, after seven or eight years, I could look back. I could see all of the things that I got to work on. I could see all the ways that I had grown and learned in that experience. And something clicked for me where I realized, you know, it's kind of two sides of the same coin, right? Being in an uncomfortable situation, being in a position where you feel like, hey, you know, do I really know how to do this? I've not [13:36] fastest and most intense periods of growth in one's career. And I started to realize, well, maybe it's not so much of a bad thing, right? Maybe if I'm constantly putting myself in a situation where I haven't seen this problem before, that's also what's going to push me to grow and learn, right? And so, yes, you asked for specific advice. I think there's two things. The first is, well, I was lucky. I was in the right place at the right time. I was at a company that was scaling.

[14:06] a lot more opportunity to then be able to try something new, right? To raise your hand, to volunteer for things to be just thrown into because somebody has to do it because it's a growing company and there aren't a lot of other people. So the first piece of advice I would have would be like, you know, if you want those types of opportunities, sometimes you just have to be at a smaller place and you have to be at a place that is going through that rate of growth. The second thing is, [14:31] Nope. [14:32] embrace the fact that it's okay to be in a position where maybe you don't know what to do, you haven't been trained for it, right? It does coincide with that intense learning, maybe approach it with that sense of curiosity and that sense of, you know, yes, it's hard. Yes, I might be an imposter and I might feel that way for a while, but this is also what's going to help me get there. It's going to be what forces me to do the work and in that process, learn and become [15:02] It's amazing to hear that you had imposter syndrome for such a long period of time. [15:07] You basically ran design for the Facebook app, right? Yeah. It's kind of an empowering, inspiring insight that someone at your level went through that for so long and made it through that. Do you have any other advice or thoughts on just like for folks that are going through that? Because I had that to you for a number of years, just like, what the hell am I doing here? People are going to see I don't really know what I'm doing and it's all going to crumble as soon as I make my next mistake. Do you have any other advice there for folks going through that themselves? I think that's so much of the, you know, just exactly what you said.

[15:37] I think so much of it that helped me was realizing that everyone feels this way to some extent. And that's also why I always want to talk about that, right? Because I feel like sometimes you can see from the outside, you're like, oh, this person has this title, they have this position, they have these responsibilities, clearly they've made it, they know what they're doing. But [15:56] That's never the case. And I mean, logically, let's think about it, right? If you're going to do anything new for the first time, how are you ever going to feel [16:05] totally comfortable, you know, totally prepared, right? Every time there's something new that you hadn't encountered before, you know, it's always going to be a little bit rough. You're never going to feel like perfectly at ease. It's only upon doing something multiple times that you start to see the patterns, you start to realize, okay, it's going to be all right. And even, you know, now, the people that I talk to, the people I really look up to, the people who I think are role models [16:35] It's like they still encounter things that are unprecedented. And if we work in tech, I mean, the rate of change, the rate of the industry and companies and kind of these new experiences that we have, that never goes away. That's just par for the course. And so I think that feeling always exists. What I have learned is that there are better tools in your toolkit for dealing with it. One of them is, of course, me just reminding myself that if I feel uncomfortable, it's [17:04] Other people feel that way too. Everyone does. It's totally natural. But then to also find other pieces in that toolkit. Right. One is I am much better at asking for help now than I was earlier in my career. You know, I used to actually just try and hold it all in. I was like, hey, I better fake it till I make it. You know, no one thinks that I if everyone thinks that maybe I'm coming to the table like I know it, then then, you know, then then I can fool them.

[17:34] from being able to get that support and that empathy and that camaraderie and that advice that would have helped me actually grow faster and maybe with a little bit less pain in the process. And so one of the things I learned is it's okay to ask for help. It's okay to reach out to people who both may be going through the same things you're going or maybe are a step or two ahead of you in the journey, right? Who have actually gone through that and have lived to tell the tale and can tell you it's going to be okay. Because often that's just what you need. You just need [18:04] to be fine. You're fine. You're good. You've got this. And that, you know, that's so meaningful, right? Whenever we sometimes feel down about ourselves. So that's another, you know, I would say tool in the toolkit, right? Asking for help, finding groups of support. And then I think the third is it's also okay to just be vulnerable and just talk to people about, right? Like, I found that some of the most meaningful conversations I had, whether with people, [18:34] be much more open about what it is that we find hard. What are we struggling with? And in that way, you know, you actually form deeper connections and people are more able to help out, right? They're able, we can spread the load a little bit, you know, we can put our heads together and brainstorm a better way to solve the problem. And I find that too, even as like, you know, the head of a department, right? Or like a founder, it's like, [19:01] I'm not going to solve everything myself. I'm never going to have all the answers. Sometimes by just sharing what the problem is, by sharing the load, we're all going to collectively come up with a better solution. Next up is Shashir Marotra, CEO of Coda, former VP of Product and Engineering at YouTube, PM at Microsoft.

