--- title: "Lenny's Newsletter — 2024 年合集" date: "2024-01-01" source: "Lenny's Newsletter" url: "https://www.lennysnewsletter.com/" ---
# Lenny's Newsletter - 2024 (61 issues) This file contains 61 articles/episodes. --- ## [1/61] Inspiration for the year ahead *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** ✨ (an AI chatbot trained on my newsletter posts, podcast interviews, and more) and my new **[swag store](https://lennyswag.com/)** (great gifts for your favorite PMs, or yourself!).* > ## Q: Do you have a favorite life motto that you come back to often and share with friends, either at work or in life? At the end of each podcast conversation, I ask my guests a series of “lightning round” questions. A few months ago I added the question you see above. This has unexpectedly led to some of the most profound insights of the podcast. To kick off 2024 with a dose of inspiration, I’ve pulled together my favorite and most meaningful life mottos—the ones that have stuck with me most. As you read through this collection, pick one that strikes a chord and put it on a post-it on your monitor. The next time you find yourself in a place of stress or indecision—come back to it. If you do this one thing today, your 2024 will already be brighter. ![Image from Inspiration for the year ahead](https://substack-post-media.s3.amazonaws.com/public/images/a2600a9e-c0d9-43fc-bc20-d7c46d8069a6_4032x3024.jpeg) ## 1. “A positive mental attitude will be your key to success.” > “This changed my life, really. When I was in fourth grade, a teacher—and I don’t remember which teacher it was, which kills me—when I was having a bad day, the teacher said to me, ‘Listen, a positive mental attitude will be your key to success.’ And I don’t know why it’s stuck in my head, but it did. I have said that to myself 100,000 times. > > I am a relentlessly positive—my wife says I’m an offensively positive—person. She’s like, ‘You know what? Some days you can have a bad day.’ And I said, ‘I just don’t. Because a positive mental attitude is my key to success.’ And it’s really the way I frame so much of my life, looking to the positive, looking to the good. And I do it for people whenever I can. And sometimes it frustrates people. But I really believe that most of life is the mindset that you bring to it. For me in fourth grade, ‘A positive mental attitude will be your key to success,’ for some reason, hit me at the right moment in the right way and has stayed with me ever since.” [[Full clip](https://youtu.be/J4wguyJZI6A?si=3RX5fFI2j8CmmRXK&t=5779)] > > *—**[Matthew Dicks](https://www.linkedin.com/in/matthew-dicks-84a95711/)** is a best-selling author, columnist, blogger, podcaster, playwright, and teacher. He wrote my all-time favorite book on storytelling,* [Storyworthy](https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/dp/1608685489/ref=sr_1_1?s=books&ie=UTF8&qid=1511398548&sr=1-1&keywords=storyworthy)*. He is an elementary school teacher by day and by night teaches storytelling and public speaking to individuals, corporations, universities, religious institutions, and school districts around the world. He’s taught storytelling at Yale, MIT, Harvard, and Purdue, along with Amazon, Salesforce, Slack, Lego, and others.* ## 2. **“It matters not how strait the gate, how charged with punishments the scroll, I am the master of my fate, I am the captain of my soul.” —‘Invictus,’ William Ernest Henley** > “I love this quote because he was going through issues with his legs and was going to potentially lose them, and then wrote this quote. The last two lines, ‘I am the master of my fate, I am the captain of my soul,’ is literally my Twitter/X bio. It’s such a powerful reminder of freedom and responsibility.” [[Full clip](https://youtu.be/tBPTwUmaxDs?si=WMoItT8UHMU07Tdg&t=5682)] > > *—**[Ebi Atawodi](https://www.linkedin.com/in/ebiatawodi/)** is a director of product management at YouTube, former head of product at Uber, and a former director of product at Netflix.* ## 3. “Strive not to be a success, but rather to be of value.” —Albert Einstein > “It’s a great motto for people and also for companies. It’s something that guides me in my life.” [[Full clip](https://youtu.be/aJWSn-tz3jQ?si=9haWFAHAxxrse02x&t=4193)] > > *—**[Itamar Gilad](https://www.linkedin.com/in/itamargilad/)**, the author of* [Evidence-Guided: Creating High-Impact Products in the Face of Uncertainty](https://evidenceguided.com/)*. He’s also a product coach, author, and speaker with over two decades of experience in senior product roles at Google, Microsoft, and various startups.* ## 4. “The world is run by insecure overachievers.” > “I used to think my insecurity was a downfall and I would just hide it and try to pretend it’s not there. And then someone that I really look up to told me this, and I’m like, okay, so I’m not the only one. I think the world is run by a bunch of people that have something to prove, for a good reason or not, but it’s better to embrace it than to pretend you’re all confident and you’re just doing this because you’re brilliant.” [[Full clip](https://youtu.be/C1_sM0_ds2c?si=eYRxfjMI4iAXkqID&t=4160)] > > *—**[Meltem Kuran Berkowitz](https://www.linkedin.com/in/meltem-kuran-berkowitz-4721114b)** is the head of growth at Deel, which went from $0 to $300m in ARR in three years (the fastest company in history to do so). Meltem joined Deel early to lead growth and currently leads all of the growth and marketing teams, including paid ads, content, product marketing, community, brand, and more.* ## 5. **“If it’s worth doing, it’s worth doing well.”** > “I’m sure there’s mottos I could say that would be aspirational mottos, but the real one is ‘If it’s worth doing, it’s worth doing well.’ From being in sports to going to school to being in product, in my opinion, if you’re going to do something, do it to the best of your ability, because that’s what you do with your day. You spend so much time working, you may as well be good at it or trying to get good at it. And that’s always how I’ve lived my life.” [[Full clip](https://youtu.be/4LjddcccYIo?si=ji4L2HbkJT6isg7k&t=4722)] > > *—**[Maggie Crowley](https://www.linkedin.com/in/maggie-crowley-42a97112/)** is VP of product at Toast, previously vice president and head of product at Charlie Health, senior director of product management at Drift, and a PM at Tripadvisor.* ## **6. “Slow is smooth, and smooth is fast.”** > “I believe the origins of this one are actually from the Marine Corps for the Scout Snipers, so not trying to promote that particular craft, but the point of it is that—and we did this a lot at Amazon—to really go fast, you actually need to go slow first and to be very clear on what you’re doing and where you want to go. Most people confuse speed with velocity, and the difference between the two is that velocity has both speed and a vector to it, meaning there’s some specific destination. And so I see a lot of people who are going very, very fast but the destination isn’t very clear; they haven’t really thought that out well. Slow is smooth, smooth is fast.” [[Full clip](https://youtu.be/S9WHQa_AJQo?si=ygGsxR6h4HPzcCiR&t=5387)] > > *—**[Bill Carr](https://www.linkedin.com/in/bill-carr/)** is the co-author of* [Working Backwards: Insights, Stories, and Secrets from Inside Amazon](https://www.amazon.com/Working-Backwards-Insights-Stories-Secrets/dp/1250267595)*. During his 15 years at Amazon, Bill played a pivotal role in shaping the company’s global digital music and video ventures, including Amazon Music, Prime Video, and Amazon Studios.* > > Variations of this same idea from other guests: > > 1. **Go slow to go fast.** “Sometimes people have a tendency to rush into things, and especially, I think, in startups, but other places too. I think urgency is important, but then sometimes you have too much urgency and you are rushing things, and what happens is that you rushed it and now you need to come back to fix it. I like to think that you should take some time to actually think about what you’re going to do, and then do it. In the end, it’s going to be faster that way than going back and forth and fixing things.” [[Full clip](https://youtu.be/4muxFVZ4XfM?si=f0dQuT6Ex7qTdwoY&t=5757)] —***[Karri Saarinen](https://www.linkedin.com/in/karrisaarinen/)** is the co-founder and CEO of Linear. Before Linear, Karri was the principal designer and co-creator of design systems at Airbnb and the founding designer at Coinbase.* > 2. **Slow down.** “My main thing I tell people is ‘Slow down.’ I think what I’ve found has been happening is, we’re so convinced that speed is the way you’re going to find the right answer that I just don’t think we slow down to develop meaningful mental models of the things we’re doing. That’s certainly true in the research projects I work on. It’s consistently true when I talk to people in business and I ask them about their mental model. By ‘mental model,’ I just mean if you’re running a marketplace, what is your model of what people care about? What makes people stay versus leave? What makes matches work versus not work? All those things shape a roadmap in your mind. And I think a lot of roadmapping, a lot of execution, paper writing in academia has all just become far more fast-paced, at the expense of deeper thinking about these kinds of structural features of the thing you’re building. With my students, but also with people I interact with in industry. I think slowing down is actually more of a virtue than it’s given credit for.” [[Full clip](https://youtu.be/BVzTfsUMaK8?si=H8D4vIFC2jZ-5QJH&t=4643)] —***[Ramesh Johari](https://www.linkedin.com/in/rameshjohari/)** is a professor at Stanford University focusing on data science methods and practice, as well as the design and operation of online markets and platforms. Beyond academia, Ramesh has advised some incredible startups, including Airbnb, Uber, Bumble, and Stitch Fix.* ## 7. “The details are not the details. They make the design.” —Charles Eames > “You can’t be a product person without having an eye-rolly Charles Eames quote that’s at the center of your existence. I just really absolutely believe that the devil is in the details when you’re a product designer, and be uninterested in nuance at your peril.” [[Full clip](https://youtu.be/maK0XD9ARoI?si=Pzm5Az2tlACji0qV&t=5802)] > > *—**[Tom Conrad](https://www.linkedin.com/in/tomconrad/)** is the CEO of Zero Longevity Science and a Sonos board member. He began his career in engineering at Apple, was the VP of product at Snap, the chief technology officer at Pandora, and an executive at Pets.com and Quibi.* ## **8. “If you’re lucky enough to make it to the top of a mountain, throw down a fucking rope.”** > “I’m somebody who has had, and continues to have, a radical amount of love and support in my life. When I was young, I started with nothing and I got thrown out of school. And I didn’t know until I was 21, because when I was young, learning differences weren’t a thing. I just think that we should never be held back by those views of others. And so we need to be unencumbered.” [[Full clip](https://youtu.be/mS4B541m9xg?si=9LJKnDRVkWuKlt9S&t=6165)] > > *—**[Christopher Lochhead](https://www.linkedin.com/in/christopherlochhead/)** is a 14-time best-selling author, top podcaster, and former 3x public tech company CMO, and has been an advisor to over 50 VC-backed tech startups. He is best known as a “godfather” of category design, and Adobe named his book* Play Bigger *one of “the five greatest marketing books of all time.”* ## **9. “Tomorrow is today.”** > “I don’t say this out loud, but I’ve had it as a post-it in my jewelry box and I see it regularly. ‘Tomorrow is today.’ And what I mean by that is that so often I will in my head be like, ‘I’ll do that tomorrow. I’ll eat better tomorrow. I’ll think about that vision tomorrow. I’ll communicate better expectations tomorrow.’ And it’s like those joke signs that ‘Free beer tomorrow.’ Because very easily, tomorrow just always moves on. And I needed to remind myself that it’s actually, it is now, today. Tomorrow is now today.” [[Full clip](https://youtu.be/gfEEcssu304?si=s_mM_7TzpOqZdXp7&t=5247)] > > *—**[Katie Dill](https://www.linkedin.com/in/katie-dill-79168b3/)** is the head of design at Stripe. Previously, she was the head of experience design at Airbnb and head of design at Lyft. Katie was named one of* Business Insider*’s “10 people changing the tech industry” as well as one of* Fast Company*’s “100 most creative people in business” and received the Girls in Tech “Creator of the Year” award.* ## 10. “Only work on what matters most” and “Stop worrying about things you can’t control.” > “I have a post-it on my monitor that says, ‘Only work on what matters most.’ It sometimes falls off and I have to write it again. I go into work, someone emails me, and I’m like, ‘Oh god.’ But then I’m like, ‘Only work on what matters most.’ > > The second one is ‘Stop worrying about things you can’t control.’ I have these two on post-its. It just reduces the temperature. Life lessons learned. I sent a lot of dumb emails in my past, like, red energy, ‘Oh my god, what are they thinking?’ You wake up in Dublin to a San Francisco email. And you’re like, ‘Oh god. Keyboard!’ And if your monitor says these two things, you just don’t do that. You just take a breath, get a coffee, come back. Does it really matter?” [[Full clip](https://youtu.be/R-Geamq9xc0?si=pRJy42TZWv8RbRDj&t=4558)] > > *—**[Paul Adams](https://www.linkedin.com/in/pauladams/)** is the longtime chief product officer at Intercom, where he leads the product management, product design, data science, and research teams. Before Intercom, Paul was the global head of brand design at Facebook, a senior user researcher at Google, and a product designer at Dyson.* ## **11. “*****Come alive*** **over** ***get ahead*****.”** > “It’s something I keep coming back to. I’m default skeptical of chasing achievement, and I use this to remind myself that it is about personal energy versus extrinsic outcomes. I’m very convinced from my own life experience that the extrinsic outcomes aren’t going to do a ton for me. Sure, I need to make enough money. But when I’m in extended states of feeling alive and connected to everything I’m doing in my life, that’s it. And I basically repeated this mantra to myself right before rejecting my book deal. It was like, I did not feel good in the conversation with the people. They talked down to me, they told me that I probably wouldn’t succeed, and it was like coming alive over getting ahead. Don’t need your prestige.” [[Full clip](https://youtu.be/yFckwBtiCUM?si=3kxmcpQDunVMJGDn&t=3550)] > > *—**[Paul Millerd](https://www.linkedin.com/in/paulmillerd/)** spent several years working in strategy consulting and on the “default path” before deciding to pursue an alternative approach to work. His book* [The Pathless Path](https://think-boundless.com/the-pathless-path/) *chronicles his journey.* ## 12. “This too shall pass” and “Fake it till you make it.” > “This is particularly meaningful to me right now because I’m going through a really tough moment because I have long Covid and lost my taste and smell, and it might be long-term. ‘This too shall pass’ is something I say to myself a lot. > > The second one is also not particularly motivational, but I really believe in it, which is ‘Fake it till you make it.’ That’s something I’ve held onto for a long time, and even today. I don’t mean lie. I don’t mean pretend to be something that you’re not. But it’s almost like a way to overcome imposter syndrome and by opening rooms for yourself to be who you want to become so that you enable opportunities to become that.” [[Full clip](https://youtu.be/sWClFYdbkRA?si=K4LZ9Da6YafZPKhs&t=5320)] > > *—**[Gina Gotthilf](https://www.linkedin.com/in/ginafrombrazil/)** is the co-founder and COO of Latitud, a startup platform supporting the next generation of iconic tech startups in Latin America. Previously, Gina led growth and marketing at Duolingo, which she helped grow from 3 million to 200 million users. She was recently named one of the 500 most influential people in all of Latin America by* Bloomberg*.* ## 13. “It’s not mean. It’s clear.” > “This is something someone told me on the streets of Manhattan. It’s actually the origin story of *Radical Candor*. I was walking my dog, almost got hit by a cab, and this man, a perfect stranger, looked at me and he said, ‘I can tell you love that dog.’ That was all he had to do to move up on the care-personally dimension, but he says, ‘You’re going to kill that dog if you don’t teach her to sit.’ And he pointed at the ground this kind of harsh gesture. He said, ‘Sit.’ The dog sat. I had no idea she even knew what that meant. And I kind of looked up at him in amazement and he said, ‘It’s not mean. It’s clear.’ And then the light changed and he walked off, leaving me with words to live by.” [[Full clip](https://youtu.be/V7tnbx-6Ayc?si=yk5hB0bM9rSjStKA&t=4897)] > > *—**[Kim Scott](https://www.linkedin.com/in/kimm4/)** is the author of* Radical Candor*, currently the #1 most recommended book on this podcast. The book has sold over 1 million copies and has been translated into 23 languages. Before writing, Kim was a CEO coach at Dropbox, Qualtrics, Twitter, and other tech companies.* ## 14. “Show up, and you’re ahead of 80% of the people in the free world.” > “My father would always tell me: Show up. Show up, and you’re ahead of 80% of the people in the free world. Show up on time, and you’re ahead of 85% of the people in the free world. Show up on time with a plan, and you’re ahead of 90% of the people in the free world. And if somehow you have the guts to put that plan into action, with a smile, then you probably will have a great chance of success. And if you do that over and over again, every aspect of your life, it can lead to successful outcomes. And that’s the mental definition for me every day.” [[Full clip](https://youtu.be/SXYc5RoU3Lg?si=CpUHJOqMtTRl4ftQ&t=5325)] > > *—**[Christian Idiodi](https://www.linkedin.com/in/cidiodi/)** is a partner at Silicon Valley Product Group. After a long product career and founding multiple companies, he now spends his time working closely with product leaders at companies big and small to implement and improve their discipline of product management.* ## 15. “Most things I worry about never happen anyway.” —Tom Petty > “I don’t always live up to it, but basically, I try to worry less. There’s a great Tom Petty lyric—I can’t remember which song it’s in [‘Crawling Back to You’], but I think it’s on the *Wildflowers* album—‘Most of the things you worry about never happen anyway.’ And it’s just so true. I find myself worrying about all sorts of things that don’t matter and never happen, and then you’re like, god, I spent three days worrying about that, or I went to this appointment and it was fine. The amount of worry, it’s just all in your head, and it’s all about anticipating the future that hasn’t happened yet. I try to tell myself that. And I try to tell others that in business, I try to tell myself that in life and in business, but also, I tell others that in business, what if people don’t like... I don’t know. You’ll find out. Worry less about it. It probably isn’t going to be a big deal anyway.” [[Full clip](https://youtu.be/dAnF0tk0di8?si=s50rLQFnxLfIEKeF&t=6254)] > > *—**[Jason Fried](https://www.linkedin.com/in/jason-fried/)** is the co-founder and CEO of 37signals, the maker of Basecamp and HEY.* > > Variations from other guests: > > 1. **What’s the worst that can happen?** “To me, when I get scared about something or try to do something, or even interpersonal reactions, where I’m like, ‘God, I have to have this hard conversation with this person,’ I try to tell myself, ‘What’s the worst that can happen?’ Usually when you sit down and start to think about it, it’s not as bad as you anticipate. So for me, that’s always helped me manage my anxiety around difficult situations or taking a leap and trying to get out there. I think in my younger days, I was a little crippled by overthinking and by being too anxious about things and not taking big leaps. So I’ve tried to stick by that and keep asking myself, ‘What’s the worst that can happen?’ and it’s usually not as bad as you think it is.” [[Full clip](https://youtu.be/9VdixM9KPN4?si=fFl6GS9BKiAyvaQj&t=4445)] *—**[Melissa Perri](https://www.linkedin.com/in/melissajeanperri/)** isthe CEO of Produx Labs, the author of the seminal PM book* The Build Trap*, a former Harvard Business School professor of product management, and the co-author of* [Product Operations: How successful companies build better products at scale](https://www.productoperations.com/)*.* > 2. **Nothing’s a big deal.** “My thing lately is, and maybe this is just an old-person thing, but my thing lately is: nothing’s a big deal. You’ll have stuff that you think is a really big deal, positive or negative, and you’ll be like, wow, if this thing happened, it’d be so great, and then it happens and you’re like, yeah, it’s pretty great, but things are good otherwise. Or it’ll be the opposite, like, oh, if this thing happened, it’d be so bad. Then it happens and you’re like, that wasn’t that bad. And so I don’t know if this is good or bad, but lately I’m in this kind of chill zone where I’m like, nothing’s a big deal, man. Everything’s cool.” [[Full clip](https://youtu.be/-VqmFI9vY7w?si=sEzOkUGX8oNZq5ES&t=4984)] *—**[April Dunford](https://www.linkedin.com/in/aprildunford/)** is a speaker, mentor, podcaster, and the best-selling author of* [Obviously Awesome: How to Nail Product Positioning So Customers Get It, Buy It, Love It](https://www.amazon.com/Obviously-Awesome-Product-Positioning-Customers/dp/1999023005) *and* [Sales Pitch: How to Craft a Story to Stand Out and Win](https://www.aprildunford.com/books)*.* ## 16. “Only a fool wishes time away.” > “Even if you’re having a bad day, even if you’re doing something boring or you’re stressed, that’s still your life and you should enjoy it.” [[Full clip](https://youtu.be/1gXNOJEWajU?si=8JAMm157QUukE5aA&t=3809)] > > *—**[Maya Prohovnik](https://www.linkedin.com/in/mayaprohovnik/)** is Spotify’s head of podcast product. She was employee #1 at Anchor, which was acquired by Spotify in 2019 and now powers more than 80% of all new podcasts created in the world. In 2023, Maya was named one of the “most important people in podcasting” by* [The Hollywood Reporter](https://www.hollywoodreporter.com/business/digital/most-powerful-people-in-podcasting-2023-1235567134/)*.* ## **17. “If you try to serve everybody, you serve no one.”** > “It’s about honing in on who you’re building your product for, who your persona is. And then with my children: try to be everyone’s friend, but it may not happen.” [[Full clip](https://youtu.be/9VdixM9KPN4?si=fFl6GS9BKiAyvaQj&t=4445)] > > *—**[Denise Tilles](https://www.linkedin.com/in/denisetilles/)** is the CPO at Grocket, a seasoned product leader, and the co-author of* [Product Operations: How successful companies build better products at scale](https://www.productoperations.com/)*.* ## 18. “There’s more knowledge outside my head than inside it.” > “I’ve taken to saying that there’s more knowledge outside my head than inside it. And this is a plea for curiosity. I have three main things that are my North Star: originality, curiosity, and wisdom. And so this idea about there’s more knowledge outside my head than inside my head is a plea for curiosity. It’s a plea for skepticism. It’s a plea to be humble about what you know, no matter how old you are, about the world around you, and always be listening for more. Even when you know something, let other people speak, because they might add 10% more to the 90% you know. And so being an active listener is very important.” [[Full clip](https://www.youtube.com/watch?v=T8TQGbJhv6Q&t=4304s)] > > *—**[Oji Udezue](https://www.linkedin.com/in/ojiudezue/)** is the chief product officer at Typeform and has held leadership roles at Twitter (head of product for creation and conversation), Calendly (CPO), and Atlassian (head of product for communication tools). He is well known for bringing a product-led-growth mindset to the companies he joins.* ## 19. “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” —’Citizenship in a Republic,’ Theodore Roosevelt > “This is the thing that I keep coming back to and the thing that I keep finding the value that I resonate with the most. It’s even what we try to build Reforge around. We’re trying to build Reforge around the people that have been in the arena. They’ve gotten the blood, sweat, and tears to talk about. I just highly respect people who enter that arena and do that hard work, and those are the folks that I’ve learned the most from and want to spend my precious hours building for and spending time with.” [[Full clip](https://www.youtube.com/watch?t=5791&v=ZG3iNH4vvMA)] > > *—**[Brian Balfour](https://www.linkedin.com/in/bbalfour/)** is the founder and CEO of Reforge. Prior to Reforge, he was the VP of growth at HubSpot and co-founded three other startups.* ### 💭 Other quotes I find myself repeating - “The cave you fear contains the treasure you seek.” —Joseph Campbell - “I’m no genius. I’m smart in spots—but I stay around those spots.” —Thomas Watson Sr., founder of IBM - “Be useful.” —Arnold Schwarzenegger - “I don’t know what I think until I write it down.” —Joan Didion - “There is nothing to writing. All you do is sit down at a typewriter and bleed.” —Unknown - “Networking is overrated. Become first and foremost a person of value, and the network will be available whenever you need it.” —Naval Ravikant - “First do what you *need* to do, then do what you *want* to do.” —My grandma - “Life is maintenance.” —Roland Martinez (a friend) ### 💡 Bonus inspiration 1. [Jocko Willink: “GOOD”](https://www.youtube.com/watch?v=IdTMDpizis8) 2. [Kara Lawson: Handle hard better](https://www.youtube.com/watch?v=oDzfZOfNki4) 3. [Rick Rubin interviews ​​Steven Pressfield](https://www.youtube.com/watch?v=lgJ_dxf2Hkg) 4. [Tyler Cowen interviews Paul Graham](https://conversationswithtyler.com/episodes/paul-graham/) 5. [Becoming a magician](https://autotranslucence.com/2018/03/30/becoming-a-magician/) 6. [How to do great work by Paul Graham](https://www.paulgraham.com/greatwork.html) 7. [Infinite chocolate bar trick](https://www.youtube.com/watch?v=z7tRr49qZfo) 🤯 8. [Strategies for becoming less distracted and improving focus with Nir Eyal](https://www.lennyspodcast.com/strategies-for-becoming-less-distracted-and-improving-focus-nir-eyal-author-of-indistractable-and/) ←Most recent podcast episode *Have a fulfilling and productive year 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [2/61] What to do if your product isn’t taking off *P.S. [New swag drop](https://lennyswag.com/)* ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/2ccd76ff-41d8-4a0c-adca-ee405dcf8d93_3600x1200.png) > ## Q: I’ve been working on my startup for a couple of years now. What are my options if my product isn’t taking off? First of all, I’m sorry. Spending years of your life on an idea that isn’t clicking—the long hours, the stress, your reputation on the line, and not seeing the fruit of all that labor—it sucks. Especially while everyone around you is seemingly killing it. Most startups, and new product ideas, fail—we all know this—but it’s different when it’s *your* product. If it’s any consolation, this is going to be happening to a lot of startups in the coming months: ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/059f5017-b2ce-46b4-b757-f925dbcfe531_2160x2160.png) To help you make it through the darkness, here’s a series of concrete actions you can take today to try to turn things around: 1. **Talk to more users (actually do it)** 2. **Change your target audience/ICP** 3. **Change your positioning/messaging/pitch** 4. **Try a “kickstarter” to get the word out** 5. **Find something that** ***is*** **working and pivot fully to that** 6. **Give it a bit more time** 7. **Give up and move on** Remember, many product builders have gone through what you’re going through now and have found a way. You can too. ### **1. Talk to more users (actually do it)** This [tweet](https://twitter.com/tomerlondon/status/1740958900982259842) from [Tomer London](https://www.linkedin.com/in/tomerlondon/) (CPO of Gusto) sums it up: ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/4cfb31af-23b9-446c-a931-93223971ec03_2160x2776.png) [Gustaf Alströmer](https://twitter.com/gustaf?lang=en), a Group Partner at Y Combinator, shared this same advice during our chat after I asked him why most startups fail: [Watch on YouTube](https://www.youtube.com/watch?v=ZoKLofsp8u0) > **“If I drill down what makes companies fail, it’s quite simple: They don’t talk to users, which means they don’t find product-market fit. And if they don’t find product-market fit, nothing else really matters. This is the mistake most people make. It’s all about talking to customers and learning that you’re building something that’s actually useful. YC’s headline is ‘Make things people want,’ and it’s still true and it’s always going to be true.”** Also: ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/17c4a37b-057f-41a7-b587-a1096c9aba1f_2160x1336.png) I know you’ve heard this advice before, and you’re probably doing it, but if you’re not, make it a point to talk to 5 to 10 potential customers this week. If you already are, that’s great. When talking to people, look for two things: *pain* and *pull*. Pain tells you there’s an opportunity to solve a problem. Pull tells you that you’re actually solving the problem. Here’s what pain and pull look like in practice: 1. **People pay you money:** Several people start to (or offer to) pay for your early product, ideally people you don’t have a direct connection to. 2. **Strong emotion:** You’re hearing hatred for the incumbents (i.e. pain) or a deep and strong emotional reaction to your idea (i.e. pull). 3. **Cold inbound interest:** You’re seeing cold inbound interest in your product. 4. **Continued usage:** If you’ve got a prototype running, people continue to use your product even if it’s bad. When I was building my startup [Localmind](https://www.fastcompany.com/1773652/how-small-and-local-businesses-can-benefit-localmind), we were talking to users all the time, and people constantly told us they loved the product, but, looking back, we didn’t hear much about their pain point. The pain we were solving turned out to be very low (helping people decide where to go out). It was a magical experience when it worked, and some people continued to use it, but for most people, it was more of a novelty than solving a real problem. We should have been more focused on the problem, and the pain we were solving, than the novelty of the solution. If you boil it down, to build a successful business, you need to solve a big enough problem for a big enough group of people to make a profit. Everything in this post is a way to help you find a bigger problem or a bigger group of people. **Homework:** 1. Talk to 5 to 10 new customers, or potential customers, this week 2. Read [Don’t confuse people rooting for you with market signal](https://www.lennysnewsletter.com/i/137198748/dont-confuse-people-rooting-for-you-with-market-signal) 3. Read [Four strategies for validating your B2B startup idea](https://www.lennysnewsletter.com/p/how-to-validate-your-b2b-startup) 4. Read [How to validate your startup idea](https://www.lennysnewsletter.com/p/validating-your-startup-idea) by Todd Jackson 5. [How the most successful B2B startups came up with their original idea](https://www.lennysnewsletter.com/p/how-the-most-successful-b2b-startups) 6. [How the most successful B2C startups came up with their original idea](https://www.lennysnewsletter.com/i/48316625/how-to-come-up-with-a-startup-idea) ### **2. Change your target audience/ICP** You may have the perfect solution to a different person’s problem. Instead of trying to bang your head against the wall to convince the same people they need your product, try pitching someone else entirely. The founders of Pinterest started off by pitching tech people, but almost by accident realized the group that needed Pinterest was [30-something female bloggers](https://arc.net/l/quote/jjyjujfr). The founders of Retool thought their product was for ops teams, but [it turned out it was CTOs](https://arc.net/l/quote/wecnypnn). DoorDash started with only independently owned restaurants in tier-2 and tier-3 cities. Stytch first went after growth teams, but then realized [engineers wanted it most](https://arc.net/l/quote/aoauliwg). Netflix realized their initial target audience should be [DVD fanatics in online communities](https://arc.net/l/quote/silwxypk), because that’s who most wanted endless DVDs. Instagram initially went after [designers interested in photography who had large Twitter followings](https://arc.net/l/quote/dsajztba). Snapchat initially went after [high school students in Orange County](https://arc.net/l/quote/mqaanmln). Your target audience should also be very narrow. Almost comically narrow. Shoot for at least three narrowing characteristics. For inspiration, here are the original ideal customer profiles (ICPs) for top B2B products and, below that, the original target audience for top B2C products (what I call the “super-specific who”). ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/c2b296c3-8bd6-4088-8219-c0086e8ea22b_2276x4584.png)![Image from What to do if your product isn’t taking off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/804f31f0-eb40-4f4a-aac6-36b109d4b06d_2374x5634.png) Why should your target market be so narrow? Several reasons: 1. **Focus:** It’s hard enough to solve one big problem for one person. By focusing all of your efforts on this one use case, you’ll have the best chance of solving a problem better than anyone else. Once you get one person to [love you](https://www.lennysnewsletter.com/i/119122450/step-get-one-company-to-love-your-product) (which most products aren’t able to do), you can expand from there. “The goal is for a fledgling start-up to take customers away from an established incumbent by focusing all their power at a single point of attack. This will be a problem that conventional solutions are not addressing well, one that is increasing in severity and attracting the attention of top management. The start-up commits to solving this problem 100%.” —Geoffrey Moore, author of Crossing the Chasm 2. **Distribution:** It’s easier to get people excited about your product if it feels like it’s made for them. It’s also easier to get in front of people with the same interests or problems. Tinder started with party-going college students at USC (one location). WhatsApp started with Russian emigrants in San Jose (one neighborhood). Discord started with PC gamers playing Final Fantasy XIV (one niche community). Instagram started with designers interested in photography who spent time on Twitter (i.e. easy to get to them), and from that beachhead expanded. **Watch this short clip to get a sense of why starting highly niche counterintuitively helps you grow more quickly:** [![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/bada8101-e696-4b0d-9bed-cfcb8577daef_1080x1920.jpeg)](https://www.tiktok.com/@redpoint/video/7226402166490041646) [@redpoint](https://www.tiktok.com/@redpoint)[Niche content ftw ▶️ #socialmediamarketing #socialmediamanager #contentcreators](https://www.tiktok.com/@redpoint/video/7226402166490041646) ![Image from What to do if your product isn’t taking off](https://substackcdn.com//img/alert-circle.svg)Tiktok failed to load. Enable 3rd party cookies or use another browser 3. **Early adopters get your flywheel spinning:** As Geoffrey Moore taught us over 30 years ago, most people aren’t early adopters. Instead, they wait for others to tell them a new product is worth their time. They wait for social proof. Early adopters, on the other hand, love new stuff. They’re less focused on pain points, and mostly just want to stay ahead. But once they get excited, they tell others. That’s how you cross the “chasm.” “We want to light a billion-dollar bonfire. How do you light a billion-dollar bonfire if all you have is a match? You don’t hold it under a big log. You get some kindling together, you bunch some paper underneath it, you get your match, and you light the corner of the paper under the kindling, under the log. Until I get the fire started somewhere, I shouldn’t try to spread my heat.” —[Geoffrey Moore](https://www.youtube.com/watch?v=4RFBdcJRdbA) ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/821c6166-2a3a-4dae-abb2-633ef08bf4c4_640x431.png) “It’s a lot easier to boil a thimble than the ocean.” —Sarah Tavel, GP at Benchmark **Homework:** 1. [If you allow your ICP to fray, you’ll lose](https://www.lennysnewsletter.com/i/137198748/if-you-allow-your-icp-to-fray-youll-lose) 2. [How to identify your super-specific who in B2C](https://www.lennysnewsletter.com/i/38459103/how-to-identify-your-super-specific-who) 3. [Stories of how top B2B companies found their ICP](https://www.lennysnewsletter.com/i/113763794/how-to-identify-your-icp) 4. *[Crossing the Chasm](https://www.amazon.com/Crossing-Chasm-3rd-Disruptive-Mainstream/dp/0062292986/ref=pd_lpo_sccl_1/139-8635645-0507405?content-id=amzn1.sym.1ad2066f-97d2-4731-9356-36b3edf1ae04)* ### **3. Change your positioning/messaging/pitch** You may have the perfect solution for the perfect person, but if they don’t understand how your product will help them, they won’t pay attention. [In her amazing guest post](https://www.lennysnewsletter.com/p/positioning), April Dunford relays how simply changing her team’s product positioning from a “Microsoft Access killer” to an “embeddable database for mobile devices” changed the trajectory of their business. In my [post on crafting your pitch](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-consumer), I share stories of how DoorDash, Netflix, and Behance took off only once they figured out how to pitch their product effectively (and without changing the product itself). In the case of Ramp, all they had initially was the messaging: > “When we launched, in mid-2020, I think we had ‘message-market fit.’ We were able to differentiate and have people be interested in our unique messaging, but we didn’t have the product there yet. In terms of the product itself, where suddenly it was spreading, that came later, probably fall of 2020, when it was finally delivering on the messaging we had.” —[Eric Glyman](https://www.linkedin.com/in/eglyman/), co-founder and CEO Here are examples of how some of the most popular B2C apps successfully pitched their products early on: ![Image from What to do if your product isn’t taking off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c9c489a5-3e04-4983-940a-eee9e9b346f1_2374x5634.png) **Homework:** 1. [How to craft your hook](https://www.lennysnewsletter.com/i/38501162/how-to-craft-your-hook) 2. [Positioning by April Dunford](https://www.positioning.show) 3. [How to build a killer sales pitch by April Dunford](https://www.lennysnewsletter.com/p/how-to-build-a-killer-sales-pitch) ### 4. Try a “kickstarter” to get the word out Maybe you do indeed have the right solution, for the right people, with the right pitch, but these people just haven’t heard about you yet. In this case, building on my [Racecar Growth Framework](https://www.lennysnewsletter.com/p/the-racecar-growth-frameworkexpanded), try a few kickstarts to get the word out: ![Image from What to do if your product isn’t taking off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/926e599f-b02f-460c-93ad-35be770e6941_5056x2672.png) “[Kickstarts](https://www.lennysnewsletter.com/i/75292796/kickstarts)” are unscalable tactics for acquiring your first 1,000 users. Once you get going, your strategy will shift to building a [scalable growth engine](https://www.lennysnewsletter.com/i/75292796/the-growth-engine), but for now, don’t worry too much about that. For more tactical ideas, also see “[turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts)” and my evergreen list of [60+ growth ideas](https://www.lennysnewsletter.com/p/growth-ideas). *Warning: Many founders assume this is the problem—that people just haven’t heard about them yet—and put all of their efforts into “growth.” Most likely this is not the problem. But it’s still worth a shot!* **Homework:** 1. [The Racecar Growth Framework](https://www.lennysnewsletter.com/p/the-racecar-growth-frameworkexpanded) 2. [Find your early adopters by doing things that don’t scale](https://www.lennysnewsletter.com/p/consumer-business-find-first-users) 3. [How to find and win your first 10 customers](https://www.lennysnewsletter.com/p/how-to-win-your-first-10-b2b-customers) ### **5. Find something that** ***is*** **working and pivot fully to that** In my research, I’ve found that something like 20% of successful consumer companies pivoted at least once in their early history, and a whopping 40% in B2B: - **Segment** started as a university classroom lecture tool - **Loom** started as a marketplace for companies to hire subject-matter experts - **Retool** started as Venmo for the U.K. - **Instagram** started as a location check-in app - **YouTube** started as a video-based dating site - **Slack** started as a game called Glitch - **Amplitude** started as a voice recognition application that allowed you to send and receive text messages by talking to your phone - **Notion** started as a no-code website builder - **Lyft** started as a long-distance ridesharing service, Zimride - **Box** started off as a “box” to put photos and content in on Facebook Four of my most successful portfolio companies found their big idea through pivots. [Vanta](https://vanta.com/) started as a B2B Alexa and pivoted to compliance and security. [Captions](https://www.captions.ai/) started as a high-school closed-community Snapchat killer and pivoted to an AI-powered creative studio. [Freshpaint](https://www.freshpaint.io/) started as a Segment killer and pivoted to analytics for HIPAA-compliant websites. [Zip](https://ziphq.com/) went through [six or seven pivots](https://arc.net/l/quote/vfkclbsb) before landing on a next-generation platform for the procurement space (now worth over $1B). If your core product isn’t working, find a feature or piece of functionality that is showing strong pull, from your existing users or even from your employees. A few examples of how this might look and feel: **Instagram:** > **“We knew it wasn’t working when we would give it to people and they’d just keep bouncing off. The one thing that people would continue to do on the service was post square images from either Hipstamatic or CameraBag or whatever filter app existed out in the world, and people loved these posts.** > > They got the most likes. They got the most comments. I would ignore every other post on Burbn except for the photos. > > One day, Mike, my co-founder, and I sat down, and we were like, ‘All right, we have to change something, because no one knows what we’re doing.’ We were like, ‘You know what? **Let’s do what everyone’s doing on our service anyway. Let’s cut everything except for photos.** Let’s build the filters in, and let’s allow for likes and comments and see what happens.’ I swear, the first day we launched it, we got 25,000 users.” > > —[Kevin Systrom](https://en.wikipedia.org/wiki/Kevin_Systrom), CEO and co-founder, via [Startups.com](https://www.startups.com/library/founder-stories/kevin-systrom) **Loom:** > “Loom was the result of two previously failed attempts in the video space. Our first was a marketplace for companies to hire subject-matter experts (i.e. product managers, designers, engineers, etc.) for feedback on checkout flows, UX, sales funnel, onboarding, and more. While we saw initial revenue here, this failed to get the traction to warrant additional build time (we were already four months in at this point). The second was a SaaS tool that any company can embed on their website and get instant feedback from their users in the form of a user test. Similar to the first iteration, this failed to get any real momentum after three months, although it led us to a remarkable insight from one of our few design partners. > > **Three months into this second idea, we had an aha moment when a client used the product to record a video of himself summarizing all of the user tests his team had collected. That’s when it occurred to us that there could be** ***something*** **here.** > > A month later, we launched on Product Hunt and had thousands of people who’d downloaded the extension by day’s end. That made it clear to us that we should double down on this new direction, and we’ve never looked back.” > > —[Shahed Khan](https://www.linkedin.com/in/shahedkhan/), co-founder **Discord:** > “His first company started as a video game studio and even launched a game on the iPhone App Store’s first day in 2008. That petered out and eventually pivoted into a social network for gamers called OpenFeint, which Citron described as ‘essentially like Xbox Live for iPhones.’ He sold that to the Japanese gaming giant Gree, then started another company, Hammer & Chisel, in 2012 ‘with the idea of building a new kind of gaming company, more around tablets and core multiplayer games.’ It built a game called Fates Forever, an online multiplayer game that feels a lot like League of Legends. **It also built voice and text chat into the game, so players could talk to each other while they played.** > > And then that extremely Silicon Valley thing happened: Citron and his team **realized that the best thing about their game was the chat feature**. This was circa 2014, when everyone was still using TeamSpeak or Skype and everyone still hated TeamSpeak or Skype. Citron and the Hammer & Chisel team knew they could do better and decided they wanted to try. > > It was a painful transition. Hammer & Chisel shut down its game development team, laid off a third of the company, shifted a lot of people to new roles, and spent about six months reorienting the company and its culture. It wasn’t obvious its new idea was going to work, either. ‘When we decided to go all in on Discord, we had maybe 10 users,’ Citron said. There was one group playing League of Legends, one WoW guild, and not much else. ‘We would show it to our friends, and they’d be like, ‘This is cool!’ and then they’d never use it.’ > > After talking to users and seeing the data, the team realized its problem: Discord was better than Skype, certainly, but it still wasn’t very good. Calls would fail; quality would waver. Why would people drop a tool they hated for another tool they’d learn to hate? The Discord team ended up completely rebuilding its voice technology three times in the first few months of the app’s life. Around the same time, it also launched a feature that let users moderate, ban, and give roles and permissions to others in their server. **That was when people who tested Discord started to immediately notice it was better. And tell their friends about it.**” > > —[David Pierce,](https://www.protocol.com/discord) *[Protocol](https://www.protocol.com/discord)* **Homework:** 1. [Pay attention to what’s already working, and double down](https://www.lennysnewsletter.com/i/48316625/strategy-pay-attention-to-whats-already-working-and-double-down-aka-pivot) 2. [Identify something you’ve built that is showing signs of pull. Pivot fully to that.](https://www.lennysnewsletter.com/i/113130490/path-present-pullidentify-something-youve-built-that-is-showing-signs-of-pull-pivot-fully-to-that) ### **6. Give it a bit more time** Finding product-market fit takes longer than most people think, especially in B2B. Here are the timelines for top B2B and B2C companies. ![Image from What to do if your product isn’t taking off](https://substack-post-media.s3.amazonaws.com/public/images/6ae1275f-1b3e-49d3-afcb-f4ca9045279e_5438x6448.png)![Image from What to do if your product isn’t taking off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5a35a80-d754-4264-a944-4273a785f9e8_3654x3286.png) In consumer, if PMF isn’t immediate, it usually takes 6 to 18 months. In B2B, the median time is two years. These timelines are extended if you’re building something that requires network effects (e.g. a marketplace, a social network). To pursue this route, you obviously need to have enough runway to last you through the darkness. So either raise a lot of money or conserve cash. **Homework:** 1. [A guide for finding product-market fit in B2B](https://www.lennysnewsletter.com/p/finding-product-market-fit) 2. [Iterate until enough people stick around](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-consumer-9c8) ### **7. Give up and move on** Life is short. Are you happy that you’re spending years of your life working on this problem? Did you ever imagine you’d be spending this long on it? Consider calling it quits. I promise you that your investors (or boss) will understand. [At least the good ones](https://x.com/dunkhippo33/status/1657438019794898945?s=20). There are too many zombie companies, zombie projects, and zombie teams. They *could* keep going for years—they raised a lot of money, they cut costs substantially (and are living on nothing)—but they shouldn’t. Yes, sometimes it takes five or more years to find PMF, as it did with Figma and Slack. But chances are you aren’t Figma or Slack. It might feel like you’d be a failure for quitting, but many of the most successful people in history quit. As [Seth Godin](https://www.sethgodin.com/) argues in *[The Dip](https://www.amazon.com/Dip-Little-Book-Teaches-Stick/dp/1591841666)*, quitting is often the best move: > **“Sometimes we get discouraged by inspirational writing, like stuff from Vince Lombardi: ‘Quitters never win and winners never quit.’ Bad advice. Winners quit all the time. They just quit the right stuff at the right time.” […]** > > **“Winners quit fast, quit often, and quit without guilt.”** [Phil Knight](https://en.wikipedia.org/wiki/Phil_Knight), co-founder of Nike, had the same advice in his memoir *[Shoe Dog](https://www.amazon.com/Shoe-Dog-Memoir-Creator-Nike-ebook/dp/B0176M1A44)*: > **“And those who urge entrepreneurs to never give up? Charlatans. Sometimes you have to give up. Sometimes knowing when to give up, when to try something else, is genius. Giving up doesn’t mean stopping. Don’t ever stop.”** #### Signs it might be time to give up: 1. “I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.” —[Steve Jobs](https://youtu.be/UF8uR6Z6KLc?si=hkqcYzXtjGNvEYev&t=561): 2. “How much conviction do you have in what you’re building? I know in the beginning, before you knew all you know now, you had tons of conviction. That’s what caused you to leave your job. But now knowing all you know, **do you have more or less conviction in the problem and the solution you’re building?** Some people are like, ‘I have more conviction; all that I’ve learned, all the validation I’ve received from customers—we just haven’t figured it out yet. We’ve tried three times and still, each product fails, but I have more conviction than ever before.’ For those people, you’re just in the messy middle. Stick with it. This is par for the course. But oftentimes I’ll hear, ‘Honestly, if I knew then what I know now, I would not have done this.’ Then it’s like, holy shit—then quit! Your life is short.” —[Scott Belsky](https://www.youtube.com/watch?v=HCKosdV1J-8) 3. You have an instinct that this isn’t going to work. Trust your instinct. 4. You’ve run out of good ideas. 5. You don’t want to work with your co-founder any longer. 6. You’re running out of money. 7. You’re exhausted. All good reasons to call it quits. Or, if nothing else, to timebox how much more time you’re going to stay with it. #### Routes to quitting: 1. Try to sell your company. Difficult these days. [Here’s a great guide](https://review.firstround.com/how-to-sell-your-startup-the-complete-guide-to-running-an-manda-process-as-a-founder). 2. Keep trying new ideas until you run out of cash. Sometimes it’s best to know you did every possible thing you could. 3. Stop now and give your remaining money back to your investors. In my experience, most investors prefer this versus your running out of cash. If it makes you feel any better, I’ve also never heard a founder regret shutting things down. Usually, like relationships, you realize later that you should have ended it much sooner. If you are winding your startup down, check out [Sunset](https://www.sunsethq.co/) (disclaimer: I’m an investor), which makes the shutdown process super-easy. To leave you with some inspiration, here’s a list of founders who failed before they succeeded: 1. **Jeff Bezos**—Before Amazon, Bezos launched an online auction site called zShops that failed miserably. 2. **Oprah Winfrey**—Before becoming a media mogul, Winfrey was fired from her job as a television reporter because she was deemed “unfit for TV.” 3. **Reid Hoffman**—Before co-founding LinkedIn, Hoffman co-founded SocialNet, a dating and social networking site that ultimately failed. 4. **Travis Kalanick**—Before Uber, Kalanick co-founded Red Swoosh, which faced endless challenges and was eventually sold for a fraction of its original valuation. 5. **Sara Blakely**—Before founding Spanx, Blakely had several failed job applications, including at Disney World, and also had a stint selling fax machines door-to-door, where she faced constant rejection. 6. **Steve Jobs**—After leaving Apple, Jobs founded NeXT Computer, which struggled. 7. **Max Levchin**—Before co-founding PayPal, Levchin founded NetMeridian Software, a company that developed marketing tools for software developers, which failed. 8. **J.K. Rowling**—Before the Harry Potter series, Rowling was rejected by 12 different publishers. 9. **Reed Hastings**—Before Netflix, Hastings started a company called Pure Software that had issues with scaling and culture fit, eventually leading to its sale. This experience taught him valuable lessons, which he applied to Netflix. 10. **James Dyson**—Before creating the Dyson vacuum cleaner, James Dyson went through 5,126 failed prototypes over 15 years. **Homework:** 1. [When to Shut Down a Startup](https://www.ycombinator.com/library/3S-when-to-shut-down-a-startup) by Aaron Harris 2. [5 Reasons to Sell Your Startup](https://blog.eladgil.com/p/5-reasons-to-sell-your-startup) by Elad Gil 3. [Your startup idea probably isn’t venture-scale](https://www.lennysnewsletter.com/p/your-startup-idea-probably-isnt-venture) Good luck 🙏 ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [3/61] How to describe your business as an equation *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *If you’re not a subscriber, here’s what you missed this month:* 1. *[What to do if your product isn’t taking off](https://www.lennysnewsletter.com/p/what-to-do-if-your-product-isnt-taking)* 2. *[First-principles thinking](https://www.lennysnewsletter.com/p/first-principles-thinking)* 3. *[Inspiration for the year ahead](https://www.lennysnewsletter.com/p/inspiration-for-the-year-ahead)* *Subscribe to get access to these posts, and every post.* Every business can be distilled into a simple equation. And until you can express your business as one, you don’t fully understand it. Figuring out this equation forces you to think about the inputs that drive your business, the outputs you want to prioritize, and how these variables interact. It also gives you a map for understanding which metrics you need to track, what factors drive the growth of your business, and, most importantly, **where you have the most leverage to drive an outsize amount of impact (and thus where to assign your precious people and resources).** To help you flesh out your own business equation, [Dan Hockenmaier](https://www.linkedin.com/in/dan-hock/) and I put together example equations for the most common tech business models: 1. **B2B SaaS** 1. Bottom-up B2B SaaS with seat-based pricing 2. Bottom-up B2B SaaS with usage-based pricing 3. Top-down B2B SaaS 2. **B2C/consumer** 1. B2C subscription (trial or freemium) 2. B2C free (ads) 3. **Marketplaces** 1. B2C marketplaces 2. B2B marketplaces 4. **DTC/e-commerce** First, a few disclaimers: 1. **This won’t be easy.** These equations and concepts can be some of the most divisive within your company, particularly between your product, GTM, finance, and sales teams. But once the equations are defined, your teams are aligned, and the equations operationalized, you’ll experience a huge force multiplier—because everyone will be focusing their energy on the same (high-leverage) levers. 2. **This won’t be perfect.** While we lay out the different “recipes,” every business is unique. Thus, the equations will require some adapting to match your business. Please send us feedback (or leave a comment below) on anything you think we’re missing, or anything unique about your business that caused you to modify the equation you use. We’d love to hear it. 3. **We focused on ARR and revenue.** All of these equations output revenue or ARR. If your business has high gross margins (e.g. >80%-90%), like some SaaS businesses, you may be able to stop there. But for any business with meaningful cost of sales, such as DTC and most marketplaces, you’ll want to instead output a metric like contribution margin. For these cases, see the section at the end of the post on adding margin to your equation. 4. **Business equations don’t cover** ***every*** **important metric.** One key metric for every business is customer acquisition payback period. This is related to but not directly captured in the equations below. See the section at the end on how to calculate your payback period. ### **How to make the most of this post** 1. Create your own business’s math formula, with inspiration from a formula below 2. Have a discussion with your team about how your business grows through the lens of this formula 3. Identify the highest-leverage lever(s) within your formula, and put more resources behind it 4. Identify one new lever you haven’t invested in, and experiment with it 5. Turn the formula into a full-fledged growth model (something we’ll explore in a future post) *A huge thank-you to [Abi Noda](https://www.linkedin.com/in/abinoda/) ([DX](https://getdx.com/)), [Alex Bilmes](https://www.linkedin.com/in/bilmes/) ([Endgame](https://www.endgame.io/)), [Alexa Grabell](https://www.linkedin.com/in/alexagrabell/) ([Pocus](https://www.pocus.com/)), [Barry McCardel](https://www.linkedin.com/in/barrymccardel/) ([Hex](https://hex.tech/)), [Boris Jabes](https://www.linkedin.com/in/borisjabes/) ([Census](https://www.getcensus.com/)), [Christina Cacioppo](https://www.linkedin.com/in/ccacioppo/) ([Vanta](https://www.vanta.com/)), [Colin Dunn](https://www.linkedin.com/in/colinwdunn/) ([Visual Electric](https://visualelectric.com/)), [Dom Wong](https://www.linkedin.com/in/domwong14/) ([Pogo](https://www.joinpogo.com/)), [Emily Kramer](https://www.linkedin.com/in/emilykramer/) ([MKT1](https://newsletter.mkt1.co/)), [Jeremy Cai](https://www.linkedin.com/in/jeremyhcai/) ([Italic](https://italic.com/)), [May Habib](https://www.linkedin.com/in/may-habib/) and [James Lee](https://www.linkedin.com/in/jameslee236/) ([Writer](https://writer.com/)), [Merci Victoria Grace](https://www.linkedin.com/in/merci/) ([Panobi](https://panobi.com/)), [Nels Gilbreth](https://www.linkedin.com/in/nels-gilbreth-36a9821/), [Peter Kazanjy](https://www.linkedin.com/in/kazanjy/) ([Atrium](https://www.atriumhq.com/)), [Reed McGinley-Stempel](https://www.linkedin.com/in/reed-mcginley-stempel-17362245/) ([Stytch](https://stytch.com/)), [Rujul Zaparde](https://www.linkedin.com/in/rujulz/) ([Zip](https://ziphq.com/)), [Whitney Steele](https://www.linkedin.com/in/whitneydsteele/) ([Descript](https://www.descript.com)), [William Hicks](https://www.linkedin.com/in/william-cree-hicks/) ([Magic Mind](https://magicmind.co/)), and [Zach Grannis](https://www.linkedin.com/in/zachgrannis/) for sharing feedback and advice on this post 🙏* *Also, don’t miss [Dan Hockenmaier’s newsletter](https://www.danhock.co/), which is a must-read for anyone working on growth and marketplaces.* ## B2B SaaS equations A B2B SaaS business sells cloud-hosted software on a subscription basis (that’s what makes it software as a service—SaaS) to other businesses (that’s what makes it B2B). Examples include Snowflake, Slack, and Jira. B2B SaaS businesses typically monetize in one of two ways—*per seat* (e.g. Slack) or by *usage* (e.g. Datadog)—and grow in one of two ways—through a *bottom-up* motion (i.e. individual employees within a company discover the product on their own, as with Figma and Notion) or a *top-down* motion (i.e. salespeople sell the product into company leaders, as with Salesforce and Box). And though not exactly the same thing, a bottom-up growth motion is, in practice, essentially the same as a “product-led growth” (PLG) motion. Below, we’ll look at the three most common B2B SaaS business models, sharing both a simplified version of each business equation (as an image) and the full equation in the text under it. ### 1. Bottom-up B2B SaaS with seat-based pricing **Examples:** Figma, Slack, Zoom, Adobe Creative Cloud, Asana, Jira. ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/146643fa-898f-480b-bd5b-eee6b29fef3a_2000x1500.png) #### **ARR = New ARR + Expansion ARR + Reactivation ARR – Churned ARR – Contraction ARR** - **New ARR** = New seats \* price per seat - **New seats** = Visitors \* conversion to trial/freemium \* conversion to paid \* seats per account - **Visitors** - Paid ads - SEO - Direct (e.g. word of mouth, virality) - Referral (e.g. G2, social, articles) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Conversion to trial/freemium** - Visit to CTA - CTA to signup - Signup to activation - **Conversion to paid** - Awareness of paid plan - Starting the purchase process to completing the purchase process - Value of product - Lead nurturing - **Expansion ARR** = Accounts upsold \* average price increase - **Accounts upsold** - In-product upsells - Outbound - Hitting limits - **Average price increase** - Seat growth - Headcount growth - Internal virality - Colleague invite rate - Invite conversion rate - Cross-sold products (e.g. Figma -> FigJam) - Hitting more expensive tiers - Raising prices - **Reactivation ARR** - Reactivated logos - Reactivated seats - **Churned ARR** - Churned logos - **Contraction ARR** - Seat contraction - Downgrading tiers - Stopped using additional products ### 2. Bottom-up B2B SaaS with usage-based pricing **Examples:** AWS, Datadog, Twilio ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/d3e2efe3-0faa-4141-8bc4-d65bf4c7ecfb_2000x1500.png) #### **ARR = New ARR + Expansion ARR + Reactivation ARR – Churned ARR – Contraction ARR** - **New ARR** = New usage \* price for usage - **New usage** = Visitors \* conversion to trial/freemium \* conversion to paid - **Visitors** - Paid ads - SEO - Direct (e.g. WOM, virality) - Referral (e.g. G2) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Conversion to trial/freemium** - Visit to CTA - CTA to signup - Signup to activation - **Conversion to paid** - Awareness of paid plan - Starting the purchase process to completing the purchase process - Value of product - Inbound sales/account managers nurturing leads - **Price for usage** - **Expansion ARR** = Accounts upsold \* average price increase - **Accounts upsold** - In-product upsells - Outbound - Hitting limits - **Average price increase** - Usage growth - Headcount growth - Internal virality - Colleague invite rate - Invite conversion rate - Data/customer/use-cases growth - Cross-sold products (e.g. Figma -> FigJam) - Hitting more expensive tiers - Raising prices - **Reactivation ARR** - Reactivated logos - Reactivated users - **Churned ARR** - Churned logos - **Contraction ARR** - Reduced usage - Downgrading tiers - Stopped using additional products ### 3. Top-down (sales-led) B2B SaaS **Examples:** Snowflake, Box, Salesforce, Workday, Looker This category includes both seat-based and usage-based pricing and normally ends up as a predetermined negotiated annual contract. ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/8bf410a3-fb5f-4aeb-b616-78abf52baba9_2000x1500.png) #### **ARR = New ARR + Expansion ARR + Reactivation ARR – Churned ARR – Contraction ARR** - **New ARR** = Leads \* qualified leads rate \* meeting booked rate \* win rate \* ACV - **Leads =** Direct **+** indirect - **Direct =** Outbound + inbound - **Outbound** - Cold emails - Cold calls - Cold DMs - Events - **Inbound** - Paid ads - SEO - Referrals (e.g. G2, backlink, social mentions) - Direct (e.g. signs up for demo on website) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Indirect** - Channel partnerships - Number of partnerships - Leads per partner - Conversion rate - **Expansion ARR** = Accounts upsold \* average price increase - **Accounts upsold** - In-product upsells - Sales nurturing - Hitting limits - **Average price increase** - Seat/usage growth - Headcount growth - Internal virality - Colleague invite rate - Invite conversion rate - Data/customer/use-cases growth - Cross-sold products (e.g. Figma -> FigJam) - Hitting more expensive tiers - Raising prices - **Reactivation ARR** - Reactivated logos - Reactivated users - **Churned ARR** - Churned logos - **Contraction ARR** - Reduced seats/usage - Downgrading tiers - Stopped using additional products ## B2C/consumer equations Consumer businesses make a software product for individual consumers. Examples include Netflix, TikTok, and Google. Consumer products typically monetize in one of two ways—*subscriptions* (e.g. Duolingo, Spotify, Tinder) and *ads* (e.g. Instagram, Snap, YouTube). Below, we’ll look at these two models. ### 4. B2C with subscription-based pricing (trial or freemium) **Examples:** Duolingo, Spotify, Tinder, Calm, Strava, MyFitnessPal ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/c094eaca-4150-4953-8f79-d37c8059eb04_2000x1500.png) #### **ARR = MRR x 12 = (New subs + Retained subs + Reactivated subs) \* Average monthly revenue per sub \* 12** - **New subs = Traffic \* visit to trial/freemium conversion \* trial to paid conversion** - **Traffic** - Paid ads - SEO - Direct/WOM - Referrals (i.e. invites) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Visit to trial/freemium conversion** - Visit to onboarding - Onboarding to activation - **Trial to paid conversion** - Awareness of paid plan - Starting to purchase to completing purchase - **Retained subs** - **Reactivated subs** - **Average monthly revenue per sub** - % annual vs. monthly subs - % premium vs. basic subs ### 5. B2C with ads (i.e. free for the user) **Examples:** Instagram, Google, TikTok, Meta, Snap, Twitter ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/d97a112e-d292-46ca-b5d4-150758f84597_2000x1500.png) #### **Revenue = Active users \* Impressions per user \* CPM/CPC/CPA** - **Active users = New users in period + retained users from prior periods** - **New users =** Traffic \* conversion - **Traffic** - Paid ads - SEO - Direct/WOM - Organic social - Referrals (i.e. invites) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Conversion** - Visit to onboarding - Onboarding to activation - **Retained users from prior period** - Quality of product and experience - Re-engagement (upsell/cross-sell) - **Impressions per user =** Sessions \* impressions per session \* sessions per user - **Sessions** - Pulling user back - **Impressions per session** - Ad load - **Sessions per user** - **CPM/CPC/CPA** - **User quality** - Geo - Income - Profession - Conversion rate from click to purchase ## Marketplace equations A marketplace business facilitates transactions between buyers and sellers. Examples include Airbnb, DoorDash, Uber, eBay, and Faire. These businesses don’t own the supply (e.g. the homes, the cars, the restaurants) but instead make it easy for customers to find and purchase from these sellers. Marketplaces monetize primarily through a transaction fee and occasionally through a subscription fee. There are two types of marketplaces—B2C marketplaces, which cater to individual consumer customers (e.g. Airbnb, Uber), and B2B marketplaces, which cater to business customers (e.g. Faire, Pachama). ### 6. B2C marketplaces **Examples:** Airbnb, Uber, DoorDash, Etsy, eBay ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/82e850a5-cf28-454a-940c-5877716b4f54_1600x1200.png) #### **Revenue = Transactions \* AOV \* Take rate** - **Transactions** = (New traffic + returning customers) \* conversion to purchase - **New traffic** - Paid ads - SEO - Direct/WOM - Referrals (i.e. invites) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Returning customers** - Quality of product and experience - Re-engagement (upsell/cross-sell) - **Conversion to purchase** - Visit to search - Search to product page - Product page to start checkout - Start checkout to complete purchase - **AOV** - **Take rate** - Supply-side commission + - Demand-side commission + - Additional revenue per transaction - Subscriptions - Financing fees ### 7. B2B marketplaces **Examples:** Faire, Amazon Business, Pachama, Novi ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/1b05c673-8d86-47df-aaf0-3e5b10d472ab_1600x1200.png) #### **Revenue = Transactions \* AOV \* Take rate** - **Transactions =** Active customers \* transactions/customer - **Active customers** = New activated customers + retained customers - **New activated customers** = Signups \* conversion from signup to activation - **Signups** - Inbound - Paid ads - SEO - Direct/WOM - Referrals (i.e. invites) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - Outbound - Calls - Emails - DMs - **Conversion from signup to activation** - Visit to search - Search to product page - Product page to start checkout - Start checkout to complete purchase - **Retained customers** - Conversion of new to retained customers + - Resurrection of previously active customers – - Churned customers - **Transactions/customer** - Quality of product and experience - Re-engagement (upsell/cross-sell) - **AOV** - **Take rate** - Supply-side commission + - Demand-side commission + - Additional revenue per transaction - Subscriptions - Financing fees ## 8. DTC/e-commerce equation Finally, we have direct-to-consumer (DTC) and e-commerce businesses, which sell a physical product to individuals. This includes companies like Warby Parker, Casper, Glossier, and Dollar Shave Club. ![Image from How to describe your business as an equation](https://substack-post-media.s3.amazonaws.com/public/images/7fff73c7-1523-4e70-892d-f43f0388309c_1600x1200.png) ### **Revenue = Transactions \* AOV** - **Transactions = Traffic \* conversion rate** - **Traffic =** New traffic + returning traffic - **New traffic** - Paid ads - SEO - Direct (e.g. WOM, virality) - [Turbo boosts](https://www.lennysnewsletter.com/i/75292796/turbo-boosts) - **Returning traffic** - Quality of product and experience - Re-engagement (upsell/cross-sell) - **Conversion rate** - Visit to search - Search to product page - Product page to start checkout - Start checkout to complete purchase - **AOV (average order value)** ### **Adding margin to your business equation** For any business with sufficiently high cost of sales, you can’t stop at revenue. What you’re really optimizing for is ***contribution margin***, or what is left over after you take out all variable costs of a transaction. This is a key metric because it describes how much you have left over to reinvest in the business. It’s also how more margin-intensive businesses will typically ultimately be valued, as opposed to high-margin businesses, like SaaS, which are often valued on multiples of ARR. To apply margin to the equations above, all you have to do is calculate your average contribution margin rate (CM%) and multiply it by revenue. So for a DTC business, the formula would be: > ***Contribution margin = Transactions \* AOV \* CM%*** There are two big components of cost to consider. Deducting only the first would give you a gross margin, and including the second gets you to contribution margin. **Direct variable costs:** These are costs that are directly driven by a transaction and are easy to attribute. For DTC models, this would include things like cost of goods sold, incentives, and shipping. For marketplace models, it would include things like payment processing fees, incentives, and defaults. **Indirect variable costs:** These are costs that are not directly driven by transactions but tend to increase as transactions increase, and include things like marketing and customer support. ### **Calculating payback period** For every business model here, one of the most important metrics that is not directly covered in these equations is ***customer acquisition payback period***, i.e. the amount of time it takes for you to recoup the costs of customer acquisition. This is a better measure than LTV/CAC because it tells you how quickly you can invest in driving more growth. At the highest level, you can calculate payback period as CAC divided by annual contribution margin per customer. For example, if you have a CAC of $100 and an average annual contribution margin per customer of $120, your payback period would be 0.83 years, or 10 months. For certain business models, especially marketplaces, this equation gets more complicated. See “problem #2” in [this essay](https://www.danhock.co/p/the-new-problems-every-marketplace) for an explanation of how to calculate payback periods for marketplaces. Also, [here are handy benchmarks for good and great payback periods](https://www.lennysnewsletter.com/p/payback-period). ### 📚 Further study 1. [The ultimate guide to product-led sales, with Elena Verna](https://www.lennyspodcast.com/the-ultimate-guide-to-product-led-sales-elena-verna/) 2. [The SaaS Metrics That Matter, by David Sacks](https://sacks.substack.com/p/the-saas-metrics-that-matter) 3. [The Burn Multiple, by David Sacks](https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200) 4. [Drive Growth by Picking the Right Lane—A Customer Acquisition Playbook for Consumer Startups, by Dan Hockenmaier and Lenny Rachitsky](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups) 5. [How to kickstart and scale a consumer business](https://www.lennysnewsletter.com/p/kickstarting-and-scaling-a-consumer) 6. [How to kickstart and scale a marketplace business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace) 7. [How to kickstart and scale a B2B business](https://www.lennysnewsletter.com/p/how-the-most-successful-b2b-startups) *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [4/61] How Gong builds product *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** ✨ (an AI chatbot trained on my newsletter posts, podcast interviews, and more) and my new **[swag store](https://lennyswag.com/)** (great gifts for your favorite PM, or yourself!).* I was speaking with one of my favorite B2B founders and asked her what company she’d most love to learn from. Her immediate answer: > **“Gong! I want to know everything about that company.”** [Gong](https://www.gong.io/) is one of the fastest SaaS companies in history to reach $100 million in ARR, has over 4,000 customers—including companies like Snowflake, Shopify, HubSpot, and LinkedIn—and has raised more than $500 million from Tier 1 investors like Sequoia Capital, Coatue, and Thrive Capital. To get an inside look at how Gong builds product, I sat down with [Eilon Reshef](https://www.linkedin.com/in/eilonreshef/), the co-founder and chief product officer. **Here’s what stood out to me most about Gong’s approach to product:** 1. The incredibly high amount of autonomy teams have 2. Teams being organized around outcomes (aka “problem areas”), not features 3. The “W”-framework yearly planning process, the quarterly “M” process 4. Their dislike for OKRs and Scrum 5. Engineers, not PMs, owning prioritization of bugs 6. How closely teams work with design partners when developing new product lines, and their “slice” strategy for new products 7. The almost-real-life assignment principle for interviewing To learn more about Gong, check out their [website](https://www.gong.io/), [demo page](https://www.gong.io/demo/), and new [AI platform](https://www.gong.io/product/ai/). *For more stories of how the best product teams operate, don’t miss my deep dives into [Linear](https://www.lennysnewsletter.com/p/how-linear-builds-product), [Shopify](https://www.lennysnewsletter.com/p/how-shopify-builds-product), [Figma](https://www.lennysnewsletter.com/p/how-figma-builds-product), [Notion](https://www.lennysnewsletter.com/p/how-notion-builds-product), [Duolingo](https://www.lennysnewsletter.com/p/how-duolingo-builds-product), [Ramp](https://www.lennysnewsletter.com/p/how-ramp-builds-product), [Miro](https://www.lennysnewsletter.com/p/how-miro-builds-product), [Coda](https://www.lennysnewsletter.com/p/how-coda-builds-product), and [Snowflake](https://www.lennysnewsletter.com/p/how-snowflake-builds-product).* # How Gong builds product ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/166b5927-a571-48f5-b014-33fa2562ca8f_6000x4000.jpeg) ### **1. How far out do you plan in detail, and how has that evolved over the years?** We have two main planning cycles: annual and quarterly. The annual process works along a “W” shape, similar to the framework Lenny suggested [here](https://review.firstround.com/the-secret-to-a-great-planning-process-lessons-from-airbnb-and-eventbrite). It starts at the top, with the Gong management team setting up top company priorities—usually three or four. Based on these priorities, product and engineering determine the capacity for the different products and product areas. So for example, if we’ve decided to enter a new category, we will assign several pods that would be focused on this new category. When we decided to build our sales engagement product, for example, we reallocated some existing pods toward that goal. Initially, a straw-man plan is built (bottom-up), with the “big rocks” that are planned for the year. It is presented to the leadership team for high-level feedback. Then a more detailed plan is put together. That plan includes more specific feature descriptions and more concrete timelines. The output of this process is guidance for the plan one year ahead, at a decreasing level of certainty: good certainty for the upcoming quarter, lower certainty the following quarter, and a very rough sketch of the second half. Once the plan is prepared, it is communicated broadly throughout the company. We found out that it’s helpful to have a single person on the product team (within the product operations team) assigned to handle the collection and communication of these plans. Of course, we also involve teams other than management in the process. Over time, we’ve built various workshops with different teams (e.g. sales, customer success) to reduce the chances of having blind spots. For example, as part of our 2024 planning, we ran a workshop with the revenue leadership team, which brought up certain opportunities for addressing the needs of revenue leaders within our customer base; not all those needs were identified within the planning process. Each quarter, we run a trimmed-down version of this process. Oftentimes, there isn’t new top-down guidance, so the process looks more like an “M,” starting from the product pods. We then create a pretty substantial document—north of 20 pages—that details the plan and what is expected to be built during the upcoming quarter. Here’s the first page of our FY2024 Q3 plan (8-10/2023): ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/344853f9-6385-4566-965e-3ec272ab71bc_597x791.png) We also provide an abridged version of the high-level rocks, for executive consumption: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/39fb50b2-f12b-4555-824a-fb329101fc0d_924x519.png) Also during this process, we provide (relatively light) updates to the annual plan. In principle, we aim to provide a rolling 12-month window of the plan, with a decreasing level of clarity. We do not plan monthly or biweekly. Both the engineering leader and I dislike the Scrum methodology. We feel it’s trying to drive urgency via artificial deadlines versus via value to the customer. And by forcing “commitment” to deliverables within a time window, it essentially inhibits on-the-fly trade-offs between content, quality, and timelines. Yet we have internal reviews with the different groups on a monthly basis. What’s interesting is that the process hasn’t changed materially over the years. That is, we had annual and quarterly planning almost from day one. But the process has become more structured over time: distribution across teams, deeper documentation and information dissemination, and so on. ### **2. How do you structure your product teams? Has this changed over the years?** When we started Gong, I built what we now call a pod: a product manager (which was initially me), a product designer, and a handful of engineers (front-end, back-end, and generalists). Later on, as we started to scale, we debated how to structure the pods. In my prior life, I’ve seen org structures built around engineering specialization (back-end vs. front-end or platform vs. applications). Even back in 2017, we realized that we wanted to optimize for customer-centricity and velocity instead of optimizing for specialization. So we’ve continued to build autonomous multi-skill teams (pods) around product areas—what is now known as “empowered product teams.” Each pod is focused on a problem area (for example, “sales forecasting”), which roughly aligns with a set of “jobs” that are carried out either by a given persona (e.g. a sales coach) or by multiple people doing a business process (e.g. a pipeline review). Now that we’re bigger, pods are assembled into “groups,” and each group roughly aligns with a product. For better or worse, products are usually aligned with an industry definition of a category (e.g. “conversation intelligence” or “sales engagement”). And in most cases, those products span multiple user types across a set of strongly connected workflows. For example, our “Engage” product is a sales engagement product, which serves account executives (working with new or existing customers), sales development managers (prospecting to new accounts), managers (driving the teams), and revenue operations (who set up the playbooks). The structure is along the lines below: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/b20d1ef8-4a09-41d8-a1a6-16b267008d07_1600x580.png) While this works in theory, we do have exceptions. Most notably, we have a data platform group, which is responsible for all data capture, data export, and data integrations. These tend to span multiple products, and we found out that it makes more sense to centralize those. Another cross-functional group is a user journey group, which also spans all products and drives the user journey (home page, targeting, recommendations, and so on). That team also drives the (naturally cross-functional) mobile application. The product group nowadays also includes non-“build” functions. I have leaders who drive new products’ go-to-market, field product management, product partnerships, and, most recently, product marketing. ### **3. How do your product/design review meetings work?** We are relatively extreme in letting the teams autonomously drive their own agendas. That is, once a pod has been assigned an area of responsibility, a great outcome is that they come up with the respective product design. So the leadership team is hardly involved in the detailed design or the iterations with customers along the way. For example, one of our core technologies is a studio that lets business users calibrate what they care to know about in sales conversations. In technical terms, they build a machine-learning model unique to them that mines key elements from conversations. This involves underlying data science work and a very particular user experience, simplifying the workflow. This capability was built end-to-end by the team, while iterating with customers. While as a CPO I was involved in the process, the involvement was loose and the planning, design, and launch were all led by the teams. This, however, is a two-edged sword. It lets the teams run much faster: a pod may pre-launch a feature, get feedback, and iterate without waiting for approvals. However, the challenge is to avoid duplicate work and build consistently across groups. When the groups observe that what they’re working on may overlap with other groups, or perhaps there are knowledge or skill gaps within the group, they flag this for attention. We operationalize this via a quarterly meeting of all the product group leaders, in which each group leader highlights the areas that either require platform-wide support or areas that are applicable to additional teams. We then translate this into a more concrete plan that determines which group leads the capability and when other groups get involved. In such cases, the decision-making process is more subtle, and decisions would sometimes bubble up to me or to the head of UX. For example, one group is building general-purpose analytics capabilities. Another group needs such capabilities, but perhaps in a different time frame. Or one group is building some AI capabilities and needs them to show up across the system. But other groups have tight plans. We don’t have a recipe for resolving such conflicts, so we found out that the most practical approach is to review those as a team ahead of each quarterly plan and ensure alignment. ### **4. Do you use OKRs in some form?** We don’t use OKRs on the product team. We tried using OKRs at Gong at some stage across the company, but we found out that the process of updating OKRs to align with reality was time-consuming and the framework did not provide us with enough benefits to justify the effort. However, we review this decision annually. We may decide to give OKRs another shot at a company level in the coming year or two, since we haven’t found a better mechanism to drive cross-functional goal alignment. Individual groups within the product team set up KPIs or metrics to track product progress. These are usually not managed top-down but serve as a vehicle for tracking and optimization rather than a true objective. During periods preceding new product launches, we’ve set up more structured KPIs to ensure we launch with confidence. That ensures that both internal metrics (e.g. stability) and external metrics (e.g. number of successful customers) would drive a successful launch. For example, when we recently launched our sales engagement product, we initially looked at metrics such as connect rates for our web dialer (a stability metric). As we became convinced that the product is stable, we focused our attention more on outcome metrics. For example, since the product helps sellers book meetings, we looked at the number of meetings booked by a typical seller to ensure that we deliver the intended value. As we became convinced that the product delivers value, we focused our attention on more operational metrics, for example, how long it takes a new customer to launch. And naturally, business metrics such as attach rates to existing customers, ARPU [average revenue per user], and similar. ### **5. Are product and design part of the same org? And who do PMs ultimately report to?** Product and product design both report to me, i.e. the CPO. Other functions (analytics, operations) also report to me directly. Very intentionally, all people report up through a professional chain. That is, all product designers report to the head of product design (who reports to me), all analysts report to the head of analytics (who reports to me), and so on. The reason we’ve followed this model is that I strongly believe that most knowledge professionals prefer reporting to someone with the same career path. That is, if I’m a product analyst, I’d much rather report to a product analyst, who understands my profession, than to a product manager, who will naturally be more interested in delivery per se. I also believe that the tension between product managers and other functions is a healthy one. Product managers are often focused on getting a product out on time. Other functions—like designers—may also be worried about quality or other aspects. So the tension is healthy, and I believe that if we aligned the reporting structure to each domain (i.e. designers reporting to PMs), it would steer the ship too close to delivery per se. We decided to put the writing function within the UX team. We felt that there was a strong connection between writing and the product’s UX. At the end of the day, it’s all about ensuring that end users understand what they need to do on a page, be it via self-explanatory UI or with more explanations. ### **6. How many PMs are there at Gong?** We have 24 PMs, organized into six groups. ### **7. What’s your primary tool for task management, and bug tracking?** The engineering team uses Jira for the development lifecycle, which includes bug tracking. Using a true workflow system is crucial to formalize the CI/CD process, aligning with best practices around the software development lifecycle. Here’s a typical Jira case: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/a90ab930-9795-4485-9f16-bb3b03ff9a37_1260x399.png) However, the product team does not “live” in Jira. In fact, some product managers create Jira cases for features. Some don’t even do this. We bifurcate very clearly between new product capabilities and bugs. For new product capabilities, the PM and UX teams use Productboard to collect inbound customer requests. We have multiple entry points into Productboard: customer requests, customer requests in calls, requests in online reviews, and more. Then product managers collect those as an input to the planning process. Here’s a typical view of our Productboard instance: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/baeb5573-a970-4480-9a06-eddd2bfaaefe_1441x394.png) As we’ve scaled, we found out that having a dedicated person to filter and route the Productboard features is helpful, since this way the PMs can focus on the substance versus the mechanics of that tool. We use Airtable quite heavily to organize our high-level feature release plan. At the beginning of each quarterly cycle, the product managers input all of the planned features into the table. That table tracks the full lifecycle of a feature, soup to nuts, and provides more information to the non-product teams: short business rationale, links to longer documents, status, impact, and more. If anyone at Gong ever wants to know where a feature is in terms of its lifecycle, this would be the place to look. Here’s a partial view of our release tracker: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/a0837971-54e9-4655-b9f4-020bc054bce0_1600x350.png) In terms of bugs, we’ve taken a pretty aggressive approach (some may say controversial) and decided that bugs would be handled by engineering, versus product. Our assumption is that engineers have enough business context to assess the severity and priority of each bug. And that most bugs take less time to fix than to prioritize. This way, the engineering teams (and oftentimes the engineering team manager) prioritize and fix the bugs. If a bug requires a disproportionate amount of time, they’d flag it to the product manager and they’d make a joint decision. ### **8. What percentage of ideas come top-down and what percentage come bottom-up, roughly?** New directions vary by type. For new products (we’ve launched two products since our original product), the decision, and even the initiation, is mostly top-down. As an executive team, we identify adjacent use cases or markets and work with the teams to ensure that we have the resources to support them. For new capabilities within current products, this is usually a collaborative effort between the PMs, Group PMs, and leadership. Rarely would leadership come up with a need (e.g. “we need customizable dashboards”) in a vacuum. In most cases, customers bring it up as a need. The PMs and Group PMs understand it’s a need and initiate a discussion around it. It then gets prioritized as part of the annual or quarterly process. Then the specifics are usually led by the product teams. As a CPO, I sometimes get involved in the “how” as well, mostly in new capabilities that the team is not yet well-versed in. So to follow the example above, the team may not have experience building customizable dashboards, so in case I do, I would get more involved than in other cases. ### **9. You build one of the most beloved, and successful, products out there. What would you say is unique or central to your approach to product that leads to such a great and successful product?** The ingredient that positively impacts the product quality from a customer standpoint is our continuous work with customers. Literally every feature we develop is being designed with a set of design partners—companies and users—with whom we jointly develop the feature. This is particularly important in our domain, which is built on data AI. We can present mocks all day long, but only once a customer sees their data in context can they make a true determination if a certain recommendation or action is valuable. Once we identify a feature as worthy (also based on discussions with customers), we develop a first “slice,” and make it available in what we call “limited availability.” This is essentially what other companies might call an alpha or beta (depending on maturity). We continue to iterate and may leave a feature in limited availability for months, until we feel it provides the expected impact. We are less concerned about this long beta process, because customers who express a need can be put in “limited availability” for any given feature, so even though a feature is not officially “generally available,” customers can still achieve the value. We’ve had many cases where we had hundreds of customers in a limited availability status until we were happy with the result and released it. We have very little—if any—work that is done completely inspirationally without involving customers at an earlier stage. And even when we do incubate a capability, it would go through this cycle. For example, when we decided to build our Forecast product (a revenue analytics solution), we knew the problem we wanted to solve for customers (increase predictability and improve the operational rhythm) but we didn’t know what was top-of-mind for them. Rather than spec out a product, we reached out to half a dozen design partners who had this need. Over the course of a few months, we gave them access to early versions of the software in an embarrassing state (that is, very far from being a “product”). We asked them initially for high-level feedback, and then for feedback based on use. I recall chatting with the PM who drove this product, and he told me he gave a design partner access to a feature that I knew wasn’t slated until a month later. When I asked him about it, he confirmed that the “Save” button didn’t work yet but he was eager to see what type of error message would pop up. I later spoke with one of the design partners, who said he truly enjoyed the process. When I asked him to elaborate, he said he met with the product manager on our end on a weekly basis, gave him ideas and suggestions, and then a week later the product manager would show up with different approaches to solve the problem, which the PM had assembled from multiple design partners. He said that being a design partner helped him better nail down his internal needs and processes, seeing how his peers were essentially guiding Gong through building our product. When we developed our sales engagement product a year later, the approach was similar. In this case, though, the product team was bigger, so we were able to work with some 20 to 30 design partners in parallel, split out between three or four PMs. ### **10. I assume much of your success has been thanks to hiring well and keeping a very high bar. In your product hires, what do you most look for (that maybe others don’t), and, broadly, what does your interview process look like?** We perfected the hiring process over the years, and the anchor is an almost-real-life assignment, which all new candidates go through. This is a process that I’ve instilled across the product organization and has made its way into additional organizations at Gong. Conceptually, the idea is to give the candidate an assignment that, as much as possible, reflects their real-life work. This means that the assignment would by nature be ambiguous (like our day-to-day life) and it would not have a right or wrong answer. Very typically, we would present a true customer pain that is or was in our product, and ask the candidate to show us their thought process around how they’d approach it. For example, when we were going to tackle adding collaboration as part of the pipeline management process (supported by Gong), we basically posed this need to candidates. A couple of years ago, I documented the principles behind the assignment: - We would like to evaluate the candidate in a situation that is as real-life as possible, meaning: the more the assignment simulates working at Gong, the better. - The assignment and the process around it are meant (almost) as much to let the candidate experience what it is to work at Gong as for us to experience how the candidate works. If Gong is not a great fit for the candidate, it’s great if they know that during the process. - We want to respect candidates’ time, and limit the work required. Ideally the assignment can be completed in hours, not days, and the feedback we’ve received is that people spend up to 10 hours. While some candidates may drill even deeper, we should minimize the body of work required. - We feel it’s our obligation to spend our own time to prepare the right assignment, so that the candidate’s time would be well spent. - We want the assignment to be interesting for the candidate. Here’s an example of a business background we gave candidates a while back. ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/27537e88-1c29-4c0d-94ae-8becfb2cade1_1238x696.png) And the customer needs: ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/e0e4906d-5ba9-44ba-b762-24b87fb03b2a_1238x696.png) Given that Gong’s solution includes a conversation intelligence product, and given that all our customer meetings are recorded, we always give candidates snippets of related conversations with customers, so they can sense the real need. We give candidates as much time as needed to prepare for the discussion. Once ready, the assignment is then discussed with a panel in the same way any proposal would be discussed or brainstormed internally. We do realize, of course, that the candidate doesn’t have the full context, so we don’t expect a “correct” answer. In fact, we’ve hired candidates who we felt had a pretty poor solution but who we felt were going through the right steps but making inaccurate assumptions. And vice versa—people who came up with great product solutions but who we weren’t certain could replicate it consistently or couldn’t collaborate well with others. What we found out over time is that this process lets us understand the candidate’s thought process and assess their interpersonal style. We expect candidates to approach the problem with a healthy and balanced approach (i.e. how much to spend on “discovery” versus solutioning, how much to assume up-front and how much to leave out, and so on). And because of our customer-centric approach, we pay special attention to candidates who enjoy working directly with customers (versus, say, the project management aspect). One area that we pay attention to is to ensure that we don’t ask candidates for a lengthy investment: we ask candidates about the time investment, and we refine the assignment to fit, in most cases, less than 10 hours. ### **11. Your processes, org structure, people, and most everything else will change over time—what do you think will stay the same?** The main thing that we’ll attempt to keep is the autonomous nature of the teams, so that each pod drives their agenda and the “how” behind it. This becomes harder over time, since it (by definition) limits our ability as a business to obtain visibility into timelines and even content. We’ve recently started to put in more mechanisms to balance autonomy with top-down thinking that ensures global direction. For example, each quarter we’re now aligning on cross-product needs, and those needs are determined to be “top-down” and the various teams have less control over them. We’re also continuously adding more checkpoints with the different groups (sales, customer success, and so on), with the goal of ensuring that priorities aren’t missed by the pods. I’m still bullish on the autonomous model, since I believe it has a profound impact on the quality of the output and on team morale (e.g. on the product team, we have one of the lowest attrition rates in the industry). But this is an area that we’ll need to calibrate to make sure there is alignment between pods and company strategy. ### **12. What are some fun/unique rituals or traditions you have on the product team, or at the company broadly?** When we were smaller, when newly onboarded people completed their first real task (for product managers, feature launched; for engineers, first code to production), we brought a bottle of alcohol of choice for the whole team or group. Now that the company is bigger, this is hard to maintain. But several team members still follow this tradition, and it’s always fun to watch a midday toast by a team for a newcomer. Here’s a photo I was able to dig up from one of the toasts. You’ll see the alcohol and, this time, also some cakes. ![Image from How Gong builds product](https://substack-post-media.s3.amazonaws.com/public/images/eac6c978-3c4f-4a95-8835-e61e9ef75ef9_1600x1200.jpeg) *Thank you, Eilon! Follow him on [LinkedIn](https://www.linkedin.com/in/eilonreshef/) and [X](https://twitter.com/eilonreshef), and to learn more about Gong, check out their [website](https://www.gong.io/), [demo page](https://www.gong.io/demo/), and new [AI platform](https://www.gong.io/product/ai/).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [5/61] Adding a work trial to your interview process *P.S. Don’t miss [Lennybot](https://www.lennybot.com/) ✨ (an AI chatbot trained on my newsletter posts, podcast interviews, and more) and my new [swag store](https://lennyswag.com/)(makes great gifts!).* > ## Q: I’ve noticed “work trials” have come up a few times on your podcast. I’m sold on the benefits and want to explore this at my company. What advice do you have for setting up a successful work trial process? Indeed they have. [Karri Saarinen](https://www.linkedin.com/in/karrisaarinen/) (CEO of [Linear](https://linear.app/)) [mentioned](https://www.lennysnewsletter.com/i/137200502/i-assume-much-of-your-success-has-been-thanks-to-hiring-well-in-your-product-hires-what-do-you-most-look-for-that-maybe-others-dont-and-broadly-what-does-your-interview-process-look-like) they run candidates through work trials, as did [Jason Fried](https://www.lennyspodcast.com/jason-fried-challenges-your-thinking-on-fundraising-goals-growth-and-more/) (co-founder and CEO of [37signals](https://37signals.com/)). When I [asked folks on Twitter](https://x.com/lennysan/status/1742326000254632094?s=20) who else they’ve seen do a great job with work trials, I learned that trials have also been a longtime practice at [Automattic](https://automattic.com/), [Gumroad](https://gumroad.com/), [Auth0](https://auth0.com/) (now part of [Okta](https://okta.com)), [PostHog](https://posthog.com/), and a number of other companies. Work trials aren’t a new concept, but they do seem to be trending. ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/6cc3bbd4-3db3-43f2-92c4-c2de500fab67_2134x1934.png) To get you an answer, I interviewed the founders of the six companies most known for work trials, and from their collective wisdom put together a guide for building your own work trial process: 1. **What exactly is a “work trial”?** 2. **Why do work trials?** 3. **What are examples of good trial projects?** 4. **How do they fit into the overall interview process?** 5. **Should you pay candidates, and, if so, how much?** 6. **How do you evaluate a candidate’s performance?** 7. **How do you convince people to invest this much time in an interview?** 8. **Lessons for implementing your work trial** *A big thank-you to [Matt Mullenweg](https://ma.tt/) ([Automattic](https://automattic.com/)), [Jason Fried](https://www.linkedin.com/in/jason-fried/) ([37signals](https://37signals.com/)), [Karri Saarinen](https://karrisaarinen.com/) and [Cristina Cordova](https://www.linkedin.com/in/cristinajcordova/) ([Linear](https://linear.app/)), [Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/) ([Gumroad](https://gumroad.com/)), [James Hawkins](https://www.linkedin.com/in/j-hawkins/) ([PostHog](https://posthog.com/)), and [Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar) ([Auth0/Okta](https://auth0.com/)) for their insights and advice 🙏* ### What exactly is a “work trial”? A work trial refers to a step in the interview process where **candidates are asked to complete a project that’s representative of the work they’ll be doing in the role**. The “representativeness” falls on a spectrum, from doing an in-depth project at home (e.g. 37signals) to co-working with existing employees in the real codebase building something the company will ship (e.g. Linear). Where you fall on the spectrum of how close to reality your work trial should be is directly correlated with the size of your company. The fewer people you’re hiring (and thus the more important each hire is), the more time you should be investing in a work trial. As you grow, you can streamline the process. ### Why do a work trial? Simple: it gives you significantly more signal on the candidate. As [James Hawkins](https://www.linkedin.com/in/j-hawkins/) (co-founder and CEO of PostHog) shared, “**It makes it obvious who to hire.** **It is** ***frequently*** **surprising how someone performs relative to what we thought in the interviews about their skills.**” **Linear** found that the only way they could know if the candidate was a fit for their unique culture was by co-working with them: > “The majority of companies don’t work in the way we do, which leads to fewer people with these kinds of skills. A conventional interview process, often modeled by large companies, doesn’t account for this. **It’s challenging to assess in interviews if someone is truly a builder, has good taste and judgment, can take initiative, and approaches problems productively.