[19:21] And here are two of my favorite clips from Shashir, one where he shares his favorite interview question using a technique called EigenQuestions and his PHSE career growth framework. I have an interview question I ask. It's a very simple question, and it's a coded EigenQuestion test. [19:37] And the question is, a group of scientists have invented a teleportation device. [19:44] They've hired you, Lenny. [19:46] to be their sort of business counterpart, bring this to market, product counterpart. This question actually worked well for any role. Let's say you could be a product manager for this thing, bring it to market, [19:54] Um, [19:55] And what do you do? [19:57] That's the whole question. Usually people will start asking a bunch of questions and say, "Well, tell me more about this device. What does it do? How does it work? Is it big? Is it small? Is it fast? Does it disintegrate things or not? Does it need a receiver and a sender? Does it save?" All these different questions come out. [20:16] And at some point, I'll just let those questions come out. [20:18] And at some point I'll say, OK, nice, nice job generating all the questions. Turns out the scientists, they kind of hate talking to people. [20:25] and they're kind of annoyed by all your questions. [20:28] And so they've decided that they will answer only two of your questions. [20:32] And after that, they expect a plan. [20:34] What two questions do you ask? [20:36] And interestingly, all of a sudden, the sharp product managers, engineers, basically every role, [20:43] They very quickly find what are the two [20:46] one or two eigenquestions on this topic. And there's no right answer, but I'll tell you, one of my favorite ones is because their product manager said, okay, if I had to ask two questions, the two questions I would ask,

[20:56] One is, is it safe enough for humans or not? [20:59] And that was a like a very like crisp way to get to like just safety, how reliable is it? Didn't ask how reliable it is, how many bits in the middle is it? Like, just tell me, is it safe enough for humans or not? And the second one is, is it more expensive capex or optics? Is it more expensive to buy them or to run them? [21:15] And then he took those two questions and he said, like, get those two questions. [21:19] I can form these quadrants. You can say, oh, it's safe enough for humans. [21:23] and it's cheaper to, they're very cheap to buy but expensive to run. [21:27] then you probably run them like human fax machines. You put them everywhere you can. [21:30] and you say, "Hey, look, it's expensive to use, but you all have the ability to teleport anywhere you want, and this is how we can run it." If the other hand, they're very expensive to buy, [21:41] but very... [21:42] but cheap to run, you probably have to place them very strategically, in which case what you probably do is replace airports. Because airports are pretty strategically placed in places where people are trying to [21:50] trying to get around places. If it's not safe enough for humans, then you've got a whole different class of use cases where you go value what goods are transported in very costly ways. And people come up with, do you do the most expensive things? Is teleporting people's replacement hearts, is that a really demanding thing to do? [22:11] - Sure. - Sure. [22:12] But these two questions kind of get to the heart of it. [22:15] The question's totally made up, like no teleportation device exists, at least not yet. And I find that people's ability to learn the method is significantly higher if it's low stakes. That question, by the way, if you ask a kid that question, the new teleportation device, you get to ask two questions. Almost every kid.

[22:33] we'll quickly get to two pretty good item questions. Again, kids are incredibly good at simplifying these things down. It's actually a skill we like... [22:40] remove from ourselves. I'll hear candidates tell me things like, I guess I would ask them what size it is. [22:46] And like, why would you ask what's that? What what what decision is that going to allow you to make? [22:51] to know what size it is. [22:52] And, you know, sometimes I can explain it, sometimes not. Don't get hired. But actually, the thing I'd say about it is there are questions kind of everywhere. I mean, you can take any product out there. I'll do it with my kids a lot. They'll say. [23:04] I was just riding with my younger daughter and she said, how come there's three gas stations in the same corner? [23:12] Why do people do that? That's a really insightful observation. [23:17] What's the answer question? [23:18] How do you place a gas station? [23:20] And there's like a... you can almost take anything and say, what is the question that really drives this answer? It stands for problem, solution, how, execution. [23:32] PSHE. So here's how it works. So if you're sort of a junior product manager, what happens? You get handed a problem, [23:38] You get handed a solution. [23:40] You can handle the how. Go talk to this person, write this document, run this meeting, so on. And all you have to do is execute. Run that playbook. [23:47] And that's all we expect of it. [23:49] You can become a little more senior. We hand you a problem. We hand you a rough solution. You figure out the how. You figure out how we're going to organize this. What are the milestones? How are we going to get it to market? How are we going to do the meetings? What are the rituals? All those things show up in the H.

[24:05] At some point, you become a little more senior, we hand you a problem and you come back with the solutions. We judge you on the creativity and the effectiveness of the solutions. And at some point, you're senior enough that you tell us the problems. And you say, hey, I know you told me to go work on activation, but actually I think our issue is brand. Or I think our issue is quality. Or I think our issue is whatever it might be. [24:25] And that's sort of the pinnacle of this way of thinking about it. Now, just back to this picture for a moment. One of the interesting things that happened was that the teams went... [24:35] and they evaluate their teams on these two axes. And they end up with a sort of curve line between them. It's not linear as you work your way through. [24:45] And what happens is early in people's career, [24:47] They mostly sit at that eat point. You get a problem, a solution, a solution, a how, and you just execute. And they gradually grow in scope. [24:54] Later in people's careers, similarly, you're at that key level, just do bigger and bigger products. It's like the job of being an entrepreneur or CEO or an owner or so on is just kind of do bigger and bigger projects. [25:05] But in the middle, [25:07] the slope changes. And all of a sudden, it's not really about scope, it's about PSHE. And there's a circle drawn here for what I like to call the trough of dissolution. [25:16] what happens in that phase, and I was talking to the calibration companies about this, the reason we fall at the top of the solution is for the employee, for the person, [25:24] This is a confusing time. Everything about [25:27] leading up to this moment. [25:28] from high school and college, has been About Scope. [25:31] And like at this point, you're all of a sudden told we're not judging you on scope anymore. We're judging you on this PSH. I think that's very confusing.

[25:39] To the calibrator, to the manager, it's also very confusing because all of a sudden, the difference, the way I put it, is the difference between a level three and a level seven may not be scope. They may do the exact same job. It's how they do the job that matters. And here's some language. [25:52] for how they do the job. And so PSHE became a very sticky way of thinking about it. [25:56] It turns out that this way of evaluating people is actually not that specific to product management. It's really easy to see why you do the exact same thing for engineers and designers and so on. But to pick one that may not be as obvious, I'll pick salespeople. A very common thing people do with salespeople is they evaluate them based on photo attainment. [26:16] The easiest thing to do is take the salespeople and rank them by who hit their quota and who didn't. [26:21] You go ask the sales team who's the best salesperson. [26:24] And what you'll realize is they'll say, quota attainment is just a signal for how good you negotiate your quota and pick the right territory. And they say, really, you want to know who's the best salesperson? They say, well, you know, so-and-so, I mean, she can sell anything. [26:37] And she can be in the region that's growing or the region is shrinking or the new product or the old product. And if you think about that terminology, it's very similar to PSHE thinking like this is the person. [26:47] who can come into a new space, identify the right problems and solve them. That's what makes a really great salesperson. So it's become my framework for evaluating talent in all sorts of ways. And you might recognize a pattern of being a great P thinker is very correlated with being good with item questions. [27:03] can you spot the right problems? It's very similar to can you spot the right questions? Can you decide what's important? Our sixth most popular episode is with Kristin Berman, founder of Irrational Labs, on using behavioral science to improve your product. Here is Kristin describing the three B's of behavior change. There are so, so many mistakes that humans make and we can call them biases, heuristics. Our team uses psychologies. What are the psychologies that drive us? And so to tackle this,

[27:32] Our team basically has created a model of behavior change we call the three B's. And this summarizes the most important psychologies that drive user behavior. [27:41] that are important to the product manager and the market artist. [27:44] We've used this at Google, Microsoft, LinkedIn, so all the companies that we work with and they now use it. [27:50] And so the first B, so 3B framework, first B, [27:54] It's actually not a psychology, but it is the most important part of behavior change. And it should kind of be obvious, like if you think about behavior, [28:01] change behavioral economics. It is [28:03] behavior. In order to change behavior, you have to pick a behavior that you want to change. So [28:08] Companies are really good at outcomes, but just not as sharp at picking the behavior. And when I say behavior, I mean action, the thing that you want someone to do. By the way, the only wrong answer here is log in. [28:20] So it's really, it's not about logging in. It's about what you do after you log in. And when we're consulting teams, it'd be like, [28:27] we need to get uncomfortably specific we say just really specific in the behavior so [28:32] Example, if I'm Peloton PM and I'm working on the app, [28:36] I would say something like within seven days, [28:39] of somebody starting the app they do two 10-minute workouts with two different instructors [28:45] Now, obviously, that is wildly specific, and you'd probably be very happy if they did one workout with one instructor. [28:52] But the reality is if you don't define that behavior you're going to change, you can't actually define the psychologies. [28:57] that affects someone's decision making when doing that behavior. [29:01] So that's the first P. Second P, again,

[29:04] is probably pretty obvious and is very critical is just barriers so we need to reduce the barriers to doing the behavior and there are two types of barriers we we look at one is logistical [29:15] So this is just the stuff in our way. It could be entering a credit card, could be any form fields. [29:19] And then the second is cognitive. So the cognitive barriers get in our way as well. These are [29:24] Things like uncertainty aversion. [29:27] This is optimism bias, information aversion. [29:30] These are the things that would prevent status quo. Big one. It's just you do the same thing today that you did yesterday. Your job is that you talk about those three just throughout there just briefly. I'm curious about the specific. Yeah. Over there. So uncertainty aversion when something is uncertain or we're not. So I'll give you an example. If you're Lyft. [29:50] There's logistical friction, which is wait time. [29:53] But then there's also this uncertainty of, is it going to come on time? When is it going to come? And with this uncertainty, [30:00] you're probably going to look for other options. You're going to open up Uber and say like, [30:04] Maybe it'll come faster. [30:06] And so when there is uncertainty in our life, we either [30:10] look for other options or we just don't make a decision at all. [30:14] Right. [30:15] This is, by the way, very big in health care, where when you're very uncertain about something, you may not even go to the doctor or you may just make the wrong decision. Got it. And same with status quo effect where, you know, we kind of underlying status quo effect is this idea that we always take the path. Not always, but majority of you don't really say always when you're talking about human behavior. Human behavior is very complex. But more often than not, we take the path of least resistance.