**” **—**[Karri Saarinen](https://karrisaarinen.com/), Linear This is the same conclusion **Automattic** eventually came to: > “**The more we thought about why some hires succeeded and some didn’t, the more we recognized that there is no substitute for working alongside someone in the trenches.** > > We recognized we were being influenced by aspects of an interview—such as someone’s manner of speaking or behavior in a restaurant—that have no bearing on how a candidate will actually perform. Some people are amazing interviewees and charm everyone they talk to. But if the job isn’t going to involve charming others, their interview skills don’t predict how well they’ll do as employees. Just like work, interviews can be ‘performed’ without real productivity. So we gradually changed our approach.” —[Matt Mullenweg](https://www.linkedin.com/in/mattm/), founder and CEO Work trials not only help you better gauge the candidate’s skill set, they also help you understand how much the candidate *wants* to work at your company, as Matias, Sahil, and Matt pointed out: > “It did mean that we might miss out on some people who couldn’t make the time for it, but because at a startup, commitment—and wanting it—is very important, **it** **was a good filter**.” —[Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar), co-founder and CTO of Auth0 > “The trial is about their work. But it’s **also about them seeing all the internals of the company**, culture, finances, my attitude, etc.” —[Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/), founder and CEO of Gumroad > “**It’s a two-way street**. It allows us to be as confident as possible in making a decision and enables the person interviewing to do the same thing.” —[Matt Mullenweg](https://www.linkedin.com/in/mattm/), founder and CEO of Automattic ### What are examples of good trial projects? [Karri Saarinen](https://www.lennysnewsletter.com/publish/post/140748471?back=%2Fpublish%2Fposts%2Fscheduled) best summarized the recurring lesson across my interviews: > **“The goal with the work trial is to simulate a normal working environment as much as possible.”** **Gumroad** wins for taking this idea furthest by hiring the candidates as contractors for 4 to 6 weeks. As [Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/) put it, “**It’s so very hard a priori to know if someone can do the job. So we just pay them to do it!**” Throughout the year, the Gumroad team marks certain tasks on their roadmap as “good for trialers” and then they assign these tasks to interview candidates. “Generally,” Sahil said, **“they ship a lot of small bug fixes and stuff. For example, we have a current trialer working on adding wishlists to Gumroad, which is a pretty big feature.** Shan recently passed with flying colors, and here’s an update to give a sense of the work trialers do”: ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/d3eba309-f1b8-4124-97e3-6c0adea77405_1179x2556.jpeg) As part of this trial, Gumroad gives candidates access to their internal tools, including their local GitHub, Figma, Notion, Slack, etc. > “**Another way to look at work trials is, you’re hired by default** but will likely be fired in 30 to 60 days if you don’t perform like the rest of the team by the end of that time limit.” —[Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/) **Linear** comes in a close second in terms of realism by having candidates co-work with their future team for 3 to 5 days, in the actual codebase, also with access to the company’s GitHub, Figma, Slack, and Notion accounts. > “**We assemble a supporting project team, including a recruiter, the hiring manager, and 3 to 5 teammates who would closely intersect with this role once they’re hired.** > > Our recruiter and people operations coordinator handle necessary logistics pre-trial, like securing a non-disclosure agreement, granting temporary tool access, scheduling meetings, and prepping docs conveying context on goals and expectations. > > Work trial projects sometimes end up being the first project for the new hire when they get started.” —[Karri Saarinen](https://karrisaarinen.com/) Examples of projects Linear gives candidates: - For an **engineer**, [building a feature allowing teams to effectively triage incoming feature requests](https://linearapp.notion.site/Kenneth-Skovhus-Work-Trial-7ef0fb71e7ab408d87169c0982726f64) - For a **content marketer**, [writing a blog post based on a feature release](https://docs.google.com/document/d/1eTRmCpkpIGHQlDHniC_R5I1rTJigCzMq7b3BjRjS4vE/edit#heading=h.fo83nqhhnonf) *(which they [shipped part 2 of to production](https://linear.app/blog/using-ai-to-detect-similar-issues) recently after the candidate was hired)* - For a **designer**, designing a way to resolve comments: ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/22430f5c-a9fa-4c27-9c83-abc5d3f9bf18_1556x976.png) **Automattic**, **Auth0**,and **PostHog** used to operate like Linear and Gumroad, bringing the candidate on part-time to work alongside existing employees for some number of days, but as they’ve grown, they’ve tweaked their trial process to be more time-efficient and standardized. > “**Our work trial task will be representative of the day-to-day work someone in the role at PostHog does, but it isn’t actual work we’d use or ship. It used to be actual work.** **We changed it to representative work because:** > > 1. Actual work comes with tricky implications around things like IP ownership, needing to hire them as contractors, etc. > 2. The codebase is now way too big and complex for this to be practical. > > Tasks are generally designed to be too much work for one person to complete in a day, in order to get a sense of the candidate’s ability to prioritize, and they’re open-ended as per above.” > > —[James Hawkins](https://www.linkedin.com/in/j-hawkins/), CEO Here’s an example project **PostHog** assigned a recent PM candidate, which they complete at home and then present to the hiring team: ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/262cb28e-6902-42fb-9e83-005bd053963f_1420x1140.png) At **Automattic**,they also used to give candidates access to the actual codebase, but as [Matt Mullenweg](https://www.linkedin.com/in/mattm/) told me, “it lacked consistency and was hard to scale. These days, for more generic engineering roles, we set up a separate repository with an already forked, smaller project, which is better controlled in terms of candidate experience, code, tasks, and access. > **The project scope also varies, but it will be as close to the actual work as possible. If you’re an engineer, you’ll be writing real code. If you’re a designer, you’ll design.** > > **In some cases, there’s a real-world project they’ll work on. However, in many cases, folks will work on a ‘synthetic’ project that simulates the work they’ll do very closely without waiting for a suitable project to come up.** > > Several people are usually involved in the process. There’s always a Lead who is the main point of contact for the candidate. The others involved are the folks the candidate would interact with most. This could be anywhere from two to six people (or more), depending on the role. For more interactive roles, such as Sales or positions where folks will be presenting internally, the trial project may include a final presentation. Mostly, however, the work is done asynchronously. > > Folks are also set up on Slack and [P2](https://wordpress.com/p2/) (our internal communication tool) so they can get used to the tools we use, communicate how they need to, and have access to all the information they need.” Here’s a blog post snippet from [an engineering candidate who went through the Automattic work trial](https://jerryjones.dev/2020/04/16/getting-hired-at-automattic/): ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/2dbe0473-4e8f-4c5a-994a-42a965a802e4_1406x1300.png) **Auth0** used to do an in-depth take-home exercise, as [Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar) (co-founder and CTO) shared: > “**The project was typically from a real-world situation we faced and solved in the past. This allowed us to know the ins and outs of the problem, which is useful when assessing and guiding candidates.** > > We’d reuse the same exercise across all levels and adjust expectations. For positions we didn’t hire for often (e.g. Director of Infrastructure), we’d make up the exercise when a few candidates reached that stage in the pipeline.” Here’s an example project prompt for an engineering role at Auth0 ([high-res copy here](https://docs.google.com/document/d/1w_BQisyyiUyhh7302NzaB9gTB9SqYqEMcUDNZkJfouc/edit)): ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/255a3925-3610-4f61-a260-658c32673e70_4125x4205.png) However, a couple of years ago, after being acquired by Okta, **Auth0** moved away from these projects in favor of shorter exercises, fully knowing they would get less signal on candidates: > “For engineering roles specifically, we now have a take-home code test that takes about 90 minutes, which replaced part of the tech interview pipeline and is fairly different from the previous process. > > **We decided to move to a shorter challenge supported by a platform ([CodeSignal](https://codesignal.com/?gad_source=1)) for two main reasons:** > > 1. **Have a larger candidate pipeline:** After gathering feedback from candidates, engineering leadership considered that the original exercise took longer than many folks would have wanted, which resulted in them self-selecting out/never applying. Thus, we could be missing out on some great folks. > 2. **Reduce time spent by the hiring team on each exercise:** Shorter tests means less time spent on them by hiring managers during the Slack phase. CodeSignal automates some of the evaluation (not all, but many manual parts). > > **There’s an understanding that there’s less ‘signal’ from the shorter exercise, but as of today this is a trade-off the org has decided to go ahead with, and we often look at the process and metrics to see where we can make future improvements.”** > > **—**[Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar), Auth0 **37signals** also does take-home assignments, but, unlike other companies, candidates *aren’t* allowed to ask the team any questions. [Jason Fried](https://www.linkedin.com/in/jason-fried/) noted they also keep the prompt strategically vague. > “We’ll give someone, say, here’s a screen in Basecamp, and what would you do with it to make it better? We might give you a little bit more direction. ‘It would be nice if you could organize this stuff better than just a flat list. What would you do?’ > > **We don’t want to be super-specific because I don’t want to tell anyone what to do. This is all about choice. One of the reasons why I want it to be sort of ambiguous is because I want to see how people choose to spend their time and what they think is important to focus on and what they think is important to show.”** Here’s a real project 37signals gave design candidates ([high-res copy here](https://docs.google.com/document/d/1WTFOR_xP7xU17qUFKpL7xydAgq7-zz9SPJg1YRPq0vw/edit))**:** ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/08e46f0a-9b58-4442-a752-5881beafaace_4106x5574.png) At 37signals, they expect designers to build the thing, not just design. > “**We’re not making pictures here.** This is not screenshot work. This is not Figma work. We don’t ship Figma to customers. We ship HTML and CSS. You have to make the real thing. That’s what we’re hiring you to do. > > You’ve got to make the whole thing work. Now, when I say work, we know you have five days. You don’t have access to our codebase. You’ve got to re-create something and make something. And what you choose to focus on is up to you. And what you choose to make work is up to you. This is all about choice.” —[Jason Fried](https://www.linkedin.com/in/jason-fried/), 37signals ### How much time should you give people, and how would this fit into the overall interview process? **Here’s how long each company gives candidates:** - PostHog: 1-3 days - Linear: 3-5 days - 37signals: 7 days - Auth0: 7 days - Automattic: 40 hours - Gumroad: 4-6 weeks **PostHog** makes a whole day (or week) of the interview experience, combining interviews and work trials into something they call SuperDays (or SuperWeeks): > “The process for most roles is: > > 1. Culture interview/screening with our internal recruiter: 30 minutes > 2. Technical interview with the team leader + 1 or 2 team members: 60 minutes > 3. Bar-raiser with me or [Tim Glaser](https://www.linkedin.com/in/timgl/) (my co-founder and CTO): 30 minutes > 4. **SuperDay work trial: typically 1 day, sometimes 3 days, and used to be a week or more when we had less experience hiring and our codebase was simpler to contribute to.** > > We’ll split these SuperDays across multiple days (e.g. two half-days) if that’s easier for the candidate so we don’t heavily favor people with more flexibility. We can get the whole lot done in a couple of days from start to finish if needed. > > Most of the day is spent on a task, but we also include a short ‘coffee chat’ with two or three selected staff. The chats are an additional culture screen and an opportunity for candidates to get to know the team, ask questions about the company, etc.” —[James Hawkins](https://www.linkedin.com/in/j-hawkins/) ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/351ee644-a54b-419e-ab79-7a0ca336f32c_1600x1396.png) **Linear**’sinterview process starts with an introductory call with a recruiter, a hiring manager interview, and role-relevant skills assessments with team members. Once a candidate makes it through those, they run them through a 3-to-5-day work trial: > “Three or four days is typical, but leadership hires often do take a full five days. We’re pretty accommodating (e.g. if you have an important work meeting at your current employer or a personal appointment, you can take time for that) during the work trial itself, and we’ll also accommodate folks who might want to do a work trial over a weekend (e.g. Friday to Monday) if they don’t have much paid vacation they can otherwise take. We sometimes schedule work trials the same week if the candidate already has offers or has time pressure. > > The work trial itself has a few standard meetings: > > - **Kickoff:** Candidatemeets with the team to go over the prompt, get additional context, ask clarifying questions, and discuss an initial approach. > - **Check-in:** Candidate leads status update to share progress, ask questions, and get feedback. Check-ins are candidate-led because we want to see their ownership and readiness to course-correct. > - **Final presentation:** Candidate presents final deliverable to the work trial team and answers questions. These presentations tend to be discussion-based. > > Apart from these meetings, the candidate focuses on carrying out the project, and can reach out to the team through a dedicated Slack channel or ad hoc calls if they have questions or need information.” > > —[Cristina Cordova](https://www.linkedin.com/in/cristinajcordova/), COO of Linear For at-home projects, both **37signals** and **Auth0** give candidates 7 days. Typically, they end up spending 6 to 12 hours on the project, but can spend as much or as little time as they’d like. > “**The idea here is put your best work forward with the amount of hours you have. If you were only able to spend six hours, tell us that and explain it. Let’s talk about those six hours.** > > Someone might spend 12, and someone else might stay up all night four nights in a row to get this done. And I don’t really think that’s better. I’m pretty sure it’s not better, actually. If someone’s working six hours and the product is pretty good, while someone’s working 16 hours and it’s slightly better, I’d rather have the six-hour person. > > ‘Here’s your time. Tell us how much time you spent. We recognize that you probably don’t have as much time as you’d like. We totally understand that.’ ” > > —[Jason Fried](https://www.linkedin.com/in/jason-fried/), 37signals Here’s **Auth0**’s process: > “Our interview process looks like this: > > 1. Email screener > 2. Two interviews (with tech lead and engineering manager, or director and engineering manager, depending on the position); typically we’d go over: > > 1. Past work experience (tell me about a complex problem you solved; dig in deep) > 2. Communication, teamwork, etc. > 3. Solving high-level/design tech problems we picked (no algorithms/coding, just general design) > 3. **Take-home exercise** > 4. Demo.” > > **—**[Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar) At **Automattic**, they allot tech work trials 40 hours, and specifically measure in hours vs. days: > “**We measure in hours rather than days or weeks, as we firmly believe in giving people the flexibility to bring their authentic selves to the project.** Someone could spend two weeks on a 40-hour project; others could take three months—we don’t judge on timelines as long as the communication matches up. For some roles, the project can take a few hours, up to 10 hours.” —[Matt Mullenweg](https://www.linkedin.com/in/mattm/) In terms of how it fits into the overall process, Matt shared that the process can vary. “For some roles, we may only need one interview before a trial project begins; however, several rounds may be required for more strategic roles. The focus of these interviews is also tailored to the role. There may also be a smaller practical element or test for some roles before the trial stage begins. For example, in engineering, we used to have an interview with an engineer, a take-home code test, and then the trial stage. We experimented with removing the initial interview, but given changes in our objectives for the role and the overall market, we are now considering reintroducing the interview. The process is ever-changing.” **Gumroad** offers by far the longest work trial, giving candidates 4 to 6 weeks, with 10 to 20 hours expected a week. > “If people can do more hours each week, they’re welcome to. But the cool thing about our model is people don’t have to quit their job or take time off work to interview. > > Prior to the work trial, I do one 30-minute ‘culture fit’ interview, basically sussing out why they want to work for a weird company like Gumroad and a weirdo like me.” —[Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/), founder and CEO ### Should you pay candidates, and, if so, how much? Here’s an overview of how everyone handles compensation: - **Gumroad:** “We pay them the same hourly rate they’d get when they join. For engineers, that is $150 to $200 an hour. We have a contract they sign as part of onboarding via [Flexile](https://flexile.com/) (our homegrown product).” - **Linear:** “Today we pay $600/day regardless of seniority, role, or location.” - **37signals:** “We pay them $1,500 for the work for the week. I don’t believe in asking people to do free projects or free work.” - **PostHog:** “If the candidate has an existing day rate, we pay that. If they don’t, we use this formula: (Your annual basic salary + 30%) / 220 days.” - **Automattic:** “We pay $25/hour for all trial projects. This is irrespective of location (in or outside the U.S.) or role.” ### How do you evaluate a candidate’s performance? The process is pretty similar across most companies—it’s a group discussion, generally with one decider. At **Linear**,they make sure everyone submits their feedback before seeing what others think: > “After the work trial, each member of the project team submits feedback separately—and without reviewing comments from other evaluators—before debriefing together live. > > In evaluations, anything other than a strong yes is a no. All debriefs begin with a blind thumbs-up or -down vote and proceed with an open discussion on feedback anchored in specific examples and anecdotes. The hiring manager makes a final decision on whether to extend an offer to the candidate, though we strongly prefer unanimous decisions. > > The recruiter documents highlights and key takeaways to later share back with the candidate, offering detailed transparency regardless of outcome, as closing the feedback loop can provide significant value to the candidate. > > When we decide not to move forward with a candidate, we stick to our transparent approach and let them know why, despite the hard situation.” —[Karri Saarinen](https://karrisaarinen.com/) At **Automattic**, the evaluation is asynchronous and highly structured: > “The evaluation is well-structured. We have scorecards that assess several areas, from the core skills needed for the role to more nuanced areas such as communication (how well someone communicates in a distributed environment) and how well they take on constructive feedback throughout the duration of the project.” —[Matt Mullenweg](https://www.linkedin.com/in/mattm/) At **PostHog**,they try to make a decision quickly, and put a lot of emphasis on culture fit: > “We aim to make a decision within 48 hours. Decision makers are the team lead/hiring manager plus me and my co-founder, Tim, but we collect feedback at each stage from everyone, including from people who joined the coffee chat or collaborated on the SuperDay task. Both of us as co-founders are very heavily involved in this and put a ton of thought into each candidate. > > We score people out of 4 (4 = strong yes; 3 = soft yes) and share feedback and mild concerns. > > Culture fit is a *huge* deal for us. > > A rule of thumb for us is that a majority of ‘soft yeses’ is actually a no (unless there’s a passionate advocate), because hiring the wrong person is more expensive than passing on someone who *might* have been good.” At **Gumroad**, Sahil always makes the final call: > “Everyone gets to participate, but I get to decide. Generally it’s a ‘hell yes’ or ‘no’ kind of decision, though. If there’s any doubt, there’s no doubt. Unfortunately, it’s hard to compromise with remote work. > > Roughly 20% to 30% pass, FWIW, so I think the framing is important, but ultimately all jobs are at-will, so it’s really a marketing/narrative thing.” —[Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/) At **37signals**, the evaluation happens during the call with the candidate, when they present their project and have a discussion about the work: > “We have a call. It’s usually me and one other designer, and the whole point of the call is to show us what you did. Tell us what you did and why you did what you did. Then we’ll sort of poke holes. Even if we like the work, we’ll poke some holes. ‘What about this and what about that? What would happen if this and what would happen if that? Did you think about this, and what if this happened or that happened?’ > > We want to see if they’re able to think. We want to have them explain why they made the decisions they made, and want to see if they’re able to adapt on the fly. We’ve had some people who deliver really good design and then it’s like deer-in-the-headlights when you ask them a question; they don’t know what to do. That will not fly here. Everyone here has to be able to adjust quickly and make moves and figure out how to riff. What we’re trying to find is, we want to get people on a riffing flow. Like, oh, we can talk with this person. This would be fun. It’d be fun to work with this person. Oh, that’s a clever idea. That’s a good idea. Or they take an idea we have and they go, well, how about this? And you’re like, okay, this is good. This is what we’re looking for. > > One thing I’ll typically ask at the end is, if you had an extra three days, what would you do differently? Or how would you make this better if you had three more days? Can you describe something that maybe you wanted to get to that you couldn’t or an idea that you had that you didn’t really have before, but now you have after talking? Again, I want to see what people think about. This is really about how you think and approach the work. How do you present the work? How do you riff with the work? How do you flow with the work? How do you take criticism and critique and feedback and all the things that really matter that really go into design work? > > **What’s very clear after this process in interviewing five people, there’s usually one person or two who really stand out. Some surprise us on the upside, some surprise us on the downside, but there’s always two—one or two. And in some cases we’ll hire both, but typically we’ll just hire one.** > > That’s why I think it’s so important to look at real work. Everything else is an abstraction. Your history is an abstraction. I have no idea if you did it or not, how much of it you did, what percentage of it you did, how many times it was redone by someone else. Don’t show me a picture of an old website. I mean you can, that’s part of your history, but I’m not going to judge you on that work pretty much at all. I’m only going to judge you on this project, for the most part, because this is what an actual work assignment would look like here. And that’s it.” —[Jason Fried](https://www.lennyspodcast.com/jason-fried-challenges-your-thinking-on-fundraising-goals-growth-and-more/) ### How do you convince people to invest this much time in an interview? It turns out this isn’t very hard, as [Cristina Cordova](https://www.linkedin.com/in/cristinajcordova/) (COO of Linear) shared: > “**Many people generally don’t need much convincing. That is one of the myths that people think is a much bigger issue than it is. Many recruiter candidates I talked to completely dismissed the idea because they couldn’t believe people would do this.** > > Many thoughtful applicants see this as a positive, as they can evaluate the team and company better. Anyone who has worked in startups knows that in some startups the internal reality can be much more of a shitshow than you would imagine.” > > I would say our process generally selects for people who are very interested in Linear (you likely wouldn’t do a work trial if you were interviewing at 10 other companies), which is also why we have a strong rate of offer acceptance after a work trial ends. That being said, we do convey that it’s just as much of an opportunity for candidates to try Linear out as it is for us to try them out. Without a work trial, they’d make a decision like where to spend the next several years of their life with just a handful of interviews. Again, I think it selects for people who are thoughtful about their careers, which is often aligned with who we want to be working with anyway.” Also, you’re paying them: > “**It has been** ***very*** **easy to get people to do this. First, paying them makes it feel very reasonable.** > > Similarly to how this gives us a much better sense of what it’s like doing actual work with someone, it enables the candidate to get a better flavor of what it’s like working with us. > > If a candidate is choosing between multiple offers, offering a ‘Well, try out PostHog this way anyway’ means they can de-risk picking us, *and* it means since we’ll be working with them during the trial that we’ll build a better relationship with more trust. > > If people don’t want to somehow figure out how to fit a trial in, then they likely aren’t motivated, have too much ego, or aren’t scrappy enough to be a great culture fit for us—of course, if we’ve made an effort to understand how to fit it around their schedule.” —[James Hawkins](https://www.linkedin.com/in/j-hawkins/), PostHog > “**We pay $200/hour and are location-agnostic and don’t have meetings and people can set their own hours and choose what percentage of that $200/hour becomes equity.**” —[Sahil Lavingia](https://www.linkedin.com/in/sahillavingia/), Gumroad It’s important to set expectations early, and make the benefits to *them* clear: > “To manage expectations, we published posts about our process and shared that early in the process. **On top of that, during the interviews, of course, candidates interview you (the company), and we showed we were a great place to work at.** And finally, we were as available as they were, which I think helped. Take-home exercises meant that candidates might have to have spent a couple of hours at night going over things. We aimed to be available at those times as well (late our nights, weekends) to provide answers, unblock them. This showed our commitment to this as well.” > > —[Matias Woloski](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar), Auth0 [Matt](https://www.linkedin.com/in/mattm/) at **Automattic** shared an in-depth answer on how to make this process something candidates are excited about, touching on many of the points others made above: > “Two common reasons convince candidates to make the time commitment of doing a trial with us: > > 1. **It’s a chance to get to know the company and their work better than a typical interview.** Since many candidates have yet to work in a distributed company and in a more asynchronous environment, the trial process often fulfills the promise of getting a glimpse into what their day-to-day might be like. Coupled with access to the same tools and communication methods they would use if they were hired, it’s a great way to get a feel for the company. > 2. **The format allows many to showcase their skills better than a typical interview**—some people are better at doing the work than interviewing. We give them a chance to shine without being put on a spot and without the pressure of a sub-hour time limit while explaining every step of the thought process to an interviewer. > > We do our best to enable people for the process. Most of this is already in line with our way of working (distributed work) but includes: > > 1. **Tailored trial projects.** While projects are tailored for the roles and the person, we also ensure that we’re not giving folks a live project. The intention isn’t to generate work that we’ll use in our products but to evaluate their abilities and ways of working. Sometimes this means a ‘synthetic’ project, which is very close to the work itself; in other cases, we set projects that simulate a challenge we’ve tackled in the past. > 2. **Flexibility.** We don’t expect them to take time off, and we understand folks could already be in a full- or part-time role, have a family, and generally have a life to live outside work! For this reason, when and how much time they are committing and when they can start is a conversation instead of a strict mandate. In some cases, we’ve had folks have life events happen where we’ve paused their trial and picked it back up after things quieted down. > 3. **Continuous feedback.** Trial projects aren’t the same as a take-home exercise. We continuously deliver feedback to ensure people can adapt their approach, learn, and show their best work. > 4. **Set clear expectations.** We set folks up for success right from the start. From the first interview, we’ll have explained the process, including the trial project, what that’ll entail, and the time commitments required. > 5. **Have dedicated Trial Leads.** Ensuring there is a dedicated point of contact is super-important. This is sometimes someone from the team the person will be working with, but in some cases, such as Engineering and Happiness, there’s a more centralized hiring experience. They’ll still be interacting with someone who is specialized in the work they’ll be doing and knows the teams well.” > > —[Matt Mullenweg](https://www.linkedin.com/in/mattm/) ### Bonus lessons and tips on setting up your work trial To leave you with even more concrete advice for setting up your work trial, I asked everyone to share their best tips and lessons: **[Matt](https://ma.tt/) / Automattic:** > “For companies that are thinking about implementing a trial stage to their hiring process, think about why you want to do it. Does it fit into your company culture and your way of working? What will you gain or potentially lose by adding a trial stage? If you are convinced that you want to begin, think hard about what you want to evaluate and rework your interview and assessment practices to take this into account. Some other things to consider: > > - **Set clear expectations with your teams.** The trial stage isn’t a solo effort and usually requires several people to be involved. This is a time commitment and will lengthen your hiring process. Ensure your hiring teams are behind the decision and know what is expected of them. > - **Communication is key!** This process works for us, as we believe that communication is oxygen ([see the Automattic creed](https://automattic.com/creed/)), and that forms a strong baseline for how we communicate expectations with folks interested in working with us, how we communicate with candidates, and, ultimately, the experience folks have. > - **Accept that your time to hire will be longer.** The average time from first contact to offer is over 70 days at Automattic. You may need to reevaluate your benchmarks for hiring metrics, and that’s OK. > - **Keep it relevant.** Don’t add a trial stage or paid project for the sake of doing it. Reengineer your assessment criteria to consider the additional skills being assessed. > - **Have dedicated Trial Leads or Buddies.** The process can be intense; having a dedicated Lead or Buddy there to support you, provide continuous feedback, and generally introduce someone to the ways of working at your company is a must-have. This links back to expectations, as it takes time from the Trial Leads’ day-to-day work.” **[Sahil](https://www.linkedin.com/in/sahillavingia/) / Gumroad:** > 1. “Use [Flexile](https://flexile.com/)! Ha. But seriously, I think it doesn’t have to be binary. I think the important thing is that candidates can really learn more about what the work actually entails. > 2. The trial is about their work. But it’s also about them seeing all the internals of the company, culture, finances, my attitude, etc. Some don’t like it!” **[Matias](https://www.linkedin.com/in/matiaswoloski/?originalSubdomain=ar) / Auth0:** > 1. “Our criteria was that the exercise stage should only be reached if up to that point we thought we’d hire the person. Don’t use the exercise as a way to decide, if you are not sure about a person; instead only use it to discover potential shortcomings you might have missed before. > 2. Invest in having exercises for each position and making it clear what is expected from each role. It was a challenge for us to keep hiring managers trained, as we grew the team fast. > 3. Keep interactions written down, and avoid Zoom (and if you must do one, record it). In our case, this pushed for remote and async collaboration (our default), but it also allowed us to track all work so it was easy for anyone inside the company to review the exercise and provide their feedback, even if they weren’t there from the beginning. > 4. Know that this is a two-pronged filter: you get to see committed people do it, but many people might not even apply if they know that level of time commitment is required.” **[James](https://www.linkedin.com/in/j-hawkins/) / PostHog:** > 1. “If you do a week or two trial, people may obviously not be strong enough after the first few days. Set expectations that you may cut the trial short so you don’t waste each other’s time in this case. It’s better for both sides. > 2. Set clear expectations over how much you expect from people. Don’t have some of your interviewers say, ‘Work a normal 8-hour day’ and others say, ‘This doesn’t reflect the day-to-day balance, but for the purpose of a one-off trial, we recommend you push as hard as you can.’ Figure out which stance you are taking. > 3. Some people can’t take payment. Offer a charity donation instead. > 4. Make the task open-ended. If you make the task too precise, then candidates can’t stretch themselves, and you’ll wind up, for example, hiring engineers who have the neatest code as opposed to those who can ship products people want. For example, we’ll often get candidates to build a new product from scratch instead of, say, a bunch of coding challenges with specific answers. This helps us assess product skill *and* engineering skill. > 5. Focus on themes throughout. Ours are things like scrappiness, low ego, ambition, and optimism. Prescriptive interview questions yield shallow answers. Have the scrappiest person in the company assessing scrappiness, and so on. If you have any doubts, write these up ahead of the next person so they can dig into them. If a candidate isn’t given a perfect score, we force our team to give a reason why not—to see if multiple people all have the same (what seemed, at first, minor) concern. > 6. 80% work and 20% meeting people is a good balance for a single day of work in the SuperDay. Don’t cram all the interviews into the same day, as then the candidate can’t get anything done. > 7. Be super-transparent about the whole process from the start. We do this through our public handbook and by summarizing the process on all job adverts. > 8. Create a dedicated Slack group for the trial a few days beforehand and invite everyone relevant to it. It’s a nice chance to say hello and do introductions beforehand.” **[Jason](https://www.lennyspodcast.com/jason-fried-challenges-your-thinking-on-fundraising-goals-growth-and-more/) / 37signals:** > “The first thing is attracting the right people. The work trial can fizzle out if you don’t have the right five finalists to begin with. We are very careful about how we write job ads, and very specific. We talk about: what would you have done here last week if you had this job? Not like, bullet: how many years’ experience do you have, or what tools do you use? We don’t care about your tools, don’t really care about years of experience. I want to know, here’s what you would’ve done last week. Does this resonate with you? Is this something you feel like you could do? We’re very, very clear about that.” ![Image from Adding a work trial to your interview process](https://substack-post-media.s3.amazonaws.com/public/images/0fcc9958-9b3a-4fb0-a90f-c76e1ad9f9a4_2400x1254.png) I hope this gives you enough advice to build your own work trial experience. If you end up implementing one, or tweaking your interview process as a result, I’d love to know! Leave a comment below. [Leave a comment](https://www.lennysnewsletter.com/p/adding-a-work-trial-to-your-interview/comments) ### 📚 Further study 1. [Why and how we do work trials at Linear](https://linear.app/blog/why-and-how-we-do-work-trials-at-linear) 2. [The CEO of Automattic on Holding “Auditions” to Build a Strong Team](https://hbr.org/2014/04/the-ceo-of-automattic-on-holding-auditions-to-build-a-strong-team) 3. [What to Expect During a Trial—Automattic](https://automattic.com/what-to-expect-during-a-trial/https://automattic.com/what-to-expect-during-a-trial/) 4. [How We Hire—Automattic](https://automattic.com/how-we-hire/) 5. [How We Hire Engineers – Volume 2—Auth0](https://auth0.com/blog/how-we-hire-engineers-volume-2/) 6. [Everything we’ve learned about hiring for startups (so far)—PostHog](https://newsletter.posthog.com/p/everything-weve-learned-about-hiring) *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [6/61] My favorite decision-making frameworks > ## Q: What are your favorite decision-making frameworks? Companies live and die by the quality of their decisions. One better decision can change the trajectory of your business. Yet important decisions often get mired in head-banging meetings, debates, and consensus seeking. And as your company grows, you’ll inevitably run into decision-making challenges. Below I’ll share several battle-tested decision-making frameworks that are designed to help you make better decisions more quickly and with less drama. Although no framework will make hard decisions easy, having a framework can significantly cut down on the head banging. First, a few caveats: 1. **Prioritize trust:** If your team is asking you to use a decision-making framework on many decisions, it could be a sign they don’t super-trust your judgment. Before running every decision through a framework, dig into this potential issue. You’re better off long-term getting things done through [influence](https://www.lennysnewsletter.com/p/how-to-get-better-at-influence) and trust, versus jumping to a framework. That being said, as your company scales and the number of stakeholders grows, even with high trust there’s often a need for a structured process to make sure everyone’s voice is heard. 2. **Save frameworks for big (one-way-door) decisions:** As[Gokul Rajaram](https://www.linkedin.com/in/gokulrajaram1/) put it, “[A decision-making] framework isn’t meant for every situation. It’s meant for hard decisions. Things that would have real consequences for a company or group. Not all decisions are important. At Square, we used to jokingly call this the ‘kombucha scale,’ which captures two variables: importance and urgency. If the choice is as simple as selecting a flavor of kombucha, everyone can save the time and effort spent on a thorough decision-making process.” 3. **Make these frameworks your own:** Don’t assume the way the framework is set up is the only way it can work. Tweak it to work for you and your company. Make your own decision-making framework that I could include in a future edition of this post! To help you evaluate these frameworks, and your decision-making process broadly, [Brian Armstrong](https://www.linkedin.com/in/barmstrong) came up with a great set of attributes to aim for: ![Image from My favorite decision-making frameworks](https://substack-post-media.s3.amazonaws.com/public/images/d31a2e7a-2bf8-4ada-b0cb-4cd506e07f4d_1137x1200.png) Keep in mind as you work on your decision-making process, as Jeff Bezos [said](https://www.youtube.com/watch?v=JL4OoKJyNrc) in his conversation with Lex Fridman, that “humans are social animals. Not truth-seeking animals. Important truths can be uncomfortable and make people defensive. Any high-functioning organization has to have mechanisms and a culture that supports truth-telling. You have to talk about that and how it takes energy.” [Watch on YouTube](https://www.youtube.com/watch?v=JL4OoKJyNrc) To help you get to truth, here are my favorite (relatively lightweight) decision-making frameworks, in descending order from most structured to least. ### 1. S.P.A.D.E This popular framework, by [Gokul Rajaram](https://www.linkedin.com/in/gokulrajaram1/), finds a nice balance between structure and simplicity. It forces you to clarify the problem, identify roles, lay out timelines, and explore all possible alternatives, without making the process too rigid. Most importantly, it helps you avoid consensus thinking while also making sure that the person who makes the final decision is also accountable for the end result. > “A lot of forward-thinking companies practice consensus. Google is famous for it. But consensus is impractical and ineffective for one clear reason: consensus means no ownership. **What is important isn’t that everyone agrees, it’s that everyone is listened to. And then the right person makes a decision, communicates it clearly, and rallies everyone around it.** > > When I started at Square, the company surveyed employees about their number one frustration. They said decision-making. And I bet if you survey any company in the Valley, or even the country, you’d see similar answers. It’s not the decisions themselves employees are frustrated with, it’s the lack of transparency around how decisions are made. And employees crave transparency. > > A couple Square colleagues and I decided to come up with a new decision-making framework, an alternative to consensus built on accountability and clarity, where the person responsible for executing the decision would be the one who decides.” > > —[Gokul Rajaram](https://www.linkedin.com/in/gokulrajaram1/) Here’s a [template](https://coda.io/@gokulrajaram/gokuls-spade-toolkit/s-p-a-d-e-template-2), [instructions](https://coda.io/@gokulrajaram/gokuls-spade-toolkit), and an [example](https://coda.io/@gokulrajaram/gokuls-spade-toolkit/ats-selection-4). This framework is best used when making a major decision, at the company or strategy level. ![Image from My favorite decision-making frameworks](https://substack-post-media.s3.amazonaws.com/public/images/84c56410-f33b-44b2-85c6-57128c5099e8_1368x1418.png) ### 2. Coinbase’s decision-making framework This framework is very similar to S.P.A.D.E. but is more compact (everything fits inside a single Google Sheet) and includes some unique attributes, like allowing multiple deciders and giving the decision an expiration date. Since it’s so simple and compact, it can flex across most decisions. > “I’ve seen it run from start to finish in under 15 minutes, live during a meeting, but it can also be used over multiple weeks for bigger decisions. > > The vast majority of decisions in a company are low-risk and should be made unilaterally by the owner of that area (e.g. should we move the standup meeting from Mon. to Tues. this week?). > > A decision-making framework is only needed when there is lack of clarity about a decision that is higher-risk. Higher risk can mean that the decision has long-term implications or that it can be costly to unwind if the wrong decision is made.” > > —[Brian Armstrong](https://www.linkedin.com/in/barmstrong/) Here’s a [template](https://docs.google.com/spreadsheets/d/1xYCr46GeyeZ-JJMyxWRM0sb-1DI3lqNGwQ5iBxKCOqA/edit#gid=0), and [instructions](https://barmstrong.medium.com/how-we-make-decisions-at-coinbase-cd6c630322e9) for how to use it. This framework is best used when you need a framework that you can apply to both big and small decisions. ![Image from My favorite decision-making frameworks](https://substack-post-media.s3.amazonaws.com/public/images/3fcd6bc2-8a99-4206-9bca-43a510ffdf76_1400x876.png) ### 3. Dory and Pulse This is a two-part meta-framework developed by [Shishir Mehrotra](https://twitter.com/shishirmehrotra) (CEO of Coda) that dozens of companies have integrated into their daily workflows. It’s especially good at making sure everyone’s voice is heard, and flexing to all kinds of use-cases. > “I did some quick math, and in the past year I’ve used Dory/Pulse over a thousand times. It’s a simple yet impactful ritual for supercharging decisions by equalizing voices and removing groupthink in meetings. > > I decided to catalog the many different ways I’ve seen teams use Dory/Pulse. As I polled teams, this list quickly grew from a handful of variations to 14. You can see the full set in my post [14 ways to Dory/Pulse](https://shishir.substack.com/p/supercharging-decision-making-14). > > In each case, a team was solving a slightly different problem and thus arrived at different solutions. For example: > > - **Teams scaling their company all-hands** were drawn to techniques like [Unbiased Dory](https://coda.io/@shishir/dory-pulse/unbiased-dory-24) and [Anonymous Dory](https://coda.io/@shishir/dory-pulse/anonymous-dory-25) > - **Teams focused on product/design proposal reviews** invented [Sentence Starter Dory](https://coda.io/@shishir/dory-pulse/sentence-starter-dory-27) and [Pick an Option Pulse](https://coda.io/@shishir/dory-pulse/pick-an-option-pulse-21) > - **Teams struggling with hard prioritization choices** landed on [$100 Voting Pulse](https://coda.io/@shishir/dory-pulse/100-voting-pulse-23) and [Ranked Choice Pulse](https://coda.io/@shishir/dory-pulse/ranked-choice-pulse-22) > - **Teams challenged with moving beyond ‘majority rules’ consensus-driven decision-making** landed on [Role-centric Pulse](https://coda.io/@shishir/dory-pulse/role-centric-pulse-20) and [Conviction, Disagree, and Commit Pulse](https://coda.io/@shishir/dory-pulse/conviction-disagree-and-commit-pulse-30) > - and so on... > > Many teams mix and match these techniques, so feel free to take a read and select the best parts for your specific situation.” > > —[Shishir Mehrotra](https://twitter.com/shishirmehrotra) Here are [templates](https://coda.io/@shishir/dory-pulse) and [instructions](https://shishir.substack.com/p/supercharging-decision-making-14). This framework is best used when you are looking to make decisions in real time (i.e. during a meeting). ### 4. RAPID This framework was developed by [Bain & Company](https://www.bain.com/insights/rapid-decision-making/), and builds on the classic [RACI](https://en.wikipedia.org/wiki/Responsibility_assignment_matrix) and [DACI](https://www.atlassian.com/team-playbook/plays/daci) frameworks. Instead of simply assigning roles for a project, RAPID is designed to help you make decisions. The acronym stands for “Recommend, Agree, Perform, Input, and Decide.” > “Not every decision requires the level of effort and investment that goes into creating explicit RAPID roles. Successful adopters start by applying RAPID to high-value or high-frequency decisions. They create positive and visible impact on priority decisions while enhancing decision-making skills across the organization. Over time, the RAPID framework becomes intuitive and easy to use wherever decision-making roles are not clear. ” —[Bain & Co.](https://www.bain.com/insights/rapid-decision-making/) Here’s a [template](https://docs.google.com/document/d/1ZJZbv4J6FZ8Dnb0JuMhJxTnwl-dwqx5xl0s65DE3wO8/edit#heading=h.z5d90jym0qho), [instructions](https://docs.google.com/document/d/1hPdWQjYfdK0SB2i3ViZ9XsMPjTYEi7Do1WI22ofmEdo/edit), and an [example](https://docs.google.com/document/d/1vkxl-OI_XHbBWqgRCbpP86SJwSnEgCIzVOjbhWCHZng/edit), courtesy of [Matt Mochary](https://www.linkedin.com/in/matt-mochary-34bb4/) (who’s a big proponent of RAPID). This framework is best used when you mostly just need to clarify people’s roles in the decision-making process, versus needing a full plug-and-play decision-making process. ![Image from My favorite decision-making frameworks](https://substack-post-media.s3.amazonaws.com/public/images/cab2caf9-5082-473f-b71b-3076c8aa08aa_1440x810.png) ### 5. Eisenhower Matrix Finally, the most widely adopted decision-making framework in product is likely the Eisenhower Matrix, first developed by [Stephen Covey](https://en.wikipedia.org/wiki/Stephen_Covey) and inspired by [Dwight D. Eisenhower](https://en.wikipedia.org/wiki/Dwight_D._Eisenhower). It’s a simple tool to help you prioritize tasks, using a 2x2 grid. It has you map all of your options into quadrants based on how *urgent* and *important* the task is and, through this simple process, helps you identify what’s truly important (not just urgent). ![productivity-methods eisenhower-matrix](https://substack-post-media.s3.amazonaws.com/public/images/e1939c87-c685-452d-9587-bda56b46052d_1472x1374.png) Here’s a [template](https://miro.com/templates/eisenhower-matrix/) and [instructions](https://jamesclear.com/eisenhower-box). And here’s a handy video walking you through it: [Watch on YouTube](https://www.youtube.com/watch?v=tT89OZ7TNwc) Use this framework when you need help prioritizing tasks/projects/investments. ### 📚 Bonus: Mental models to help you make better decisions For extra credit, skim this additional reading to level up your decision-making powers. 1. **See the problem more clearly** 1. **[Eigenquestions](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems)** by[Shishir Mehrotra](https://twitter.com/shishirmehrotra) 2. **[One-way-door vs. two-way-door decisions](https://fs.blog/reversible-irreversible-decisions/)** (aka Type 1 vs. Type 2 decisions) by [Jeff Bezos](https://en.wikipedia.org/wiki/Jeff_Bezos) 3. **[Cynefin Framework](https://www.youtube.com/watch?v=N7oz366X0-8)** (pronounced ku-*nev*-in) by [Dave Snowden](https://en.wikipedia.org/wiki/Dave_Snowden) 4. **[A Leader’s Guide to Deciding: What, When, and How to Decide](https://medium.learningbyshipping.com/a-leader-s-guide-to-deciding-what-when-and-how-to-decide-f6caf659fa7e)** by [Steven Sinofsky](https://www.linkedin.com/in/sinofsky/) 2. **See the opportunities more clearly** 1. **[SWOT analysis](https://asana.com/resources/swot-analysis)** 2. **[McKinsey’s 7S Model](https://www.investopedia.com/terms/m/mckinsey-7s-model.asp)** 3. ***[Thinking in Bets](https://www.amazon.com/Thinking-Bets-Making-Smarter-Decisions/dp/0735216355)***by [Annie Duke](https://www.amazon.com/Thinking-Bets-Making-Smarter-Decisions/dp/0735216355) 4. **[The 10-10-10 decision-making technique](https://www.reddit.com/r/LifeProTips/comments/13tuoo8/lpt_use_the_101010_rule_to_make_better_decisions/)** by [Suzy Welch](https://www.amazon.com/10-10-10-Life-Transforming-Idea-Suzy-Welch/dp/1416591826) 5. **[The Regret Minimization Framework](https://alyjuma.medium.com/the-regret-minimization-framework-how-jeff-bezos-made-decisions-4d5a86deaf24)** by Jeff Bezos ### ✅ Once you’ve made a decision 1. Celebrate 🎉 2. Communicate your plan using the [Minto Pyramid Principle and the SCR Framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) 3. Learn to get better at getting [buy-in](https://www.lennysnewsletter.com/p/getting-buy-in) 4. Build your [influence muscle](https://www.lennysnewsletter.com/p/how-to-get-better-at-influence) *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [7/61] The ultimate guide to willingness-to-pay *P.S. Don’t miss* **[The Best of Lenny’s Newsletter](https://lennyswag.com/products/vol-1)** ***[book](https://lennyswag.com/products/vol-1)** (all proceeds going to charity), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), my **[recruiting service](https://www.lennysjobs.com/)** (focusing on Sr. PM and VP roles), and my new **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* > ## Q: How do I figure out how to price my product? Pricing is the most under-leveraged growth lever. It can drive enormous sustained growth (quickly) and often takes very little product work, yet is rarely prioritized or even discussed within product teams. That’s because pricing can be scary, irrational, and hard to know if you’ve done it right. Yet everyone who invests in pricing wishes they’d done it a lot sooner. Enter my friend [Kristen Berman](https://www.linkedin.com/in/kristenberman/). Kristen is a behavioral scientist, a founder of [Irrational Labs](https://irrationallabs.com/), and a past [podcast guest](https://www.lennyspodcast.com/using-behavioral-science-to-improve-your-product-kristen-berman-irrational-labs/) and [newsletter](https://www.lennysnewsletter.com/p/how-to-use-behavioral-science-to) collaborator. For a decade, she’s worked closely with tech companies to drive behavior change. She leverages the latest behavioral-science research to improve products’ conversion, engagement, and, most impactfully, pricing. Just in the past few years, she’s helped dozens of companies revamp their pricing strategy—with tremendous results. **Below, based on** **her work and the latest research, Kristen shares the most in-depth and actionable guide I’ve come across on how to execute a pricing study (spoiler alert: there is way more than Van Westendorp).** She also provides [two mega qualitative and quantitative templates](https://bit.ly/3SzoqRk) for you to use in your own pricing research. This advice is meaty and actionable, and will help any product leader on the hunt for new growth levers. *For more from Kristen, [you can reach out to her here](https://irrationallabs.com/contact/) if you want to chat about pricing, [watch her weekly teardowns on Substack](https://kristenberman.substack.com/), and [subscribe to the Irrational Labs newsletter](https://irrationallabs.com/newsletter/).* ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/87ec25ef-4b1d-4a61-841d-dd80df78b60d_4000x2000.png) Pricing is one of the biggest levers to growth. Why are so few product teams testing their pricing? At [Irrational Labs](https://irrationallabs.com/), we surveyed 60 software companies to reflect on their experience with pricing studies. Of them, 50% said their companies have never run pricing studies, and only 25% reported even A/B testing a pricing change. Larger firms often have dedicated staff for pricing strategy yet are still generally reluctant to change the status quo. Why do so few companies run pricing studies? Based on our work with dozens of top companies, we primarily hear: 1. **It’s too risky.** What if we annoy users? [Reddit](https://news.ycombinator.com/item?id=36166236)’s users flipped out. [Strava](https://www.theverge.com/2023/1/13/23553453/strava-subscription-increase-fitness) had bumps. [Patreon](https://www.cnet.com/tech/services-and-software/patreon-changes-fees-services-tiers-please-dont-freak-out/) got blowback. 2. **It’s technically complex.** Testing multiple prices in the market for SaaS products also means maintaining them—which no technical team wants to do indefinitely. 3. **Willingness-to-pay (WTP) studies are just hard to run.** Recruiting participants, writing the study, and analyzing data requires lead time and some expertise. It can be intimidating. These are legitimate reasons. However, the potential revenue gains from effective pricing often outweigh them. A [McKinsey analysis](https://hbr.org/1992/09/managing-price-gaining-profit) suggests that a 1% improvement in your pricing can increase your profits by up to 11%. So if you do decide to change your prices, how should you go about it? This article will decode the four most commonly used quantitative WTP methods and provide a [template of questions](https://docs.google.com/document/d/1NOo6VYa8oCBe4_iR8HrmqqTfNb6x28Jqnqy6jkjS_MI/edit) you can use. Quant is very important, but it can be even more powerful paired with qualitative work. Likewise, we also included a robust [qualitative research guide](https://docs.google.com/document/d/1qJDcl0G6nE1SxGc-VDRhzIxAFLXKKPP84_59JeuKp44/edit), focused on helping B2B companies with pricing. While the optimal recipe is to do both qual and quant, anything is better than doing nothing. As pricing expert [Madhavan Ramanujam](https://www.linkedin.com/in/madhavan-ramanujam-1533063/) says on [Lenny’s Podcast](https://www.lennyspodcast.com/the-art-and-science-of-pricing-madhavan-ramanujam-monetizing-innovation-simon-kucher/), “Talk to at least one person. Most companies are not even doing that.” ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/4ea9f4d4-86b0-42c4-8cfe-df1fd5676fa5_1600x900.png) ## Willingness-to-pay methods: The rundown The top four commonly used quantitative methods are: 1. Van Westendorp 2. Becker-DeGroot-Marschak 3. Multiple price list 4. Discrete choice or choice-based Until recently, these methods were difficult to compare—the most frequently cited studies were published around 20 years ago. This changed in 2023, when Randy Gao, Simon Huang, and Minah Jung [comprehensively reviewed the top methods](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4484841), combining insights from dozens of papers to make sense of WTP. Their analysis builds on a [compelling 2019 WTP field study](https://www.journals.uchicago.edu/doi/abs/10.1086/705374?mobileUi=0) and an [in-depth comparison](https://www.researchgate.net/publication/255851498_How_Should_Consumers'_Willingness_to_Pay_Be_Measured_An_Empirical_Comparison_of_State-of-The-Art_Approaches) from 2011. Below, I’ll run through the different methods and pros and cons. Every research method has trade-offs, and part of being able to trust your final results is understanding these nuances. At the end of the post, I’ll share six tips for implementing these surveys yourself, along with two mega [templates to help guide you](https://bit.ly/3SzoqRk). But first, a **big** **disclaimer**: Most of the below methods hold the product description constant while trying to determine some magical number that people will pay. But as pricing experts will tell you, this number, i.e. the price, is just part of the story. In reality, your product’s description and features, as well as [what it’s compared to](https://journals.sagepub.com/doi/10.1177/00222429231195564)[1](#footnote-1), play a role in WTP. - Stories can add measurable value to seemingly worthless items. Someone paid $51 for this [yellow bear figure](https://significantobjects.com/2010/02/10/yellow-bear/). Why? The story makes it feel scarce. ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/bf76ab35-7c58-4f62-9661-e3603404f156_1318x1048.png) - [Pasta](https://www.amazon.com/SFOGLINI-Cascatelli-Pasta-16-OZ/dp/B09YB51CFT) that is described as “sauceable” commands an 80% higher price. Why? The adjective implies quality. If the marketing team asked customers, “What’s the most you’d pay for pasta?,” “sauceability” wouldn’t factor in—and the results would be off. ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/cb19f415-eb2b-4a4f-a582-eb9420f0df89_934x1436.png) - How much would you pay for a virtual whiteboard? Probably not $960 a year. Yet “the visual workspace for innovation” [Miro](https://miro.com/) charges $80 a month for a team of 10 people. Clearly, they’ve figured out positioning. ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/84dca09c-4c46-48f7-aae4-20c6e8924015_1548x840.png) Assuming that price is a “magic number” implies that people have predetermined their willingness to pay for your product; they have a number in their head. But in reality, most of your customers haven’t thought much about it. They are deciding in **[real time](https://people.duke.edu/~dandan/webfiles/PapersPI/Constructing%20Stable%20Preferences.pdf)** what they’re willing to pay based on the information they have about the product. As a product manager, marketer, or designer, you decide what that information is. In other words, customers aren’t walking in with an unmovable POV—you *shape* their POV. You have two levers to do this: (1) change your prices and (2) [change your positioning](https://www.lennysnewsletter.com/p/positioning). The latter starts long before customers reach your pricing page–but once they’re there, the impact of your copy, descriptions, and choice architecture on conversions can’t be overstated. Let’s suppose you’re looking at changing prices and want to know what your customers are willing to pay. In that case, a quantitative pricing study is your best bet. **So what are the methods to determine WTP?** ### 1. The Van Westendorp If you’ve heard about pricing studies, you’ve likely heard of the Van Westendorp (VW) method (sometimes called price sensitivity meter, or PSM). But despite being the favored child in [popular tech posts](https://www.nfx.com/post/superhuman-product-frameworks), it’s not a fully reputable method. First, not many companies are actually using it. Of the 60 software companies we surveyed, only eight said they used it. And academics don’t use it either. The [top VW study on Google Scholar](https://www.sciencedirect.com/science/article/pii/S1877042814039172) has 36 citings (a low number) and was run on university students measuring their WTP for private dormitories. (Aren’t we through with using college students for psychology papers?) The other methods mentioned in this article have citings in the hundreds and thousands. Perhaps most damningly, it was invented in the 1970s. Given the advancement of data science and research methods, surveys are not like fine wine—they don’t age well. Why *do* people like it? The pros: The method itself is pretty simple. You ask people four questions to find out the lowest and highest price they’re willing to pay for something: 1. At what price would it be so low that you would start to question this product’s quality? 2. At what price do you think this product is starting to be a bargain? 3. At what price does this product begin to seem expensive? 4. At what price is this product too expensive? Participants typically respond to an open-ended question (empty text box). This is called the open-ended, or “direct,” approach in the literature. In this method, you’ll get what people *want to pay* instead of what they *might pay*. The questions are straightforward—and there are only four. Win. And the continuous format, without a scale consisting of set intervals, gives detailed information on individual variation. This makes responses easy to analyze. However, the Van Westendorp method has a big problem: the well-documented phenomenon known as **[hypothetical bias](https://link.springer.com/article/10.1007/s11747-019-00666-6)**. Gao et al. sum up the issue in their [recent paper](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4484841): “Under hypothetical settings, people state a higher valuation than their actual valuations.” What does this look like? [John List](https://en.wikipedia.org/wiki/John_A._List), a University of Chicago professor and Walmart’s first chief economist, ran a [donation study](https://ideas.repec.org/a/bpj/bejeap/vadvances.6y2006i2n2.html)—the real treatment raised $310 for their cause, whereas more than twice that ($780) was pledged in the hypothetical. We’re asking people to imagine a fake world and tell us what they would do in it. Sadly, we’re bad at predicting our future self’s actions. In a fake world, we have no competing priorities, we’re very rich, and we like lots of things[2](#footnote-2)—not an ideal scenario for figuring out WTP. Should you use the Van Westendorp? We say proceed with caution, unless you’re including questions that reduce hypothetical bias (see [this guide](https://docs.google.com/document/d/1NOo6VYa8oCBe4_iR8HrmqqTfNb6x28Jqnqy6jkjS_MI/edit) for examples) and you’re focusing on more established product categories (versus products that are brand-new to the world). ### 2. The Becker-DeGroot-Marschak To overcome the hypothetical bias associated with Van Westendorp, economists have developed “incentive-compatible” pricing methods. These methods give you an incentive to report what you would really pay (or rather, a disincentive for answering hastily or intentionally misreporting your willingness to pay). The goal is to more accurately gauge people’s true willingness to pay. The Becker-DeGroot-Marschak (BDM) is arguably the [most-used method in experimental economics](https://journals.sagepub.com/doi/10.1509/jmkr.39.2.228.19086). While it’s very similar to the Van Westendorp, it adds an important twist: it tries to eliminate cheap talk. In the study’s original design, participants are asked to write down the maximum amount they’d pay for an item. Then a random number is selected. If the participant’s written amount is higher than this random number, they must purchase the item at the random number’s price. However, if their amount is lower, they cannot buy the item and they owe nothing. This is important because, when answering, people *think* they may have to pay for the thing. There is skin in the game. They don’t know the selling price in advance, so overstating might lead to paying more than their actual valuation—and understating might result in missing the opportunity to buy at a price they would have accepted. This seemed to have removed most of the hypothetical bias[3](#footnote-3) that’s made the Van Westendorp method contentious. [A semi-recent study](https://sci-hub.se/10.1086/705374) looked at the sale of water filters to families in Ghana and found BDM had predictive power on demand, when compared with the straight sale of the filter. Problem solved? Not quite. Critics point out that the method’s core mechanism, which involves a “random number” scheme for aligning incentives, is complicated. Be honest. Did you really understand how this worked from the above explanation? Many participants [don’t](https://www.jstor.org/stable/10.1086/677254) [either](https://www.aeaweb.org/articles?id=10.1257%2F0002828054201387). ### 3. Multiple price list (or Gabor-Granger) To recap: Becker-DeGroot-Marschak improved on the Van Westendorp method a little by “adding teeth” to the questions. But BDM can be hard to understand. Another problem with the BDM method is that it asks people to name their price—to be price *givers*. This assumes we have a predetermined number in our heads. It’s as if we expected our customers to always be thinking deeply about our product, just waiting for us to ask them how much they’d pay. In reality, though, we’re price *takers*: we go to a website and it tells us the price. The [multiple price list method](https://www.researchgate.net/publication/24076093_Valuation_using_multiple_price_list_formats) (MPL) was developed to address this. In the BDM, respondents must state a maximum WTP (price giving). In MPL, on the other hand, the respondents must say yes or no to a list of prices (price taking). ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/3301769a-ff96-4767-9793-94b2a8047c78_1280x1400.png) Do you want to purchase this for $35? $45? $55? This lets you simplify the incentive-compatible element, because the researcher just tells the study participant: “One of your choices will be randomly selected and we will implement it. For instance, if you select $45 and you say yes to the $45 price point, you will have to buy it. If you say no to $45, you cannot buy it.” So from an empirical perspective, is MPL better than BDM? Historically, researchers have recommended MPL over BDM—mainly because it’s simpler and more transparent. This has led economists to use it widely.[4](#footnote-4) But new research points to some potential flaws. Gao et al.’s latest paper implies that the MPL method may mislead researchers to underestimate the value of their products. They run 10 experiments and show that the MPL method “actually leads to systematically lower WTP estimates.” This could lead researchers and marketers to underprice their products and leave money on the table. Why? Possibly, getting people to pay attention to each value (yes/no) puts the focus on the opportunity cost of money—and this may [decrease people’s willingness](https://www.researchgate.net/publication/46553778_Opportunity_Cost_Neglect) to spend it. ### 4. Discrete-choice-based This last pricing survey method is fundamentally different. In the VW, BDM, and MPL methods, we ask people to decide about **one product**. In contrast, discrete choice involves giving people multiple product options with slightly different features and prices and asking them to pick one they would buy. Basically, you replicate whatever you intend to launch and describe it just as you would on your marketing page. [Silvia Frucci](https://www.linkedin.com/in/silvia-kiely-frucci), a go-to-market leader at [Optum](https://www.optum.com/en/), endorses this method: > “We used the choice-based pricing method at Optum. To figure out WTP for a new product, we asked questions along the lines of *Which of the three products are you most inclined to purchase?* The study asked this question five different times with a variation of feature and pricing combinations. Our sample was representative to our target; it went out to 12 provider practices via phone-based interviews. > > The results had a really profound impact on our business. Based on this study, we found out the WTP for the product was lower than we assumed and adoption would be more difficult. Based on the survey insights, we ended up killing the full product that we were about to launch! Instead, we integrated the high-value parts into other existing businesses and products.” John List also endorses the discrete choice method: “I would say when I cannot obtain revealed preference data, I would follow [this](https://ideas.repec.org/a/bpj/bejeap/vadvances.6y2006i2n2.html) approach to estimate marginal values.” Why does he like it? It leverages **relativity**. We can’t assume that responses to a survey reflect *absolute* willingness to pay. But we can infer *relative* willingness to pay, and that comes closer to how we make real-world decisions: *this* or *that*? You can design it simply, with a couple of straightforward options: ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/0633942e-74eb-4a3e-8bb4-b0da27203188_1372x264.png) Alternatively, you can ask the question six or seven different times and vary attributes. Here’s an example question using the discrete-choice-based experiment method for a random product: > *Imagine you’re considering purchasing new and innovative enterprise software that can do the following:* > > 1. *Project management software that costs $8/month per user and can automate quarterly headcount planning* > 2. *Project management software that costs $11/month per user and can automate quarterly headcount planning and provide what-if scenario planning* > 3. *Project management software that costs $12/month per user and can provide what-if scenario planning and real**-**time headcount planning* > 4. *Would not purchase* > > *Please click around on the landing page and explore what these products can do. Then select the option that you would be most likely to purchase. At the end, we will choose 20% of the people who take this survey and sell them the product at the price they choose. Make sure to choose the product you would actually spend money on!* As with the other methods, we need to add incentive alignment to avoid cheap talk. In this method, it’s a bit easier. You can say a few people will be chosen at random to receive the option they choose. If you’re familiar with [conjoint analysis](https://en.wikipedia.org/wiki/Conjoint_analysis), you might rightly ask: Isn’t this just that? Yep. This is one type of conjoint. [Qualtrics says it’s the simplest and most common](https://www.qualtrics.com/experience-management/research/types-of-conjoint/). Full conjoints focus more on individual attribute trade-offs and ranking (which can be less “real world”), versus complete product choices. They also tend to be longer studies—which risks causing decision fatigue for participants. Maybe more damningly, they can be time-consuming to set up and [hard to get right](https://sawtoothsoftware.com/resources/technical-papers/a-new-approach-to-adaptive-cbc), and thus more expensive. Discrete-choice-based studies are an art and a science. To avoid a long questionnaire, you’ll need to make some strategic choices on product bundles. And you need a statistical package you can use to analyze data. SurveyMonkey has [strong examples](https://www.surveymonkey.com/market-research/resources/when-to-use-discrete-choice-models/) of this on their blog (scroll down). Qualtrics (which Irrational Labs uses) [has survey design packages](https://www.qualtrics.com/experience-management/research/types-of-conjoint/). There’s also [Conjointly](https://conjointly.com). ## Which WTP method should you use? The main conclusion from all of these papers is: whatever you do, include some *incentive-compatible* element. We don’t want cheap talk. People should have some skin in the game (i.e. you may have to buy this widget at the price you said!). ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/81d5520e-43d4-4df1-88f6-50b8c45ab0d5_868x784.png) In a clever study on [pricing a new cleaning product](https://sci-hub.se/10.1509/jmkr.48.1.172), researchers examined four different WTP methods, comparing them against real purchase data from an online store where purchase was mandatory. What they found out: incentive-compatible methods aligned more closely with actual WTP than non-incentive-compatible ones. This wasn’t just due to lower price estimates, but also because more participants said “would not purchase” in the incentive-compatible conditions. Assuming you have integrated an incentive-compatible question, you now have three direct methods (Van Westendorp, Becker-DeGroot-Marschak, and multiple price list) and one indirect method (discrete-choice-based) to choose from. In the study on cleaning products, researchers found the direct methods of WTP to be most effective for products with established mental models. For less familiar, infrequently purchased, and higher-priced items, they advise using a choice-based approach[5](#footnote-5)[6](#footnote-6). User researcher [Mathew Diep](https://www.linkedin.com/in/mathew-diep-5ab35661/) pushed to use the choice-based method (#4 in our list above) over the Van Westendorp at [Fivestars](https://www.fivestars.com/) for this exact reason: people weren’t familiar with their product. People struggle to accurately evaluate the pricing of a product they’ve never used, and thus their answers will cover a wide price range. The choice-based method paid off for Fivestars, resulting in an additional pricing tier. The choice of what method to use depends on what you’re selling. - Are you selling **frequently bought, familiar products**? - Choose an open-ended method (Van Westendorp or BDM): Ask the series of four VW questions or just “What’s the most you would pay for this widget?” Your audience should already know how the widget can help them, so they’ll be able to give a reasonable answer. - Are you selling **unusual or high-ticket items**? - Consider a choice-based method: Ask people to choose between different product bundles. Since your audience will likely not have experience buying your widget, they’ll need some comparison set to drive their valuation. - Are you selling a **new product**? - The direct methods (Van Westendorp and BDM) are particularly difficult for new-to-the-world products. Newness makes open-ended questions much harder to answer. Before ChatGPT launched, for instance, would you have known what you’d be willing to pay for it without having experienced its capabilities? And many times (if you have enough resources), the best approach could be to include multiple approaches. You can combine two or more of these methods into one longer survey. Overall, the goal of all of these questions is to help predict real-world behavior. The closer you get to achieving this, the better. ## 6 tips to running your own pricing study Now that you know the methods to determine WTP and how to determine which to use, you’re ready to run your own pricing study. Here are six tips to do it. #### **1. Minimize hypothetical bias** Always include a component that makes your study incentive-compatible. You can do this either by saying, “Some participants will be selected to purchase the item” or by creating a lottery setup and telling participants that if they win they will get the product for free *or* they could choose totake home the equivalent amount of cash. If the product doesn’t exist or you can’t do this, weaker alternatives have been tested. One option is to explain “cheap talk” and encourage participants to think as if spending their own money. Or you can tell them that their choices will strongly influence what’s produced. There’s some evidence that both of these approaches will yield more incentive-compatible findings. For a complete list of ways to eliminate hypothetical bias, refer to the quantitative survey template [here](https://docs.google.com/document/d/1NOo6VYa8oCBe4_iR8HrmqqTfNb6x28Jqnqy6jkjS_MI/edit). #### **2. Copy matters. Re-read every question 15 times** Sweat the details. Most academics prefer scales that range from 1 to 7 or 1 to 9. Label—but don’t overlabel— your scales, i.e. label the ends (“highly likely” vs. “not at all likely”) for every number. When asking more subjective questions, include a follow-up question to determine their [level of certainty](https://www.researchgate.net/publication/236151599_Using_Discrete_Choice_Experiments_to_Estimate_Willingness-to-Pay_Intervals): “How confident or not confident are you in your answer?” If people aren’t confident, don’t base your key company decisions around this answer. Run attention checks to ensure that people understand the incentive-compatible scheme. Remember to always include the option to “not purchase it.” Otherwise you’ll get an inflated read on your WTP. #### **3. Do a controlled trial to test different descriptions and framing** How much you’d pay for this 10GB widget depends on how the widget is described. If you recruit 250 people, consider tripling your sample and running two more conditions that vary your widget’s description and core benefits. #### **4. Who you recruit matters** Don’t ask event planners to evaluate IT software. You need a good screener to ensure that the people who answer your questions represent the actual audience you’ll be selling to. For a consumer or non-niche audience, I recommend [Prolific](https://www.prolific.com/). Recruiting 1,000 people for a 10-minute study would cost you $2,000. Irrational Labs uses this for our work (sign up via [this link](https://app.prolific.com/register/researcher/email) to get $10 off your first study). Other reputable tools for recruiting samples include [Sago](https://sago.com), [Guidepoint](https://guidepoint.com), [Disqo](https://www.disqo.com/solutions/researchers/), and [Respondent](https://www.respondent.io/). If you have a B2B specialized product, get scrappy. Does your audience hang out online somewhere (newsletters, forums, or Slack groups) where you could post a study? Or people they follow online who could promote your study? #### **5. The best way to test is always in-market** If you can pull off an A/B test in-market, go for it. Real user data always trumps study data. My personal favorite WTP testing method was championed by both Apple and Elon Musk. Apple launched the iPhone in 2007 and [lowered the price by $200](https://www.cultofmac.com/500422/tiah-200-iphone-reduction/) within months. Twitter Blue announced a monthly subscription rate of $20 and promptly dropped to $8 a month. Start on the higher end of your range and adjust quickly. Not only are these real ways to test the market—they also give you a strong anchoring effect that makes your second price appear low. When employing this approach, make sure to compensate early adopters who made the jump at the higher price. Can’t do this? Try offering a product at a particular price instead, then giving people the option to be notified when it becomes available in the future. [Brian Lafayette](https://www.linkedin.com/in/brian-lafayette/), when he was director of strategy at Meetup, [did this with their Pro product](https://openviewpartners.com/blog/how-meetup-built-demand-for-an-enterprise-product/): “Essentially, before the Pro product even existed, we created a landing page for it.” #### **6. Never forget: price is perception** Change my perception of your product’s value, and you’ll also change my WTP (and your conversions too). Price goes beyond a number. The lowest-cost way to impact your revenue is to better help people see and understand how your product benefits them. Ideally, you should include a clickable website, a demo video, or real mock-ups in your survey. ![Image from The ultimate guide to willingness-to-pay](https://substack-post-media.s3.amazonaws.com/public/images/45588139-9b8f-4176-8c46-97cc9464453b_968x756.png) ## Here are templates to run your own studies Pricing is more than a guessing game; it’s a strategic play deeply rooted in customer perception. It represents the value your customers perceive. The techniques we’ve unpacked—Van Westendorp, Becker-DeGroot-Marschak, multiple price list, and discrete choice—aren’t just methodologies. They’re your tool kit for delving into what your customers truly value—and delivering on that. Here are [two templates](https://bit.ly/3SzoqRk) for you to use when planning and executing research: 1. **Willingness To Pay Survey Questions:** This template provides the exact questions you’ll need to run your study and examples from all the methods talked about in this article. 2. **Qualitative Research Guide:** In qualitative work, the right questions can uncover gold. This mega-guide (authored with behavioral scientist [Chris York](https://www.chrisyork.co/)) contains over 100 of them for you to use. If you’re B2B, this is for you. It’s based on the reality that what consumers [say they want isn’t](https://twitter.com/patrickc/status/1443215022029619200?lang=en) typically what they *actually* want—and this is [particularly true of pricing](https://www.groovehq.com/blog/pricing-that-worked). ## 📚 Further study: 5 helpful academic papers on WTP Want to dive deeper into the research on consumer willingness to pay? I recommend the following papers: 1. [“All Roads Lead to Rome? Evaluating Value Elicitation Methods”](https://ssrn.com/abstract=4484841) 2. [“How Should Consumers’ Willingness to Pay Be Measured?”](https://journals.sagepub.com/doi/10.1509/jmkr.48.1.172) 3. [“Using Choice Experiments to Value Non-Market Goods and Services](https://www.degruyter.com/document/doi/10.2202/1538-0637.1132/html?lang=en)” 4. [“Measuring Willingness to Pay: A Comparative Method of Valuation”](https://doi.org/10.1177/00222429231195564) 5. [“Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana”](https://doi.org/10.1086/705374) *For more from Kristen, [reach out to her](https://irrationallabs.com/contact/) if you want to chat about pricing, [watch her weekly teardowns on Substack](https://kristenberman.substack.com/), and [subscribe to the Irrational Labs newsletter](https://irrationallabs.com/newsletter/).* *Have a fulfilling and productive week 🙏* ### 🔥 **Featured Job: Director of Product, Geospatial @ Niantic** I’ve been helping a few great companies find their next product leader and wanted to highlight one in particular: [Director of Product for Niantic’s Geospatial Services team](https://nianticlabs.com/careers/openings/director-of-product-geospatial-services?hl=en). If you or someone you know has experience building with maps or other geospatial services, head to the link below to learn more. [Connect with Niantic](https://app.pallet.com/onboard/v3/6dbcabd8-8857-4aa8-bad9-c761f385989d/get-referred?pallet=lennys-jobs) If you’re hiring and want help filling your role(s), fill out [this form](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8), and our team will be in touch if it’s a good fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 [1](#footnote-anchor-1) The newly developed comparative method of valuation measures WTP for a target option in the context of relevant alternatives, such as competing products or alternative versions of the target. Researchers say this more closely resembles real choice situations consumers face. [2](#footnote-anchor-2) Valuation is [highly susceptible to “anchors”](https://psycnet.apa.org/record/2016-28717-004) in hypothetical settings. Hypothetical WTP can be [tied to perception of its market price](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4294247) rather than actual valuation for the product. [3](#footnote-anchor-3) In the water filter study, demand is lower under BDM than Take It or Leave It (TIOLI) at each of the three TIOLI price points (18.2%, 16.3%, and 10%). However, in the subset of children ages 0 to 5, the gap is 14.2 percentage points narrower if the subject reported diarrhea among her young children in the previous two weeks. In this group, the BDM-TIOLI gap is negligible. This suggests that respondents with more at stake may have taken the exercise more seriously. [4](#footnote-anchor-4) Two critiques of MPL are that (1) it anchors people on a number (maybe I was thinking 1,000 and you said 35) and (2) you have to pick intervals, and this can be tricky. You’re not going to ask people in $1 increments how much they’d pay for construction management software, but what should the interval be? [5](#footnote-anchor-5) [From the paper](https://sci-hub.se/10.1509/jmkr.48.1.172): “Direct methods are more suitable for relatively lower-priced, more frequently purchased, nondurable product categories with no direct competition. Indirect methods seem to be more suitable for relatively higher-priced, less frequently purchased product categories with significant competition.” [6](#footnote-anchor-6) [There is some evidence](https://www.sciencedirect.com/science/article/abs/pii/S0095069614000692) that better-informed people will have higher WTP for the same item compared with less-informed people. In this study, there was a significant increase of $85 to $129 in WTP for well-informed individuals. This implies that you may have a difference in prices for people who understand your category and product versus people who do not. --- ## [8/61] You should be playing with GPTs at work *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *If you’re not a subscriber, here’s what you missed this month:* 1. *[My favorite decision-making frameworks](https://www.lennysnewsletter.com/p/my-favorite-decision-making-frameworks)* 2. *[Why you should add a work trial to your interview process](https://www.lennysnewsletter.com/p/adding-a-work-trial-to-your-interview)* 3. *[The ultimate guide to willingness-to-pay](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-willingness)* *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), my **[Swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!), and* **[The Best of Lenny’s Newsletter](https://lennyswag.com/products/vol-1)** ***[book](https://lennyswag.com/products/vol-1)** (all proceeds going to charity).* It’s become clear to me that everyone should be playing with [GPTs](https://openai.com/blog/introducing-gpts) (custom versions of ChatGPT) right now. It’s easy to think AI tools are a fad, too complicated, or unlikely to have real impact on your job. But you’re wrong. Consider these recent news items that caught my attention: 1. PwC forecasts that AI could contribute [$15.7](https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html) *[trillion](https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html)* [to the global economy by 2030](https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html) from increased productivity. 2. When Italy banned ChatGPT, [the productivity of coders in the country fell by 50%](https://arxiv.org/pdf/2304.09339.pdf) before recovering. On the flip side, Duolingo reported a [25% increase in developer velocity](https://arc.net/l/quote/jmmharfz) when using GitHub Copilot, and Shopify has already [written over a million lines of code](https://twitter.com/mustafa01ali/status/1723229081913721218) with Copilot. 3. [Nat Friedman](https://twitter.com/natfriedman/status/1758143612561568047) (former CEO of GitHub) and [Daniel Gross](https://x.com/danielgross/status/1758180171520028695?s=20) (former Y Combinator partner) are investing $100 million in a startup called [Magic](https://magic.dev/) that’s looking to replace engineers. [Prominent engineers are worried](https://x.com/GergelyOrosz/status/1758457319791145272?s=20). 4. In the public markets, [there’s a growing separation between companies betting heavily on AI and those that aren’t](https://tomtunguz.com/the-ai-premium-multiples-2024/). ![Image from You should be playing with GPTs at work](https://substack-post-media.s3.amazonaws.com/public/images/30f16dbe-46bd-4825-add0-08814ba9d516_3600x2700.png) 5. The power of AI models is only accelerating. [Even MrBeast is worried](https://x.com/MrBeast/status/1758194696034365674?s=20). [Here’s AI video generation 10 months ago vs. today](https://x.com/thegarrettscott/status/1758198134134489375?s=20). [Here’s a video](https://twitter.com/sama/status/1758218820542763012https://twitter.com/sama/status/1758218820542763012) generated by [Sora](https://openai.com/sora) (OpenAI’s latest model) from the prompt “Two golden retrievers podcasting on top of a mountain.” 😮 As [Chris Dixon](https://cdixon.org/) put it, “The next big thing will start out looking like a toy.” I started to get super-curious in particular about leveraging [GPTs](https://openai.com/blog/introducing-gpts) at work after my recent podcast conversation with [Logan Kilpatrick](https://www.lennysnewsletter.com/p/inside-openai-logan-kilpatrick-head) (head of developer relations at [OpenAI](https://openai.com/)). He shared a few examples of how people at top-tier tech companies are using custom GPTs to help their non-eng teams be more productive, while also taking a load off their eng teams. I wanted to find more examples—to see how and why people are doing this—so I turned to [Twitter](https://x.com/lennysan/status/1757851011732156658?s=20) and [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_is-your-company-using-chatgpt-or-a-custom-activity-7163665383097294848-F-1g). I asked how people are using GPTs in their day-to-day work now. The volume (and variety) of responses blew my mind. I got over 300 replies with hundreds of examples—from cooking up copy experiments to extracting feature ideas from sales calls to having conversations with their customer personas. The creativity, and the impact people are seeing, is 🤯. Below, to help you explore this yourself, I’ll explain what GPTs are and help you build your own custom GPT. Then I’ll share 20 examples of how people are using GPTs today to make their workplaces more productive. When you read this post, I encourage you to pick an idea and try to create your own GPT. See how easy it is, and how good they actually are. You may be blown away too. *A big thank-you to [Dan Shipper](https://twitter.com/danshipper) and [Dennis Yang](https://www.linkedin.com/in/dennisyang/) for providing feedback on this post, and to everyone X and LinkedIn who shared their experience.* ### What are GPTs? [GPTs](https://chat.openai.com/gpts) are custom versions of [ChatGPT](https://chat.openai.com/) that can be tailored for very specific tasks. They live at a unique URL, run in the cloud, and anyone can make one in a few minutes. To set one up, you tell the GPT what you want it to do for you (in plain English), upload docs that “train” it on your specific context (e.g. your roadmap), and then adjust the capabilities it can leverage to complete your task (e.g. browse the web, use Zapier to take actions, etc.). Normally, straight-up ChatGPT is more than enough for most use cases, but if you want to upload proprietary datasets or customize how the chatbot interacts, and then share this tailor-made GPT with colleagues, custom GPTs are the way to go. ### How to create your own GPT It’s so easy. [Go here](https://chat.openai.com/gpts), sign up, click “Create” in the top right corner, and tell the AI what you want it to do. [Here’s one I created](https://chat.openai.com/g/g-c14K022PN-strategy-sage) in a few minutes that helps you think more strategically based on advice from the writings of Hamilton Helmer, Michael Porter, Annie Duke, Richard Rumelt, and Geoffrey Moore. Once you get the initial version set up, you can then upload “knowledge”—decks, PDFs, spreadsheets, and any other documents that give the GPT more information on your specific context and company. For example, you can upload your roadmap, your company values, your career ladders, etc. The more you give it, the better it does. Think of it like onboarding a person—what context would you want them to have to do their job well? To delve deeper into GPTs: 1. [Read this very short guide from OpenAI](https://help.openai.com/en/articles/8554397-creating-a-gpt) on how to create a GPT 2. [Browse examples](https://chat.openai.com/gpts) of the most popular public GPTs 3. [Get a ChatGPT Plus account](https://openai.com/blog/chatgpt-plus). You’ll get faster response times and avoid hitting usage limits. ← *Get your company to pay for this;* *it’s very high ROI for $20/month* 4. [Watch Logan Kilpatrick build a custom GPT step-by-step live](https://www.youtube.com/watch?v=3TLORk-eZAw) 5. [Learn how LLMs work](https://ig.ft.com/generative-ai/) ([also this](https://www.youtube.com/watch?v=zjkBMFhNj_g)) 6. [Add Zapier powers to your GPT](https://actions.zapier.com/docs/platform/gpt) in order to let it take actions for you ### 20 ways to use custom GPTs at work If you discover an idea here that could benefit your team, go ahead and try to build it yourself as a learning exercise. And if you’ve found another use case for GPTs at your workplace, I’d love to know. Just leave a comment below. #### **1. Refine new product copy** > “We built a UX GPT Writer trained on all of our writing, brand guidelines, and product nomenclature. Designers rough out what they need it to say, send the GPT a screenshot from Figma, and it will rewrite it to be concise, using our guideline and brand voice standard. This means anyone on our team can write well, whether they’re a product manager, designer, or engineer.” > > —[Diego Zaks](https://twitter.com/diegozaks), VP of design at Ramp ![Image from You should be playing with GPTs at work](https://substack-post-media.s3.amazonaws.com/public/images/8b14efd0-74f7-4441-b669-5af29e2b556f_720x690.png) #### **2. Have conversations with your personas** > “Everyone has ‘personas.’ I literally took our persona documents, made it a PDF, uploaded it to the GPT (as knowledge), and made a GPT to talk to our personas. It helps me refine roadmap ideas and really empathize better with my customers.” > > —[Dennis Yang](https://www.linkedin.com/in/dennisyang/), PM at Chime ![Image from You should be playing with GPTs at work](https://substack-post-media.s3.amazonaws.com/public/images/61584d75-fbda-413d-a299-d602cb412b68_1624x1864.jpeg) #### **3. Learn from past user research findings** > “We built a GPT that indexes all of our user research decks, and then people can ask questions [about past research findings]. It’ll answer the questions and link to the decks.” —Anonymous #### **4. Create a source of truth for product requirements** > “We created a custom GPT that has our DB schema, company overview, and some of our product requirements in markdown format. We are in the middle of an intense push over the next six weeks to deliver a fairly substantial feature set. This custom GPT is fully armed to act as both a source of truth for requirements and brainstorming technical approaches. > > If you are a PM and want to take [your work] to the next level, look at delivering not just the usual PRD, but also an internally shareable link to a custom GPT that has those same requirements added to its context. (Don’t forget to disable the training toggle in setup.) Your devs will love you.” > > —[Matt Burch](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163684560696725504%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163684560696725504%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), VP of engineering at Making Space #### **5. Figure out internal ownership and technical dependencies** > “We have a GPT that searches the internal employee databases and org structures and component libraries, and answers queries like ‘Who is the eng lead for X” and “What is the Jira component for Y?’ etc.” —Anonymous #### **6. Dream up copy experiment ideas** > “I use this for experiment analysis and copy: > > 1. Train a custom GPT on brand guidelines and examples. > 2. [I feed] Google Sheets → Zapier → GPT connection. When I enter in my control copy, GPT will create two variants, explaining the hypothesis for each. > 3. GPT → Zapier → Google Sheets connection. When I enter in experiment results, GPT will hypothesize why X variant won. > 4. Upload a CSV of all experiment results to custom GPT again, so GPT can learn from winning experiments. > > Challenges: When analysing experiment results, it lacks context on the product and other external factors, but I can’t feed that to the GPT out of data privacy issues.” > > —[Quintin Au](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163874354047516672%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163874354047516672%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), growth marketing manager at Spotify #### 7. Create a personal exec coach for yourself > “I’ve made a CEO coach GPT that I’ve trained on podcasts and books from my fav business leaders so I can ask it questions and advice. Works well!” > > —[Alex Zaccaria](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163685098897223680%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163685098897223680%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), CEO of Linktree #### **8. Help your team set annual goals** > “I built a custom GPT to assist my team with setting their annual goals. It used to be a real struggle to get people to do it, and when they did, it often took hours and multiple meetings to refine. > > I took the company values, team principles and values, company scorecards, and our progression model and used that as a knowledge base. I then had my team share where they wanted to be in five years, what they are currently interested in, and what their current role in the company is. > > The GPT then returns custom, detailed goals using the SMART framework that takes all the values above into consideration. It gives people their annual goal and then it shares quarterly goals based on the annual ones. They now have goals that are unique to them and their career aspirations while still aligning with what the expectations are at a company level. I’ve been told countless times how much they love the workflow and how much easier it is to set goals. I’ve got people adding goals on time for the first time in seven years without having to track them down.” > > —[Andrew Kelly](https://x.com/andrewkelly/status/1757922994457043311?s=20), Designer ![Image from You should be playing with GPTs at work](https://substack-post-media.s3.amazonaws.com/public/images/4a2e43ff-886c-4581-a878-326fb04411bd_742x1371.jpeg) #### 9. Grade the relevance of search results > “At Faire we use GPT to grade the relevance of our search results. For reporting, we used to have a manual operation grading the relevance of search. Now automated through GPT. For model offline evaluations, we used to manually look at examples, now automated through GPT. > > [In terms of impact on reporting], it’s much cheaper to label with GPT vs. humans. [On model evaluation], an increased experiment win rate. We have a better idea of what our models are actually doing to relevance before launch and a better sense of what works vs. not.” > > —[Minh Pham](https://x.com/mtp_jr/status/1757868788958060628?s=20), PM at Faire ![Image from You should be playing with GPTs at work](https://substack-post-media.s3.amazonaws.com/public/images/a7a78d3d-b5e0-4757-ad28-a190e798a613_1200x464.jpeg) #### 10. Create data pipeline documentation > “[I] created a tool for my data engineers which almost completely off-loaded the work they absolutely hated to do (and thus saved for last/never): *documentation*. Before, documentation of our data pipeline was horribly incomplete and would quickly grow stale. Even though it isn’t perfect, the tool saved so much time that adoption by the team was assured.” > > —[Jason B. Hart](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163925705578283011%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163925705578283011%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), director of global analytics and data operations at Springboard #### **11. Generate takeaways from raw survey results** > “I’ve got a custom GPT to analyze survey responses from the prior week/month/quarter to create a report for the team each week.” > > —[Adrianne Stone](https://x.com/dradriannestone/status/1757859657870197086?s=20), PM at Big Cartel #### **12. Generate takeaways from sales conversations** > “For me, GPT revolutionizes sales. Our most impactful application of GPT lies in summarizing customer interviews in sales. We used to spend a ton of time conducting interviews and synthesizing findings to improve our sales process, find innovative feature ideas for R&D, and enhance marketing collateral. > It’s all history now. > > With GPT, we: > ↳ Identify recurring pain points across all interviews. > ↳ Find compelling customer testimonials for marketing materials. > ↳ Pinpoint nuanced critique points that we may have missed. > ↳ Generate action items for every individual customer interaction to hand over to CSM/AE. > > The benefits to our customer experience (CX) efforts are gigantic.” > > —[Adam Egger](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163881138782994432%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163881138782994432%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), co-founder of SKLLD #### **13. Score customer leads** > “We created a chatbot to nurture/score potential customers. This way we would only process the ones that would be more likely to become customers.” > > —[Javier Ortiz](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163800700248961025%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163800700248961025%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), head of marketing/growth at Taxfix #### 14. Avoid vendor customer support > “When a team is frequently working with a vendor with complicated support (e.g. they don’t have a chatbot, long wait times, etc.), we make a GPT for that vendor. We upload all of the vendor documentation and API docs and point it to the website and support docs, etc. Now when the team has a support question, they first ask the GPT the question. We find they often get faster, better answers than from the vendor itself.” > > —[Dennis Yang](https://www.linkedin.com/in/dennisyang/), PM at Chime #### 15. Enrich new-user signups > “GPT + web scraping enriches every product signup with important metrics.” > > —[Yash Tekriwal](https://twitter.com/yash_tek/status/1757881688363839533), community and growth at Clay #### **16. Write optimized product details copy** > “We have a GPT writing SEO-optimized e-commerce product info copy in five local languages simultaneously. So far, we’ve seen a 95% price drop and ~5-10x productivity gain compared to the previous manual process. Huge for our translation costs.” > > —[Rickard Liljeros](https://x.com/rliljeros/status/1757870165390196744?s=20), CPO at Nordiska Galleriet Group #### 17. **Draft release notes** > “I built a custom GPT to write product updates. [Here’s a real example](https://chat.openai.com/share/d77bf2a6-f9bd-46df-af9f-564e891f077c).” > > —[Michael Rumiantsau](https://twitter.com/MicRum/status/1757853626880659893), founder of Narrative BI ![Image](https://substack-post-media.s3.amazonaws.com/public/images/6def173a-afe2-4a3b-b82a-5816123b2a46_1200x887.jpeg) #### **18. Search through your wiki in Slack** > “We have a GPT that is trained on all of our Atlassian wiki pages and built a Slack bot to query it.” —Anonymous #### 19. Track competitors > “We are doing competitor and category tracking in social with LLMs.” > > —[Noam Cohen](https://x.com/noam_coh/status/1757854207171047654?s=20), co-founder of Tetrix #### **20. “Clone yourself” to reduce meetings** > “I have made myself a clone [GPT] bot that is trained on how I like to write project proposals, PRDs, roadmaps, and more, from the PM perspective [that has] saved me endless hours of work. > > It provides a lot of autonomy for my marketing team. I do not have to write content for them. For my product team, we can quickly take client conversations and rapidly return a PRD and/or proposal. This saves me countless hours of middle management.” > > —[Traci Levine](https://www.linkedin.com/feed/update/urn:li:activity:7163665383097294848?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163671609470341120%29&replyUrn=urn%3Ali%3Acomment%3A%28activity%3A7163665383097294848%2C7163675733846925312%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287163671609470341120%2Curn%3Ali%3Aactivity%3A7163665383097294848%29&dashReplyUrn=urn%3Ali%3Afsd_comment%3A%287163675733846925312%2Curn%3Ali%3Aactivity%3A7163665383097294848%29), CEO and founder of makeitMVP If you’ve found other interesting uses for custom GPTs at work, please share in the comments! [Leave a comment](https://www.lennysnewsletter.com/p/you-should-be-playing-with-gpts-at/comments) *Note: You need [ChatGPT Team](https://openai.com/blog/introducing-chatgpt-team) or [ChatGPT Enterprise](https://openai.com/blog/introducing-chatgpt-enterprise) to restrict access to your GPT to just your company. Otherwise, you need to rely on keeping the URL secret (which is probably fine in most cases).* ### Bonus: Publicly available GPTs for product managers 1. **[ChatPRD](https://www.chatprd.ai/)** by [Claire Vo](https://twitter.com/clairevo): An on-demand chief product officer that drafts and improves your PRDs, while coaching you to become an elite product manager. 2. **[PM Product Sense interview prep](https://chat.openai.com/g/g-VEZbZQzDJ-pm-product-sense-gpt):** Tailored for Big Tech product-sense-type PM interviews, this GPT provides ideal responses to generated or your own questions, with a focus on AI-powered solutions (and provides a sample mock). 3. **[Landing Page Optimizer](https://chat.openai.com/g/g-jwreC2Mvm-landing-page-optimizer-gpt):** Find actionable changes in landing page copy to improve conversion, by submitting a URL. 4. **[Release Notes Writer](https://chat.openai.com/g/g-H7JUMI2mC-release-notes-writer):** Customer-centric copywriter for software release notes. Know of others? Leave a comment! [Leave a comment](https://www.lennysnewsletter.com/p/you-should-be-playing-with-gpts-at/comments) *Have a fulfilling and productive week 🙏* ### 🔥 **Featured Job: Director of Product, Geospatial @ Niantic** I’ve been helping a few great companies find their next product leader and wanted to highlight one in particular: [Director of Product for Niantic’s Geospatial Services team](https://nianticlabs.com/careers/openings/director-of-product-geospatial-services?hl=en). If you or someone you know has experience building with maps or other geospatial services, head to the link below to learn more. [Connect with Niantic](https://app.pallet.com/onboard/v3/6dbcabd8-8857-4aa8-bad9-c761f385989d/get-referred?pallet=lennys-jobs) If you’re hiring and want help filling your role(s), fill out [this form](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8), and our team will be in touch if it’s a good fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [9/61] How to learn the most about a candidate from a single interview question *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!), and* **[The Best of Lenny’s Newsletter](https://lennyswag.com/products/vol-1)** ***[book](https://lennyswag.com/products/vol-1)** (all proceeds going to charity).* > ## Q: What is your favorite interview question? In most hiring processes, you’re lucky if you get 45 minutes to chat with a candidate before you have to make a thumbs-up or thumbs-down decision. How do you use that precious time to get the most—and most important—information? For over a year now, I’ve been asking my illustrious podcast guests to share their favorite interview questions (nearly 150 guests now!), and the collection of questions that’s emerged is like nothing I’ve seen elsewhere. These are not just great questions—they are exceptionally good at pulling out the essential insights about the candidate in the least amount of time. Below, I’ll share my 25 favorite high-signal-to-noise interview questions, including what to look for in a great answer, grouped by theme. If you’ve found any other questions that are super-valuable in your interview experience, please share in the comments! [Leave a comment](https://www.lennysnewsletter.com/p/how-to-learn-the-most-about-a-candidate/comments) *Thank you to [Jeremy Jerschina](https://www.linkedin.com/in/jeremy-jerschina/) for encouraging me to write this post, [Gün Karagöz](https://medium.com/@GunKaragoz/essential-takeaways-from-lennys-podcast-interview-episode-exploring-effective-interview-questions-edfc0cd8eb56) for consolidating a lot of these questions for me, and all of my podcast guests for sharing such amazing questions!* ![Image from How to learn the most about a candidate from a single interview question](https://substack-post-media.s3.amazonaws.com/public/images/2043bdf1-3c2b-43d0-87cc-9a867cc3d071_2048x1024.png) As you read through this list, pick a few that resonate with your process and goals, and try them out in your next interview panel. ### How do they handle the hard stuff? You can learn the most about how a person operates, thinks, and collaborates by exploring times when things didn’t go as planned. If they get hired, you can guarantee they’ll face unexpected challenges, so you’ll want to know how they’ll handle these moments before they have to tackle them on your team. #### 1. Talk me through your biggest product flop. What happened and what did you do about it? > “I look for people being brutally honest about how bad it was and why it failed. The rest of the interview, they’re trying to tell you all the wonderful things they did and all the accomplishments they had. And so I think the rawer the answer in terms of how bad it was and why, the better.” > > —[Annie Pearl](https://www.lennyspodcast.com/behind-the-scenes-of-calendlys-rapid-growth-annie-pearl-cpo/), corporate vice president at Microsoft, ex-CPO at Calendly #### 2. What’s the hardest thing you’ve ever done? > “I want to understand what hard means for them. I want to understand why it was hard. I want to understand how they overcame that difficulty, how they worked with other people to overcome that difficulty, and how much agency they had in overcoming that.” > > —[Geoff Charles](https://www.lennyspodcast.com/velocity-over-everything-how-ramp-became-the-fastest-growing-saas-startup-of-all-time-geoff-charl/), VP of product at Ramp #### **3. Tell me about a time you’ve been in a challenging or highly ambiguous situation, and how you navigated that ambiguity.** > “This is a big one for me because, at the end of the day, the PM job is really ambiguous. It’s really hard to describe on a piece of paper all the things that you’re going to encounter. So I ask a lot of behavioral questions around that. > > I look for people who look for structure and a way forward through the ambiguity. Also, I look for people who seek help, seek inputs, versus ‘This is the way.’ ” > > —[Jiaona Zhang (JZ)](https://www.lennyspodcast.com/building-minimum-lovable-products-stories-from-wework-and-airbnb-and-thriving-as-a-pm-jiaona-zha/), head of product at Linktree, ex-SVP of product at Webflow [![Image from How to learn the most about a candidate from a single interview question](https://substack-post-media.s3.amazonaws.com/public/images/adf85076-5061-48b3-b183-9fab02d01823_1080x1920.jpeg)](https://www.tiktok.com/@lennyrachitsky/video/7253276672542199083) [@lennyrachitsky](https://www.tiktok.com/@lennyrachitsky)[Pause it and try before she reveals what she’s looking for! #productmanager #productmanagement #jobinterview #interviewquestions #interviewtips best job interview questions, job interview examples, product manager job interview, how to become a product manager, product manager jobs, product manager test](https://www.tiktok.com/@lennyrachitsky/video/7253276672542199083) ![Image from How to learn the most about a candidate from a single interview question](https://substackcdn.com//img/alert-circle.svg)Tiktok failed to load. Enable 3rd party cookies or use another browser #### 4. Describe a time when you were part of a controversial product decision, and what you did. > “It’s really revealing, because if they can explain this conflict and understand why this problem was really important—and represent both sides such that you can understand why that conflict existed in the first place—and they can do it in this even-keeled way, where you realize that they can take on these different perspectives, you start to learn a lot about that person.” > > —[Yuhki Yamashita](https://www.lennyspodcast.com/an-inside-look-at-how-figma-builds-product-yuhki-yamashita-cpo-of-figma/), CPO of Figma #### **5. Tell me about a time something went wrong. What happened and what did you do about it?** > “The question gets at when the product failed, and when something about the team didn’t work, because that’s what happens when you’re doing this work. What are people’s mindset? I look at the way they talk about it and the way they relate to evaluating the situation. It really tells you a lot about how people think and how they perceive themselves when things are not working well.” > > —[Paige Costello](https://www.lennyspodcast.com/how-to-ask-the-right-questions-project-confidence-and-win-over-skeptics-paige-costello-asana-i/), co-head of product management and head of AI at Asana #### 6. What is the worst product that you’ve ever shipped? > “It tells me you have some humor, you’re humble, and you can point out when you’ve made a mistake. You’ve done enough to be able to confidently say, of course I’ve made a mistake. Because none of us are perfect. And you know how to spot those mistakes and you can learn from them.” > > —[Maggie Crowley](https://www.lennyspodcast.com/mastering-product-strategy-and-growing-as-a-pm-maggie-crowley-toast-drift-tripadvisor/), VP of product at Toast #### **7. Tell me about a time when you needed to disagree with your manager or fight for a position against higher leadership.** > “You want to look for people who have backbone but can also disagree and commit. That’s what I’m normally looking for.” > > —[Ethan Evans](https://www.lennyspodcast.com/taking-control-of-your-career-ethan-evans-amazon/), retired VP at Amazon > > “It showcases a lot about your character and if you are willing to stand your ground and push up when you need to. What is that influential communication skill that you have?” > > —[Inbal Shani](https://www.lennyspodcast.com/the-future-of-ai-in-software-development-inbal-shani-cpo-of-github/), CPO of GitHub ### How do they think? The strongest and most valuable candidates are people who are good at self-reflection and can approach problems differently. They break norms, they challenge assumptions, and they think [from first principles](https://www.lennysnewsletter.com/p/first-principles-thinking). These questions can help you find lateral and “out-of-the-box” thinkers. #### 8. What’s something that everyone takes for granted that you think is hogwash? > “I’m always looking for people to break this sort of interview mindset. Everyone always prepares for interviews, and then their entire conversation is predicting what you think you want me to say. As a result, you can have high-quality people that you dismiss because they weren’t genuine. > > There’s no way to answer that question without being genuinely opinionated. Because it starts with ‘What is the thing that you think...?’ When I break that wall, I’m testing: is this person authentic? Because sometimes I’m dismissing them because they told me nothing new. But I don’t want the interview process to penalize them, and this was my ‘save’ question. > > Sometimes I’ll ask a manager, ‘Look, you’ve managed hundreds of people in your career. What’s conventional wisdom that you bet against, that you have found is actually inaccurate?’ You could do that for ‘What do people think about AI that’s inaccurate, that everyone believes?’ You could do that for domains. You can do all kinds of things.” > > —[Nikhyl Singhal](https://www.lennyspodcast.com/building-a-long-and-meaningful-career-nikhyl-singhal-meta-google/), VP of product at Meta [Watch on YouTube](https://www.youtube.com/watch?v=o0Kq8QEijO4) #### 9. What’s an unfair secret you’ve learned to improve a product team’s velocity and energy level? > “When I say ‘unfair’ or ‘secret,’ I mean not something that you read on Medium. I’m looking for what you learned, how you learned it, how it works, and how you apply it.” > > —[Noah Weiss](https://www.lennyspodcast.com/the-10-traits-of-great-pms-how-ai-will-impact-your-product-and-slacks-product-development-process/), CPO at Slack #### **10. Tell me about something you did that worked out but not for the reason that you thought it would.** > “I’m trying to tease out introspection. Are you a person who is reflective about the decisions you made, why they worked, and why they did not? And do you incorporate that into your model so you make different decisions?” > > —[Ayo Omojola](https://www.lennyspodcast.com/frameworks-for-product-differentiation-team-building-and-thinking-from-first-principles-ayo-omoj/), CPO of Carbon Health #### 11. What is an experiment you launched that had a very unexpected result? And what did you do after that? > “This reveals the deep, deep level of their thinking. If you should expect that result based on what they described, then they are not thinking deeply enough. They are not understanding the customer enough.” > > —[Hila Qu](https://www.lennyspodcast.com/the-ultimate-guide-to-adding-a-plg-motion-hila-qu-reforge-gitlab/), growth advisor ### How do they build, ship, and drive impact? You’re likely asking questions along these lines already, but here are some clever ways to get to the juiciest bits. #### 12. Tell me about your most significant professional accomplishment. > “To understand everything from the situation to the result, and everything they did in between, who they influenced, how they’d influenced, what decisions they had to make, what roadblocks they encountered.” > > —[Bill Carr](https://www.lennyspodcast.com/unpacking-amazons-unique-ways-of-working-bill-carr-author-of-working-backwards/), ex-Amazon VP, author of *Working Backwards* #### 13. Ask them about a product they shipped or a release they led that is not cherry-picked by the person. > “This helps you learn more about their frameworks, not just their outcomes—how they build products, how they know if they’re going to succeed, and how they approach building.” > > —[Laura Schaffer](https://www.lennyspodcast.com/career-frameworks-ab-testing-mistakes-counterintuitive-onboarding-tips-selling-to-developers-l/), VP of growth at Amplitude #### 14. What’s something that would not exist without your initiative? > “The ability to actually define something specific and tangible in itself is a really, really, really good sign. I think a lot of people definitely get startled by that question sometimes, because it requires you to know what it is you put on the table.” > > —[Upasna Gautam](https://www.lennyspodcast.com/an-inside-look-at-how-cnn-builds-product-upasna-gautam/), Sr. PM at CNN #### **15. Tell me about a time when you delivered something that was impactful.** > “I’m looking for someone to help me understand how they define impact and what it means to them. I think a good answer for a growth practitioner is intrinsic motivation about having an impact on the business.” > > —[Lauryn Isford](https://www.lennyspodcast.com/mastering-onboarding-lauryn-isford-head-of-growth-at-airtable/), head of growth at Notion #### **16. Talk about a big problem that you worked on.** > “The thought experiment for me is always, coming out of that, do I feel compelled to work on that problem? Right? No matter how boring it sounds on the surface, I think a really great product manager casts something. It’s like, ‘Well, this is why it’s so existential and this is why it’s so interesting, and really rallied the troops.’ That’s kind of one big thing of storytelling and communication, because at the end of the day, so much of our job is around that.” > > —[Yuhki Yamashita](https://www.lennyspodcast.com/videos/an-inside-look-at-how-figma-builds-product-yuhki-yamashita-cpo-of-figma/), CPO of Figma [lennyspodcast](https://instagram.com/lennyspodcast) [![Image from How to learn the most about a candidate from a single interview question](https://substack-post-media.s3.amazonaws.com/public/images/__ss-rehost__IG-meta-CtXwoCLp0-v.jpg)](https://instagram.com/p/CtXwoCLp0-v) A post shared by [@lennyspodcast](https://instagram.com/lennyspodcast) #### **17. Tell me about a piece of work that you’re most proud of.** > “The reason I ask that is because it helps me understand their taste and their judgment, what motivates them, what work they view as good and as a good outcome. It also helps me understand a little bit about what they like to do and where their gravity pulls them.” > > —[Katie Dill](https://www.lennyspodcast.com/building-beautiful-products-with-stripes-head-of-design-katie-dill-stripe-airbnb-lyft/), head of design at Stripe > > “It gives you a little bit of indication what the person values and how they think about things.” > > —[Karri Saarinen](https://www.lennyspodcast.com/inside-linear-building-with-taste-craft-and-focus-karri-saarinen-co-founder-designer-ceo/), CEO of Linear [Watch on YouTube](https://www.youtube.com/watch?v=UhASMW6X4AY) ### Who are they as people? You’re hiring a whole human to work with all the other humans at your company. To get a sense of how that dynamic will or won’t work, you want to understand the person deeply. What are their strengths? What do they value? Where do they want to go in their career? #### **18. When I ask people you’ve worked with about you, what will I hear? What would they say are your superpowers and weaknesses?** > “I like this for a couple of reasons, not least of which is I often do follow up with references, and I like to triangulate their awareness of how other people calibrate them. Also, I like how they respond to criticism. Sometimes candidates surprise me. They say, hey, you’ll hear this critique a lot about me, I don’t think it’s fair. That can be an okay answer, but they’ve gotta be pretty robust there. > > Or it’s like, hey, this is something I’m working on. > > But I also like to hear what they think the superpowers are. Too often, a lot of attention in interviews is paid to weaknesses, which I care about, because I want to know what the downside is. But way more important to me is, what are you awesome at? What is the thing that I can just hitch a wagon to and ride? That’s what I want to know. Where’s the superpower that you’re crushing? > > What’s funny is that people are rarely, given my reference checks, accurate about what the critiques are, but they are usually pretty accurate about what their strengths are.” > > —[Andrew Bosworth](https://www.linkedin.com/in/andrew-bosworth-8247a01/), CTO at Meta #### **19. To what do you attribute your success?** > “You can’t say ‘luck.’ I always kind of want to know how self-aware are you, basically, and how curious are you. I think if people have really gone back and reflected on why they are where they are today, that really says a lot about how they think about the world.” > > —[Eeke de Milliano](https://www.lennyspodcast.com/how-to-foster-innovation-and-big-thinking-eeke-de-milliano-retool-stripe/), ex-Retool, Stripe, co-founder of Constellate [Watch on YouTube](https://www.youtube.com/watch?v=Hneuz4rHSgc) #### **20. Tell me about something you’re really proud of that you accomplished. Take me through the process, and talk to me about why you’re proud of it.** > “I find you can learn so much about a person’s motivations, about their work ethic, about what they care about, what good looks like to them, and I think those are all really important things to understand about a person if you’re going to work closely with them.” > > —[Camille Hearst](https://www.lennyspodcast.com/monetizing-passions-scaling-marketplaces-and-stories-from-a-creator-economy-vet-camille-hearst/), head of fan monetization at Spotify #### 21. Fast-forward three years. What’s different about you then? > “A lot of people will default to telling you about where they aspire to be in terms of role or title. I’m really looking for signals of humility, of self-awareness around areas of personal and professional growth; people who can be open about where they think they need work to grow themselves as people.” > > —[Ben Williams](https://www.lennyspodcast.com/how-snyk-built-a-product-led-growth-juggernaut-ben-williams-vp-of-product-at-snyk/), product and growth advisor [lennyspodcast](https://instagram.com/lennyspodcast) [![Image from How to learn the most about a candidate from a single interview question](https://substack-post-media.s3.amazonaws.com/public/images/__ss-rehost__IG-meta-CsXcodXgYOL.jpg)](https://instagram.com/p/CsXcodXgYOL) A post shared by [@lennyspodcast](https://instagram.com/lennyspodcast) #### **22. Imagine you had a really great day at work and you’re telling your partner all about it. What are you telling them?** > “I’m trying to figure out if, left to their own devices, what do they go to naturally because it rewards them? Because I think it’s really important to find the highest, best use of everyone you hire. And sometimes you can get to the bottom of what’s the highest, best use if you understand where there’s a natural reward mechanism.” > > —[Tom Conrad](https://www.lennyspodcast.com/billion-dollar-failures-and-billion-dollar-success-tom-conrad-quibi-pandora-petscom-snap-ze/), CEO of Zero #### 23. What frustrates you the most about where you’re working right now? > “This is as people always tell you why they want to join Wise, or join whatever company you’re coming to, and that’s not that interesting. But what’s interesting is what they’re running away from. And usually there’s something broken there, that’s really wound them up. But what’s more interesting is they’ve been unable to fix it. And so, in asking this question and probing, you get quite good at getting a sense of what is their limit, what’s the thing they found, and what did they get stuck with? And you think, ‘Okay, you’re going to run into that here every day, every week. Or ... you should be fine.’ And that’s why I ask that question.” > > —[Nilan Peiris](https://www.lennyspodcast.com/how-to-drive-word-of-mouth-nilan-peiris-cpo-of-wise/#transcript), CPO of Wise ### Other unexpected questions to consider #### **24. A group of scientists have invented a teleportation device. They’ve hired you to be their business counterpart and bring this to market. What two questions do you ask those scientists?** > “It’s a very simple question, and it’s a coded [Eigenquestion](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems/eigenquestions-3) test. Interestingly, all of a sudden the sharp product managers, engineers—basically every role—very quickly find what are the one or two Eigenquestions on this topic. Two questions can get to the heart of the problem.**”** > > **—**[Shishir Mehrotra](https://www.lennyspodcast.com/the-rituals-of-great-teams-shishir-mehrotra-coda-youtube-microsoft/), co-founder and CEO of Coda [![Image from How to learn the most about a candidate from a single interview question](https://substack-post-media.s3.amazonaws.com/public/images/66ca026e-4d29-4100-ac7b-36fa5cc8755c_1080x1920.jpeg)](https://www.tiktok.com/@lennyrachitsky/video/7133654527420468526) [@lennyrachitsky](https://www.tiktok.com/@lennyrachitsky)[Pause and try! Are you getting the job at google? #google #founder #tech #productmanagement #startup #vctok #vc #softwareengineer](https://www.tiktok.com/@lennyrachitsky/video/7133654527420468526) ![Image from How to learn the most about a candidate from a single interview question](https://substackcdn.com//img/alert-circle.svg)Tiktok failed to load. Enable 3rd party cookies or use another browser #### 25. What question should I have asked you? > “I’ve been using that one forever, whether I am interviewing somebody or being interviewed, because the person is an expert in themselves. And if you say, ‘What question should I have asked you?’ a lot of times they’ll be like, ‘Oof.’ They’ll be knocked off base and then they’ll give you a really honest answer.” > > —[Christina Wodtke](https://www.lennyspodcast.com/the-ultimate-guide-to-okrs-christina-wodtke-stanford/), Stanford University professor If you’ve found any of these questions particularly interesting, or have your own ideas to share, leave a comment and share with other readers! [Leave a comment](https://www.lennysnewsletter.com/p/how-to-learn-the-most-about-a-candidate/comments) ### 📚 Further study 1. [How to pass any first-round interview (even in a terrible talent market)](https://www.lennysnewsletter.com/p/how-to-pass-any-first-round-interview) 2. [Adding a work trial to your interview process](https://www.lennysnewsletter.com/p/adding-a-work-trial-to-your-interview) 3. [Preparing for a PM interview](https://www.lennysnewsletter.com/p/preparing-for-a-pm-interview) 4. [My favorite PM interview questions](https://www.lennysnewsletter.com/p/my-favorite-pm-interview-questions) 5. [How to interview product managers](https://www.lennysnewsletter.com/p/how-to-interview-product-managers) 6. [Podcast episode: My favorite interview questions from 100+ guests](https://www.lennysnewsletter.com/p/my-favorite-interview-questions-from) *Have a fulfilling and productive week 🙏* ### **🔥 Featured open role: PM, Projects @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5841932003) is an opportunity to own the end-to-end Project Management experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [10/61] How to successfully launch on Product Hunt (when it’s right for your startup) *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* > ## Q: How do I hit #1 on Product Hunt? Product Hunt is one of the most effective ways to get early users for a product. It’s free, available to everyone, and if you can pull off a great launch, Product Hunt can change your startup’s growth trajectory. Companies like Notion, Loom, Zapier, Robinhood, and Front all found their first set of users this way. However, the little-known truth is that of the thousands of startup founders who try their hand at Product Hunt each week, very few see any impact. For many, it proves to be a big waste of time. Over the past few months, I’ve been polling startups that have done well on PH about their secret to winning. One name kept coming up: Leo Bosuener. Leo stays relatively under the radar (he doesn’t have a LinkedIn or Twitter profile), but his company [Social Growth Labs](https://www.socialgrowthlabs.co/) has helped more than 60 startups hit #1 on Product Hunt, and over 100 startups hit the top 3. I didn’t know this initially, but he’s helped five of my portfolio companies alone (including[Arcade](https://www.producthunt.com/products/arcade-2#arcade-2-0), [Daydream](https://www.producthunt.com/products/daydream-3#daydream-3), and [Mage](https://www.producthunt.com/products/mage-3#mage-2)) hit #1. I asked Leo if he’d be up for sharing his best advice, and I’m so happy he agreed. **Below, Leo shares the seven things you need to get right to win on Product Hunt, and five myths.** This is the most actionable and high-signal-to-noise guide for successfully launching on Product Hunt you’ll find. I know many guides exist, but until this post, I’ve never had one definitive guide to share with people that doesn’t also overwhelm them. **I ran this guide by [Rajiv Ayyangar](https://www.linkedin.com/in/rajiv-ayyangar) (CEO of Product Hunt), asking him what’s missing or wrong about this advice, and his response was, “This is honestly really great.” Rajiv went further and shared a few bonus pro tips that we’ve integrated throughout the post.** *A huge thank-you to Leo for sharing his hard-earned wisdom. If you want to chat with Leo about your launch, [learn more about his service here](https://www.socialgrowthlabs.co/), and [grab a time to chat with him here](https://www.socialgrowthlabs.co/schedule-a-call/). When working with Leo’s team, the launch preparations will take on average around 10 hours, versus 50 to 120 hours when managing the campaign entirely in-house.* ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/5bf62c98-6db3-433f-b344-203a92593ec9_4000x2000.png) It’s tempting to see Product Hunt as the golden ticket to startup fame. Many founders we talk to expect a PH launch to cause their servers to buckle under a tsunami of traffic, venture capitalists to queue up with checks, and instant startup stardom to be theirs—all before their morning coffee even cools down. But the truth is, launching on Product Hunt is not for everyone. Every week our agency receives a dozen requests from founders looking for help launching on Product Hunt, and we convince 70% of them that they aren’t ready. So before I get into how to win on Product Hunt, I’ll first try to convince you that Product Hunt might not be the best use of your time right now. #### **The hard truth about Product Hunt launches** On average, startups that do well on PH invest 50 to 120 hours preparing for launch. Though some startups hit #1 investing very little time, your odds go up significantly if you put in the time. The number of hours required to prepare for a successful campaign varies based on the stage of your product, your experience with PH, and who your users are (i.e. B2B versus B2C). And as [Rajiv](https://www.linkedin.com/in/rajiv-ayyangar) shared with me, “Founders often launch too late. Most founders I know recommend launching early and often. Product Hunt is a powerful signal on what the market wants, and it’s worth finding that out as soon as possible.” Still, there are also hundreds of startups that launch on Product Hunt each week and see no impact. Why? A mix of reasons: lack of preparation, audience mismatch, or just bad timing, with too much competition on your chosen launch day. **With such a large investment of time and team hours, you need to ask yourself—are there better ways you could be using your time?** Especially if you’re looking for a sustained increase in signups or launching your product for the first time, paid ad campaigns are often a more efficient way to test initial messaging or scale your marketing efforts sustainably. All that being said, for the right product, with a well-executed launch, the impact can be game-changing. A few startups that have shared their metrics publicly include [Twinr](https://www.producthunt.com/discussions/1000-signups-after-the-product-hunt-launch-ask-me-anything), a no-code mobile app builder that won Product of the Day. Twinr received 1,000 signups on launch day and has continued to get 150 signups per day since. Wide-appeal B2C launches such as newsletters or productivity tools can result in upward of 3,000 signups. Another prominent example is [Air](https://air.inc/blog/how-to-win-at-product-hunt). Their team saw web traffic increase 5x, single-day account creation go up by 8x, and single-day workspace creation increase by 10x. The launch day was also their best day of organic sales leads ever. #### **Product Hunt is a playground for brand awareness, credibility, and social proof among early adopters and tech enthusiasts. It’s a sweet spot for startups that want to:** 1. Catch the eye of tech bloggers, influencers, or investors to raise their next round 2. Drive a short-term growth boost 3. Receive genuine user feedback from tech enthusiasts 4. Leverage SEO juice from backlink from a high-authority domain like Product Hunt On that last point, a valuable long-tail effect of launching on Product Hunt is the SEO benefit you can reap from landing a high-authority backlink. Especially for brand-new startups that haven’t focused on their SEO strategy yet, this can make a big difference. Finally, B2C products often see more signups than B2B products, thanks to a broader target market. The average B2B startup might get 50 to 300 signups and consider it a great success, whereas [B2C productivity tools](https://www.producthunt.com/discussions/we-doubled-our-user-sign-ups-thanks-to-product-hunt) can get 500 to 1,500 signups on average. > **Tip:** If you’re launching a B2B product, you need a smooth, self-serve onboarding flow to make the most of a Product Hunt launch. Product Hunt users are early adopters who love to dive in and explore right away. Delayed access? You’ve lost them. ## The insider’s guide to winning Product Hunt So you’ve weighed the pros and cons and decided to go for it. Here are 7 tips that will help you crush your campaign and 5 common myths about Product Hunt that’ll save you a lot of time. ### **1. Set the right goals: aim for conversion over popularity** First things first—set a conversion goal for your product. It’s great to aim for the top spot on Product Hunt, but what actually matters are your business KPIs: website visits, new signups, and trial conversions to paid. These are the metrics that will truly drive your growth. You can use [this template](https://docs.google.com/spreadsheets/d/1pYP4Cj_Og_Xgwyb0elOUNLtoHxsZGKP_irvMOPy9xQ8/edit?usp=sharing) to decide on what metrics you are optimizing for. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/4368b74c-fab4-431c-a72a-67c70b9335ac_2038x943.png) ### **2. Warm up your audience: start 30 days before launch** Imagine throwing a party and not telling anyone until the day of. That’s what it’s like to launch on Product Hunt without warming up your audience. Start building buzz 30 days in advance of your planned launch. This isn’t just about letting your close circle know—it’s about strategically seeding your launch with people who can amplify your reach. High-level, here’s what you need to be doing weeks before launch: - **Build anticipation:** Let your community know you’ll be launching on Product Hunt. Plant a seed that you’ll ask for their help later. - **Account creation:** Encourage your network to create a Product Hunt account 30 days prior to your launch date (if they haven’t already). The Product Hunt community (and algorithm) values engagement from seasoned members more than newcomers. - **High-value-user engagement:** Focus on engaging users who are active on Product Hunt and have a significant following. Their support can be pivotal. More on this in the following sections. - **Global strategy:** Leverage time zones to your advantage. You’ll want users in as many time zones as possible, to spread votes throughout the 24-hour period. Much more on this in the section below. - **Maker Network:** Engage with the community well before your launch. If you are active on Product Hunt in the weeks leading up to your launch and support other makers throughout their launches with meaningful feedback and comments, they are often more than happy to reciprocate the favor and support your launch in turn. Users who have recently launched on Product Hunt have much better response rates than those makers who last posted anything two years ago. [Here’s a template](https://socialgrowthlab.notion.site/Email-templates-to-engage-your-network-ba26eafaa9804c5db961c556286e7d6e?pvs=4) I use with my clients to help them craft these early outreach messages. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/4549e3d9-74c5-4171-8a48-4e886da89095_807x818.png) Remember to focus on connecting with users within your ideal customer profile (ICP). For example, if you already know that your product is particularly popular among product managers, seek these people out on Product Hunt and connect with them on LinkedIn. This will help you not only get your product in front of the general Product Hunt crowd (startup founders, developers, product marketers, and investors) but will increase your outreach conversion rate, as you have tailored it to those Product Hunt users for whom your product is most useful. #### **What happens if you fail to warm up your audience in advance:** If your supporters have not signed up to Product Hunt in advance and they create brand-new accounts on launch day to upvote, there is a high likelihood that these votes end up being removed by the Product Hunt algorithm. For a full launch preparation agenda, [see our Notion template here](https://socialgrowthlab.notion.site/Engaging-your-network-for-a-PH-Launch-fc37ed8746ba46ee914bc24e46d92dbd?pvs=4). ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/ac8d7cb3-86c4-47cf-abd1-c819305b28d9_1482x1384.png) ### **3. Be strategic about launch day: consider time zones and day-of logistics** Once you start preparing for your launch, your existing network can be your biggest asset during the launch, but you need to plan wisely to mobilize your community most effectively. #### 1. Use time zones to your advantage One of the most overlooked strategies is playing the time-zone game to your advantage. Spreading your votes throughout the day is crucial, as is launching at 12:01 a.m. Pacific Time. Product Hunt’s algorithm favors products that maintain a steady stream of engagement. Here’s a strategy to maximize your visibility: - **Segment your outreach:** Plan at least three major pushes throughout the day to ensure a consistent flow of upvotes—ideally, at 12:01 a.m. PT to announce your launch, at 7 a.m. PT when U.S. users come online, and at 2 p.m. PT to maintain momentum throughout the afternoon. - **Email drips:** If you have a sizable email list, segment it even further. Schedule up to 10 email blasts throughout the day (by time zone if possible, to make sure people are awake). This ensures that your network is engaged and ready to support you at the right time. - **Engage your entire network:** Don’t leave anyone out. From employees to users and investors, encourage everyone in your circle to participate. Remember, engagement from long-standing Product Hunt accounts is more valuable than a sudden influx of new accounts. - **Staggered engagement on your social channels:** Schedule your social channels as well. Similar to the above, aim for a rollout in waves, following the sun around the globe. This ensures a steady stream of engagement rather than a one-time spike. - **Local influencers:** Identify key influencers in different time zones and get them on board early. Their engagement can trigger others to follow suit. #### 2. Launch-day logistics As D-Day approaches, make sure you have a detailed plan for what you’re going to do throughout the day. [Here’s a template](https://socialgrowthlab.notion.site/Launch-Day-Timeline-40bfd3e9858a480e94533f200b1a142c?pvs=4) to create your launch-day war plan and assign tasks to your team members. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/8b371928-e850-4d0f-bd48-8cba1546dd5a_936x818.png) Also, before the big day, double-check your preparations: - **Engagement plan:** Have a clear plan for responding to comments and engaging with the community on Product Hunt throughout the launch day. We recommend having two or three team members on standby who can answer questions with different perspectives. Batching the response process in two-hour intervals usually works best to stay on top of it while keeping your sanity. - **Monitoring:** Set up a schedule to keep an eye on your product’s performance on Product Hunt, and be ready to adapt your strategy in real time. - **Personal touch:** Reach out to your contacts personally, especially those with a strong Product Hunt presence. A personal message goes a long way. - **Team effort:** If you’re launching in-house, get your entire team involved. Have them reach out to their networks and inform them about the upcoming launch. > **Pro tip from [Rajiv Ayyangar](https://www.linkedin.com/in/rajiv-ayyangar) (CEO of Product Hunt):** “On launch day, don’t forget to use [an embed on your web page](https://help.producthunt.com/en/articles/2731371-how-to-add-a-product-hunt-badge-to-your-website?q=live+on+product+hunt) that shows live upvotes. It’s a great way to help your community know about the launch, plus it creates some excitement and shows visual engagement, since the upvotes are live-updating. Plus, you can keep the badge up afterwards.” ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/37e0ce90-87da-4265-8ab9-49b33d7e6430_744x219.png) ### **4. Pick the right day of the week: your goals determine your day** Picking the right day of the week to launch according to your objectives is a crucial part of successful campaign planning, and one that often gets overlooked by startups. Once you have decided what your launch goals are, pick a day that increases your chances of hitting those objectives. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/5ba4993f-e9f8-4eee-b3da-90b706be0a9b_1253x565.png) Source: **Mondays and Fridays:** These days have great engagement metrics, while having a significantly lower amount of competition. Choose Monday or Friday if getting a higher rank is more important than traffic. **Tuesdays, Wednesdays, and Thursdays:** These days have the highest traffic metrics on Product Hunt but also the fiercest competition. Choose one of these days if you are OK ranking in a lower spot but want the highest amount of incoming traffic. **Saturdays and Sundays:** These days have the absolute best chances to rank in the #1 spot on Product Hunt but have less traffic than weekdays. Choose one of these days if your priority is to give yourself the best chance to rank in the #1 spot to gain more brand awareness, social proof, and credibility. Once ranked in the top spot, few people will check what day of the week it was. Most of our clients aiming to boost brand visibility and establish credibility through Product Hunt’s #1 badge tend to choose Mondays or Fridays. For those viewing Product Hunt as just another channel for traffic, the midweek days from Tuesday to Thursday are recommended. Remember, the goals you set are crucial, as your launch date is locked in once the page goes live at 12:01 a.m. Should you have a last-minute change of heart and decide you want the top spot but find yourself launching on a bustling Tuesday competing against giants like ChatGPT 5, you’ll be out of luck. ### **5. Understand the Product Hunt algorithm: play by the rules** The Product Hunt ranking algorithm is a bit of a black box, but several key factors can influence your product’s visibility: - **Upvotes:** It’s not just the number but the velocity and timing that count. A sudden spike in votes might raise flags. - **Engagement:** Comments and discussions around your product matter. It shows that the community is genuinely interested. And if you can get reviews or comments from notable Product Hunt users, these will have a significant impact on your ranking, since Product Hunt values users with high “karma” scores. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/85734b78-a78b-4dd6-a9e9-d055b017f907_719x457.png) - **Upvoter quality:** Product Hunt will highlight notable upvotes in your own launch dashboard. - **Product quality:** It goes without saying, but Product Hunt values innovative, well-crafted products. #### **A note on securing hunters with a large following:** In the past, having a big hunter was super-valuable, because all of their followers received notifications when they hunted a new product. But this does not happen anymore, so the additional visibility boost is gone. However, securing the support from a well-known hunter—especially one with an interest and background in your product category—can still be helpful for receiving valuable feedback in the comment sections, as outlined above. #### **Beware of the pitfalls:** - **Launch parties:** While it might seem like a great idea to gather everyone for a voting party at launch, simultaneous votes from the same location can trigger spam filters, leading to a shadow ban. - **Community support:** In the past, Product Hunt communities (oftentimes these were secretive upvoting rings) would band together to support each other’s launches. However, recent changes have started to crack down on these practices to ensure fairness. - **Bots and fake accounts:** Similar to how 500 new signups from your own users on launch day can trigger the Product Hunt algorithm, competitors can intentionally abuse this tactic by deploying bots and flooding products with newly created accounts to provoke deranking and gain an edge for themselves. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/69c99eef-3e9f-482a-b1da-e96427cd36a8_779x709.png) If you notice an influx of comments from new users (as indicated by a red balloon next to their name), use the reporting function to mark them as spam. This helps Product Hunt keep the platform legitimate. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/2d337358-af48-42f0-9e87-fa0e27448912_303x172.png) ### **6. Invest in the right assets: spend time on these four elements** When building marketing assets for a Product Hunt launch, it’s crucial to tailor your content to both the platform’s unique environment and its audience of tech enthusiasts, early adopters, and industry influencers. Here are the most critical asset categories to focus on: #### Tagline This is one of the most important marketing assets you will create. The tagline is the main CTA that will incentivize users to click from the Product Hunt home page to your actual product page, which is the first hurdle to overcome. This makes it quite important to choose a tagline that evokes curiosity. > **Pro tip from [Rajiv Ayyangar](https://www.linkedin.com/in/rajiv-ayyangar) (CEO of Product Hunt):** “A common failure mode is trying to make a tagline seem grander but in the process losing clarity (e.g. ‘An AI platform to turbocharge...’). Make sure it’s both compelling *and* clear.” Example of a great tagline that clearly outlines the value proposition ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/fa9f91dd-f6b5-43f5-b50b-cb232ea038ff_750x755.png) If you can, include an action verb and call people to action. **A few examples to give you a better idea:** - *“Make Chrome faster and use 10x less memory”* - *“Find the best SEO tools for the job”* - *“Launch your own swag store in 3 easy steps”* #### High-quality images Ensure that your visuals are high-resolution and clearly communicate your product’s value proposition. Product Hunt allows for multiple images, so make sure to showcase different facets of your product. > **Pro tip from [Rajiv Ayyangar](https://www.linkedin.com/in/rajiv-ayyangar) (CEO of Product Hunt):** “To be even more explicit: Show the UI. The PH community wants to know what your product looks like!” We always recommend embedding captions within the image itself so the audience knows exactly what they are seeing in the product screenshot (see examples below). We recommend a minimum of three images. Example of a gallery image where the captions straightforwardly outline the value prop: ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/ae00956a-b35c-4788-8114-9723d6b3343d_985x581.png) #### Video If you are creating a video, we typically recommend a product walkthrough, which comes across as very relatable. A simple Loom recording of you walking through the product is often a great option that doesn’t require a huge time investment. [Here’s an example](https://www.producthunt.com/products/attio#attio-2) of a simple but powerful demo walkthrough created by the maker team: [Watch on YouTube](https://www.youtube.com/watch?v=bAm5qHUOFes) Highly polished videos often require large time and resource investments (four weeks for a professionally made product teaser can be common, and running up to $10,000 in creative costs). Yet the video is only a small piece of what makes a launch successful. If you do decide to go with a video, the recommended time is around three to five minutes, and it should be a YouTube link that is not set to private. Try to avoid using a link that will only go live at the time of the launch, in case there are tech issues. #### Maker’s comment This is where you reel the audience in and tell your origin story. Start by describing what pain points you encountered in the past motivated you to create the product. What makes it unique, and how is it different from other competitors in the market? What is your mission for the product, and what value prop are you focusing on? Finish off the maker’s comment with a quick outline of how people can get started using the product, and add a discount code to your CTA if you have one. The Product Hunt audience loves free trials! [Here’s a great example](https://www.producthunt.com/products/daydream-3#daydream-3): ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/addd43cf-5a84-4af9-9392-4fdec0606547_798x298.png) ### **7. Going beyond upvotes: comments and reviews matter, for a different reason** When launching on Product Hunt, it’s easy to get caught up in the race for upvotes. But let’s take a step back, rethink that approach, and remember the metrics you set. It’s not just about hitting that top spot; you want meaningful engagement, valuable feedback, and, most importantly, conversion (both on launch day and beyond). #### **Positive feedback converts an audience** Genuine, positive feedback can dramatically increase the conversion rate from your Product Hunt page to your website. Many users will check out the review section of your product to see what others think. The quality of these reviews will have a big impact on how many people will click through to your website and sign up. Think of this as the Amazon reviews section for SaaS products. One-liner reviews don’t drive purchasing decisions. If you can get some of your current power users to chime in on what they love about your product, this will usually drive the best results. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/765f81e8-e16e-4cff-8ec4-73c24d5969ab_695x818.png) #### The power of engagement Engagement in the form of comments on your launch page can significantly impact your product’s success. While the algorithm values quality engagement over quantity, a high number of comments on your page can increase the click-through rate from the Product Hunt home page to your launch page. ![Image from How to successfully launch on Product Hunt (when it’s right for your startup)](https://substack-post-media.s3.amazonaws.com/public/images/401def50-7f0c-4b93-b953-9b08984cf024_670x420.png) ## **Five myths about launching on Product Hunt that could cost you a ton of time and impact** ### **Myth 1: You need a well-known hunter to succeed** A prominent figure in the tech community hunting your product can give you a visibility boost, but it’s not a make-or-break factor. Success on Product Hunt comes down to the product itself, the story you tell, and how you engage with the community. A well-known hunter might open a few more doors, but engaging, innovative products can and do succeed on their own merits every day. Many of the Golden Kitty award winners from past years launched successfully without a big hunter. Some examples are [Dora AI](https://www.producthunt.com/products/dora-ai-alpha#dora-ai-alpha), [Bento](https://www.producthunt.com/products/bento-22a484ea-84c2-42e5-9739-4bd97b040659#bento-7), [Framer AI](https://www.producthunt.com/products/framer#framer-ai), and [Amie](https://www.producthunt.com/products/amie-2#amie-5). ### **Myth 2: Winning Product of the Week or Month is significantly more valuable than Product of the Day** Winning Product of the Week or Month is an incredible achievement and can certainly give you a boost in visibility and credibility. However, it’s not a golden ticket to exponential growth. Rather than focusing additional resources on maintaining the promotions on the Product Hunt platform to win weekly or monthly titles, it often pays multiple-fold to capitalize on the attention that you have already received, increase free trial conversions, continue to engage with your new users, and iterate on your product based on the feedback you receive. ### **Myth 3: More upvotes equals higher ranking** It’s a common misconception that the product with the most upvotes automatically gets the top spot. In reality, Product Hunt’s algorithm considers a variety of factors, including the velocity of upvotes, the engagement on your product page (comments and replies), and even the diversity of the upvoters’ geographic areas. Quality and consistency of engagement often outweigh the sheer quantity of upvotes. ### **Myth 4: Only new products can launch** Product Hunt is not just a platform for brand-new products; it’s a community that celebrates innovation in all its forms. Significant updates, major new features, or even relaunches of existing products are all welcome. The key is to clearly communicate what’s new, why it’s important, and how it adds value. We’ve seen clients successfully launch on Product Hunt multiple times a year by highlighting new milestones and updates. ### **Myth 5: Direct linking to your product page will get you penalized** Let’s clear this up: linking directly to your Product Hunt page is not only allowed, it’s encouraged. Product Hunt wants to see genuine interest and engagement with your product, and if those links are driving engaged, interested traffic, that’s a good thing. ## **Make the most of Product Hunt** A successful Product Hunt launch is a blend of art, science, and a bit of social engineering. By warming up your audience, understanding the Product Hunt algorithm, leveraging your network, and playing the global time zone game, you can significantly increase your chances of making your launch not just visible but truly impactful. The goal isn’t just to launch, but to launch with a bang that echoes across the Product Hunt community and beyond. > **Closing thoughts from [Rajiv Ayyangar](https://www.linkedin.com/in/rajiv-ayyangar) (CEO of Product Hunt):** “Ultimately, a successful launch is about the market resonating with your product and positioning. Think of the market like a gust of wind, and your startup is a sailboat. You’re looking for that gust of wind, but to maximize your chances, you can put the effort in to unfurl your sails—a crisp tagline, using your network, and telling your story well in the launch assets.” ### 📚 Further study 1. [Templates for engaging your network for a Product Hunt launch](https://socialgrowthlab.notion.site/Engaging-your-network-for-a-PH-Launch-fc37ed8746ba46ee914bc24e46d92dbd?pvs=4) 2. [Launch-day template agenda](https://socialgrowthlab.notion.site/Launch-Day-Timeline-40bfd3e9858a480e94533f200b1a142c) 3. [Product Wars 2](https://pw2.akkio.com/)—The best new way to monitor your launch day on Product Hunt *If you want to chat with Leo about your Product Hunt launch, [learn more here](https://www.socialgrowthlabs.co/), and [grab a time to chat with him here](https://www.socialgrowthlabs.co/schedule-a-call/).* *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: PM, Projects @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5841932003) is an opportunity to own the end-to-end Project Management experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [11/61] My podcast tech stack, workflows, and lessons *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *P.S. Don’t miss **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), my **[PM recruiting service](https://www.lennysjobs.com/)** (we help you hire Sr. PMs and VPs), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* > ## Q: What’s in your podcast stack? I’m approaching two years of podcasting (and just crossed 10M downloads and 3M YouTube views!), so now feels like a good time to reflect on how I got here. I was incredibly hesitant to start a podcast. There are a trillion podcasts, they’re a lot of work, and it’s so dorky to tell people you have a podcast 🤦. But thanks to a nudge from [Harry Stebbings](https://twitter.com/HarryStebbings), and having a newsletter platform to help kickstart it, I took the leap. Two years in, I’ve learned a *ton*, and the podcast is consistently a [top 10 technology podcast globally](https://chartable.com/charts/spotify/united-states-of-america-technology), with a 5.0 average star rating across nearly 4,000 reviews. Even better, the messages I get daily from listeners melt my heart. ![Image from My podcast tech stack, workflows, and lessons](https://substack-post-media.s3.amazonaws.com/public/images/04ea17ca-4381-49eb-8942-591c7f1c6657_2819x1368.png) In today’s post, I share my podcasting lessons (so far), along with my tech stack, workflows, things I wish I’d known when I started, and advice to anyone thinking about starting a podcast. My approach isn’t necessarily the best or smartest, but it’s what I do. *A big thank-you to [Jordan Bornstein](https://www.jordanbornstein.com/) and [Kiki Garthwaite](https://www.linkedin.com/in/kikigarthwaite/) of [Pen Name](https://penname.co/), [Zac Goodsir](https://www.linkedin.com/in/zac-goodsir/) and [Xavier English](https://www.linkedin.com/in/xavier-e-15193a10b/) of [Supermix](https://supermix.io/), [James Beshara](https://www.linkedin.com/in/jjbeshara), [Harry Stebbings](https://twitter.com/HarryStebbings), [Tommy Harron](https://www.armaziproductions.com/), and [Hanne Winarsky](https://www.linkedin.com/in/hanne-winarsky-2960921/) for helping me make this podcast what it is today.* ## My podcasting lessons so far ### 1. **Become** 100 people’s favorite podcast I forget who gave me this advice, but it was so important early on—and still is now: Instead of trying to make something a lot of people like, create something that 100 people *love*. It’s the same advice you hear when [starting a company](https://www.lennysnewsletter.com/p/consumer-business-super-specific-who). Why *100*? It may feel like 100 listeners is absurdly small, but most podcasts can’t even do that. And it turns out that when you focus on a small number of people, you can do a great job at giving them exactly what they want. Once you have that foothold, people who love your podcast tell their friends, better guests say yes, you get better at podcasting, and you grow from there. Why *love*? There are so many podcasts out there. If people don’t love your podcast, they’ll move on. You need to break into people’s podcast rotation, which often means bumping another podcast off their list. They’ll only do that if they love—and continue to love—your stuff. For my podcast, you might think: how many nerds would listen to a podcast about product management? But I knew there would be at least 100. So I focused on making it the best podcast out there on product management for those people. Then I began to expand into [sales](https://youtu.be/eMe_FWldQF0?si=xFEsWQbY5h1BnQvN), [storytelling](https://youtu.be/J4wguyJZI6A?si=V2nLu1KbrF72e90h), [design](https://youtu.be/gfEEcssu304?si=8hT6BF7lCdo19Mei), [fear](https://youtu.be/bCel0X2Ta7U?si=2cpWStvRgjGVOJCk), [productivity](https://youtu.be/cuce7zvOFHY?si=Hf5AFYa87v_tqIJe), and more. And the audience grew with me. ### 2. Your audio is your product—make it A+ If you boil podcasting down to its essence, your job is to create a great audio file. That’s basically it. What makes an A+ audio file? A+ content and A+ audio quality. I’ll share my lessons for creating great content and audio quality below, but first some advice: you don’t need to *start* at A+. What helped me get over the hump and finally give podcasting a shot was putting very little pressure on myself. I started with basic equipment, audio only (YouTube came later), and I set expectations with my early guests that it was an experiment—if the interview went great, amazing. If not, we’d scrap it. My advice is to aim for B+ to start, then work up from there. ![Image from My podcast tech stack, workflows, and lessons](https://substack-post-media.s3.amazonaws.com/public/images/71744b3c-2f81-4145-9f62-711a5f53bfc9_4596x1245.png) To reinforce this lesson, here are the first episodes from some of your favorite tech podcasts. Clearly not A+ on day one. **Would you guess this person would later be interviewing Elon, Zuck, Altman, and Kanye and getting millions of downloads/views per episode?** [Watch on YouTube](https://www.youtube.com/watch?v=Gi8LUnhP5yU) **Notice how sheepish Huberman looks early on (though he nailed that opening jingle):** [Watch on YouTube](https://www.youtube.com/watch?v=H-XfCl-HpRM) **Notice the awkwardness:** **Notice the terrible audio quality:** > **Pro tip:** Pre-recording episodes is a good idea, but don’t pre-record too many—especially at first. I pre-recorded about 10 episodes before I launched the podcast, and that was a mistake. Once you launch, you learn what resonates, and notice issues with your audio/video or how you talk. By then it’s too late to improve that first batch. I’d recommend recording only three to five ahead of time, just so you aren’t immediately behind schedule. ### **3. Become a good interviewer** I do an interview-style podcast, so most of what I’ve learned about creating better content has come from improving my interviewing skills and booking great guests. But when it comes to interviewing, I’ve picked up a few tips (and have *so* much still to learn): 1. **Be the listener’s home base.** Make it easy for a listener to keep track of where you are in the conversation, mirror back what the guest is sharing, and ask questions the listener likely has in their head. When the conversation goes on a tangent, or gets complicated, reframe where you are and get back on track. Also, I try to be a calm and empathetic ear for the guest, and not interrupt them. Create space for guests to complete their thoughts, because some of the best stuff comes at the end. 2. **Get to the gold quickly.** Spend very little time on backgrounds, life stories, and introductions. Unless the guest is famous or wildly fascinating, no one cares much. Listeners care most about what you can teach them. Get to that part as soon as you can. 3. **Look for “dropped facts.**” I learned this trick from [a book on interviewing](https://www.amazon.com/Stop-Asking-Questions-High-Impact-Entrepreneurs-ebook/dp/B09HRJ4SMX/ref=tmm_kin_swatch_0?qid=1667606471&sr=1-3). Guests sometimes mention something offhand that sounds interesting but then quickly move on for one reason or another (e.g. they don’t want to go off track, they don’t want to keep talking endlessly, they don’t want to sound egotistical). Come back to this “dropped fact” and see if there’s more *there* there. Often, the guest very much wants to talk about it. 4. **Prepare.** Come into the conversation with a good sense of where the gold is going to be. I spend one to two hours preparing for each guest (more if they’re famous/fancy). I read all of their public posts and social media, listen to past interviews, and explore their LinkedIn. I also ask the guest a set of questions before the interview to help me uncover the juiciest bits to probe. Here are the questions I send every guest beforehand: 1. Are there 2-3 topics you’d especially love to talk about? 2. Are there any frameworks, methods, or processes you’ve found to be especially useful in your work that others may find useful, too? 3. Is there anything you have a contrarian opinion about that would be fun to share? 4. Any super-fun, surprising, or wild stories from your career, or life? 5. Anything you haven’t shared elsewhere that could be good to share, to make the conversation extra-special? 6. If this were to be the one podcast episode you send everyone who wants to learn about how you think and operate, what would you want to include? 5. **Just ask the next question.** Though it may feel impolite, you don’t have to respond to each answer with “So interesting!” or “Thank you for sharing that” or “Amazing.” Instead, ask a great question, let the guest give a great answer, and then move on to the next question. Push yourself to not respond to every single answer unless you have something to add. Listen to [Tyler Cowen](https://conversationswithtyler.com/)—maybe the best interviewer out there—to see how he does it. 6. **Go off-script.** Follow threads that are unexpected and interesting to you. Even if you’ve aligned on a set of questions ahead of time, stick with unexpected or intriguing lines of thought. Guests don’t mind, it often leads to the best stuff, and you can always cut that section in post-production if it doesn’t go anywhere. 7. **Keep your ego in check.** Don’t try to sound smart. Make your guests sound smart. 8. **Be yourself.** When I began podcasting, I tried imitating other podcast hosts I admired. Things got immediately better when I gave that up and let myself be myself. Disclaimer: If you have a different podcast format, these lessons may not apply. ### 4. Finding great guests In addition to interviewing well, you need to get great guests to interview if you want to end up with great content. Some of my lessons so far: 1. **Create a wishlist.** You build the best products by working backward from the ideal experience (versus incrementally working forward). Likewise, with podcast guests, I work backward from a wishlist of dream guests, and slowly but surely find a connection to each of these people. I’ve made it through a ton of my original wishlist and now have folks like Satya Nadella, Tony Fadell, Jony Ive, Gwynne Shotwell, and Nikita Bier on there. 2. **Mix fancy guests with under-the-radar amazing guests.** People won’t listen if they don’t recognize your guests (sad, but true), but known people are already on many other podcasts. Creating a mix is a great strategy because it helps the world discover unknown-but-wisdom-rich people while still bringing listeners in with known names. Also, along these same lines, tech podcasts are infamous for having lots of white men, so if you make an effort to bring in a more diverse mix of guests, you’ll find tons of stellar people who may have gotten less exposure. 3. **Most people say yes.** It’s surprisingly easy to convince people to be a guest on a podcast. Obviously, you’re not going to get the most high-profile people on day one, but you’d also be surprised how many great people say yes with a simple cold DM or email. 4. **Leverage your unfair advantage.** I have access to ex-Airbnb people (I worked there for seven years), plus the folks I’ve collaborated with on the newsletter. You likely have some unfair advantage to get access to interesting people that other hosts don’t. 5. **People will start to come to you. Say no to most of them.** These days, I get one to three pings a day from people asking to come on the podcast, including from many comms/PR people. Some of these inbound requests have turned into great episodes, but I find this channel to be the least helpful for finding great guests. See point #1 above. 6. **Keep trying.** It took me a year to convince Brian Chesky to come on. Now that’s the most listened-to episode of the podcast. Currently, I’m focusing on Satya Nadella. 🤞 To make this even more concrete, here’s how I got my top 12 most popular guests to come on the podcast: 1. **[Brian Chesky](https://youtu.be/4ef0juAMqoE?si=znhSedt9l6Ns4zup):** I knew Brian from Airbnb, and we email occasionally. So I started floating the idea of coming on the podcast the next time they had a big launch. A year later, he agreed. 2. **[Shreyas Doshi](https://youtu.be/YP_QghPLG-8?si=TxTDZqa5oJd_FjKm):** He was on my wishlist from day one. We collaborated on stuff in the past, so I reached out when I was scheming to start the podcast and pitched him on being my very first guest (alongside [Julie Zhuo](https://youtu.be/YLsxHa1dhSw?si=qVWpq4nixejFthJI)). 3. **[Elizabeth Stone](https://youtu.be/2XgU6T4DalY?si=yQivd5owEdMBgFKl):** Maybe the most random story of all. I was hanging out with an ex-Airbnb colleague ([Ali Rauh](https://www.linkedin.com/in/ali-rauh/)), who suggested her friend Elizabeth for the podcast (before she was promoted to CTO of Netflix). This rarely ends up being a great channel for getting guests, but Elizabeth seemed incredible, so I asked for an introduction. 4. **[Gustaf Alströmer](https://youtu.be/ZoKLofsp8u0?si=Pgko8SP2KfYoalbr):** We worked together at Airbnb before he became a YC Partner, so I emailed him. 5. **[Marty Cagan](https://youtu.be/h-KVGHoQ_98?si=P9B5QLQc4B421Oiu):** Similar to Shreyas, he was on my wishlist from day one, so I cold-emailed him and he kindly agreed to come on a podcast that wasn’t even live yet. 6. **[Nikhyl Singhal](https://youtu.be/U_WQuUIYnJg?si=cBdfR9ybyHPRPEHn):** A few of my past guests suggested Nikhyl for the podcast because he’s been really helpful in their careers. So I asked one of them for an introduction. 7. **[Matt Mochary](https://youtu.be/bCel0X2Ta7U?si=CxwD9Y-WciPV8fnL):** He’d been on my wishlist, so I just cold DM’d him. And he agreed! 8. **[Ethan Smith](https://youtu.be/mOY159TlYXM?si=-2lDVN66dSrD5Tih):** Several founders I work with mentioned they worked with Ethan on SEO and his work led to a massive impact, so I asked for an intro. 9. **[Ethan Evans](https://youtu.be/GB0P0_nFPTA?si=2Hyf4so00aO0pR3r):** We collaborated on a popular newsletter post, so I asked him to come on the podcast. We originally met through his comments on my LinkedIn posts. 10. **[Marily Nika](https://youtu.be/qNPPoj1qUG0?si=pIcbg0flZQMlwQzH):** Marily taught a popular course on [Maven](https://maven.com/), and the Maven team reached out to pitch Marily for the podcast. AI + product management? I couldn’t resist. 11. **[Geoff Charles](https://youtu.be/aNJDZ_RzTVk?si=kj4Wi1StwtE6fjL-):** We collaborated on a popular newsletter post, so I asked him to come on the podcast. I’m pretty sure I originally cold DM’d Geoff about doing a newsletter post. 12. **[Claire Hughes Johnson](https://youtu.be/Mv0o9o4MRh0?si=Vmb4EW8rN4p-iDyN):** She tweeted that she was coming out with a book, and I replied to the tweet with “Come on the podcast?” Her people followed up with me over DM and we made it happen. This method works really well. ### **5. Evolve your podcast stack** We’ve talked about how to create A+ content. Now let’s talk about how to create A+ audio quality. No matter how great your content, if the audio quality stinks, people will get annoyed and quickly bounce. Great audio quality comes from the right equipment, the right recording space, and editing. In terms of equipment, here’s my stack. #### My software stack The tools I use today to record, edit, host, and track the podcast: 1. **Recording:** [Riverside](https://riverside.fm/). This is what most podcasters use. I also occasionally use [Podcastle](https://podcastle.ai/) as a backup, and [Descript](https://www.descript.com/) to record solo portions (e.g. ads, guest introductions). 2. **Editing:** [Descript](https://www.descript.com/). I now have an editor who does this for me (more on this below), but they also use Descript. 3. **Hosting:** [Substack](https://substack.com/podcasts). This makes the most sense if you’re running a significant newsletter with Substack. Other platforms people like: [Spotify for Podcasters](https://podcasters.spotify.com/) (free, but limited analytics), [Transistor](https://transistor.fm/) (not free, but good data), [Simplecast](https://www.simplecast.com/) (similar to Transistor). 4. **Analytics:** [Podstatus](https://podstatus.com/) for charts, [Chartable](https://chartable.com/) for general analytics, and your hosting provider will have most of your analytics baked in. The state of analytics in the podcasting space stinks. 5. **Website:** [Podpage](https://www.podpage.com/). It’s the service behind [LennysPodcast.com](https://lennyspodcast.com/). #### **My hardware stack** I started with simple hardware and then updated it once it felt like this podcast would last. My original kit was based on advice I got from a few podcasting friends, and it wasn’t very expensive. Here’s the equipment I started with, much of which I continue to use today: 1. **Microphone:** [Shure MV7 USB](https://www.amazon.com/Shure-Microphone-Podcasting-Voice-Isolating-Technology/dp/B08G7RG9ML) [*still using this one*]*.* Most podcasters seem to use this mic. It sounds great, isn’t very expensive, and plugs in with USB. 2. **Mic holders:** I experimented with [Elgato Wave Mic Arm](https://www.amazon.com/gp/product/B09737ZXMK) and [Samson MD5 Desktop Microphone Stand](https://www.amazon.com/Samson-MD5-Desktop-Microphone-Stand/dp/B000MYIIRG) and ended up using the [BILIONE Portable Foldable Tripod](https://www.amazon.com/dp/B097BRGQPB). I suggest trying a few options to see what feels least awkward. 3. **Headphones:** [Sony MDR7506](https://www.amazon.com/gp/product/B000AJIF4E?th=1) [*still using this one*]*.* You’ll notice many podcasters wearing these. They plug right into the mic. 4. **Camera:** [Opal](https://opalcamera.com/). I love this camera (disclaimer: I’m an investor) and it got me a long way, but eventually I upgraded (more below). 5. **Light:** [Lume Cube Edge](https://www.amazon.com/Conferencing-lighting-Adjustable-Brightness-Temperature/dp/B09DKF5ST1/ref=sr_1_3?keywords=Lume+Cube&qid=1667606634&qu=eyJxc2MiOiI0LjMwIiwicXNhIjoiNC4xNSIsInFzcCI6IjMuODIifQ%3D%3D&sr=8-3&ufe=app_do%3Aamzn1.fos.fa474cd8-6dfc-4bad-a280-890f5a4e2f90). I ended up sticking with this as part of my more sophisticated light setup. About six months into the podcast, it was going great, so I decided to invest my time and money into taking the production up a notch. I took [the Dream Studio course](https://dreamstudiocourse.com/?affcode=277113_nfnrwrb5), which I highly recommend (use code LENNY50 to get $50 off). My favorite lesson from the course was: the more work your studio seems like it took to make, the more professional it’ll look. ![Image from My podcast tech stack, workflows, and lessons](https://substack-post-media.s3.amazonaws.com/public/images/182afc58-4051-42ff-91ad-8d8916051e31_5712x4284.jpeg) Everything below is advice from the course, though there are many variations and alternatives, depending on your budget and goals. 1. **Microphone:** [Shure MV7 USB](https://www.amazon.com/Shure-Microphone-Podcasting-Voice-Isolating-Technology/dp/B08G7RG9ML) (same as I started with). 2. **Headphones:** [Sony MDR7506](https://www.amazon.com/gp/product/B000AJIF4E?th=1) (same as I started with). Lots of people like the [Audio-Technica ATH-M30x](https://www.amazon.com/Audio-Technica-ATH-M30x-Professional-Monitor-Headphones/dp/B00HVLUQW8) as an alternative. 3. **Camera:** [Canon EOS M50 Mark II](https://www.amazon.com/dp/B08KSKCPNG) for the body, and a [Canon EF-M 22mm f2](https://www.amazon.com/dp/B008NF8BRI) lens, with a [tripod](https://www.amazon.com/dp/B0834NPHRY) to hold it all. Nothing too fancy. Reliable, affordable, and flexible. 4. **Lights:** Lights are shockingly essential for a great studio look. You’ll need three different lights: [Keylight](https://www.amazon.com/dp/B08RNW4L7G) with [soft box](https://www.amazon.com/dp/B09SCPWV19) and [stand](https://www.amazon.com/dp/B00UWDD0AW). [Hair light](https://www.amazon.com/dp/B08BLB2D8G) with [stand](https://www.amazon.com/dp/B09PRB8X96). And [a side light](https://www.amazon.com/Conferencing-lighting-Adjustable-Brightness-Temperature/dp/B09DKF5ST1/ref=sr_1_3?keywords=Lume+Cube&qid=1667606634&qu=eyJxc2MiOiI0LjMwIiwicXNhIjoiNC4xNSIsInFzcCI6IjMuODIifQ%3D%3D&sr=8-3&ufe=app_do%3Aamzn1.fos.fa474cd8-6dfc-4bad-a280-890f5a4e2f90). 5. **Teleprompter:** This lets me look straight into the camera while talking. The rig is somewhat tricky to set up, but it’s easy to use once it’s up. [Here’s what holds the camera](https://www.amazon.com/dp/B01GOV3636), and [here’s the screen it sits inside](https://www.amazon.com/dp/B07XCM26CP). I’m looking into getting a larger teleprompter, so I’ll update this with the links if/when I do that. 6. **Keyboard:** [Logitech K380 Multi-Device Bluetooth Keyboard](https://www.amazon.com/gp/product/B0876MVKQC?th=1). You want this keyboard to be very quiet, so you can type during a recording. 7. **Mouse:** [Logitech Signature M650 Wireless Mouse](https://www.amazon.com/gp/product/B09KX66ZCD?th=1). Same advice as above. 8. **Controls:** This[Elgato deck](https://www.amazon.com/Elgato-Production-Controller-Streaming-Customizable/dp/B0BJL8SJ59?dib=eyJ2IjoiMSJ9.DnKGuy9SJK53bS0om0K6AIY-0UgtjJxKpnl-lo6S7s__HDfhK1DXSaW3RWpArD7xg3arb1hvEsfcp4cS3zevhvbRazgOxQeW83-bjhxA7sp-wmUcw0u19hHJk4qayQ6ehdf9oxm1IJO8qHUV5A_PLO2G6CHK63Se6i72fER4DhzSViSaoMePUV7P2njxdNU0OwIBnLUWyeK1YpYALj0Ebx5u2JvRO_3RYDKYyK3iR1A.MQJpkLWzwUy9h08RO6Y8DJ3618mUOW6KP6ifGg-t8M4&dib_tag=se&hydadcr=8348_13470685&keywords=elgato+stream+deck+amazon&qid=1709846688&sr=8-2&th=1) is so handy (and fun) for quickly muting, toggling DND, and opening apps during your recordings. 9. **Adapters and such:** [Power your camera](https://www.amazon.com/dp/B08FHY2XLR), [connect your camera to your laptop](https://www.amazon.com/dp/B07K3FN5MR), [USB hub](https://www.amazon.com/dp/B087JMGSL2), [HDMI cable](https://www.amazon.com/dp/B089GM4JGK), [remote-controlled plugs](https://www.amazon.com/dp/B01NASZ0UM). In terms of room layout, [some advice](https://www.descript.com/blog/article/how-to-set-up-the-ultimate-podcast-studio) from the fine folks at Descript: > *“Your recording space will have the biggest impact on your sound quality. Avoid large, empty spaces, which create echoes that will muddy your audio. Hard surfaces like mirrors, windows, and tile also bounce sound around. Instead, pick a smaller, secluded room with lots of soft surfaces, like carpeting, curtains, pillows, and upholstered furniture, which absorb sound and cut down on echo.”* ### 6. Find help The final piece of the puzzle for great audio is finding fantastic help—especially an experienced editor and/or producer. I work with [Pen Name](https://penname.co/) on the core podcast production, with [Supermix](https://supermix.io/) for IG/TikTok/Shorts clips and [podcast trailers](https://www.linkedin.com/posts/lennyrachitsky_elizabeth-stone-is-the-chief-technology-officer-activity-7166468408094416897-OGkJ/), an EA from [Double](https://withdouble.com/) to coordinate guest schedules, and a (new) researcher to help me dig into guests. Initially, I only worked with an audio engineer ([Tommy Harron](https://www.tommyharron.com/)), who made the audio sound great (that’s when I wasn’t doing video). I eventually brought on Pen Name and Supermix, who help me with so much: 1. **Editing the audio and video:** This used to take hours per episode, and now it takes just 10 to 30 minutes to review the producer’s work. They remove *um*s and *ah*s, point out boring parts we can cut, create smooth transitions, add music, insert ads and intros, and basically make the audio and video top-notch. 2. **Writing titles/thumbnails/show notes:** This used to take me one or two hours to write and iterate on, but now it takes 10 to 20 minutes to review and approve the producer’s work. On titles and thumbnails, we often go through many iterations until we land on one that feels right. 3. **Creating clips:** Check these out on [Instagram](https://www.instagram.com/lennyspodcast/) and [TikTok](https://www.tiktok.com/@lennyrachitsky). 4. **Creating episode trailers:** Check these out on [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_elizabeth-stone-is-the-chief-technology-officer-activity-7166468408094416897-OGkJ/) and [Twitter](https://x.com/lennysan/status/1766854960480989663?s=20). 5. **Prepping guests:** A week before we record, the guest gets a detailed set of instructions for joining the recording, what to expect during the recording, and advice for how to look and sound good during the recording (e.g. no AirPods, don’t sit in front of a bright window, turn on DND). We also offer to send the guest a great mic (for free, that they get to keep) and an option to schedule a call to help with audio/video setup. 6. **Reviewing drafts:** Before we publish, we give the guest a chance to review the final draft. We share the final audio and video, the title, description, show notes, thumbnail, and assets they can use if they’d like to share it once it’s live. 7. **Guest research:** I’ve started experimenting with having someone do the research on the more famous guests to save me time. 8. **Staying organized:** Production calendar in Notion, interview questions in Coda, Slack for communication, and Google Calendar for recordings. With this help, each episode takes me about 4 to 5 hours of total work. Here’s my workflow: 1. **Select a guest:** I’m always doing this in the background. 2. **Coordinate recording schedule with guest:** 30 minutes. EA sends the recording invite. 3. **Prep questions:** 1-2 hours. I send a draft of the agenda to the guest 3-7 days before we record, and I may iterate based on their feedback. 4. **Prep the guest:** See details above. 5. **Record the interview:** 1.5–2 hours. We do this in [Riverside](https://riverside.fm/). Once we finish recording, the producer exports it and whips it into ready-to-ship audio/video, which we then run by the guest before it goes live. 6. **Record the guest introduction:** 15 minutes. 7. **Record ads:** 15 minutes per ad. 8. **Review draft:** Guest reviews final draft (see above). 9. **Ship and promote the episode:** 10-30 minutes per episode. This includes writing a few X and LinkedIn posts. ### 7. Do YouTube! Eventually, YouTube is a must. There’s no better way for new people to discover your podcast than through YouTube’s algorithms. Over half of my views are from YouTube sending new people my way. You won’t find a new-listener growth channel like this anywhere else. ![Image from My podcast tech stack, workflows, and lessons](https://substack-post-media.s3.amazonaws.com/public/images/af3712c4-b08b-43df-b032-78ac399a08c0_1016x864.png) The sooner you get there, the better. I only started using YouTube (at the behest of my producer) about six months in, and I wish I’d started earlier. That being said, don’t let this keep you from just starting. You can always add video/YouTube later. As a bonus, once you record video, you can create TikTok/IG/Shorts clips ([here’s a cool tool that does this for you magically](https://www.opus.pro/)), and then you can share clips on X/LinkedIn. Plus, having a following on multiple platforms (not just podcasting platforms) is good diversification. Video is definitely more work, especially the editing, but so it goes. — Podcasting has been an incredible experience for me. It’s pushed me out of my comfort zone, it’s taught me a ton about audio and video and editing, and it’s been the best excuse I can imagine for meeting interesting people. It’s a lot of work, yes, but the juice has been worth the squeeze. Who would have thought a niche podcast about product management would become a top global tech podcast? P.S. In a future post, I’ll cover advice for launching, growing, and monetizing the podcast, plus any new lessons I’ve learned since. P.P.S. If you got this far, I’d love your feedback! What’s one thing I can do to make the podcast more valuable for you? Please leave a comment 🙏 Also, if you have advice on better tools/hardware/workflows, please please please let me know. [Leave a comment](https://www.lennysnewsletter.com/p/my-podcast-tech-stack-workflows-and/comments) *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: PM, Projects @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5841932003) is an opportunity to own the end-to-end Project Management experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [12/61] Taking the week off I’m taking this week off to celebrate my wife’s birthday. In the meantime, to give you something fun to explore, here’s some of my brilliant wife’s best work, as a writer and illustrator, categorized by their jobs-to-be-done. ### I’m thinking about writing a book (via *[The New Yorker](https://www.newyorker.com/humor/daily-shouts/publishing-a-book-by-the-numbers)*) ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/e247fd7f-2e73-47af-9daf-a26eefd0bd58_1600x1501.webp)![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/edafd155-8e57-475c-9262-7a46ddb2fb9b_1600x1378.webp) ### I’m going on a trip (via [Google Trends](https://searchingthe.world/)) ### I’m planning a birthday (via *[Am I Overthinking This?](https://www.amazon.com/Am-Overthinking-This-Over-answering-questions/dp/1452175861?qid=&sr=)*) ### I don’t want to get sick (via [Substack](https://michellerial.substack.com/p/its-germ-season)) ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/add1e14e-3e11-4837-82cb-87aa829fd991_749x843.jpeg) ### I want to feel less lonely (via *[Oprah](https://www.oprahdaily.com/life/a39611450/hello-is-it-connection-you-are-looking-for/)* [magazine](https://www.oprahdaily.com/life/a39611450/hello-is-it-connection-you-are-looking-for/)) ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/45c29a29-faa2-4510-a6ee-be8f8a3432f5_980x653.png)![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/9c817da8-265f-4249-a911-8de409b247c8_980x653.png) ### I want to create great work (via [IG](https://www.instagram.com/michellerial/)) See you next week! --- ## [13/61] Become a more technical product manager *P.S. Don’t miss my **[PM recruiting service](https://www.lennysjobs.com/)** (to hire your next Sr. PM or VP), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!)* > ## Q: How do I become more technical? A technical background is a superpower for product managers, [as I’ve said](https://www.lennysnewsletter.com/p/getting-more-technical) before. You’ll make better decisions, understand trade-offs, make more accurate estimates, and communicate with engineers with more confidence, while also creating more career opportunities for yourself. And now that AI is increasingly infused into products, it’s even more important that product managers understand the basics. To help you level up, I teamed up with [Colin Matthews](https://www.linkedin.com/in/colinmatthews-pm/?originalSubdomain=ca), instructor of the very popular Maven course [Technical Foundations for Product Managers](https://maven.com/tech-for-product/tech-fundamentals?promoCode=LENNY25). Below, Colin breaks down in the simplest way possible—and with hands-on practice—APIs, code deployments, system architectures, branches, databases, unit tests, and much more. If you’ve been embarrassed, or too busy, to ask your engineers how all this works—this post is for you. *For more from Colin, [check out Colin’s Maven course](https://maven.com/tech-for-product/tech-fundamentals?promoCode=LENNY25)—the next cohort kicks off on May 6! [Use this link to get 25% off](https://maven.com/tech-for-product/tech-fundamentals?promoCode=LENNY25).* ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/0942a45c-a8af-4249-8eb6-7d4334f2ef47_4000x2000.png) Building a strong foundation of technical skills improves your ability to bridge technical and business domains, uncover implementation issues before they’re in production, and improve your working relationships with your technical counterparts. This quick guide will help get you up to speed and start building your skills with hands-on practice. ## Application architecture and APIs Almost every software product is built with the same three parts: a client, a server, and a database. Things can get a lot more complicated as you grow, but these fundamental ideas stay the same. The client is your website or app that’s used by the end user. The server processes requests from the client. The database is your permanent storage of data. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/da847544-73b7-4327-907e-6c7c8b2e879e_1600x1020.png) Your client communicates with your server through an application programming interface, or API. ### What is an API? For most software product managers, we’re talking about web APIs. This is the front door to your server that allows other applications to access data or trigger events. APIs are everywhere—[Meta](https://developers.facebook.com/docs/#), [Etsy](https://www.etsy.com/developers/documentation/getting_started/api_basics), [OpenAI](https://openai.com/product), [your bank](https://developer.citi.com/), [your doctor](https://open.epic.com/), [the weather](https://openweathermap.org/api). These kinds of public APIs are meant to be used by developers outside of the company that built them. Anyone who has permission can start making API calls to get data, submit new information, or even interact with AI. APIs can also be private. These are intended to be used only within that application or product (versus by third parties). As a quick example, let’s look at how Airbnb might fetch listings to show you when you search for Toronto. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/e1faa688-ea6a-428b-bab1-26f483f079fa_1600x573.png) Breaking this down, we can see that: 1. The client sends a request to ***listings*** at the URL ***api.airbnb.com*** and specifies the location as ***Toronto*** 2. The server gets the listings in Toronto from the database 3. The database returns listings to the server 4. The server returns listings to the client ### Wait, so what exactly is the API? Is the API the server? Kind of. As we said above, the API is the server’s front door—it’s the set of actions that are available to clients. The API (hosted on a server) will either process the request itself or pass it downstream to be processed. Going back to our Airbnb example, in addition to fetching Listings, you could imagine the API also allows a client to access Users, Bookings, Prices, and more. We commonly call these **endpoints** or **resources**. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/3bf479fb-04ff-4431-85b7-7acbc4446257_1600x859.png) Let’s take a look at another example: OpenAI. OpenAI supports a wide range of actions via their API. You can create images, transcribe audio, and get chat responses. Here’s what their API endpoints look like: ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/a5163957-c391-49c0-932c-6e0033d55cf8_1600x780.png) OpenAI has organized their API into a few groups—images, chat, and audio. Within each, there are a few endpoints that allow you to take different actions. For example, you could send a request to ***/audio/speech*** to create an ​​MP3 file of text-to-speech with the AI voice of your preference. Here’s an example: ### What are some common patterns with APIs? Once you understand a few basic patterns with APIs, you’ll be able to breeze through technical documentation in no time. First, there are three main types of APIs: - **SOAP:** This is a legacy design, still used mostly in health care and financial services. - **REST:** This is the most popular design pattern; we’ll get into more details below. - **GraphQL:** This is a newer design created at Meta, most commonly used in private APIs within your own application. It uses the same request types but in different ways. As mentioned, REST is by far the most popular design for APIs. It supports many different request types, but there are two we’ll focus on today—GET and POST. #### **GET requests** GET requests do what you think they would: get stuff. Every time you open a web page, your browser sends a GET request to the server at the URL you’ve entered and the server returns some content to be rendered. In its simplest form, this content can be an HTML file that your browser displays, or it can be a more complex format that needs to be interpreted, like JSON. Let’s update our Airbnb example above to specify the request type. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/1daedca6-1581-4578-884c-af1abe5ec32b_1600x572.png) Now we can see that we’re sending a ***GET*** request to the ***/listings*** endpoint. We also specified that we only want listings in ***Toronto***. Let’s break the request down into its components: ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/4f39c658-bd8b-42f7-b7b5-3192103f6a68_999x256.png) 1. **Base URL:** The “home” for all API endpoints 2. **Endpoint:** The specific resource we want to access 3. **Query parameter:** Additional data passed in with our requests #### **POST requests** POST requests are used to submit new data to the server. For example, we would use a POST request on Open AI’s ***/images/generations*** endpoint to create a new image. We would also include a ***body*** with the request, which contains data to be processed by the server. Here’s what that might look like: ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/5ba36e38-cad7-494f-b632-662441ffa51d_1600x555.png) As long as we have access, OpenAI will respond to this request with the cutest baby sea otter you’ve ever seen. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/5e990493-6ff3-4645-8b6b-bc8b363dc15f_1024x1024.png) Remember that text-to-speech example with an AI-generated voice that we got from OpenAI’s API? Well, that was a POST request. To generate this, we sent a POST request to ***https://api.openai.com/v1/audio/speech*** with the following body: `{` `"model": "tts-1",` `"input": "Did you know subscribers to Lenny's Newsletter get exclusive discounts with partners? Pretty cool! And there's a Slack channel!",` `"voice": "alloy"` `}` In response to this request, the API sends back an MP3 file with the text-to-speech phrase. ### How can I practice? Want to try a request for yourself? Follow along to generate your own images using DALL-E and OpenAI’s API. 1. Sign up for an API account at 2. Navigate to API Keys. Verify your account and create your first API key. Make sure you copy it! ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/89ebaba6-e0e5-492c-aef6-eeaa97734661_1600x666.png) 3. Using [Postman](https://www.postman.com/) or a web-based API request tool ([here’s a free one](https://stackblitz.com/edit/github-18edst?embed=1&file=README.md&hideExplorer=1&view=preview)), make a POST request to **** 4. Add the following Headers 1. Authorization: Bearer [your-api-key] 2. Content-Type: application/json 5. Add the following body in JSON `{` `"model": "dall-e-3",` `"prompt": "A cute baby sea otter",` `"n": 1,` `"size": "1024x1024"` `}` 6. Send your request! ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/d22ebc1d-3c16-401e-afd9-c9c74df8efa5_1600x866.png) ## Software development lifecycle Now that we understand the basics of application architecture and APIs, we can talk about how engineers actually build software. Chances are you’re following some version of the software development lifecycle, or SDLC. This follows a familiar process: 1. Plan - What outcome are you trying to achieve? - What solution(s) will get you there? - What customer problems align to business goals? - How will customers know you offer the solution? 2. Design - What will you build? - How will it work? 3. **Implement** - **Engineers write the code** 4. **Test** - **Does the code match the specifications?** - **Do our systems work together as intended?** - **Can customers use our feature to accomplish their goal?** 5. **Deploy** - **Move code from local through dev, staging, and production** 6. Maintain - Resolve bugs - Handle customer support You’re likely familiar with Planning and Design, but how well do you understand the processes of **Implementation**, **Testing**, and **Deployment** that engineers go through? ### Implementation We all use tools like Google Docs to collaborate. We can comment on others’ work, track changes over time, and share work publicly once it’s ready. Engineers have a similar tool for code: Git. Git is a version-control system that tracks changes as they are made to code. Products like GitHub allow engineers to move those changes from their local machine to online storage, where others can view and edit as well. This is similar to the idea of moving your local text file over to Google Docs so others can collaborate with you. The home for all their code is a **repository**, or **repo**. This is like a Google Drive folder that tracks changes to files. When an engineer wants to make a change, they **commit** it from their local copy to the copy in GitHub. But having a bunch of disorganized commits would be like everyone changing a Google Doc at the same time—an absolute mess. To solve for this, engineers create **branches**. A branch is a copy of the code. Engineers use these to make their changes in isolation from each other. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/7d712ca1-75cf-48d9-b091-219490455626_1036x422.gif) Once they’re done, they submit a **pull request** from their branch back into the **main branch**. This request will be reviewed by other engineers, who can suggest improvements before it is accepted. Once the pull request is approved, the independent branch will be **merged** back into the main branch. Another style of version control typically found in legacy workflows is called Gitflow. This has many more layers of branches, such as Develop and Release. It usually requires specific approvals to move code up from a lower branch to a higher branch, until it eventually reaches the main branch after a scheduled release. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/71b31e4e-5545-49b0-87c3-9b5b100dabfb_1600x555.png) ### Testing You might be surprised to learn that any one engineer doesn’t actually know how the whole codebase works at any given time. Each engineer has a high-level view of the product and a more detailed understanding of the last few components they worked on. Because many engineers work on the same codebase, they often have to learn (or re-learn) how specific sections work before implementing new changes. On top of that, they may not have context beyond what you’ve provided to gut-check if what they’re building makes sense. This makes testing essential to successfully shipping new features the first time. There are many types of testing, but we’ll focus on the following: - Unit tests - Integration tests - End-to-end tests - User acceptance tests Testing is a high-leverage area for PMs to quickly improve your product quality. A quick round of end-to-end testing with your engineering team before a major release will help them build context on the workflow and catch issues before you ship to production. #### **Unit tests** Unit tests are code written in combination with new functions, to test a variety of functionality. For example, we might have a function called Double, which doubles any number we send it. A unit test would provide *4* and check that the result is *8*. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/7b6a245d-935e-426b-95f6-70ad1b299301_1060x684.gif) This is the lowest level of testing. The percentage of the code base that has associated unit tests is called **coverage**. #### **Integration tests** Integration tests are tests between different components of the software. For example, we might test that the new feature we added to upsell customers at checkout properly works with our tax calculation service. This is targeted testing between components that are independent but closely related. #### **End-to-end tests** End-to-end (E2E) tests are a full walkthrough of the desired workflow and interact with all relevant systems. E2E testing is more time-intensive but often reveals issues you otherwise might not find. This is especially true if the workflow is dependent on many services working together correctly. #### **User acceptance tests** User acceptance tests are typically in the domain of product or design. These tests require users to use the current version of your feature from beginning to end with minimal intervention. From this, you’ll learn if the interaction design is intuitive or if more work is needed before making the feature available. ### Deployment Once our feature is ready, we need to make it available to customers. Usually you would move your current version of the code to at least two of these environments: - **Dev:** Servers dedicated for developers to use - **Staging:** A close replica of production for testing and internal use - **Production:** The main environment used by customers every day Deployment practices follow one of two patterns: scheduled or continuous. Scheduled deployments happen on a recurring cadence, like once a week, once a month, or once a quarter. **Continuous deployment** **(CD)** allows developers to automatically deploy their code to one or more environments when it is merged into a branch. For example, any approved pull requests to the main branch would automatically deploy to the production environment. Continuous deployment is usually paired with **continuous integration (CI)**, which refers to running tests *automatically* every time new code is added to a branch. This can include unit tests, integration tests, vulnerability assessments, and more. CI helps developers ensure that their changes work without manual testing. ![Image from Become a more technical product manager](https://substack-post-media.s3.amazonaws.com/public/images/217106ec-1ef8-40be-863c-ab996c4ad9ea_1600x980.png) [Popularized by Eric Ries](https://www.lennyspodcast.com/reflections-on-a-movement-eric-ries-creator-of-the-lean-startup-methodology/), CI/CD helps teams move quickly and keep the pace of shipping code to production high. For example, [Stripe’s annual letter](https://twitter.com/dps/status/1767936528729477344) highlights their robust deployment and testing methodologies, with more than 400 deployments per day and 1.4 million automated tests! ### How can I practice? Want to learn how to create a new pull request yourself? Check out this [free practice exercise](https://docs.google.com/document/d/11_WFRYVy_UZUrlEfApB5SSea5T4Jj11ov4zCeDvio4g/edit?usp=sharing), where I’ll walk you through each step of creating your own branch, creating commits, and ultimately submitting a pull request. It includes five videos covering every step along the way. All you’ll need is a GitHub account and about 15 minutes! ## Putting it all together Here are a few questions to consider the next time you write a PRD or work on a feature: #### **Application architecture** - What changes need to be made to each tier for your new feature? - Ask the engineer to walk you through implementation at a high level. Does it align with what you were expecting? #### **APIs** - Have you tested your API from the perspective of your customer? - How well does your API support customer workflows? - Test internal and external APIs yourself. Do they perform the way you expect? What bottlenecks are there (if any)? #### **SDLC** - How can you reduce implementation risk through closer collaboration with technical stakeholders? - How much testing, and what types of testing, are appropriate for the change you’re pushing to production? The purpose of this isn’t to micromanage engineers or take responsibility for [feasibility](https://www.svpg.com/four-big-risks/). It’s to help you be a better collaborator with your technical team by reducing communication overhead between you and them. *Thank you, Colin! For more from Colin, [check out his Maven course](https://maven.com/tech-for-product/tech-fundamentals?promoCode=LENNY25)—the next cohort kicks off on May 6. [Use this link to get 25% off](https://maven.com/tech-for-product/tech-fundamentals?promoCode=LENNY25).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [14/61] The secret to Duolingo’s exponential growth *P.S. Check out my **[recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs of Product), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!)* [“How Duolingo reignited user growth,” by Jorge Mazal](https://www.lennysnewsletter.com/p/how-duolingo-reignited-user-growth), is my [#1 most popular post](https://www.lennysnewsletter.com/archive?sort=top) of all time. But the story didn’t end there. Growth at Duolingo has continued to go exponential, and VP of Engineering [Sean Colombo](https://www.linkedin.com/in/seancolombo/) has been there through it all. In the past five years, Sean’s team has grown Duolingo’s daily active users from 5 million to nearly 30 million today (over 6x!), and [the stock](https://www.google.com/finance/quote/DUOL:NASDAQ?sa=X&ved=2ahUKEwidxfKMz6GFAxW0ADQIHa85DvsQ3ecFegQILxAf&window=5Y) has nearly 3x’d in the past two years, largely thanks to methodical product iteration and experimentation. This re-acceleration is something you almost never see at a company that’s over a decade old, especially after a multi-year deceleration. ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/6a5d0692-48c4-4814-9231-a623d7053633_1171x726.png) In this post, Sean shares five of his biggest growth lessons over these five years at Duolingo. If you’re looking for ideas and strategies to drive your own product’s growth, this post is for you. *For more from Sean, follow him on [LinkedIn](https://www.linkedin.com/in/seancolombo/).* ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/a9cf144d-e69c-4666-b020-1611445799a7_4000x2000.png) When we were bringing all our Growth teams under one org, I made an internal doc called “Colombo’s Musings on Growth” with some opinions on what I felt was driving our massive re-accelerated growth over the past few years and how we could keep up the momentum. The doc seemed to resonate well with my fellow Duos, and so this post is an attempt to share several of these musings with a larger audience—a continuation of Jorge’s post, in a way. It covers both strategic and tactical things that we learned during the growth we’ve sustained for over five years. ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/867cd52c-82af-4bd6-8cf9-31f414381cf6_1600x774.png) ### 1. 📈 Maintain a sense of urgency to drive compound growth One of the core things we’ve learned is that a **sense of urgency leads to compounding growth**. To get the best long-term gains, you should always have a sense of urgency. The quicker you launch winning experiments, the quicker those changes impact your growth. Not only that, but these improvements compound! At Duolingo, we are very fortunate to have strong word of mouth. Even with our extremely successful marketing (and partially *because* of it), about 90% of our DAU growth comes when new learners hear about us from friends, family, teachers, coworkers, and others. Because of this, DAUs benefit from some compound growth automatically. An even more pronounced compound growth effect is seen in retention metrics. #### An example Say you have 100,000 DAUs and a retention rate of 80%, and for every five users, one of them tells a friend each day to download your app (and they do it). You get 20k new users per day just from word of mouth. In this equation, Xn is the number of DAUs today and Xn+1 is the number of DAUs tomorrow: > **Xn+1 = (Xn \* 80%) + (Xn \* (⅕))** If you start with Xn = 100,000 DAUs, you’ll notice that the next day’s value (Xn+1) remains 100,000 DAUs—an equal number of users join and churn each day. However, if we find an experiment that can improve retention by 1%, something interesting happens: > `Day 0 (Sun.): 100,000 = X0 > Day 1 (Mon.): (X0 * 81%) + (X0 * (⅕)) = 101,000 (which we will now call X1) > Day 2 (Tue.): (X1 * 81%) + (X1 * (⅕)) = 102,010 (this is X2, etc.) > Day 3 (Wed.): (X2 * 81%) + (X2 * (⅕)) = 103,030 > Day 4 (Thu.): (X3 * 81%) + (X3 * (⅕)) = 104,060 > Day 5 (Fri.): (X4 * 81%) + (X4 * (⅕)) = 105,100 > Day 6 (Sat.): (X5 * 81%) + (X5 * (⅕)) = 106,151 > Day 7 (Sun.): (X6 * 81%) + (X6 * (⅕)) = 107,213 > Day 8 (Mon.): (X7 * 81%) + (X7 * (⅕)) = 108,285` You’ll notice that between Sunday and Monday the first week, we added 1,000 DAUs. One week later we added 1,072 DAUs that day because there were more users to spread the word. Whatever experiment it was that resulted in this 1% gain to retention is already adding 72 *more* people each day just because it was launched one week prior. After two or three weeks, the effect continues to grow compared to that first day. At Duolingo we launch hundreds of experiments per quarter, so this type of impact can really add up. OK, so compound growth is great, but how does this tie in with a sense of urgency at Duolingo? We run experiments on almost everything we do, and launching these experiments quickly has a meaningful impact on our long-term success. > #### ***Compound interest in action—in the ~~real~~ totally hypothetical world*** > > *Let’s take a completely hypothetical example from an app called Luodingo that had two major feature launches.