[30:39] So we do the thing that's easiest. [30:42] And typically the thing that's easiest is the thing that we've done yesterday and the day before. [30:46] And so when you're asking someone to do something different, which is what most product, especially startups are trying to do. [30:52] You actually have to increase [30:54] you know their motivation or make it easier reduce the barriers to get them to do that and so [31:00] Status quo, in fact, is a big... [31:01] big one that folks are fighting. Awesome. Thanks for sharing this. The third B is [31:07] benefits. So this is where you want to increase [31:10] the not just benefits but the immediate benefits of doing something so we are all present bias which means we [31:17] Prioritize our present self over our future self. [31:20] So there are plenty of reasons that, [31:22] somebody your customer your user should take an action but you actually have to give them a reason to take an action today. [31:28] So as an example, if you're [31:30] Asana and... [31:32] if you're trying to get someone to log a task, the right thing for them to do is log the task because it's going to get their project done on time. [31:39] You're going to have a collaborative and communicative team that you're going to want to be on. [31:44] But one of the real reasons we may log a task is because of completion bias. We want to see the checkbox. [31:50] We may log it because of social desirability bias where [31:54] Other people see that we're getting our work done. There's a notification that goes to my teammate when I complete something. [32:00] So these are the immediate benefits that we have to build into products and features to drive use. Awesome. I definitely have completion bias. I love checking those freaking checkboxes.

[32:30] data and builds trust with customers and partners, especially those with serious security requirements. Also, if you want to sell to the enterprise, proving security is essential. Sock 2 can either open the door for bigger and better deals, or it can put your business on hold. If you don't have a Sock 2, there's a good chance you won't even get a seat at the table. But getting a Sock 2 report can be a huge burden, especially for startups. It's time-consuming, tedious, and expensive. [33:00] Over 3,000 fast-growing companies use Vanta to automate up to 90% of the work involved with SOC 2. Vanta can get you ready for security audits in weeks instead of months, less than a third of the time that it usually takes. For a limited time, Lenny's podcast listeners get $1,000 off Vanta. Just go to vanta.com slash Lenny. That's V-A-N-T-A dot com slash Lenny to learn more and to claim your discount. Get started today. [33:29] The fifth most popular episode of the year is with the great Elena Verna on B2B Growth. Elena is currently head of growth at Amplitude. Prior to that, she was CMO at Miro. She was senior vice president of growth at SurveyMonkey, and she might be the smartest person in the world on B2B growth. Just putting that out there. Here are two clips from Elena. The first on why retention is so important to your product and why it's so important to get right, and the second on what to

[33:59] I think every single company has to first focus on being product-led and retention. [34:06] Period. [34:07] The only way that you will ever have any chance of acquisition [34:11] being product-led is if you nail your product-led retention. Let me break it down. Retention falls into two main KPIs, which is activation and then engagement. If your product is not able to activate and more importantly, engage via habitual loops and be in the habit-forming zone, [34:29] then you'll have no chance to hooking an acquisition engine. [34:32] into your product because acquisition and product lead means users invite or users refer or users create content that attracts other users well [34:42] If your users are not habitually using your product, there's less and less opportunities for you to actually create any sort of product-led acquisition. So never start with product-led acquisition. You first always have to start with product-led. [34:54] Retention. [34:56] activation and engagement, then you can choose: is your product has a relationship of one-to-many, [35:01] if it has a collaboration at its core, say Slack or Miro, or even the Amplitude, or does it have more [35:10] of a singular mode relationship. So let's say snowflake. [35:14] There is not one-to-many relationships there between users. Well, if you have one-to-many relationships, product-led is a fantastic way for you to prototype that model. If you don't have them, then it becomes increasingly hard. And most of the B2B products don't have that one-to-many relationship, so it's very difficult to stand up product-led acquisition. So you rely on marketing-led and sales-led, and that's fantastic. Those are fantastic growth models as well. The only other question becomes in the self-serve monetization. That's product-led.

[35:43] Otherwise, you go in the sales lead and you chase after those large contract values. [35:48] And you can still be product led and monetization with sales team via product led sales, or you can just be self-serve if you have a specific segment that is valuable for, but. [36:01] The question there is your use cases and your market matureness to handle self-serve, or do you need that sales touch? [36:10] Every industry and every [36:13] sector is going through transformation, [36:16] at different velocities. So even if you don't have that product-led sales or self-serve in your industry now, I guarantee you it will pop up in the next 10 years. And if you're not going to introduce it, you will get disrupted by it. For a product leader or founder who's thinking about what they should make free in their freemium model, do you have kind of a mental model of how you think about here's what you should make free? Or is that too big of a question for... [36:43] for a quick answer. So, I mean, you first have to align on what your strategic value of free is. I do have a general framework of saying freemium has to do has to check one of these boxes. Does it help my indirect monetization? So some sort of virality or network effects? If it does, I'm probably going to make it free. [37:03] Does it suffice for every single user, regardless of their complexity? [37:07] If it does, then it's probably commoditization of the feature anyways, and I should make it free. Does it help my aha moment? If it does, then I definitely want to have a POC as part of my free, and I'm going to put it in in the free offering. Does it create habit loops for me? So let's say notifications or some sort of channel communication. If it does, then I'm probably going to put it for free. So anything that actually creates friction for my growth model, I'll probably

[37:36] gated in the paid. Anything that promotes my growth model, I will put it into free. Now, it is very heavily dependent on your actual monetization strategy. So it's a little bit of over-encompassing statement. But at the end of the day, I'm thinking about it very much. How does free help me achieve my growth model outcomes without sacrificing monetization potential? Our fourth most popular episode of the year. And just to put this out there, the next three have came in really close to each other. So you can kind of mix and match them in order. [38:06] the fourth most popular episode of the year is with Ethan Smith, CEO of Graphite and just general SEO guru. Here are two clips from Ethan, one on how people often under-invest in SEO, and two signs that SEO might be right for your product. I think people under-resource SEO a lot of times and over-resource ads. So if you're Zillow, you're going to spend [38:29] tens of millions of dollars on ads or if you're ebay you're gonna spend tens of millions of dollars on ads [38:33] why would you not have a really great SEO team? The amount of traffic you get is probably equal to that. So if you're going to spend $100 billion on ads, why would you spend [38:43] $50,000 on SEO. That doesn't make sense. What are just attributes of a product or a company that tell you that SEO could be a growth driver and/or a massive growth driver? Because I imagine SEO isn't useful for everybody. How do you think about that? There's two big things. The first thing is, is the addressable market large? Is the addressable market for SEO large? [39:05] And for most categories, it is. The second is, do you have authority? Do you have existing traction?

[39:11] If you start from zero and you have no traction, so we talk with Steve, [39:17] seat stage companies and Series A companies. [39:19] Typically, they don't have a lot of authority and it's too soon. [39:23] And Google doesn't want you to just be an SEO site, and they want you to be a credible person. [39:28] Domain? [39:29] before they rank you, [39:30] And if you're starting from zero, they don't have enough signals that you are. [39:34] The way that we assess that is [39:36] I will go into... The first thing I'll look at is... [39:39] What's your traffic? What's your current traffic? And your non-SEO traffic is actually an authority signal. [39:45] So I'll go into SimilarWeb, I'll put the domain in, I'll look at the total traffic, and I'll want to see at least [39:51] I would say 1,000 visits a day roughly for non-SEO at least. [39:55] you have five visits that that's very little and then the second thing i'll look at is the number of referring domains so i'll go into ahrefs or scm rush and look at the total number of referring domains i'll try to have at least 1000 roughly referring domains you could grow [40:10] with less than that and less than a thousand visits but it's much harder [40:14] And the more you have, the easier it is to grow and the faster you can grow, the more you can grow. [40:19] And then in terms of the addressable market, that's a little bit [40:22] more complicated but, [40:24] Most markets are pretty large actually in SEO. [40:27] but we want it to be large. So WithPower is actually an interesting example. So they're a clinical trial lead gen site. [40:35] They want to acquire people to take clinical trials. [40:39] How many people are typing online, I want to take a clinical trial? Not very many.

[40:44] But the number of people that could be taking clinical trials is very large. [40:47] And so if we target the persona, like what's the key demographic of who might be [40:52] a candidate for taking clinical trial. It's very, very large. And so, [40:56] We can then create content that targets that gig economy or college students or [41:01] People like that. And so if you think about targeting the persona, most sites have a very large addressable market. But the way that I would think about the addressable market is that which is what's what product am I offering? What are the use cases for that product? What is the persona? [41:15] What's the size of that? [41:18] And then I would assess that typically by looking at [41:22] external benchmarks. So, [41:24] If I'm a shopping site, and I haven't started yet, I can look at other shopping sites. I can see how much traffic they have. So again, I can go into similar web. [41:32] If I'm wish.com and I want to see what my traffic potential is, I can put in Walmart and Wayfair. [41:38] Put it in similar web, look at their total traffic. You can get similar webs free for all of this. [41:43] And then I can get a sense of [41:45] how big i can uh get the one other thing i'll mention is that there are product competitors and audience competitors so for something like uh i'm at a we work right now so [41:57] For WeWork, I could look at the traffic for other... [42:01] you know, rental office companies. [42:03] Or I could look at companies that are ranking for the kinds of things that I would want to rank for. And they may not be direct front of competitors. So like fintech is interesting. So for Robinhood. [42:13] Robinhood to look at other