* > > *Feature A they ported from iOS to Android quickly, immediately after they launched the win on iOS. Including development time, experiment rollout, and running the experiment for two weeks to get data, they ended up launching the port of Feature A 82 days later.* > > *Feature B had a similar impact in its initial experiment, but the team did two small iterations to polish it before they ported it to Android. The iterations were roughly neutral, but they made Feature B into something that the Luodingans were more proud of (and of course they hoped the results might also be positive). The Android port of Feature B was launched 184 days after the launch of Feature B on iOS.* > > *Let’s see the impact here from waiting to port:* > > - *184 days to launch vs. 82 days, so 102 extra days that didn’t have the port live.* > - *The port showed a gain of roughly 21k DAUs per day over a two-week period.* > - *There were about 7.3 of these two-week periods in the 102-day gap between the two potential approaches.* > - *This means that roughly 7.3 \* 21k, or 153.3k DAUs, were lost on an average day during the period. (Note that this is just roughly or directionally accurate; you can’t actually multiply experiment results by time completely linearly like this. Please forgive me, Data Platform and Data Science & Analytics teams! 🙏)* > - *At this totally hypothetical company, they tend to get one new user each day from word of mouth for every 50 DAUs, on average.* > - *During this period, that means they were missing out on an average of (153,000/50), or 3,000 new users, per day from word of mouth! This is on top of the average of 153.3k DAUs that they lost from not having Feature B live on Android during that time.* > - *The moral of the story is that the team probably worked really, really hard coming up with other experiments, writing specs, implementing, etc. to try to get gains equal to the amount of DAUs they could have gotten by just porting this win in a different order.* > - *I would clearly never have made this mistake and it’s obviously not a completely real-world example from a team I was responsible for. 0:-)* To ensure that we’re moving quickly and striving for growth without sacrificing quality, we use these guidelines that you can also apply at your org: 1. **Make a decision** ***as soon as*** **you’re confident you have the data to do so.** At any given point, teams often have several experiments running at once while also working to ship upcoming features. Teams might let experiments sit on the back burner to “collect more data” and check in on them every now and then. Having the discipline to carefully and regularly examine experiments to know when you have sufficient data to launch them means that you’ll get the maximum impact as soon as possible. 2. **Roll out experiments to as many learners (aka users) as you can, as quickly as you can.** In order to have sufficient confidence in experiment results, we need a ton of users treated into experiments. Many experiments start with a very small number of people who are allowed to see the new experiment at the start, and, as I noted above, there is often no pressure to ramp this up while the team is working on the next big thing. But it’s important to increase the rollout as soon as you’re confident that a change is safe. The sooner you get the data that you need to make a decision about the experiment, the sooner you’ll launch it and start compounding the gains. 3. **Don’t pull your punches.** If you have a good new feature but there are some things you want to change about it, don’t just shut it down, make a tweak, and then run another experiment. If the imperfect version is strictly an improvement over the prior experience, launch it to new users (which starts the compound gains) and then make the improvements through iterative experiments after that. The amount of re-work saved by only launching afterward is likely very low, compared with the benefit of having the feature released. It also means that users on the various platforms will have a more consistent experience, which is valuable. 4. **Consider return on investment when determining the order of experiments.** There are many factors that team leads consider when prioritizing projects, but I’d argue that doing the most efficient, high-ROI projects *first* is the right path, because they will have a longer period of paying compound interest. When teams do quarterly planning, they often overlook order and focus on the list of things they want to accomplish in a three-month period. Order matters! 5. **Launch on your biggest platforms first.** If you have significantly more users on Android, launching experiments on Android first and then porting to iOS will give you more gains in the long run than if you launch on iOS first and then port to Android. If you launch to the bigger pool of users first, you have bigger compound gains than if you do it in the other order. 6. **Port the wins.** If your company doesn’t have to run experiments on all platforms at once, it’s probably faster to try things on one platform and then port to others—and this is the most common approach. Porting wins *quickly* is a huge opportunity to reap the benefits of compound growth. At Duolingo we launch around 50% of experiments. Experiments that are ports, however, are much closer to 100% launched. Nearly everything that wins on one platform wins on the other. Users aren’t *that* different between platforms. Of course, many reasonable people (and companies) gather as much data as possible, wait to launch until things are perfect, and expose experiments to only a small number of users for a long time. And these companies can also succeed. However, our experience at Duolingo has shown me that our approach works very well over the long term. Keeping a sense of urgency leads to fantastic compound growth. If the concept of urgency resonates with you and you want to take it to an entirely new level, it’s worth reading Frank Slootman’s book *[Amp It Up](https://www.amazon.com/Amp-Unlocking-Hypergrowth-Expectations-Intensity/dp/1119836115)* or [his LinkedIn article](https://www.linkedin.com/pulse/amp-up-frank-slootman/) to get a shorter version of his ideas. ### 2. ♟️ Identify your strategic advantage Finding your strategic advantage can be really helpful in guiding your product strategy. At Duolingo, our strategic advantage is that our users *want* to build a habit. Our CEO, [Luis von Ahn](https://en.wikipedia.org/wiki/Luis_von_Ahn), has said many times that our competition might actually be Instagram, TikTok, and other ways for people to just pass the time on their phones. While social networking and games have their own advantages, we have one that those other apps don’t: our learners want to build a habit on Duolingo. Nobody downloads Royal Match thinking, “I hope I keep up playing this game for hours each day.” But our users have a conscious desire to learn another language, so they’re a partner in our goal to retain them. This strategic advantage plays out well in a number of ways. One especially important thing I’ve learned is that if we give users *useful* notifications (with an easy way to turn them off for those who don’t find them valuable), those tend to be well-received. ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/b99adec4-7d94-400a-be53-dd6e0dc3ec4e_1179x372.png) Please note that this doesn’t mean we should spam users. (See the section below on notifications and the golden goose.) The best book I’ve read about strategy is *[Good Strategy/Bad Strategy](https://www.goodreads.com/book/show/11721966-good-strategy-bad-strategy)* by Richard Rumelt. Conveniently, the author was also [on Lenny’s Podcast](https://www.lennysnewsletter.com/p/good-strategy-bad-strategy-richard) recently discussing strategy. Check it out! While it’s definitely worth reading the whole book, a very short explanation of how to find your strategic advantage would be: > **Identify a unique strength that your company/product has that aligns well with the current opportunities in your environment. Then leverage that strength in a way that others cannot easily replicate. Focus on what sets you apart and use it to create a sustainable competitive advantage.** Our learners wanting to build a habit gives us an advantage over other ways they could spend their time. We built on that advantage, and now we have a sustainable lead over language learning apps and other learning apps, too. For us, identifying our strategic advantage pointed us toward iterating on notifications and the [streak](https://support.duolingo.com/hc/en-us/articles/204980880-What-is-a-streak) system (which helps build the habit that our users want to build). When you find your strategic advantage, it will point you in the direction of product changes that should have outsize results for your business. First, read the Rumelt book mentioned above, figure out your strategic advantage, and then use it to home in on actionable product changes. ### 3. Copy first, then innovate #### 🚲 Don’t reinvent the wheel when it comes to app mechanics There are literally millions of mobile apps, and the biggest of them have billions of users. The larger ones have run A/B tests with a combined total of billions of treatments. Furthermore, the app marketplace itself could be seen as a [genetic algorithm](https://en.wikipedia.org/wiki/Genetic_algorithm) where winning concepts end up with more users, which means they inspire the next set of app developers, and so on. This means that if you would like to use a concept that’s already widespread in the industry, your first approach should be to start with a system that closely resembles an existing successful one, but adapted to your app. A great example for Duolingo was our [leaderboards](https://www.lennysnewsletter.com/i/104096876/leaderboards-vector). Many apps, especially casual mobile games, have excellent leaderboards. They’ve spent tons of time refining them, so we rightly assumed we could find a version of these that was effective for us, too. Our current leaderboard system was our fourth iteration, but it blew away our prior attempts. ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/e71358a6-f2ce-4fc2-997e-10d901dbfe72_1600x858.png) We based it heavily on successful leaderboards in other games such as Gardenscapes, Golf Clash, Toon Blast, and more. The winning leaderboard for us (our fourth iteration) was an opt-out experience that put people in a new group of 30 each week, where a number of people get promoted or demoted to higher or lower leagues each week. The leagues automatically tuned people to be with others of a similar difficulty. Along with rewards for the top three places, this created several different interesting boundaries in the group of 30, where many users are always close to either gaining or losing something based on their position. It took a ton of great product and design work to adapt these ideas to fit in Duolingo. Our leaderboard system was the most complicated feature we’d added to Duolingo, but we had to make sure that people could figure it out without pop-up explainers. But it was worth the effort: D1 retention went up 1%, D7 retention went up 2%, and D14 retention went up 3%. Additionally, the time people spent learning increased by around 17%, which was an absolutely amazing result for us—typically if our experiments can move a major metric by 1%, that’s a really good outcome. These sorts of lessons can be applied to many other very common game mechanics that work well in some apps and platforms and poorly in others. For example: achievements, quests, badges, cosmetics. I even think Duolingo could often do better at following our own advice. **Your first minimum viable product (MVP) version of an existing, widespread mechanic is not the time to get clever and innovative.** #### 💡 When should we innovate? There are two scenarios where I think you *should* try to be clever and start to push the envelope: 1. **When you’re already at the cutting edge.** Duolingo’s notifications are a good example of this scenario. We became well-known as leaders in notifications early on, and since then we’ve pushed boundaries by using a bandit algorithm, making UIs to let non-engineers run copy experiments, and creating a way to [send millions of notifications within seconds](https://blog.duolingo.com/super-bowl-commercial-2024/) of a button push, which have all been important wins. While there are still opportunities to pull in new things from the industry over time (like we did with adding emoji to notifications when others found it to be effective), it is important to continue pushing our advantage rather than waiting for others to do the innovation that we can copy. We’re on the cutting edge with our experimentation tooling, and our Experiments team is constantly trying things in our tooling where there isn’t a lot of prior art. One analogous example I like to keep in mind here is early Netflix. Netflix put Blockbuster out of business with their mail-in DVD system, but then Netflix became a pioneer in an even more advanced delivery system (streaming) and successfully put their own mail-in market out of business. By making sure they were the continued innovators on delivery of home movies and TV series, they maintained the dominant position even through a massive pivot in the industry. > #### **The bandit algorithm** > > Our quirky notifications are a hugely important lever for us, and one of our most successful iterations has been to add a bandit algorithm, which automatically scores various notifications to see how effective they are at bringing people back to Duolingo to do a lesson shortly after they are received. > > See this [blog post](https://blog.duolingo.com/hi-its-duo-the-ai-behind-the-meme/) and this [academic paper](https://research.duolingo.com/papers/yancey.kdd20.pdf) to geek out on more details. 2. **After launching a solid MVP based on best-in-class industry standards.** An MVP of our leaderboard system still took us months to design and implement—largely because our app is clean and simple, and leaderboards were complex. After that, we still tried out other aspects of popular leaderboards that were too advanced to make it into the MVP. Once we got to a point where we had either implemented—or at least experimented with and rejected—the major features of other leaderboards, it made sense to start exploring our own independent ideas. (One of our more impactful innovations there has been how we group people into batches, but the technical details are a good topic for a completely different type of post.) ### 4. 🦢 Notifications are [the goose](https://en.wikipedia.org/wiki/The_Goose_that_Laid_the_Golden_Eggs#Story_and_moral) that lays the golden eggs—don’t kill the goose This won’t apply to all apps, but at Duolingo, notifications have been a source of continued small-to-medium wins year after year, with no obvious signs of slowing down. 1. **Modifying existing notifications and even (*****rarely*** **and** ***carefully*****) adding new, useful notifications has been a nearly infinite source of gains.** We’ve been improving notifications for years, and they still deliver consistent wins that affect a huge slice of the pie (see the next section for more on this). These experiments are golden eggs! 2. **The notification channel itself is the goose.** If we send notifications that users do not find interesting, that they don’t think are worth reading, or that cause them to unsubscribe, we will destroy the channel and kill the goose. There’s a story that we’ve heard from talking to people from Groupon: When they ran experiments that sent additional emails, every experiment showed positive metrics. So they sent more and more emails. Eventually, though, the channel started to rot and they had all sorts of problems—users would unsubscribe, emails would go to the spam folder and delivery rates dropped, and people just generally didn’t bother to read the emails anymore. Some things we do at Duolingo to avoid killing the goose: 1. **We set a very high bar for how successful an** ***additional*** **notification has to be.** We’ve killed some notifications that were huge wins but weren’t big enough to justify the additional level of spamminess. Here are two concrete examples of when this happened and what we did instead: 1. We had an “XP Happy Hour” notification that told people to come and get five experience points for the next hour on Saturday. It was great for DAUs, but the efficiency per notification sent was much lower than we typically see for great notifications. So we iterated on the feature in a way that got similar DAU results without sending more notifications: if you show up on Saturday—at *any* point in the day—that begins your XP Happy Hour, and we show a screen that lets the user know this. 2. There is a famous notification we send that says, “These notifications don’t seem to be working.” We send that seven days after your last session, and we legitimately stop sending practice reminders until you come back later. We ran a test to figure out how many days to send these before stopping. The more we sent, the more people came back, but this would spam users, which would likely reduce their long-term likelihood to respond to our notifications (and might cause them to uninstall, or disable notifications, in the very long term). We ended up charting the point where sending one additional notification was less incrementally effective than sending the previous day—this makes an “elbow” in the retention chart. It was right after seven days, so we cut the eighth day onward despite what shows up on the experiment report as lots of DAUs in the short term. 2. **When running an experiment for notifications, we look at leading indicators** we’ve identified as important. For Duolingo, those are the rate at which people disable notifications, or the efficiency of how many messages are sent per DAU gained. Even if the experiment is positive, if the rate of unsubscribing is higher than control or if the efficiency is low, then that’s something that should be looked into and likely could prevent launching. To make this concrete, an experiment that added a Streak Saver notification for the night after you used a Streak Freeze resulted in one DAU for every 3.6 notifications, which is a *great* ratio. We consider one DAU for about 30 notifications to be quite good. The XP Happy Hour notification mentioned above, which we eventually removed due to its inefficiency, was only giving one DAU for about 130 notifications. 3. **We use [notification channels](https://developer.android.com/training/notify-user/channels) on Android for any new notification type.** This lets our learners disable a specific type of notification they don’t like without removing their access to notifications they find valuable. 4. **We create a setting in the app to disable a new notification type.** Notification channels are a distinction in the phone’s OS if someone long-presses on your notification or looks at the notification settings for your app, but it is *also* important for customization to be easy inside your app itself. We do this early, even in the initial experiment to try out the notification type, if possible. 5. **We make it easier to make new settings for notifications.** For the previous point to work well, the engineering lift of adding a new channel and notification setting should be trivial. 6. **We aim for a general frequency cap across all notifications.** This is important if you have an extremely mature app and can get to this point. At Duolingo we even dream about creating a way to prioritize among competing notifications, and we regularly take baby steps toward making it a reality, but we aren’t there yet. ### 5. 🍕 Consider the whole pie (total impact) when prioritizing work When calculating the potential ROI of an experiment, keep an eye on the size of the “pie”: how much of the user base can actually benefit from the change if it’s successful and is ported everywhere that it can be ported. The total size of your impact will be affected not just by the percentage improvement from your experiment but also by what percentage of users actually get to see the improvement. This is basically the product version of [Amdahl’s law](https://en.wikipedia.org/wiki/Amdahl%27s_law). For example, some features may be encountered by every user of the app (e.g. the loading screen) and others may be buried deep in several menus and rarely seen (e.g. the “search for friends” screen). Similarly, there may be features that are prominent in the app but only affect certain types of users (paid users, users in certain UI languages, etc.). Here are two more examples—improving the Streak Session End screen vs. the Streak Drawer: ![Image from The secret to Duolingo’s exponential growth](https://substack-post-media.s3.amazonaws.com/public/images/d70d0a2e-dc62-4d8c-8277-4a3ab11f9ba4_1530x1048.png) At Duolingo, if we changed the icon that gets sent with all our notifications and increased DAUs by 0.1% on that experiment, that’s likely to be more impactful than increasing the DAUs by 30% only for users of Korean [stories](https://support.duolingo.com/hc/en-us/articles/360035934072-What-are-Duolingo-Stories) (0.007% of DAUs use stories in Korean on a given day). About 50 times as impactful, if I did the math right—and that’s assuming you ported the Korean stories experiment to all three clients (web, Android, and iOS). So it’s worth running a calculation anytime you notice yourself making an experiment that is only relevant for some clients, some language directions, or in a feature (e.g. stories, audio lessons, etc.) that isn’t applicable to all users of your app. Related: If something is highly successful (e.g. stories are fantastic for retention and time-spent-learning) and there are actions we can take to smooth the ability to roll it out more widely, that’s great for a growth team to work on—but still run the numbers to see how much of the pie you can affect with that work. > #### **Corollary: Opt-in vs. opt-out** > > Experiences that are opt-in will automatically have a much smaller slice of the pie. For example, if you could convince 33% of users to opt in to a feature, now you need to have that feature result in a 9% gain just to be as effective as an opt-out feature that gives a 3% gain. If you had to choose to show up in Duolingo’s leaderboards, for example, a huge percentage of people would never even find the feature. Many more might feel reluctant to try it (without having ever experienced it to know what it’s like), and the feature likely would be way less impactful. > > When designing new features, it is often worth the time to make sure that the experience can be good for nearly all users (so that it can be opt-out) rather than making a potentially more complicated feature that might seem better or more advanced for those who use it but that would only be appropriate to be opt-in. To recap this “whole pie” point: **When you’re comparing the expected impact of potential feature changes, remember to factor in how often those features will be seen.** This can maximize your impact so that instead of focusing on 1% improvement on 1% of users, you can focus on 1% improvement on 100% of users. ## Conclusion The principles above are some of the lessons we’ve learned from thousands of experiments in growth at Duolingo over the past several years. If you think of how to apply them in your own organization, hopefully they can help you to accelerate and maintain strong user growth as well! Duolingo still has plenty to learn and many interesting challenges ahead. We are going to be focusing on growing more in the English-learner market. English learners make up about 80% of language learners globally but only about 45% of Duolingo learners. Another exciting change is that the day before this post goes live, I’ll be shifting from being a co-lead of the Growth Area to taking on a new role at Duolingo as the head of Product Engineering. I’ll be overseeing five areas (one of which is still Growth) and am really excited to see all the new things that the Growth Area can accomplish. ### ***Acknowledgments*** A huge thank-you to everyone who worked on growth with me for the past five-plus years, especially the co-leads of the Growth Area, Liz Nagler (Product) and Achim Spelten (Marketing), as well as their predecessors, Albert Cheng and Manu Orssaud, who created the Growth Area with me. Thank you to all of the team leads and members of the Growth Area since it was created. Your results have been world-class. Thanks to Jorge Mazal, who was not only a [Lenny’s Newsletter trailblazer](https://www.lennysnewsletter.com/p/how-duolingo-reignited-user-growth) but who also brought us the idea of the growth model, and to [Erin Gustafson, who built it](https://blog.duolingo.com/growth-model-duolingo/). And finally, thanks to [CoPilot](https://mycopilot.com/) and [WeWard](https://wewardapp.com/) for letting me be an advisor while you both tackle things in a very Duolingo-style approach of making something that’s good for you be fun and engaging. *Thank you, Sean! For more from Sean, follow him on [LinkedIn](https://www.linkedin.com/in/seancolombo/).* *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: Product Manager of Collaboration @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5926606003) is an opportunity to own the asynchronous collaboration experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [15/61] How AI will impact product management *P.S. Check out my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* > ## Q: I’d love to see a list of core skills for PMs and to what extent they’ll be replaced/impacted/influenced by AI. I’ve been thinking about this question a lot. AI is coming for many jobs, but it’s different when it comes for yours. Is the PM job one of the first to be replaced or one of the last? What skills will be most, and least, valuable in this fast-approaching future? As I often do when thinking about a question, I ran a poll on [Twitter](https://twitter.com/lennysan/status/1760091303382266154) and [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_activity-7166159716623056896-YKyP/) asking which core skills of product management folks think are most likely to be impacted/replaced by AI. Here are the results: ![Image from How AI will impact product management](https://substack-post-media.s3.amazonaws.com/public/images/56bda212-312a-45e4-a9e5-8875fe5a6fb0_1832x984.png) Here’s the thing: I believe the truth is the complete opposite. Some may think that because AI is good at helping them write and accomplish small tasks today, soon it’ll take over most of the low-level communication, collaboration, and execution work we do. Instead, I believe that AI will have the most profound impact on the high-level (and historically most valued) skills of product management: developing a strategy, crafting a vision, identifying new opportunities, and setting goals. Furthermore, soft skills like product sense, communication, creativity, and being the glue that enables a team to operate at their very best will become even more important (and a differentiator among companies). Think about it—what is AI best at? Taking gigabytes of data, analyzing it, and giving succinct and (increasingly) insightful answers. That sounds a lot like a tool that would be incredibly good at identifying a clever strategy. If this sounds unlikely, remember [move 37](https://www.wired.com/2016/03/two-moves-alphago-lee-sedol-redefined-future/) in the match between AlphaGo and Lee Sedol (one of the world’s top Go players). AI saw something no human had ever seen in playing the game for over 4,000 years. > *“With the 37th move in the match’s second game, AlphaGo landed a surprise on the right-hand side of the 19-by-19 board that flummoxed even the world’s best Go players, including Lee Sedol. ‘That’s a very strange move,’ said one commentator, himself a nine dan Go player, the highest rank there is. ‘I thought it was a mistake,’ said the other. […]* > > *Indeed, the move turned the course of the game. AlphaGo went on to win Game Two, and at the post-game press conference, Lee Sedol was in shock. **‘Yesterday, I was surprised,’ he said through an interpreter, referring to his loss in Game One. ‘But today I am speechless.’**”* Another example—when Sam Altman, CEO of OpenAI, was asked four years ago how OpenAI would make money, here was his answer: [Watch on YouTube](https://www.youtube.com/watch?v=TzcJlKg2Rc0) > *“We have made a soft promise to investors that once we’ve built this generally intelligent system, we will ask it to figure out a way to generate an investment return.”* Similarly, here’s Jensen Huang, CEO of Nvidia, telling people that soon no one is going to have to learn how to program, because AI will program for us: [Watch on YouTube](https://www.youtube.com/watch?v=6Lcy2N3YcIs) > *“Everybody who sits on a stage like this would tell you it is vital that your children learn computer science. That everybody should learn how to program. In fact, it’s almost exactly the opposite. **It is our job to create computing technology such that nobody has to program. That the programming language is human. Everybody in the world is now a programmer. This is the miracle of artificial intelligence.”*** These are arguably the smartest people in the world when it comes to AI, and they are saying that historically high-level skills like engineering and business (and game) strategy are going to be solved by AI. It’s actually already happening in engineering (check out [Devin](https://twitter.com/cognition_labs/status/1767548763134964000) and [Magic](https://twitter.com/natfriedman/status/1758143612561568047)). On the other side, what are *people* best at? People stuff! Aligning opinionated stakeholders, unblocking blockers, pushing teams to work harder, creating amazing experiences, getting buy-in on big ideas, understanding and acting on nuance, etc. I’m not saying AI won’t be better than humans at this stuff one day (check out [Hume](https://x.com/hume_ai/status/1773017055974789176) 🤯), or at least very helpful. I’m saying that these soft skills are where AI won’t take over for a long while, and thus they are the skills you should be cultivating more than ever. I once [defined](https://www.lennysnewsletter.com/i/44031543/the-job-of-a-product-manager) the job of a product manager as to “**deliver business impact by marshaling the resources of your team to identify and solve the most impactful customer problems.**” Essentially, to be the conductor/quarterback/glue of the team who pulls all the disparate pieces together to create great products and drive the business forward. I believe this will only increasingly become the case now that AI is one of your resources, and this element of the role will become ever more important. Here are the besties making that case on the most recent All-In episode (2-minute clip): [Watch on YouTube](https://www.youtube.com/watch?v=z3Zzlgo-xZM) To show you what I mean, I’ve created a semi-comprehensive list of the day-to-day work that a PM does and ranked how much I believe AI will disrupt that work on a scale of 1 to 5 🤖s (the more 🤖, the more AI will take it over). I’ve also included tools that can help with these jobs today that you may want to check out. **Disclaimers:** 1. This assumes a world before super-intelligent AGI. Once we get there, all bets are off 😵‍💫 2. I’m not arguing that you should stop improving the skills that AI will be great at. I’m saying you should double down on strengthening your soft skills (e.g. communication, collaboration, product sense, influence) and learn how to work with AI on creating more leverage in your hard skills (strategy, vision, data, setting goals). 3. This post is just the beginning of a discussion. I’d love to hear what I’m missing or where I’m getting it wrong. Please tell me! Leave a comment with your thoughts once you’ve read the post 👇 [Leave a comment](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management/comments) As a framework to have this discussion, I think of the PM role as consisting of [three jobs, each of which contains a number of tasks and skills](https://www.lennysnewsletter.com/p/what-is-product-management): ![Image from How AI will impact product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f20f2147-5cc4-453e-ac6a-8c274d5931ff_2400x1350.png) ## **1. Shape the product 🤖🤖🤖** This part of the job is where you determine/influence what your team builds, and it is where product management is the most different from project manager, or product owner. It’s also where you bring the most value to the org. Here’s the day-to-day product-shaping work of a PM, and how I believe AI will impact it: #### **1. 🤖🤖🤖🤖** Developing a product strategy and vision: Significantly impacted - **The job:** Analyzing your market, data, customers’ needs, and insights about the future to craft a winning product strategy and vision. - **AI’s impact:** This is where AI will eventually be strongest—taking a ton of data and developing a super-intelligent plan. The PM’s role here will shift to becoming very good at knowing what data to feed it and asking the right questions. And to be clear, I’m not saying you should quit building your strategic-thinking muscle—I’m just saying that AI will give you huge leverage here eventually. - **Tools to explore:** [ChatGPT](https://chat.openai.com/), [Claude](https://claude.ai/), [Gemini](https://gemini.google.com/app), [Perplexity](https://www.perplexity.ai/), and [here are examples](https://www.lennysnewsletter.com/i/111708404/strengthen-your-argument) of how people are already using ChatGPT to strengthen their thinking #### 2. **🤖🤖🤖🤖** Setting goals: Significantly impacted - **The job:** Picking KPIs, setting goals, drafting OKR docs, and creating dashboards to track these metrics. - **AI’s impact:** AI tooling will become increasingly smart at suggesting goals you should be optimizing for, based on your strategy, business requirements, and constraints. PMs will become editors of super-intelligent suggestions. - **Tools to explore:** [ChatGPT](https://chat.openai.com/), [Claude](https://claude.ai/), [Gemini](https://gemini.google.com/app), [Perplexity](https://www.perplexity.ai/) #### 3. **🤖🤖🤖** Creating specs: Considerably facilitated - **The job:** Crafting PRDs/1-pagers for engineers and designers to implement new products/features. - **AI’s impact:** [This is already happening](https://x.com/clairevo/status/1775716873830797377?s=20) with tools like [ChatPRD](https://www.chatprd.ai/). Describe what you want in human language, get an 80% complete draft, refine it, and then ship. - **Tools to explore:** [ChatPRD](https://www.chatprd.ai/), [WriteMyPRD](https://writemyprd.com/), [Uizard](https://uizard.io/), and [tldraw](https://makereal.tldraw.com/) (to create mocks and prototypes) #### **4. 🤖🤖🤖 Discovery:** Considerably facilitated - **The job:** Talking to customers, analyzing data, and getting input from sales and CX conversations to uncover insights about customer pain points and opportunities and inform what to build. - **AI’s impact:** Tools will make it significantly easier to find the signal in the noise. However, customers will still want to talk to real people to share their honest challenges, ideas, and experiences. Skills like empathy, communication, and creativity will become increasingly important for connecting with customers. - **Tools to explore:** [Dovetail](https://dovetail.com/), [Sprig](https://sprig.com/), [Kraftful](https://www.kraftful.com/), [Notably](https://www.notably.ai/), [Viable](https://www.askviable.com/), [Maze](https://maze.co/ai/), and [a bunch of examples from readers](https://www.lennysnewsletter.com/i/111708404/collect-and-summarize-user-feedback-and-usage-data) #### 5. **🤖🤖** **Building a roadmap**: Facilitated - **The job:** Ideate, refine, prioritize, and get buy-in on a 3-to-6-month roadmap. - **AI’s impact:** AI tools will give you a strong first draft (taking in your strategy, user research, and goals) and help you prioritize ideas, but you’ll still spend time with your team brainstorming, reviewing data and user research, discussing tradeoffs, and refining your roadmap. The roadmap determines what your team does, so it’s hard to imagine significantly offloading this to AI for quite a while. - **Tools to explore:** [Productroadmap.ai](https://www.productroadmap.ai/) #### **6. 🤖🤖 Giving product/design feedback:** Facilitated - **The job:** Provide feedback on designs, prototypes, and the final product before it goes live. - **AI’s impact:** This is where we’ll need (and want) human input for a long while—if for nothing else than to keep the user experience simple, cohesive, and delightful. This is also where companies will have the most opportunity to compete, once everyone’s got AI tools at their disposal. That being said, I can definitely imagine AI tools will get good at pointing out UX challenges and suggesting best practices. ## **2. Ship the product 🤖🤖** This part of the job is where PMs help their team, and org, ship high-quality products on time and free of surprises. #### 1. **🤖🤖🤖🤖** Quality assurance: Significantly impacted - **The job:** Battle-test products before they launch, to catch bugs, UX issues, and confusing copy. - **AI’s impact:** Tooling will likely become incredibly good at catching unexpected behaviors. Feed it your PRD/1-pagers, and AI will tell you where it got stuck. This is already happening with tools like the ones below. - **Tools to explore:** [Rainforest](https://www.rainforestqa.com/?gad_source=1), [Katalon](https://katalon.com/), [Codium](https://www.codium.ai/), [Sapient](https://www.sapient.ai/), [Diffblue](https://www.diffblue.com/) #### 2. **🤖🤖** Fighting for budget/resources: Facilitated - **The job:** Make a case for budget and people, and convince leaders to give them to you. - **AI’s impact:** If an org overall is running in an increasingly automated way, this part will become more AI-driven. But you’ll continue to use all your human negotiating skills to get resources for your team. #### 3. **🤖🤖** Unblocking blockers: Facilitated - **The job:** Identify blockers, delays, and unexpected challenges your team runs into, and solve them. - **AI’s impact:** Tools will make it easier to identify issues, but engineers and designers will want to discuss and solve problems with people (i.e. not feel like they are being treated like robots). This work involves a lot of soft skills and, often, a soft touch. #### 4. **🤖🤖 GTM:** Facilitated - **The job:** Training sales, marketing, CX, etc. ahead of launch, crafting copy, and figuring out positioning. - **AI’s impact:** This will get easier with some AI assistance, but will likely still require humans talking with other humans to make sure everyone has what they need to make the launch a success. - **Tools to explore:** [Copy.ai](https://www.copy.ai/), [Jasper](https://www.jasper.ai/free-trial?adgroupid=124949426633&gad_source=1) #### 5. **🤖** Adjusting resources/priorities when things come up: Somewhat facilitated - **The job:** Dealing with unexpected vacation/sick time, scope creep, technical challenges, stakeholder requests, etc. - **AI’s impact:** This is core glue work that PMs are currently best at, and will continue to provide value around. ## **3. Sync the people 🤖🤖** Finally, a big chunk of a PM’s day-to-day work is keeping stakeholders aligned—around a vision, strategy, goal, roadmap, and timelines. This involves a lot of soft skills—communication, collaboration, influence, empathy—and thus it’s an area PMs will continue to own for quite a while. #### **1. 🤖🤖🤖** Running meetings: Considerably facilitated - **The job**: Running effective standups, product reviews, kickoffs, 1:1s, etc. - **AI’s impact:** AI will assist in many ways (e.g. clarifying agendas, helping the meeting run efficiently, taking smart notes, sending along action items), but people will want to meet with people, and for better or worse we’ll all still be spending a lot of time in (more efficient) meetings. - **Tools to explore:** [Gamma](https://gamma.app/https://tome.app/), [Tome](https://tome.app/), [Fireflies](https://fireflies.ai/), [Otter](https://otter.ai/), [Rewatch](https://rewatch.com/), [Airgram](https://www.airgram.io/), [Avoma](https://www.avoma.com/) #### **2. 🤖🤖 Communicating important information up and down the ladder:** Facilitated - **The job:** Share information, changes, surprises, and important news with team members, execs, managers, stakeholders, and customers. Avoid surprises and waste. - **AI’s impact:** This is core glue work. AI will help in many ways, but I expect this is where people will continue to bring a lot of value. #### **3. 🤖🤖** Aligning stakeholders: Facilitated - **The job:** Getting buy-in from sales, marketing, CX, etc. for your product roadmap, timelines, and vision, and then again before your final product goes live. - **AI’s impact:** Humans will need to drive this work for quite a while. This generally involves a lot of soft-skills work, like making everyone feel heard, adjusting priorities based on feedback, dealing with disagreements, and communicating changes in priorities—while also pushing for what you believe is right. Though I do suspect that tools like [Hume](https://x.com/hume_ai/status/1773017055974789176) will help us with influencing people. - **Tools to explore:** [Gamma](https://gamma.app/https://tome.app/), [Tome](https://tome.app/), [Hume](https://x.com/hume_ai/status/1773017055974789176) #### **4. 🤖** Aligning your team: Facilitated - **The job:** Getting your team’s buy-in on the vision, strategy, roadmap, goals, and timelines. - **AI’s impact:** Lots of squishy people stuff, so I expect AI will not impact this job much for a while. - **Tools to explore:** [Gamma](https://gamma.app/https://tome.app/), [Tome](https://tome.app/), [Hume](https://x.com/hume_ai/status/1773017055974789176) #### **5. 🤖 Maintaining team morale:** Somewhat facilitated - **The job:** Building team culture, bringing the energy, catching morale issues and addressing them, maintaining team momentum, and generally being the energy center of the team. - **AI’s impact:** Maybe AI will make it easier to identify teammates who need special attention, but otherwise this is where we will need humans for a long time. ### Takeaways To summarize my current thinking on the future of the product management role and AI: 1. The PM role isn’t going away, and I believe it will become even more important. 2. Soft skills—like influence, communication, product sense, creativity, and empathy—will become ever more valuable to the role of product management. Lean into building these skills. 3. Some of the most high-value skills—like strategy, vision, discovery, data fluency (and even engineering)—will be significantly impacted by AI. As a result, you’ll want to learn how to work with AI tools (e.g. asking great questions) to build leverage in these areas. 4. Broadly, PMs will continue to be the “glue” or “conductor” who ties everything together, helping your company’s most important assets (both people and AI) drive the most possible impact in the shortest amount of time. Here’s a handy summary of this post ![Image from How AI will impact product management](https://substack-post-media.s3.amazonaws.com/public/images/4787c26c-955b-4b20-8880-984081b34aa8_2318x4738.png) I’ll leave you with [this](https://twitter.com/tobi/status/1777433576457285881): ![Image from How AI will impact product management](https://substack-post-media.s3.amazonaws.com/public/images/0b8920df-67fc-4566-b198-cd9eecad5acf_1832x1498.png) This is just my thinking. I’m so curious to hear what you think. Leave a comment and let me know! [Leave a comment](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management/comments) ### 📚 Further study 1. [How to use ChatGPT in your PM work](https://www.lennysnewsletter.com/p/how-to-use-chatgpt-in-your-pm-work) 2. [You should be playing with GPTs at work](https://www.lennysnewsletter.com/p/you-should-be-playing-with-gpts-at) 3. [How Do You Use ChatGPT?](https://www.youtube.com/playlist?list=PLuMcoKK9mKgHtW_o9h5sGO2vXrffKHwJL) by Dan Shipper 4. [The Art of Product Management in the Fog of AI](https://tomtunguz.com/art-of-pm-in-ai/) 5. If you’re worried AI will be taking *your* job soon, [read this excellent thread by Aaron Levie](https://twitter.com/levie/status/1776673128573284523). *Thank you, [Dan Hockenmaier](https://www.linkedin.com/in/dan-hock/overlay/about-this-profile/) and [Dan Shipper](https://twitter.com/danshipper), for pushing my thinking on this topic.* *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: Product Manager of Collaboration @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5926606003) is an opportunity to own the asynchronous collaboration experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [16/61] How to accelerate growth by focusing on the features you already have *P.S. Check out my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* Everyone gets excited about launching new features, but in my experience, most of a company’s growth comes from the less glamorous stuff: incremental and consistent optimization of the core product. Of course, you need to add new features and business lines over time, but there’s a lot of hate for micro-optimization product work, and I’m here to tell you that this work is important—maybe the most important. Every major tech company, including [Facebook](https://www.youtube.com/watch?v=URiIsrdplbo), [Amazon](https://arc.net/l/quote/exmunezx), [Netflix](https://netflixtechblog.com/its-all-a-bout-testing-the-netflix-experimentation-platform-4e1ca458c15), [Airbnb](https://medium.com/airbnb-engineering/experiments-at-airbnb-e2db3abf39e7), [LinkedIn](https://www.linkedin.com/blog/engineering/ab-testing-experimentation/fine-tuning-premium-products-through-a-b-testing), [Uber](https://www.uber.com/blog/supercharging-a-b-testing-at-uber/), [TikTok](https://www.theguardian.com/technology/2022/oct/23/tiktok-rise-algorithm-popularity), and—as we’ve seen in recent newsletter issues—[Duolingo,](https://www.lennysnewsletter.com/p/the-secret-to-duolingos-growth) has long prioritized optimizing every square inch of their product. But surprisingly, I’ve never seen a great framework for how to think about this work. Until now. Below, guest author [Ken Rudin](https://www.linkedin.com/in/kenrudin/) shares his home-grown **ARIA framework**. Ken’s background is bonkers: He was the first SVP of Products and Engineering at **Salesforce**, led the Growth and Analytics team at **Zynga**, was one of the earliest senior execs on the legendary growth team at **Facebook**, and went on to lead growth at **Google** (including leading growth for Google search, ads, cloud, and even their behavioral science work). Most recently, at **ThoughtSpot** (an AI-enabled analytics vendor) he helped transition their growth motion from a traditional sales-led B2B SaaS model to product-led growth. For more from Ken, make sure to follow him on [LinkedIn](https://www.linkedin.com/in/kenrudin/). ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/369636fb-7e54-4f19-bb93-82edd11170b6_4000x2000.png) Ask most product teams how they plan to drive more growth, and you’ll frequently hear the same answer: we need more features. More features will make the product more useful, which will lead to more engagement and retention, which will lead to more revenue. Or so the thinking goes. But in my experience, **you can drive significantly more growth by focusing on getting users to engage more with your** ***existing*** **key features and user flows**. I realized just how effective it can be to focus on improving the engagement of existing key features when I joined Google in 2015 to lead their growth team. At that time, the average Google Search user in the U.S. did only 12 searches per month (which shocked me—I probably do 12 searches before getting out of bed every morning! 🤓). We wanted to encourage users to search more, because more searches = more opportunities to show ads = more revenue. Our analysis showed that searches whose results changed frequently (e.g. sports scores, weather, or movie times) were the stickiest searches—users who did those searches would repeat them often. But only about 15% of users were aware of these types of searches. So rather than building new features, we focused on building ways to raise awareness and engagement with the searches we already had. We used several approaches (discussed in the sections below), which together nearly doubled the number of users who did these types of searches—and translated into millions of dollars of incremental ad revenue. 💰 Of course, you need new features to address changing user needs and compete in the market, but most product teams significantly over-index on building new features. Thus, my goal for this post is to provide a framework for (1) identifying key features to double down on and (2) increasing engagement with those features, which will drive overall product growth. ### Why increasing engagement with existing key features is more impactful than launching new features The most important features for a product are usually the ones that were built first. Once you get past a certain level of functionality, a lot of the new functionality on the roadmap often targets just a subset of users (e.g. power users) or supports use cases that are adjacent to the core use cases. So it’s a safer bet that you’ll drive more business impact by increasing engagement with a feature that has already been launched than one that’s still on the roadmap because it wasn’t critical enough to be prioritized. Another reason to focus on existing features is that you probably have not squeezed the most utility for users, and therefore engagement, out of them yet. When you first release a feature, you’ll usually find that about 80% of the feature’s design works well but the other 20% doesn’t. Some users may get stuck on a step that they find confusing or takes significant effort, and don’t complete the flow, which means they actually get 0% of the feature’s value. For others, it means they use the feature less than they otherwise would, and therefore get less value. By focusing on improving that last 20%, you unlock the full 100% of the value for users. I’ve applied the approach of focusing on increasing engagement with existing key features many, many times—with several Google products (including Search, YouTube, Google Cloud, and Google Ads), at [ThoughtSpot](https://www.thoughtspot.com/) (an analytics vendor I worked at, whose product allows you to analyze data using natural language and AI), and with several other venture-backed companies that I have the honor to advise. I can confidently say that product teams frequently, or even usually, drive more growth by optimizing engagement with existing key features than by launching new ones. And in an economic environment where engineering budgets and projects are being cut, getting more impact from work that’s already been done is even more critical. If increasing engagement with existing key features frequently has more impact than adding new features, the next question is: How do we increase engagement in a structured, repeatable way? ### The ARIA framework Product teams have lots of frameworks leading up to launching new features, including identifying user needs, defining solutions, and prioritizing them on a roadmap. But what about a framework for increasing the adoption of features *after* they’ve launched? It’s one thing to know that you should focus on optimizing existing features but another to know which features to focus on, and what to do to make them more successful. When I’ve looked for a framework for increasing engagement with existing features, I’ve always come up empty-handed. That’s what led me to create the ARIA framework. ARIA has four key principles: **Analyze**, **Reduce**, **Introduce**, and **Assist**: ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/c9e605e5-738d-477c-abba-e19c16af824f_2274x1196.png) This isn’t a one-and-done process, however. The intent is not to choose a feature, go through the four principles once, and then move on to the next feature. Instead, it’s meant to be an ongoing process—sort of like having an implicit Repeat principle as the last step of the framework (though changing the name to ARIAR just doesn’t sound as good. 😁) ARIA is certainly not a complete list of everything you can do to increase feature adoption, and it would be a waste of time to create such a list anyway, because people are always innovating new ways to make features more engaging. Instead, use the framework as a cheat sheet to help guide you. ### Principle #1: Analyze First, you need to figure out which features to focus on. That means you need to analyze your data to identify which of your features are *most correlated with growth*, and then analyze the engagement levels of those features to highlight which features aren’t getting the user love they deserve. #### 1.1 Identify key features correlated with growth As product people, our features are our creations. We’re proud of all of them, and we’d like to see them all thrive. (OK, I admit that I have a few that I’d like to forget about. 😬) But given that you always have limited resources, you need to **identify your “key features”—that is, those features that have the highest correlation with acquisition, monetization, retention, or expansion**. Increasing adoption of those features will have the biggest impact on growing your business. (You might be thinking, “But [correlation doesn’t imply causation](https://en.wikipedia.org/wiki/Correlation_does_not_imply_causation)!” That’s true, but it’s still the best way to identify features with the highest likelihood of driving growth.) A *correlation analysis* will tell you how strongly the use of a feature is related to the movement of your various growth metrics. There are many popular, easy-to-use tools (including some free ones) for quickly doing a correlation analysis, or you can even do it pretty easily in a spreadsheet. For a great primer on how to do correlation analysis, see this post in Lenny’s Newsletter by Olga Berezovsky: “[How to do linear regression and correlation analysis](https://www.lennysnewsletter.com/p/linear-regression-and-correlation-analysis).” *Examples of key features:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/3d416cd8-6704-4ce7-bca1-5e4e021cc78d_1744x482.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/0022a9f8-118f-43c0-9f27-dbe8175dc822_1744x1446.png) #### 1.2 Calculate usage metrics for key features Once you’ve identified your set of key features, the next step is to gather data about their existing level of user adoption and engagement. For example, what percentage of YouTube users have subscribed to a channel, or what percentage of Loom users use the Auto Message Composer? When analyzing usage, it’s helpful to look at the different stages of feature adoption: ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/d3b3a628-b52b-448b-8283-bcf7927e449c_1570x578.png) If using the feature requires multiple steps (which is true for most features), then you also want to measure completion rates. For example, of the Gmail users who start the process of adding another email account (like a Microsoft Outlook account) to their current Gmail account, what percentage complete that process? One final important metric to measure is success rate. This doesn’t apply to every feature, but many features have a concept of a successful outcome for the user. For instance, what percentage of resumes submitted for a job opening on Indeed receive a call back from the employer? Or what percentage of apartment searches on Apartments.com return at least one result that meets the user’s search criteria? ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/473cabdb-e45c-4b90-aea5-841f09890062_1576x382.png) When I was an advisor to Roblox in their early days, many of our growth wins came from focusing on success rates. For example, our analysis showed that making frequent changes to your avatar was strongly correlated with user retention, particularly for new users. But we saw that about 20% of visits to the Avatar Shop were “unsuccessful”—users would leave the shop without changing their avatar. By adding the ability to sort clothing and accessories to show newest or best-selling items first, and adding simple search capabilities, we were able to increase the success rate of these Avatar Shop visits significantly, increasing the frequency of avatar changes, and ultimately increasing new-user retention by a couple percent. 🎯 ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/a71ed6e4-7ffc-407e-b21a-6e7170fae01e_3048x1406.png) Final tip: When analyzing these metrics, segment your users by how long they’ve been using your product (such as 0-30 days, 31-90 days, and 91+ days). This helps you see which features are adopted early in a user’s journey and which take more time. #### 1.3 Focus on features that drive growth and have low usage metrics The final step in Analysis is simple: identify key features (i.e. features correlated with growth) that have low adoption, completion, or success rates. If something is already successfully used by a large percentage of users, then there’s not much room for improvement. Once you’ve identified which features to focus on, you then need to increase their engagement. Below, I cover the three most consistently effective ways that I’ve found for doing this. ### Principle #2: Reduce The first consistently effective way to increase engagement with a feature is by *reducing the friction* associated with using it. This includes reducing the number of steps, reducing the effort to complete each step, and reducing how much we need to learn before we can really use it (i.e. reducing the “cognitive load”). #### 2.1 Reduce steps in the process Most features have multiple steps. Every time you ask a user to click, tap, or type, even if it all happens in one screen, that’s a step. And when you start counting all these steps, you’ll realize that you’re asking your users to do a lot more than you realize. You need to look at whether some of the steps can be removed. *Examples of reducing steps in the process:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/d788fb59-f865-4e67-a0ce-c64c63ded165_1742x1600.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/577f902c-263d-4c25-8068-f017d3667e7b_1744x1602.png) #### 2.2 Reduce effort per step Once you’ve minimized the steps needed to use a feature, look at the remaining steps and see if you can reduce the effort required for each step, i.e. make each step simpler. Product teams know they need to do this, but in my experience they rely on a limited number of approaches, such as optimizing the UI flow, mimicking how similar flows are built in other popular apps so the flow feels more familiar to users, and clarifying the verbiage in the app. But there are many other approaches. Below are three additional methods that I’ve found to be very effective and should be used much more often than they currently are. ##### a. Have users edit rather than create from scratch You know how it’s usually easier to start with content that’s close to what you want and edit it than it is to create new content from scratch? That’s true for your users as well, which means that where possible, providing users with a good starting point for any kind of content creation can reduce friction and increase engagement. This “edit vs. create” idea applies to not just traditional text or image-based content but to anything the user needs to create or define. *Examples of editing vs. creating from scratch:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/08f6a83a-fda3-48e8-bc41-9f24f589ed9b_1742x1100.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/83d99db4-2157-42f8-9643-80fdf024ac54_1742x1156.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/e9eb399d-3759-4dcb-853b-e98b6c3c73b8_1744x384.png) ##### b. Use smart defaults Another way to reduce effort is to intelligently prefill default values. *Examples of using smart defaults:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/c0471355-b25f-4af3-b495-e64cc4aa0e80_1742x912.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/4578aaf7-f9c2-47d3-b391-0de5b212d712_1742x1050.png) ##### c. Enable users to click or tap rather than type Asking the user to enter information by typing is an overlooked but very real source of friction. You need to know exactly what to type (for example, if you want to share a Figma file with someone, you need to know the correct email address to type), and you have to deal with typos. Also, this friction is magnified if the typing needs to be done on a small mobile screen. Instead, explore where you can have users select something from a list with a click/tap. *Examples of clicking or tapping vs. typing:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/1daf12f3-339e-4d4b-8c73-ec30c6561444_1742x712.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/8b1bb4a3-be9d-4d5c-886d-7a2a11d40599_1744x1320.png) #### 2.3 Reduce cognitive load We can’t have a discussion about removing friction in your product without at least mentioning reducing *cognitive* friction, also known as cognitive load—that is, reducing the mental effort required to understand and use a feature. To find out which of your features users struggle with, you need to grab a few new users and watch them try those features for the first time. These sessions are often painful to watch, but you’ll learn a ton. You’ll uncover which concepts in your product are unfamiliar to your users. For example, I love Notion as an all-purpose note-taking and productivity tool, but I know several people who tried to switch from Evernote to Notion and had trouble getting their head around Notion’s central concepts of “blocks” and “databases.” A big part of Notion’s success (and that of other companies like Figma and Airtable) is due to their heavy investment in building templates that introduce users to core concepts by showing them in action, making them less conceptual and more tangible. (I discuss templates more in the Assist section below.) Notion created over 150 templates for different use cases, and users can also create and publicly share their own—see screenshot below. If it’s absolutely necessary to introduce your users to unfamiliar concepts, be prepared to spend a fair bit of time and resources finding ways to help people easily understand them. ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/37bf9900-2129-4097-a6a0-6680a4912c83_1600x1009.png) ### Principle #3: Introduce Reducing the friction associated with features is critical, but it only solves part of the problem. It doesn’t matter much that you’ve been able to reduce the number of steps required, the effort per step, or the cognitive load *if no one knows about the feature*. In this section, we’ll talk about how to increase users’ awareness of a feature and motivate them to use it. A key point here is that I’m not just talking about introducing newly launched features. I’m referring to all your key features. Many of your existing users don’t know about all of them, and for your new users, every feature is new to them. #### 3.1 Increase feature awareness, *in context* The first step to introducing a feature is to simply increase users’ awareness of the feature. We’ve all seen the common UI elements used for this: pop-up modals, tooltips, banners, pulsing hotspots, walk-throughs, checklists, etc. But the key question we should ask isn’t *how* we should raise awareness but *when*. Product teams often rely on the new-user onboarding flow to introduce key features, but there’s a limit to how much functionality you can show a new user before you overwhelm them. Or they rely on What’s New pop-ups, but their effectiveness is questionable. (I’m sure I’m not the only one who reflexively closes these pop-ups without reading them. Particularly when they take over my entire screen, blocking me from my games! 🎮 ) ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/73f7fd3a-a488-4203-a305-a94aaf01de1f_462x968.png) Fortunately, there’s a better way. The right time to introduce a feature is to introduce it *in context*, which means at a point when the user is most likely to want to use it. Compared with a user who is simply told about a feature, a user who is told about a feature *when they need it* is much more likely to use that feature and remember it. *Examples of increasing feature awareness in context:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/543e21e6-4346-4988-8a14-ee993bf8f5e8_1398x1680.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/719cab8f-87bf-4efb-9c0e-684912a933ac_1744x468.png) #### 3.2 Motivate the user to use the feature Once you’ve raised awareness of a key feature, your next step is to motivate users to use it by explaining *why* they should use it. ##### a. Describe the benefits of using the feature Don’t assume users understand the value of a feature. Instead, spell out what goals the feature can help them with. *Example of describing benefits:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/eb7c09e2-c682-4c7a-8713-cc8a3696fc20_1746x1094.png) ##### b. Highlight different use cases Another way to motivate users to engage more with a feature is to introduce them to different use cases for that feature. *Examples of highlighting different use cases:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/4ce05acf-67e3-4be8-9e75-3c246fe2c21c_1746x1346.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/17c2a335-1f59-4a28-849c-72b308d4057a_1748x1062.png) ### Principle #4: Assist A designer friend of mine likes to say that if you need to explain how to use a feature, you’re in a “failure state,” i.e. it’s a sign of product design failure. I agree that the goal should be to design features that are completely intuitive, but sometimes we aren’t able to find a way to do that. So in those cases, users need a little assistance in order to understand the value of a feature and how to use it. Some examples of how to do this are below. #### 4.1 Provide “empty state” guidance We’ve all had the experience of navigating to a tab for the first time, only to be greeted by a mostly empty page because there’s nothing to show yet. This is the “empty state” for that page, and leaving it empty is a huge missed opportunity. All that space can be used to explain what the feature is, the benefits of using it, provide a clear call to action so users know where to start, and provide resources or links for them to learn more. *Example of empty-state guidance:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/e0f70198-092c-4535-930e-7500bbf765fa_1748x1244.png) #### 4.2 Offer templates Templates assist users in successfully accomplishing their goals by incorporating a level of expertise that many users, particularly new users, don’t have. *Examples of using templates:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/446e7dc9-371c-46d1-8947-48a32d3ee4f5_1746x1032.png)![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/006f6744-8630-40c0-87d5-2ee7ec4436f8_1742x1086.png) #### 4.3 Create error messages that are actually helpful When a user makes a mistake and sees an error message, use that as an opportunity to guide them to a successful outcome. In your error message, focus on what caused the error (without blaming the user) and, most importantly, tell them how to correct it. *Example of a helpful error message:* ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/6613b43a-b605-4846-a3f5-a9ce0bc44c1b_1744x1092.png) ### Conclusion Frequently, the best way to accelerate product growth is to increase engagement with existing features known to be correlated with moving growth metrics that aren’t performing to their potential—rather than over-indexing on building new features. I hope you’ll be able to use this framework as a simple, structured, and repeatable guide to increase the adoption of the features that really drive your product’s growth. I’ve included a handy checklist below to help you get started. By **analyzing** data to identify the key features to focus on, **reducing** the friction of using those features, **introducing** those features to users at the right time, and **assisting** users in using those features successfully, you’ll be covering the main ways that I’ve seen product teams successfully increase overall product engagement and retention. Good luck! ![Image from How to accelerate growth by focusing on the features you already have](https://substack-post-media.s3.amazonaws.com/public/images/2f20c60d-7c0e-435b-acee-5172c363cb2c_647x628.png) P.S. I love hearing about and sharing examples of the ARIA principles in action in successful products. If you have examples that you’d like to share, I’d be grateful if you’d give a quick summary in the comments below (and doubly grateful if you include a link to screenshots). It’s a great way to help others by sharing ideas of approaches they might be able to use in their own products. *Thank you, Ken! For more from Ken, make sure to follow him on [LinkedIn](https://www.linkedin.com/in/kenrudin/).* *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: Product Manager of Collaboration @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5926606003) is an opportunity to own the asynchronous collaboration experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [17/61] How to make an impact in your first 90 days *P.S. Check out my **[PM recruiting service](https://www.lennysjobs.com/)** (helping you hire Sr. PMs and VPs), **[Lennybot](https://www.lennybot.com/)** (an AI chatbot trained on my newsletter posts, podcast interviews, and more), and my **[swag store](https://lennyswag.com/)****(great gifts for your favorite PM, or yourself!).* Today’s post, by [returning](https://www.lennysnewsletter.com/p/product-led-marketing) [collaborator](https://www.lennysnewsletter.com/p/what-is-a-good-free-to-paid-conversion) [Kyle Poyar](https://www.linkedin.com/in/kyle-poyar/), is one of my new favorite guest posts ever. It’s for anyone starting a new job, or simply looking for ideas to make an immediate impact at their company. I guarantee you’ll find at least one quick win you can implement this week that’ll make a big impression. Kyle has spent the past 14 years working with and advising top startups as a consultant at Simon-Kucher turned VC operating partner at OpenView. He shares tactical insights about how to grow faster in his newsletter, [Growth Unhinged](https://www.growthunhinged.com/), and on [LinkedIn](https://www.linkedin.com/in/kyle-poyar/). ![Image from How to make an impact in your first 90 days](https://substack-post-media.s3.amazonaws.com/public/images/8c3a3e8c-ee25-45bd-a036-61e8eb96fb38_4000x2000.png) Your first 90 days at a new job have an outsize impact on your next one to two years at that company. It’s your chance to establish trust, influence, and build a reputation within the org. To do this well, you want to show quick wins: low-effort, high-impact changes that create a sense of “Holy shit, this person is amazing.” To help you do just that, I asked the sharpest tech operators I know about their most effective early quick wins. These operators have a track record of significant impact and rave reviews from their colleagues, at well-loved brands like Asana, Calendly, Canva, Dropbox, Linktree, Ramp, and Wiz. Even if you’re not starting a new job, most of these ideas can be implemented anytime. A surprising commonality that came through as I was collecting them is that these ideas are typically hiding in plain sight—a beginner’s mind and a new way of analyzing the funnel can unlock missed growth opportunities and potential revenue that’s gone unnoticed. ![Image from How to make an impact in your first 90 days](https://substack-post-media.s3.amazonaws.com/public/images/f802b3d2-a30c-4648-9b55-d0dbbcab6edb_2098x2406.png) ## Find friction in the funnel (and fix it) Hunt for unnecessary friction points—especially during signup and onboarding—and implement best-practice fixes. There’s always something lurking here that people have overlooked. #### **1. Audit the funnel looking for low-hanging fruit** > “When I came into Linktree, I worked with the team to audit the funnel, looking for low-hanging fruit. A small tweak like turning the Linktree logo at the bottom of a Linktree to a ‘Create a Linktree’ CTA has almost doubled signups. > > Also, look for opportunities that might turn pre-existing assumptions on their head. The team was optimizing traffic coming from paid marketing channels because they’ve historically converted better. Yet, the bigger opportunity is in profile referrals. It was uncomfortable at first for the team to focus on this because the channel is much lower intent, but it’s a channel with 5x improvement opportunities.” > > —[Jiaona Zhang](https://www.linkedin.com/in/jiaona/), CPO at Linktree > “The website is almost always an opportunity. Doing an audit usually exposes low-hanging fruit that will quickly improve conversions and deliver a quick boost to the top of funnel. > > With the changes in keyword searches happening from AI, take a look at your YouTube channel—at any startup, it could probably use some love, and when you are competing in an early market where buyers are still learning, it’s a great place to dominate.” > > —[Cate Lochead](https://www.linkedin.com/in/clochead/), CMO at Snorkel AI #### **2. Grow a backbone (in your copy)** > “My favorite quick win is to help the company grow a backbone. Develop a provocative point of view. Create thought leadership that changes how people think. Take an unpopular stand and challenge the status quo. Reframe your value props to hit on C-level problems. Market the hell out of those problems. Take a hard look at messaging, value props, and customer perceptions. I can pretty much guarantee (especially at PLG companies) that they’ll be very feature-oriented. > > ‘Safe’ marketing and positioning kills companies. ‘Consensus’ messaging created by committees is never any good. Be the forcing function to grow a backbone, stand for something, and make a splash in the market.” > > —[Kyle Coleman](https://www.linkedin.com/in/kyletcoleman/), CMO at Copy.ai #### **3. Test a signup flow with a blurred UI in the background** > “Instead of the usual white background, place your signup form over a blurred or dimmed version of your product. Populate the UI with fake data—it’s unclear anyway. Make it feel like the final step. > > It creates a ‘peek behind the curtain’ effect, making users want to see what lies beneath. Form-over-UI taps into the curiosity bias, increasing conversion rates.” > > —[Tom Orbach](https://www.linkedin.com/in/tomorbach/?originalSubdomain=il), head of growth marketing at Wiz and author of [Marketing Ideas](https://www.marketingideas.com/) #### **4. Improve the latency of the first few signup steps** > “In a freemium product, you can lose a *lot* of users in the first few minutes before and after account creation. Even before a user can make an assessment of your product’s core value, they are immediately making assessments of product and service quality based on things like how long it takes for a page to load. Early latency can send the signal that your product might not be able to perform in the times your customers need it most.” > > —[Christopher Miller](https://www.linkedin.com/in/christopherwilliammiller/), VP of product, growth, and AI at HubSpot #### **5. Test GIPHY for brand visibility** > “Upload your existing branded GIFs (that you created in the past) to GIPHY, the world’s largest GIF search engine. Clever keyword tagging can land your logos in millions of views (literally!). It’s free brand exposure on a massive scale. > > We did it at Wiz, and the *Happy Birthday*, *Happy Holidays*, and *1 Year Anniversary* GIFs with our logos have around 1M views each. Not bad for 20 minutes of work!” > > —[Tom Orbach](https://www.linkedin.com/in/tomorbach/?originalSubdomain=il), head of growth marketing at Wiz and author of [Marketing Ideas](https://www.marketingideas.com/) ![Image from How to make an impact in your first 90 days](https://substack-post-media.s3.amazonaws.com/public/images/838d2807-b38b-4a54-b1ad-84e1bbc645e5_1267x729.png) #### **6. Test a new call to action (CTA) where drop-off is highest** > “Identify the highest point of leverage where there’s drop-off in the funnel and check to see whether there are obvious calls to action (CTAs). If the product has a large free user base but there isn’t an obvious ‘Upgrade’ CTA in the free product user interface, start by adding that to drive monetization awareness. If a marketing site has good traffic, test clearer CTAs on the page with an eye to reduce the time to value. A client of mine changed ‘Contact Sales’ to ‘Book a demo’ with a booking page connected, and that simple change generated way more leads.” > > —[Hila Qu](https://www.linkedin.com/in/hilaqu/), growth advisor and former director of growth at GitLab ## **Tweak pricing** Pricing improvements are often the fastest path to new revenue, and there’s rarely a dedicated owner. Try some of these low-hanging fruit ideas. #### **7. Restart a reverse trial for existing users** > “Restart a paid trial for your *existing* user base on a predetermined date, providing access to premium functionality at no cost for a limited time. And no, it’s not just about making users simply eligible; it means actually restarting the trial. > > That’s right—trials shouldn’t be reserved just for new signups. There’s a lot of value in offering them to your existing users too. Let’s be honest: your product is (or should be) constantly getting better. So why not give your existing users a taste of the latest improvements? > > The goal? To instill a sense of urgency (the trial begins now!) and enhance the perceived value of paid plans (by driving usage) to trigger an upgrade.” > > —[Elena Verna](https://www.linkedin.com/in/elenaverna/), interim head of growth and data at Dropbox #### **8. Adjust prices to match psychological thresholds** > “Stop using price points that make people overthink. Instead, move prices to just below ‘psychological thresholds’ that correspond with budgets like $75, $100, or $300. If the price is $273.43, it makes people stop and think before buying. If you push the price up to $299, most people see that as only $25 per month and it feels reasonable. > > When you publish pricing, lead with the monthly price point on an annual deal. It’s an easy hack—but I still see companies not doing it.” > > —[Madhavan Ramanujam](https://www.linkedin.com/in/madhavan-ramanujam-1533063/), senior partner at Simon-Kucher > “Emphasizing the monthly price on an annual deal not only improves conversion, but is also one of the easiest and most impactful growth hacks to improve retention and LTV. This single initiative of driving more annual plans was one of the biggest churn reducers at Canva.” > > —[Melissa Tan](https://www.linkedin.com/in/melissamtan/), former head of growth at Webflow and Dropbox #### **9. Revisit feature gating** > “Audit pricing and packaging. Are you gating features users need to experience to unlock your product’s core value? > > Feature packaging can be a pain, but if there are features that are completely gated behind a paywall, aren’t driving meaningful monetization, and aren’t heavily used by paying customers, then it might make sense to consider making them free, especially if they help users unlock core value. This is also an area where putting a usage limit in place can make a lot of sense.” > > —[Christopher Miller](https://www.linkedin.com/in/christopherwilliammiller/), VP of product, growth, and AI at HubSpot #### **10. Turn overages into a cash cow** > “Let users get a taste of your premium features on a free plan or upgraded plan for free, especially in a consumption-based pricing model. Then focus on overages for both feature use and usage/consumption. At Heroku, we allowed users to use most of the product features and plans for free and generated an upsell and cross-sell motion from the overages. We closed several million in ARR just in one quarter by having a sales motion to not just top off what they are using but also sell more products with their growing needs.” > > —[Rajan Sheth](https://www.linkedin.com/in/rajansheth/), general partner and go-to-market advisor at HyperGrowth Partners #### **11. Test give-to-get discounts** > “Many sellers are just giving a discount and not getting anything back for it. What are the list of concessions that you can get back when you offer a discount? Do you get references, product feedback, a longer commitment? A no-brainer concession is an annual price escalator where the price ‘automatically’ increases at renewal. At the very least, set up tracking for the most common ‘gets’ for every sales discount.” > > —[Madhavan Ramanujam](https://www.linkedin.com/in/madhavan-ramanujam-1533063/), senior partner at Simon-Kucher ## **Improve how people work** Companies get stuck in operating rhythms that no longer work for the team. Fresh eyes can be a great opportunity to identify obsolete processes that almost always lead to an easy win. #### **12. Get rid of meetings** > “Figure out the meetings that are happening that people hate. Get rid of them or change them around to be meaningful. At Linktree, I axed 50% of meetings to create more maker time and consolidated around just a few key rituals. > > To solve for higher shipping velocity, I introduced Demo Power Hour, which helped everyone feel ownership and pride in their work. To solve for transparency and accountability, I introduced Scorecard. And to solve for alignment and working more closely with founders, I introduced founder jam sessions with PMs, designers, and engineering leads.” > > —[Jiaona Zhang](https://www.linkedin.com/in/jiaona/), CPO at Linktree #### **13. Write a weekly update** > “I immediately start sending a regular (weekly) written update on observations, personal areas of focus, and kudos that allows you to scale leadership visibility in an async way. This is a great way for new leaders to quickly get visibility and build trust (which is much harder to do in a remote world). > > I also like to build a ‘personal’ data dashboard of metrics that matter to your success. This helps you learn the data tools, think about your goals, and get in the habit of looking at performance regularly.” > > —[Claire Vo](https://www.linkedin.com/in/clairevo/), CPO at LaunchDarkly #### **14. Document how the business works** > “I like to put together two documents right after I join: > > 1. A mind map of the domain: Inputs and outputs of the business equation. This helps the individual learn the space by dissecting it, but also gives a win to the team in terms of documentation. You can then easily pin existing projects to this map and plan for the future. > 2. A clear document about what the highest priorities are for the team:Writing this forces you to understand the space, pull information from people’s heads, and synthesize well, but, most importantly, align the team. Often people are too busy to write such a document. This helps people verify you understand, helps you clarify your thinking, and ensures you are now rowing with the team in the same direction.” > > —[Geoff Charles](https://www.linkedin.com/in/geoffrey-charles/), VP of product at Ramp #### **15. Build trust through feedback** > “Building trust is critical in the first 30 days. Without it, you can’t be effective. With it, you have the power to unlock the largest opportunities. The fastest way to build trust is through feedback. > > - Receiving feedback: Ask for feedback to not only get input, but also establish that you want to hear from others. If you are not getting any substantive feedback it’s not because you are perfect–most likely it’s that others don’t trust you yet to share it. > - Giving feedback: Be brave. Someone has to start giving honest feedback and, when done thoughtfully, you will elevate your relationship. > > In growth, everyone needs to be rowing in the same direction and they need to get into formation ASAP. At Dropbox and Webflow, some of the strongest rapports I built happened when I shared feedback in the first week of working together. It established from the outset that I was transparent, invested in their success, and wanted us to win together.” > > — [Melissa Tan](https://www.linkedin.com/in/melissamtan/), former head of growth at Webflow and Dropbox ## **Mine the data** Even the most data-driven operators steadily become blind to what’s going on in their product. Bring a fresh way of looking at the data to unlock overlooked insights. #### **16. Grow revenue by slowing signups** > “Every time I have a first conversation with a CEO, they’ll say: our top of the funnel is getting thousands of signups every month, and we need to scale it even more as our inbound motion is working really well and we can see proportional growth in pipeline/monetization. > > All signups are not created equal. Yes, it’s good that your CEO cares about marketing, but it’s our job to drive non-linear growth in the business metrics. Only 20% to 30% of the signups actually matter in most products. Find out which segment of signups is driving or may drive revenue, and hyperfocus on growing that cohort, even at the expense of overall signup volume going down. You’ll be able to drive so much efficiency and put your budget and team in the right areas, versus trying 100 things to grow top of the funnel.” > > —[Rajan Sheth](https://www.linkedin.com/in/rajansheth/), general partner and go-to-market advisor at HyperGrowth Partners #### **17.** **Redefine success criteria for online ad campaigns** > “When you’re looking at ROI from ads and other marketing activities, look beyond signups and even conversions, all the way to retained customers. PLG customers tend to have higher churn, so if you ignore retention, you could be paying for customers that convert quickly but also churn quickly.” > > —[Jessica Gilmartin](https://www.linkedin.com/in/jessicagilmartin/), CRO at Calendly #### **18. Investigate why activated users churn** > “As a general rule of thumb, 50% of signups will not activate (meaningfully use your product even once), and 40% of users who activate for the first time will drop within seven days. Focus on that 40% churn first. Don’t go after volume or non-actives. They have made the effort to use the product and you have more information about them, and there will be two or three common drop-off reasons which you can experiment around quickly.” > > —[Rajan Sheth](https://www.linkedin.com/in/rajansheth/), general partner and go-to-market advisor at HyperGrowth Partners #### **19. Identify which features drive upgrades** > “Run a simple correlation analysis for customers who grew their usage—by going on higher plans or adding users—to identify which features drove that. This analysis can then be used for sales conversations, as well as how you bundle your pricing plans.” > > —[Haresh Bajaj](https://www.linkedin.com/in/haresh0712/), VP of product growth at Pleo #### **20. Look for performance discrepancies across platforms** > “When I start a new role, I typically look for quick ways to improve the product experience. For example, in my first months at Slack, I realized that user onboarding on mobile performed worse than on web, resulting in hundreds of thousands of people who were signing up without experiencing Slack’s magical value of seamless team communication. So I identified opportunities to simplify the mobile onboarding flow and shipped a quick experiment that increased user activation.” > > —[Jules Walter](https://www.linkedin.com/in/juleswalter/), product leader for Gemini at Google #### **21. Identify and investigate power users** > “Build a working definition of your power users. Start with a cohort of your best-retained users and search for trends in their product usage that tell a story. Tack on some qualitative research to create a demographic and behavioral profile to match the data. Even a rough power user profile makes your PLG strategy significantly easier. > > Overshare this profile with your marketing and product leaders—the fastest path to better conversion, higher monetization, and stronger retention is focusing acquisition and product optimization efforts on the segment of your users that naturally fit your product best; as you run experiments to further activate and engage this group, the results will compound.” > > —[Amaan Nathoo](https://www.linkedin.com/in/amaannathoo/), head of growth at Durable ## **Talk to customers** Regardless of your role, fresh intel from your customers will drive better decision-making and more customer empathy. Even better, talk to someone who could *become* a customer. #### **22. Ask customers what they wish they could change** > “Talk to a few customers directly right away (or even before you join). A question I love to ask is ‘If you had a magic wand, what would you change about [product]?’ > > You’ll find the answers often break out from feature gripes and into the problems customers are facing that they wish you were solving better. Armed with this intel, you can confidently share firsthand insights with the team (during a time when you are otherwise operating with minimal data) and role-model customer-centric behaviors and curiosity for your team.” > > —[Paige Costello](https://www.linkedin.com/in/paigecostello/), head of AI at Asana #### **23. Try to sell your product yourself** > “Nothing beats going out into the field, talking to prospects—even cold-calling—and existing customers to understand their pain points, what is working and not working to solve these pain points, and making the sale happen yourself. This way, you understand how to tailor your acquisition efforts across all touchpoints, like ads, email marketing, website, sales pitch, partners, SEO, etc.” > > —[Haresh Bajaj](https://www.linkedin.com/in/haresh0712/), VP of product growth at Pleo #### **24. Ask about global payment providers** > “If you have a global user base, you will need to offer different payment providers for your self-serve customers. Implementing the new payment providers will take time, but you can quickly learn which payment providers your users prefer. > > My quick win is to add a survey to your checkout flow to get context on which payment providers your users want to pay with. This data will help build a case to present to the infrastructure and billing team.” > > —[Francesca Krihely-Price](https://www.linkedin.com/in/krihely/), head of marketing at Oso #### **25. Leave no deal behind** > “Improving our win rate is a company key result. While product continues to build features that support that, our sales and marketing teams work on initiatives to make sure no deal is left behind. This includes campaigns like engaging those previously lost to competition, those with high product-led growth scores (high product usage) that didn’t convert, and trial cancellation emails to ask what we could have done better.” > > —[Andrea Kayal](https://www.linkedin.com/in/andreakayal/), CRO at Help Scout ### **Final words of advice** In a new role, it’s almost inevitable that you’ll feel like you’re falling behind or you’re missing out on context that everyone else takes for granted. Remember that your beginner’s mind has its advantages. You can revisit areas like the website or the product experience and catch issues that others have become blind to. You can ask the questions that others might have been afraid of, and then use the answers to try a different approach. The trick is to be intentional—you are in the driver’s seat of your onboarding. Keep an eye out for potential improvements, assess which of those improvements are indeed quick wins, and then advocate to give them a try. The faster you drive improvements, the faster you integrate into the team. Soon enough, you’ll be trusted to take on even more. Be sure to pick your battles wisely. Just as making an impact quickly puts you on a fast track, driving disruptive changes that *don’t* pay off can alienate others and erode trust. A final word of advice comes from Zach Kitschke, chief marketing officer at Canva: > “One of the biggest pieces of advice we give folks starting at Canva is to take the time to just be new. Soak it all in, ask questions, build relationships, but don’t try and ‘do’ too much early on. People often feel like they need to immediately deliver results, but the first few months are a period of transition you only get once. That space to think, gain context, and the relationships built are what set you up for the long haul.” > > —[Zach Kitschke](https://www.linkedin.com/in/zachkitschke/), chief marketing officer at Canva *Thanks, Kyle! For more from Kyle, don’t miss [Growth Unhinged](https://www.growthunhinged.com/) and his [LinkedIn](https://www.linkedin.com/in/kyle-poyar/).* *A huge thank-you to [Amaan Nathoo](https://www.linkedin.com/in/amaannathoo/) (head of growth at Durable), [Andrea Kayal](https://www.linkedin.com/in/andreakayal/) (CRO at Help Scout), [Cate Lochead](https://www.linkedin.com/in/clochead/) (CMO at Snorkel AI), [Christopher Miller](https://www.linkedin.com/in/christopherwilliammiller/) (VP of product, growth, and AI at HubSpot), [Claire Vo](https://www.linkedin.com/in/clairevo/) (CPO at LaunchDarkly), [Elena Verna](https://www.linkedin.com/in/elenaverna/) (interim head of growth and data at Dropbox), [Francesca Krihely-Price](https://www.linkedin.com/in/krihely/) (head of marketing at Oso), [Geoff Charles](https://www.linkedin.com/in/geoffrey-charles/) (VP of product at Ramp), [Haresh Bajaj](https://www.linkedin.com/in/haresh0712/) (VP of product growth at Pleo), [Hila Qu](https://www.linkedin.com/in/hilaqu/) (growth advisor), [Jessica Gilmartin](https://www.linkedin.com/in/jessicagilmartin/) (CRO at Calendly), [Jiaona Zhang](https://www.linkedin.com/in/jiaona/) (CPO at Linktree), [Jules Walter](https://www.linkedin.com/in/juleswalter/) (product leader for Gemini at Google), [Kyle Coleman](https://www.linkedin.com/in/kyletcoleman/) (CMO at Copy.ai), [Madhavan Ramanujam](https://www.linkedin.com/in/madhavan-ramanujam-1533063/) (senior partner at Simon-Kucher), [Melissa Tan](https://www.linkedin.com/in/melissamtan/) (former head of growth at Webflow and Dropbox), [Paige Costello](https://www.linkedin.com/in/paigecostello/) (head of AI at Asana), [Rajan Sheth](https://www.linkedin.com/in/rajansheth/) (general partner at HyperGrowth Partners), [Tom Orbach](https://www.linkedin.com/in/tomorbach/?originalSubdomain=il) (head of growth marketing at Wiz and author of [Marketing Ideas](https://www.marketingideas.com/)), and [Zach Kitschke](https://www.linkedin.com/in/zachkitschke/) (CMO at Canva) for contributing to this post. Art by [Natalie Harney](https://natalieharney.com/).* *Have a fulfilling and productive week 🙏* ## **🔥 Featured open role: Product Manager of Collaboration @ Notion** We recently partnered with Notion to help them scale their PM team. [One role that’s particularly interesting to me](https://boards.greenhouse.io/notion/jobs/5926606003) is an opportunity to own the asynchronous collaboration experience within Notion. If you’d like to get referred directly for this role, follow this button: [Apply to Notion](https://lennys-jobs.pallet.com/onboard/v3/0153c44c-b8c4-44b6-ba42-78fbcf220033/get-referred) *If you’re hiring and want to work with us, [apply here](https://airtable.com/apprGaxWWPYU0068E/shr2WFo5UqJjA5dQ8). Our team will reach out if we think it’s a good fit. Note, we primarily work with fast-growing U.S.-based startups.* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [18/61] How Perplexity builds product *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *If you’re not a subscriber, here’s what you missed this month:* 1. *[The secret to Duolingo’s exponential growth](https://www.lennysnewsletter.com/p/the-secret-to-duolingos-growth)* 2. *[How to accelerate growth by focusing on the features you already have](https://www.lennysnewsletter.com/p/how-to-accelerate-growth-by-focusing)* 3. *[How AI will impact product management](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management)* 4. *[How to make an impact in your first 90 days](https://www.lennysnewsletter.com/p/how-to-make-an-impact-in-your-first)* *For $150 a year, get access to these posts and every prior post, along with an invite to a private Slack community with global meetups, a mentor matching program, interview prep support, live AMAs, and more. I guarantee you’ll get 100x the value of a subscription or your money back.* Founded less than two years ago, [Perplexity](https://www.perplexity.ai/) has become a many-times-a-day-use product for me, replacing many of my Google searches—and I’m not alone. With fewer than 50 employees, the company has a user base that’s grown to tens of millions. They’re also generating over $20 million ARR and taking on both Google and OpenAI in the battle for the future of search. Their [recent fundraise of $63m](https://x.com/AravSrinivas/status/1782784338238873769) values the company at more than $1 billion, and their investors include Nvidia, Jeff Bezos, Andrej Karpathy, Garry Tan, Dylan Field, Elad Gil, Nat Friedman, Daniel Gross, and Naval Ravikant (but sadly not me 😭). Nvidia CEO Jensen Huang said he uses the product “[almost every day](https://arc.net/l/quote/uglckdse).” I sat down with [Johnny Ho](https://www.linkedin.com/in/hjohnny/), the company’s co-founder and head of product, to give you an inside look at how Perplexity builds product—which to me feels like what the future of product development will look like for many companies: 1. **AI-first:** They’ve been asking AI questions about every step of the company-building process, including “How do I launch a product?” Employees are encouraged to ask AI before bothering colleagues. 2. **Organized like slime mold:** They optimize for minimizing coordination costs by parallelizing as much of each project as possible. 3. **Small teams:** Their typical team is two to three people. Their AI-generated (highly rated) [podcast](https://www.perplexity.ai/podcast) was built and is run by just one person. 4. **Few managers:** They hire self-driven ICs and actively avoid hiring people who are strongest at guiding other people’s work. 5. **A prediction for the future:** Johnny said, “If I had to guess, technical PMs or engineers with product taste will become the most valuable people at a company over time.” *For more, check out [Perplexity](https://www.perplexity.ai/). And [they’re hiring](https://www.perplexity.ai/hub/careers)! For more stories of how the best product teams operate, don’t miss my deep dives into [Linear](https://www.lennysnewsletter.com/p/how-linear-builds-product), [Shopify](https://www.lennysnewsletter.com/p/how-shopify-builds-product), [Figma](https://www.lennysnewsletter.com/p/how-figma-builds-product), [Notion](https://www.lennysnewsletter.com/p/how-notion-builds-product), [Duolingo](https://www.lennysnewsletter.com/p/how-duolingo-builds-product), [Ramp](https://www.lennysnewsletter.com/p/how-ramp-builds-product), [Miro](https://www.lennysnewsletter.com/p/how-miro-builds-product), [Coda](https://www.lennysnewsletter.com/p/how-coda-builds-product), [Gong](https://www.lennysnewsletter.com/p/how-gong-builds-product), and [Snowflake](https://www.lennysnewsletter.com/p/how-snowflake-builds-product).* *P.S. I’m collaborating with Perplexity on a deep dive into how product managers use Perplexity, and we’d love to hear from you. Fill out [this short survey](https://perplexity.typeform.com/to/gh54lgJh) if you use Perplexity regularly, and they’ll reach out to conduct a user interview.* # How Perplexity builds product ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/c79f69d5-7443-4c73-870c-ab2fdf76c24c_2048x1365.webp) ### **1. How do you use AI tools within Perplexity to build Perplexity?** Honestly, at the very beginning, we didn’t know how to do all kinds of things, including product management, *project* management, finances, HR, etc. We had early access to GPT-3, and as we were figuring out how to build the company, we’d start everything by asking AI, “What is X?” and then “How do we do X properly?” For example, we asked questions like “How do you launch a product? What should be the steps in the launch process?” You get a rough step-by-step process, which for a startup was good enough. Obviously, it’s often not correct on the first try, but neither is a human, right? So we’d just iterate naturally from there. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/b9d81313-7d81-4b90-bd2a-c65a278d353d_1600x1036.png) Trying to figure things out by ourselves took days, but with AI and some prompting, we could get rolling in five minutes. We’re still doing this. This week, for example, I asked Perplexity, “How do I write an email inviting someone to Perplexity Pro?” We even tried to use it at times to build our product, but we found AI tooling wasn’t anywhere near good enough when it comes to coding. It could help us write scripts, but if you wanted sustainable code to build a platform on, it didn’t really work. Even today, with the advances and latest models, it still only writes templates. You can’t really design a new long-lived abstraction with it. ### **2. How many PMs do you have?** We have only two full-time PMs, in an organization of 50. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/1695cb77-8c3c-4ee9-81bd-aca112fd9f5a_1600x1125.png) Typical projects we work on only have one or two people on it. The hardest projects have three or four people, max. For example, [our podcast](https://www.perplexity.ai/podcast) is built by one person end to end. He’s a brand designer, but he does audio engineering and he’s doing all kinds of research to figure out how to build the most interactive and interesting podcast. I don’t think a PM has stepped into that process at any point. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/06c9380c-cddb-4063-8773-e3f23499152a_1600x1036.png) We leverage product management most when there’s a really difficult decision that branches into many directions, and for more involved projects. The hardest, and most important, part of the PM’s job is having taste around use cases. With AI, there are way too many possible use cases that you could work on. So the PM has to step in and make a branching qualitative decision based on the data, user research, and so on. For example, a big problem with AI is how you prioritize between more productivity-based use cases versus the engaging chatbot-type use cases. Pretty early on, we decided to focus on the former, but there are still ongoing discussions. We plan to hire one or two more PMs over the next year, but the bar for hiring is going to stay very high. ### **3. I assume much of your success has been due to hiring well, and keeping a very high bar. What do you most look for when hiring (that maybe others don’t)?** Given the pace we are working at, we look foremost for flexibility and initiative. The ability to build constructively in a limited-resource environment (potentially having to wear several hats) is the most important to us. When you take a look at resumes of PMs, a lot of them prioritize helping other people and finding alignment. I believe this becomes less important with the advent of AI. So you don’t necessarily need skills around managing processes or leading people as much. We look for strong ICs with clear quantitative impacts on users rather than within their company. If I see the terms “Agile expert” or “scrum master” in the resume, it’s probably not going to be a great fit. Also, AI allows PMs to do a *lot* more IC work, especially for data analysis and customer insights. You still need some fundamental knowledge, of course (i.e. math, statistics, a basic grasp of programming), but it’s never been easier to be a truly “technical” PM. We still select for culture fit and being easy to work with, but we’re less looking for people who guide other people’s efforts, because it’s not as necessary with AI. This might change as we get to a certain scale, but at the current scale, there are way more products to build than there are people to work on them. I think in the future, I expect fewer layers of management in the industry in general. And if I had to guess, a technical PM or an engineer with product taste will become the most valuable people at a company over time. ### **4. Do you structure your teams around products, user types, user journeys, outcomes, or something in between? Has this changed over the years?** My goal is to structure teams around minimizing “coordination headwind,” as described by [Alex Komoroske](https://www.linkedin.com/in/alex-komoroske-6597336/) in [this deck on seeing organizations as slime mold](https://komoroske.com/slime-mold/). The rough idea is that coordination costs (caused by uncertainty and disagreements) increase with scale, and adding managers doesn’t improve things. People’s incentives become misaligned. People tend to lie to their manager, who lies to *their* manager. And if you want to talk to someone in another part of the org, you have to go up two levels and down two levels, asking everyone along the way. Instead, what you want to do is keep the overall goals aligned, and parallelize projects that point toward this goal by sharing reusable guides and processes. Especially with the advance of AI, it’s possible to minimize coordination costs by using AI for “[rubber duck debugging](https://en.wikipedia.org/wiki/Rubber_duck_debugging)” your ideas instead of relying on perfect alignment and consensus. We also keep a “who’s who” list updated in our internal docs, and if you feel the need to reach out to anyone, just do it. This requires a large degree of trust. But even more importantly, with AI, you don’t have to reach out to people as often. Sometimes before asking the question you were going to ask someone else, you could first try spending one minute asking AI to reduce coordination costs and give everyone a reasonable jumping-off point to do it themselves. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/6612e4f4-673a-4570-8b67-7800f978b6ff_1600x1036.png) ### **5. How far out do you plan in detail, and how has that evolved over the years?** Perplexity has existed for less than two years, and things are changing so quickly in AI that it’s hard to commit beyond that. We create quarterly plans. Within quarters, we try to keep plans stable within a product roadmap. The roadmap has a few large projects that everyone is aware of, along with small tasks that we shift around as priorities change. Being nimble is critical as developments in AI often have unforeseeable impact. For example, the rapid developments in open-source models and context length have had downstream impact on the product, roadmap, and overall business. Just recently, Meta released Llama 3 and Mistral released 8x22B; we’re looking into creative ways to use those models in our product. The projects in the product roadmap also need to be flexible because new product development runs in parallel with a technical/model development roadmap. Engineers shift between maintaining existing products and building new products, depending on the week. The technical roadmap tends to grow quickly as we run into limitations of existing systems and accumulate tech debt, but we try to prioritize tech debt that unlocks product improvements. Within a given week, though, plans are fairly stable. Each week we have a kickoff meeting where everyone sets high-level expectations for their week. We have a culture of setting 75% weekly goals: everyone identifies their top priority for the week and tries to hit 75% of that by the end of the week. Just a few bullet points to make sure priorities are clear during the week. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/a667091e-df3b-4ca8-908a-ab332c02bbca_1600x1104.png) Taking a moment at the beginning of the week to reflect on meta tasks brings clarity and prevents overly reactive or hectic decision-making. Over time, our ability to estimate size and prioritize based on return on investment has also improved. ### **6. Do you use OKRs in some form?** We try to be as rigorous and data-driven as possible in quarterly planning. All objectives are measurable, either in terms of quantifiable thresholds or Boolean “was X completed or not.” Our objectives are very aggressive, and often at the end of the quarter we only end up completing 70% in one direction or another. The remaining 30% helps identify gaps in prioritization and staffing. Underinvestments, for example, in hiring infra engineers become quickly apparent when infrastructural goals aren’t met. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/ce3f301a-c3a9-44a5-b140-e094db25d771_1600x1000.png) ### **7. How do your product/design review meetings work?** After the central objectives and high-level designs are determined, we try to be fairly decentralized in our decision-making. Projects are driven by a single DRI, and execution steps are done in parallel as much as possible. The first step for any project is to break it down into parallel tasks as much as possible to reduce coordination issues. We do this in Linear, and I lead this work along with the PM on the team (or whoever is handling the PM duties). We strive for each task to be self-contained—you should be able to execute on it without blockers. And you will likely have to make some controversial decisions, but you can just work through the controversy later. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/9e714a3f-cc26-454c-86eb-76a795100adc_1600x1036.png) At the beginning of each project, there is a quick kickoff for alignment, and afterward, iteration occurs in an asynchronous fashion, without constraints or review processes. When individuals feel ready for feedback on designs, implementation, or final product, they share it in Slack, and other members of the team give honest and constructive feedback. Iteration happens organically as needed, and the product doesn’t get launched until it gains internal traction via dogfooding. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/d564f868-872f-4d01-b9de-37ce38519c3b_820x292.png) I encourage people to try to work in parallel as much as they can. They should not be waiting for everyone to unblock them. Ideally, you have design, front end, and back end all working at the same time on the same project. And now that we have a business team, all four people could work in parallel, whereas conventionally you might wait for designs or mock-ups to show up first. ### **8. How do reporting lines work?** The teams are currently structured by function (product, R&D, design, business, etc.), and different teams think about different layers of the company and stack. But all energy is directed toward improving the core product. We design objectives that translate to common top-level metrics and improve the user experience holistically. For example, all teams share common top-level metrics while A/B testing within their layer of the stack. Because the product can shift so quickly, we want to avoid political issues where anyone’s identity is bound to any given component of the product. At our current size, we are flat by design, and the reporting structure does not dictate priorities as much as commitments to top-level goals. Our two full-time PMs—one web and one mobile—report to me as head of product. We’ve found that when teams don’t have a PM, team members take on the PM responsibilities, like adjusting scope, making user-facing decisions, and trusting their own taste. ### **9. You build one of the most beloved and successful products out there. What would you say is unique or central to your approach to product that leads to such success?** Central to our approach is to take feedback, both from users and internally, and distill it into a few intuitive products that can work for many customers. We also try to distill the feedback in a way that motivates and informs our team, setting a broad vision but letting individuals control their own decisions about what would best serve the original goal. Our decentralized approach for decisions passes the torch of responsibility, enabling fast-paced iteration without the need for approval processes. Individuals make urgent, locally optimal decisions. Any misalignments are then ironed out quickly afterward. ### **10. What’s your primary tool for task management, and bug tracking?** [Linear](https://linear.app/). For AI products, the line between tasks, bugs, and projects becomes blurred, but we’ve found many concepts in Linear, like Leads, Triage, Sizing, etc., to be extremely important. A favorite feature of mine is auto-archiving—if a task hasn’t been mentioned in a while, chances are it’s not actually important. The primary tool we use to store sources of truth like roadmaps and milestone planning is [Notion](https://www.notion.so/). We use Notion during development for design docs and RFCs, and afterward for documentation, postmortems, and historical records. Putting thoughts on paper (documenting chain-of-thought) leads to much clearer decision-making, and makes it easier to align async and avoid meetings. [Unwrap.ai](https://www.unwrap.ai/) is a tool we’ve also recently introduced to consolidate, document, and quantify qualitative feedback. Because of the nature of AI, many issues are not always deterministic enough to classify as bugs. Unwrap groups individual pieces of feedback into more concrete themes and areas of improvement. ### **11. Would you say roadmap ideas primarily come top-down (teams are told what to build) or bottom-up (teams generally come up with the ideas)?** High-level objectives and directions come top-down, but a large amount of new ideas are floated bottom-up. We believe strongly that engineering and design should have ownership over ideas and details, especially for an AI product where the constraints are not known until ideas are turned into code and mock-ups. Plenty of brainstorming is going on at all times. We have a dedicated brainstorm channel in Slack, follow-up ideas are collected in Linear, and often polishes go straight to code without anyone asking. The best examples of bottom-up ideas can be seen in Perplexity’s Discovery, Collection, and Sharing experiences. For example, as I shared above, our brand designer Phi builds [the Discover Daily podcast](https://www.perplexity.ai/podcast) and simultaneously makes decisions around the script, ElevenLabs integration, brand, and audio engineering. With AI, it’s impossible to predict use cases until iterations of the product are released. A year ago, we would never have predicted that the Discover experience would eventually be built into a podcast. ### **12. When people see a company like yours from the outside, it all looks perfect and like you have everything figured out. What are some things that aren’t working well or have been big challenges?** Big challenges today revolve around scaling from our current size to the next level, both on the hiring side and in execution and planning. We don’t want to lose our core identity of working in a very flat and collaborative environment. Even small decisions, like how to organize Slack and Linear, can be tough to scale. Trying to stay transparent and scale the number of channels and projects without causing notifications to explode is something we’re currently trying to figure out. ### **13. What are some fun/unique rituals or traditions you have on the product team or at the company?** A lot of features and products at Perplexity were built during one-week (or less) hackathons. Focused sprints to build new features have proved to be the most exciting and memorable times. Our first interactive search prototype, Pro Search (formerly Copilot), was built in a few days, but it has improved over many iterations of polish and fine-tuning. ![Image from How Perplexity builds product](https://substack-post-media.s3.amazonaws.com/public/images/f182487a-8046-41b5-af35-b0e30a0435f3_1024x768.jpeg) *Thank you, [Johnny](https://www.linkedin.com/in/hjohnny/)! Also, a big thank-you to [Phi Hoang](https://www.linkedin.com/in/phi-hoang-a8689741/) for helping with visuals.* *For more, check out [Perplexity](https://www.perplexity.ai/), and [they’re hiring](https://www.perplexity.ai/hub/careers)!* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I run a white-glove recruiting service specializing in product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply to work with us: [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [19/61] The art of the pivot, part 1: The definitive list of successful pivots > ## Q: How do I know if I should pivot or stay the course? Based on my research, one in three B2B startups, and one in five consumer startups, pivot before finding their big idea. That’s a lot! Pivoting is the second most consequential decision you’ll make as a founder (second only to committing to your original idea). But it’s a surprisingly under-explored topic, and there’s very little tactical information on how to make this incredibly hard turn. To give the topic the time it deserves, I’m making “The art of the pivot” a two-part series. For part one (this post), I’ve spent the past few weeks combing through my podcast episodes, newsletters, and online interviews to put together [the most definitive and detailed breakdown of startup pivots](https://docs.google.com/spreadsheets/d/1OEJJbEF5LQS2edQNdJovoMKsbrZV_iEtpfUtU15ZwNs/edit#gid=246941585) you’ll find anywhere. For 30+ successful pivots, I’ve collected: 1. Why they pivoted 2. How long it took them to pivot 3. How they discovered their new idea 4. What they kept from the original idea 5. The story behind the pivot Here’s a peek: ![Image from The art of the pivot, part 1: The definitive list of successful pivots](https://substack-post-media.s3.amazonaws.com/public/images/a1946b95-673b-4233-bb5c-e20119376d6d_6486x6966.png) ## **→ [Check out the full document here](https://docs.google.com/spreadsheets/d/1OEJJbEF5LQS2edQNdJovoMKsbrZV_iEtpfUtU15ZwNs/edit#gid=246941585) ←** ### A few surprising takeaways: 1. Companies only pivot into B2B, never out of it. B2B startups stay in B2B. No one I’ve come across has pivoted from B2B to B2C successfully. 2. A fourth of companies pivoted less than three months after launching their initial product. The median time was one year. Notion took four years, and Lyft took five. 3. Many pivots kept nothing from the original idea, counter to Eric Ries’s advice to “keep one foot in the past and place one foot in a new possible future.” 4. That being said, the majority of pivots emerged from founders narrowing their focus to a single feature or piece of tech that was showing pull. 5. A surprising number of successful pivots (over a fourth of this list!) came from finding pull for a piece of tech the team built for themselves while building their original, unrelated, business. **→ [Go check out the doc](https://docs.google.com/spreadsheets/d/1OEJJbEF5LQS2edQNdJovoMKsbrZV_iEtpfUtU15ZwNs/edit#gid=246941585) ←** [In part two](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-2-how-why), I unpack the lessons from this data, including: 1. The signs that it’s time to pivot 2. How to find an idea to pivot to 3. When to pivot vs. when to give up As you explore [the document](https://docs.google.com/spreadsheets/d/1OEJJbEF5LQS2edQNdJovoMKsbrZV_iEtpfUtU15ZwNs/edit#gid=246941585), if anything pops out at you, please leave a comment! Also, if I’m missing a great pivot story, please tell me 👇 [Leave a comment](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-1-the-definitive/comments) ![Image from The art of the pivot, part 1: The definitive list of successful pivots](https://substack-post-media.s3.amazonaws.com/public/images/cf4287fc-6c97-446c-8616-05cca995648f_480x270.gif) *Thank you to all of the founders and friends who helped me flesh out this document, including [Christina Cacioppo](https://twitter.com/christinacaci), [Dalton Caldwell](https://twitter.com/daltonc), [Jack Altman](https://twitter.com/jaltma), [Jason Citron](https://twitter.com/jasoncitron), [Spenser Skates](https://twitter.com/spenserskates), [Steve Chen](https://twitter.com/stevechen), and others.* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I run a white-glove recruiting service specializing in product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply to work with us 👇 [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [20/61] The art of the pivot, part 2: How, why, and when to pivot > ## Q: How do I know if I should pivot or stay the course? In [part one](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-1-the-definitive), I shared the largest-ever data set of startup pivots. The Google Sheet within the post (available to paid subscribers) includes the stories behind 40 pivots—why they decided to pivot, how they found their new idea, how long it took them to decide, and more. Today, I’m going to analyze this data and share the many lessons that emerged. ### Why you should consider pivoting It’s heartbreaking to pivot. You are thinking about killing an idea you’ve been obsessed with for months or years. Your team joined because of it, you’ve built a lot of great product around it (so much sunk cost!), and some people probably love what you’ve done. You’ve spent so long convincing people (and yourself) that this is a huge idea. And who knows—if you give it just a bit more time, it could still work! No single post, video, or tweet is going to give you a definitive answer for whether you should pivot or not, but the truth is that pulling the plug on one thing often allows something much better to flow through. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/1280a4ab-6f34-427b-b49b-ec524eacdff0_1832x616.png) As [Dalton Caldwell](https://twitter.com/daltonc) (Managing Director at Y Combinator), in [his legendary talk on pivoting](https://www.youtube.com/watch?v=8pNxKX1SUGE) points out, **pivoting is all about opportunity cost:** > “[Pivoting] gets more shots on goal to try to find this elusive thing [called product-market fit]. If you made something and you launched it and it’s like, ‘Meh, not really working,’ a dang good reason to pivot is you get another roll of the dice. I’ve seen people use these opportunities really well. It’s much easier to be lucky when you get half a dozen shots on goal than one.” ### There are two kinds of pivots: ideation pivots and hard pivots As I was doing this research, I realized that people mix up two very different types of pivots and that it’s important to differentiate which path you’re on: 1. **Ideation pivots:** This is when an early-stage startup changes its idea before having a fully formed product or meaningful traction. These pivots are easy to make, normally happen quickly after launch, and the new idea is often completely unrelated to the previous one. For example, Brex went from VR headsets to business banking, Retool went from Venmo for the U.K. to a no-code internal tools app, and Okta went from reliability monitoring to identity management all in under three months. YouTube changed direction from a dating site to a video streaming platform in less than a week. 2. **Hard pivots:** This is when a company with a live product and real users/customers changes direction. In these cases, you are truly “pivoting”—keeping one element of the previous idea and doubling down on it. For example, Instagram stripped down its check-in app and went all in on its photo-sharing feature, Slack on its internal chat tool, and Loom on its screen recording feature. Occasionally a pivot is a mix of the two (i.e. you’re pivoting multiple times over 1+ years), but generally, when you’re following the advice below, make sure you’re clear on which category you’re in. ### How long to wait to pivot When looking at the data, a few interesting trends emerged: 1. **Ideation pivots** generally happen within **three months** of launching your original idea. Note, a launch at this stage is typically just telling a bunch of your friends and colleagues about it. 2. **Hard pivots** generally happen **within two years** after launch, and most around the **one-year mark**. I suspect the small number of companies that took longer regret not changing course earlier. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/3e0ef3ee-ada9-42fa-a980-14be03a0e3d4_5492x8578.png) My takeaway is that you should have a hard conversation with your co-founder around the three-month mark, and depending on how it’s going (see below), either re-commit or change the idea. Then schedule a yearly check-in. If things are clicking, full speed ahead. If things feel meh, at least spend a few days talking about other potential directions. Remember, you’re probably waiting too long to pivot. If you’ve tried your best ideas and they aren’t clicking, it’s unlikely that a few additional features will all of a sudden change everything. See: [The next feature fallacy](https://andrewchen.com/the-next-feature-fallacy-the-fallacy-that-the-next-new-feature-will-suddenly-make-people-use-your-product/). ### The two signs it’s time to consider a pivot Reasons to strongly consider a pivot are very clear across both the data and the advice from folks who’ve seen a lot of pivots: 1. Persistent lukewarm interest 2. Realizing it’s never going to be as big as you thought Here are examples of each. #### **Sign #1: Persistent lukewarm interest** If you see [very low retention](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29), a consistent growth plateau, and largely lukewarm interest in your idea, *and* you don’t have any more good ideas to drive growth, it’s probably time to pivot. It’s hard to put a super-strict time frame on this, but I’d say give it two to three months during the ideation phase, and six or more months if you have a live product with meaningful traction. But be sure to read this whole post before making the decision, since there are also good reasons to keep going. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/c603c437-c898-4ab7-8b4d-074ad74cd7d2_2400x1350.png) To make this more real, here’s what it felt like to founders right before they pivoted: **Instagram:** > “We knew it wasn’t working when we would give it to people and they’d just keep bouncing off.” > > —Kevin Systrom, CEO and co-founder ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/4b0dbf15-a0a3-42b0-afa3-454984d43fbd_320x480.jpeg) **Amplitude:** > “Sonalight did decently well, reaching hundreds of thousands of downloads and some number of paying customers, but it never really became a mainstream success. Our retention was very poor because the accuracy of the voice recognition wasn’t good enough yet.” > > —Spenser Skates, co-founder and CEO **Twitch:** > “We started trying to reignite growth and we had all these ideas for products we’d build, but they pretty much all failed in a variety of different ways. We were bumbling around, and a VC came by and told us, you’re doomed. Reigniting growth is almost impossible once it stops. And if you’re not growing on the internet, you’re dying.” > > —Emmett Shear, co-founder, via “How I Built This” ![Justin.tv Alternatives: Top 10 Video Streaming Apps | AlternativeTo](https://substack-post-media.s3.amazonaws.com/public/images/63d527a3-bdff-4558-82fb-31fcc2329fe2_888x500.jpeg) **Notion:** > “A lot of the early stuff didn’t stick. The retention was not great, and it was very buggy.” > > —Akshay Kothari, co-founder and COO [Watch on YouTube](https://www.youtube.com/watch?v=m3DfhYiWjVk) **Segment**: > “Counting laptop screens, it’d be looking over the shoulders of the students, and we discovered at the beginning of class about 60% of students were on Facebook [not using our product] and by the end about 80% were on Facebook.” > > —Peter Reinhardt, co-founder and CEO ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/5367419e-5d68-4fe7-b8e3-d8af383d0ed2_1024x768.png) **Lattice:** > “We would have pivoted more quickly, but it appeared to be at least sort of working; we got a good amount of top-of-funnel interest (in fact, OKRs are still a major reason people come to look at Lattice) and some great customers who signed up. However, the user retention was really bad, and after a few months there was a massive drop-off in how many employees were using the tool. So eventually we just recognized that this would never be the foundation for a growing business and knew we needed to pivot.” > > —Jack Altman, CEO and co-founder **Yelp:** > “When we launched Yelp, in my heart of hearts I tried to remind myself, as painful as it was, that we probably didn’t get it perfectly right. Even though we thought we were super-geniuses, there’s probably some way that we got it wildly wrong and we should look for something that *is* working, if it doesn’t work. So as soon as we launched, that’s what I was doing. Especially as the data that’s coming in, it’s like … people don’t like the site very much.” > > —Jeremy Stoppelman, CEO and co-founder **Loom:** > “Seven months in, we only made $600.” > > —Shahed Khan, co-founder ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/36ef6e7b-aae3-4e4f-be4b-3fa900e8b78a_1368x758.png) #### **Sign #2: Realizing it’s never going to be as big as you thought** For many founders, it wasn’t so much seeing hard data as it was just realizing they were mistaken about the potential of the idea. With time and the additional experience of building the thing, it’s not at all surprising that you may realize your idea is simply not good enough. **Brex:** > “We applied to YC with this VR idea, which, looking back, it was pretty bad, but at the time we thought it was great. And within YC, we were like, ‘Yeah, we don’t even know where to start to build this.’” > > —Henrique Dubugras, co-founder and CEO **Slack:** > “We came to the conclusion that Glitch was never going to be the kind of business that would have justified the $17.2 million in venture capital investment [that we raised]. It might have been a neat project for a half-dozen people if we had spent a million dollars to get there, but by the end of 2012, there were 45 people working on it, we had spent many millions of dollars, and it just wasn’t ever going to scale. So we decided to shut it down without knowing what we were going to do next.” > > —Stewart Butterfield, founder and former CEO, via *Business Insider* ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/19dc6403-7d67-404a-b769-7fa88465bc72_1473x875.jpeg) **YouTube:** > “The whole thing didn’t make any sense. We were so desperate for some actual dating videos, whatever that even means, that we turned into the website any desperate person would turn to—Craigslist.’ Despite offering to pay women $20 to upload videos of themselves to YouTube, nobody came forward, forcing Chen, Karim and co-founder Chad Hurley to adopt a different strategy.” > > —Steve Chen, co-founder, via *[The Guardian](https://www.theguardian.com/technology/2016/mar/16/youtube-past-video-dating-website#maincontent)* ![Youtube History dating](https://substack-post-media.s3.amazonaws.com/public/images/2c884e80-246a-4982-a599-b972061f24d3_724x413.webp) **Box:** > “We looked at our user base and said, 2% to 3% of people are paying. And we did the math on how long it would take us to build a real business here when you have 2% to 3% of people paying. > > We got to this struggle: you either had to be a consumer product that really optimized for consumer products, like upsell percentage, consumer use cases, all of that. Or we were listening to customers and heard more advanced and significant business use cases, like better security, business processes, and sharing files across enterprise. That was an entirely different segment of the market but with the same foundation of ‘make it really easy to share files and power how businesses work.’ So we said, OK, we think this is a bigger opportunity in the business space.” > > —Aaron Levie, co-founder and CEO **Discord:** > “We soft-launched Fates Forever in the fall of 2013 and, after months of testing, had a hunch it wasn’t going to be a hit, but we released it anyway in the spring of 2014 to confirm. At that point it was pretty clear it wasn’t working as is (an iPad MOBA), but we committed to post-content updates for a bit while starting to port it to iPhone and explore other ideas. I think it was winter 2014 when we first started seriously discussing the Discord concept.” > > —Jason Citron, co-founder and CEO ![Image](https://substack-post-media.s3.amazonaws.com/public/images/da4ec121-1122-467d-bd41-da01e784463c_1001x514.jpeg) **Flickr:** > “We were never going to raise money for the game. I had tried everything. I had put all of my savings into it, we had tapped out friends and family. We had more or less worked through all of the very small amount of angel investment we were able to get.” > > —Stewart Butterfield, CEO and co-founder, via “Masters of Scale” ![gne1.jpg](https://substack-post-media.s3.amazonaws.com/public/images/a6a734c3-5fe5-42b0-a68b-768acf17dbe3_560x505.jpeg) ### How to find a better idea The best news of this post is that there are four clear paths to finding a better idea. And three of the four paths are simply about noticing what’s working when building your current product. This doesn’t mean you’ll find something that works, but it does give you a limited number of places to look. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/9fb3bf3c-5ff9-4dce-800d-a69e8604c9b4_2294x1446.png) Let’s look at the stories of each strategy. #### Strategy #1. **Go all in on** ***one******feature*** **that’s showing pull: Loom, Notion, Yelp, Pinterest, Instagram, Flickr, Okta** Pivoting is often a story of narrowing and simplifying: stripping away what you’ve built and going all in on one feature. Is anything in your existing product being used an order of magnitude more than anything else? Is there anything about your product that people *love*? Are people using any part of your product in an unexpected way? **Loom:** Users unexpectedly loved and used the screen recording feature more than anything else. > “**Three months into this second idea, we had an aha moment when a client used the product to record a video of himself summarizing all of the user tests his team had collected. That’s when it occurred to us that there could be something here.** > > A month later, we launched on Product Hunt and had thousands of people who’d downloaded the extension by day’s end. That made it clear to us that we should double down on this new direction, and we’ve never looked back.” > > —Shahed Khan, co-founder ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/8edec0b3-ca4c-46b2-8455-d768bef8bc03_1818x1452.png) **Notion:** Users unexpectedly loved and used the wiki editor and collaboration tools more than anything else. > “We realized that some people used and liked some parts of the editor, and some people liked some parts of the collaborative features. **The insight was that the wedge into the market is probably more docs and wiki, rather than the [no-code] apps.**” > > —Akshay Kothari, co-founder and COO **Yelp:** Users unexpectedly started leaving reviews proactively. > “As the data started coming in, as I was querying the database, **I could see each user ID and they’d write a review and then another. Some people would write three or five or 10 reviews in one sitting. So that was the true lightbulb moment of, oh, maybe review writing is fun and we didn’t even know it.** So just with that one little insight, we started to reshape the site around being a platform for you to share your recommendations. > > It took another four months or so, and as soon as we turned it on, at that moment it was like night and day.” > > —Jeremy Stoppelman, CEO and co-founder ![Building Yelp. A history lesson on how to launch a… | by Jordan Bowman | The Startup | Medium](https://substack-post-media.s3.amazonaws.com/public/images/a13b6a9d-56ba-4ea3-a23e-f975796cc1b4_670x611.png) **Pinterest:** Users unexpectedly made product collections within Tote. > “**But while Tote users weren’t making purchases via the app, they were amassing growing collections of ‘favorite’ items to share with their friends. To [co-founder Ben] Silbermann, who had collected insects as a kid, this was yet another example of people’s tendency to share their collections with one another.** And while there was already a plethora of sites that allowed people to display virtual collections, they were all limited to a single item. > > So a year after launching Tote, Silbermann pivoted to offer people a visually appealing way to display all their collections—whether they were books, adorable dog images, or women’s clothes—on the same site. […] Six months after its launch, Pinterest, then still an invitation-only site, had 80,000 collections.” > > —*Fast Company* ![Pinterest early website in 2010](https://substack-post-media.s3.amazonaws.com/public/images/a10e1549-c3de-4d92-b723-3c55dd56ce9b_990x680.png) **Instagram:** Users unexpectedly loved and used the photo feature more than anything else. > “**The one thing that people would continue to do on the service was post square images from either Hipstamatic or CameraBag or whatever filter app existed out in the world, and people loved these posts. They got the most likes. They got the most comments. I would ignore every other post on Burbn except for the photos.** > > One day, Mike [Krieger], my co-founder, and I sat down, and we were like, ‘All right, we have to change something, because no one knows what we’re doing.’ We were like, ‘You know what? Let’s do what everyone’s doing on our service anyway. Let’s cut everything except for photos. Let’s build the filters in, and let’s allow for likes and comments and see what happens.’ I swear, the first day we launched it, we got 25,000 users.” > > —Kevin Systrom, CEO and co-founder, via [Startups.com](https://startups.com/) ![Instagram's History: Full Evolution of Instagram Timeline (2024)](https://substack-post-media.s3.amazonaws.com/public/images/6ba5ea41-ef7a-4f5f-a9aa-c27e4a0b1dcf_1187x738.png) **Flickr:** Users unexpectedly loved and used the photo feature more than anything else. > “We had this game interface. In the game, you had an inventory, you could pick up objects. We made that inventory a shoebox full of photos. And you could do interesting things, like drag photos around on to group conversations, and they would pop up on the other person’s screen. You could annotate them in real time. And there was chatting in the game, so you could talk to the fellow players—that became a cornerstone of Flickr.” > > —Stewart Butterfield, co-founder and former CEO, via “Masters of Scale” ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/e9904d4a-c6e0-45ce-a2f0-5bfe16e83cc8_1052x663.png) **Okta:** Potential users were consistent about the one feature they wanted. > “I showed this to 100 people, and they kept asking about identity. We listened.” > > —Todd McKinnon, co-founder and CEO #### Strategy #2. **Go all in on an** ***internal tool or piece of tech*** **that’s showing pull: Amplitude, Slack, Shopify, Hugging Face, Discord, Segment, Plaid, WhatsApp, YouTube** Along the same lines, many startups noticed that something they built internally, oftentimes for themselves, showed unexpected pull—either from users, other founders, or their employees. Surprisingly, this turned out to be the most common strategy. **Hugging Face:** > “Thomas Wolf, one of our co-founders, I think it was like a Friday night, was like, I’ve seen this thing called BERT that was released by Google, but it kind of sucks because it’s on TensorFlow. I think I’m going to spend the weekend porting that into Pytorch. And we’re like, yeah, you do. You have fun. Have fun during your weekends. > > And on Monday he came back and it’s like, okay, I’m going to release it. **And he released it on GitHub, tweeted about it. And we got like a thousand likes, which for us at the time—we were, like, nobodies. We're like, what’s happening? Why are people liking this very specific, very niche, very kind of technical tweet about the Pytorch port of BERT? There’s something there. So we kept kind of exploring that.** > > We joined them, started to add other models to the GitHub repository. And the community came together. People started to fix bugs for us in the repository. We’re like, Why are people doing that? They started adding models. They started, for example, the first GPT. They added the next models that were released, and really fast. We ended up with one of the most popular GitHub repositories for AI. And that’s kind of like what transitioned us from this first idea to where we are now.” > > —Clement Delangue, co-founder and CEO ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/e320e6f1-d779-421a-b738-4ab0a0d4693c_750x505.png) **Amplitude**: > “We started with a different company before Amplitude, called Sonalight, which was a voice recognition application that allowed you to send and receive text messages by talking to your phone. Sonalight did decently well, reaching hundreds of thousands of downloads and some number of paying customers, but it never really became a mainstream success. > > One of the things that was really clear to us at the time was that you should look at what people are doing in your product in order to figure out how to make it better. We tried out tons of products on the market. I remember Flurry, Google Analytics, Adobe, Kissmetrics, and others. And none of them were able to answer the questions I just posed. And so we said, ‘All right, well, we’ve got to build it ourselves.’ > > **A bunch of engineers with a lot of hubris, ha ha. So we ended up doing that. And as we shared those insights with other companies that we knew (we were at Y Combinator at the time), they were like, ‘Wow, that’s amazing. I really need to understand that about my business.’ So we pivoted from Sonalight and built what’s now called Amplitude.**” > > —Spenser Skates, co-founder and CEO ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/148fe753-1d03-4b29-87cb-472d75dfc9ea_307x512.jpeg) **Discord:** > “**[Jason]** **Citron and his team realized that the best thing about their game was the chat feature. This was circa 2014, when everyone was still using TeamSpeak or Skype and everyone still hated TeamSpeak or Skype. Citron and the Hammer & Chisel team knew they could do better and decided they wanted to try.** […] > > After talking to users and seeing the data, the team realized its problem: Discord was better than Skype, certainly, but it still wasn’t very good. Calls would fail; quality would waver. Why would people drop a tool they hated for another tool they’d learn to hate? The Discord team ended up completely rebuilding its voice technology three times in the first few months of the app’s life. Around the same time, it also launched a feature that let users moderate, ban, and give roles and permissions to others in their server. That was when people who tested Discord started to immediately notice it was better. And tell their friends about it.” > > —David Pierce, *Protocol* ![r/discordapp - The old discord homepage from 2015 looks so weird compared to what we have now](https://substack-post-media.s3.amazonaws.com/public/images/f822ca64-350a-47b9-918b-52b52d55a23c_640x328.png) **Segment:** > “As a growth hack, my co-founder Ilya [Volodarsky] built a little library called Analytics.js. The idea was that users can use it as a ‘drop-in replacement’ for Mixpanel or Kissmetrics and send us the exact same data as you would to each of them via one library. Users didn’t care much about our tool, but they seemed to like the idea of Analytics.js. > > **Finally, we have about six months of runway left and we haven’t launched anything. My co-founder Ian [Storm Taylor] thinks that the idea behind Analytics.js could actually be a big deal. We could effectively be the ‘API layer’ over all these annoying and similar, but inconsistent, data tools. We’re split on the decision. Peter [Reinhardt, co-founder and CEO] thinks it’s the worst idea he’s ever heard and that there’s zero chance a company could be made from 100 lines of JavaScript. We all agreed to build it for a week and launch it on Hacker News. That day, it goes straight to the top of HN, and the rest is history.**” > > —Calvin French-Owen, co-founder ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/4e4d90dc-4fbb-4247-8e18-4e91e3928d92_1974x1116.png) **Shopify:** > “As Snow Devil’s sales slowed down during the spring, Tobi [Lütke, co-founder and CEO] and Scott [Lake, co-founder] pondered whether to expand their product range or pivot to something else. **Tobi’s custom software for Snow Devil caught the attention of others, who wanted to license the platform for their own businesses. Realising that this software could help countless other entrepreneurs, they decided to shift their focus from selling snowboards to creating a user-friendly e-commerce platform.**” > > —Founderoo ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/c40f4b35-2b98-4823-9ef9-893c3e15c746_2522x1080.png) **Slack:** > “It took us a little while to settle on the idea that would become Slack. > > That was really born out of the style of communication that developed while we were working on the game. We used an older technology called IRC, and because IRC is very limited, over the years we added the little features here and there that we wanted. For example, in IRC, if you’re not online at the same time as me, I can’t send you a message. I have to wait until you are also connected. > > So one of the first things we did was build a way of archiving messages so that you could catch up when you came back online, and in those archives we wanted to be able to search them, so we added search, and so on. There was no good iPhone client, so we made an HTML5 front end for our archive viewer. > > **This interesting dynamic happened. By the time we shut down the game, again there were 45 people at the company, we had been in operation for three and a half years, and we had a companywide email list. After more than three years, it only had 50 messages on it, so about one every three weeks. That wasn’t a deliberate decision, that wasn’t ideologically driven. But it just happened that everyone paid attention to IRC, and the more people paid attention to it, the more information we routed to it; and the more information we routed to it, the more people paid attention to it.** > > So eventually, everything from database alerts to daily sales figures were being pumped into IRC. Every time someone uploaded a file to the file server, that would be posted into IRC. While we weren’t successful in making the game, we were very efficient in being unsuccessful to make the game.” > > —Stewart Butterfield, founder and former CEO, via *Business Insider* #### Strategy #3. **Go all in on an** *adjacent bigger market* showing pull: Coinbase, PayPal, Box, Twitch, Framer, Lattice **Coinbase:** > “I basically launched the hosted Bitcoin wallet. There were people signing up. I just posted on Reddit and places like that. And maybe like a hundred people would sign up and then nobody would come back. And so I just—in Y Combinator they often tell you, talk to your customers and improve your product. That’s all you’re supposed to be doing. Try to find product-market fit. > > So I emailed like five of the users that had signed up and I was like, ‘Hey, I worked on this app. I saw you signed up. Can I get on the phone with you?’ I get on the phone with like five of these folks. And I was like, you know, why didn’t you come back? And the guy was like, well, the app was okay for a beta, but I don’t have any Bitcoins. So I didn’t really know what to do with it. **And I remember, this lightbulb kind of went off in my head. I was like, well, if I put a ‘buy Bitcoin’ button in there, would you have used it? And he was like, yeah, maybe. So then we went about the process.** > > My co-founder at that time, we got that basically you had to get a bank partnership, payment rails, you know, an exchange, basic exchange functionality, all that stuff in place. And the minute we launched that feature where you could just click buy, put in your bank account or credit card, buy it, buy Bitcoin that showed up in your account from that day forward, the number of users started to go up like this. And so we finally had found product-market fit after two years of wandering in the desert.” > > —Brian Armstrong, co-founder and CEO ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/b4e4ab99-8e2a-402b-80ee-967a76232e63_1245x988.png) **PayPal:** > “In the beginning, the company wasn’t even known as PayPal. It was called Confinity and was designed to provide encryption on mobile devices. The idea was that someone else would build an application that would then require Confinity’s encryption technology. > > The company quickly realized that it was dependent on others to build applications and decided to shift course. > > **The first pivot:** Confinity changed its focus to building an application that could make use of its encryption technology, and decided to build an application related to financial transactions on a mobile phone. Soon after this, the company saw that it would take years for mobile phones to be able to effectively handle financial transactions and it again changed direction. > > **The second pivot:** The company turned its attention to financial transactions between PalmPilots, hoping that would make it easy for them to eventually service financial transactions over mobile phones—its ideal scenario. > > **The third pivot:** It didn’t take long before the company realized not everyone had PalmPilots. > > Reid Hoffman, one of those working at the company, explored a potential use case that highlighted this problem. He detailed a scenario where a group of people went to dinner and wanted to split the tab after dinner. > > He questioned how many people at that dinner table would actually have a PalmPilot. Reid argued that you’d only be able to split the dinner tab successfully if everyone had a PalmPilot, a scenario that was rare. > > So the company decided to adjust its approach. > > **The fourth pivot:** The company focused on PalmPilot *and* email payments and called this new system PayPal. > > Soon they found that the email payment feature **was being used a lot** and having a significant impact on the business. The PalmPilot payments, though, weren’t that popular in comparison. > > **The fifth pivot:** Confinity then decided to drop PalmPilot payments and focus only on email payments. This meant that they concentrated on the web and doubled down on the concept of web payments. > > All of these changes happened during the space of **15 months**.” > > —*Fast Company* ![Some iPhone screen grabs which show how PayPal Send Money 2.0 app keeps you solvent](https://substack-post-media.s3.amazonaws.com/public/images/e74b1f84-0036-41b4-a947-20a2d0754342_1200x800.jpeg) **Box:** > “We were listening to customers and heard more advanced and significant business use cases, like better security, business processes, sharing files across enterprise. That was an entirely different segment of the market but with the same foundation of ‘make it really easy to share files and power how businesses work.’ And so we said, OK, we think this is a bigger opportunity in the business space.” > > —Aaron Levie, co-founder and CEO ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/535f6b1a-a843-43a1-86ec-bea7fdbadb4e_846x627.png) **Twitch:** > “Justin.tv always had a small, small amount, 1% to 2%, of gaming content. And when Starcraft 2 beta came out, a bunch of people started streaming it. They’d run screen capture software. They do screen share with the video game plus their webcam sort of overlaid on top so you could see their face. This was a tiny number of people who were consuming this content. It was maybe 50 streamers, and maybe in total 500,000 people a month. But it was the first time I’d ever actually enjoyed watching my own product. > > We’d been running an entertainment product for four years at this point. And I was like, this is fun. I like watching this live. This is great. I can ask the pros questions. I’m hanging out with other people who also like the same thing I do. And I know that if other gamers who I know understood what I had, the experience I'm having and understood it, they’d like it too. And so I was like, I think there’s something here. I think if we focus on this, we could grow something really big. I think gaming is the vertical for us to work on.” > > —Emmett Shear, co-founder and CEO, via “How I Built This” ![Image](https://substack-post-media.s3.amazonaws.com/public/images/7ddb349a-0513-40c1-b8d3-c9e441a8b3a1_857x603.png) #### Strategy #4: **Ideate internally: Twitter, Lyft, Brex, Retool, Vanta** Finally, a meaningful number of pivots (though only startups in the “ideation” phase) resulted from simply brainstorming, tinkering, and talking to users. To leverage this strategy, look for ideas everywhere: organize hackathons, ask all of your employees, and talk to everyone you can about their (work) pains. Look for big markets with low-NPS incumbents, ideally in a space you have experience with. **Twitter:** > “**The company started holding official ‘hackathons’ where employees would spend a whole day working on projects.** They broke off into groups. Odeo co-founder Noah Glass gravitated toward Jack Dorsey, whom Glass says was ‘one of the stars of the company.’ Jack had an idea for a completely different product that revolved around ‘status’—what people were doing at a given time.” > > —*Business Insider* ![First Versions: Twitter](https://substack-post-media.s3.amazonaws.com/public/images/f87d66d0-412a-4e19-9be9-883b4dcddfdd_550x455.png) **Lyft:** > “**During a hackathon, the mobile team came up with a couple concepts for something radically different from what Zimride had been.** They were thinking about how the service worked and designing it for a mobile-first experience. After spending a few weeks on it, we launched Lyft as an experiment in June 2012.” > > —Logan Green, co-founder and CEO **Brex:** > “We applied to YC with this VR idea, which, looking back, it was pretty bad, but at the time we thought it was great. And within YC, we were like, ‘Yeah, we don’t even know where to start to build this.’ It was pretty complicated. > > **So we started to look for other stuff to do within YC, and we circled through a few ideas until we got some feedback that we should start a company that we, as founders, have an unfair advantage by starting that company. And we felt, well, we know a lot about fintech. We know a lot about payments. That might be an area. And we figured out there were all these startups in YC that couldn’t get a credit card and had raised millions of dollars. And we thought that was super-dumb. Why can’t they get a credit card if they raise millions of dollars? And that’s kind of how, working through with the YC partners, we came to the idea of Brex.**” > > —Henrique Dubugras, co-founder and CEO **Retool:** > “Perhaps a little-known fact is that I had actually started a couple of other companies and products before Retool. And every time the team built any of these products, we had to go build our own tools for it. **Eventually, when you build enough of the same things—in this instance, internal tools for different projects—you kind of realize they actually all have the same building blocks.** We thought, ‘There’s got to be a better way of doing this.’ And we’re lazy engineers and we thought other engineers would be lazy as well. So that’s how the idea [for Retool] first came about.” > > —David Hsu, founder and CEO **Vanta:** > “I chose (1) team collaboration tools, because I thought, I don’t know if I truly love this but I know it from my Dropbox days, and (2) security, because it seemed interesting and I wanted to learn it. They both seemed big and important and interesting, and I had all kinds of security and compliance challenges at Dropbox. I also felt like I’d be happy learning about that space, and I also wanted to work with startups. > > Within collaboration, we were asking ourselves, ‘What are the macro trends and new technologies shaping the world?’ It’s late 2016, and so ... voice! Team collaboration software is also emerging, and so the answer is B2B Alexa. At the whiteboard stage, it makes so much sense. And in reality, zero sense. We recognized that if you can do it on a whiteboard, someone has probably done it. There are no $20 bills on the sidewalk. > > Also, when you’re changing context from B2B Alexa to other ideas like, I’m going to make a better wiki, to solving security, to whatever, you’re spreading yourself too thin and you’re not going deep enough to actually learn anything that someone else hasn’t. > > **So within the security bucket, I started asking all the startups I knew about security, and they all looked at me really guiltily and said, ‘We don’t really do anything. We know we should, but we don’t.’ Everyone wanted to do security, but it was hard to prioritize until customers asked for it. So I started doing it for them scrappily and manually, and that led to what Vanta is today.** > > When I tell founders this, sometimes they’re like, ‘Well, how did you know security was going to work?’ You don’t. If you know the answer to that, go for it. But it’s only obvious if you look back.” > > —Christina Cacioppo, founder and CEO ### Should you pivot or stay the course? The million-dollar question. Most companies that pivot still fail, and most companies that fail will go through at least one pivot. I ran a poll on both [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_if-youre-a-former-founder-please-take-this-activity-7194005401799987201-mo9c) and [X](https://x.com/lennysan/status/1788238310667903218) asking founders who had their startup fail if they had pivoted beforehand, and nearly two-thirds had attempted a pivot before giving up. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/66870ee0-f0a3-4d13-bb21-8e4fb8990cf1_910x530.png) All of this is to say, the odds of your startup succeeding are low, no matter what you do. To make the decision even harder, check out this chart from [my B2B series](https://www.lennysnewsletter.com/i/119122450/in-bb-it-normally-takes-two-years-to-start-feeling-product-market-fit) on how long it took for B2B startups to find PMF. It took many companies 3+ years. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://substack-post-media.s3.amazonaws.com/public/images/6ae1275f-1b3e-49d3-afcb-f4ca9045279e_5438x6448.png) [For B2C](https://www.lennysnewsletter.com/i/48314350/how-long-does-it-take-for-companies-to-find-pmf-in-bc), it’s generally much quicker—but it still took some companies 3+ years. ![Image from The art of the pivot, part 2: How, why, and when to pivot](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5a35a80-d754-4264-a944-4273a785f9e8_3654x3286.png) So going back to our question: How do you know if you should stay the course? My favorite general piece of advice on this question comes from [Scott Belsky](https://www.linkedin.com/in/scottbelsky/), a former podcast guest and the CSO at Adobe. Here’s what he told me when I asked him this question in [our podcast conversation](https://www.youtube.com/watch?v=HCKosdV1J-8): > “I’ve had this conversation quite a few times over the years with founders and friends who were running a company going sideways or worse and have had this question, ‘Should I continue or not?’ I always have the same answer. I basically say, and I really ask, **‘How much conviction do you have in the solution you’re building?’** > > I know in the beginning, before you knew all you know, you had tons of conviction. That’s what caused you to leave your job. That’s what caused you to take all this risk and hire people and raise money and all this stuff. Now, knowing all you know, do you have more or less conviction in the problem and the solution you're building? And I’ll tell you, I get different answers. Some people are like, ‘Oh, Scott, I mean I have more conviction. All that I’ve learned, all the validation I’ve received from customers, we just haven’t figured it out yet. It’s driving me crazy. We’ve tried three times, and it’s still like each product fails, but I have more conviction than ever before.’ > > And for those people, I’m like, ‘You know what? You’re just in the messy middle. Stick with it. This is par for the course.’ But oftentimes I’ll hear, ‘Honestly, if I knew then what I know now, I would not have done this. Holy shit.’ I’m like, ‘Then quit.’ Your life is short. You have a great team. Pivot. Do something completely different. If you’ve lost conviction, you should not be doing what you’re doing in the world of entrepreneurship.” > > —Scott Belsky If this doesn’t resonate, consider [Dalton Caldwell](https://twitter.com/daltonc)’s perfect and hilarious equation: `if ((how well things are working) / (# of months of concerted full-time effort)) < (excitement to work on another idea) (confidence that you can find an idea that works better)) {` `you_should_pivot()` `｝` Other factors that could be good enough excuses to keep going: 1. You’re building complex tech that simply takes time. 2. You have a clear vision of what needs to exist in the world, and you need to see it through. 3. You’re having a lot of fun and aren’t concerned about the business outcome. My final piece of advice is that if you’re reading this post right now and your gut is telling you that it’s time to pivot, it’s probably time to pivot. Leave a comment with what you decide—in case it helps someone else down the line 👇 [Leave a comment](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-2-how-why/comments) *Have a fulfilling and productive week 🙏* ### 📚 Further study 1. [All about pivoting](https://www.youtube.com/watch?v=8pNxKX1SUGE&t=233s) 2. [A brief guide to startup pivots (4 types of pivots)](https://blog.eladgil.com/p/a-brief-guide-to-startup-pivots-4-types) ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [21/61] On saying no > ## Q: This may seem weird, but the skill I’m working on most right now is simply saying no. I don’t say yes to many things, but even that small number takes too much time away from existing projects and obligations. It’s theoretically easy but difficult in practice, when many requests come from people you like, admire, and respect. How have you gotten better at saying no? I’ve had to learn to say no out of self-preservation. Each day I get more than 100 emails, a dozen DMs on Twitter and LinkedIn, and at least twenty Slack messages and social media pings. All with asks, offers, and requests that are mostly easy individually but add up to an avalanche of work. Just replying with a polite “no thanks” to every one of them would take up my entire day. And if I messed up and accidentally said something that came across poorly in one of my replies, a world of pain could follow. Saying no doesn’t come naturally to me (I really like helping people), but to consistently produce a high-caliber newsletter and 1-2 podcast episodes a week, I’ve had to build this skill. Below is everything I’ve learned about how to say no, including a bunch of templates that I use to (kindly) let people down. *Important: This advice is meant for a solopreneur with too many good opportunities and too little time—a privileged place to be. If you’re just starting out and looking for opportunities, or have a day job with less flexibility in what you can say yes and no to, this advice will be less relevant. Though probably still helpful. For advice for saying no during your day job, [check out this post](https://www.lennysnewsletter.com/p/saying-no).* ### Why you should say no more often Someone (probably [Naval](https://x.com/naval)) once tweeted this advice that, for the life of me, I can’t find, so I’ll paraphrase: You become successful by doing something really well. Once you’re successful, you get offers to do cool things, like go to fancy fun events, do new projects, and meet interesting people. But when you start spending your time on these other things, you don’t have as much time to do the thing that made you successful in the first place. That work suffers. And so your success fades. This is why so many people who come out of nowhere and become really successful also quickly disappear. It’s hard to resist the distraction. But it’s essential. > **“The difference between successful people and really successful people is that really successful people say no to almost everything.”** ―Warren Buffett ### **Deciding when and why to say yes** As you’ve heard many times, saying yes to something means you’re saying no to something else. So how do you know what to say yes to? Here’s my guide: 1. **Imagine if there were no emotion involved:** I ask myself, “If I didn’t care whether the other person felt disappointed or sad when I said no, what would I do?” Then I do that. Once the decision is clear, it simply becomes a matter of how to break the news to them most kindly. 2. **Do more things that energize you:** Run an [energy audit](https://beta.mocharymethod.com/blog-post/energy-audit) and learn what brings you energy and what saps your energy. Say yes to more of the former and less of the latter. It may sound simple, but this simple practice is life-changing. 3. **Ask yourself, What if you had to do it tomorrow?** It’s incredibly easy to say yes to something that’s months in the future. Then all of a sudden that talk is next week, and 100% of the time I’m thinking, “WTF was I thinking?” Now I always ask myself, “Would I be excited about this if it were tomorrow?” The answer is almost always no. So I say no. 4. **Filter asks through your priorities:** What are the two or three things you must do well to be successful in your work and life? For me, if I can produce a great newsletter post and prepare well for each podcast interview, then my business will grow. If I take my eye off the ball there, it will decline. So I say no to almost anything that isn’t furthering these priorities. 5. **Make it a two-factor decision:** A trick that my wife suggested, which has worked well, is to run big asks of my time by her. For example, speaking gigs. Every time I’m about to say yes to a talk, I have to tell her I’m about to say yes to a talk. And most of the time, she reminds me how much I dislike them, and that helps me get over the hump of the fear around letting someone down. It works wonders, and I’ve never regretted saying no to these things. 6. **Reflect on what you’ve said yes to in the past:** In spite of everything above, I still say yes to many things. Often things I regret—events, coffee chats, talks, calls, etc. But what I’ve learned to do is reflect on the event afterwards. About half the time, I realize I should have said no. And so I use that to remind myself that next time, even though it sounds like a neat event with interesting people, you’re probably going to be A-OK not going. ![Image from On saying no](https://substack-post-media.s3.amazonaws.com/public/images/06b0cefd-f6fb-49f5-82e7-65161fb08cb8_1388x664.png) ### General strategies for saying no 1. **Just don’t reply:** This may sound unkind, but I’ve learned that no reply feels better than a half-hearted reply. People know you’re busy, and will assume that you didn’t see it (totally understandable) or it’s not a fit (oh well). In the past, when you’ve emailed a busy person and not heard back, did you feel mad at the person? I suspect not. 2. **Pivot to email:** When someone asks to meet or hop on a call, ask to keep the conversation to email (see template below). Not only does this save you time and a call, but it also helps you get to the root of the ask, removing all the fluff and letting you help faster. 3. **Create a policy for yourself (and then tell them the policy):** This trick has helped me a ton. I created policies for myself like “I don’t do talks/podcasts/events/etc.” and “No CEOs, founders, or VCs on the podcast.” When I tell people that’s my policy, they totally understand and move on. Your policy could be things like “I’m not taking on any new projects until [Date]” or “I’m not adding anything to my todo list right now” or “I don’t say yes to anything on the spot”: ![Image from On saying no](https://substack-post-media.s3.amazonaws.com/public/images/44fcfea0-9eea-4b6c-8f38-5afbd7466b52_2160x2818.png) 3. **Block out deep work time (and don’t ever schedule over it):** Speaking of policies, I have a policy of no meetings before 3 p.m. I reserve this time for “[deep work](https://www.amazon.com/Deep-Work-Focused-Success-Distracted/dp/1455586692)” time, to work on the newsletter and prepare for podcast episodes. Quite a luxury, I know, but even during my day-job days I blocked out two hours on Wednesday and Friday mornings for the same reason. In addition to this delicous focus time, a secondary benefit is that with the remaining (limited) number of hours in the day, you’re forced to say no more often. ![Image from On saying no](https://substack-post-media.s3.amazonaws.com/public/images/05861e98-6102-4082-b6b2-263890fd044e_1830x1262.png) 5. **Ask to check back in a month from now:** If you’re open to the idea but aren’t sure, tell the person to ping you again in a month (or three months) to revisit the idea. Over half the time, they’ll never email you about it again. Problem solved. ### Templates for saying no Finally, here are actual templates I’ve set up for myself for asks I regularly have to decline. I’ve tried a few different tools to make these easy, and currently I’m happy with [TextExpander](https://textexpander.com/) as my tool of choice. **Request for coffee chats (aka picking your brain)** > Hi [Name], > > I truly wish I had the time. Unfortunately, I’ve got too much on my plate right now and need to prioritize other things. [Optional: Can I answer your questions over email? What are you most curious about?] **Request to hop on a call about something** > Hi [Name], > > Happy to help! Can we keep this to email to start? I’m trying to cut back on calls, and I can often be even more helpful over email (since it gives me some time to think). What are you most curious about? **Speaking invitation** > Hi [Name], > > I appreciate your thinking of me. I’m flattered! I really wish I had the time. Unfortunately, I have a blanket rule of no talks, events, or podcasts, which I have in place in order to protect my writing/creative time. I hope you understand. > > And thanks again for the invite! **Event invitation** > Hi [Name], > > Thank you so much for the invitation, and for thinking of me. I know the event will be a lot of fun. I wish I could make it work. Unfortunately, I’ve got a bit too much on my plate right now and need to prioritize other things, so I’ll very kindly have to pass on this, but I truly appreciate the invite! > > Thank you again. **Request to invest in a startup—before meeting them but you know it’s not a fit** > Hi [Name], > > Thank you for sharing this opportunity with me. I can absolutely see this becoming a big business, and there’s a lot to love about what you’re building. It’s not a fit for me as an investor, unfortunately, but I won’t be surprised in the least if/when you become a big success. > > Thank you again for the opportunity, and good luck on the journey! **Request to invest in a startup—after you’ve met with the founder and it’s not a fit** > Hi [Name], > > Thanks again for finding time to chat earlier this week. I’ve been marinating on the opportunity and digging into the space since our call. There’s so much to love about what you’re building: (e.g. [share the things you loved]). It was a tough call, but I’m very kindly going to pass on asking to invest in this round. I just couldn’t get over the hump on a few things (e.g. [share the things that convinced you not to invest]). That being said, I’ll continue to be a fan of yours and what you’re building, and I will not be surprised in any way if/when this becomes an incredibly successful business. > > Thank you again for giving me a chance to invest, and good luck on this journey 🙏 **Request for someone to come on my podcast—guest is against my policy** > Hi [Name], > > I really appreciate the suggestion, and [Guest name] seems great. Unfortunately, I have a rule of no founders, CEOs, or VCs on the podcast, in order to prioritize folks further down the ladder. Thank you for the offer, though. **Request for someone to come on my podcast—not a fit** > Hi [Name], > > I really appreciate the suggestion! Unfortunately, she/he isn’t a fit for the podcast. **Request to write a guest post for the newsletter** > Hi [Name], > > I really appreciate the offer, and for thinking of me. It’s unfortunately not a fit for my newsletter. Thanks, though! #### Other phrases you can integrate to make it your own 1. Mention the priorities you’d be sacrificing (e.g. “This would take time away from my family life”). 2. “I decline with gratitude” or “I’ll very kindly decline this offer.” 3. “My heart says yes, but my schedule says no.” (h/t [Dharmesh](https://www.onstartups.com/tabid/3339/bid/60758/Dear-Friend-Sorry-My-heart-says-yes-but-my-schedule-says-no.aspx)) 4. “I want to ensure I continue to do my best with my existing projects.” 5. “I’m struggling to finish the work I already have on my plate.” ### Additional inspiration ![Image from On saying no](https://substack-post-media.s3.amazonaws.com/public/images/c4df30ac-33c7-4edd-a625-48f8453c30a5_1832x1844.png)![Image from On saying no](https://substack-post-media.s3.amazonaws.com/public/images/9d17934b-c5d0-41e6-bed5-2ac013cbf720_1832x808.png)[Watch on YouTube](https://www.youtube.com/watch?v=sWdTsesGvfU) > “Just because you have all of these demands on your time and on you doesn't mean that you have to say yes. You get to decide because you’re the master of your fate, the captain of your soul. And understanding that really changed the meaning of my life in that I was no longer driven by what other people wanted me to do but took charge of my own destiny, making choices based on ‘what do I feel is the next right move for me?’” —Oprah Winfrey [Watch on YouTube](https://www.youtube.com/watch?v=H8eP99neOVs) > “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.” —Steve Jobs #### **Bonus: Examples of excellent decline messages shared in** ***[How to Say No](https://tim.blog/2017/11/25/how-to-say-no/)*** **by Tim Ferriss:** **[Danny Meyer](https://www.ushg.com/danny-meyer):** > “Jeffrey, > > Greetings and thanks for writing. I’m grateful for the invitation to participate in Tim’s next book project, but I’m struggling, at this moment, to make time ends meet for all we’re doing at USHG, including my ongoing procrastination with my own writing projects. > > I thought carefully about this, as it’s clearly a wonderful opportunity, but I’m going to decline with gratitude. > > I know the book will be a big success! > > Thanks again, Danny.” **[Neal Stephenson](https://www.nealstephenson.com/):** > “Hey there, Tim. > > Sorry for the slow response, and thanks for thinking of me in this context. It has become pretty obvious of late that I’m trying to do too much. And so, I started an experiment of not adding anything whatsoever to my to do list so that it wouldn’t get any longer. The result is that the items that were already on my to do list only spawned more items as I crossed them off. And so, it’s a little like fighting a hydra. I am hoping that if I am ruthlessly efficient, I can one day get to the point where the list actually gets shorter instead of longer. > > In the meantime, unfortunately, the ruthlessly efficient part of this plan means that I am turning down things like this just as a blanket policy. Again, thanks for thinking of me, and good luck with the project! Neal.” **[Wendy MacNaughton](https://www.wendymacnaughton.com/):** > “Hi, Tim, okay, I’ve been battling with this, and here’s the deal. After five intense years of creative output and promotion, interviews about personal journeys and where ideas come from, after years of wrapping up one project one day and jumping right into promoting another the next … I’m taking a step back. I recently maxed out pretty hard, and for the benefit of my work, I’ve got to take a break. Over the past month, I’ve canceled contracts and said no to new projects and interviews. I’ve started creating more space to explore and doodle again, to sit and do nothing, to wander and waste a day. > > And, for the first time in five years, I’m finally in a place where there’s no due date tied to every drawing, no deadline for ideas. And it feels really right. So, while I really wanted to do this with you, I respect you and your work, and I’m honored that you’d ask me to participate. And as capital S stupid as it is for me professionally not to do it, I’m going to have to say thank you, but … I’ve got to pass. > > I’m simply not in a place to talk about myself or my work right now. Crazy for a highly verbal, only child to say. Hopefully, we will get a chance to talk somewhere down the line. I promise any thoughts I’ll have for you then will be far more insightful than anything I could share with you right now. I hope the space created by my absence is filled by one of the brilliant people I suggested in my previous email. And really, thank you so much for your interest. I’ll be kicking myself when the book comes out. > > Wendy.” ### 📚 Further study 1. [Sorry. My heart says yes, but my schedule says no.](https://www.onstartups.com/tabid/3339/bid/60758/Dear-Friend-Sorry-My-heart-says-yes-but-my-schedule-says-no.aspx) by Dharmesh Shah 2. [This is Your Reminder to Say ‘NO’](https://ryanholiday.net/this-is-your-reminder-to-say-no/) by Ryan Holiday 3. [How to Say “No” Gracefully and Uncommit](https://tim.blog/2018/07/19/essentialism/) with Tim Ferriss 4. [Jessica’s Client Email Helper](https://www.jessicahische.is/helpingyouanswer) *Thank you, [Jay Clouse](https://x.com/jayclouse/status/1790083303275442557) for asking the question that inspired this post, and [David Perell](https://x.com/david_perell) for sharing inspiration as I wrote it. Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [22/61] Taking the week off I’m taking this week off to celebrate Memorial Day weekend with my family ([per my PTO policy](https://www.lennysnewsletter.com/about#§posting-schedule)). **In honor of Memorial Day, for the next 48 hours, [get an annual subscription for just $120 (20% off)](https://www.lennysnewsletter.com/memorialday2024). The last time I offered a discount was almost two years ago.** ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/c47876df-9f10-40ba-9e1c-a46c273cc16f_5712x4284.jpeg) If you’re looking for something to read or listen to in the meantime, a few suggestions: 1. [The latest podcast episode, with Bangaly Kaba](https://www.lennysnewsletter.com/p/frameworks-for-growing-your-career-bangaly-kaba): Don’t miss this one. I promise you’ll leave with something that’ll make you better at your job. 2. [Who’s Got the Monkey?](https://hbr.org/1999/11/management-time-whos-got-the-monkey): I’ve found myself referencing this essay many times over the past month. Hat tip to [Gokul Rajaram](https://x.com/gokulr) for sharing it. 3. [101 Additional Advices](https://kk.org/thetechnium/101-additional-advices/) and his [Recomendo newsletter](https://www.recomendo.com/) by Kevin Kelly 4. [How to do great work](https://paulgraham.com/greatwork.html) by Paul Graham See you next week! --- ## [23/61] In defense of feature team product managers After my [conversation with SVPG founder Marty Cagan](https://www.youtube.com/watch?v=9N4ZgNaWvI0) (currently the fifth most popular episode of the podcast and still growing), I saw many reactions to Marty’s difficult-to-hear advice. The strongest response came in [a thread by Ben Erez](https://www.linkedin.com/posts/benerez_i-used-to-think-the-feature-factory-was-activity-7168978777966891008-jh75/). Ben made the case that feature teams are not innately wrong, and that “feature factory” PMs are real PMs doing important work. More than 200 comments later, with lots of full-throated agreement from readers and listeners, I thought it was worth spending more time on this perspective. With the newsletter and podcast, I like to give a platform to different ways to think about and build product, especially when a perspective seems to resonate with a lot of people. So I asked Ben to expand on his experience and insights in a guest post, which you’ll find below. [Ben Erez](https://www.linkedin.com/in/benerez/) is a longtime product builder who has worked at almost every stage of a company. He’s been a founder, a first PM at three different startups, and held senior PM roles at Facebook and Attentive. After leading product and design at [Continuum](https://www.joincontinuum.com/) (a marketplace for fractional executives), he now partners with early-stage teams as an advisor and interim first PM, helping founders define the PM role before making a full-time hire. For more from Ben, follow him on [LinkedIn](https://www.linkedin.com/in/benerez/) and check out his [podcast](https://suprainsider.substack.com/), [newsletter](https://benerez.substack.com/), and upcoming [Maven course](https://maven.com/ben-erez/pm-interview). ![Image from In defense of feature team product managers](https://substack-post-media.s3.amazonaws.com/public/images/1902893a-35c8-449c-86cd-ff9f8c56fd3b_4000x2000.png) This past March, Marty Cagan joined Lenny on the [podcast](https://www.youtube.com/watch?v=h-KVGHoQ_98) to talk about his new book, *Transformed*. I’ve been a longtime fan of Marty’s and enjoyed his previous books, *Empowered* and *Inspired* (and have recommended both to others many times)*.* I was looking forward to hearing all about *Transformed*. Marty’s conversation with Lenny went deep on the future of product management, feature teams versus empowered teams, and the degree to which product managers have agency to transform their cultures. Marty believes that most companies would be better with empowered PM cultures and expressed his views about why feature team PMs are more project managers than product managers. He came on the podcast to get spicy, and he certainly did. At one point, Lenny asked Marty for his response to [a LinkedIn post I wrote](https://www.linkedin.com/posts/benerez_i-used-to-think-the-feature-factory-was-activity-7168978777966891008-jh75) about why feature factories—businesses that focus on outputs over outcomes—might actually be the optimal product culture for some companies. Marty said that in the long run, this way of thinking leads to building products that nobody likes (e.g. Oracle and SAP). On that point, we’re in agreement. Where our thinking diverges is that I see the feature factory as the right choice for *some* CEOs to run their companies, especially when those CEOs have a clear and compelling product vision. While I don’t think that feature factories make for better businesses, I do believe that many founders have a clear vision of what needs to be built in order to win; the resulting environments can often feel like feature factories because product teams are expected to execute on top-down directives. And VCs love to back these types of founders (pattern-matching to Elon Musk, Steve Jobs, etc.). I’m not saying it’s fun or enjoyable to be a PM in a feature factory. I’ve been a PM on both types of teams and have talked to hundreds of PMs about their experience. The general consensus is that empowered teams offer more strategic and meaningful work, making them preferable for PMs. My goal in writing this post is to round out the public narrative around feature teams and enable you to form a more nuanced perspective. Counter to the popular narrative, I believe that: 1. **Feature team PMs are real PMs doing important work** 2. **Feature teams are extremely valuable to CEOs in certain scenarios** In this post I’ll explain why, and what that might mean for you. ### **What’s a feature factory?** “Feature factory” is a term that, I believe, [John Cutler coined in 2016](https://cutle.fish/blog/12-signs-youre-working-in-a-feature-factory) (shout-out, John, for being awesome) to describe a process focused on rapidly producing and shipping features without strategically considering the impact these features have on users and the business. John’s original post lists 12 ways to know you’re in a feature factory, which I boil down to *rewarding outputs over outcomes*.Feature-factory teams are praised for shipping many features but not for achieving specific goals or moving important metrics. Note: Even in a feature factory that doesn’t explicitly focus on outcomes, there still should be a basic floor around the quality and reliability of the features being delivered to customers. ### **Feature teams vs. empowered teams** The alternative to the feature factory is a culture that rewards*outcomes over outputs*. These teams are praised for helping the company figure out *what* to build, solving customer problems, improving customer satisfaction, moving the needle on key product metrics, and contributing to company goals. Marty refers to teams in feature-factory environments as “feature teams” and the alternative as “empowered teams.” I’ll use those terms in this post. I’ve worked in both environments and personally find empowered teams 10 times as enjoyable as feature teams, a sentiment shared by every PM I know. **Yet despite empowered teams being dramatically more popular environments for PMs (stated preference), the majority of PMs still seem to be operating in feature teams (revealed behavior).** I dug into this delta and boiled it down to several reasons PMs stay on feature teams: 1. PM has never been on an empowered team and doesn’t know what they’re missing 2. PM might not know how to find and land a PM role on an empowered team 3. PM might have unintentionally joined a feature team and needs to stay to avoid a short resume stint 4. PM might need to optimize for compensation, and their high-paying role is on a feature team 5. PM might depend on their current employer for work visa sponsorship 6. PM gets to do just enough of the “fun” work to stay engaged 7. PM believes that success as part of a feature team earns the right to be empowered Regardless of their reasons, many feature team PMs decide to stay. And when they hear the following, they feel frustrated because the validity of their role as a PM is called into question: > “The truth is they don’t need PMs in a feature team. They don’t because it’s a project management role… An individual can … raise their game. They can literally do a self-assessment and raise the skills from a feature team product manager to a ‘real’ product manager.” —Marty Cagan I’d like to counter the notion that the only real PMs are those on empowered product teams. I believe that PMs on feature teams are also real product managers. ### **The role of feature team PMs** I believe Marty is heavily discounting the product work required for feature teams to be successful. When a feature request comes in, it’s usually vague. Sometimes it’s a single sentence. When a feature team commits to delivering a new capability, the PM is responsible for execution, which means driving the cross-functional team effort to translate the request into a useful experience for the customer/user the feature is intended to serve. Feature team PMs often don’t have a dedicated project manager or program manager they can rely on for tactical execution support, so they need to do it themselves, leading to the misconception that feature team PMs are merely project managers. (They may have to do some project management, but their core work is product work.) In my experience, the product work involved on a feature team and empowered team are largely the same. Here are some of the PM activities you’ll see on both teams: - PM writes a PRD/project brief that outlines goals, constraints, requirements, etc. - PM partners with design to figure out where the new feature will live in the product, map out the total surface area of the feature, flesh out the general UX of the feature, etc. - PM partners with engineering lead to discuss any architectural changes required to support the new feature. - PM works with research (or drives research themselves) to line up a few customer discovery conversations with customers who are expected to benefit from the feature to understand the pain point and de-risk the proposed solution. - PM equips sales and marketing with key information about the new capabilities being developed. - PM measures the post-launch adoption and performance of new features. - PM socializes the initiative internally to get people excited about it. On an empowered team, PMs take on additional responsibilities: - Pre-execution: PMs drive opportunity identification, problem prioritization, and right-sizing the solution scope to the chosen problem. - Post-launch: PMs iterate on the solution until the customer problem is solved and business impact realized. While I agree with Marty that an empowered team can do everything a feature team can do plus some, feature team PMs do product work. They’re real PMs. ### **Why CEOs value feature teams** Similar to every other function in a company, the Product function exists primarily to serve the business and its customers. Successful product leaders often help the CEO flesh out their vision and bring it to life by working with PMs to execute at the highest level. Many CEOs (especially founders) want to hire world-class product leaders to help them build winning products, yet they ultimately struggle to create empowered product cultures. Some of these CEOs value execution speed above all because moving quickly is what has worked for them in the past, or has been successful for other leaders they know. Some want feature parity with competitors so that they can close more deals faster. They want filled checkboxes on those side-by-side competitor charts. And sometimes, to catch up to your competitor or to win a big deal, you *do* need to ship a bunch of features. Here are a couple of scenarios that will sound familiar even to CEOs who want an empowered product culture: **Scenario 1: Staying ahead** You’re the founder of a company whose competitor launches a new capability. Your customers notice and start asking when you’ll have it. You become paranoid that if you don’t build the capability, you’ll lose customers to the competitor. You decide to build the feature as a defensive play to protect revenue. **Scenario 2: Displacing incumbent** You’re the founder of a vertical B2B SaaS company attempting to displace a legacy player in a well-known domain with clear jobs to be done. You decide that reaching feature parity on certain must-haves is the only way to win deals. So you fund a multi-quarter feature roadmap. In both situations, it’s the responsibility of the product leader to help the CEO understand the tradeoffs of various paths. The product leader might make the case that the company should be more strategic and customer-focused with its roadmap, and that choosing to fund these long-term roadmaps is reactive. But once a CEO has made up their mind, the product leader needs to commit to the decision. Otherwise they’ll irreparably damage their trust with the CEO. Product leaders who consistently struggle to influence their CEO can either stay for similar reasons as those of feature team PMs or they can leave. This dynamic is part of the reason why the typical tenure of a product executive is one to two years. ### **When feature team PMs try behaving like empowered PMs** With so much hype about the benefits of being a PM on an empowered team, it’s not surprising that some feature team PMs start behaving more like empowered team PMs. Here’s how that tends to play out: 1. Feature team PM **decides to stop focusing on outputs** and start focusing on outcomes. 2. The PM **starts pushing back** on feature requests and refocuses the momentum toward product discovery. 3. Sales leaders **perceive the PM to be slowing down velocity** instead of accelerating it. They tell the CEO about the problematic PM. 4. The PM who “won’t play ball” **gradually depletes their social capital** within the company and loses the ability to influence leaders, killing any chance of the PM advancing any outcome-focused product initiative that results from the product discovery work they’ve been driving. 5. When performance reviews come around, the **PM is dinged for being neither collaborative nor impactful**. I’ve seen this happen firsthand and have heard it from many other PMs. With that said, I’d like to highlight a story about a product leader (not an individual contributor) who pushed his team to do the empowered product job *on top of* the feature team job for the better part of a year to show results. Marty describes this as a proven transformation technique called an “outcome-based roadmap,” which could be a reasonable expectation for some teams with particularly strong product leaders. > “Hi Ben. I empathise with your post. And it is a tough, uphill battle to transform from a sales-led or target-led organization to the product model. > > I joined a feature-factory organization seven years ago and I read Marty’s book *Inspired*. > > I knew that stakeholders wouldn’t buy into a concept just because it came from a book I’d read (as someone new to the organization and with no track record). They weren’t theory people. I also didn’t know if this model would drive the financial impact that the organization measured success on. > > But I knew our targets, and I had two approaches I could take: do the feature factory or attempt this model. I knew I wouldn’t get permission to do #2. I also knew if I didn’t do #1, then I’d be seen as a lone wolf out for my own agenda. > > So my team took a crazy third option. We did both at the same time. For two quarters we did two jobs and twice the work—feature factory and empowered product. We continuously measured the results and showed it to our stakeholders. It was nuts, but the model was awesome and the results convinced stakeholders to eventually buy in, because the model delivered on their results agenda. > > So transformation is hard and improbable without the right team. But not impossible.” > > —[Ronnie Varghese](https://www.linkedin.com/in/ronnievarghese/), product coach and advisor In summary, I’d caution feature team PMs against trying to behave like empowered PMs without a strong product leader spearheading the transformation and a stomach for a huge amount of work. It’s an uphill battle unless the CEO decides to embrace the empowered culture—a decision that is significantly more likely to occur with a strong product leader present. That said, if you see an opportunity to make this transition in your current role, I think it’s worth considering. It’ll help you build better products and teach you new skills while also providing you with opportunities to gain a new set of experiences and stories that set you up for success down the road. ### **So what’s my advice for feature team PMs?** There’s no silver-bullet advice here, but I’ll wrap up with food for thought. 1. Think critically about advice from thought leaders. Don’t put people on a pedestal if they say there’s one right way to be a product manager (including me, Lenny, and Marty). 2. Don’t let anyone tell you that you’re a project manager—you’re a product manager. Remember that many of the companies cited in articles about empowered product culture have dedicated program managers and project managers to take care of “the details.” 3. Don’t beat yourself up if your environment makes empowered PM behavior impossible or risky. If you feel truly stuck on a feature team, there’s no shame in being a great feature team PM. However, if you have the opportunity to join an empowered team, it’s worth exploring! 4. In interviews, no hiring manager will explicitly say the role is on a feature team. You’ll need to make your own assessment. Questions you can ask: 1. Can you tell me about a recent feature or product you shipped and how you measured success post-launch? Why’d you choose to work on it in the first place? 2. Which project is most exciting to you on the current roadmap? What’s the origin story of this project, and what’s its intended outcome? 3. How do you evaluate and reward PMs? I hope this post adds helpful nuance to the public discussion around feature factories, which often seems so black-and-white. If you’re a PM on a feature team, I hope my perspective recognizes your challenges on the ground and dispels any notion of inferiority relative to PMs on empowered teams. Let me know what you think in the comments! [Leave a comment](https://www.lennysnewsletter.com/p/in-defense-of-feature-team-product/comments) A big thank-you to [John Cutler](https://www.linkedin.com/in/johnpcutler/), [Melissa Perri](https://www.linkedin.com/in/melissajeanperri/), and [Joshua Herzig-Marx](https://www.linkedin.com/in/joshuaherzigmarx/) for reviewing early drafts of this post. Your feedback and suggestions were incredibly helpful in getting it over the finish line. *Thanks, Ben! For more from Ben, follow him on [LinkedIn](https://www.linkedin.com/in/benerez/) and check out his [podcast](https://suprainsider.substack.com), [newsletter](https://benerez.substack.com/), and upcoming [Maven course](https://maven.com/ben-erez/pm-interview).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [24/61] How to use Perplexity in your PM work *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *If you’re not a subscriber, here’s what you missed this month:* 1. *[On saying no](https://www.lennysnewsletter.com/p/how-to-say-no)* 2. *[The art of the pivot, part 1: The definitive list of successful pivots](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-1-the-definitive)* 3. *[The art of the pivot, part 2: How, why, and when to pivot](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-2-how-why)* 4. *[In defense of feature team PMs](https://www.lennysnewsletter.com/p/in-defense-of-feature-team-product)* *Subscribe to get access to these posts, and every post. For more: **[Podcast](https://www.lennysnewsletter.com/podcast) | [Lennybot](https://www.lennybot.com/) | [Swag](https://lennyswag.com/) | [Best of Lenny’s Newsletter](https://www.lennysnewsletter.com/p/the-best-of-lennys-newsletter-2023)** | **[Hire your next product leader](https://www.lennysjobs.com/)**.* Chatbot tools like ChatGPT and Perplexity are quickly becoming de facto co-pilots for product managers. I ran this poll on [X](https://x.com/lennysan/status/1795512255427268746) and [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_bonus-share-which-chatbot-you-use-most-in-activity-7201278518868000769-hBJM), and holy shit, over 50% of PMs who responded are now using a chatbot *daily*. And 85% are using one weekly 🤯 ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/1e487b03-8f8e-4748-9d94-17c7f0fc0159_1034x568.png) [Robert Bye,](https://x.com/RobertJBye/) a PM at Figma, shared a common sentiment: ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/1427ee1f-15e1-4748-ba3f-d76f50fda75a_1832x712.png) When was the last time a new tool went from non-existent to daily use for the majority of product managers? Things are changing fast. Interestingly, Perplexity was the second most mentioned chatbot, behind ChatGPT. I’m not surprised. I recently did a [deep dive on how Perplexity builds product](https://www.lennysnewsletter.com/p/how-perplexity-builds-product), and while working on that piece, I got to talking to their team about how product managers use Perplexity to do their work. The conversation led to [an in-depth survey](https://x.com/lennysan/status/1785469502681231752), which received more than 300 responses, which led to 30 follow-up calls and, finally, to the post you’re reading now. **Sourced from hundreds of product managers who filled out our survey and hopped on calls, I put together a comprehensive collection of ways PMs are using Perplexity to do their work, including:** 1. Understanding and crafting growth strategy 2. Finding benchmarks 3. Doing market research 4. Learning best practices 5. Evaluating popular tools 6. Understanding technical jargon This collection builds on [How PMs use ChatGPT to do their work](https://www.lennysnewsletter.com/p/how-to-use-chatgpt-in-your-pm-work) (currently my [fourth most viewed](https://www.lennysnewsletter.com/archive?sort=top) post) and expands on [my collection of advice](https://www.lennysnewsletter.com/t/ai) for integrating AI into your PM workflows. Whether all this change scares you or gets you excited, you should be carving out time to play around with these tools. Here’s a bunch of stuff to try. # 27 ways PMs are using Perplexity in their day-to-day work Actual prompts shared by readers, including links to try out the prompt and screenshots of some of the results: ### a. Understanding and crafting growth strategy 1. [Explain growth accounting to a product manager](https://www.perplexity.ai/search/Explain-growth-accounting-amwLSoSSRQujWzA07eEi7Q) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/1fde139e-dc49-4a91-ae41-7e757873532b_1920x1440.png) 2. [Walk through the evolution of Dropbox’s referral program. Why did it work?](https://www.perplexity.ai/search/Walkthrough-the-evolution-ncXVojGVT4ClsNidaprqaQ) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/58de0330-c645-424d-9adc-25203bffef5a_1920x1440.png) 3. [How are the app store top charts calculated?](https://www.perplexity.ai/search/How-are-the-NrPJ0.v4Tz.OfbgrgqkYSQ) 4. [Give me examples of a reverse trial that led to an increase in conversion rate](https://www.perplexity.ai/search/Examples-of-a-1z75apuSSHK7Z_GubTUwzw) 5. [Incrementality test designs for advertising campaigns](https://www.perplexity.ai/search/Incrementality-test-designs-oJlPmO_1SrK49JtQ_sFpyA) 6. [Google Play and Apple App Store optimization techniques](https://www.perplexity.ai/search/Google-Play-and-S_1cAbynS2i3wuHGM7YWxQ) ### b. Finding benchmarks 7. [What is the average open rate for push notifications on Android and iOS?](https://www.perplexity.ai/search/What-is-the-36oOjPRcS9ix5_3TQdMDrg) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/20bc5e8e-8cca-4472-8856-0eb8b9e4adbf_1920x1440.png) 8. [Using Lenny’s Newsletter research, what is good retention for a consumer product?](https://www.perplexity.ai/search/Using-Lennys-Newsletter-jX4jUkNkTIOJ4DGrX__W5Q) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/1ba4c29e-3cdc-4bf3-9e9b-4b5c412ecd6d_1920x1440.png) 9. [What is CSAT and how is it calculated? Include CSAT scores from top technology companies.](https://www.perplexity.ai/search/What-is-CSAT-37_RX93cQGG2JFVNZjgREA) 10. [What is Net Promoter Score and how is it calculated? Include NPS scores from top technology companies.](https://www.perplexity.ai/search/What-is-Net-dKTr8KBaQOqInehtzv..pQ) 11. [Explain the product-market-fit survey by Rahul Vohra](https://www.perplexity.ai/search/Explain-the-product-DnY9tJpdQ_Cmz7WVp3bMRg) ### c. Doing market research 12. [Notion’s AI go-to-market strategy](https://www.perplexity.ai/search/Notions-AI-gotomarket-pLAJwSwNTqaqYj7bbfJaIA) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/8fa8264c-290b-4a18-a6e7-b65295f56a89_1920x1440.png) 13. [Provide a detailed overview of Deel’s go-to-market strategy](https://www.perplexity.ai/search/Provide-a-detailed-DQDUqd5rSF.fDIRNb_dINw) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/db63fb9d-dca3-40fe-be34-faa7a2955ac5_1920x1440.png) 14. [How many rides does the average ridesharing user take per month?](https://www.perplexity.ai/search/How-many-rides-LmKa2NMBQmWsSHyNGcL0hg) 15. [How does Airtable upsell users to an Enterprise plan?](https://www.perplexity.ai/search/How-does-Airtable-A83kBON8RiCSKgdiJl4i0g) ### d. Learning best practices 16. [List of brainstorming techniques for product managers](https://www.perplexity.ai/search/List-of-brainstorm-pxZqk0SGR6ubuM64XMiZgg) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/7da8e4a6-a79f-48e2-b2b2-b0fb263061fe_1920x1440.png) 17. [How did Spotify use the Jobs to Be Done framework?](https://www.perplexity.ai/search/How-did-Spotify-ekSWR9OQQT6tf0k3ChEDaA) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/25063380-f848-4cd9-897b-be4e4b781192_1920x1440.png) 18. [Walk through the evolution of Slack’s personalized user onboarding experience](https://www.perplexity.ai/search/Walkthrough-the-evolution-gcxHoBwKSYyxVzIo5A6ylA) ### e. Evaluating popular tools 19. [Compare and contrast product analytics tools: Amplitude, Mixpanel, and Posthog. Include key features, existing customers, differentiation points, and user reviews.](https://www.perplexity.ai/search/Compare-and-contrast-yJ40YkoBS2CPN6DWO8_u4g) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/c1936249-b289-41d2-bc07-0764a51ec21d_1920x1440.png) 20. [Compare and contrast Zendesk, Drift, and Intercom. Include key features, existing customers, differentiation points, and user reviews.](https://www.perplexity.ai/search/Compare-and-contrast-yJ40YkoBS2CPN6DWO8_u4g) 21. [What is the difference between Segment and Freshpaint?](https://www.perplexity.ai/search/What-is-the-a138wLCHRHilDnl52RHwzg) 22. [Weather APIs by developer preference](https://www.perplexity.ai/search/Weather-APIs-by-0XyQFoO7QNupxaw7DKfmjQ) 23. [Most popular tools for in-app localization](https://www.perplexity.ai/search/Most-popular-tools-GDK8VhgVTASEgU20cyWgmQ) ### f. Understanding technical jargon 24. [Explain what DAU/MAU means](https://www.perplexity.ai/search/Explain-what-DAUMAU-QfYWRw3ITPWC2ccd8oQ4yA) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/97882fa3-72d6-4cce-ab38-83a1b14d5bc9_1920x1440.png) 25. [What is Kubernetes?](https://www.perplexity.ai/search/What-is-Kubernetes-_yDOXAyXSS6JSfP9QUY8TA) ![Image from How to use Perplexity in your PM work](https://substack-post-media.s3.amazonaws.com/public/images/5789e68b-d1ab-497e-ac7e-31f9985b80d3_1920x1440.png) 26. [What is the difference between GraphQL and REST?](https://www.perplexity.ai/search/What-is-the-a_NLmDn_QmaMQBjOKsg0nw) 27. [What is the difference between follow and no follow backlinks?](https://www.perplexity.ai/search/What-is-the-KR5MJrlHQwyu7Wxsh6090w) For more, check out [this slick landing page](https://www.perplexity.ai/productmanagers) the Perplexity team put up. I’d love to hear in the comments about how else you use Perplexity, or other AI tools, in your day-to-day work.👇 [Leave a comment](https://www.lennysnewsletter.com/p/how-to-use-perplexity-in-your-pm/comments) As I’ve said before, the best way to prepare for this fast-approaching future is to get your hands dirty. So go try one of these prompts for yourself. *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [25/61] When and how to run a billboard campaign When I see billboard ads as I drive around the Bay Area, I often wonder about the ROI behind these investments. As someone who’s always worked on product-oriented growth, I’ve never had a chance to understand the logic behind advertising out in the real world, and what kind of impact startups see from these levers. So when I came across [Reed McGinley-Stempel](https://www.linkedin.com/in/reed-mcginley-stempel-17362245/) (CEO and founder of [Stytch](https://stytch.com/)) [sharing his experience](https://www.linkedin.com/posts/reed-mcginley-stempel-17362245_are-billboard-campaigns-worth-it-we-run-activity-7193326973123715073-0TPu/) of running billboards for his startup, I immediately pinged him to see if he’d be up for expanding on his lessons. Not only did Reed share many in-depth details (and numbers) from his company’s experience, he also reached out to marketing leaders at basically every other startup with billboards in the Bay Area for theirs. **Below, you’ll find a synthesized set of lessons about how to successfully leverage billboards to grow your product, including insights from Ramp, Notion, Vanta, Rippling, Canva, Brex, Writer, Bland, Statsig, and Stytch. With every post in this newsletter, I try to offer the most definitive advice on a topic, and I believe this is** ***that*** **for billboard advertising.** *[Reed McGinley-Stempel](https://www.linkedin.com/in/reed-mcginley-stempel-17362245/) is the co-founder of [Stytch](https://stytch.com/). For more from Reed, follow him on [LinkedIn](https://www.linkedin.com/in/reed-mcginley-stempel-17362245/) and [X](https://x.com/McStempel).* ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/8005d11b-5cb0-4427-9dab-c69da941720b_4000x2000.png) Every two years, our team at Stytch runs a large out-of-home (OOH) campaign in San Francisco—physical or outdoor advertising such as billboards, bus ads, airport takeovers, or cyber-truck wraps. “Is it worth it?” is one of the most common questions I get from B2B SaaS founders and go-to-market leaders. It may seem counterintuitive to advertise modern software on a medium as old-school as a bus ad. But we’ve found the real world to be one of the most effective channels to grow and establish our brand. The value and strategy vary widely depending on the company or product profile, so to give you a holistic perspective on when and how to run a successful OOH campaign for a B2B software product, I asked leaders at Brex, Ramp, Notion, Vanta, Rippling, Canva, Writer, Bland, and Statsig about their lessons from running similar campaigns. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/817fa641-49f8-46c0-884e-e9cf6bf878f7_3000x3000.png) *Huge thanks to [Michael Burke](https://www.linkedin.com/in/michael-burke-223285175) from Bland, [Brandon Camhi](https://www.linkedin.com/in/bcamhi/) from Rippling, [Lisa Ferragano](https://www.linkedin.com/in/lisa-ferragano-07213b8/) from Canva, [Elizabeth George](https://www.linkedin.com/in/georgeelizabeth/) from Statsig, [Kira Klaas](https://www.linkedin.com/in/kirstenklaas/) from Notion, [Kasper Koczab](https://www.linkedin.com/in/kasperksf/) from Brex, [Cody Morgan](https://www.linkedin.com/in/cody-morgan/) from Ramp, [Andrew Racine](https://www.linkedin.com/in/andrewracine/) from Writer, and [Sarah Scharf](https://www.linkedin.com/in/sarah-scharf-55339a31/) from Vanta for sharing their insights in this piece, and to [MB](https://www.linkedin.com/in/maryboydcrosier/), [Gedney](https://www.linkedin.com/in/gedney-barclay/), [Aiden](https://www.linkedin.com/in/aidenforrest/), and [Robert](https://www.linkedin.com/in/rfenstermacher/) for their help on the Stytch side*. ### **Evaluating ROI: How can I decide if it’s “worth it”?** When I get asked this, SaaS startup leaders and founders are often thinking about sales pipeline and revenue. These are important, but the ROI question for out-of-home is much more nuanced. Stytch’s most recent OOH campaign ran for a month in San Francisco in April 2024. For that campaign, we bought 80 bus ads, 130 bus and transit shelter ads, eight billboards on SF city streets, and, yes, three billboards on Highway 101. We used those billboards to sell our B2B SaaS product—in our case, authentication APIs—but also to communicate what Stytch is and establish our brand among the city’s high concentration of software engineers. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/1c3a4696-6c96-4fc3-9c8a-040a95856d7c_1600x1131.png) And it worked! During the campaign, we saw a more than 25% uplift in branded search traffic and an over 70% increase in branded search clicks *globally* (social media is powerful!). We also sustained a 10% to 15% uplift after the billboards came down. Further down the funnel, more than 10% of our sales opportunities created since the campaign have explicitly cited billboards or bus ads as a factor in exploring Stytch. And employees have posted hundreds of pictures to our internal #billboard-spotting Slack channel (on average, 2.1 per employee)—so it’s pretty good for team morale too! It’s important to remember that billboards and other OOH spots are broad-stroke mediums, so they work best for high-level brand awareness, rather than immediate pipeline generation. For B2B businesses especially, the reality is that only a fraction of your ideal customer profile is actually in the market right now. An OOH campaign aims to make your audience feel something*now* so that they remember your brand*in the future*. If the following traits match your B2B SaaS company, an out-of-home campaign is a no-brainer to my mind: ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/57232f1e-58d5-4a5f-ac56-f76b50dc8147_1080x597.png) Unlike with digital demand generation (think: Google Ads), where there are tracking pixels, UTM tags, and a clear view of money in versus money out, attribution for physical ads is murky and imperfect. You may never get a big final number to share in your board presentation, and that’s OK. Instead, brand awareness from OOH affects a range of metrics up and down the funnel, which combine to make the investment worth it. I heard from other startup leaders about the impact they’ve seen from their campaigns: ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/13e5b52b-8c3f-4c90-ba94-f98879aa86fd_2516x2569.png) To quote Brandon Camhi from Rippling, “With out-of-home advertising, you should make the investment because the logic makes sense. While you should try to get a directional read on OOH impact, you also have to use your best judgment around where your audience is and what message they respond to. Intuition can carry you far in marketing.” And for Stytch, and almost every other company I spoke with, the logic is there when you want to grow brand awareness, you have the money to invest now to see impact later, and you believe you can create a compelling enough message. ### **Making an impression: How do I ensure my campaign is memorable?** It’s important to acknowledge that the value of out-of-home is contingent on making a lasting impression. [Kira Klaas](https://maven.com/kira/branding-strategy#bio) from Notion offered a great framework for how to think about what makes OOH advertising memorable: > *“Effective OOH is about frequency (how often it’s seen) and resonance (‘this feels relevant to me’), both of which help with recall.”* ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/fd32eed1-36d1-4aed-8b2c-e40e3230a536_1600x707.png) In other words, you need either a lot of placements, a killer message, or a mix of both. A single billboard can work, but for it to work, it has to be *extremely* resonant—so resonant, in fact, that it goes viral. Here are two examples of extremely resonant billboards: Vanta’s SOC 2 billboard garnered [thousands of upvotes](https://www.reddit.com/r/Accounting/comments/ub7c5b/my_girlfriend_didnt_appreciate_this_billboard_but/) on Reddit (running an ad with any upvotes on Reddit is an achievement; getting 1,000 upvotes organically is next-level) and helped them land their biggest enterprise customer. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/f36e91ac-5ff9-4424-baef-2ce3ec9c711b_1524x1126.png) Bland’s [billboard demo video](https://x.com/usebland/status/1785383574419718541) garnered 25 million views, tens of thousands of phone calls, and hundreds of qualified leads. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/8137a631-b7b9-47be-8fc4-f5bc0a020fdf_1202x916.png) For Michael Burke from Bland, the key to virality was sparking some controversy and then seeding virality with a clever video too: > *“To go viral, I’ve found that something has to be* new *and* slightly controversial*. Traditionally, billboards often have a phone number—replacing it with an AI number is novel. Asking the question ‘Still hiring humans?’ was concise yet slightly controversial. The billboard was inherently interesting, but our video is what went super-viral. This allowed us to have the billboard as the hook at the start of the video, the CTA at the end, and we could sandwich a demo in between.”* And for Sarah Scharf from Vanta, the most essential elements were simplicity and humor: > *“The most important thing is a simple and compelling creative concept—ideally one that elicits an emotional response. It doesn’t have to be humor (as we typically lean into), but it has to be easily understood and memorable.”* More likely, though, a single billboard won’t have a Vanta or a Bland outcome. And so a more immersive campaign, where users might have two to seven impressions in a city on a given day, is more likely to leave a lasting impact. In practice, what that means for us at Stytch is that we: 1. **Pick** **ad copy that will resonate** with our core demographic (software engineers) 2. **Aim for high frequency** within a relevant time and space (San Francisco, during peak developer conference season) 3. **Buy a mix of different ads**—billboards, bus ads, bus shelters, newsstands—to maximize impressions 4. **Make OOH into a broader marketing moment**, with amplification efforts that span physical and digital, organic and paid One of the brands I’ve seen excel at having a holistic approach to OOH and online marketing is Notion. According to their former VP of brand and marketing, Kira Klaas, their success has a lot to do with taking full advantage of what a physical, in-person advertising format has to offer and leveraging it further on digital channels: > *“We don’t just think of OOH as ads; we think of them as experiences. The more you integrate your OOH strategy with complementary channels, frequency and resonance go up—and the more effective each can be…* ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/20be0795-3af2-47cc-af50-ca3aaff42d11_960x960.png) > *… As an example, Notion’s global pop-up series was a set of community-centered experiential marketing plays that focused on some of our top metropolitan cities. For each city, we chose a popular destination (e.g. where our target demographic lives or hangs out, where startups are based, which areas get high foot traffic) to host a Notion pop-up, orchestrating community meetups and driving both customers and prospects to stop by for a free treat and a chat with the team or an enthusiastic community member. Community leads from around the world organized their own complementary meetups and after-parties. We drove buzz on our own social channels and with partner influencers, and used limited swag giveaways to drive urgency—and, last but not least, we surrounded each city with OOH creative that created familiarity ahead of each activation and the feeling that ‘Notion is everywhere!’”* At the very least, if you buy a billboard, share it on social media, a lot. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/fc883840-f565-4bf3-aaaf-8bfcb907306a_1335x1159.png) Cody Morgan, VP of demand gen at Ramp, offered this advice: > *“The best tip I can give someone planning to invest in OOH for the first time is to get loud on social media when the campaign goes live. Hire a professional photographer to take photos of the placements to make it easy for team members, investors, and friends and family to post on social media.”* Put all together, combining ad **frequency** and **resonance** leads to good **recall**—and nice boosts to metrics across the funnel. ### **Getting tactical: So how do I actually do this?** At this point, we’ve talked about the “why” of out-of-home advertising. But there’s quite a bit of tactical work required, so I want to touch on that too. Here are a few grounding questions when you’re considering how to approach your campaign: ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/5774800f-28ac-425d-aafa-d1fa6d5e4f16_1080x905.png) #### **Right places** For out-of-home, it’s not enough to know who your ideal buyer is; you have to understand their physical habits—where they live, where they work, and how they move back and forth. For us at Stytch, we knew we wanted to target software engineers and tech workers, and we found that those people were heavily concentrated in San Francisco, or would at least visit for conferences. We mapped our target Sales accounts, typical commuting routes, and conference venues, then picked ad locations to maximize impressions near those locations. ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/3d380ed7-0046-4f2b-aa89-40e4bdaaa6ab_1600x827.png) Lisa Ferragano, Canva’s Americas brand media lead, echoed this approach to targeting: > *“We geo-target our OOH around regions with a high concentration of our target audiences, around specific events, and in downtown areas with a high concentration of large organizations that could benefit from utilizing Canva in the workplace.* > > *OOH allows us to reach decision makers in a context they might not expect, like on their commute or while they’re away from their desks. We’re taking B2B off LinkedIn and into the real world.”* #### **Right place*****ment*****s** Once you’ve decided on a geographic location to target your ICP, you also need to think about individual placements. In out-of-home advertising parlance, that’s your “media.” At Stytch, we were fortunate to learn from the best in [Kasper Koczab](https://www.linkedin.com/in/kasperksf/), who leads OOH at Brex. Here’s his advice: **1. Mix different types of ads to maximize both resonance and frequency.** > *“When entering a new market, we aim to have a good balance of high-profile units (usually units that people literally have to look up to see), along with a format that offers a wider footprint (street furniture or transit, for example) in order to deliver frequency. While folks might only recall the big unit on the sales call, the smaller formats that deliver frequency play a crucial role in driving recall.”* **2. Every placement is different. Consider the viewer experience for each ad.** > *“Market rides with an ethnographic eye are central to designing a campaign that stands out. Is the highway littered with billboards one after the other to the point where no one is paying attention, not to mention remembering what they saw? Are the newsstands facing the street targeting the drivers, or are they better suited for the pedestrians who are two to four lanes on the other side of the street from the poster box? If the latter, then are my font, contrast, and graphics appropriate for easy legibility from the viewing distance?”* To demonstrate why thinking holistically about placements matters, here are two examples of billboards partially blocked by trees. Which one is more compelling? If you run an out-of-home campaign, this means you’ll likely spend a lot of time on Google Street View and/or running around a city taking pictures. It’s worth the time investment to get it right. #### **Right time** Timing-wise, there are a few factors to consider: - **Lead time:** Design and production require at least a few months; Cody Morgan from Ramp recommends planning further out (at least six months) to get the best ad inventory. - **Major events:** Are there any conferences or industry events you can target? - **Seasonality:** When is your buyer in the market, with a budget to spend? - **Internal milestones:** Do you have any upcoming company launches or milestones that OOH could help amplify? At Stytch, we lined up our most recent successful OOH campaign with three developer conferences (RSA, Post/Con, and Stripe Sessions) and an internal product launch. At Brex, one of their early OOH activations was tied to a major product announcement at TechCrunch Disrupt. They [timed the billboard creative all across San Francisco to change](https://www.youtube.com/watch?v=tQXNe-cuJsw)—mid-speech—from a teaser message to the new product announcement. This creative use of timing paid off: they exceeded their qualified sign-ups goal by 300%, and the campaign was picked up by 75 industry news outlets and by local TV stations. #### **Right budget** Last but not least, an out-of-home campaign is not cheap; it requires an investment of both time and money to do well. To offer a directional sense, a billboard on Highway 101 in San Francisco is probably about $20,000 at minimum for a month. Larger billboards in high-profile locations (or locations where viewers sit in traffic!) might go for more like $50K to $80K. At 400,000 to 1 million impressions per week, this is actually a relatively affordable CPM, particularly if you amplify your OOH campaign across digital ads, socials, and more. However, it’s ultimately an investment in awareness. It shouldn’t be the majority of your marketing budget (Andrew Racine from Writer offered a maximum of 20% as a rule of thumb) and it isn’t a replacement for traditional demand gen—but it can be a powerful amplifier. One tactical tip when making your budget: consider setting aside funds to “protect your brand” by buying paid search ads related to your company name or advertising themes. After people see your ad and search you to learn more, you want to make sure they find *you* and not a wall of ads from competitors (we were reminded of this [the hard way](https://www.linkedin.com/posts/mkkazantsev_google-search-results-these-days-are-incredible-activity-7193058470995099648-Ww-S) at Stytch!). #### **A final note on planning** In addition to this post, there are plenty of other resources to help. Two great ones that are worth mentioning: - Kira Klaas has a public template that she used to plan large-scale OOH campaigns while at Notion, along with her campaign brief to share with media owners or agencies: [www.notion.so/templates/out-of-home-planning](https://www.notion.so/templates/out-of-home-planning) - There are also lots of agencies and partners out there that can make this easier. At Stytch, we worked with [Division of Labor](https://www.divisionoflabor.com/work/best-startup-outdoor-advertising-stytch) on creative and with [Kasper from Brex Rewards](https://www.brex.com/product/rewards) to help pick out our ad placements. Their expertise has helped us maximize the impact of our spend and avoid potential pitfalls. ### **The TL;DR** In summary, my high-level answer to “should you do out-of-home” is usually yes, if your budget allows and you bring a thoughtful approach. Whether it’s a single, resonant billboard that makes a big impression on a conference, like [Vanta’s SOC 2 billboard did at SaaStr](https://www.linkedin.com/feed/update/urn:li:activity:7178054102675836929/), or a holistic campaign experience like [Notion’s global pop-ups](https://www.instagram.com/notionhq/p/CepJSAvPbdu/), or a city domination like [Statsig’s SF takeover](https://www.statsig.com/blog/san-francisco-statsig-experimentation-campaign), billboards are a powerful medium to establish a brand identity and relate to your target audience, with ROI that continues to grow over time. It’s also really fun! As a founder, it’s unbelievably cool to get to see billboards or bus ads for Stytch on my way to work. So just think, this could be you someday too: ![Image from When and how to run a billboard campaign](https://substack-post-media.s3.amazonaws.com/public/images/fdf1484b-4005-4452-9a70-9bd983bb1a1d_826x1080.png) ### **Bonus tips** The startup leaders I spoke with had tons of amazing tactical advice—too much to fit into one post. Here are a few more suggestions for how to plan and execute a B2B billboard campaign: **On brand design (and not putting your software UI on a billboard):** > *“In advertising, as brands mature, you’ll likely see the fidelity of the product depiction becoming less literal and more abstract—more inspiring. For tech brands advertising on OOH, your software UI isn’t going to be the most memorable aspect of your ad, and it’s probably too complex to convey much value in the OOH ad format. Being clear on who you’re for and how you want to make people feel is the most important creative consideration behind designing OOH ads.**”*** > > —Kira Klaas, Former Global Head of Brand Marketing and Campaigns at Notion **On knowing if your ad will resonate:** > *“Emotion takes buyers from awareness to action. There are three questions we ask ourselves at Vanta to make sure our marketing is hitting the mark:* > > - *Will it make them smile?* > - *Will it make them nod their head?* > - *Will it make them tell a friend?”* > > —Sarah Scharf, VP of Marketing at Vanta **On controversy as a good thing:** > *“Even the most daring digital ads don’t get discussed much, whereas billboards are shared, reposted, and debated. If your product introduces a new way of thinking or is defining a new product category—good luck explaining that in a digital ad. Advocating for this way of thinking on a billboard, however, creates a stir, and if you’re lucky, you’ll have personalities from your industry writing articles agreeing or disagreeing with you.”* > > —Elizabeth George, VP of Marketing at Statsig **On testing and learning:** > *“Certain placements will dramatically outperform others, and finding the right mix of placements takes a few iterations. There’s no way to know what works best from the start—it’s best to test and learn along the way.”* > > —Cody Morgan, VP of Demand Generation at Ramp **On referencing competitors:** > *“Taking jabs at your competitors in digital advertising can seem classless or petty, but in out-of-home it’s playful and daring. It’s best if you’re ‘punching up’—if you’re trying to disrupt a giant, billboards are a fantastic way to get the word out. This was especially fun for us given that we’re based in Seattle, taking it to our competitors’ doorstep in San Francisco. We even got word that we (accidentally) put one right outside our main competitor’s COO’s apartment—which was great for office morale.”* > > —Elizabeth George, VP of Marketing at Statsig **On connecting physical and digital experiences:** > *“One important goal of an out-of-home campaign is to generate organic and direct website traffic, as people see billboards and want to know more about your brand. To maximize the value of this traffic, it’s important to make sure that your website experience is dialed-in and acts as an extension of your billboards (especially on mobile!). For us, this involved revising design and content to align with the campaign creative, revisiting information architecture to optimize visitor journeys, updating the sign-up and onboarding flow, optimizing CTAs, and improving how we identify attribution sources at sign-up. This investment ensured visitors had a cohesive experience and were more likely to stay on our site and try our product.”* > > —Robert Fenstermacher, Head of Marketing at Stytch Don’t hesitate to reach out if it’s ever helpful to chat more about our experience at Stytch—or if you have tips for out-of-home that you think other startup leaders should know! *Thanks, Reed! For more from Reed, follow him on [LinkedIn](https://www.linkedin.com/in/reed-mcginley-stempel-17362245/) and [X](https://x.com/McStempel).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [26/61] General management, functional, and hybrid models: Which org design works best for top companies? > ## Q: I’m trying to decide if we should switch to a GM model. When (and why) do companies generally make this move, and what are some tips for making the transition successful? Much of your time as a senior leader is spent figuring out how to organize your people. And one of the most common and consequential questions that company leaders face is whether to move to (or from) a GM organizational model. Today’s guest authors, [Rohini Pandhi](https://www.linkedin.com/in/rohinipandhi/) and [Mary Liu](https://www.linkedin.com/in/marygliu/), have witnessed firsthand how reorgs transformed the way six different prominent companies operate, including Square, Shopify, Dropbox, Meta, Google, and Mercury. In this post, Rohini and Mary lay out a tactical and in-depth breakdown of when, why, and how you can shift between a GM, functional, and hybrid model. I’ve always felt that a comprehensive and super-tactical post about this very critical transition has been missing in the world, so I’m excited to finally bring you one. *[Rohini Pandhi](https://www.linkedin.com/in/rohinipandhi/) is currently a product leader at [Mercury](https://mercury.com/). Previously, she spent over seven years at [Square](https://squareup.com/us/en)/[Block](https://block.xyz/) leading product work on Square payments, invoicing, and the Bitkey hardware Bitcoin wallet. She’s also been a PM for companies ranging from small startups to large enterprises, is the co-founder of the startup bootcamp [Transparent Collective](https://www.transparentcollective.com/#/), and is an active angel investor. You can find her on [LinkedIn](https://www.linkedin.com/in/rohinipandhi/) and [X](https://twitter.com/rohinip).* *[Mary Liu](https://www.linkedin.com/in/marygliu/) is a seasoned product leader specializing in core/growth products and AI for consumer and SaaS companies. She has founded and scaled new product and platform areas at [Square](https://squareup.com/us/en) and [Shopify](https://www.shopify.com/) and accelerated growth and engagement at [Dropbox](https://www.dropbox.com/about) and [Facebook](https://about.meta.com/technologies/facebook-app/). She now advises growth-stage companies as an interim product leader, devising product and talent strategies, often involving AI/ML transformations, to unlock their next level of growth. You can find her on [LinkedIn](https://www.linkedin.com/in/marygliu/).* ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/b57956f5-9add-417f-ba3b-14ce39344174_1600x800.png) Late last year, Block (formerly known as Square) made several striking announcements about its org structure. The company [laid off](https://www.businessinsider.com/jack-dorsey-warns-block-employees-job-cuts-internal-memo) about 10% of its headcount and moved Square from a general management (GM)-led organization to a functional model, which was a surprise to most employees and the press. For years, Square’s product and engineering teams had been organized into separate business units, each led by a general manager who owned the business outcomes and related product mandates. Now product and engineering are centralized into functional organizations, where engineering, product, and design discipline leaders co-lead product metrics that drive specific business outcomes. ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/6eb20cc5-a6b3-4fe0-a4d4-db65a196ad29_1452x512.png) As the founder and CEO of Block and Square, Jack Dorsey underscored the change to his [shareholders](https://s29.q4cdn.com/628966176/files/doc_financials/2023/q4/Block_4Q23_Shareholder_Letter.pdf): > *“**The past organizational structure was holding us back, slowing us down, and weakening our skills.** I want Square to be a leader in engineering and design again. A team people point to as an inspiration, and aspire to join.”* Block is not alone in this type of restructuring. Other successful companies, including Coinbase, Shopify, and DoorDash, have shifted between GM models and functional models at various stages of their growth. While there is no perfect organizational design, the optimal organizational structure involves carefully weighing the pros and cons that align with the company’s current lifecycle, values, and offerings. To make the most suitable choice, leading companies consider the inherent strengths of their products and business approaches, and the implications an org structure has on internal decision-making and talent retention. ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/f10d723e-3418-467d-b2c1-abe9221a3fdc_4000x3416.png) ## How company stage informs organizational design **In the early stages, companies almost always adopt the functional model.** Since general managers are responsible for business P&L, the founder essentially plays the role of a GM. The rest of the organization focuses on finding product-market fit, scaling the core product, or building new product functionality. **To scale the founder’s role, companies consider GM models typically after they have multiple proven product groups, predictable business outcomes, and significant scale.** For example, Block transitioned to the GM structure close to its IPO, when it had hundreds of millions in revenue, an extensive portfolio of product groups (e.g. Cash App, Capital, Invoices), and thousands of employees. Coinbase shifted to a GM structure in late 2022 when it produced multi-billions in revenue from distinct customer segments (consumer vs. institutions). About 10 years after founding, Airbnb restructured to a GM-led model when the company was a few thousand employees strong and started expanding beyond accommodations (e.g. experiences)—all of which ran differently and required fast decision-making. Interestingly, after Airbnb divested from these new business bets (as a result of the pandemic), they’ve reverted back to a function-led structure. **In practice, most companies operate in a hybrid model but** ***skew*** **toward the GM or functional mode.** Depending on what is needed for specific products and teams to succeed, some parts of the company are GM-led, with P&L accountability, and some are function-led, with product success metrics. The approach marries GM-model advantages in speed and agility with functional-model benefits in product cohesion and organizational alignment. ## How **product and business model** inform organizational structure Besides company stage, leading companies typically have two primary considerations for deciding between a functional versus GM model: #### **Factor A: How close is the product North Star metric to revenue?** **The closer your North Star metric is to revenue, the more suited your organization is to a GM model.** For instance, many payments and commerce platforms (e.g. Block, Coinbase, Amazon) have a North Star metric of transaction volume, which directly drives their business topline. Since each of their product lines has an immediate impact on that P&L, those product groups can be easily aligned to GM responsibilities. Conversely, companies with product metrics that are a few levels removed from direct revenue impact often work better with functional structures. For example, most ad-based businesses (e.g. Meta, Google Search) invest heavily in user growth and engagement as their product North Star metrics. These product metrics scale user reach and time spent on their platforms, which indirectly drive the ad impressions and business revenue but are detached from immediate P&L impact. The functional model allows functional leaders to focus on the product priorities that will ultimately make the company a success. A hybrid approach could work for companies somewhere in between. For instance, DoorDash’s product and operational metrics are both equally important to business topline and margins, given the incredible complexities of its go-to-market and logistics operations. So the company pairs product leaders alongside GMs. Product leaders are responsible for product growth and engagement, with the typical engineering, product, and design triads. GMs lead go-to-market and operations (e.g. marketing, sales, partnerships, physical micro-fulfillment centers) and have P&L responsibilities. Similarly, parts of Canva also pair their product leaders with GMs. Product teams build Canva’s scalable content creation software, while GMs lead the enablement of hundreds of content experts to produce its rich content library of more than 125 million templates and media. The separation of duties between the product teams and GM orgs allows Canva to grow both its platform and content templates in parallel, one of its key business differentiators. #### **Factor B: How critical is the holistic customer journey to the product’s growth?** **Functional models optimize for product growth through cohesive customer journeys.** This is especially critical for growth-stage companies. When the customer journey is seamless, organic flywheels emerge. The core product’s reach and distribution enables new products to be surfaced organically in user journeys. Those new products then increase core product stickiness and retention. For example, Shopify’s core product is a single “back-office” that makes it easy for e-commerce merchants to operate their online store. The core back-office offerings solve merchants’ needs for online store transactions: building elegant websites, accepting payments, and managing orders. More complex merchant needs, such as those before and after an online store transaction like website marketing and order fulfillment, Shopify makes possible through first- and third-party apps and services. The shift from GM to functional model in 2020 made it easier for the company to deliver a seamless merchant experience across the suite of products that are part of the core back-office. Product cohesion also amplified organic growth flywheels. Synergies across core product lines enabled the core platform to scale across customer segments and make it easier to organically attach apps and services in flow, instead of needing ad-like “cross-sell” strategies. Although it takes longer for Shopify to win specific verticals (such as fulfillment) through first- and third-party apps, the overarching merchant experience has been highly defensible and sticky. Shopify is now the sole system of record and engagement for many customers. ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/a76ceea4-a26e-4df0-8e3e-003eda32414b_1600x893.png) ## Organizational structure’s downstream impact on **teams and talent** Best-in-class companies also consider a few downstream factors of their organizational design when deciding on the right one. The structure can impact how business-critical decisions are made, the cultural tone set for the company, and even talent goals. #### **Factor A: Can the business support redundant teams?** GM organizations often have redundant staffing across functional disciplines so that business units can operate as independently as possible—a key trait of the GM model. A great example within Block was the mirrored corporate structure of Square and Cash App. Both organizations had their own teams running functions like compliance, communications, and marketing. They even had separate physical office locations, underscoring the optics of the autonomous business areas. That said, most GM companies take a hybrid approach. For instance, Coinbase and Intuit both have centralized platform teams alongside GM business units. Platform groups build shared services and infrastructure, especially where there are data network effects (e.g. AI modeling, identity and security) to enable more intelligent and consistent application layers. GM-led business units build platforms and products unique to distinct customer segments, with dedicated resourcing for the business unit to move nimbly. For example, Intuit’s B2B business area leads QuickBooks and Mailchimp, whereas Intuit’s consumer business area leads TurboTax and Credit Karma. Similarly, Coinbase has three business areas serving institutions, consumers, and developers distinctly. On the other side of the coin, companies like Meta and Shopify use a hybrid approach to help leaders move quicker within the functional structure. Leaders set company-level priorities and pull together a special task force, with a champion or captain for each priority to drive critical decisions. Those champions are GM-like. They have the vision and strategy chops to consider the end-to-end product journey and business “system.” They influence and debate with their peers and executive teams to win sponsorship and resourcing across various product and business organizations. Decision alignment frameworks like [RACI](https://en.wikipedia.org/wiki/Responsibility_assignment_matrix), [RAPID](https://en.wikipedia.org/wiki/Responsibility_assignment_matrix#RAPID), and [SPADE](https://review.firstround.com/square-defangs-difficult-decisions-with-this-system-heres-how/) also help delegate downstream decisions to people outside the task force. #### **Factor B: What type of talent is the company aiming to retain?** In GM organizations, leaders with depth of expertise in one specific domain are crucial, because they are responsible for the success of their business area alone. For example, a GM leader you may consider hiring for an e-commerce lending business would have a vastly different profile than a GM leader focused on building payment infrastructure. In functional structures, the core engineering, product, and design triad is more fungibleand can be placed in various projects that need their discipline expertise, rather than specific business or industry domains. It’s more important to have strong and flexible crafters for a functional structure. In addition to the type of talent required, another consideration is talent retention and career ladders. Within the GM structure, the promotional path for an ambitious senior leader is to wait for a GM position to open up. When the structure limits these leaders from “leveling up,” the best they can do is find larger internal teams to lead or search for opportunities externally. Conversely, a functional model allows discipline leaders to own an increasingly larger scope of impact as they rise in the ranks. But this model allows only a small number of top leaders to own the business end-to-end across disciplines, which can limit the learning for strong crafters who have multidisciplinary aptitude. One of the biggest advantages to a hybrid structure is that it provides additional flexibility in career ladders so that a company can retain strong talent across the board. Meta and Shopify have champions leading company-level priorities across disciplines and organizations, akin to GMs. Intuit and Coinbase have more “horizontal” product groups that drive shared missions across business units, such as platform and growth teams, which affords more opportunities for senior leaders to take on responsibilities with more breadth, akin to GMs, partnering across business units to make tough tradeoffs like balancing short- and long-term investments. ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/931eefc9-eab0-41c8-9050-84e076a999ac_1600x878.png) ## **Summary** The “right” organizational model is all about determining acceptable tradeoffs. To decide what suits your company’s stage, culture, and products best, it’s crucial to deeply understand your product and business model advantages, the processes that will drive the appropriate decision-making internally, and the people who can execute to make it all happen. Companies often start with a more functional mindset and then swing to the other side of the spectrum, installing GMs who can drive additional growth. While the perfect hybrid state of balance is almost impossible to achieve, most organizations aim to get the best of both worlds as they scale and end up with a structure that leans toward one of the models described above, either with quasi-GMs installed or shadow functional organizations operating across the matrixed organization. ![Image from General management, functional, and hybrid models: Which org design works best](https://substack-post-media.s3.amazonaws.com/public/images/66e3cb6f-aa8d-4ddc-bece-f0ee3b41824a_4000x4282.png) *Thanks, [Rohini](https://www.linkedin.com/in/rohinipandhi/) and [Mary](https://www.linkedin.com/in/marygliu/)! Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [27/61] Meet your Lenny’s Newsletter Fellows ✨ When I announced [the launch of my fellowship program](https://x.com/lennysan/status/1777829703799418964) three months ago, I had no clue how this idea would land—much less how popular it would turn out to be. The caliber of applicants and the effort they all put into their applications was beyond anything I could’ve hoped for. I received over 1,600 applications, many of which came with heart-melting messages, laugh-out-loud-funny videos, and even a ChatGPT injection attempt 🤣 ![Image from Meet your Lenny’s Newsletter Fellows ✨](https://substack-post-media.s3.amazonaws.com/public/images/7558d683-9aed-4e1b-9163-e4d0a7c8a6cb_678x116.png) I read every application, watched every video, and looked at every writing sample. I wasn’t *exactly* sure what profile I was looking for when I started, but I knew I wanted to find people who were senior enough to have had firsthand experience building world-class, successful, and impactful products (to have real-life lessons to share with others), while also not so senior that this fellowship wouldn’t meaningfully impact their career trajectory. Essentially, I designed the fellowship for product leaders with strong industry experience and lots of potential career upside. **I’m excited to share the inaugural Lenny’s Newsletter Fellows: [Tara Seshan](https://www.linkedin.com/in/tarstarr/), [Natalie Rothfels](https://www.linkedin.com/in/nrothfels/), and [Jules Walter](https://www.linkedin.com/in/juleswalter/).** ![Image from Meet your Lenny’s Newsletter Fellows ✨](https://substack-post-media.s3.amazonaws.com/public/images/85dd57d3-8aa8-4868-8a8a-fad267749b49_4000x2000.png) **Tara Seshan** has spent the past 10 years building software to solve hard problems in health care, finance, and climate. She spent two years as Head of Product at Watershed, seven years as an early PM and Business Lead at Stripe, and founded a health-care startup as an early Thiel Fellow. These days, she’s working on a new startup in the creative-tools space. She likes to throw [pancake block parties](https://x.com/tarstarr/status/1495959861317799940) in San Francisco, record a podcast called [The Red Queen](https://podcasts.apple.com/us/podcast/red-queen-podcast/id1744818916) with her friends, and write about the friction between our private and working selves at [Working Assumptions](https://worktopia.substack.com). **Natalie Rothfels** is an executive coach working with co-founders and leadership teams to strengthen their relationships and build less toxic organizations. After a decade of building ed-tech products at Khan Academy and Quizlet, she felt the gravitational pull toward tending to the hearts of the humans behind the products. She is perpetually trying to sew the perfect pair of pants (still no dice) and recently launched a facilitation tool called [The Ripple Deck](https://rippledeck.com?ln=). Sorry in advance if she asks how you’re feeling and expects a real answer—you can blame that on being a Certified Internal Family Systems Practitioner and a facilitator for Stanford’s “Touchy Feely” course. In another life, she’d like to lead an angsty pop-punk band. **Jules Walter** is a product leader at Google working on Gemini. Previously he was at YouTube, where he launched Primetime Channels with more than 40 streaming packages, such as NFL Sunday Ticket. Prior to Google, Jules spent four years as a product leader at Slack on their growth and monetization teams. While there, he was a key contributor to Slack’s 10x growth. Jules is passionate about building helpful products at scale and improving inclusion and diversity in the industry. He serves on the boards of [CodePath](https://www.codepath.org/) and [Black Product Managers](https://www.blackproductmanagers.com/), two organizations he co-founded to support underrepresented people in tech. He lives with his wife and two kids in Berkeley, California. Please join me in welcoming Tara, Natalie, and Jules in the comments 👏 [Leave a comment](https://www.lennysnewsletter.com/p/meet-your-lennys-newsletter-fellows/comments) **What comes next:** I’ll be looping in Tara, Natalie, and Jules on both the back end and front end of my newsletter and podcast operations—expect to see a handful of guest posts, podcast appearances, and some other fun surprises soon. *P.S. If you applied for the fellowship, I’ve already sent you a note, but I just want to say thank you once more. There are so many incredible people who applied, and I’m thrilled to see that this newsletter and podcast have made such an impression on such an impressive group. Assuming all goes well, I’ll be kicking off another fellowship cohort later this year 👀* --- ## [28/61] Counterintuitive advice for building AI products You’re either building AI into your product now or you will be soon. And you’re probably already swimming in advice on the subject. But most of the advice out there is full of big, lofty ideas and light on tactics rooted in actual experience that you can implement today. So I teamed up with frequent collaborator [Kyle Poyar](https://www.linkedin.com/in/kyle-poyar/) to interview more than 20 successful builders and founders—people who have learned about building AI products the hard way—to share their biggest surprises and counterintuitive lessons. Many of these insights surprised me and got me thinking in a different way. I hope they will for you too. ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/f9f3fede-958e-4db1-959e-87180174e353_4000x2000.png) Let me guess: You have a high-priority project on your roadmap right now to add (more) AI features to your product. You’re in good company. A recent [survey](https://docsend.com/view/pi629vaxy57u9qvb) by Emergence Capital found that 60% of companies have already integrated generative AI into their products, and another 24% have it on their roadmap. AI is quickly eating the world. Unfortunately, many of these efforts will end in failure. Most early AI apps have a [“tourist”](https://twitter.com/omooretweets/status/1770470084601114837) problem: they get a lot of traction quickly but have [shockingly low retention and engagement](https://www.bvp.com/atlas/seven-product-strategies-to-prevent-churn-for-b2b-ai-app-leaders). And according to that Emergence survey, [two in five](https://docsend.com/view/pi629vaxy57u9qvb) gen AI products still haven’t made a single dollar despite companies spending millions (or even [billions](https://www.nytimes.com/2024/04/24/technology/meta-profit-stock-ai.html)) to build and support them. The goal of this post is to help you avoid wasting your precious time and resources by pointing your team in the wrong direction. I polled more than 20 of the sharpest AI product builders asking them for the most counterintuitive and surprising things they’ve learned about building AI into their products. These leaders have built many of today’s most loved and successful AI products, including products at Adobe, GitHub, Intercom, Perplexity, Canva, Runway, HeyGen, and Superhuman. Here’s what I learned: ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/a18d9636-1132-4b94-bba9-91968a13e0e1_6958x7088.png) ### **1. You first need to learn to think differently** > *“It takes time to think AI-native. The first-pass product is often a bolt-on or simple chat experience. **The high-value experience is a deeper rethink** once you have played with the technology, understood what it really provides more deeply, and then integrated it into a key part of your product experience.”* > > —[Elad Gil](https://www.linkedin.com/in/eladgil/), technology entrepreneur and investor [Watch on YouTube](https://www.youtube.com/watch?v=xcvIGJ3_H_k) > *“**It’s actually easier and safer for startups to work on hard problems, problems that cannot quite be solved with today’s foundation models.** We’re excited about riding the capability curve of improving models, instead of fighting that progress.”* > > —[Sarah Guo](https://twitter.com/saranormous), startup investor and founder at Conviction > *“Over the past 10 years, for most companies (with the exception of some hard-infra projects), it is assumed that what you want to build can be fairly easily built. You start by deeply understanding the customer problem and opportunity, design what you believe to be a great solution, and build it. **AI is different.*** > > *With AI, it is wholly unclear if something is possible to build. And when it is built, it is wholly unclear if it is any good, even if it appears to be good. Often the best place to start projects is by asking, **‘What is technologically possible?’ and prototyping.** This is a big mindset shift for anyone who has built software for the past decade and followed standard best practice.”* > > —[Paul Adams](https://www.linkedin.com/in/pauladams/), chief product officer at Intercom [Watch on YouTube](https://www.youtube.com/watch?v=4fJ3rYVlfYE) ### **2. Though it still comes down to who can solve real problems for people best** > *“**Demo value isn’t user value.** Building a cool AI demo doesn’t mean we have a product that customers love and is useful.”* > > —[Joshua Xu](https://www.linkedin.com/in/buffxz/), co-founder and CEO at HeyGen [Watch on YouTube](https://www.youtube.com/watch?v=SEE875kutbk) > *“I spend a lot of time thinking about adoption curve segmentation—identifying who adopts a new product quickly and who does not, and what distinguishes these groups. Historically, I’d focus on understanding the value a new product provides to people with different functional needs. **AI changes this dynamic because the most meaningful segmentation often depends on attitudes toward the technology itself: AI embracers versus AI skeptics.*** > > *Many have discussed the AI ‘phantom PMF’ phenomenon, where novelty-driven acquisition leads to a steep churn cliff, but the reverse is also true. I frequently speak with customers who reject AI products that meet their needs simply because they don’t trust or want to embrace AI. With the right messaging and onboarding, these skeptics can become superusers! But they behave very differently from AI embracers. I sketched this out in the chart below.* > > ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/65afde2c-12b4-480e-a0dd-99080ecd7c4b_1600x955.png) > > *As a result, I’ve had to rethink our user testing approach from the ground up. When testing AI products, I focus on the following:* > > 1. *Longitudinal validation: Are we testing for a long enough period to understand how engagement changes once the novelty wears off?* > 2. *High-touch testing: Are we staying close enough to users to understand how their attitudes, which drive engagement patterns, change daily? We’re experimenting with user Slack groups instead of traditional surveys and one-on-one qualitative interviews.* > 3. *Attitudinal segmentation: Are we including both AI embracers and AI skeptics in our early testing groups? Crucially, are we segmenting them carefully to avoid averaging out their engagement and creating [‘tepid tea’](https://theaccidentalmarketer.com/blog/why-your-b2b-company-should-focus-on-needs-based-segmentation/)—a product that satisfies no one?”* > > —[Hilary Gridley](https://www.linkedin.com/in/hilarygridley/), head of core app product at WHOOP [Watch on YouTube](https://www.youtube.com/watch?v=zIaNjKYImFA) > *“Building fantastic product experiences hasn’t gotten easier with AI. Sci-fi capabilities of the models are inspiring, but that’s not what makes AI products great. Good old-fashioned product engineering does. **This means homing in on real user pain points, iterating closely with customers, and holding a high bar for a delightful user experience.**”* > > —[Caitlin Colgrove](https://www.linkedin.com/in/colgrove/), co-founder and chief technology officer at Hex [Watch on YouTube](https://www.youtube.com/watch?v=Gvq7M0Cd9HQ) > *“Most people think about AI-assisted services in terms of the model quality, but model quality is just a tiny piece of the total product. It turns out that post-processing filters, contractual guarantees, data privacy, feedback loops, observable human impact, etc. are all far more important. **In other words, building AI products looks a lot like building products.**”* > > —[Ryan J. Salva](https://www.linkedin.com/in/ryanjsalva/), vice president of product at GitHub ### **3. Paired with the right product design and UX to teach people how to use it** > *“The promise of AI (LLMs in particular) is to create anything for you with just a few words. But as we have seen over the past decade with Canva, when you give people the power to do anything, it can be pretty daunting and they don’t know where to start. So—just as with the very first version of our design tool—giving people the right starting points and confidence to utilize AI is a crucial part of delivering a great AI product.* > > *The evolution of our Magic Media feature is a great example of this. Text-to-image is a magical piece of technology when you know what image you want and how to describe it. But most people don’t have the right vocabulary to properly explain what they’re looking for; or even worse, they don’t know what they’re looking for!* > > *Our iterations on Magic Media have lessened that fear-inducing empty prompt box and introduced more visual options to guide you to a great image, as well as help to get people prompting in the right way. We’re also focusing on what happens after that generation—how you tweak and adjust what an AI has given to be exactly what you want.* > > ***All of this underscored to us that AI tools require a combination of intuitive product design and broader, ongoing education to support these behavior shifts.** You can't ‘flip the switch’ with AI—society is in the midst of change at a cultural level, but well-built products can support this shift.”* > > —[Cameron Adams](https://www.linkedin.com/in/themaninblue/?originalSubdomain=au), co-founder and chief product officer at Canva > *“Experimenting to find the right UI/UX for an AI feature can have an equally big impact on conversion metrics as research updates to the AI model itself. The right UX doesn’t just make new model capabilities more discoverable—it actually improves the conversion for users who use that capability, even if they were already using the capability anyway in the original UI.”* > > —[Joel Kwartler](https://www.linkedin.com/in/joelkwartler/), head of product at Runway [Watch on YouTube](https://www.youtube.com/watch?v=nByslCkykj8) ### **4. And the (proprietary) data you have access to (and a license for) is becoming increasingly important** > *“The data and the interfaces may become more important than the models themselves, which are becoming increasingly commoditized, available via open source, and pushed to the edge (we’ll be running many models locally on devices within a few years). The AI products I am most excited about leverage a proprietary or uniquely structured set of data—for which they have a license to use rather than scrape it—and a superior interface that transforms an antiquated workflow.* > > *What are the implications of this? **Companies that have or really understand data in a deep vertical will have an advantage.** **And designers will be more important than ever before**, imagining entirely new ways to transform the interfaces of our everyday work and life with the superpowers of AI.”* > > —[Scott Belsky](https://www.linkedin.com/in/scottbelsky/), chief strategy officer and executive vice president (EVP) of design and emerging products at Adobe; founder of Behance [Watch on YouTube](https://www.youtube.com/watch?v=vpiALnqE-VQ) ### **5. Be intentional about your initial wedge workflow** > *“**Start with a core workflow that feels like a chore where the promise-to-payoff is high if you get it right.** You want to select a place where the upfront user effort (like taking the leap to try it out or customizing it) yields a big reward (like substantial time savings) and invites repeat use.”* > > —[Paige Costello](https://www.linkedin.com/in/paigecostello/), head of AI at Asana ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/7421589a-0cf8-4995-9a38-67f174653e9e_1036x820.png) ### **6. Just calling your product “AI” could give you a boost** > *“We talk so much in software about how users don’t care about how something is built; they care about the job software does for them. **But we’ve found that branding AI-powered products as ‘AI-powered’ (as cringe as that can be) does more than increase initial engagement—it also helps users understand what the feature is capable of and how they should interact with it.** We sell a chatbot product and typically encourage our customers to brand their chatbot as AI-powered in some way. When they do this, more users use it, and they also use it better.”* > > —[James Evans](https://www.linkedin.com/in/james-evans-7086b3126/), co-founder and CEO at CommandBar ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/6238a90d-59ab-4495-8f59-813d6aabbaf6_1600x923.jpeg) > ***“ ‘AI mandates’ at larger companies create a window for startups to gain customers faster than they could pre-AI**,simply because the board and CEO of larger companies are pushing for something in AI to happen in their org.”* > > —[Elad Gil](https://www.linkedin.com/in/eladgil/), technology entrepreneur and investor ### **7. And even small AI-driven improvements can go a long way** > *“**The smallest (and almost invisible) features are usually the fan favorites.** Things like pre-filling names, tiny bits of UI magic, simple data transformations often have a bigger impact and more customer adoption than the Big AI Features™ like chatbots or complex agents. You don’t need a big idea to ship useful AI features into your app.”* > > —[Claire Vo](https://www.linkedin.com/in/clairevo/), chief product officer at LaunchDarkly and founder at ChatPRD > *“**Look less at ‘what cool new things could AI do’ but more at ‘what’s the thing our users do 100 times a day that AI could make better.’** An example for us is writing a summary for an incident. It turns out that users vastly, vastly prefer automatically generated summaries to writing these themselves; 75% of incident summaries are now AI-generated.”* > > —[Stephen Whitworth](https://www.linkedin.com/in/stephenwhitworth/), co-founder and CEO at Incident.io [Watch on YouTube](https://www.youtube.com/watch?v=NHUhC5vHDZk) ### **8. Anticipate the AI won’t be perfect, so give users options, and keep fine-tuning the prompts** > *“People need and want a lot of customization to make AI products work for their use case. They are willing to put in a lot of effort curating prompts, experimenting with models, and building on APIs that were never even imaginable a year ago.”* > > —[Johnny Ho](https://www.linkedin.com/in/hjohnny/), co-founder and chief strategy officer at Perplexity ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/1b54cc52-858e-4063-b90f-af426cc2f22f_1600x1036.png) > *“It may seem obvious, but traditional software is deterministic—it either does a thing or doesn’t. Services built using LLMs, on the other hand, are probabilistic. They may occasionally produce a helpful response, and other times not. **The trick is achieving consistency in the model responses so that users can generally expect a good result.*** > > *GitHub Copilot has an acceptance rate of 35%. That is to say, developers commit 35% of Copilot suggestions into their code editor. A ‘good enough’ acceptance rate will differ based on the use case and customer cohort. The best way to find out what’s right for you is to ask your customers, ‘Is this making your job easier?’ ”* > > —[Ryan J. Salva](https://www.linkedin.com/in/ryanjsalva/), vice president of product at GitHub ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/4b5cb073-5fcf-4bf3-9034-5b7ed4905f40_1600x714.gif) > *“A significant amount of AI innovation is in the prompt. Time and time again, I’ve seen teams reach this aha moment of realizing **they don’t necessarily need to build new features, but they need to spend time on making their prompts better**—prompts to improve quality, improve the results, or prompts which solve a problem for a customer in a unique way. A meaningful prompt can solve meaningful problems for customers.”* > > —[Sherif Mansour](https://www.linkedin.com/in/sherifmansour/?originalSubdomain=au), distinguished product manager at Atlassian ### **9. Also anticipate the base model constantly improving** > *“[RAG](https://aws.amazon.com/what-is/retrieval-augmented-generation/) works surprisingly well if you give it the right context and ask the model to include links to the sources. If built the right way, AI-infused products automatically get better on their own when the underlying model improves. For example, Limitless will get better overnight when we move from GPT-4 to GPT-5. So build products in a way that leverages the strengths of the underlying foundation models and doesn’t compete with those strengths. Assume the models will keep getting stronger.* > > —[Dan Siroker](https://www.linkedin.com/in/dsiroker/), co-founder and CEO at Limitless [Watch on YouTube](https://www.youtube.com/watch?v=lt_WnR_GZqs) ### **10. Watch out for scalability bottlenecks** > *“Initially an AI model might perform well with a limited set of tasks or data. **However, not planning for the scalability of both the AI system and its infrastructure can lead to performance bottlenecks as user demands increase**.This oversight can result in slow response times, decreased accuracy, and an inability to integrate new data or features efficiently. Scalability planning from the outset is crucial to support growth and changing requirements.”* > > —[Chris Lu](https://www.linkedin.com/in/chris-lu11/), co-founder at Copy.ai ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/3ceddcd3-c661-47ce-87e4-3c953ce39d1d_960x727.gif) > *“It’s easy to build too much ‘scaffolding’ logic on top of base models in the pursuit of optimizing quality. Fine-tuning and few-shot example training the models directly have been far more effective at improving quality for us. Beyond those, the product needs to be designed to use the raw model output as directly as possible to maximize quality, not to mention support a wide range of inputs and work reliably.”* > > —[Henri Liriani](https://www.linkedin.com/in/hliriani/), co-founder and chief product officer of Tome ![Image from Counterintuitive advice for building AI products](https://substack-post-media.s3.amazonaws.com/public/images/22fa3c07-168c-4e91-a74c-883b69aee0a2_800x450.gif) ### **11. Keep an eye out for time spent in-app going down** > *“While the previous generation of AI/ML breakthroughs like recommendation or ranking systems were finding the best product-market fit with products that took time away from people (social media, etc.), this new wave of generative AI seems to find the best PMF with products that increase productivity and give time back to people. **So don’t be surprised if the best AI features reduce metrics like time spent in-app.**”* > > —[Gaurav Misra](https://www.linkedin.com/in/gamisra1/), co-founder and CEO at Captions [Watch on YouTube](https://www.youtube.com/watch?v=X9yNocxacHs) ### **12. Oftentimes, speed alone will help you win** > *“**The thing we’ve learned: speed wins.** Take, for example, Instant Reply or Auto Summarize. Gmail and Outlook have similar features, but you have to generate the replies and summaries on demand—and then wait for them to finish generating. In Superhuman, we pre-compute them so they are always instantaneous. That simple difference is a massive lever on the user experience.”* > > —[Rahul Vohra](https://www.linkedin.com/in/rahulvohra/), founder and CEO at Superhuman [Watch on YouTube](https://www.youtube.com/watch?v=OiNWdByBU98) ## **Closing thoughts** Embracing AI opportunities calls for a new approach to building products. The companies that succeed will bring different mindsets and frameworks to unlock 10x outcomes. While the tech gets the attention, the winners will still be the products that solve real problems for people the best and provide the best design and UX to train people how to use it. Be intentional about your initial wedge, and look for a workflow with a big reward and potential for repeat use. The last mile of building AI products can make all the difference. How long do people have to wait for the AI to generate? How consistently helpful are the outputs? Can people customize the prompt for their use case? And remember that we’re still in the early days of AI. Models will make step-function improvements. People will get more familiar with the technology. Keep up with changing expectations to build winning AI products that last. Your first-pass product may be a miss, but keep going and don’t shy away from hard problems. **—** *A huge thank-you to [Caitlin Colgrove](https://www.linkedin.com/in/colgrove/), [Cameron Adams](https://www.linkedin.com/in/themaninblue/), [Chris Lu](https://www.linkedin.com/in/chris-lu11/), [Claire Vo](https://www.linkedin.com/in/clairevo/), [Dan Siroker](https://www.linkedin.com/in/dsiroker/), [Elad Gil](https://www.linkedin.com/in/eladgil/), [Gaurav Misra](https://www.linkedin.com/in/gamisra1/), [Henri Liriani](https://www.linkedin.com/in/hliriani/), [Hilary Gridley](https://www.linkedin.com/in/hilarygridley/), [James Evans](https://www.linkedin.com/in/james-evans-7086b3126/), [Joel Kwartler](https://www.linkedin.com/in/joelkwartler/), [Johnny Ho](https://www.linkedin.com/in/hjohnny/), [Joshua Xu](https://www.linkedin.com/in/buffxz/), [Paige Costello](https://www.linkedin.com/in/paigecostello/), [Paul Adams](https://www.linkedin.com/in/pauladams/), [Rahul Vohra](https://www.linkedin.com/in/rahulvohra/), [Ryan J. Salva](https://www.linkedin.com/in/ryanjsalva/), [Sarah Guo](https://twitter.com/saranormous), [Scott Belsky](https://www.linkedin.com/in/scottbelsky/), [Sherif Mansour](https://www.linkedin.com/in/sherifmansour/?originalSubdomain=au), and [Stephen Whitworth](https://www.linkedin.com/in/stephenwhitworth/) for contributing their insights.* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [29/61] How close is AI to replacing product managers? *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career. If you’re not a subscriber, here’s what you missed this month:* 1. *[Counterintuitive advice for building AI products](https://www.lennysnewsletter.com/p/counterintuitive-advice-for-building)* 2. *[General management, functional, and hybrid models: Which org design works best for top companies?](https://www.lennysnewsletter.com/p/general-management-functional-and)* 3. *[When and how to run a billboard campaign](https://www.lennysnewsletter.com/p/when-and-how-to-run-a-billboard-campaign)* *Subscribe to get access to these posts, and every post. For more: **[Best of Lenny’s Newsletter](https://www.lennysnewsletter.com/p/the-best-of-lennys-newsletter-2023)** | **[Hire your next product leader](https://www.lennysjobs.com/)** | **[Podcast](https://www.lennysnewsletter.com/podcast) | [Lennybot](https://www.lennybot.com/) | [Swag](https://lennyswag.com/)*** In my quest to develop a comprehensive benchmark to measure progress toward AI replacing PMs, I teamed up with full-time prompt engineer (and past collaborator) [Mike Taylor](https://www.linkedin.com/in/mjt145/) on a piece that will surely blow your mind. I’d love to hear your reactions in the comments. [Leave a comment](https://www.lennysnewsletter.com/p/how-close-is-ai-to-replacing-product/comments) ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/80761805-aa31-4255-ae20-8a66abd3de16_8000x4000.png) The AI industry moves fast, which leads to lots of confusion about what AI is actually good at. OpenAI, Anthropic, and all the other AI companies are constantly testing their latest models’ math, language, and coding abilities. However, these abstract benchmarks don’t tell us how much of *your* job AI is able to potentially replace, now or in the near future—which is really what we care about. To make matters more challenging, expert prompting is necessary to make responses from a model any good. **As a result, most people underestimate how close ChatGPT and other tools are to replacing the work of a human. Whenever you see the headline of an article or scientific paper that says “ChatGPT can’t do x,” it’s usually because they didn’t use the latest model and didn’t make use of prompt engineering.** For example, the authors of the paper “[ChatGPT is fun, but it is not funny](https://arxiv.org/abs/2306.04563)” used only basic prompts like “Tell me a joke, please!” and were testing GPT-3, not GPT-4. When I tried this same task myself, applying some prompting principles, I found that [you can very much get the newer models of ChatGPT to tell a funny joke](https://www.saxifrage.xyz/post/chatgpt-joke). “[Language Models are Few-Shot Learners](https://arxiv.org/pdf/2005.14165.pdf)” showed that prompting techniques could drive around a 30% improvement in accuracy on some tasks, and if you add multiple examples of the task being done correctly, you can get an overall 50% to 60% accuracy boost. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/b51d1aab-fe4e-474e-b86d-f7770b798575_1198x630.png) Thus, to realistically measure how close AI models are to replacing the work of a human—in our case, a product manager—we need to collect real-world examples of difficult PM tasks that AI tools seem to struggle with, use the best current model, and apply *prompt engineering* principles to give the models the best chance possible. (This is [the same approach Google recently used](https://storage.googleapis.com/deepmind-media/gemini/gemini_v1_5_report.pdf) to test Gemini 1.5’s capabilities.) I work as a professional prompt engineer and recently published a book with O’Reilly, *[Prompt Engineering for Generative AI](https://www.amazon.com/Prompt-Engineering-Generative-Ai-Future-proof/dp/109815343X)*, so I’ll use my prompting skills to see if I can get an AI tool to beat humans at a set of PM tasks. We’ll evaluate who “wins” at each task with blind Twitter/X polls, where voters don’t know which response is AI or human. From this exercise, our goal is to understand how close AI is to automating the PM role, and what task areas are most likely to be delegated first. ### Sourcing hard tasks To establish a baseline of what tasks are hard for AI, [Lenny put out a call for tasks](https://x.com/lennysan/status/1785055728903897209) that PMs have tried and failed at getting ChatGPT to do: ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/9b981867-2dc2-459d-aa73-162a06cb58e4_876x720.png) Our plan was to take three of these tasks and see if I could prompt the AI to do a better job than a human. Whether one answer to a task is “better” than another is subjective, even among humans. With AI in the mix, some people dislike its overly formal tone, verbosity, or lack of personality, while others appreciate AI’s comprehensiveness, objectivity, and well-structured formatting. For the purposes of this experiment, we're interested in both how people rate the answers and their comments about why. **In order to run a fair test, we got people to rate which answer to the task was better, without revealing which was AI. The results were shocking:** - **The AI answer beat the human answer in two out of three tasks!** - **70% to 80% of people guessed which answer was AI, but many still preferred it** - **There is room for improvement—small changes to the prompt yielded better results** This was only a small test, and AI is still a long way from working independently as a product manager. But it’s important to remember that right now is the worst AI will ever be at any task—these models may continue to get twice as good every six months. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/0996b5d4-1ba8-43a6-93a0-7570912983a9_1600x900.png) ### Our method for testing AI performance From the initial shortlist of hard PM tasks we got in response to Lenny’s social posts, we selected three that we thought would be most impactful to day-to-day work: 1. **Developing a product strategy** 2. **Defining KPIs** 3. **Estimating the ROI of a feature idea** My method was to look at what a typical human response to each task might be and then write a prompt to solicit a similar response quality and structure from AI. We then asked people on X which of the two answers they thought was better. Prompts were run in the OpenAI Playground (which is available to anyone with a developer account). This let us set our own [system prompt](https://docs.anthropic.com/en/docs/system-prompts) (the instructions for how the model should behave) rather than using the [ChatGPT system prompt](https://www.reddit.com/r/OpenAI/comments/1akye4v/chatgpt_system_prompt_is_1700_tokens_if_you_were/), which has a lot of extra words that might throw off our test. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/38a67f2a-e478-4991-9dc8-3430524914c6_1600x841.png) The actual evaluation poll was run by Lenny tweeting screenshots of two solutions, without saying which one was AI. People were encouraged to vote on which they thought was the better answer, and also tell us which one they thought was made by AI: ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/3fe35ba3-5cc6-4cd8-9a0e-d3912a762a0c_1208x1296.png) We ran this as a blind test because that’s the only fair way to evaluate performance. Think of it like the [Coke vs. Pepsi challenge](https://en.wikipedia.org/wiki/Pepsi_Challenge): when Pepsi is in unmarked containers, people prefer the taste, but when people see the Coca-Cola brand on the can, they prefer that instead. Given that people have so many opinions on AI, both positive and negative, revealing which response was AI could have skewed the test. (Perhaps it’s self-preservation, but when I compare AI output with my own work, I think it’s bad, yet when I run blind tests, people often prefer the AI.) ### Finding training and evaluation data The hardest part of doing a blind evaluation was finding real examples and results from a human doing the task. When we googled these PM tasks, we mostly got blog posts with advice on how to approach the task, but with no tangible real-world examples. One rare exception was the fantastic PM interview questions database curated by [Exponent](https://www.tryexponent.com/questions) (no affiliation; I just like their content), a website that helps people prepare for job interviews at top-tier tech companies like Google, DoorDash, Amazon, Airbnb, Spotify, and Meta and is the official interview prep partner for schools like Stanford, Yale, Cornell, and Columbia. We used PM answers from Exponent as the human responses for all three selected tasks. I’ll add that there could certainly be better human answers, but thousands of PMs are using these answers in their interview prep monthly, so it’s a strong benchmark to use. ### Test results Now let’s get to the test results. We’ll first present the task and the two solutions (one AI, one human). Then we’ll reveal how they did when we tested them with X polls and discuss what that means for product managers today. After sharing the results, I’ll also share my prompts for you to use and explain what techniques I deployed to get above-average results. ## Task **#**1: Developing a product strategy ### What AI struggles with: One of the most common complaints about AI is that it can’t think creatively, and therefore makes for a poor sparring partner when developing a strategy. This is so pervasive that I’ve even seen people claim they use ChatGPT to decide what *not* to do, to avoid any strategy or action that was too obvious. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/e6fbb40e-77ad-4ce3-89c0-aa6e72ffe80b_1196x538.png) This is a clever use of AI, but I feel that it sells the technology’s capabilities short. LLMs are trained on all the text available on the internet (and beyond), so the default answer you get is going to be approximately the average of the internet. But with better prompting, you can do much better than average, by steering it toward less obvious answers. Developing a strategy is the skill Lenny thinks will become [most dominated by AI](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management#%C2%A7developing-a-product-strategy-and-vision-significantly-impacted), so let’s see where it’s at today. ### The real-world scenario we tested: **Imagine you’re the PM for YouTube Music. What is your strategy for the next year?** #### [Solution A](https://docs.google.com/document/d/1-KCePp5C1TWAS6zj1RyVYw3r7-qJtMjAGBKSvoxZqU0/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/bc3e1f6c-9ede-45b2-a6c5-5090ff845687_1124x1222.png) #### [Solution B](https://docs.google.com/document/d/17jPWOESqaWHHMuSjJ2CMmt2Qs3O1mEcT5Gfspg-TVhY/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/bc76128b-3922-49c8-b0cb-7bc8dceb4e3a_1172x1402.png) ### Which was the winner? The preferred solution was B, which was the AI version, with 55% of the votes (when you include tied votes)! This was a close contest, but a tie is still a win for AI, because it’s so much cheaper and quicker to have AI develop your strategy versus a human. Shockingly, solution B won despite 77% of people correctly guessing it was the AI answer. The human answer comes from [Harshit G’s answer](https://www.tryexponent.com/questions/2930/pick-a-product-that-you-have-been-using-over-the-past-6-months-you-are-the-new-pm-for-it-the-cpo-ask) to a job interview question on Exponent. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/2975710d-1fb6-4b80-9139-883ac3c37200_2100x1526.png) Given that product strategy is so, well … strategic, I’d suspected AI would be further behind on this task. The overriding criticism of the AI version, B, was that it felt like a list of features, rather than a true strategy. I expect this is fixable over time: reasoning ability is an active research area and will likely be the next major leap forward with GPT-5. Humans win on actually being strategic (versus tactical), for now. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/52558cdd-8a67-4139-878d-d651569ddfd4_1100x370.png) I put a lot of work into the prompts to make it harder to guess which was AI, because I assumed people would reject the AI work if they knew it wasn’t human. Not so, as the majority of people who voted for B knew it was AI but still chose it as the better answer. This was unprecedented for me, and it says a lot about the growing familiarity with and acceptance of AI tools. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/e90fb2ad-c961-4c1a-a478-134a4dd5ac09_1178x268.png) Sometimes it’s small details that humanize our work, as in solution A, which mentions a famous cricket player. AI by default produces average answers based on the highest-probability answer, whereas humans can surprise and delight with unexpected connections between concepts. To make your work more noticeably human and less replaceable by AI, incorporating your niche interests and passions into your work seems like it would be a good strategy. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/0870f5d2-ae7a-4eb9-acf9-cc7f51fd03e2_1178x328.png) One thing to note is that we changed up the prompt slightly between [X](https://x.com/lennysan/status/1798412435394904447) and what we posted on [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_help-me-with-one-more-ai-experiment-which-activity-7210797636138725376-h9px/). There were a couple of dead giveaways in the first version of solution B posted on X that I wanted to see if I could correct for by adjusting the prompt. For example, the human solution, A, had grammatical errors and a niche reference to a famous cricketer, so I added instructions to my prompt to “add obscure references” and “make some minor grammatical mistakes due to being busy.” As a result, the score did differ between the social networks, giving AI an advantage on LinkedIn: 59% versus 38%. If we had run v2 of solution B on both social platforms, AI would have had an even more dominant win. ## Task #2: Defining performance metrics ### What AI struggles with: Many of the comments we got on social media mentioned that ChatGPT had a lack of creativity in coming up with performance metrics, and, to be fair, this is a tricky topic that most humans also get wrong. I worked for over 200 startups as a growth-marketing-agency owner, and I would say that less than 10% were confident they were measuring the right performance metrics. But when you do, you can unite an entire organization around a single goal, and magic happens—as was the case with [Duolingo and CURR](https://www.lennysnewsletter.com/p/how-duolingo-reignited-user-growth) (current users retention rate), a key metric they focused on. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/d0171ec0-d4be-41d7-a5af-5098dcb9a78f_1410x556.png) While ChatGPT does perhaps tend to go with the obvious metrics (I haven’t seen it come up with anything as creative as CURR), I was confident we could get it thinking a little deeper about how different metrics stack together. The key was breaking things down by department before bringing everything together in a North Star goal, which is an approach I saw often in human-written responses to this type of task. ### The real-world scenario we tested: **What are the most important metrics for DoorDash?** #### [Solution A](https://docs.google.com/document/d/1n8fC1RJE--r7Rn7oVAXByPw84JCqdrreB5UtGlIppZw/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/b828e11a-683b-409b-b879-3479e781cd6f_1476x1012.png) #### [Solution B](https://docs.google.com/document/d/1JBUwbRMiisomvIljTVBjpbBkR5TZPH7BD3BnZeHmSno/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/341011ce-32d7-4bf5-aa0f-6b9a2663326a_1476x888.png) ### Which was the winner? The preferred solution was A, with **68%** of the votes. This was the **AI** **version**, which 70% of people guessed correctly. If you credit any tied votes to AI, it scored 86%! The human answer comes from [Anonymous Muskox’s answer](https://www.tryexponent.com/questions/3852/what-metrics-will-you-measure-for-doordash) to a job interview question on Exponent. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/c636b65e-9c0c-47e6-8c43-b4ac666f2a8f_2100x1526.png) This was a big win for the AI, with a majority of people admitting it was the better answer despite suspecting it was done by the AI. Again the primary way of identifying AI was that it gave a more comprehensive answer. I actually took steps to decrease the verbosity considerably with this prompt, but it was still enough to get noticed. However, for short tasks like this I have found that being more verbose than a human can sometimes lead to a better answer overall. Many people were fairly certain that A was AI, and they cited how comprehensive or long-winded the answer was as the obvious tell. If you’re trying to hide whether your answer was AI-generated, finding ways to get it to [quit yapping](https://www.reddit.com/r/ChatGPTPromptGenius/comments/1ahu86n/stopping_chat_gpt_from_yapping/) seems to be the key. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/2438ba1b-d845-4770-831e-74645bf6a42e_1178x160.png) Sometimes people were wrong about whether an answer was AI but were right in their criticisms. I think if we can get AI to be considered on the same level as a human, that in itself is a win, because AI costs pennies and takes seconds to answer, so can be scaled significantly, leaving human product managers to do higher-value work, or do the research necessary to get us past intern level. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/6110a902-288f-4827-b78f-f156844ceb97_1178x286.png) We saw many ties across the tests we ran, sometimes because respondents thought both were equally good and other times because they were equally bad. Whether equally good or bad, equal is a win for AI! Especially when you consider it will continue to get better from here, with every possibility that in 6 to 12 months AI could be edging out the average human across multiple PM tasks. We do have to remember that this is a very hard test for AI, given that Lenny’s audience is full of experienced product managers who likely have their own opinions on how to do the task. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/537bfdc9-53fc-49bb-80a8-758426f05918_1192x1042.png) ## Task #3: Estimate ROI ### What AI struggles with: Another task many PMs were frustrated with getting AI to do well was prioritizing product features. The difficulty with this type of task is that ChatGPT doesn’t have all of the context that you have about your organization and the various tradeoffs that need to be made. AI chatbots that “talk to your data” still don’t solve the problem that most of the important things in your organization are tacit, not explicit, knowledge, and not written down anywhere. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/42ae58c6-35e9-4834-8421-1153547f1e1e_850x610.png) In the future, when AI tools have been a fly-on-the-wall participant in every conversation across your business, can access all of your documents, and can fit all of that in its context window (the amount of information it can take into the prompt), they will likely become superhuman at estimating ROI in particular. However, even without these advantages, I’d suspected that AI could be better with just a little bit of advanced prompting. ### The real-world scenario we tested: **Imagine you’re a PM for Meta about to release a new Jobs feature. The launch will happen in 2 weeks. How do you measure the success of this product in the short and long term?** #### [Solution A](https://docs.google.com/document/d/1Fj6Ja0bbWtaZsXSHiObSrTjEGf5bH-iZF5-OHVUd5tI/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/4d07fd90-89c1-4d4b-81e0-9d13ac6909ff_1159x1600.png) #### [Solution B](https://docs.google.com/document/d/1i4johrJ9FqW39aGbfjfCPYIgxUQ0y3WcTjz_qXchEFo/edit?usp=sharing): ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/5b63ae71-ddf9-4bf4-a9e1-9789142db371_1057x1600.png) ### Which was the winner? The preferred solution was A, with **58%** of the votes, which was the **human version**. This was a very close race, with many people saying they only picked A for marginal reasons. And only 65% of people guessed correctly which was AI. The human answer comes from [Avi G’s answer](https://www.tryexponent.com/questions/3811/if-you-were-a-pm-at-meta-and-you-are-about-the-release-jobs-feature-and-this-is-a-new-feature-launch) to a job interview question on Exponent. I actually modified it by adding the numbers, as the original human answer didn’t supply any estimates and I wanted it to be a fair fight. I suspect the AI would have won if it was the only one with numbers. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/2ba73a49-3e44-49a1-bb92-9b2313e30835_2100x1526.png) We got far fewer people voting on this one; I guess I scared people away with the math! So we posted it on LinkedIn as well to get more votes. This time we kept both versions the same as what we tested on X. One of the common misconceptions is that LLMs are bad at math (an early weakness of LLMs that is now largely solved with [chain-of-thought](https://arxiv.org/pdf/2201.11903) prompting), so I think I would have fooled more people with this. If you give LLMs plenty of thinking time so they can work things out step-by-step, they are actually fairly good at providing reasonable estimates. Nevertheless, we got a very tight race for the AI and saw a lot of the same patterns we saw in other tests. When I’m evaluating AI performance for my clients, it frequently becomes clear that we aren’t putting enough effort into measuring human performance. There were disagreements on whether the human answer was good or not, as it did not focus on monetization metrics. Given that this theoretical task was for Meta, which is famously willing to forgo profits for decades before switching on monetization for a feature/platform, I think it’s fair to say that the human-given answer “$ made” wouldn’t be the main metric for launching a new feature. Plenty of PMs disagree, however, and that’s particularly valid now that the era of zero-percent interest rates is over and VC funding is less frothy. How you measure impact is a function of how you measure strategy, which is why these tasks are always going to be somewhat subjective. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/47674042-5d36-485e-b466-cf113187479e_1192x536.png) In their comments on X and LinkedIn, many people guessed which option other people would vote for, separate from their own rating. This adds another interesting dimension to evaluations where the responses are public: there’s a risk of groupthink once the vote sways in one direction, and bias if our mental models of what other people think about AI are out of date. I’m finding that attitudes to AI are changing rapidly over time, and clients that were previously skeptical of AI are suddenly all-in months later. It’s best to run private blind tests periodically to see what people really think about AI results. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/3320e619-d22b-43f6-b528-c12c8199dd7f_1192x978.png) Another type of answer I saw a lot was “neither was good.” This may be a function of conducting the test publicly in Lenny’s social media feed, where many ambitious PMs are hoping to prove themselves and stir up a discussion. The next time I do this test, I would give people a way to vote privately, and I suspect that would lead to more interesting results—and perhaps even more favorability toward AI results. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/b5346689-0299-4678-ab16-fc129cd1d705_1192x316.png) ## What comes next? Testing head-to-head on three tasks isn’t a comprehensive evaluation, so we want to extend these benchmarks across more types of difficult PM tasks. This section describes our suggested approach to doing so. We’d love to hear from you in the comments here on Substack or on [social media](https://x.com/hammer_mt) about which may be good ideas, and what we may have missed that would make the results more trustworthy and believable to you. Lenny [once defined](https://www.lennysnewsletter.com/p/what-is-product-management#%C2%A7the-job-of-a-product-manager) the job of a product manager as to “**deliver business impact by marshaling the resources of your team to identify and solve the most impactful customer problems**.” He also defined a comprehensive framework for categorizing PM skills (below). Aligning the hard PM task benchmarks with this framework will help us track what percentage of the overall PM role is currently automatable. 1. **Shape the product** 1. Developing a product strategy and vision 2. Setting goals 3. Creating specs 4. Discovery 5. Building a roadmap 6. Giving product/design feedback 2. **Ship the product** 1. Quality assurance 2. Fighting for budget/resources 3. Unblocking blockers 4. GTM 5. Adjusting resources/priorities when things come up 3. **Sync the people** 1. Running meetings 2. Communicating important information up and down the ladder 3. Aligning stakeholders 4. Aligning your team 5. Maintaining team morale To go even deeper, we would explore multiple questions per category to get more diverse and robust results, and run the tests with more models (and potentially different prompting techniques). In particular, I would love to explore whether [Claude 3.5](https://www.anthropic.com/news/claude-3-5-sonnet) or [Google Gemini 1.5](https://blog.google/technology/ai/google-gemini-next-generation-model-february-2024/) can beat GPT-4o, and how giving a model access to the internet, like [Perplexity](https://www.lennysnewsletter.com/p/how-to-use-perplexity-in-your-pm) has, may change which tasks it can compete at. One big problem is [data contamination](https://ehudreiter.com/2024/03/12/data-contamination-worries/), where the LLMs learn which answers are “correct” when they are trained on fresh data from the internet, which includes posts like this one that document common LLM failures and reveal what the correct answers are. With an updated post, we would avoid data contamination of the evaluation benchmark by not revealing which solution was AI and just tallying the aggregated results. This would make the evaluation benchmark less accessible (people wouldn’t be able to run the evaluation themselves if we don’t reveal the correct answers), but hopefully there are researchers out there with good suggestions on this front. The voting mechanism we used wasn’t ideal. Posting on X and LinkedIn and then tallying the votes manually was too open to interpretation, and took too long to be able to run tests more frequently. We would need to change the methodology to support an expanded list of tasks. For inspiration, we’re thinking about how [LMSYS](https://chat.lmsys.org/) handles their chatbot arena, but we’re open to suggestions. The major difference is that we’d also need to collect real human answers to questions like Exponent does and compare them against the LLM responses. ![Image from How close is AI to replacing product managers?](https://substack-post-media.s3.amazonaws.com/public/images/7f764777-4562-49ad-a7f5-70921537bcd8_1600x910.png) ## Bonus: How I created the prompts for these tasks There are plenty of prompt engineering techniques and tactics to employ to get better performance from AI, but for this exercise I wanted to develop something more formulaic. Here is the process I settled on: 1. Find a real-world example of a human doing the task (for example, on [Exponent](https://www.tryexponent.com/questions/2930/pick-a-product-that-you-have-been-using-over-the-past-6-months-you-are-the-new-pm-for-it-the-cpo-ask)) 2. Copy and paste the task into ChatGPT (it helps to convert to [markdown](https://word2md.com/) first) 3. Prompting ChatGPT: 1. *“Make up a version of this but for a fake product, using the exact same structure.”* 2. *“Make it sound more authentic,” to avoid AI speak.* 3. *“Write brief instructions for someone who hasn’t seen this example to replicate its structure and style. Do not number your instructions. Only return the instructions.”* 4. Add the instructions and the example plus a role (“As a product manager…”) to create the prompt template 5. Generate the results and match the formatting to the human answer (I save the markdown in VSCode and then copy and paste the preview) The prompt template structure ends up as follows: `As a {role} you are tasked with {task} for the provided product.` `Start by listing assumptions and planning out your answer in a separate bullet point section labeled "Thinking". Then follow the instructions.` `## Instructions` `{instructions}` `Follow the structure in the example exactly:` `## Example` `{example}` **Role** Many of these tasks are a kind of cultural and political game, where the type of answer that would seem “obvious” to a Silicon Valley executive might feel completely alien to the boss of a consumer packaged goods company. The important part of this prompt is asking the AI to role-play as “As a product manager for a major tech company…,” which helps it get the right cultural references and acronyms that a product manager would use. Without role-playing, you get an average response, which might not match your subjective tastes. **Instructions** One of the mechanisms that makes this prompt work is the instruction to “Start by listing assumptions...” AI models (and humans) tend to give better answers when they spend some time planning the answer first, which OpenAI calls “[Giving the model time to think](https://platform.openai.com/docs/guides/prompt-engineering/give-the-model-time-to-think),” also called “[chain of thought](https://arxiv.org/abs/2201.11903)” prompting. In the example I added to the prompt, I made sure to add that assumptions and clarifying questions section so that the model could follow my lead and arrive at a more robust answer. There were also smaller optimizations to the instructions for specific tasks, like in task #1 where I specifically asked it to make obscure references and make minor grammatical mistakes. **Example** The most impactful thing in the prompt template is the example we provided. It’s hard to describe exactly how a task should be done, and providing an example allows the AI to pick up on nuances we might not be sufficiently able to describe. Adding at least one example massively improved the reliability of the results, and adding additional examples from a diverse range of scenarios helped further. Although too many examples ran the risk of constraining the AI’s output creativity, as it might follow the examples too strictly. In addition, collecting good examples comes with a cost of your time, so I would try to add a single example first to see if that does a good enough job. Here are the final prompts I used: ### [Task #1](https://platform.openai.com/playground/p/K00oiCDRAhNkL3c0HWwvHNCs): `As a product manager for a major tech company similar to Google, Amazon, Microsoft, or Facebook, you are tasked with developing a product strategy.` `Start by listing assumptions and planning out your answer in a separate bullet point section labeled "Thinking". Then follow the instructions:` `## Instructions` `Define the overarching goal of the strategy or product in the first bullet point to set the context for the upcoming points.` `List each strategic initiative separately as bullet points, giving each a distinct heading that conveys the core action or goal, like "Expanding into Exclusive Original Content."` `For each initiative, provide a brief explanation of the current state and the rationale for the change or enhancement. Compare with industry benchmarks or competitors to justify the strategy's relevance.` `Outline the specific benefits or outcomes expected from each initiative, using bullet points for clarity. Make sure these benefits directly relate to the overarching goals mentioned initially.` `Use a tone that is professional yet engaging, focusing on concise language that clearly communicates the purpose and expected outcomes of each strategy.` `Incorporate industry-specific terminology to make the strategy sound knowledgeable and well-informed.` `Conclude each bullet point section with a summary of how the initiative will impact the business or product, emphasizing improvements in user engagement, revenue, or market position.` `Ensure the entire list maintains a cohesive flow, with each section naturally leading into the next, reinforcing the strategic narrative you are building.` `Use arrows throughout -> to show how one assumption leads to another.` `Be brief and authentic.` `Think deeply about what would actually work for the strategy, based on historical precedents in the tech industry. Cite examples where possible.` `Have something resembling a real user flow, some explanations behind why.` `Make something that sounds actually tangible. Don't just provide a templated -> . The words matter.` `Don't label each bullet point with "Rationale", "Expected Benefits" etc, just let the text stand for itself.` `Don't include a summary at the end of the strategy.` `Keep it concise.` `Make it more of an actual strategy, and less of a laundry list of tactics.` `Be colloquial like a real human would, make some minor grammatical mistakes due to being busy and intensely thinking, but maintain professionalism like you would in a job interview.` `Add obscure references that shows you have a breadth of diverse ideas.` `## Example` `**Strategy for the next year**` `## Thinking` `- Goal: Increase user engagement and revenue through diversified content offerings and enhanced user experience.` `- Assumptions:` `- Users are seeking more original content and personalized experiences.` `- There is an opportunity to leverage existing technology to improve content discovery.` `- Cross-platform integration can enhance user loyalty and increase overall satisfaction.` `- Competitors are focusing heavily on algorithm-driven recommendations, leaving room for more humanized approaches.` `**Strategy for the next year**` `-## Thinking` `- Goal: To enhance user engagement, increase revenue, and solidify market position through unique and innovative strategies.` `- Assumptions:` `- Users value exclusive content and personalized experiences.` `- There is a need for better content discovery tools.` `- Cross-platform integration enhances user loyalty.` `- Initiatives must be distinct, innovative, and provide clear benefits.` `## Strategy for the next year` `- **Expanding into Exclusive Original Content**` `- Leverage existing relationships with studios to create "StreamSync Originals," focusing on underserved genres like international dramas, niche documentaries, indie films. Similar to other originals plays by competitors.` `- Launch series or films that connect with current viewing trends or untapped audiences, i.e. as eco-thrillers / historical fiction → This can attract a broader user base → hook niche audiences, increasing subscription retention.` `- Offer a mix of premium (subscription-only) and ad-supported viewing options for originals → Catering to different user preferences encourages both subscription upgrades and increased ad revenue, similar to Hulu's dual revenue model.` `- **Enhancing Content Discovery Through Innovative Features**` `- Many users feel overwhelmed by choices → Simplify the discovery process with "Highlight Previews." → intelligently selected based on user behavior and current trends → boosts interest in lesser-known titles like TikTok's algo.` `- Combine algo recommendations with real user reviews and highlight in previews → Building trust and curiosity → more exploration on the platform, i.e. Spotify's Discover Weekly.` `- Introduce celebrity-curated collections as a regular engagement tool i.e. see LeBron's downtime bing watching playlist. Feature guest curators from various fields like authors, chefs, or athletes to add freshness and a sense of ceremony to content discovery, similar to what Tidal does with artist-curated playlists.` `- **Cross-Platform Personalization Integration**` `- Personalization not only helps retain users but also makes them feel at home across all platforms. When I play Fortnite on any platform it's the same. Preferences should sync intuitively across services like StreamSync and SmartFrame.` `- If a user likes action movies on StreamSync, this data should subtly enhance their experience on SmartFrame with action-themed backgrounds or soundtracks, always allowing customization or opt-out They must feel their preferences are respected without being intrusive.` `- Cross-utilization of user data can inform content creation → tailoring our originals to better match the preferences seen across our platforms → can lead to more hits, similar to use of data for original programming. Like how Zynga used in-game data to predict the next hit.` `LIMIT TO THE TOP FIVE GOOD ANSWERS` `DON'T USE JARGON OR CORPORATE SPEAK UNLESS IT'S SOMETHING PREVALENT IN SILICON VALLEY CULTURE.` `DON'T LABEL BULLET POINTS WITH A WORD THEN A COLON, JUST PROVIDE THE BULLET POINT` ### [Task #2](https://platform.openai.com/playground/p/GEmHeIqHCCX2jISAOCGcvEIy): `As a product manager for a major tech company similar to Google, Amazon, Microsoft, or Facebook, you are tasked with defining performance metrics for the provided product.` `Start by listing assumptions and planning out your answer in a separate bullet point section labeled "Thinking". Then follow the instructions:` `## Instructions` `Start by identifying the core service or product of your hypothetical business, and determine the most crucial metric that aligns with the overarching goals of all stakeholders involved. This is your NorthStar metric. It should reflect the primary measure of success that impacts revenue, user satisfaction, and operational efficiency.` `Next, define the primary metrics that feed into the NorthStar metric. Break these down into categories based on different user groups or aspects of your business. For each category, list specific, measurable metrics that provide insight into performance and effectiveness. These metrics should be actionable and clearly related to enhancing the NorthStar metric.` `Use clear, professional language to describe both the NorthStar metric and the primary metrics. Make sure the metrics are logically connected, showing how improvements in the primary metrics directly influence the NorthStar metric. This structured approach ensures that each part of your business contributes to the overall success and objectives of the company.` `Follow the structure in the example exactly:` `## Example` `**What should be the NorthStar metric for StreamLine?**` `The ideal NorthStar metric for StreamLine would be the "Number of active streamers per day," as this metric is pivotal to the ecosystem's vitality. A greater number of active streamers suggests more content generation and user engagement, which in turn leads to increased advertising and subscription revenues. This also ensures that viewers have a rich variety of content, keeping the platform dynamic and appealing.` `**To strategically drive our North Star metric, we should rigorously track these primary metrics:**` `- **Streamers** - Metrics such as Daily Active Streamers, Number of Streaming Sessions per Streamer, and Conversion Rate (from log-in to stream start), along with Average Stream Length, are crucial.` `- **Viewers** - Key indicators include Daily Active Viewers, Average Viewing Duration per Session, and Viewer Engagement Rate (interactions such as likes, shares, and comments per session).` `- **Advertisers** - Metrics like Number of Active Campaigns, Average Impressions per Stream, and Ad Click-Through Rates are essential to monitor advertising engagement and effectiveness.` ### [Task #3](https://platform.openai.com/playground/p/AcZv0zJJBqYBkiK4rURuBMO4): `As a product manager for a major tech company similar to Google, Amazon, Microsoft, or Facebook, you are tasked with estimating business impact/value of a new feature.` `Start by listing assumptions and planning out your answer in a separate bullet point section labeled "Thinking". Then follow the instructions:` `## Instructions` `Begin by identifying the key metrics to assess the success of a new feature, focusing on short-term and long-term impacts. Break these down by the different types of users who will interact with the feature.` `For the short-term, select metrics that reflect initial user awareness and adoption. These should be straightforward, measurable statistics like the number of users who engage with the feature in specific ways.` `Include a guardrail metric to monitor any potential negative effects or user feedback that could indicate problems with the feature's implementation or reception.` `For the long-term, choose metrics that evaluate sustained engagement, user referrals, and the direct outcomes related to your feature’s objectives. These should track deeper usage patterns and more significant impacts.` `Additionally, set another long-term guardrail to monitor critical undesirable outcomes, focusing on why users might stop using the feature or express dissatisfaction.` `Organize these elements into a clear, easy-to-read format, distinguishing between different user types and specifying the nature of each metric. This will help in effectively communicating the goals and monitoring the success of the feature.` `Use Fermi estimations throughout to calculate the potential impact.` `Follow the structure in the example exactly:` `## Example` `Success Metrics: As we introduce this new feature, our immediate goals will center on Visibility and Engagement:` `_Educators:_` `- Total number of educators who incorporated the feature into their lessons – 10%` `- Total number of educators who utilized the progress tracking – 25%` `10 million educators on the platform x 10% (incorporated into lessons) x 25% (utilized progress tracking) = 0.25 million (250,000) educators utilizing progress tracking.` `_Guardrail Metric:_` `- User Complaints – Number of grievances regarding functionality or content quality – 5%` `## Long-term Focus: We will shift our attention to Sustained Use, Advocacy, and Educational Outcomes:` `_Students:_` `- Average number of sessions completed per student – 10` `- Average number of feature interactions per student – 15` `300 million students on the platform x 10% (students whose educators use the feature) = 30 million students` `30 million students x 10 sessions completed per student = 300 million sessions` `30 million students x 15 interactions per student = 450 million interactions` `_Educators:_` `- Average frequency of feature usage among educators – 15 times per month` `- Number of positive educational impacts reported by educators – 60%` `1 million educators using the feature x 60% (reporting positive impacts) = 600,000 positive educational impact reports` `_Guardrail:_` `- Attrition Rate – Percentage of users discontinuing use due to dissatisfaction or non-engagement – 20%` ### Footnotes Some further details on the tests we ran: - X doesn’t let you run polls on images, so we had to ask people to comment and then tally up the votes manually. - Some people only voted on whether it was AI or not; others only chose their preference. That’s why the numbers don’t fully add up. - Wherever there is a tie in preference, I treat that as a win for the AI, given that a human worker is orders of magnitude more expensive. This isn’t intended as a scientific test, but the results should make you think about whether you have been judging AI unfairly, and perhaps it’s further along than you may realize! *Thanks, Mike! Mike Taylor co-authored the O’Reilly book* Prompt Engineering for Generative AI *and builds AI products at [Brightpool](https://brightpool.dev/). Previously, he built a 50-person marketing agency, working with clients like Booking.com, Time Out, and Monzo. Follow him on [LinkedIn](https://www.linkedin.com/in/mjt145/) and [X](https://x.com/hammer_mt).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [30/61] Taking the week off I’m taking this week off to be fully present on my trip to Wimbledon with my dad. I told my dad a decade ago that I’d take him to all of the Grand Slams of tennis, and with this trip, we’ve done them all. ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/0b07107f-a68b-42b9-8d79-31cbda2c95e6_5712x4284.jpeg) I even snuck in a community meetup while in London, and let me tell you, the London product community is extraordinary. So much energy, so many great ideas, and such nice people! Big thank-you to Index Ventures for hosting this unbelievable crowd 😮 ![Image from Taking the week off](https://substack-post-media.s3.amazonaws.com/public/images/d969fb3d-0f6f-4835-a20e-51c633ccbd90_4032x3024.jpeg) If you’re looking for something to read or listen to in the meantime: 1. [My latest podcast episode, with Jeff Weinstein (product lead at Stripe)](https://www.youtube.com/watch?v=qbZQjprTnrU). I guarantee you will become a better product leader if you listen to this episode. 2. [The Right Kind of Stubborn](https://paulgraham.com/persistence.html) by Paul Graham, which builds on a conversation Jessica Livingston (his co-founder and wife) and I had [during her recent visit to the pod](https://youtu.be/h9MUuhsDJOM?si=CJmF20IW1kG_NMCZ&t=1966). 