[42:15] sites that allow you to sell stocks in crypto or they could look at investopedia investopedia doesn't allow you to buy stocks but they have a bunch of traffic it's not a product competitor but it's an audience competitor and so these competitors basically can tell you what the size of that market is so that's how i think about [42:30] the addressable market. So ideally, it's large. It typically is. And then the more authority I have, the more I can compete. [42:36] If I'm starting from zero, it's probably too early. But once I have traction, SEO can then multiply that traction. We are now in the top three. Who could it be? Drum roll. The third most popular episode of the year at this point is Shreyas Doshi. Shreyas was a longtime PM at Stripe. Before that, he was a PM at Twitter, at Google, and is generally just an incredibly insightful and helpful human, constantly sharing his wisdom on Twitter. And now he has his own course on Maven. [43:06] the LNO framework, which people have brought up so many times after this episode and that I personally found incredibly useful. When I just joined Google as a relatively new PM, this is back in 2008, for the first [43:19] three years. [43:21] I was overwhelmed and stressed. [43:24] And that was because, one, I was a new PM in this really high-performance environment. I was working on some important products and launches. [43:34] And I just had too much to do. And I look back at that time and it was perhaps the most stressful situation. [43:41] time of my career. I would work

[43:45] long hours etc but even at the end of the day I'd feel highly dissatisfied because my to-do list was endless and I wasn't able to make a dent on it and you know I was also a little bit of a perfectionist so I was like no no I need to do this well and yeah I was just constantly I would come home and talk to my wife and kind of basically just complain to her about how I'm not able to make [44:15] when that was accompanied with not being able to sleep very well because I was concerned about how much output I was producing and whatnot. And so again, very stressful time in my career. [44:28] And then things changed when I discovered the ideas related to this LNO framework in a blog post. And I can't, unfortunately, I can't even find that blog post somewhere, but it had some ideas that [44:41] that I took and then kind of created this LNO framework on myself, which is essentially that like as a product manager or as anybody in a creative, high impact, high leverage role, all your tasks are not created equal. There are actually three type of tasks that you end up doing in such a role. So there are L tasks, which are leverage tasks. And the L tasks are such that when [45:11] So if you put in a certain amount of effort, you get 10x or 100x in return in terms of impact. So those are L tasks, leverage tasks. Then there are neutral tasks. So that's N.

[45:25] Those are tasks where you basically get what you put in, or just a little more than that. So you put in 1x and you get 1.1x. [45:35] Those are neutral tasks. And then there are overhead tasks where you get back in again in terms of impact, you get back a lot less than you actually put in. And it turns out that many people, many people who are ambitious or perfectionists like myself, [45:53] They by default treat [45:56] each of these types of tasks the same way. And therein lies the problem. So this was the epiphany for me back at Google when I kind of discovered some of these ideas. And what I realized is that among the things in my to-do list, there are actually only very few L tasks. [46:14] And so it made sense for me to focus a lot on those L tasks, to take on those L tasks when I was feeling most productive, most energetic during a certain time of the day. And [46:29] For the L tasks, [46:31] Let my inner perfectionist shine because I'm going to get so much more in return. Right. It makes sense for me to spend that time on that PRD, for instance, related to an important feature that will meaningfully impact our revenue. Right. I'm going to spend more time on that than I ordinarily would. So now where does that more time come from? Because it cannot come from just working more hours. Well, it comes from spending less time on end tasks and no tasks.

[47:01] And so there are some tasks that you do. A classic example of an O task is, say, an expense report. It sounds silly, but I used to try to make my expense reports really good. And sometimes that made no sense. But I was like, no, no, no. [47:21] I need to do that. And again, this is the silliest example, but there are many examples and something I realized [47:28] that the same type of activity can actually be either an L task or an N task or an O task. So what's an example? So say like a classic PM activity of filing a bug report. [47:41] And so many companies have these bug templates, et cetera, et cetera, right? Like that you use to file a bug report. Well, it turns out that filing a bug report, depending on the situation, depending on what type of bug it is, can actually be an L task, high leverage task. And over there, you want to file a very detailed, explicit bug report. And in other cases might actually be an O task where, you know, you know, you're going [48:10] you don't fill out the template that diligently and you don't add 15 screenshots with annotations, right? Instead, you just have one screenshot and you hit submit on the bug report. So that shift, we are usually for the same type of activity, we provide the same type of engagement. One last example I'll use to illustrate this is taking notes. It turns out even taking notes,

[48:40] an L task, an N task or an O task depending on what type of notes they are. [48:45] So if it's like, you know, after I understood this previously, I would just send all notes like I tried to make them really good, which took a lot of time. But then I realized, well, this is a meeting where, yes, I need to send notes. But, you know, again, it's like it's just standard stuff. I just need to, like, quickly list out people. All people need to really know is. [49:06] the three action items that came out of the meetings, who owns them. That's it. And it is not about something highly strategic or controversial. Well, in that case, I'm just going to send the notes out the moment the meeting is over. I'm just going to hit send because I've already taken the action items. I'm not going to try to make my notes look great so that others can appreciate, oh, Shreyas always sends great notes. On the other hand, if it was a product [49:36] back and forth multiple times and now you made a decision about something you want to [49:43] perfect those notes before you send them out, right? Like you want to get the language right. You want to be very clear on what the decision is. So there's no room for misinterpretation. So you don't backtrack afterwards or people say, well, but I thought we said this or so that's an, that's a case where it's, [50:00] an L task. And yeah, I would say just spend an hour or even two hours perfecting those notes because it's an L task. So hopefully that helps illustrate some of the ideas behind the LNO framework. Runner up for the most popular episode of the year is my conversation with Marty Kagan.