3. [100 Best Books since 2000](https://www.nytimes.com/interactive/2024/books/best-books-21st-century.html) in the *New York Times*. See you next week! --- ## [31/61] New data on the product job market ### ✨ Photos from recent reader meetups If you’d like to attend (or host!) a meetup and are a paid newsletter subscriber, join our Slack and find your local city channel. [Learn more here](https://www.lennysnewsletter.com/p/community). With ongoing news of layoffs, shutdowns, and product roles being replaced by AI, it’s easy to get discouraged about the state of the job market, especially if you’re having a hard time finding a job. Is the market particularly rough for your role right now or is it just you? **I’m excited to share hot-off-the-presses data I haven’t seen elsewhere about the state of the product (and product-adjacent) job market.** This data comes from a company that I recently discovered, [Live Data Technologies](https://www.livedatatechnologies.com), which has developed a method of prompt-engineering major search engines (e.g. Google, Bing, Baidu, Yandex, etc.) to capture near-real-time data on employment changes in the U.S. Leveraging this publicly available information, they use a proprietary process to monitor job changes for over 88 million people. They can track hiring trends across companies, roles, functions, levels, industries, and locations. The company normally sells this data to investors (e.g. VCs, private equity), startups (e.g. platforms that incorporate people data), HR orgs, and go-to-market leaders, and serves as a data resource to media outlets (e.g. the *Wall Street Journal*, *The Economist*), but, lucky for us, they offered to collaborate with me on this unique dive deep into the state of the product job market. A big thank-you to [Jason Saltzman](https://www.linkedin.com/in/jason-salt/) for hooking me up. We decided to analyze the 10 most popular product and product-adjacent roles: **Product manager, Engineer, Design, Growth, User research, Data science, Sales, Marketing, Product owner, Scrum master.** At the end of the post, I’ve included a sampling of the job titles included within each role. Here are my biggest takeaways and surprises from the data: ### **1. Growth roles are the #1 fastest-growing roles right now** ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/018b7f02-25b5-4a9d-a39a-ae6fbba1fbc0_2036x1358.png) This isn’t what I expected to see. I’ve always thought of growth roles as a niche, and not one that was significantly expanding. I was wrong, but I can also understand why. With the market starting to return, companies are increasingly leaning into growth. It’s also interesting to see that growth roles are growing much faster than sales and marketing roles—although those roles show an upward inflection. This might mean an increasing focus on product-led growth, potentially driven by a need for capital efficiency—something investors and public markets are increasingly prioritizing. To give you a sense of scale, there are about 80,000 active “growth” roles in the U.S. right now and about 1,000 to 2,000 growth hires made per month. **If you’re looking for a growth role right now, here are the companies that have hired the most growth people in the past few months (in descending order):** HubSpot, Salesforce, TikTok, Velera, Amazon, Enpal, Headway, Pocket FM, Uber, Accenture, Atlassian, Compass, MongoDB, AI Digital, Google, CrowdStrike, AECOM, Adobe, Airwallex, Askable, Grab, Media.Monks, Traba, and Walmart. **Here are the top hirers of growth roles over the past few years:** ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/91cf371c-2e30-4e63-90ca-ffd5cd0b7350_2160x2160.png) ### 2. Product management is doing fine Here’s a view of the PM role over the past 2.5 years: ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/b893b946-5472-453e-b650-1ac0673b957d_2036x1358.png) The story I see is that there was a hiring acceleration through 2022 and then a steady state (i.e. the number of PMs being hired and fired each month staying relatively even) over the past 1.5 years. That feels healthy to me. Here’s an eye-opening chart showing the rise of the PM role over the past two decades (followed by the recent plateau): ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/54921065-159d-44bb-8951-f9a780ff82da_650x412.gif) TL;DR: The PM role isn’t going through the hypergrowth it saw earlier this decade, but it’s also not shrinking. This seems like a good thing all around. Numbers-wise, there are about 450,000 active PMs in the U.S. right now, and 2,500 to 4,500 are being hired each month. As a comparison, here’s the engineering role over that same time frame—similar growth trajectory, also a bit of a slowdown in the past one or two years, though not as much of a slowdown as PMs. Again, this seems right. ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/685d04de-9722-4f76-a991-cfe16788a3ec_610x440.gif) **If you’re looking for a PM role, here are the top companies hiring PMs over the past few months:** Amazon, Microsoft, Capital One, Google, Meta, ServiceNow, Salesforce, JPMorgan Chase & Co., Adobe, TikTok, Wells Fargo, Masterclass, Solventum, Visa, IBM, American Express, Oracle, Nvidia, AWS, Disney, Walmart, Apple, Medline Industries, GE Vernova, and Intuit. **Here are the top hirers of PM roles over the past few years:** ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/96dec60b-3708-48d5-aeaa-46142ab95a18_2160x2160.png) ### **3. User research is resurgent** Another unexpected insight from this data is that user research is the second-fastest-growing role right now 🤯 ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/836a2806-a598-40e7-b2c2-7a5ef6cc1e77_2040x1360.png) I believe what’s happening is that the UXR function went through a huge overhiring phase (see the large bump in late 2022) and then [a reckoning](https://www.lennysnewsletter.com/p/the-ux-research-reckoning-is-here) as the market tanked last year. Companies realized their UXR teams were not adding enough value, and thus those saw some of the most significant layoffs in the tech industry. Now that the market is returning, companies are starting to rehire these roles after realizing they went too far. I’ll add, though, that the absolute number of UXR people is relatively small compared with other roles. There are only around 14,000 active UXR roles in the U.S., according to the data, and about 200 are being hired each month. ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/0b65cfd3-8691-4faa-9d65-704e9e1dce12_2160x2160.png) ### 4. P**roduct owners are owning it** Another surprising result is that product owners are the third-fastest-growing role in tech. And there are around 65,000 of them. WTF. ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/3fd17913-02df-45c3-9aa5-e4b7f0a02236_2034x1358.png) Also, the growth of this role has been very steady. No big spikes, no slowdown. I don’t have a great explanation for this role’s growth other than that non-tech companies (e.g. banks, telecom) are expanding their product investments as they grow. If anyone has any insights on this role and its continued growth, please share in the comments! [Leave a comment](https://www.lennysnewsletter.com/p/new-data-on-the-product-job-market/comments) ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/bcb58df5-1f56-41a4-a66a-45101fccee95_2160x2160.png) ### **5. Scrum masters are masters no more** The only role that’s shrinking (i.e. more people being let go than hired each month) is the scrum master. Sorry, folks. ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/7f1b92df-893c-4845-a2a4-74c74b6442aa_2036x1356.png) I’m guessing this in part explains the growth in product owners—people who used to be called scrum masters are now called product owners. There are still about 40,000 active scrum masters in the U.S., so we’ll see if this trend continues. ### Bonus: Top hiring and firing companies for engineering, design, DS, sales, and marketing ![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/bde9b4d1-4a84-4876-a06d-13c257d980c6_2160x2160.png)![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/db30d910-4c3d-4431-b008-e7e4235b4dd6_2160x2160.png)![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/52d44bfe-51ea-4b84-9e29-79b54e695126_2160x2160.png)![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/9d804ac5-528a-4c52-89bc-bd34413b9b77_2160x2160.png)![Image from New data on the product job market](https://substack-post-media.s3.amazonaws.com/public/images/8bcacb34-b325-4a9b-b28f-d0a48a1a439f_2160x2160.png) I hope you found this deep dive into the data as illuminating as I did. I plan to do these job market reports a few times a year, and I’d love to know what additional data you’d most want to see. Leave a comment and let me know. 🙏 [Leave a comment](https://www.lennysnewsletter.com/p/new-data-on-the-product-job-market/comments) **A sampling of job titles within each role analyzed:** 1. **Product management:** Product Manager, Senior Product Manager, Director of Product Management, Associate Product Manager, Principal Product Manager, Technical Product Manager, Lead Product Manager, Group Product Manager 2. **Engineer:** Software Engineer, Senior Software Engineer, Data Engineer, Staff Software Engineer, Software Engineer II, Associate Software Engineer, DevOps Engineer 3. **Design:** Product Designer, UX Designer, Senior Designer, Lead Product Designer 4. **Growth:** Head of Growth, Chief Growth Officer, Growth Manager, Director of Growth, Growth, Growth Marketer, Growth Lead, Growth Specialist, VP of Growth 5. **User research:** UX Researcher, User Experience Researcher, Senior UX Researcher, User Researcher, Lead UX Researcher, Senior UX Researcher, UX Research Lead 6. **Data science:** Data Analyst, Data Scientist, Senior Data Scientist, Lead Data Scientist, Business Data Analyst, Data Science Manager, Principal Data Scientist, Junior Data Analyst, Data Scientist II 7. **Sales:** Account Executive, Sales Associate, Sales Manager, Sales Representative, Sales Development Representative, Senior Account Executive, Regional Sales Manager, Sales Consultant, Enterprise Account Executive 8. **Marketing:** Marketing Manager, Marketing Director, Marketing Coordinator, Marketing Specialist, Digital Marketing Manager, Chief Marketing Officer, Head of Marketing, Director of Marketing, Product Marketing Manager 9. **Product owner:** Product Owner, Senior Product Owner, Technical Product Owner, Digital Product Owner, Lead Product Owner, Associate Product Owner, Agile Product Owner, Principal Product Owner, Senior Technical Product Owner, Junior Product Owner 10. **Scrum master:** Scrum Master,Project Manager/Scrum Master, Agile Scrum Master, Lead Scrum Master, Scrum Master II, Scrum Master/Agile Coach, Certified Scrum Master *Thank you to [Jason Saltzman](https://www.linkedin.com/in/jason-salt/) and [Live Data Technologies](https://www.livedatatechnologies.com/) for sharing this juicy data with me. For more ongoing insights from the data, check out Jason’s newsletter, [Human Capitalist](https://humancapitalist.substack.com/). And if you’re looking to stay up to date on the latest job changes at top companies, Live Data’s [free trial](https://www.livedatatechnologies.com/trial) allows you to track up to five companies.* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I run a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply to work with me below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [32/61] Announcing the Lenny & Friends Summit 🙌 I’m thrilled to announce that I’ll be hosting a very special one-day conference this fall in San Francisco, on Thursday, October 24. I’ve curated a speaker lineup of product and growth leaders who I deeply respect, and we’re aiming to have 1,000 senior product people in attendance. Want to be one of them? [Apply to attend now](https://lennyssummit.com/). ![Image from Announcing the Lenny & Friends Summit 🙌](https://substack-post-media.s3.amazonaws.com/public/images/88429159-a15f-4187-aeaf-ef2a000b3234_2392x5718.png) [Apply to attend](https://lennyssummit.com/) I’ve heard from so many of you that you’re pining for a large yet intimate IRL gathering, and now feels like the right time. This will be unlike any other conference you’ve been to. We’ll have tactical talks from world-class product builders, organized roundtables with peers, a curated group of attendees, and a few fun surprises. You’ll come away with: 1. New tactics for building and growing your product 2. Actionable tips for hiring, managing, and coaching world-class teams 3. New friends and connections to lean on and learn from going forward Given we’re expecting lots of interest and the venue has limited capacity, we’re asking people to apply to attend. Paid newsletter subscribers will get priority access. We also want to make sure the content will be valuable to all attendees. This summit is for senior product leaders, and typically someone’s title will be: - Product Lead or Growth Lead - Principal PM - Group PM - Director of Product or Director of Growth - Head of Product or Head of Growth - VP of Product or VP of Growth - Chief Product Officer If you’re just starting your career in product or growth, the content won’t be as relevant for you. I may host a future event targeted at early-career folks. [Apply to attend](https://lennyssummit.com/) ![Image from Announcing the Lenny & Friends Summit 🙌](https://substack-post-media.s3.amazonaws.com/public/images/d41ed0fa-fc4b-430b-a1b9-44f583694e01_2276x1544.png) I’m quite excited to make this a reality, and I hope to see you there. **Any questions?** Please email [support@lennyssummit.com](mailto:support@lennyssummit.com) and we’ll do our best to reply promptly. --- ## [33/61] How should you monetize your AI features? > ## Q: What trends are you seeing in how incumbents are pricing AI features and products? Have you seen any innovation in how companies charge? Pricing and AI: individually, two of the most mysterious topics for product builders. Put them together, and things get dizzying. To answer your questions in the most comprehensive way possible, I teamed up with [Palle Broe](https://www.linkedin.com/in/pallebroe/) to analyze how leading tech companies are approaching AI pricing and, from that, create a framework to help you make decisions about how to price your own AI products and features. Palle Broe was part of the early team building Uber in San Francisco and the U.K. and then spent five years across various operational, strategy, and product roles at the company. He led pricing strategy while at Uber (B2C) and then at Templafy (B2B SaaS), and has advised more than 20 fast-growing tech startups (seed to Series D) on monetization strategy, creating better packaging, cutting back on discounts, and building stronger ROI and business cases. I’m excited to offer you his insights on pricing for AI features and products, which looks very different than it does for other technologies. *For more from Palle, make sure to subscribe to his newsletter, [Rule of Thumb](https://palle.substack.com/), where he provides tangible pricing advice to operators, and follow him on [LinkedIn](https://www.linkedin.com/in/pallebroe/).* ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/cf23a101-2296-41c9-ac12-566a9cd564c7_8000x4000.png) AI features and products present brand-new pricing challenges for companies. I’ve spent the past decade working on monetization strategies for places like Uber and Templafy, as well as advising more than 20 tech companies on their approaches, and what I’m seeing around AI products is very different from older technologies. Unlike with traditional SaaS products, companies looking to integrate AI products and features need to consider the real, underlying costs of generative AI compute and the intense competitive pressure in the AI market now, while also focusing on adoption and new business models. To ensure long-term ROI, companies have always needed to think carefully about how and when to monetize, but AI requires even deeper analysis. During Alphabet’s 2024 Q2 earnings call, many questions from investors addressed the ROI of the company’s $12 billion AI investments—a real shift from the previous quarter’s call. It’s clear that investor focus is changing from pure adoption to how big tech is going to be monetizing their innovations. This left me wondering: ***How do tech companies monetize their new AI features today? And what can we learn from that data?*** To answer, I investigated the pricing and bundling strategies of 44 leading tech incumbents. I focused on the “application layer”—companies that are building end-user products (e.g. Figma)—rather than base models (OpenAI’s LLM) or infrastructure (e.g. Azure). We reviewed public data forpricing models, value metrics, bundling, and free versions to identify current trends. Based on that data and my own experience in pricing, I’ve put together a framework for you to help make strategic decisions for your own AI products and features. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/e7453e5f-4e24-4073-bbee-ea4a6e581992_647x432.png)![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/974e9bab-f915-41be-8f3d-4654858733e4_976x625.png) ## 1. Direct and indirect monetization strategies Broadly speaking, there are two methods that companies can use to monetize AI features: direct and indirect monetization. Direct monetization involves charging for the AI feature directly, or increasing the price of your product after adding the new AI feature. Conversely, indirect monetization integrates the AI feature into an existing bundle without altering the price, or offers the feature on its own at no additional cost. Below is an overview of the five high-level monetization strategies we are seeing right now for tech companies launching AI features and products. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/0529a242-9c1d-4214-8014-9d3ab5c28a54_1335x1221.png) #### **What companies are doing now** The predominant strategy we saw in the data was to bundle the AI features into *existing* packages (59% of companies chose this path). This approach allows users with current subscriptions to benefit from AI capabilities. In some instances, this integration is accompanied by a price increase or usage-based pricing for the AI feature—making it a direct strategy. In others, it is added without altering the existing pricing structure—an indirect approach. Adding AI features to an existing bundle can be used as an interim strategy to launch quickly and before thinking more carefully about monetization as more data is gathered around usage of the AI feature. The second most common approach is a direct strategy: offering AI features as an add-on with a distinct price tag (23% of companies chose this path). The add-on strategy is the “purest” form of direct monetization and will provide you with the cleanest data in terms of adoption and monetization. Also, the ability to track the direct impact of your AI feature will enable you to understand willingness to pay and can provide important feedback to the roadmap and product development. Additionally, some companies (18% of those reviewed), particularly those with large language models (LLMs), have developed standalone AI products available for separate purchase, independent of any existing subscriptions. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/2fd9ceeb-9d5c-45ea-9da3-6fd1ae8fbaf5_1333x853.png) #### **How you can choose between direct and indirect monetization** There’s a reason the majority of the companies we looked at used a direct monetization strategy. As a rule of thumb, I believe direct is best, either offering the new AI feature/product as an add-on or bundling it in the existing plan *with* a price increase (or usage-based component). And this seems to be the path many of the largest tech companies took. It’s critical to understand willingness to pay and the underlying cost structures associated with gen AI, and employing this strategy will enable you to understand both. One of the core issues in applying indirect monetization is that it can be very hard to track and accurately attribute the value from increased retention and upsell. Direct monetization is likely the right choice if your company has: 1. **High variable costs:** The variable costs associated with gen AI are significant and cannot be absorbed by indirect revenue gains—for example, the cost associated with compute, bandwidth, data storage and labeling, security and compliance, as well as maintenance and upgrades. LLMs such as ChatGPT, Gemini, and Claude incur very high computing costs, while companies leveraging LLMs such as Airtable pay every time a user uses their AI feature. 2. **Clear customer value:** Customers clearly recognize the added value that gen AI features bring them and are thus happy to pay for it—for example, GitHub’s coding Copilot or Intercom’s AI bot, Fin. An **indirect** monetization strategy (e.g. including it in a plan *without* a price increase, or giving it away for free) can be successful when generative AI features significantly boost usage, conversion, or retention of your core product. This results in indirect revenue gains that outweigh the costs for these features—particularly when you have usage-based pricing or when the AI feature greatly increases overall customer conversion or retention. Zoom and Shopify are two examples of companies that have pursued this strategy. Sometimes this is an interim strategy to get user feedback before integrating a price increase once the value to the user is better understood. Making price increases with a large customer base is not an easy task and needs to be handled extremely thoughtfully. In my experience—and in the data—indirect monetization is usually the less attractive choice, particularly long-term. In reality, very few companies get to choose their monetization strategy in isolation. If a competing company is launching a similar AI feature but choosing an indirect monetization strategy, you will have to take that into account alongside all the other variables above. It might be the right decision to follow suit to ensure competitiveness, but ultimately this will depend on multiple factors not discussed in detail in this article. ## 2. Direct monetization deep dive Next, let’s dig deeper into the three core strategies for direct monetization (add-on, standalone, and included in plan with a price increase) and break down which path might be the best for your company. Typically, the factors to consider are the value your AI feature delivers for the user and your business, the best bundling approach, and the optimal distribution of the AI features across different package tiers. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/f27b68ea-5634-4f52-b1ba-3474f4ff0d24_1334x809.png) ### Step 1: Defining the role AI will play in your product portfolio Consider the following questions: 1. **Will this feature be widely used by a broad audience? Or does it cater to specific personas [y-axis below]?** In most companies I have worked with, the benchmark for whether or not to include a feature in a bundle or as an add-on is: If over 70% of users are likely to utilize the feature, it is advisable to bundle it in a standard package. If usage is expected to be below 70%, you need to think carefully if it will make more business sense to include it as an add-on instead—particularly if the feature has high value for a small group of users. 2. **Will a critical mass of people want to pay for this feature [x-axis below]? You want to understand if your feature is a nice-to-have versus a need-to-have. The best way to get this insight is to talk with your users. You can do this via a beta program to get usage data, as well as asking potential customers about their willingness to pay for the feature.** Once you’ve gotten answers to the above, you can place the feature on the map below to identify the best path for bundling your AI feature. As an example, if your AI feature is one that is widely used by users (more than 70%) and adds a lot of value to their work, it’s a “leader” feature in your bundle and could likely result in a price increase. On the other hand, if your AI feature is used by relatively few users in a company (say, 20%) but those users love the feature, it should be an “add-on” to your bundle: ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/b454c085-bcee-4291-bb16-3fac5898d3ab_1600x869.jpeg) ### Step 2: Evaluate the three direct strategy options ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/e531cf4e-3835-4803-8789-0b008fb9a2e7_622x399.png) #### Option 1: Standalone product The maturity and functionality of AI products significantly influence how a company decides to commercialize its AI capabilities. Some companies, like OpenAI, have developed AI products such as ChatGPT that are advanced enough to function as a standalone offering, independent of existing subscriptions. These rare products can address specific use cases and attract buyers willing to pay for the solution. The great advantage of a standalone AI product is the flexibility to set the optimal pricing without being constrained by legacy pricing or bundling structures. So far, the only standalone offerings on the market have been products like ChatGPT and Gemini, which are built on top of proprietary LLMs. GitHub Copilot is one of the only examples of a tech incumbent not in the LLM space that is offering AI features as a standalone product. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/832f8b97-c0e2-4882-972e-bbf8a250bbd6_1017x571.png) **Offering a standalone product is best when:** The AI product is solving a different problem than what your existing product is solving. There is little to no overlap between your new product and your existing solutions. In those cases you want to be able to segment the product toward a new buyer, industry, and ideal customer profile. #### Option 2: Add-on to an existing product The add-on strategy is similar to the standalone strategy in that it also necessitates a product that provides sufficient value to have a price tag of its own, but differs in that it is in connection with the existing bundle and the buyer might be the same. AI add-ons should closely align with the existing product portfolio and address related problems, allowing for seamless integration. Companies such as Notion, Microsoft, and Airtable have implemented this approach by creating AI products as add-ons. Notion, for example, charges $10 to enable their Notion AI feature. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/e8057c12-5847-4474-9acb-291defafa326_1418x421.png) **The add-on approach is best when:** - The AI feature provides value to some of your customers but would not be something that all buyers would want to use, or pay for - It adds value to existing bundles and is an enhancement of the solution that enables customers to better solve their problems #### Option 3: Bundle in existing plan Of the companies I looked at, 59% opted to incorporate new AI features into their existing plans (although I wasn’t able to discern from the data how many of those came with price increases). The decision whether or not to implement a price increase alongside the addition of new AI features depends on the extent of the value these features provide to the customer. If the features significantly enhance value for the majority of customers, it may be justifiable to raise the package price or add a usage-based pricing component. One thing to consider is that price increases for large customer bases is no easy feat and has to be thought through carefully before making any changes. Thorough testing with users and understanding of willingness to pay is crucial before executing the price increase. Examples of companies that have integrated AI features into existing packages with a price increase in the shape of usage-based pricing include Canva, Box, and Grammarly. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/f7f0e371-ffe4-41bd-8705-0a1ac3871662_842x598.png) **This approach is best when:** - The feature aligns with the core value proposition of that package and about 70% of customers consider it a crucial feature - Customers are unlikely to buy it separately - Offering it separately might be seen as overly transactional or nickel-and-diming the customer ### Step 3: Distribute AI features across product tiers If you choose to incorporate AI features into existing packages, it is crucial to thoughtfully consider their distribution across the packages. Rather than adding all functionalities to a single one, evaluate the various use cases and the different levels of customer willingness to pay in order to sprinkle the features across various packages with different price points. This strategic approach ensures that the features are effectively aligned with customer needs and maximizes revenue potential. Canva is a great example of this: ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/55607512-6486-4031-9624-77d198616af8_710x626.png) This approach helps create an upsell path and saves costs on entry-level subscriptions. ## 3. Price points for AI features Finally, let’s talk about actual price points. We looked at the companies offering AI products as add-ons or standalone products to understand how they priced their AI feature compared with their standard SaaS offerings. (We left out the companies offering AI features in an existing plan, as we can’t accurately allocate the price to the AI feature.) This can provide you with a benchmark of roughly where to price your own AI products relative to how you are pricing your core products today. While direct comparisons can be challenging across different value propositions, this analysis provides valuable insights into pricing trends. #### **What companies are doing** The pricing for AI add-ons varies significantly, ranging from 25% of the base package price (Adobe) to as much as 4.75 times the cost of the standard SaaS product (GitHub). In absolute terms, the monthly price per user for these AI products spans from $4 to $30. Generally, AI products are priced lower than their non-AI add-on counterparts. The price point for AI seems to be somewhat correlated with the value the feature or product provides to the user. A key takeaway from our analysis is that features should be priced accordingly to capture their worth. For example, Microsoft Copilot for Microsoft 365 charges the highest per-user price, at $30, exceeding the subscription cost for Microsoft 365. Similarly, GitHub Copilot charges $19 per user, which is more than 4.75 times the cost of their standard SaaS subscription. Those prices are high, but reports indicate that Microsoft Copilot increases productivity by up to 70% and coders reported that they complete tasks 55% faster with GitHub Copilot. These examples illustrate the importance of aligning your pricing strategy with the perceived value of your AI features. ![Image from How should you monetize your AI features?](https://substack-post-media.s3.amazonaws.com/public/images/c1e2103a-69ac-47a8-b1e1-44c35867f56f_1000x1450.jpeg) #### **How to pick the right price point and structure** For almost all of the 44 companies we reviewed, a per-user monthly fee was the preferred way to charge. While the underlying cost structures are generally based on usage, the companies have chosen a per-user-based pricing structure rather than translating the internal costs to customer-facing prices. Charging a per-user fee is still the simplest way to sell a product and the simplest way for users to buy one. Right now, all the companies we looked at seem to be prioritizing making adoption as easy as possible while ensuring competitiveness. Picking the right per-user price point for your AI product requires consideration of several key factors: 1. **Consumer insights:** The closer you can tie the price to the value you are creating for the customer, the easier it will be to charge a premium. Understand how much ROI you are creating by analyzing the core metric the AI offering impacts, such as productivity gains, time savings, etc. Copilot and GitHub are examples of this. 2. **Competitor pricing:** Review your five closest competitors to see how much they are charging relative to the value they provide versus your own product. Customers will review multiple products, and although all products are unique early on, I would encourage you to stay in the same ballpark as close competitors. 3. **Costs:** Understand how much cost you incur on average per user (if you are charging on a per-user basis). Early on when you have little usage, this does not matter, but as you scale you need to ensure that each user is profitably priced. That means taking into account items such as compute, bandwidth, data storage and labeling, and security and compliance, as well as maintenance and upgrades. ## **Final words** In the rush to bring AI features to market, monetization has taken a backseat for most companies. That is changing now. The focus is shifting from mere adoption to strategic monetization, signaling a new era where the true value of AI is recognized and harnessed. Companies now need to think carefully about how they monetize, and given how new the market and tech are, very few companies are likely to get it right the first time around. In the coming years, we expect to see a lot of changes to both how AI is integrated into products and what their price points are. So far, pricing model innovation has been scarce from the big tech companies, with Fin from Intercom being one of the only examples of pricing model innovation. They’ve implemented a pay-per-resolution model, which means that the customer pays only when Fin achieves the outcome the customers care about most—resolved conversations. Aligning the price closer to end-user value like this is attractive for many reasons and something we are likely to see become more apparent as gen AI matures in the application layer. In the generative AI market, we are all navigating uncharted territory. What companies are doing now may not be what they’re doing next year. The same might be true for your business. But as has been the case for a long time with other types of products, rapid testing and iteration of monetization strategies with users is likely the best path toward successful long-term results. *Thank you, Palle. For more from Palle, make sure to subscribe to his newsletter, [Rule of Thumb](https://palle.substack.com/), where he provides tangible pricing advice to operators, and follow him on [LinkedIn](https://www.linkedin.com/in/pallebroe/).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [34/61] Ethan Smith: The power of internal linking for SEO ![Image from Ethan Smith: The power of internal linking for SEO](https://substack-post-media.s3.amazonaws.com/public/images/ba6b7abd-356a-4b50-bfc6-ba4ad78ba369_1280x720.jpeg) What do MasterClass, Medium, and Upwork have in common? They’re hugely successful companies that knew search engines like Google and Bing could play a significant role in their growth — and they all turned to search engine optimization (SEO) guru Ethan Smith to make it happen. Good SEO increases a website’s visibility to bring in more organic traffic. And the more users entering a business’s sales funnel, the greater their revenue. It’s a concept most companies understand, at least at a surface level. But putting the idea into practice can feel more like a dark art than a learnable skill. Enter [Graphite](https://www.graphitehq.com/), the boutique growth agency Ethan co-founded to assist companies with programmatic SEO, content strategy, and growth design. Lenny welcomed Ethan to [the podcast](https://www.lennyspodcast.com/) for an in-depth conversation about all things SEO, including one of its most essential yet overlooked aspects: internal linking. ## What’s internal linking? There are three main types of SEO: - **Programmatic SEO. The production of product pages, landing pages, and other web pages automatically generated from a database of information.** - **Editorial SEO.** Articles, guides, and other content generated manually (written by a person) instead of automatically. - **Technical SEO.** A website’s infrastructure, including site architecture, internal link architecture, category pages, tags, redirects, and page speed. Internal links are part of both editorial and technical SEO. As the name suggests, they connect one web page to another page or resource on the same website, internally, via hyperlink. Your site may also include external links, or backlinks, which connect a page on your site to a high-quality resource outside of your domain. A site’s internal linking structure is one of Graphite’s key focuses when conducting SEO, says Ethan. “Consistently, we'll see [that] if you don't have good link spread, fixing it has significant opportunity.” “Of anything that I can recommend to companies, as the quick win, the thing to do at the start, it's this.” ## The different types of internal links You can use two types of internal links on your website: - **Contextual links. Hyperlinks within the body of a website’s content, such as blog posts, that lead to another page on the same site are contexual, driving deeper engagement by encouraging visitors to explore related topics and spend more time on your site. These links are more valuable for SEO because they connect pages and deepen context.** - **Navigational links.** Menu links in a website’s header, footer, or sidebar that allow users to quickly find to other pages are for navigation. These links help users easily move through your website to find the content they seek. Including both types of links in your internal linking strategy allows you to create a website that’s informative, easy to navigate, and optimized for Google and other search engines. ## The power of internal linking in SEO In SEO, internal links are an often underappreciated lever for growth — a tool Ethan estimates more than 90% of websites aren’t utilizing. “Google is crawling the web and your site through links,” says Ethan. “And if you don’t have links, then Google doesn’t have paths to find all of your pages.” So not only do internal links help SEO, but they’re actually make-or-break if you want your site to rank higher on search engine results pages (SERPs). Here’s what links do - **Teach search engines about your website’s structure. Internal links allow search engine crawlers to index your site’s pages more effectively by showing how your content is interconnected. This helps the search engines understand the hierarchy of your content.** - **Distribute link equity.** When you link out to another internal page, you pass some of the authority and credibility of the original page to the linked resource. This is how you distribute link equity (or “link juice”) throughout your site. - **Improve the user experience.** Internal links help users navigate your site more easily, improving the user experience and enticing visitors to stick around longer. In turn, a high-quality experience increases engagement, social shares, and backlinks to your website. - **Help target specific keywords.** By linking to pages that target a specific keyword, you signal to search engines which pages on your site are most relevant for search queries containing that keyword. Engines prioritize credibility and relevance in content, putting stronger content on SERPs, in turn generating more traffic and visibility for your site. ## Ethan’s 4-step guide to building an internal linking strategy If you’re looking to optimize your website but don’t have the human or budgetary resources to devote to highly specialized programmatic SEO, focus your efforts on the editorial side of things — that’s where internal linking really comes into play. Here are the four steps Ethan recommends to build your internal linking strategy: ### 1. Perform a site audit Using a program like [Screaming Frog](https://www.screamingfrog.co.uk/), crawl your site to pull data for an internal link audit. You’ll learn the total number of internal links, find any broken links that take visitors to an error page, and gain performance metrics that show you which pages are most in need of improvement. ### 2. Identify your best-performing pages Your audit is likely to show that a small percentage of pages are bringing in the most traffic. Low-traffic pages generally benefit from additional internal links to pages that already rank well and earning significant clicks. These high-authority and popular pages, called “crawl points,” are locations where Google enters your site. And a page’s proximity to a crawl point influences its share of the link juice. “You want the shortest path from a crawl point,” says Ethan. ### 3. Identify related content. Look for pieces of content that are relevant to your best-performing pages, whether existing or new. These internal resources can benefit one another thanks to the power of linking. ### 4. Link related content to the best-performing pages. Use internal links to connect pages — the more, the better. (Ethan recommends at least 5–10 links per page.) Just be sure to use descriptive anchor text that’s relevant to the content it’s linked to. ## The importance of human-generated content Don’t underestimate the power of the written word — according to Ethan, editorial SEO has become more effective at driving traffic than programmatic SEO. “The way that you grow is with programmatic and with editorial SEO,” he says. “And I think editorial SEO, and by that I mean articles and content, manually written content, is underappreciated.” Whether you’re updating existing content or creating new material for your website as part of your digital marketing and internal linking strategies, you might be tempted to save time and resources by using an AI tool like ChatGPT. But although Ethan believes AI is useful for the parts of the content creation workflow that lead up to writing — such as extracting structure, identifying topics and subtopics, and performing keyword research — he cautions against using it for the writing itself. “A lot of times, it’s indistinguishable from a human,” he says. “The problem is that you want the sentence to be factual.” And because GPT-3 works by crawling very large data sets and generating sentences similar to those it finds, the sentences it produces may or may not be accurate. Google’s algorithm places a higher value on pages with quality, relevant content, so inaccuracies can have a negative impact on your site’s performance. And, more importantly, unreliable information can harm your users. “If I have cancer, and I’m researching cancer options, and this AI content suggests some treatment that isn’t a good treatment, that’s a big problem,” Ethan says. ## Power up your SEO strategy Lenny’s Podcast features interviews with world-class product leaders and growth experts to uncover concrete and actionable advice and empower you to launch your own product. Listen to the full [interview with Ethan Smith](https://www.lennyspodcast.com/the-ultimate-guide-to-seo-ethan-smith-graphite/) for a comprehensive breakdown of internal linking best practices to improve your website’s search rankings and help Google drive more traffic to your business. For answers to reader questions about product and career growth, subscribe to [Lenny’s Newsletter](https://www.lennysnewsletter.com/). And be sure to explore the full [podcast archive](https://www.lennyspodcast.com/episodes/) for valuable conversations on topics such as: - [Building a cult-like brand](https://www.lennyspodcast.com/how-to-build-a-cult-like-brand-laura-modi-bobbie/) - [Techno-optimism](https://www.lennyspodcast.com/hot-takes-and-techno-optimism-from-techs-top-power-couple-sriram-and-aarthi/) - [Product-led sales](https://www.lennyspodcast.com/the-ultimate-guide-to-product-led-sales-elena-verna/) - [Defining your ideal customer profile](https://www.lennyspodcast.com/blog/defining-your-ideal-customer-profile-pete-kazanjys-perspective/) - [When to quit your job](https://www.lennyspodcast.com/blog/when-to-quit-your-job-ada-chen-weighs-in/) --- ## [35/61] On asking for help (even when you really don’t want to) ### Photos from recent reader meetups 🥰 If you’d like to attend (or host!) a meetup, join our paid subscriber Slack and find your local city channel. [Learn more here](https://www.lennysnewsletter.com/p/community). People sometimes believe that asking for help will make them look weak, or even incapable of doing their job. But in fact, it’s the complete opposite. Every successful person you know became successful *because* they were skilled at asking for help. What I’ve heard repeatedly from the many leaders I’ve met, and have found to be true in my own career, is that knowing when and how to enlist support is a career unlock. **You’re slowing your trajectory if you don’t build this muscle.** In her phenomenal inaugural guest post, [Newsletter Fellow](https://www.lennysnewsletter.com/p/meet-your-lennys-newsletter-fellows) [Natalie Rothfels](https://natalierothfels.com) shares a step-by-step guide for when, who, and how to ask for help, including how to get over your fears about asking for help, practical templates, example scripts, and tactical advice—rooted in her coaching practice and personal experience. Natalie is an executive coach who works with co-founders and executive teams, helping them build interpersonal skills to become more effective leaders. She spent a decade as a product manager building educational tools at [Quizlet](https://quizlet.com/gb) and [Khan Academy](https://www.khanacademy.org/) and now helps leaders build their emotional intelligence, influence, relationships, and ability to navigate conflict. She is a certified Internal Family Systems practitioner and a facilitator for Stanford Graduate School of Business’s Interpersonal Dynamics course, aka “Touchy Feely.” She also recently launched [The Ripple Deck](https://rippledeck.com), a facilitation tool for building connection. You can follow her on [LinkedIn](https://www.linkedin.com/in/nrothfels) and [Twitter](https://x.com/natatouille). ![Image from On asking for help (even when you really don’t want to)](https://substack-post-media.s3.amazonaws.com/public/images/ae90ef5d-8b2e-4d75-a5cf-7a52fdb31d1b_4000x2000.png) In late 2021, after pushing myself to the edge of burnout, I made it a goal to ask for help at least once a week. I requested testimonials from clients who had ghosted me after months of work together. I asked strangers for financial support on multiple Kickstarter campaigns. I solicited words of affirmation from peers to help boost me up. I even asked some of my family to quietly listen while I expressed anger about my childhood. None of this came naturally to me. I’ve prided myself on being independent, hyper-resourceful, and not “needing” anyone, especially in a professional context. Being dependent on others felt vulnerable and risky. And because of that, I was willing and able to work 10 times harder to avoid the vulnerability of asking for the help I needed and deserved. When my body and my brain gave up, I lost joy for a job that was otherwise a perfect fit. My previous strategy was no longer an option. Three years later, I can say that learning to effectively ask for help has been the biggest transformation in my personal and professional life. I can sleep at night without the burden of chronic overwhelm and rumination. I have healthier, reciprocal relationships that both challenge and support me. My work is more focused and productive than ever before. Since learning that lesson for myself, I’ve spent hundreds of hours coaching product leaders, founders, and executives to incorporate this skill into their lives too. Most clients logically understand the upside of asking, but few can anticipate how much emotional energy it unlocks. Take it from my client Meena (not her real name): > **“The exhaustion of subconsciously assuming I have to do everything on my own robbed me of agency, joy, and so much energy in my work. Shifting this has been radical for me in terms of my relationship to myself and to my work.”** This tendency to hold onto everything can be especially salient among product managers, who are lauded for their “ownership” of problems. It’s hard to be high-agency, take radical responsibility, be everyone’s unblocker, build great products—and do it alone. When done well, asking for help does not diminish your ownership or credibility. It increases your agency, builds higher-trust relationships, and models a willingness to put your vulnerability aside for the sake of the work. That can also help your peers and reports, who will see you modeling a practice that keeps a team psychologically safe and sustainable to work in. I’m writing this post now to share everything I’ve learned about asking for help so far. I’ll help you navigate the fears associated with asking and give you a toolkit for making your asks more effective, including template scripts you can start using today, based on the ones I created for myself and my clients. ![Image from On asking for help (even when you really don’t want to)](https://substack-post-media.s3.amazonaws.com/public/images/8567dee3-950f-45bc-ba43-4b9459ae6fb7_1504x802.png) ## Step 1: Navigate the fear Making an ask is vulnerable for everyone, and can provoke fear, anxiety, and stress. One client just this week expressed the fear in a way that I’ll never forget: > **“Asking for help is a sign of weakness, and weakness is a sign of death.”** These emotions can be paralyzing, preventing you from seeking the support you desperately need to unblock your work. My client Meena’s story is a great example: Meena is a Group Product Manager with 10 years of experience, currently working at a 300-person Series C SaaS startup. She came to me struggling with an overwhelming workload and on the brink of burnout. As a player-coach, she manages PMs, has her own IC growth work, and supports the hiring and onboarding process for new talent. I noticed immediately that Meena was spending her whole day helping her teammates and putting her own priorities last. Her “real” work didn’t start until after 5 p.m., when she was finally done with meetings. It wasn’t just a matter of poor time management. She was subconsciously avoiding her product work; it felt more ambiguous than the clear needs of her team, and she didn’t know the “answers” to the problems she was supposed to own. Rather than putting some draft ideas to paper and gathering initial feedback, she refused to share anything half-baked out of concern that others might see her as incompetent or dumb. She’d sit for hours at a blank screen while her inner critic repeatedly said, “This is your job. You’re so bad at this. You’re going to get fired if you don’t finish this tonight.” The reality was that she actually was good at her job—great, even! But when she was in that state of fear, she couldn’t see her own skills and agency clearly. No agency, no action. She was blocked. When I asked Meena when the last time was that she’d asked for help at work, she looked at me with confusion. She had never even imagined the possibility. Her fears of looking inadequate obfuscated the choice. To be fair to Meena and all of us, these fears *can* absolutely be well founded. There are times when asking for help can lead to degraded trust or, in the worst case, being fired. But if done with consideration and skill, you are more likely to encounter the best case: you get the help you need, and your boss and your team get their needs met too. From my own experience and from working with countless clients, I knew asking for help could open a world of possibilities. Spoiler alert: it ended up working for Meena too. She experienced a noticeable and lasting shift in stress and overwhelm. Her team relationships became more reciprocal and less stuffy. Once she got past her fears, she was even asked to expand her leadership to two more teams. And she could take on the new scope sustainably—good for her career, good for the company. Meena’s case may seem extreme, but she’s not alone. Most of my clients have fears come up when I ask this same question. Boiled down, the fears sound like this: 1. **Fear of being a burden:** “If I ask for help, I’ll be imposing on others who are also busy.” 2. **Fear of appearing incompetent:** “If I can’t handle this on my own, they’ll think I’m not qualified for my role.” 3. **Fear of rejection:** “If I ask for help, they’ll just say no.” 4. **Fear of losing control:** “If I involve others, I might lose autonomy over my projects.” 5. **Fear of uncertainty:** “If I ask for help now, it might negatively impact my future opportunities or relationships.” 6. **Fear of the cost:** “If I ask for help and it doesn’t solve my problem, I’ll have exposed my vulnerability for nothing.” In Meena’s case, she was most afraid of appearing incompetent to her manager. Her manager had given her increasingly more responsibility during Meena’s two-year tenure and she didn’t want to be seen as a failure. But the starting point for learning this skill is not running to your boss with your arms flailing. It’s befriending your fear enough that you can begin by making *any* ask at all—usually first to a friend or peer. It really helps to have someone to process with, but here are a few steps you can take on your own to address your fears. ### Phase 1: Increase awareness of your emotions Your body is likely sending you all sorts of signals that say, “I’m scared.” Become familiar with your body’s vocabulary of fear. If you are unattuned to how fear shows up, it’s difficult to work *with* it. I often tell clients to create an “emotion log” ([here’s a template](https://docs.google.com/spreadsheets/d/1W7ukM0DMzHpoXWEJPnLIEX-R4sbhexKs33h4og7McX4/edit?gid=0#gid=0)!) to start increasing their awareness of when and how the emotion shows up, what triggered it, and what its supportive function is. *Example: Meena’s fear lived in her chest and would send constriction all the way up her neck, making it hard to speak. She noticed it most acutely when she had said yes without knowing whether she had the capacity (skills or time) to succeed at the task.* ### Phase 2: Allow the fear without changing it All fears are valid, even if they’re not true. [Name it to tame it](https://www.youtube.com/watch?v=ZcDLzppD4Jc). Articulate what you’re afraid of. Acknowledge how the fear serves and protects you, and allow it to be present without making it wrong. Sometimes we are even scared of acknowledging our fear! This extra layer of fear can make it difficult to fully acknowledge how scared you might be, so be compassionate and allow yourself the time you need at this step. Your goal is to really hear the story that your fear has, without second-guessing it, debating with it, or overriding it. I often ask my clients to imagine the fear as a little character sitting atop their hand that we can have a conversation with. Hear out your fear. *Example: Meena eventually acknowledged something like “I’m afraid that if I ask for help, my manager will think I can’t handle the responsibility they’ve given me. My fear helps me stay small and play it safe so I ensure I won’t feel like a failure.”* ### Phase 3: Offer yourself security by shifting the narrative Cognitive reframes aren’t always effective for transformational work, but they can be enough to shift us in the moment toward possibility rather than pessimism. At this step, the goal is to offer yourself internal security. Try these shifts: - “Asking for help makes me a burden” → “People really appreciate being asked and valued for their expertise.” - “Asking for help makes me look weak or incompetent” → “Demonstrating that I know what I don’t know is a key leadership competence.” - “People will think less of me if I ask for help” → “People respect and appreciate my vulnerability, and expressing my needs will allow them to do the same.” - “My boss will be annoyed that I can’t do it alone” → “Leaders want my work to succeed and need to know when that’s at risk.” These narratives are not just mental gymnastics. You have firsthand experience to draw on, too. How often do *you* perceive someone as burdensome, incompetent, or weak when they make a thoughtful, unentitled ask? Probably rarely. ### Phase 4: Design and enact an experiment We expand the edges of our fear through experimentation and data gathering, not just self-awareness. As I worked with Meena to peel back the layers of fear and stress, we uncovered some key issues: Meena was heavily overcommitting herself, not involving her peers early enough in her thinking process, and assuming her team couldn’t step up more. She was slow to produce work, and she made reactive decisions based on fear and urgency. I asked her to design an experiment that could yield real data that might challenge her mental models (namely, “I must do this alone or I will be seen as ineffective”). Her first experiment was designed to verify whether her PM and engineering peers perceive her as ineffective or burdensome when she asks for help. (They did not. She was brave enough to reveal her insecurity, and they both empathized with it.) It pays to practice these strategies early and often. As you grow in your career, you’ll encounter more projects that you don’t immediately know how to tackle. New, bigger, and more ambiguous projects often feel more threatening because you’ve never successfully done them before! With enough practice, you’ll shift away from the fear of asking to proactively anticipating where you might get stuck and who you can ask well before you ever need it. ## Step 2: Make the ask Once you’ve navigated the fear, the next step is the big one: making the ask. This starts with structuring your ask effectively. Then, we’ll determine what help you need and who you can ask, using Meena’s situation as an example. ### a. How to ask Start with this template. You don’t need to use all of its parts, nor in this exact sequence, nor with these specific words. Treat it as an example, and modify it based on the strength of the connection, overlap in your goals, and expertise of the recipient. ![Image from On asking for help (even when you really don’t want to)](https://substack-post-media.s3.amazonaws.com/public/images/e3a478b5-00e0-42dd-9f87-9c8f16fabd5b_1600x1087.png) 1. **Signpost:** “I’d like to ask for your help with something.” 2. **Clear request:** “Specifically, I need [type of help] with [specific task/problem].” 3. **Rationale:** “This is important because [reason].” 4. **Why them:** “I’m asking you because [specific reason].” 5. **Timeline:** “I’d need this by [date/time].” 6. **Opt-in/out:** “Is this something you’re able to help with?” Let’s walk through an example from Meena to her manager, the CPO: > “I’d like to ask for your help with something *[signpost].* > > Specifically, I need your support in prioritizing work across our three product teams *[request].* > > Our current workload is unsustainable, and I’m causing bottlenecks that will impact our ability to hit our targets *[rationale].* > > You do this all the time at the org level, so I’d really like to share my existing prioritization and have you pressure-test it based on your experience *[why them].* > > I’d like to discuss this in our next 1:1, if possible *[timeline]*. Is this something you’re able to help with *[opt-in]*?” #### Making it compelling Your goal is to make it as easy as possible for them to say yes. **To do so, first create a relational connection.** This doesn’t have to be big, and it doesn’t have to take a long time.Find or create an overlapping goal, highlight that you’ve done your homework, talk about shared experiences, disclose something personal about yourself, invite them to share something personal, talk about your weekend, express interest in their team’s recent success. **Then, make your request as small, easy, and clear as possible.** Incrementing asks is a lot easier once there is momentum in a conversation. Once Meena has her manager in the room and shares her prioritization, it’s easier to then open up to bigger asks around headcount, how to navigate the CEO effectively, etc. The specificity and degree of thoughtfulness in your ask will contribute to an easier yes. Frame your ask around *their* goals, not just *your* needs. Remember that there are cultural and interpersonal considerations to take into account. How power and hierarchy functions in your org should inform who you ask, and for what. If your team functions asynchronously in a remote environment, that will likely change the tone and medium of your asks. Don’t make asks of people whose asks you have not met! Use good judgment. ### b. What to ask Now that we’ve covered how to structure your ask, you need to clarify what type of help you’re seeking. I’ve built out this menu to make the choice easier, as it can be hard to know what help you want or need. 1. **Perspective gathering:** Advice, expertise, opinion, alternative viewpoints. Think of this as a simulator of someone else’s brain. 2. **Information/knowledge:** Analysis, data, insider knowledge, facts, domain know-how. Think of this as a database download. 3. **Task or goal progression:** Thought partnership, rubber-ducking, taking on a task or reducing the load, giving feedback on work, reducing risk or overhead, helping to clarify/focus/prioritize. Think of this as the conveyor belt moving forward. 4. **Empathetic support:** Being a shoulder to lean on, providing supportive challenge, helping you access your own strengths or resourcefulness, being a mirror and reflecting back, mitigating interpersonal conflict. Think of this as a ship to help you navigate the stormy seas. 5. **Advocacy:** Opening doors, championing you, holding you accountable, celebrating your wins, believing in you, providing new opportunities. Think of this as a propeller or catalyst. ![Image from On asking for help (even when you really don’t want to)](https://substack-post-media.s3.amazonaws.com/public/images/1637abbd-b7cf-4d5f-8651-36ba098d015f_1600x1029.png) Meena benefited from seeking multiple types of help at once. She needed a combination of task progression (help with prioritizing work across teams) and advocacy (support in securing additional resources). Throughout our coaching, she also leaned on our sessions for emotional support to navigate the stress. As that became more comfortable, she started to seek additional support across her peers. It turned out that Meena was not the only one feeling the overwhelm. She enjoyed providing support for her peers as well, which reminded her how good it can feel on the other side of being asked. Notice that not all asks need to be grandiose. Small things are still very worth asking for, and often easier to start with because they’re also easier to fulfill! This is why a meal train is so popular for new parents: it’s an easy yes for asker and giver alike. ### c. Whom to ask There are a ton of different factors for selecting the person to ask. Here are the few I most frequently turn to: - **Connection:** How strong is our relationship? - **Goals:** How overlapping are our goals? - **Expertise:** How relevant is their skill set? - **Seniority:** How much more positional power do they have? - **Ease:** How convenient is it for me, and for them? - **Reciprocity:** How much have I already supported them? It’s significantly easier to ask for help when you have an existing relationship or overlapping goals. It’s much more effective to ask someone who has the expertise you need and the power to provide it. It’s substantially safer to seek support from a peer rather than your CEO. Of course, there are times when you don’t know the right person to ask, you have no relationship with them, you share no overlapping goals, they’re more senior, or it’s not convenient to ask. Don’t let that stop you! My heuristic is simple: could my ask be at all compelling to this person? If not, it might not be the right type of ask for the right person. Or you haven’t done the legwork to identify what would make it compelling. It’s a trap to think you need to have some profound relationship first before asking. You can build the relationship *while* asking by making it significantly more compelling. The level of intention you put behind your request is palpable. Say whatever will motivate them to help you. This requires upfront work to consider why they should care. Your thoughtfulness will show. ### Example scripts With each subsequent ask, Meena progressively had more and more data that disconfirmed some of her fears. In fact, her manager was giving her *positive* feedback about how much more confident and engaged she seemed. I encouraged Meena to start with asks that felt less risky and then expand from there. Below you’ll find some scripted examples with all of the elements from our template. Remember that you can cut many pieces from the template based on the strength of your connection and shared goals, and inject your own personality. **1. Asking a peer PM on another team (existing strong relationship), chat via Slack** > Hey Taylor, quick question *[signpost]*. > > I’m trying to prioritize work across my three teams *[rationale]*. > > I honestly don’t know how you manage to do this *[why them]*. > > Looking for a brain buddy on this—I have 3 questions *[specific ask]*. > > Are you open to answering inline or finding 15 minutes to chat live by the end of this week *[timeline, opt-in]*? > > I don’t want to make an avoidable error in how I’m thinking about this. Notice that Meena need not be as formal or concrete with a peer here. **2. Asking the CEO in a 1:1 they scheduled to talk through a new project idea** > I’m glad you want me to own this. I want to say yes, but I don’t feel confident I can deliver it and need some support from you *[signpost]*. > > My top goal right now is to drive expansion within the Big Bad Customer account by moving it to multiplayer. To do that well and also take this on, I’d need us to either deprioritize the other initiative or staff up the new project for success *[rationale]*. > > Is there another possibility you see or other relevant context that you have that I’m missing *[opt-in]*? Notice that we don’t need to be heavy-handed with the why them or timeline because we’re in a conversation, live. The signpost still helps because it sets the person up to receive more about your intent, not just your message. **3. Asking a stranger who’s written about this topic** > Hi, Tomas. > > I read your post about saying “no” more, and it sparked a whole chain of events for me: I realized how much I’ve been people-pleasing, and it’s exhausting, but I’m so grateful for the tools you shared because I do feel some relief too *[why them]*. > > I’m wrestling with one piece that I’m hoping you can help with *[signpost]*: I feel a profound guilt after I say no, and I ruminate on it for days after. > > Do you have 1-2 tips you can share via email about how you navigate the aftermath? > > Or I’d be happy to pay for a session with you to talk more about it live if you’re open to sharing your calendar link *[opt-in]*. Notice that, without any relational connection, Meena tries to create one by sharing more about herself and more about the impact of reading Tomas’s work. She does this before making the request, and her ask is hyper-specific and starts small. She can certainly grow to ask more once she’s on a call. ## Step 3: Receive the help How you receive help is just as important as how you ask for it. It’s another opportunity for relationship building and can influence future interactions. Let’s explore how to handle different outcomes when you’ve made an ask. ### When it helps Express authentic appreciation**.** Follow up and share the impact of the help, as it positively reinforces the behavior. Then offer reciprocity. Meena might say to Taylor, her peer: > 🙏🙏🙏 Your backup with prioritization stuff helped me regain my sanity and actually figure out what work to do with my team. I feel a million times better, thank you for that! Anything you need help with so I can return the favor? ### When “help” doesn’t help Try to find an iota of what’s helpful in what’s been offered. Then politely redirect back toward your original ask or eject early from the conversation. Avoid giving real-time feedback about how unhelpful they were. You’ve just asked them for help and they tried their best! Meena might say to her manager: > The bigger org context is helpful. I’m specifically looking for your help on which of these three priorities I should drop this week or if you have other ideas for how I can tackle all three simultaneously. ### When they can’t or won’t help Often a no has more to do with the other person’s circumstances and capacity than you or your request. Avoid taking it personally. Keep the door open, and seek alternative support. Meena might say: > Not an issue, I get it. Anyone else you would recommend I ask? ## The impact of asking well In the depths of my own burnout, I felt overwhelmed by carrying the weight of my entire team. And I felt hurt that I had to go it alone. But the great irony was that I was refusing to let anyone hold the weight with me. I worked emotional overtime to avoid the vulnerability of asking for help, and then worked another shift of overtime doing it all alone. That was a disservice to myself, the team, and the work. When I learned to befriend my fear and negotiate with my ego, the doors opened up to what felt like another reality. I was shocked by how many people wanted to help and support me. I haven’t stopped feeling vulnerable when I make an ask. Sometimes I’m clumsy in the moment and waffle around what I really need. But I have a lot of data now that makes it easier to take the risk. People want to help, and when I ask thoughtfully, they will and we’ll all benefit. I know the same is possible for you. ## 📚 Further study 1. Here’s an exercise [to process your fear using Internal Family Systems](https://www.youtube.com/watch?v=qQdloHS3g50). 2. Learn about [David Rock’s SCARF model](https://www.mindtools.com/akswgc0/david-rocks-scarf-model). Asking for help triggers threat responses for many of us. We are all wired to move away from interpersonal threats, but the good news is that we can help ourselves move toward rewards once we know what’s so threatening to us. 3. Ed Batista’s [article on the importance of safety, trust, and intimacy](https://www.edbatista.com/2010/03/safety.html), the foundation for risk-taking and experimentation. *Thanks, Natalie! For more, check out her [website](https://natalierothfels.com/) and [The Ripple Deck](https://rippledeck.com),* *and follow her on [LinkedIn](https://www.linkedin.com/in/nrothfels) and [Twitter](https://x.com/natatouille).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [36/61] Summary: The ultimate guide to adding a PLG motion | Hila Qu (Reforge, GitLab) Hila Qu is an Executive in Residence (EIR) at [Reforge](https://www.notion.so/WIP-The-ultimate-guide-to-adding-a-PLG-motion-Hila-Qu-Reforge-GitLab-311e0176f8d341ae80bdfe9e340eb7ed?pvs=21) as well as a renowned growth advisor, angel investor, and published [author](https://hilaqu.medium.com/) (her book about growth was named one of the top 10 business books of 2018 in China). Previously, she served as the Director of Growth at [GitLab](https://www.notion.so/WIP-The-ultimate-guide-to-adding-a-PLG-motion-Hila-Qu-Reforge-GitLab-311e0176f8d341ae80bdfe9e340eb7ed?pvs=21), where she implemented and scaled their PLG motion, and VP of Growth at Acorns, scaling them from 1 million to 5 million users. You can also see the episode [transcript](https://www.lennyspodcast.com/the-ultimate-guide-to-adding-a-plg-motion-hila-qu-reforge-gitlab/#transcript/) and Hila’s [references](https://www.lennyspodcast.com/leaving-big-tech-to-build-the-1-technology-newsletter-gergely-orosz-the-pragmatic-engineer/#show-notes). ### [What PLG is and why it’s so popular ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=478s) PLG is popular due to the shift from sales-driven B2B business models to user-focused, try-before-you-buy tactics: Consumers have become accustomed to testing products before committing, which has led to increased demand for similar experiences in the B2B space. Even if you think of Facebook, there is no one selling it to you to use it, its PLG in motion where your friend invites you. ### [Why companies should have PLG and sales ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=312s) The question is not either or but both and a matter of sequencing. PLG is perfect for lowering the barrier for more people to try the product and broaden the reach. Sales motion is for a very targeted list of big customer for big orders and having a clear hit list for revenue targets. If you are in a sales motion dominated traditional B2B software industry, you’ll will need to add PLG because competitors will be adding it and gaining an advantage. It is easier to have PLG from early on rather than trying to add it to a pure sales-led company ### [What makes a company product - led with Zoom as an eg ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=581s) - **Low barrier to entry:** PLG products like Zoom often have a free version or free trial, making it easy for people to start using them without needing approval from their bosses or even knowing much about the product beforehand. - **Self-service checkout flow:** PLG products allow users to upgrade to paid plans or access more advanced features on their own, without needing help from a sales team. - **Product spreads on its own:** The nature of PLG products encourages organic growth and word of mouth, as people who find value in the free version are likely to share it with others, expanding its user base." ### [Common pitfalls in adding a PLG motion ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=684s) ![b19c92a7-0e44-4314-aa1e-6b2e336689d4_1624x1000.jpeg](https://substack-post-media.s3.amazonaws.com/public/images/1d80aa58-202f-40f4-82f7-1fb2c5918b79_1456x897.jpeg) - **Make your product more accessible:** A big pitfall for many B2B companies is that the entry point to product-led growth (PLG) is often cut off. Their "biggest CTA is called book demo," which means you have to submit a form before even getting a taste of the product. - The first step is you need to either have a free product, free trial, some sort of a low barrier entry for anyone who stumble upon this product to give it a try. - **Commit to the process:** Some companies may think a simple three-month free trial will bring in leads and conversions, but that's not the case. - They think the leads will come, conversion will come, self-service revenue will come. It's not that easy. - PLG is a complete motion that requires commitment and a well-thought-out roadmap, potentially spanning a year or more. - **Don't just go 'free', go 'data-led':** Companies that want to do PLG but lack usage data are setting themselves up for failure. When offering a free product, the two returns you want are broader reach and user data. Without that you're basically giving away your product for nothing. ### [The spectrum of when PLG makes sense ▶️](https://youtu.be/7l1fIxk7SnA?t=966) - **Don't equate launching a free version or trial with PLG:** Many companies assume that "PLG equals launch of free version or launch of free trial." It's not enough to just open a free trial, you must also consider how to activate users, design an upgrade path, and how this growth team will collaborate with sales and marketing. - **Have a dedicated team:** If you're serious about PLG, then a dedicated team is necessary. Assigning just one person to manage all the different stakeholders and parts of PLG won't cut it. Hila notes, "The person needs to be a magician in order to be successful." - **Consider the fit for your business:** It's essential to contemplate if PLG is actually a good fit for your type of business. For example, if your product requires extensive customization for the customer to see value, or if you are targeting only a handful of large companies, then PLG may not be the best approach. - …Or defense companies, only three target customer exist in the entire world, you don't probably want to do PLG. - **Remember, PLG is a spectrum:** Not every company needs to add a PLG piece, it's a spectrum. However, the majority of B2B software companies fall somewhere in the middle of this spectrum and can benefit from integrating elements of PLG into their growth strategy. ### [What you need to be successful in a product-led growth strategy ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=1204s) - **Have a Vehicle:** A company needs to have a free version, a free trial, an open-source product, or a realistic experience for their product to successfully utilize a PLG strategy. This is the vehicle that will help your product reach potential users and give them a taste of what your product can offer. - **Time to Value:** You also need to think about how to provide value to your users quickly. Give users a warm start and helping them get started with your product as soon as possible. This could mean offering sample content or tutorials to help users get started. - **Data Foundation:** With the data, you can design a user journey in the product, via email, or through other tools to guide the user to the next step. ### [The first step to adding a PLG motion ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=1492s) The first step in understanding the difference between the PLG funnel and the sales-led funnel (SLG) ![8e8ca2af-f664-479c-aba3-fb3ed6cc1671_4000x2000.jpeg](https://substack-post-media.s3.amazonaws.com/public/images/7af16edc-67f3-449b-8c44-c838101dfab9_1456x728.jpeg) **Sales-Led Funnel (SLG):** The sales-led funnel begins with the marketing team attracting visitors and turning them into leads. Leads are assessed based on how much they interact with marketing campaigns, like opening emails or attending webinars. A scoring system is employed, and those who reach a certain score become marketing-qualified leads and are handed over to the sales team. **Product-Led Funnel (PLG):** This approach mirrors the B2C model more closely. Visitors sign up for a free version, account, or trial of the product, and the aim is to encourage product usage. This becomes the primary success indicator for PLG. Usage can lead to two conversion paths: a self-service purchase or sales team involvement. - In the self-service purchase route, if the product isn't very expensive, customers may decide to buy it online without interacting with the sales team. - In the sales team involvement route, if the customer fits the ideal customer profile (like being from a Fortune 500 company), the sales or customer success team may reach out to them to provide personalized service, potentially leading to a larger deal. Once you understand PLG and SLG funnels, think about the user journey your product needs to have to enable successful conversion in the PLG funnel. Establish the steps necessary for users to convert, utilize the product optimally, and create a revenue-generating pathway. ### [What GitLab does and how the sales funnel and PLG funnel work there ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=1811s) **Sales-Led Funnel**: GitLab's marketing team works on attracting visitors to their website and getting them to sign up for free trials or free accounts. These sign-ups undergo a lead nurturing and scoring process, and the ones that score high are given to the sales team. The sales team, which is divided into SMB, mid-market, and enterprise, then works on closing the deals, which convert into revenue. Product-Led Funnel: - An individual, such as a developer, might hear about GitLab, visit their website, and sign up for a free account to use for personal projects. They may use GitLab independently of their company's current solution. - The company can then sign up for a free trial to test GitLab's more advanced features and use that period to conduct a proof of concept. If they only need a few seats, they might choose to go to the pricing page and buy the product directly. - However, if this is a large company, the sales team might receive data indicating this company's interest, and reach out to start a sales conversation, potentially leading to a contract. Hence, the product-led funnel is user-driven and has a more organic growth path, starting with personal use and possibly expanding to enterprise-level usage. ### [Mapping out the funnel ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=2047s) Start by mapping out the major steps of how users would interact with your product-led growth motion, such as marketing site, free version, and checkout flow. 1. **Marketing Site**: This is where potential users first learn about the product. The messaging on the marketing site should be designed to encourage free sign-ups. 2. **Free Version:** The product should have a free version that gives users a taste of what it can do. The UX should guide users towards the product's three most important features. 3. **Checkout Flow:** The checkout flow should be smooth and offer various payment options to accommodate customers from all regions. After mapping out these broad components, the team should then dive deeper to identify the specific details that need to be optimized or maximized in each step of the funnel. ### [Finding leverage and other next steps ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=2129s) 1. **Establish the Fundamental Components:** After mapping out the product-led growth (PLG) funnel, the first step is to build the foundational components, such as a clear marketing site, a free version or trial of the product, and a smooth checkout process. 2. **Identify the Starting Point:** Choose a part of your funnel to focus on first that will drive the most significant impact. This should ideally be an area where a small investment could yield substantial results. 3. **Conduct a Full Funnel Audit:** Run through the entire user journey from a customer's perspective to understand where potential bottlenecks and pain points exist. This includes the initial website visit, the sign-up process, the initial product use, and finally, the purchasing process. 4. **Address Pain Points:** Be proactive in identifying and addressing issues within the customer journey. Common problems may include confusing checkout forms or unclear paths to reach the product's 'aha moment'. 5. **Prioritize User Onboarding:** Ensure users can quickly reach their 'aha moment' where they realize the value of your product. This crucial step should be a significant focus to prevent user drop-off due to confusion or frustration during the initial product use. ### [What an aha moment is and conducting an audit ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=2304s) ![efc79bec-eec8-45c6-bc51-f2af48b68951_4000x2000.jpeg](https://substack-post-media.s3.amazonaws.com/public/images/b7dbd5b9-0ab6-42b9-a34c-0350b83d593d_1456x728.jpeg) - **Data Analysis:** Pair the audit with data on how many people are on your website, how many go through the signup process, how many reach the 'aha' moment, and how many are successful in self-checkout. This combination of data and user experience will help identify the most significant areas of opportunity, often activation and conversion. - **Understand your Product’s ‘Aha Moment’:** The 'aha' moment refers to the first time a user experiences value from your product. This concept originated from Facebook's early growth strategy where if a user added 10 friends within 7 days, they were more likely to continue using the platform. - GitLab defined their 'aha' moment as "two users using two features within 14 days". This indicates that the initial user found value in the product and was confident enough to invite a coworker, demonstrating the platform's collaborative nature. - **Validate Your Aha Moment with Experiments:** Correlation doesn't imply causation. Just because users who perform a certain action are more likely to convert doesn't mean they will. - You just saw people who are doing this are more likely to convert. But it doesn't mean if you get people to do that, they will convert. - **Audit Your Product’s User Experience:** Audit your product by assessing the excitement it generates on the landing page, its usability, and if the user can get to the 'Aha Moment' and purchase the product all by themselves. Look at the initial emails sent to the user as well. - **Use Data to Identify Opportunities for Growth:** By mapping out the user's journey and analyzing data at each step, you can spot areas that have the biggest opportunities for improvement. Usually, areas like activation (users taking meaningful action in your product) and conversion are common starting places for growth. - Obtain data on website traffic, sign-up rates, aha moment achievement, and self-checkout success to spot the biggest opportunities for growth ### [Activation and conversion ▶️](https://youtu.be/7l1fIxk7SnA?t=2851) - Focus on activation if users are confused on their first interaction with the product: Identify the ideal aha moment metric and design a product experience that leads users towards that goal. Use warm starts by providing templates or samples to reduce friction and engage them immediately. - Focus on activation: If you're finding that people are initially entering your product but don't know what to do next, then you have an activation problem. To solve this, you need to identify your "aha moment metric and then, design a product experience to help more people together." - Improve conversion if the checkout process has friction: If your activation is in good shape but your conversion is low, it could be that the checkout process is too difficult or confusing. It could be that users can't even find where to buy your product or they encounter issues during the checkout process that are specific to their region. - Explore product-led acquisition for collaboration software: If your product is something that encourages collaboration, you could leverage this to help spread the word about your product. Think about how companies like Airtable or Figma encourage users to invite their team members to join the platform. ### [Why you should start with activation, and who is doing it well ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=3137s) ![739ca6c8-df4c-4722-a3d0-76c0ef75d0cf_3624x1228.jpeg](https://substack-post-media.s3.amazonaws.com/public/images/f06104af-797b-48c6-828f-547607ab3267_1456x493.jpeg) - **Start with activation:** Historically, B2B software hasn't been designed for quick use, but that's changing with successful PLG companies. The speed at which a user can go from signing up to actually using the product (time-to-value) is critical. - "Think about Miro, as an example. If you go through their activation experience and sign up to usage, they ask very limited questions, very targeted... they quickly gave you templates to get started**."** - **Improve the conversion process:** This means making the self-checkout flow as smooth and easy as possible. The goal is to make sure your users don't get confused about pricing or where to find things. - "You can actually go to any E-commerce website, like, I don't know, go to Lululemon, go to Amazon, make your conversion process as easy as theirs." - **Invest in PQL/PQA after establishing activation and self-checkout:** This is a more complex process and you might want to wait until you have a reasonable number of users and a well-functioning activation and self-checkout process before you invest time and resources into this area. - Leverage product-led acquisition if your product encourages collaboration: If your product has inherent, internal viral components (i.e., the product encourages users to invite others to use it as well), investing in product-led acquisition is a smart move. - "Think about Figma, think about Calendly even, right? It can spread. This product is so easy. You can build something to allow it to spread on its own." ### [How Hila made an impact on retention at Acorns](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=3634s) - **Focus on activation for retention improvement:** Analyze features users need to experience early on for better retention. Hila Qu identified recurring investment as a high correlation with retention at Acorns and experimented with getting more users to set it up - **Adding Higher-Frequency Use Cases:** Add features with higher frequency to increase engagements, thus improving retention. For instance, they introduced an Individual Retirement Account (IRA) and a spending account with a debit card. These features inherently encouraged more frequent usage, leading to better retention. ![e205e45f-5ea6-4abd-909e-d73d9b436f0c_2194x2000.jpeg](https://substack-post-media.s3.amazonaws.com/public/images/3aad2f94-c708-4059-bb5f-33c647c0c5cc_1456x1327.jpeg) ### [The two buckets of data](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=3783s) - **Product Usage Data:** It involves tracking and analyzing user behaviors, feature usage, and other similar details. In traditional B2B software sales (primarily sales-led), granular usage data hasn't historically been as crucial. However, in a product-led growth approach, this data is essential for understanding what drives user engagement, retention, and eventually, conversion. - **Customer 360 Database:** This refers to a comprehensive view of customer information that integrates data from different sources. It includes not only product usage data but also data from marketing campaigns, customer relationship management (CRM) systems, sales data, etc. The idea is to form a complete, 360-degree picture of the customer journey, from the initial point of contact, through the user's engagement with the product, to eventual conversion. ### [Tools for implementing a PLG motion ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=3896s) In terms of tool recommendations for setting up an initial stack for product-led growth, Hila Qu mentions several key pieces: [Add links] Infrastructure Tools: - **Data Collection/Hub Tool:** A tool like Segment allows you to collect, clean, and control your customer data. - **Product Analytics Tool:** This is used for understanding how users are interacting with your product. Examples include Amplitude, PostHog (an open-source tool), Mixpanel, and Pandle. - **Experimentation Tool:** These tools are used for A/B testing and other forms of experimentation to improve your product based on user behavior. Examples include Optimizely, and Eppo, or Amplitude which has an experimentation component. - **Lifecycle Marketing Tool:** These tools are crucial for personalizing your engagement with customers based on their behavior in your product. This is different from lead nurturing tools, which are more focused on engagement with marketing materials, not the product itself. Additional Tools for Specific Product-Led Growth Areas: - **Data Enrichment Tool:** These tools, like ZoomInfo or Clearbit, are particularly important in B2B settings because they provide additional data about the user's company, not just the user themselves. - **Onboarding Tools:** Tools like Appcues and User-Led allow for quick and easy creation of onboarding flows without needing substantial engineering resources. These are beneficial for creating and testing different onboarding experiences. - **Conversion Tools:** For B2B companies looking to convert product qualified leads or product qualified accounts, tools like Endgame, Pocus, Toplyne, and Pace could be useful. They provide insights and automation capabilities to help improve conversion rates. ### [Tips to get started, and why you need to have good data first ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=4220s) 1. **Start with a Product Analytics Tool and a Data Hub:** Start with a product analytics tool as it's hard to get it wrong completely. Also, consider adding a data hub, such as Segment, which allows easy integration with many different tools. The flexibility of a data hub allows for trial and error without significant commitment. 2. **Garbage In, Garbage Out:** The effectiveness of a product analytics tool depends on the quality of the data input. If the data input is incorrect or irrelevant, the output will also be flawed. 3. **Audit Your Data Situation:** Do an audit of their data instrumentation situation before implementing a tool. This involves understanding what key actions are in place, if the data formats are correct, and identifying any gaps. This may involve re-instrumentation or reformatting to make the data more useful for product analytics. ### [How to do a data audit ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=4330s) - **Establish a data dictionary for product analytics:** Identify key actions in your product experience and matching these to your data instrumentation to find gaps. Eventually, the goal is to establish a data dictionary that contains all key actions, event names, properties, etc. to standardize understanding and interpretation across the team. - **Data Warehouse:** When a business starts gaining data users, it's time to consider setting up a data warehouse and an ETL (Extract, Transform, Load) solution. Early stage companies can get by with basic tools like Google Analytics or Amplitude, but as the business grows, a more robust solution is necessary to avoid fragility and inconsistencies. AWS Redshift is a common and best practice option. The overarching theme is that businesses need to be serious about investing in their data infrastructure. Data is a key asset in a product-led growth strategy, and a well-structured data infrastructure can ensure this asset is leveraged effectively. ### [Building a PLG team ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=4504s) - **Tiger Team vs Dedicated Team:** There are two different ways to start a growth team. The most common one is to create a dedicated team with a head of growth and resources to support the growth initiatives. However, she also mentions a "tiger team," a cross-functional group assembled for a specific purpose for a period of time. A tiger team may be useful when the initial focus area involves multiple departments, like Product Qualified Leads (PQLs) which involve sales, marketing, and data teams. - **Team Evolution:** After the initial growth team is established and has achieved some early wins, it's time to extend and formalize. You need to move from just a PLG team to a PLG organization. This involves having a head of growth product, a head of growth marketing, and a head of product-led sales, each managing different parts of the PLG motion. - **PLG Metrics:** Once the PLG organization is established, it is crucial to determine the metrics that each team will own. For example, the head of growth product might focus on usage and activation metrics, whereas the head of product-led sales might focus on conversion rates and revenue. ### [The core growth squad ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=4960s) - **Initial Team Roles:** The most critical role for an MVP PLG team is the growth PM (Product Manager) who leads the team. A growth PM is similar to a traditional PM but is more focused on analytics, experimentation, and data-driven decisions. - In addition to the growth PM, she recommends hiring a data analyst as one of the very first hires for the team. - Engineers and designers are also necessary, although designers may not need to be dedicated full time in the early days. - **Internal vs External Hiring:** Hire internally if possible, as individuals already within the company might have a better understanding of its systems, culture, and products. This could be a PM who wants to focus on growth, an analyst who wants a more product-oriented role, or even someone from a different department who has strong analytical skills. - If internal hiring isn't feasible, she suggests finding an external hire with experience related to the company's initial growth focus area, be it activation, conversion, or acquisition. ### [Lightning round ▶️](https://www.youtube.com/watch?v=7l1fIxk7SnA&t=5271s) - Recommended Books: - "[The Almanack of Naval](https://amzn.to/3DwLAR0)," which she found life-changing and helped her understand the importance of leverage in life and business. - "[How Women Rise](https://amzn.to/47dkBYn)," which she found very educational and often gifts to her female team members. - The last one is her own book, currently only available in Chinese, which is reported to boost email campaign conversion rates just by its presence. - **Favorite Movie or TV Show:** A Chinese sci-fi movie, "The Wandering Earth 2," written by Cixin Liu, the author of the "Three Body Problem" series. - **Favorite Interview Question:** When interviewing growth PMs or analysts, she likes to ask, "What is an experiment you launched that had a very unexpected result? And what did you do after that?" The answers to this question reveal the depth of their thinking, their understanding of customers, and their approach to failure or unexpected results. - **Favorite products:** ChatGPT and Lululemon yoga pants. - **Product dev process improvement:** Adding a section in the ticket stack where PMs write the success metric ahead of time and specify which growth lever the feature will help. This forces them to think deeply about the purpose of the feature. - **Favorite children’s books:** "Someday" is her favorite children's book. - **Favorite growth concept:** North Star Metric. This concept helps her think long term and evaluate what's valuable not just in her work, but in personal areas such as career and child upbringing. This is a human edited summary of the podcast episode with Hila, by Gaurav Chandrashekar ([@cggaurav](https://twitter.com/cggaurav), [productscale.xyz](https://productscale.xyz)). To listen to the full episode, go [here](https://www.lennyspodcast.com/the-ultimate-guide-to-adding-a-plg-motion-hila-qu-reforge-gitlab/). --- ## [37/61] Summary: AI and product management | Marily Nika (Meta, Google) [Marily Nika](https://www.linkedin.com/in/marilynika/) is an AI Product Lead at [Meta](https://www.linkedin.com/company/meta/) and previously worked at Google’s Assistant and AR/VR teams. She teaches among the most popular courses on [AI and Product Management](https://maven.com/marily-nika/technical-product-management) and also runs an [AI Product bootcamp](https://maven.com/marily-nika/ai-pm-bootcamp) as part of the AI Product Academy that she founded. She has a PhD in ML from Imperial College London, spoke at TED AI SF and she writes about AI Product Management at: [![Image from Summary: AI and product management | Marily Nika (Meta, Google)](https://substack-post-media.s3.amazonaws.com/public/images/1b35defe-de98-4b38-bbfd-e3a36df4f13c_1280x1280.png)Marily Nika’s AI Product Newsletter Weekly AI & Product Management content by Marily Nika, one of the world's top AI Product Leaders with 12+ years @ Google & @ Meta. Opportunities, exclusive templates, course discounts and tools that will transform your career.](https://marily.substack.com) . You can also see the episode [transcript](https://www.lennyspodcast.com/ai-and-product-management-marily-nika-meta-google#transcript) and Marily’s [references](https://www.lennyspodcast.com/ai-and-product-management-marily-nika-meta-google#show-notes). ### [Staying informed on AI developments ▶](https://youtu.be/qNPPoj1qUG0?t=200) - Sources for AI news: Marily recommends following experts on Twitter and subscribing to any tech-focused newsletters, like the [MIT Technology Review](https://www.technologyreview.com/). “All tech newsletters would write AI-focused content going forward anyway.” - AI is both overhyped and under-hyped: She thinks writers complaining writing is dying because of ChatGPT is overhyping and misunderstanding it. “AI is enhancing us, not stealing from us.” She thinks there is more to AI than just ChatGPT. Something that she found under-hyped in AI was news about how [AI can now detect lies](https://www.indiatimes.com/technology/science-and-future/lie-detection-face-expressions-554621.html). ### [Using ChatGPT for work ▶](https://youtu.be/qNPPoj1qUG0?t=361) 1. Writing mission statements that are readable by all stakeholders: Marily uses ChatGPT with a prompt of “Rewrite this mission statement for me,” and it produces something much better even on the first try, because it helps orient the words such that even kids and all stakeholders can understand and not just other PMs. 2. Creating user personas and framing the prompt: It provides her with user segments that you might not even think of, while providing motivations, pain points, etc. To frame a persona prompt, she mentions an example: if you were responsible for creating a fitness band that doesn’t have a screen, you can ask something like “Who would be interested in a fitness band that doesn’t have a screen?” and it provides a list, like people who don’t want to charge it often, among others. 3. Providing AI-enhanced ideas: She doesn’t make it do her job for her, but when she already has an issue in her hand, she asks it to improve it with a lot of ideas. ![Untitled.png](https://substack-post-media.s3.amazonaws.com/public/images/95fc242a-d045-4836-9152-3fd4ed5fc9c2_1324x828.png) ### [Why all PMs will be AI PMs ▶](https://youtu.be/qNPPoj1qUG0?t=512) - All PMs will be AI PMs because she sees all products needing to have personalized experiences and recommender systems, and even to make technological advancements, you need to have an AI-centric view. - [PMs should get comfortable with having research scientists on their teams](https://youtu.be/qNPPoj1qUG0?t=618). A lot of PMs are very used to saying, “Okay, I’m going to do XYZ on launch” and don’t know how to approach researchers. Whereas when you’re working with research, it’s more like: we’re going to try this, and then in a year if it doesn’t work out, we’re going to shut the whole thing down. - Find the intersection of something that’s desirable by users, something that is going to be a viable business, and something that is going to be feasible from a research-scientist and technical perspective. ![desirable.png](https://substack-post-media.s3.amazonaws.com/public/images/62e8cad6-4fa8-44de-b23c-866aaf37912e_1058x1104.png) ### [How to get started using AI ▶](https://youtu.be/qNPPoj1qUG0?t=676) - **Think twice before you use AI for your MVP.** If you need to just get buy-in for an idea that may use AI in the future, just create a Figma prototype and a demo of what the experience is going to be like. - Anything where you can get data behind the behavior with users can be improved with AI. For every product you ship, you can always ask yourself if it can be made smarter, e.g. enhancing it with fraud detection; if it’s in health-care you can make it faster or more accurate, etc. Leverage the data that is just sitting around. - **Don’t fall for the “shiny object trap.”** Make sure there is a problem and pain point that needs to be solved in a smart way. Once you figure that out, only then figure out how to implement it (by hiring a data science intern or some other way). Only use AI when you already have some data, or data from an adjacent product. ### [How much data you need for AI to work](https://youtu.be/qNPPoj1qUG0?t=948) - If you’re trying to do classification (like a photo being of a cat or a dog), even 20 labeled photos might work, but if you’re making complicated NLP products or voice recognizers, etc., you might need thousands of data. ![Untitled (2).png](https://substack-post-media.s3.amazonaws.com/public/images/3fd9ab64-ab82-4d4d-a203-3aa2e95db6f3_1054x596.png) ### [When to build your own model vs. use a ready-made model ▶](https://youtu.be/qNPPoj1qUG0?t=1033) - A model is like a 3-year-old kid’s brain: You will end up training your kid’s brain by repeating the same information again. Saying, “Here’s what the rhino looks like, here’s what an elephant looks like,” etc., repeatedly. And once you’ve done this enough times, then your kid will see the animal and they’ll be able to recognize it. This is how models work as well. - Most impactful AI demo she saw: Google demonstrated the power of AI by translating a conversation between two people speaking different languages in [real time via Google Glass](https://www.youtube.com/watch?v=SQd394a4qEo). - Build tools only if existing ones don’t meet your needs: Companies should consider developing their own AI tools when off-the-shelf solutions don’t meet their specific needs or when they have a competitive advantage in doing so. This would probably be more relevant for larger companies. - Most startups also don’t have enough data to build their own models and should rely on using off-the-shelf models more. - An AI PM role is to decide when the recognition level is good enough to launch the product. Big tech companies should use diverse data to train their model to get better-quality than competitors’. ### [How to become a strong AI PM ▶](https://youtu.be/qNPPoj1qUG0?t=1480) - **AI will let PMs focus on some things more than others**: AI augments PM capabilities, making them more efficient and effective. PMs should focus less on areas that can be managed/handled with machine learning/AI and more on building their skill sets to understand the underlying mechanisms; e.g., for Marily, having GPT write for her across projects lets her focus her time on more strategic things. - **AI PMs should learn how to code**. Even though ChatGPT etc. can help code, learning it gives you a different mindset and confidence, knowing how things work; e.g. in learning to play the piano, Marily hated that she had to learn classical music first, but she understood from her teacher that she needed to learn fundamentals that would help her later. - **Where to learn:** Marily recommends her AI PM [Bootcamp](https://maven.com/marily-nika/ai-pm-bootcamp) or AI PM [101](https://maven.com/marily-nika/ai-product-management) or [Advanced](https://maven.com/marily-nika/advanced-ai-product-management/) course but also courses on Coursera like [Intro to AI](https://www.udacity.com/course/intro-to-artificial-intelligence--cs271?irclickid=z0uSzDXy0xyNT0XSiwQCUyCpUkAQImSQZ2huXE0&irgwc=1&aff=259799&adid=788805), [CareerFoundry](https://careerfoundry.com/), [General Assembly](https://generalassemb.ly/), and Coding Dojo. If your company already has AI projects, talk to people on those teams. PMs should also read papers on [Arxiv](https://arxiv.org/list/cs.AI/recent). Lenny recommended Tyler Cowen’s blog, called [Marginal Revolution](https://marginalrevolution.com/), to read research paper insights. - **Strong AI PM qualities**: To become a strong AI PM, one should have a good understanding of AI, be able to work with data scientists, and possess excellent communication skills. Marily has a [course](https://www.marilynika.com/offers/mno7ymQZ/checkout) on this for PMs and aspiring PMs. - Ask yourself “Is there a problem that can be solved with a smart solution?” but make sure you start from the problem itself. ### [4 main challenges for AI PMs ▶](https://youtu.be/qNPPoj1qUG0?t=948) 1. **Dealing with uncertainty:** With your given hypothesis, when you actually train the model, the results you may be getting may not be answering the questions or the hypothesis that you actually had in mind. 2. **Leadership support:** You might have to pivot, so leading that change can be difficult, and you need to be prepared. 