[50:18] Marty is the legend of legend of product managers, and I'm not surprised this episode was incredibly popular. [50:24] Here are two of my favorite clips from my chat with Marty. One, talking about why big companies are just bad at product often. And two, the four steps to be a good product manager. [50:38] from 1995, for God's sakes. His argument was... [50:43] As a company gets bigger, [50:46] product historically became less important. The people in a company that would be [50:53] that would be celebrated [50:55] were marketing people. [50:58] Salespeople? [50:59] Finance people. Because if a company stops innovating, these are the engines for growth. [51:05] Right. Sales, marketing or not growth with finance, but cutting costs. [51:10] And and his argument was this this happens over time pretty soon. [51:16] These are your leaders. They're the ones that have been promoted. So then what happens? [51:21] good product people don't want to work there anymore. [51:24] And they leave. [51:25] and they go to a company that values product. [51:30] I think that's a better explanation than any other that I've heard. [51:35] And it was so prescient because when he said this, [51:41] This had yet to even happen to so many other companies, but it still happens all the time. You know, I hate the idea of those companies that have separate product owners because product owner is just an administrative role. Product owners almost never have the skills to be a product manager.

[51:58] and that's a problem but let's just say there's a product manager and nobody's ever coached this poor person [52:04] And so they really don't know much. [52:06] So the first thing that product manager needs to do is [52:10] get themselves prepared to contribute to their team the way they need to. In general, that means four things. First of all, they have to really get to know the users and customers. [52:20] The second thing is they have to be an expert in the data. How is your product used? How is that change over time? What's the sales analytics? What's the user analytics? The third thing is, and this is usually the hardest one, and it's the one that your stakeholders will judge you on, is you have to learn the different parts of the business. [52:41] you have to know how it's marketed how it's sold how it's paid for how it monetizes if there are any compliance regulatory privacy security issues you need to know what those are [52:54] So that you have to convince those stakeholders that you understand what the issues are. [53:00] and you understand what to look for and that you convince them that if, if, [53:05] there's ever any question, you will bring them a prototype that they can see and make sure it's okay. So you need that trust with the different parts of the business. [53:14] And the fourth area is you have to know the competitive landscape. You have to know the industry. You have to know the trends. [53:20] Those are the four things you bring to the team. Realize the designer doesn't have this info. [53:26] The engineers don't have this info. If the team is going to be an empowered team and they're going to come up with solutions, they need somebody on the team that brings this knowledge. And that is you as product manager.

[53:38] That is the single biggest area [53:40] empowered teams fall down. [53:43] The product manager is ill-equipped. [53:46] or a nice way of saying incompetent. And finally, our number one most downloaded, most popular episode of the year, which raced to number one as soon as it came out, is with the one and only Matt Mashari. Matt is a full-time CEO coach. He's worked with CEOs of companies like OpenAI, Coinbase, [54:06] Notion, Rippling, Angelist, so many other amazing folks that I could just keep listing. In this episode, there are just so many nuggets of wisdom and I could share 100 clips from just this one episode, but I'm going to choose just two. [54:21] the power of small teams and how small teams often get more work done. And two, advice for having hard conversations with your employees and with people in general. Enjoy. My companies have done a lot of layoffs. And here's why the companies that I coach. Back in March of 2020, [54:37] There was a chance. [54:39] that the world economy wasn't floating. Now, of course, [54:44] By April and May, we realized that wasn't the case. [54:46] that the tech world kept going and that was even flourishing. [54:50] But in March of 2020, [54:52] We didn't know that. [54:54] And so, [54:55] You needed, if you were being fiscally responsible, [54:59] You needed to prepare for that eventuality. So you needed to pay costs. 80% of costs in any tech company, [55:05] his payroll as humans. [55:07] So if you're going to prepare costs, you actually have to let go of humans. And so almost every one of my companies did.

[55:14] Some on the low side of 5%, some on the high side of one company that is a hotel company. [55:20] Let go of 40% because it looks like their business was about to get obliterated. [55:26] The results were crazy. [55:28] Within 60 days of each layoff, [55:32] The CEO reported back to me. [55:34] It's insane. I don't know how this happened. [55:37] But the company is now operating better. I'm not talking on a relative scale. I'm talking on absolute scale. [55:43] We're putting out more features, more code, our NPS is up, our whatever it is, whatever department is performing properly. [55:53] better. [55:54] And the only answer for it was, [55:56] we've got less people so it's this coordination issue is reduced. [56:00] With fewer people in the organization, [56:04] things work better. That's the big realization that most people never discover. So they hit product market fit, they get tons of money from investors, not just hire, hire, hire, hire, hire. But every additional human you have in your organization, [56:18] causes extra overhead and geometrically so. [56:22] Because now you have to keep all those people informed, give them all context, make them all feel heard. Because unless they feel like they're contributing and you understand what they're saying, then they feel ignored and they feel passed over and they feel disrespected and grumpy. [56:35] And so there's this morale problem that exists. So there's this friction of information flow and a morale problem that grows and grows and grows. [56:43] And really, the only answer is, I mean, that's why people bring me in, because I'm not a

[56:47] They're growing, growing, growing, and things are breaking. [56:49] So I have a system. [56:50] that keeps things together. [56:52] but, [56:53] it doesn't make it. [56:55] like perfect [56:57] It just makes it so that the company doesn't fall apart. [56:59] Thank you. [57:00] But, the really the ideal? [57:02] is just to keep the team super small. And that's what WhatsApp did. [57:06] That's what Instagram did. [57:08] That's what linear is doing right now. That's what notion has been doing for a while. [57:13] And those to me are the real success stories. Whenever I have a difficult conversation, I started off, hey, [57:21] This is going to be a difficult conversation. I want you to take a few seconds to prepare yourself. You are not going to enjoy this. [57:28] And what I found is that the way the amygdala gets triggered, [57:33] is often because of surprise. [57:35] And so if you give someone just a few seconds to, [57:38] Mentally prepare? [57:40] then the amygdala often doesn't get triggered nearly as hard. [57:44] Because if they're aware that they're going to go into fear, if they're going to go into anger, they're going to go into sadness. Then they can see it coming and they go, oh, that's what it is. But if they don't see it coming, just surprise and all of a sudden. [57:56] It grips their whole brain and now they're in it. [57:59] And they don't even know they're in it. So that's the first thing I do. This is going to be a difficult conversation. [58:04] Are you ready? [58:05] Person says yes. Then I share the news. [58:08] I'm letting you go. [58:10] Here's why, da-da-da-da. Then, I'll be back. [58:14] the second so the [58:15] I give them deliver the message. The third thing is then I say, I, I, now they're feeling emotions.

[58:20] strong ones, even though I warned them. [58:23] They're still feeling it. [58:24] Now you want them to be able to release those emotions. [58:27] And so I say to them, [58:28] My guess is you're feeling a lot of anger right now, fear, sadness. [58:32] Is that true and if so would you be willing to share with me? [58:36] what you're feeling and what you're thinking. [58:38] and sometimes they don't answer, but many times they do. [58:42] And they share with me and they let it out. [58:45] And that's important to allow them to let it out. [58:47] And then I... [58:48] Make them feel heard. [58:50] and I actively listen. [58:52] And that makes them realize that. [58:54] I'm not trying to run away. [58:56] from the pain that they're feeling? [58:58] I'm not trying to leave them alone with it. [59:01] I sit with them as they have it and then I try to help them get through it. And that's our top 10. [59:07] It was actually really hard to make this list because all 50 episodes have something really fascinating and interesting to share. [59:14] For example, if you need help with pricing strategy, don't miss the Madhavan episode. If you want to get better communication, don't miss the episode of Wes Cow. [59:22] If you're building a marketplace, there's the Dan Hockenmeyer episode. [59:25] If you're trying to figure out your marketing and how to build your marketing function, [59:28] Don't miss the episodes with Emily Kramer and Ariel Jackson. [59:31] I could keep going, but I'm just going to stop here. I encourage you to check out the full list of episodes in case you're currently facing a problem that one of the episodes can solve. To close, this podcasting journey has been so much more fulfilling and exciting and interesting than I ever expected. And I'm so thankful for you for listening and for supporting this podcast, telling your friends about it. I'm also really thankful to our wonderful sponsors for supporting this work.

[59:57] In terms of what's ahead, basically more of the same. More amazing guests, more topics that maybe you haven't thought about that you need help with, maybe more amazing topics that you know you need help with that I want to help you solve. [1:00:10] I'm still learning how to interview, how to do this podcast, how to make it more amazing. And so my goal is just to continue to refine and iterate and continue making this podcast better and better. With that, I'd love to hear from you. What do you love about this podcast? What do you hate about the podcast? What annoys you? [1:00:28] What do you find most interesting? I'd love to hear your feedback. You can either email me at podcast at LennyRichitsky.com. [1:00:37] You can also go to this episode on my newsletter. If you go to Lenny's newsletter.com and find this episode, you can leave a comment at the bottom of that episode. You can also DM me on Twitter if you just want to reach out directly. Seriously, I'd love to hear from you. This is how I'm going to make this podcast better. Until then, happy holidays. Happy New Year. From the bottom of my heart, thank you for listening and for supporting this podcast. [1:01:00] I'll see you next year.