3. **Getting good data is hard, so be willing to do everything**: You may need to figure out creative ways to get the data, e.g. maybe going to the street and asking people to contribute data for you. 4. **Career trajectory for AI PMs is not defined by launches:** Usually PMs get ahead the more they launch. So AI PMs need to clarify with hiring managers early on what progress means and how you will be assessed in research work. ### [Getting leadership buy-in for investing in AI ▶](https://youtu.be/qNPPoj1qUG0?t=1876) - **Use examples of successful adjacent products**. Marily reminds the leadership about how a previous project in the same space (adjacent product) sounded crazy at the time but has worked out well. - **Provide contingency and rollback plans**. In case the project doesn’t work out, have the rollback plan and mention the maximum downside we could have in doing the project. - PMs need to actually figure out ways to also monetize the ideas of research scientists, e.g. there was a willingness-to-pay survey for ChatGPT to try to monetize it and PMs have to come bridge that gap. ### [Marily’s AI course and AutoML ▶](https://youtu.be/qNPPoj1qUG0?t=2129) - Marily’s three-week AI course covers the product development lifecycle, idea generation, production, and career paths in AI. Students learn coding fundamentals and no-code tools while developing their own AI products. Some students have even raised funding for their creations. People have built a tool to diagnose a patient based on an x-ray in three weeks and managed to raise funding after the course as well. - **AutoML as a no-code AI tool**: [AutoML](https://cloud.google.com/automl) is a tool offered by Google Cloud that allows for the training of custom machine learning models with minimal effort. A renewable-energy company was able to use AutoML to reduce their turbine maintenance procedure from three weeks to a few hours using AutoML. - Marily treated her course like a product, e.g. the first version was directed toward software engineers, but she later pivoted to a less technical audience based on market reception. She continually updates and modifies her course based on feedback and new developments in the AI field. ### The importance of creating your own course - **Course creation**: Marily built her course using her experience in AI and product management, as well as feedback from students and industry professionals. - **Why create a course**: She believes that creating a course is a great way to share knowledge, improve one’s own understanding, and help others learn about a topic. - Her favorite interview question is “explaining complex concepts”: In interviews, Marily likes to ask candidates how they would explain a database to a 3-year-old. **Resources** - Marily recommends ChatGPT and the [Lensa app](https://prisma-ai.com/lensa), which allows users to transform their photos into fantastical images. This is a human edited summary of the podcast episode with Marily, by Gaurav Chandrashekar ([@cggaurav](https://twitter.com/cggaurav), [productscale.xyz](https://productscale.xyz)). To listen to the full episode, go [here](https://www.lennyspodcast.com/ai-and-product-management-marily-nika-meta-google/#transcript). --- ## [38/61] Summary: April Dunford on product positioning, segmentation, and optimizing your sales process [April Dunford](https://www.aprildunford.com/obviously-awesome) is an expert at nailing positioning for scaling tech companies and wrote [Obviously Awesome](https://amzn.to/3KTzncy), a definitive guide to [product positioning](https://www.lennysnewsletter.com/p/positioning). She spent 25 years leading marketing, product, and sales teams and is now an independent consultant. April has worked hands-on with over 200 companies on positioning, including Google, IBM, Postman, and Epic Games. You can also see the episode [transcript](https://www.lennyspodcast.com/april-dunford-on-product-positioning-segmentation-and-optimizing-your-sales-process#transcript) and April’s [references](https://www.lennyspodcast.com/april-dunford-on-product-positioning-segmentation-and-optimizing-your-sales-process#show-notes). #### [April’s background ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=222s) April didn’t study marketing but engineering at school and worked at a startup when they were still called “small companies.” She ended up working for a “loser product” in a marketing role that she helped reposition and that took off. Her boss quit, so she became the VP of Marketing, which made her discover positioning as a fundamental concept in marketing that actually didn’t have a methodology. She is, today, talking about this methodology in her book, specifically for B2B SAAS growth stage/scale-ups. [An interesting or unusual client?](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=456s) [Bluelight Analytics](https://www.bluelightanalytics.com/) helps dentistry instruments work better; she learned so much about the industry and is scared of visiting her dentist now. #### [Defining positioning, and when you know you have a positioning problem ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=737s) Positioning as a concept is not new; it defines how your product is the best in the world at delivering some value that a well-defined set of companies care a lot about. It's hard to measure bad or weak positioning, but you can feel a sluggishness (e.g. the lightbulb does not come on with a customer unless they have an extra sales call). So how do you assess positioning? 1. Hang out with Sales. You’ll get to listen to customers who are like, “Back up and pitch it to me again. Can you say that again?” Sometimes they’d say, “Oh, you are like Salesforce” or “I can do this on a spreadsheet; why do I need you?” And in this confusion lies your positioning problem. 2. Alignment across the founding team, marketing, sales, customer success, marketing: each function of the company says something different about the product! 3. Sometimes the C-folks get together and say, “Okay, so why does everybody love our stuff?” This is a terrible way to go about positioning, because what you'll get is just opinions and you’ll not know a way to measure if it’s good or not. ![1.png](https://substack-post-media.s3.amazonaws.com/public/images/4094062f-1e8b-42c3-9c98-2f031e61622f_709x397.png) With her client [Postman](https://www.postman.com/), which is “a platform for building and using APIs,” they didn’t know what to call themselves three years ago, and that took work to go through her positioning exercises. #### [Company misalignment vs. positioning issues ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=931s) Most cases April has dealt with are misalignment problems within the org and not positioning problems. The founder often has the positioning story done right with their early customer calls, but their C-level team “is not doing or getting it right.” Or the market conditions have changed (e.g. during Covid), where positioning needs a re-evaluation and Product or Marketing has to convince the founders. #### [The essential five steps to figuring out your product’s positioning ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=1352s) ![dc597ea0-acf1-4a8b-b18e-30c59d2f9616_1593x912.jpg](https://substack-post-media.s3.amazonaws.com/public/images/37facac1-3260-43cf-a6d9-405baa481468_1593x912.jpeg) 1. Competitive alternatives: What do we have to position against? It’s like saying, who do you have to beat in order to win a deal? 2. You often have a status quo alternative, like Zendesk, that is easy to ignore, but you shouldn’t because in B2B you lose about 40% of deals to “no decision,” which actually means you lost to the spreadsheet, you lost to pen and paper, you lost to interns. And if you’re not positioning well against that product, you’re never going to get the customer to come off that. 3. Key unique attributes: What makes you different? These are key product capabilities or feature functions that the alternatives don’t have. 4. Translate into value: The above unique attributes often bucket into themes of value that are differentiated. 5. Customers who care are your target customers: What are the characteristics of a target account that make them really, really care a lot about that value? 6. Market you win: What’s the context I position this thing in that makes my value obvious to the people I’m going after? ![3.png](https://substack-post-media.s3.amazonaws.com/public/images/7fbe0265-928d-403e-9273-378e27b2ac16_716x401.png) #### [Help Scout’s positioning process ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=1765s) April helped [Help Scout](https://www.helpscout.com) figure out its differentiation, which was in its philosophy of customer service, where they treat their customers as humans, not a number, and a chatbot convo happens only when there is a human. Offering a high level of service, their value became the amazing service to customers, not pushing them to a low-cost channel. And then you ask yourself, “Well, who cares a lot about that?" Not everybody, but a lot of direct-to-consumer brands or e-commerce brands do, where they see customer service as a way to really drive growth through customer loyalty. ![b4cc5dc0-db9c-49e1-a6db-bf61bdcfcde0_1830x566.png](https://substack-post-media.s3.amazonaws.com/public/images/ac2946cf-99a5-4c9f-ab27-7734e2d7757e_1830x566.png) #### [The difference between positioning, messaging, and branding ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=2412s) - These concepts are distinct, because positioning is a fundamental precursor to messaging. By messaging, people mean “This is the text on the homepage.” You can’t write that until you understand the value for whom. - You can’t figure out what the “brand” stands for until you know the target buyer and the differentiation for the brand to be distinct. - Examples: - [Magic Leap](https://magicleap.com): Magic Leap is a VR headset, but April was like, so what? What am I actually going to do with that? She helped them pivot to selling B2B for manufacturing companies. - [Segway](https://www.segway.com): Segway’s founder pitched “Revolution in human transport.” And people were getting so excited because they believed it was a flying car. And then when they saw the actual product, they were disappointed because they saw a moped and didn’t know what to compare it to. #### [How should early-stage companies think about positioning? ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=2912s) 1. The actual 5-step exercise above takes a week and depends on how contentious the existing alignment is. 2. For an early-stage company trying to find PMF, the positioning makes less sense, because there is a lot of validation of the product hypothesis first. Allow the market and customers to pull you as opposed to nailing positioning. For example, if you are selling fish nets—if your thesis is that it’s only for tuna, if it fails, it fails hard. In the beginning, you can just use it for all kinds of big fish and let’s see where it goes. Maybe it’s good for grouper, and this you figure out by being flexible. 3. You feel the need for nailing positioning when you start seeing common patterns with the customers, e.g. they all have Zendesk, are 50-people strong, and are yet to hire their COO. #### [What’s the difference between segmentation and personas? ▶](https://www.youtube.com/watch?v=hdjlCLb9Hl8&t=3281s) - In B2B, you first segment your customers via firmographics, i.e. things like how many employees, revenue, geography, etc. Then, a more actionable segmentation is: “three-member or more creative agencies that follow a specific firmographic profile and have a budget of 20K and they use Notion.” Often in enterprise B2B decision-making, there are between five and seven people involved, so the tighter your segment, the more effective your marketing team is. - After segmentation, personas come to know who the internal champion of the prospective buyer is. For example, this could be John, who is the head of Sales Ops, and it’s his responsibility to build consensus and galvanize the deal, including their boss, who’s the actual check writer. John becomes the gatekeeper and the most important persona, and if your product is not differentiated, you don’t get on John’s shortlist. This is a human edited summary of the podcast episode with April, by Gaurav Chandrashekar ([@cggaurav](https://twitter.com/cggaurav), [productscale.xyz](https://productscale.xyz)). To listen to the full episode, go [here](https://www.lennyspodcast.com/april-dunford-on-product-positioning-segmentation-and-optimizing-your-sales-process/). --- ## [39/61] Summary: Lessons from working with 600+ YC startups | Gustaf Alströmer (Y Combinator, Airbnb) [Gustaf Alströmer](https://twitter.com/gustaf) is a Group Partner at [Y Combinator](https://ycombinator.com), where he has worked with over 600 startups. He’s also a fellow [Airbnb alumnus](https://gustafalstromer.com) along with Lenny and started the original Airbnb growth team. > If I drill down what makes companies fail, it’s quite simple. It’s just like they don’t talk to users, which means they don’t find product-market fit. And if they don’t find product-market fit, nothing else really matters. What mistakes people make is all about that. It’s all about talking to customers and learning that you’re building something that’s actually useful. YC Slack headline is “Make things people want,” and it’s still true and it’s always going to be true. You can also see the episode [transcript](https://www.lennyspodcast.com/lessons-from-working-with-600-yc-startups-gustaf-alstromer-y-combinator-airbnb/#transcript) and Gustaf’s references. ### [What made Airbnb so special? ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=441s) - Airbnb felt like a group of friends with a special bond working on a project rather than a job. Folks were diverse, including former founders and people outside the technology industry, which contributed to better decision-making and a YC-like mindset. - The most important thing Airbnb looked for in early hires is how excited they were to be there. The second thing was to understand their true motivations and make sure they mapped to the company’s core values. Airbnb did this through “culture interviews.” ### [Motivations for starting companies ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=631s) - “I disagree with [Elad Gil](https://twitter.com/eladgil) that starting up is an act of desperation; most founders start from a positive place.” - Motivations can be diverse: solving technical problems, proving oneself, having a grand mission, or simply wanting to be successful. Motivation doesn’t necessarily determine success, and we have seen motivations change over time, e.g. just running the company and enjoying the process of building something big, even if the idea is not grand or shiny. - Being clear on the motivations also improves conflict resolution and self-awareness among co-founders. - Don’t start a company as a career step: If you’re successful, it will most likely be your entire career, and if it’s not successful, that’s not something you generally aspire to. - Consider personal constraints: Startups are hard, so don’t do it if you have financial, family, or relationship constraints that are more important. ### [The magic that happens at YC Office Hours ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=963s) YC Office Hours come in two types: Regular Office Hours (one-on-one) and Group Office Hours (with multiple startups). Regular Office Hours key question: “What’s holding you back from moving faster?” Group Office Hours key question: “What are your goals for the next two weeks and what were your goals for the last two weeks? Did you hit the goals? If not, what came in the way of hitting the goals?” - Addresses the loneliness of the founders by allowing them to lean on others who share similar problems and anxieties. - Creates accountability by having founders share their goals and progress every two weeks. Founders in coworking spaces should schedule time to talk, because by default they end up working by themselves with headphones on and no time for interaction. YC’s best experiences were in person, with everyone paying attention to each other without distractions. ### [Common reasons startups fail ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=1346s) 1. Failing to find product-market fit because they don’t talk to customers: Often because they think software is the solution to everything, or because they’re afraid of rejection. Ninety percent of customers are not early adopters, so they’re not incentivized to take risks and try something new, and you need to reach out to 10 customers to be able to find that one. External validation (e.g. investments, praise) is often confused with product-market fit, leading to neglect of customer input. One of the most important moments in Airbnb history was Paul Graham asking the founders of Airbnb, “Where are your customers?,” to which they said, “Oh, they’re in New York,” and Graham responded, “So why are you talking to me and not in New York right now talking to them?” 2. Lacking technical knowledge: Startups need technical founders who can build the first prototype. Key advice: [Talk to customers, learn what they want, and build products that address their needs.](https://www.youtube.com/watch?v=T9ikpoF2GH0&ab_channel=YCombinator) ### [The importance of solving pain points and why you should watch users ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=1677s) - Founders fear that users will try their product and hate it, but the most common thing that happens is the user is indifferent. So if you make improvements and come back after a while, they’ll always give you a second chance. Airbnb started with air mattresses and iterated from there, and Brian Chesky continues to [do that today](https://twitter.com/bchesky/status/1635875342782169088?s=20). - Don’t ask users if something is working—watch them do it. That will give you a much better sense of their pain points. ### [The value of having a technical co-founder ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=2061s) - Having an idea and trying to find technical co-founder to build it is like having an idea for a song and looking for a musician to make it. Engineering is really hard and valuable. - Start by asking the best technical people you know if they’re interested in starting a company with you, or ask for introductions to others. Many successful startup founders also learn how to code. - Contracting an engineering team to build the product doesn’t really work because you can’t spec your way to a great product; you have to be part of the iterations. [Calendly’s](https://calendly.com/) success story: A Ukrainian dev team built their first product and drove initial growth by using it within their firm and spreading it to others. ### [Attributes of the most successful founders ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=2446s) - They’re determined to win and don’t give up when things get hard. - They’re generally technical. - They figure out how to talk to users and make progress, not waiting for permission. - They have excellent communication and storytelling skills. YC is not very good at predicting which startups will be the monster hits, but they’re good at identifying what failure looks like and advising against it. One good indicator, though, is if every Office Hours there are new things to talk about (progress on a weekly timescale). Are successful founders more focused on...? > Speed vs. quality: It’s a false choice. If you know what the customer wants, you’ll come up with something that’s high-quality and move fast. > > Confidence vs. humility: Successful founders need both to motivate and attract employees, investors, and customers. > > Execution and tactics vs. strategy: Execution is most important pre-product-market fit, while strategy comes into play afterward, where multiple tasks can be tackled simultaneously. > > Autocratic vs. collaboration-driven: In early-stage startups with small teams, autocratic decision-making is not feasible. Be willing to adhere to the agreed-upon process. > > Cares more about product vs. distribution: Early-stage founders should care more about product (from the user’s perspective, not the founder’s), but the growth mindset is very useful when something is working. ### [On climate tech ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=3543s) - Gustaf and David Rusenko (CEO of Weebly) wrote a [request for startups](https://www.ycombinator.com/blog/rfs-climatetech) in climate tech with a detailed list of ideas and areas of opportunity, and have invested in over 130 companies. It’s not just about doing good for the world; it has strong economic incentives as well, Tesla being a good example. - Software founders are realizing their skills are relevant in addressing climate change. What’s needed are core PM and engineering skills, not necessarily deep scientific knowledge or domain expertise. - Decarbonization and carbon removal require changes in transportation, energy, and home heating. - In shipping, [Seabound](https://www.seabound.co/) focuses on carbon capture and removal for ships, while [Fleetzero](https://fleetzero.com) builds electric ships. Carbon accounting and recommendation systems help companies track and reduce emissions like Unravel Carbon (Singapore), [Carbon Chain](https://www.carbonchain.com/) (U.K.), and [Sinai](https://www.ycombinator.com/companies/sinai) (Bay Area). [Enode](https://enode.com) is building a software platform for EV chargers and home energy systems, similar to Plaid. [Statiq](https://statiq.in) is the Airbnb for EV charging in India, creating a bottom-up EV charging system and platform. Aviation startups include [Heart Aerospace](https://heartaerospace.com) and [Right Electric](https://rightelectric.com), which focus on battery electric planes for commercial aviation. - Climate tech is a profitable market, with battery prices and solar costs decreasing and wind power increasing. In the past 12 months: 1. Political change: In the U.S., the Inflation Reduction Act supports green energy and onshoring supply chains for the green economy. 2. Corporations as customers: Fortune 100 companies now invest in decarbonization solutions due to pressure from shareholders, governments, and public promises. ### [Lightning round ▶️](https://www.youtube.com/watch?v=ZoKLofsp8u0&t=4609s) 1. Favorite book? [The 100% Solution](https://www.amazon.com/100-Solution-Solving-Climate-Change/dp/1612198384?linkCode=sl1&tag=cggaurav-20&linkId=b1a2eefd79604cf03595adf0a7d37f0f&language=en_US), by Solomon Goldstein-Rose for climate change. Also, [Without a Doubt](https://www.amazon.com/Without-Doubt-How-Underrated-Unbeatable/dp/1982147903?linkCode=sl1&tag=cggaurav-20&linkId=f111a645ec6817b9f6ec15bdaf8ce62a&language=en_US), by Surbhi Sarna. 2. Favorite movie/show? [Emily in Paris](https://www.netflix.com/title/81037371) and [Everything Everywhere All at Once](https://www.imdb.com/title/tt6710474/). 3. Favorite interview question with YC? “What have you done since you applied to YC for your product?” 4. Most out-there wild startups you have funded? [Heart Aerospace](https://heartaerospace.com/). 5. What’s a pro tip for applying to YC? Watch [YouTube videos](https://www.youtube.com/watch?v=8yiOcCPvyNE) about hacking the application from other founders and reach out to them. 6. What’s one pro tip for visiting Sweden? Go during summer, explore the wild nature, and be prepared for a different social vibe compared to the U.S. [Watch on YouTube](https://www.youtube.com/watch?v=6lY9CYIY4pQ) This is a human edited summary of the podcast episode with Gustaf, by Gaurav Chandrashekar ([@cggaurav](https://twitter.com/cggaurav), [productscale.xyz](https://productscale.xyz)). To listen to the full episode, go [here](https://www.lennyspodcast.com/lessons-from-scaling-spotify-the-science-of-product-taking-risky-bets-and-how-ai-is-already-impacting-the-future-of-music-gustav-soderstrom-co-president-cpo-and-cto-at-spotify/#transcript). --- ## [40/61] Time management techniques that actually work *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week, I tackle reader questions about building product, driving growth, and accelerating your career. If you’re not a subscriber, here’s what you missed this month:* 1. *[How should you monetize your AI features?](https://www.lennysnewsletter.com/p/how-should-you-monetize-your-ai-features)* 2. *[New data on the product job market](https://www.lennysnewsletter.com/p/new-data-on-the-product-job-market)* 3. *[On asking for help (even when you really don’t want to)](https://www.lennysnewsletter.com/p/on-asking-for-help-even-when-you)* *Subscribe to get access to these posts, and every post. For more: **[Best of Lenny’s Newsletter](https://www.lennysnewsletter.com/p/the-best-of-lennys-newsletter-2023)** | **[Hire your next product leader](https://www.lennysjobs.com/)** | **[Podcast](https://www.lennysnewsletter.com/podcast) | [Lennybot](https://www.lennybot.com/) | [Swag](https://lennyswag.com/).*** > ## Q: I’m overwhelmed with work and wondering if you have any productivity tips that help you stay above water? There are a lot of big ideas out there for how to use your time most effectively, but sometimes you just need a few really good tricks. Over the years, I’ve read dozens of productivity books and tried a bunch of stuff. Most of the ideas work for a few weeks and then fade. But below are 10 techniques that have stuck with me. I use them daily, and they consistently help me get more stuff done. Pick a few to try and see how it goes for you. ### 1. Use your calendar for to-dos Instead of adding to-dos to an app, try slotting some into your calendar. You don’t need any fancy tools for this—literally just make your to-do into an event and put it on your calendar: ![Image from Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/fecacfc1-1edd-4c4d-9385-f32735dc062c_266x318.png) If something comes up and you aren’t able to do the task at that time, move the event to a new slot. This works because your calendar is basically your personal roadmap. And we all know what happens when something isn’t on your roadmap. This tactic comes from both [Nir Eyal](https://youtu.be/WSscIIY609c?si=f-J0EW_porYw1Cca&t=1687) in his book *[Indistractable](https://www.nirandfar.com/indistractable/)* and from [Jake Knapp and John Zeratsky](https://youtu.be/cuce7zvOFHY?si=pVf51yYJvP0OD1LX&t=1688)’s book *[Make Time](https://maketime.blog/)*. It also came up a bunch in [this X thread](https://x.com/RobertJBye/status/1821252156550512998) asking for people’s favorite productivity tips. **Go even further:** Sunday evening, plan out your week ahead by slotting your most important to-dos into your calendar. ### 2. If it takes less than two minutes, just do it Next time you’re about to add a task to your to-do list and you think it would take less than two minutes to do, just do it right then instead. This tip comes from [David Allen’s book](https://en.wikipedia.org/wiki/Getting_Things_Done) *[Getting Things Done](https://en.wikipedia.org/wiki/Getting_Things_Done)*, which I read over 15 years ago. This trick is so good that it’s stuck with me for *that* long. > “The rationale for the two-minute rule is that it’s more or less the point where it starts taking longer to store and track an item than to deal with it the first time it’s in your hands—in other words, it’s the efficiency cutoff.” —David Allen ### 3. Keep a “waiting for” list Whenever you ask someone to do something for you, add them to your “waiting for” list. I keep this alongside my to-do list: ![Image from Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/f1171ed6-2004-4831-9c1f-6abc9de50f38_6000x3375.png) This tactic also comes from the Getting Things Done framework, and it changed my life. One of the [most important habits of highly effective PMs](https://www.lennysnewsletter.com/i/33702655/great-pms-build-an-aura-of-ive-got-this) is creating an aura of “I got this,” and the best way to build that aura is to never drop the ball. This tactic allows you to keep track of every open thread, versus relying on your memory, and makes it easy to remember to check in when someone else is dropping the ball. Once your brain knows that the information is written down somewhere, it can relax and create space for much more valuable thinking. If you’re using a to-do app, you can alternatively note who you’re waiting on (aka who’s blocking progress on that task) within the task description: ![Image from Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/1124578c-0599-4741-976c-15aca29b4d5c_748x178.png) ### 4. Each morning, write down just 1-3 things you *have* to accomplish that day Before you open up your to-do list—and definitely before you dive into your work—pick one to three things that, if you got done today (and if you did nothing else), would make it a great day. Write these items down. Don’t write more than three. Even better, create time in your calendar to work on these items each morning. ![Image from Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/27e4b7ff-2ac4-4dae-ab98-db59230f000d_1280x150.png) Mornings are great for trying to knock these out because your mind is at its most productive, and after you get the most important things done, the rest of your day is going to feel like gravy. Keeping this list short makes it much more likely that you’ll accomplish any of them. And yes, ideally, you get more than three things done in a day, but often we end up doing a lot of easy things instead of the one to three we should really do. This idea is inspired by [Matt Mochary’s Top Goal](https://docs.google.com/document/d/1ZJZbv4J6FZ8Dnb0JuMhJxTnwl-dwqx5xl0s65DE3wO8/edit#heading=h.u92txq7xuirk) approach, and [picking one “highlight” for your day](https://youtu.be/cuce7zvOFHY?si=D7HwbZ5FFPkhB2iN&t=1230) from the book *[Make Time](https://maketime.blog/)*. If you want to take this further, do the hardest thing on your list first, aka “[eat the frog](https://www.reddit.com/r/productivity/comments/108tgov/eat_that_frog/),” which is an idea the internet tells me is attributed to Mark Twain: > “If it’s your job to eat a frog, it’s best to do it first thing in the morning. And if it’s your job to eat two frogs, it’s best to eat the biggest one first.” ### 5. Set up, and fiercely protect, regular deep work time One of the most important professional development books I’ve ever read is *[Deep Work](https://www.amazon.com/Deep-Work-Focused-Success-Distracted/dp/1455586692)* by [Cal Newport](https://calnewport.com/). The core idea is that any work of real value comes from people doing “deep work”—focused, uninterrupted, and cognitively demanding work that stretches their brain. Unfortunately, most of our time is spent on “shallow work”—not cognitively demanding, logistical-style tasks, often performed while distracted. And that’s totally OK, as long as you get enough deep work time in. It takes time to get into a deep work state (30 to 60 minutes) and, more importantly, you need to avoid distractions to stay in this mode. What worked really well for me while I was working full-time was creating two to three recurring blocks each week that were dedicated to deep work time. Those were basically the only time I got “real” work done, and I treasured them. The key is to not let anyone ever schedule over this time. Here’s my approach (which worked really well, FWIW): ![Screenshot 2020-04-14 15.43.00.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0499dba1-b1e3-4af8-8c15-321e3acd4648_290x272.png) **Go even further:** 1. Kill all of the apps that often distract you during this time. 2. Explore the power of [binaural beats](https://www.youtube.com/watch?v=iboQ7mmGGGU) while in deep work time. I use [Brain.fm](https://my.brain.fm/payment?extended_promo=30) religiously when I write. 3. Encourage your company to have one day a week when meetings aren’t allowed. This is life-changing. 4. Check out this killer feature within Google Calendar called [Focus Time](https://zapier.com/blog/google-calendar-focus-time/). It’s only available if you’re using Google Workspace (e.g. your work calendar), but if you’ve got it, it will mute notifications and automatically decline meetings during this slot. ![A focus time block on Google Calendar, with a headphones icon](https://substack-post-media.s3.amazonaws.com/public/images/7eb0889e-1f49-494e-9ceb-ef956294b4c9_950x422.png) ### 6. Make a rule: No meetings before [as late as possible] This is going to sound absurd to most people, but I currently have a rule of no meetings before 3 p.m. It used to be 2 p.m., but I made it later. And it made my life so much better. I do this because I’d rather use that time (when my brain is freshest) for generative, creative, deep work as much as I can. I know this isn’t something most people will be able to do. However, I bet you could (for at least some days of the week) have a rule of no meetings before, say, 10 a.m. Or maybe even 11 a.m.? And I bet your team would love it. Jeff Bezos (one of the most successful businesspeople in history) makes time each morning to “[putter around](https://www.youtube.com/watch?v=bpAuQx8ZF7s).” [And many people](https://x.com/ttrauser/status/1821361544891937141) mentioned this idea when I asked them for their favorite productivity tactic. ### 7. Keep Do Not Disturb mode on Imagine a product that could turn off *all* notifications, calls, SMSs, pushes, buzzes, etc., across all of your devices in a couple of clicks. This product exists, it’s free, and it’s built into your operating system. The smartest people I know leave it on all the time. ![The Focus status menu open to show the Focus list, including Personal, Work, Study, and others. Do Not Disturb is at the top of the list and is on for one hour.](https://substack-post-media.s3.amazonaws.com/public/images/d4aa1ff2-6cba-438e-aa77-27db195cbc97_738x700.png) Here’s how you can turn it on [on your Mac](https://support.apple.com/guide/mac-help/turn-a-focus-on-or-off-mchl999b7c1a/mac) and [on your PC](https://support.microsoft.com/en-us/windows/turn-off-notifications-in-windows-during-certain-times-81ed1b25-809b-741d-549c-7696474d15d3). **Go even further:** When I really need to get deep, I physically remove all of my distractions. I put my phone in another room and kill anything I’d be tempted to check in on even without getting a notification (e.g. Slack, Messages, X). ### 8. Keep work async One of the biggest unlocks in my productivity has been learning how to pivot a meeting request into an email conversation. The majority of the time this becomes a five-minute task versus a 30- to 60-minute meeting. Here’s a reply template you can steal/tweak for when someone sends you a meeting invite: > *“Happy to help! Could we start async over email? What are you most looking for my input on?”* It’s so easy to schedule a meeting. No sweat off that person’s back to send that invite. It’s also kinda fun to hang out and avoid your work for a bit, and sitting in a meeting feels like you’re working. The worst part is that it isn’t just the meeting time itself you’re wasting. It’s also the time before the meeting, when you aren’t able to go deep on anything (it’s almost meeting time!), and the time after the meeting, when you have to rebuild context on whatever you were doing. ![Image from Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/93bb9943-e91e-4914-9e6b-9d7cb7c0c679_1536x1536.jpeg) I’ll add, though, that sometimes meetings can indeed be great and a much better use of time than going back and forth over email. It’s just that this is *usually* not the case, so meetings shouldn’t be the default. ### 9. Get a virtual assistant to take on low-impact work [Shreyas Doshi](https://www.linkedin.com/in/shreyasdoshi/) has a great productivity framework, called [the LNO framework](https://x.com/lennysan/status/1570138587760594945), which helps you identify which tasks you should spend time on versus which to avoid and/or delegate away. ![Image](https://substack-post-media.s3.amazonaws.com/public/images/5673f09f-5f02-4fdc-b4e9-df2c5a018186_1920x1080.jpeg) An unlock for me has been finding an executive assistant to take on as many of these N and O tasks as possible. I know this sounds extravagant, but it’s really not. You just sign up for a site like [Double](https://withdouble.com/) (there’s also [Athena](https://www.athena.com/) and [Fancy Hands](https://www.fancyhands.com/) and others), and you get matched with someone awesome. Everyone starts off thinking there’s very little an EA can do for them, and then months later they’re doing 20 to 30 hours of work a week for you. There’s up-front effort in getting the virtual assistant set up, but it quickly becomes very high ROI. [Here’s Ryan Hoover sharing](https://x.com/rrhoover/status/1693748817185968513) how he uses an EA, and Sam Corcos, the co-founder and CEO of Levels, wrote this [in-depth guide to how to use EAs across your company](https://review.firstround.com/a-tactical-guide-to-working-with-eas-how-to-make-delegation-your-superpower/). ![Image](https://substack-post-media.s3.amazonaws.com/public/images/78702acd-d7c8-4009-937a-427a98f108f9_1200x1161.jpeg) ### 10. Say no more often, even when it’s hard I can’t write a productivity guide for product managers without also encouraging you to say no more often. It’s a rule. Most of our burnout and overwhelm comes not from a lack of productivity tools and tricks, but from taking on too much work. The more you can do up front to make your workload less full, the better everything gets downstream. To help you say no more often, I pulled some tactical advice from previous pieces I’ve written: 1. **Filter asks through your priorities:** What are the two or three things you must do well to be successful in your work and life? For me, if I can produce a great newsletter post and prepare well for each podcast interview, then my business will grow. If I take my eye off the ball there, it will decline. So I say no to almost anything that isn’t furthering these priorities. 2. **Prioritize** ***and*** **communicate:**Often, your manager has no idea what you’re trading when they add something to your plate. They just want something done. And when we get the ask, we often make one of two mistakes: 1. Communicating but not prioritizing—saying yes, jumping on it, and dealing with the consequences later 2. Prioritizing but not communicating—saying no to avoid slowing down other work, but without a great explanation as to why Instead, try prioritizing *and* communicating. Let your manager know what tradeoff you’re making to do this ask and, most importantly, confirm they’re OK with it. They’ll tell you if they aren’t. 3. **Imagine if there were no emotion involved:** I ask myself, “If I didn’t care whether the other person felt disappointed or sad when I said no, what would I do?” Then I do that. Once the decision is clear, it simply becomes a matter of how to break the news to them most kindly. 4. **Ask yourself, What if you had to do it tomorrow?:** It’s incredibly easy to say yes to something that’s months in the future. Then all of a sudden that talk is next week, and 100% of the time I’m thinking, “WTF was I thinking?” Now I always ask myself, “Would I be excited about this if it were tomorrow?” The answer is almost always no. [Here are a few templates](https://www.lennysnewsletter.com/i/144661665/templates-for-saying-no) for saying no that you can adapt to your situation. — #### For more, don’t miss part 2: [More time management techniques that actually work](https://www.lennysnewsletter.com/p/part-2-time-management-techniques). — Is there anything that’s worked super-well for you that I didn’t mention, or that you totally agree with? **Share in the comments** 🙏 [Leave a comment](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually/comments) ## 📚 Additional frameworks and tactics to explore 1. [Calendaring your emails](https://x.com/destraynor/status/1220309500156092418) 2. [Pomodoro technique](https://en.wikipedia.org/wiki/Pomodoro_Technique) ← Hasn’t worked for me, but many people swear by it 3. [Shreyas Doshi’s LNO framework](https://www.youtube.com/watch?v=R8uPpsDqJWk) 4. [Elon Musk’s 5-step algorithm](https://youtu.be/CDZ9REOh2xA?si=7_W-lEKa6Ob1WTb5&t=23) for picking his battles 5. More great ideas from readers on [X](https://x.com/lennysan/status/1821250775601074195) and [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_what-are-1-2-time-management-techniques-youve-activity-7227016560198967297-ral9) *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [41/61] Why PMs are best positioned to thrive in an AI world I’ve recently published a couple of pieces that have created anxiety in the PM community (i.e. [how AI is getting closer to replacing PMs](https://www.lennysnewsletter.com/p/how-close-is-ai-to-replacing-product), [which parts of the job are most likely to be impacted](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management)), so I wanted to take this week to share an important message: **I believe that product managers are the** ***best*****-positioned role in tech to thrive in a world of AI.** In fact, many jobs will start to look more like product management. ![Image from Why PMs are best positioned to thrive in an AI world](https://substack-post-media.s3.amazonaws.com/public/images/a5db0ed6-5e36-4539-803f-838510dff630_3714x2000.png) Pop quiz: Which tech role is best at: 1. Identifying what to build 2. Distilling and communicating requirements 3. Prioritizing everyone’s ideas to the highest-ROI opportunities 4. Coordinating stakeholders, inputs, and conflicting needs 5. Giving feedback on designs to improve the product’s impact 6. Developing GTM strategy 7. Understanding business strategy 8. Crystallizing and getting buy-in for a vision 9. Influencing 10. Writing I think the answer is obvious. AI is good at doing what it’s told, but someone needs to be skilled at pointing it in the right direction, iterating until the work is great, shipping it, and driving adoption. That’s literally the job of a product manager. ### Product management is evolving Here’s how I’ve historically described the job of a product manager: > #### **Your job as a PM is to deliver business impact by marshaling the resources of your team to identify and solve the most impactful customer problems.** Here’s my updated definition: > #### **Your job as a PM is to deliver business impact by marshaling the resources of your team (*****both human and AI*****) to identify and solve the most impactful customer problems.** The most valued skill set will increasingly shift from building to knowing what to build, giving clear instructions for what to build, and having the taste to know if what you’ve created is great. We aren’t in a place yet where someone can use AI tools to completely build great products, but every few months it feels like we’re taking a big leap closer. ### Why PMs won’t be replaced with AI anytime soon I’ve written about how [many parts of the PM job](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management) will be impacted (or taken over) by AI over time, and what I haven’t made clear enough is that *other* tech roles will be impacted much more, and more quickly. For better or worse, the PM job is an amalgamation of soft skills—communication, collaboration, coordination, influence, taste, vision, etc. People stuff! Glue stuff. Skills that AI will have the toughest time replacing. Hard skills, like writing code, creating designs, analyzing data, extracting insights from research—this is work that AI is very good at. **A top-tier PM with the skills to fully harness AI’s capabilities is going to be the most valuable role in tech.** ![Image from Why PMs are best positioned to thrive in an AI world](https://substack-post-media.s3.amazonaws.com/public/images/0cb2496f-33be-4b55-b8b2-c5d0c4b6c609_1998x2000.png) I’m not saying that engineers and designers and other roles will totally disappear; however, the engineers and designers with the strongest PM-type skills—identifying customer pain points, understanding business levers, clearly communicating, turning ambiguity into action—will do best. Peter Thiel recently made this point—that AI is bad news for people with strong math skills and good for people with strong soft skills: [Watch on YouTube](https://www.youtube.com/watch?v=flRSWqq4OUI) #### **What about product-minded engineers?** Yes, engineers with strong product and business sense will do well. They are basically a PM and engineer in one. And it’s their product/business sense that will make them special in the future. Over time, they’ll look more like PMs than engineers. #### **What about designers?** Same as above. The more PM’y the designer, the better they’ll do. That said, a designer’s taste, empathy, and desire to solve customer problems and make the experience ever-better, plus the ability to actually design, and identify great design, will certainly be a superpower. However, if I were a designer today, I’d be closely studying the best PMs I know. #### **What about founders?** PMs and founders are kind of the same role in many ways. There’s a reason PMs are often called the “CEO of the team.” So everything I’m describing about PMs applies to founders as well. ![Image from Why PMs are best positioned to thrive in an AI world](https://substack-post-media.s3.amazonaws.com/public/images/401b974d-e79a-4c9c-9306-fde9ea64e14b_1832x664.png) ### Evidence of this already happening in other verticals We’re already seeing creation shift from people doing the creating to people telling the AI what they want created. Some examples: 1. **Music:** [Suno](https://suno.ai/) (currently the [fastest-growing AI product in the world](https://x.com/heykahn/status/1823330662063149274)) lets you play PM for music. You describe in words what music you want to hear, and it goes off and creates it. [Here’s a song](https://suno.com/song/83f4b116-e64f-4731-89c7-f1cfcdbbb114) I made with the prompt “A sea shanty about how product managers will thrive in a world of AI”: 2. **Movies:** [Pika](https://pika.art/home), [Runway](https://runwayml.com/product), and [Sora](https://openai.com/index/sora/) allow you to be PM for video. Describe what movie you want, and it creates it for you. As these tools improve, you’ll be able to refine and iterate until you have something great. 3. **Engineering:** As I’ve written about previously, [Devin](https://www.cognition.ai/blog/introducing-devin), [GitHub Copilot Workspace](https://githubnext.com/projects/copilot-workspace), [Magic](https://magic.dev/), and other startups are building increasingly better AI engineers that take your instructions and build the product for you. [Here’s a whole thread](https://x.com/jeff_weinstein/status/1825692745064919294) of mind-bending demos of people coding with a product called [Cursor AI](https://www.cursor.com/), including [an 8-year-old building a chatbot in 45 minutes](https://x.com/rickyrobinett/status/1825581674870055189). We’re not totally there yet, but we’re on our way. Here’s an example of what this might look like: Jensen Huang, CEO of Nvidia (currently the third most valuable company in the world), explained recently that his vision is to create a world where no one needs to learn how to program: > *“It is our job to create computing technology such that nobody has to program. That the programming language is human. Everybody in the world is now a programmer. This is the miracle of artificial intelligence.”* [Watch on YouTube](https://www.youtube.com/watch?v=6Lcy2N3YcIs) 4. **Design:** [Figma recently announced an AI tool](https://www.figma.com/ai/) that auto-generates product designs based on a description you provide. There’s also [Uizard](https://uizard.io/), which goes even further. ### How to set yourself up to thrive in a world of AI Simply being a great PM is going to set you up well. So keep it up! But if you are looking to maximize your chances of thriving in a world of AI, a few suggestions: 1. **Get your hands dirty:** Stop reading about AI and use it. Experiment with using [ChatGPT](https://www.lennysnewsletter.com/p/how-to-use-chatgpt-in-your-pm-work), [Perplexity](https://www.lennysnewsletter.com/p/how-to-use-perplexity-in-your-pm), and [Claude](https://claude.ai/) in your day-to-day work. 2. **Watch and learn:** 1. Follow [Dan Shipper](https://x.com/danshipper)’s journey as he [builds AI products](https://x.com/danshipper/status/1803056709079834846) and [interviews people on how they use AI in their day-to-day work](https://www.youtube.com/watch?v=Vm49oIPtyRE). 2. Follow [Claire Vo](https://x.com/clairevo)’s journey [building and evolving ChatPRD](https://x.com/clairevo/status/1823375505187610729) as a side project that now generates six figures. 3. Check out some of [Andrej Karpathy’s videos](https://www.youtube.com/andrejkarpathy) explaining how LLMs work. 4. Check out [Andrew Ng](https://www.andrewng.org/courses/)’s online courses on machine learning, and AI for everyone. 3. **Read about where things are heading:** 1. [The Rundown](https://www.therundown.ai/), [Superhuman AI](https://www.superhuman.ai/), and/or [Ben’s Bites](https://bensbites.com/) to stay up-to-date on what’s new in AI 2. [No Priors](https://www.youtube.com/@NoPriorsPodcast) podcast with Sarah Guo and Elad Gil 3. [Eric Schmidt’s AI prophecy: The next two years will shock you](https://www.exponentialview.co/p/eric-schmidts-ai-prophecy) 4. **Strengthen the core PM skills that’ll matter most in an AI world:** 1. Identifying what to build (and being right) 2. Distilling and communicating requirements 3. Prioritizing everyone’s ideas to the highest-ROI opportunities 4. Coordinating stakeholders, inputs, and conflicting needs 5. Giving feedback on designs to improve the product’s impact 6. Developing a GTM strategy and driving adoption 7. Understanding business strategy 8. Crystallizing and getting buy-in for a vision 9. Influencing 10. Writing That’s my thinking! I’d love to know what you think. What do you agree or disagree with? **Leave a comment with your thoughts.** [Leave a comment](https://www.lennysnewsletter.com/p/why-pms-are-best-positioned-to-thrive/comments) *A big thank-you to [Dan Shipper](https://x.com/danshipper/) and [Dennis Yang](https://www.linkedin.com/in/dennisyang/) for helping me think this post through.* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [42/61] Part 2: Time management techniques that actually work ## 🚨 Enter to **win an all-expenses-paid ticket to the Lenny & Friends Summit** [My YouTube channel](https://www.youtube.com/@LennysPodcast) just crossed 100,000 subscribers (😱), so to celebrate, and to thank you for listening, I’m hosting my biggest ever giveaway: **Win an all-expenses-paid ticket to the [Lenny & Friends Summit](https://lennyssummit.com) on October 24th in San Francisco. One lucky winner will get a ticket to the summit, a round-trip flight to San Francisco, and a hotel stay for two nights.** To enter, just subscribe to Lenny’s Podcast on Apple, Spotify, and YouTube, leave a rating, and fill out this form. Already did these things? You can still enter! I’ll pick a winner on August 29th and notify them by August 31st. Enter here. Good luck! Now, on to this week’s post… My post a few weeks ago on [time management techniques that actually work](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually) is on track to be my most popular post ever (wtf!). Since I left a bunch of tactics out of that post to keep it from feeling overwhelming, I’ve got seven more productivity tricks for you that I use regularly: ### 1. Set arbitrary deadlines Deadlines work. Even arbitrary ones. One of my favorite techniques for getting someone to finish something that’s important but not urgent is to come up with an arbitrary deadline together. I say to the person, “Let’s come up with an arbitrary deadline!” We both know it’s made up, but there’s a weird gravitational pull once you’ve put a date out there. It’s important to have the person doing the work pick the deadline so that it’s a date that works for them. You’d be surprised how often it’s very reasonable. And how often they hit it. Pick a [waiting-for](https://www.lennysnewsletter.com/i/147172995/keep-a-waiting-for-list) off your list that’s been lagging, and float the idea of picking an arbitrary deadline to that person. ### 2. Use pen and paper for your to-dos—and rewrite them each morning Something I’ve learned about myself is that if my to-dos are sitting inside an app on my laptop, the one place I don’t want to look is that app on my laptop. There’s hard work to do there! Let’s check my email and Slack channels for the thousandth time instead. However, when my to-dos are sitting right in front of my face, in a nice notebook I can’t swipe away (and always have with me), I’m much more likely to see the work I need to do, and thus work on the things I should be working on. ![Image from Part 2: Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/ecefabf1-3d4b-4d0f-9fe9-aac1d7739d21_5712x3045.jpeg) A secondary trick I found to be *super*-effective is to rewrite my to-dos each morning on a fresh page. I tear out the previous page, transferring anything that wasn’t done but is still a priority for today to the new page. I rethink [my top 1-3 priorities](https://www.lennysnewsletter.com/i/147172995/each-morning-write-down-just-things-you-have-to-accomplish-that-day) and, in the process, remove stuff that I’ve been transferring for too many days. As a bonus, it also feels so damn nice to cross out a to-do physically, and tear out pages and throw them away. It may be irrational, but it’s much more satisfying than checking a checkbox in a to-do app. A reader shared the same advice with me: ![Image from Part 2: Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/fa4ec7f8-a0f3-430c-98f6-6f0b40dc1d38_1084x232.png) ### 3. Say no to stuff you’ve said yes to In the previous post, I shared a tactic for knowing when to say no: ask yourself, would I say yes if it were tomorrow? Well, often we still say yes, and today is now almost tomorrow. And you’re wishing you didn’t say yes. Here’s the good news: often you can still get out of it, without much issue. This will save you a bunch of time and stress, and it’s almost always not a big deal to that person. It just takes crafting the right message to that person. There are basically three routes you can take here: 1. **Light:** “Hey John, I see this presentation I offered to give is coming up, and I’m finding myself unexpectedly slammed right now. I’m still totally on board with giving it, but I wanted to just check—how important, and timely, is this presentation to your team? If it’s not that big of a deal, I’d love to skip it, or push it out. Let me know if that’s OK. But again, I don’t want to cause you trouble, so if it’s important, I’m still 100% happy to make it happen.” 2. **Medium:** “Hey Michelle, I noticed our meeting is coming up later this week. Any chance we could skip the meeting and knock it out over email async?” 3. **Heavy:** “Hey Steven, bad news. I won’t be able to make the coffee chat we have coming up next week. Something timely came up, and I need to prioritize it. Very sorry about this.” ← Try not to do this, but it’s also OK occasionally. Backing out of something can feel terrible, but once you’ve experienced the relief from not having to do something your former self agreed to, you’ll find there’s a lot of power here. Better still, you’ll get better at saying no in the first place. ### 4. Build out a library of text replacement snippets Anytime I find myself writing out an address, phrase, or paragraph over and over again, I turn it into an auto-expanding snippet. I’ve created snippets for common email replies, URLs, email addresses, and sentences I find myself using often. To do this, I’ve settled on using an app called [TextExpander](https://textexpander.com/individual). It’s fugly, but has the best combination of features. Here’s a screenshot of some of my snippets: ![Image from Part 2: Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/b455d3a6-8283-4f85-830f-96997b27f9cc_742x872.png) For most people, though, if you’re on a Mac, I’d highly recommend starting with the built-in [text replacement](https://support.apple.com/guide/mac-help/replace-text-punctuation-documents-mac-mh35735/mac) feature. Go to *System Settings* → *Keyboard* → Click *Text Replacements* under *Text Input*. To poke your toes in the water, add a few replacements (click the “+” on the bottom left) for your email address(es), Calendly link, and a URL you often share. I settled on starting my snippets with “@@” since I never use this in regular writing, but some people like to start with “/” or “;” or “-”. Try stuff and see what feels natural. ![Image from Part 2: Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/dfca3e85-83b6-4c94-aa69-1978fc5144b7_892x524.png) ### 5. **Do an end-of-day calendar review for the next day/week** At the end of each day, spend 15 minutes reviewing your calendar for the next day. And on Friday (or Sunday) evening, review your calendar for the week ahead. During this time: 1. Review meetings you’ve got coming up, and think about what you need to do to be ready for them. 2. Write out your [1-3 most important to-dos](https://www.lennysnewsletter.com/i/147172995/each-morning-write-down-just-things-you-have-to-accomplish-that-day) in your notebook (see tip #2 above). 3. Slot important to-dos into your calendar ([per my advice in last week’s post](https://www.lennysnewsletter.com/i/147172995/use-your-calendar-for-to-dos)). 4. Check in on [waiting-for’s](https://www.lennysnewsletter.com/i/147172995/keep-a-waiting-for-list) that have been lagging. 5. Look at meetings you can kill, or shift, in order to make your day more productive. 6. Extra credit: Reflect on whether you used your day/week well. See tip #6 below. This one habit took my anxiety each morning from “holy shit I’ve got so much to do” to “I’ve got this.” You start feeling ahead of the curve versus always starting the day a little behind. Also, you can spot days/weeks where you’ve taken on way too much, and adjust (or simply set expectations) accordingly. My approach to making time for this process is to do it each afternoon right before I leave for the day, and then on Sunday evening. I know it’s not ideal to be working on Sunday evening, but I rarely get to this on Friday, and even spending 15 minutes before the craziness of the week kicks in has a huge impact on my week. Cal Newport has a technique he calls the [work shutdown ritual,](https://calnewport.com/drastically-reduce-stress-with-a-work-shutdown-ritual/) where he takes this idea further and even says the words “schedule shutdown, complete” when he finishes it 😅 (Thank you to reader Beth Spencer for sharing this with me.) ### 6. Do a time and energy audit What do you want to be spending your time on? I bet it’s things like longer-term strategy, in-depth product design feedback, identifying blockers coming around the curve, mentorship, and leveling up your writing/thinking in a few key docs and decks. What are you *actually* spending your time on? I bet it’s not that. Step one in addressing this mismatch is to see how you’re currently allocating your time, to identify your revealed preferences versus your stated preferences. I couldn’t find a good guide for how to do this well, so I asked Perplexity and [got a great answer](https://www.perplexity.ai/search/i-want-to-do-a-time-audit-of-m-ymXFQqrFRKWqg88sX.qXnw). ![Image from Part 2: Time management techniques that actually work](https://substack-post-media.s3.amazonaws.com/public/images/455b18af-0ed9-45b8-b1d0-a2f37d08b19f_1226x1276.png) In addition to doing a time audit, I’ve also found an energy audit to be transformative. What type of work gives you energy? What saps you of energy? Wouldn’t that be good to know, so that you can do more of the former and less of the latter? Yes indeed. That audit will inform how you want your day-to-day schedule to ideally look, and will help you use your energy best throughout the day. [Here’s an amazing step-by-step guide](https://beta.mocharymethod.com/blog-post/energy-audit) from Matt Mochary for how to do this, and here’s a video walk-through if you’d prefer: [Watch on YouTube](https://www.youtube.com/watch?v=emAXGqwtPCk) ### 7. Set up your environment for flow When have you felt the most productive? Where were you sitting, what were you wearing, what did you eat/drink, and what time of day was it? Learn what your mind and body need to get into the flow. For me, it’s: 1. A good pair of over-ear headphones 2. Binaural beats (e.g. [Brain.fm](https://my.brain.fm/payment?extended_promo=30)) 3. Caffeine (or something like [Magic Mind](https://magicmind.co/)) 4. Fast, reliable Wi-Fi 5. Having 1 to 3 clear to-dos that I know I’ll be focusing on 6. At least two hours to work, with confidence that I won’t be disturbed ([here’s tips for that](https://www.lennysnewsletter.com/i/147172995/keep-do-not-disturb-mode-on)) 7. Ideally, in the morning Knowing this, I make sure to have all of these in place whenever I need to get deep work done—basically, every day. What is this list for you? I’d actually love to know. Share it in the comments and see what other folks say too: [Leave a comment](https://www.lennysnewsletter.com/p/part-2-time-management-techniques/comments) ### 📚 Further study 1. [How Future Billionaires Get Sh\*t Done](https://www.youtube.com/watch?v=ephzgxgOjR0) by Y Combinator 2. [Entrepreneur Life: Tips to manage your time as a startup founder](https://www.youtube.com/watch?v=Y_bArdkS8NQ&t=2s) by Caya 3. [Pmarca Guide to Personal Productivity](https://pmarchive.com/guide_to_personal_productivity.html) by Marc Andreessen 4. [Leave a Summary for Yourself](https://perell.com/note/leave-a-summary-for-yourself/) by David Perell *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [43/61] The Subscription Value Loop: A framework for growing consumer subscription businesses *👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career.* *If you’re not a subscriber, here’s what you missed this month:* 1. *[Why PMs are best positioned to thrive in an AI world](https://www.lennysnewsletter.com/p/why-pms-are-best-positioned-to-thrive)* 2. *[On asking for help (even when you really don’t want to)](https://www.lennysnewsletter.com/p/on-asking-for-help-even-when-you)* 3. *[Part 2: Time management techniques that actually work](https://www.lennysnewsletter.com/p/part-2-time-management-techniques)* *Subscribe to get access to these posts, and every post.* ### Photos from recent reader meetups 🥰 If you’d like to attend (or host!) a meetup, join our paid subscriber Slack and find your local city channel. [Learn more here](https://www.lennysnewsletter.com/p/community). **If you’re building a consumer subscription app, this post is your new bible.** Over the past year, [Phil Carter](https://www.linkedin.com/in/philgcarter/) has been developing a framework for growing consumer subscription businesses, called the Subscription Value Loop. The framework is based on his experience advising dozens of consumer subscription businesses, as well as his analysis of over 30,000 consumer subscription apps (based on proprietary data provided by [RevenueCat](https://revenuecat.com/)) and interviews with leaders at dozens of top consumer subscription companies. **In this post, Phil pulls it all together to give you a comprehensive blueprint for growing your consumer subscription business. The post includes a plug-and-play benchmarking tool to identify your biggest growth opportunities, 10 of the most powerful levers for scaling your app, and case studies from the world’s top consumer subscription companies.** A massive thank-you to [Phil](https://www.linkedin.com/in/philgcarter/) for doing the work to put a piece like this together. He spent the past decade as a VC and product leader helping world-class companies like Faire, Quizlet, and Ibotta accelerate their growth. He is now a full-time growth advisor and angel investor who helps consumer subscription companies build their growth models, develop their growth strategies, hire and scale their growth teams, and achieve their full potential. For more from Phil, check out his [website](https://www.philgcarter.com/) and [Reforge course](https://www.reforge.com/courses/consumer-subscription-growth/), subscribe to his [Substack](https://philgcarter.substack.com/), and follow him on [LinkedIn](https://www.linkedin.com/in/philgcarter/) and [X](https://x.com/philgcarter). ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/39262edd-b151-49e4-84dc-8a13c1c93d85_4000x2000.png) Consumer subscription apps are relatively easy to launch, which is why there are hundreds of thousands of them in the app stores. Compared with more complex models like B2B SaaS or marketplaces, these businesses can launch faster with less capital for many reasons: no sales teams, rapid purchasing cycles, high gross margins with low marginal costs to serving additional subscribers, and turnkey global distribution, payments, and support tools through the app stores. **But these apps face several fundamental challenges that make them very hard to scale:** 1. **Lack of control over distribution:** The Apple and Google app stores exert significant control over product placements, promotions, TOS and usage guidelines, payments, and cancellation terms. This locks consumer subscription apps into paying expensive app store fees and restricts their ability to distribute and monetize their products. 2. **Overdependence on paid acquisition:** Since consumer subscription apps don’t have sales teams and often can’t rely on virality as much as social networks or marketplaces, many turn to paid acquisition as their primary growth lever. This strategy always had flaws, and Apple’s [App Tracking Transparency (ATT) restrictions](https://www.appsflyer.com/glossary/app-tracking-transparency/) have only made it harder. 3. **High subscriber churn rates:** Churn is generally higher for consumer subscription apps vs. B2B SaaS businesses, and most don’t benefit from strong network effects like social networks or marketplaces. This makes products less sticky and retention more difficult. Many also have products and growth strategies that are fairly easy to replicate and thus prone to copycats, weakening their defensibility and further exacerbating churn rates. 4. **ARPU is often low and hard to grow:** Consumer subscription apps generally have much lower Average Revenue per User (ARPU) vs. B2B SaaS, and they have a harder time expanding ARPU than many other business models. B2B SaaS businesses increase Net Revenue Retention (NRR) by growing the value of retained accounts to offset churn. Marketplaces can boost ARPU by increasing transactions as they gain liquidity. Social networks grow ad revenue by increasing user engagement. But most consumer subscription apps offer only one subscription, which means they have a hard time extracting additional value from users. In fact, it is *because* consumer subscription apps are relatively easy to launch that so many exist, leading to fierce competition, channel saturation, and subscription fatigue. Meanwhile, Apple’s recent ATT restrictions have rendered paid acquisition less efficient, making it even more difficult for these companies to maintain healthy unit economics. This explains why out of all the consumer subscription apps out there, *fewer than 50* have ever reached $1B+ valuations, and *fewer than 10* are publicly traded companies with $10B+ market caps. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/286d8b34-df71-4382-b866-ab3771a4b0c3_1692x3908.png) These challenges are supported by [RevenueCat](https://www.revenuecat.com/)’s proprietary data from the past year, which has been aggregated from over 30,000 subscription apps accounting for over 290M subscribers: ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/221eb955-e1dc-4d3c-bc2c-ebf38e5727df_3842x1012.png) Even top-quartile consumer subscription apps only convert roughly 1 in 20 installs into a paid subscription. They also lose more than half of their annual subscribers after the first year, and more than half of their monthly subscribers after just three months. This makes it hard to build a sustainable business, but not impossible. 95th-percentile apps, like those in the figure above, outperform the rest by a wide margin, with metrics that provide a strong foundation for growth. So what makes these top apps different? ## Using the Subscription Value Loop to grow your consumer subscription business **The best consumer subscription apps overcome these challenges by doing two things:** **1. Building their businesses on a core value promise that provides enduring value.** This core value promise is what attracts users to the app and keeps them coming back over time. The stronger and more differentiated the value promise, the more subscribers will pay and the longer they’ll keep paying. The value promises of category-leading consumer subscription apps are clear and compelling, to the point where I can describe these promises in a single sentence without naming the associated companies and you can probably guess the ones I am talking about: - Listen to music you love, build playlists, and find new artists who match your taste. - Enjoy gamified study experiences that make language learning fun. - Record and share your workouts with a supportive community of athletes. - Find, match, and connect with attractive single people in your area with one swipe. **2. Harnessing their value promise to drive a compounding Subscription Value Loop that increases LTV/CAC and accelerates Payback Period:** - **Step 1: Value Creation:** Quickly connecting new users to the app’s core value promise and offering enduring value that keeps them coming back - **Step 2: Value Delivery:** Cost-efficiently distributing the app to users organically through word of mouth and SEO, as well as through sustainable paid acquisition - **Step 3: Value Capture:** Converting free users into subscribers, which generates revenue that can be reinvested into the business to strengthen the rest of the loop ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/5f7432f8-a875-4420-bb1a-093a8df40287_1456x904.png) **As a company bolsters its Subscription Value Loop, LTV/CAC goes up and Payback Period comes down, driving faster and more efficient growth.** What makes consumer subscription apps unusual is that most don’t have sales teams, which means the product must be able to sell itself organically and through paid advertisements. Core product, growth product, and marketing teams must work together to build an integrated system that converts their app’s core value promise into subscription revenue by maximizing each step in the Subscription Value Loop. **I built a [Subscription Value Loop Calculator](https://docs.google.com/spreadsheets/d/1KBclBYpQKV2TasNuZxfn3UdaOXTkLimCxWSauMGguW4/edit?gid=0#gid=0) with [RevenueCat](https://www.revenuecat.com/) where you can plug in your numbers, measure the performance of your loop, and identify growth opportunities.** **There are five steps to using this tool:** 1. **Identify** metrics that drive Value Creation, Value Delivery, and Value Capture for your app. 2. **Calculate** your company’s recent performance against each metric. 3. **Compare** your performance on each metric vs. category-specific benchmarks. 4. **Discover** opportunities based on metrics where you underperform vs. these benchmarks. 5. **Prioritize** initiatives to improve the metrics with the greatest upside potential. For a detailed step-by-step guide on how to use this tool, see my Substack post on [“The Subscription Value Loop Calculator!”](https://philgcarter.substack.com/p/the-subscription-value-loop-calculator) ## Top 10 levers for growing consumer subscription apps Now that we’ve introduced this framework, let’s discuss strategies and tactics that successful consumer subscription apps use to strengthen their Subscription Value Loops.Below, I’ve outlined my top 10 list of proven product and marketing levers companies can pull to bolster their loops. These are based on my experience running hundreds of A/B tests across dozens of consumer subscription businesses and roughly stack ranked in order of expected impact. However, you should prioritize levers that directly address the biggest growth opportunities for your business that you identify using the [Subscription Value Loop Calculator](https://docs.google.com/spreadsheets/d/1KBclBYpQKV2TasNuZxfn3UdaOXTkLimCxWSauMGguW4/edit?gid=0#gid=0). Remember, this is only a jumping-off point. The best consumer subscription apps are constantly finding innovative ways to grow that complement their unique core value promises to subscribers. ### **1. Build a great product with a unique and enduring core value promise** - **Step:** Value Creation - **Target metrics:** Nearly all of them This first one is obvious, but the most important prerequisite for creating a consumer subscription business that lasts is building a world-class product. This is the beating heart at the center of a company’s core value promise, and it impacts every step in the Subscription Value Loop and nearly every important metric that powers this loop. Better products benefit from higher prices, superior conversion rates, healthier subscriber retention, and lower acquisition costs, not only because paid ads are more efficient but also because they benefit from more viral word of mouth. This helps explain why ChatGPT became the fastest-growing app ever, with a core value promise so profound that it reached 100M MAUs in just two months largely through organic growth. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/68f7eaaa-0e43-4789-944e-1d1c2f1ce4a3_750x650.png) #### **Specific tactics** Building a great product is more art than science, but there are tools that early-stage companies (and larger companies launching additional products) can use to measure and improve their product-market fit (PMF). - **Measure your PMF Score:** There is a tool called the [40% Test](https://productcoalition.com/using-sean-ellis-test-for-measuring-your-product-market-fit-c8ac98053c2c) created by [Sean Ellis](https://www.linkedin.com/in/seanellis/) that offers companies a way to measure their PMF Score by running a [PMF Survey](https://pmfsurvey.com/) that asks users, “How would you feel if you could no longer use [product]?”: very disappointed, somewhat disappointed, or not disappointed. If over 40% of respondents say they’d be “very disappointed,” then you can be confident you have at least the initial signs of PMF. - **Identify your High-Expectation Customers (HXCs):** Next, you can group respondents based on their answers and identify those who [Julie Supan](https://www.linkedin.com/in/juliesupan/) refers to as HXCs, the ones she says “will acknowledge and enjoy your product or service for its greatest benefit.” - **Synthesize feedback from HXCs and “on the fence” users:** After finding your HXCs, as well as “on the fence” users who said they would be “somewhat disappointed,” review their qualitative feedback to understand what improvements they are most interested in. - **Prioritize your roadmap to serve these users:** Finally, prioritize new product features and improvements to the existing product experience that directly address the demands of your HXCs and on-the-fence users. This offers a fast track to boosting your PMF Score. #### **Example: Superhuman** In [“How Superhuman Built an Engine to Find Product Market Fit,”](https://review.firstround.com/how-superhuman-built-an-engine-to-find-product-market-fit/) founder and CEO [Rahul Vohra](https://www.linkedin.com/in/rahulvohra/) recounts how his “blazingly fast” email app iterated its way to stronger PMF using the 40% Test. When Rahul’s team first ran the test, only 22% of respondents said they would be “very disappointed” if they couldn’t use Superhuman. After the company zeroed in on founders, managers, executives, and business development professionals as their HXCs, their PMF Score jumped to 33%. Qualitative research showed that these users most valued Superhuman’s speed, so the company resegmented its “somewhat disappointed” users to focus on those who viewed speed as a primary benefit. Then, by building a backlog of improvements to delight their HXCs and their on-the-fence users who highly valued speed, Superhuman was able to increase its PMF Score from 33% to 58% in just three quarters. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/b3ced238-6fc6-4ff8-8716-28b4516bb89e_1544x860.png) ### **2. Optimize subscription pricing and packaging** - **Step:** Value Capture - **Target metrics:** Subscription Prices, Trial Start Rate, Trial Conversion Rate, Install to Paid Conversion Rate, Subscriber Retention Rates One of the strongest growth levers consumer subscription apps have is pricing and packaging, so it’s surprising that many apps never optimize them at all. For new apps, offering one subscription tier with annual and/or monthly plans and setting prices based on competing apps in your category is a good starting point. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/48f0c8e7-d24f-4cb2-9c64-d2617210c32e_1484x882.png) However, many startups do this and then don’t revisit subscription prices and packages for years. This is a mistake, as I’ve seen pricing and packaging optimizations consistently generate 5% to 15% lift on subscription revenue (often while maintaining or even improving subscriber growth). #### **Specific tactics** Pricing expert [Kristen Berman](https://www.linkedin.com/in/kristenberman/) details techniques for price testing and optimization in [“The ultimate guide to willingness-to-pay,”](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-willingness) the most common of which are: 1. [Van Westendorp](https://www.lennysnewsletter.com/i/141479121/the-van-westendorp) 2. [Becker-DeGroot-Marschak](https://www.lennysnewsletter.com/i/141479121/the-becker-degroot-marschak) 3. [Multiple price list (or Gabor-Granger)](https://www.lennysnewsletter.com/i/141479121/multiple-price-list-or-gabor-granger) 4. [Discrete choice (or choice-based)](https://www.lennysnewsletter.com/i/141479121/discrete-choice-based) Since Kristen provides details on how to run each study, I won’t repeat that information (check out her [article](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-willingness)!). What I will say is that because most consumer subscription apps are selling into relatively established product categories, I’ve generally found that Van Westendorp, which is the simplest approach, is accurate enough to drive significant impact. For companies that also want to optimize subscription packaging, I recommend coupling this with conjoint analysis, which also offers guidance on relative willingness to pay (WTP) for specific premium features. Once you’ve conducted one or more of these studies to inform your pricing and packaging strategy, run a live A/B test in your product to confirm the results before rolling out changes to 100% of your users. #### **Example: AllTrails** In 2022, after maintaining its price for years, AllTrails conducted Van Westendorp and conjoint analyses that indicated it should increase its U.S. annual subscription price from $29.99 to $35.99. A/B testing subsequently confirmed that this higher price drove an ~8.3% lift in ARPU. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/a5277ce1-76c6-4309-ba5d-24e6f47abc35_1600x513.png) ### **3. Deliver immediate value through new user onboarding** - **Step:** Value Creation / Value Capture - **Target metrics:** Signup Rate, Trial Start Rate, Trial Conversion Rate, Install to Paid Conversion Rate Attention spans are getting shorter, leaving apps with little time to turn new users into subscribers. Recent reports have found that more than 75% of trial starts occur on the same day a user installs an app (often in the first few minutes). This means onboarding flows should be optimized for speed to value so new users quickly understand why they need your product. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/9f6da4ee-c54b-4fc8-9978-f3cb8e04586a_1600x1069.png) #### **Specific tactics** - **Emphasize your value promise:** What does your app do better than anyone else, and why does it matter? Lead with this so that users understand within their first minute of using your app how it will make their lives meaningfully better. - **Conduct a Psych audit:** The [Psych Framework](https://darius.com/increase-funnel-conversion-with-psych-7378d51c4caf) by [Darius Contractor](https://www.linkedin.com/in/dariusmc/) is a useful tool for optimizing onboarding. It works by assigning a positive or negative score to every screen in your onboarding flow based on its emotional impact. By front-loading +Psych screens (e.g. interactive activities that demonstrate your value promise) and backloading -Psych screens (e.g. registration forms), apps can improve signup and activation rates. - **Leverage single sign-on (SSO):** Filling out registration forms is a -Psych experience, particularly on mobile devices. Google, Facebook, and Apple (for iOS apps) provide SSO options that make signup significantly faster and easier for consumer subscription apps. On web, Google One Tap is another great option for streamlining signup. These tactics are quick to implement and can often boost signup rates by a couple of percentage points. - **Provide a personalized experience:** Innovative apps like Noom, Headway, and Ladder are incorporating quizzes into onboarding flows that allow them to quickly gather information about new users to deliver personalized experiences. The ideal length and composition of these quizzes can vary (Noom’s is famously long), but I consistently find the optimal length of mobile app onboarding flows to be shorter than web flows. Onboarding quizzes can also vary by category (they are often longer for high-intent purchases in categories like Health & Fitness and Finance) and by business model (they are often shorter for freemium apps where the user has time to experience the free product before making a purchase decision). Many apps have also improved performance by interspersing motivational screens and/or testimonials that are personalized based on user responses. #### **Example: Headway** Headway’s effective onboarding flow has helped it overtake Blinkist to become the world’s top book-summary app. As you can see from the screenshots below, it follows all the recommended tactics above: (1) it leads with a clear, compelling value promise, (2) it uses SSO to streamline registration, (3) it front-loads +Psych with interactive questions that gather user information and motivational screens and testimonials that build intent, and (4) it provides immediate payoff by personalizing the user’s reading plan and content recommendations based on their responses. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/6dd1b6b2-5c2d-4ffe-88a1-0bfa79af4661_1316x876.png) ### **4. Boost paid marketing efficiency by investing in web conversion flows** - **Step:** Value Delivery - **Target metrics:** Cost per Install (CPI), Cost per Trial (CPT), Paid CAC per Subscriber, Gross Margin, Subscriber Retention Rates In the wake of Apple’s ATT restrictions, companies are increasingly experimenting with web flows to register new users and convert them into trials. Since web flows still offer deterministic data on conversion events, marketing teams can test and iterate on ad creative and optimize campaign performance much faster, reducing Paid CAC per Subscriber and accelerating Payback Period. These web conversion flows also have the benefits of avoiding 15%-to-30% app store fees and often driving better subscriber retention, because users who subscribe on web generally have lower involuntary churn rates from payment failures. Both of these factors improve subscriber LTVs. [Ketty Slonimsky](https://www.linkedin.com/in/ketty-slonimsky-1589618/), the Chief Growth Officer at Palta, which owns apps like Flo, Simple, and Zing, says she’s consistently seen web conversion flows boost LTV by 30% to 50% with strong execution. #### **Specific tactics** - **Detailed onboarding quiz:** Given that onboarding flows can generally be longer on web, companies can ask more questions without sacrificing conversion. Marketing teams also receive deterministic data from every user, unlike mobile (particularly iOS), where privacy restrictions make it much harder to attribute responses back to individual users. - **Predicted LTV (pLTV) model:** Correlating user-level response data from onboarding quizzes to subscriber conversion and retention rates lets companies build pLTV models. The most sophisticated models don’t just assign an overall pLTV to each user, they assign incremental LTV values to each response across every question in the onboarding flow. - **Continuous feedback loop:** Finally, companies can channel these pLTV scores back to advertising networks like Meta and Google to help them fine-tune their algorithms. This not only improves campaign targeting, it also helps companies test and iterate on creative concepts more quickly, both of which improve the efficiency of paid advertising. #### **Example: Ladder** In a podcast episode called [“How Ladder Cracked TikTok and Grew 500%,”](https://open.spotify.com/episode/3cX61OzjpAJ3ucREc3R1HU) CEO [Greg Stewart](https://www.linkedin.com/in/gregoryfstewart/) describes how his fitness app, Ladder, grew from 9,000 to over 50,000 subscribers in 2023 by linking TikTok videos created by the company and its influencer coaches to a web-based conversion funnel (the company now has over 100,000 subscribers). Not only does Ladder follow all the same onboarding best practices as Headway, it has also built its own tools to be able to rapidly iterate on every screen in this flow, calculate the pLTV of a user based on their responses to each quiz question, and pipe this information back to TikTok to maximize the efficiency of its brand and [Spark Ads](https://ads.tiktok.com/help/article/spark-ads). This has also created a continuous feedback loop that helps Ladder rapidly iterate on ad creative, further improving its LTV/CAC and Payback Period. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/19394761-06e3-4e8d-8c2d-8a54e1ae91a6_1240x1074.png) ### **5. Optimize paywall visibility and conversion** - **Step:** Value Capture - **Target metrics:** Trial Start Rate, Trial Conversion Rate, Install to Paid Conversion Rate, Subscription Plan Mix One of the most critical metrics consumer subscription apps must maximize is Paywall View Rate, the percentage of all users who view your paywall at least once. Ideally, you want Day 1 Paywall View Rate to be at or above 80%. In a podcast episode called [“A Systematic Approach to Paywall Optimization,”](https://open.spotify.com/episode/40RfZZ7ymvjJjNLX51tRzc) Superwall CEO [Jake Mor](https://www.linkedin.com/in/jake-mor-3b397392/) highlights the four most common places for consumer subscription apps to trigger their paywalls, which I’ve summarized below: ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/a9b3593d-98e8-49fd-a339-47703e82133b_1374x1022.png) The next step is to refine your paywall design to maximize conversion. The two most important variables are visuals and copy, in that order, since many users won’t read your entire paywall. #### **Specific tactics** - **Visuals** - Try using “feature cards” highlighting your best premium features with images. - Incorporate a high-production-value video recording of your app with overlays that highlight specific features to bring your premium value promise to life. - Use high-contrast colors for CTAs like “Start Trial” or “Subscribe” so they stand out. - If you have multiple subscription tiers, highlight the one you want users to purchase using colorful tags like “Best Deal,” “Most Popular,” or “Recommended.” - If you offer a free trial, use the [“Blinkist paywall”](https://growth.design/case-studies/trial-paywall-challenge) that shows users a clear timeline of when their trial will end and they will be charged. In this [podcast episode](https://open.spotify.com/episode/76PUXDldlJhxhAorm693fF), former Blinkist designer [Jaycee Day](https://www.linkedin.com/in/jayceeannday/) explains how this pattern boosted Blinkist’s trial start rate by 23%, cut cancellations by 4%, and increased subscriber conversion by 9%. - **Copy** - Ask users why they love your app in interviews, and incorporate their language. - Lead with an emotional appeal to excite users before asking them to subscribe. - Explain your premium features concisely to avoid overwhelming users. - If you offer annual and monthly subscription plans and the effective monthly price of your annual plan is cheaper, do the math for users with a direct comparison. - Be clear what you want users to do (start a free trial, buy a subscription, etc.). #### **Example: Calm** Calm takes a simple approach to its paywall, which makes sense because (1) most of Calm’s users convert through mobile (often at night through bleary eyes), so the company must optimize for small screens, and (2) Calm’s core value promise is helping people reduce stress and sleep better, so the last thing the company wants is to overwhelm users. It incorporates many of the tactics highlighted above: starting with an emotional appeal (“Find your Calm today”), following it up with a simple list of features with concise descriptions, emphasizing the annual plan with a yellow “Most Popular” tag, strikethrough pricing, a clear comparison of effective monthly prices for the annual vs. monthly plans, and a large, high-contrast “Subscribe” CTA button. For users who don’t convert to subscribers, Calm also periodically triggers additional paywalls on subsequent app opens and has a home screen widget offering an additional 7-day free trial. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/546edfd6-1b4c-4ffb-97cb-acd658a55d95_1600x888.png) ### **6. Distinguish and emphasize your premium value promise** - **Step:** Value Creation / Value Capture - **Target metrics:** Trial Start Rate, Trial Conversion Rate, Install to Paid Conversion Rate Consumer subscription apps need to make sure users are aware of their premium products and understand how they add significant incremental value. For freemium apps, this also means not giving away too much value for free and making it very clear to users why spending money on a subscription will make their experience meaningfully better. #### **Specific tactics** - **Premium feature badges:** Use specific colors and iconography to distinguish premium features and content. This boosts free-user awareness of premium experiences, makes paywalls less jarring, and reminds subscribers of all the extra value they are getting. - **Customized UI:** Change your app’s UI after a user starts a free trial and/or purchases a subscription. This makes free trial experiences more compelling, delights new subscribers at the point of purchase, and boosts virality by giving subscribers more content to share. - **Premium feature packaging:** Ensure that premium products have clear value promises that are distinguished from your free experience. If you offer multiple subscription tiers and/or in-app purchases (IAPs), make it clear how they enhance the product experience. #### **Example: Tinder** Over time, Tinder expanded from one to three subscription tiers, each with a clearly distinguished premium value promise. Tinder Plus gets subscribers more swipes on their profile, Tinder Gold helps subscribers get more successful matches, and Tinder Platinum lets subscribers message other users before matching. Tinder also offers IAPs like “Boosts” and “Super Likes” that create additional value for power users. The company has invested heavily in merchandising these premium products and making them visible to users. According to former CPO [Ravi Mehta](https://www.linkedin.com/in/ravimehta/), these investments drove hundreds of millions of dollars in incremental revenue for the business. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/c2ab5b25-b7bb-4b69-858c-c69a68f34789_1600x1083.png) ### **7. Improve subscriber retention by minimizing involuntary churn** - **Step:** Value Capture - **Target metrics:** Install to Paid Conversion Rate, Subscriber Retention Rates Sources like [Paddle](https://www.paddle.com/) and [Recurly](https://recurly.com/demo/recurly-subscription-billing-management-platform/?gad_source=1&gclid=CjwKCAjw8rW2BhAgEiwAoRO5rIrlllMNNszeRZ6EazTF33g30b3YS7Dv8sc_iETh_VKXClrct6WgihoCxTEQAvD_BwE) estimate that 20% to 40% (or more) of the churn problem that many consumer subscription businesses face can be attributed to involuntary churn, when subscribers lose access to a premium service without meaning to. The most common problem is payment failures arising from expired credit cards, insufficient funds, or issues with payment gateways. Other issues, like outdated payment information, technical problems, and processing errors, can also contribute to involuntary churn. Given how important subscriber retention is for the long-term viability of consumer subscription apps, minimizing involuntary churn is essential. #### **Specific tactics** - **Dunning:** One of the most common tactics for reducing involuntary churn is “dunning,” which refers to both retrying failed payment attempts and sending a series of escalating communications to customers with past-due payments. When executed well, dunning can help companies recover missed payments and maintain positive subscriber relationships. - **Supporting alternative payment methods (APMs):** A rapidly growing percentage of online payments come from APMs like PayPal, Apple Pay, Google Pay, and Amazon Pay. Supporting these APMs helps avoid involuntary churn by giving consumers more flexibility. - **Validating payment information:** Periodically checking in with subscribers to confirm they have updated and valid payment information can further reduce churn. - **Proactive renewal communications:** Sending subscribers emails or notifications when their subscriptions are about to renew can avoid payment failures before they happen. #### **Example: Spotify** According to [Owen Smith](https://www.linkedin.com/in/owentsmith/), VP of Audiobook Product at Spotify, who spent several years on subscriptions, Spotify has had a lot of success reducing involuntary subscriber churn by supporting local payment methods and proactively communicating with subscribers who experience payment failures. This is particularly important for an app like Spotify with many younger users, who tend to have higher involuntary churn rates both because of more frequent changes in payment methods and because of relatively low account balances. By giving subscribers who experience payment failures the benefit of the doubt and providing them with every opportunity to rectify the problem, Spotify not only builds trust with its customers but is also able to recover a lot of failed payments and improve long-term subscriber retention. In cases where the subscriber truly can’t pay, their premium subscription is turned off, but because Spotify has such a great free user experience, the company sees many of these churned subscribers reactivate down the line. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/ae1554c4-6349-48e0-aa69-a3f2540920c6_1600x881.png) ### **8. Leverage motivation tactics (e.g. streaks, badges, leaderboards, and notifications)** - **Step:** Value Creation - **Target metrics:** Subscriber Retention Rates Retention is one of the hardest metrics to move, which is why many growth teams don’t invest much time in it. However, it is also the foundation for any successful consumer subscription app. In [“How Duolingo reignited user growth,”](https://www.lennysnewsletter.com/p/how-duolingo-reignited-user-growth) former CPO [Jorge Mazal](https://www.linkedin.com/in/jorgemazal/) highlights how the company grew DAUs 4.5x from 2018 to 2022 by focusing on current user retention rate (CURR). Similarly, Flo CEO [Dmitry Gurski](https://www.linkedin.com/in/dmitrygurski/) has written about how the women’s health app gets over 50% of its MAUs and revenue from users who installed the app over a year ago. Clearly, retention is critical. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/921706b8-e31a-45f1-ba78-d8ff7f4fc1d2_1600x1148.png) While the best way to improve retention is by building a great product, growth teams can help by investing in motivation tactics to augment the core product experience. The key is understanding what motivates your users, and building experiences that tap into these underlying motivations. #### **Specific tactics** Users are motivated to use different products for different reasons. [Yu-kai Chou](https://www.linkedin.com/in/yukaichou/) created a tool called the [Octalysis Framework](https://yukaichou.com/gamification-examples/octalysis-complete-gamification-framework/)that identifies eight “core drives” of human motivation: - **Epic Meaning:** A drive to feel “chosen” for a purpose greater than oneself - **Accomplishment:** A drive to progress, develop skills, and overcome challenges - **Empowerment:** A drive to figure things out as part of a creative process - **Ownership:** A drive to own something and make it better - **Social Influence:** A drive to improve one’s social status - **Scarcity:** A drive to want something because you can’t have it - **Unpredictability:** A drive to find out what happens next if it is uncertain - **Avoidance:** A drive to avoid loss (time, money, status, relationships, etc.) At Quizlet, we ran a survey that identified Ownership, Accomplishment, and Scarcity as the three primary motivational drives for our users. This led to the launch of features like Study Streaks and Accomplishments, which drove significant improvements in both MAU engagement and retention. You can boost these metrics for your own consumer subscription app by identifying which drives motivate your users and building them into your product features and user communications. #### **Example: Duolingo** According to former VP of Marketing and Growth [Gina Gotthilf](https://www.linkedin.com/in/ginafrombrazil/), investing in features like streaks, badges, achievements, and leaderboards helped accelerate Duolingo’s DAU growth by tapping into user motivations to seek Accomplishment, Ownership, and Social Influence. These efforts have been reinforced by an ongoing commitment to aggressively test and optimize notifications as a means of reminding users about these features. Duolingo has also tapped into Avoidance, the motivation to avoid loss, to increase monetization through streak freezes and repairs and engagement through streak earn-back challenges that help users avoid losing their streaks. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/a1e606fc-b128-4aa3-bd27-3659169e7a31_1600x657.png) ### **9. Promote word of mouth to drive more organic user acquisition** - **Step:** Value Delivery - **Target metrics:** Cost per Install (CPI), Cost per Trial (CPT), Blended CAC per Subscriber While most consumer subscription apps depend on paid marketing to fuel their growth, several category-leading apps, like Tinder, Spotify, Duolingo, and Strava, have benefited significantly from organic user acquisition through word of mouth. Obviously certain apps have more inherent viral potential than others, but nearly every consumer subscription app can reduce its dependence on advertising and bring down Blended CAC by measuring virality and promoting word of mouth. #### **Specific tactics** The fastest way to gauge how likely users are to promote your app is [Net Promoter Score (NPS)](https://www.qualtrics.com/experience-management/customer/net-promoter-score/#:~:text=NPS%20stands%20for%20Net%20Promoter,of%20recommending%20a%20given%20business.). However, NPS doesn’t tell you how many users actually share your app, nor does it indicate how many of the people they share it with convert. The [Word of Mouth Coefficient (WoMCo)](https://yousuf.substack.com/p/how-to-systematically-measure-and), created and refined by [Yousuf Bhaijee](https://www.linkedin.com/in/yousufbhaijee/) at Zynga, goes beyond NPS by calculating the rate that existing active users generate new users through word of mouth. This helps you understand how much virality your app drives, how this varies seasonally, and how new features impact word of mouth. You can calculate your app’s WoMCo using this formula: ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/ff48147d-30c9-4a9d-9242-ad6922c2b882_1600x143.png) - **New WOM Users:** First-time users believed to be acquired via word of mouth (e.g. users acquired from social channels, referral programs, or branded SEO) - **Returning Users:** Existing active users of your app - **New Non-WOM Users:** First-time users who were not acquired via word of mouth (e.g. users acquired from paid ads or non-branded SEO) Once you understand how viral your app is and what drives this virality, you can design tactics to increase word of mouth, many of which are outlined in Lenny’s post on [“How to increase virality.”](https://www.lennysnewsletter.com/p/increasing-virality) #### **Example: Quizlet** When I was at Quizlet, we used WoMCo to estimate how many new users we were acquiring through word of mouth from existing users. Unsurprisingly, we found that WoMCo tended to dip during summer months and spike in August as students returned to school, as well as during exam periods. When the pandemic hit in March 2020, we initially saw WoMCo plummet as schools closed and went remote but then saw significant recovery as teachers and students turned to digital tools like Quizlet for remote learning. Based on this data, we developed various strategies to promote additional word of mouth, such as classroom management tools to encourage teachers to invite their students to Quizlet during back-to-school and updated versions of Quizlet’s classroom learning game called [Quizlet Live](https://quizlet.com/features/live) to support remote learning. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/83aa5b0b-3adc-4fd9-935a-37f05b0e00fc_1600x778.png) ### **10. Leverage strategic discounts and promotions** - **Step:** Value Capture - **Target metrics:** Trial Start Rate, Trial Conversion Rate, Install to Paid Conversion Rate Discounts and promotions allow companies to better align pricing with WTP, capturing consumer surplus in the process. They are particularly effective for digital subscription products that have little to no marginal cost to serve additional subscribers, because their cost structures allow them to maintain profitability even at much lower price points. The key is designing discounts and promotions that are highly targeted, so that they capture additional subscribers with lower WTP without cannibalizing revenue from subscribers with higher WTP. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/08891510-716e-4000-9b17-eee45c6f6bbf_1600x624.png) #### **Specific tactics** - **Activity-based discounts:** This usually takes the form of a discount for users who don’t convert into a trial within a certain time period. One popular tactic is sending new users who don’t subscribe within 24 to 48 hours an email with a one-time 15%-to-30% discount linked to a web-based checkout flow. By avoiding app store fees, companies remain net revenue neutral on these transactions while increasing trial start and conversion rates. - **Location-based discounts:** If your app operates internationally, implement geo-based pricing where users in countries with lower WTP have a lower subscription price. If you don’t want to go this far, you can offer temporary discounts to users in certain geos. - **Demographic-based discounts:** Offer discounted pricing to special groups of users, such as students (who often have lower WTP) or families (essentially a volume discount). However, be aware of restrictions against offering discounts on the basis of age, gender, race, religion, marital status, or disability, which is often illegal. - **Seasonal promotions:** In addition to Black Friday/Cyber Monday, offer discounts during holidays or other times of the year that are particularly relevant for your app. Examples include New Year’s promotions for Health & Fitness apps, which often make an outsize share of their revenue in January, and back-to-school promotions for Education apps. #### **Example: Flo** Flo incorporates clever tactics into its paywall that help align price with a user’s WTP. First, it provides a toggle that users can tap to enable a free 14-day trial. This means that users who are ready to pay for a subscription immediately can do so, but those who aren’t sure can give the app a try without any up-front commitment. But for users who reject the free-trial offer, Flo triggers a significant lifetime discount on its subscription presented as an expiring one-time offer. This is a perfect example of an activity-based discount. Since users who reject Flo’s free trial are signaling much lower intent, the company offers them a discount to better align its price with their WTP. However, the promotion only applies to Flo’s annual plan, which is much better for the business. ![Image from The Subscription Value Loop: A framework for growing consumer subscription](https://substack-post-media.s3.amazonaws.com/public/images/fe37569b-acd1-43c1-b85f-f5b38f8dd472_1600x696.png) ## Conclusion **Consumer subscription apps are hard to scale, but with the right growth strategies, they can be very successful.** I hope the tips I highlighted in this article help you beat the odds. By understanding the [Subscription Value Loop](https://philgcarter.substack.com/p/the-subscription-value-loop), using the [Subscription Value Loop Calculator](https://docs.google.com/spreadsheets/d/1KBclBYpQKV2TasNuZxfn3UdaOXTkLimCxWSauMGguW4/edit?gid=0#gid=0) to measure your company’s performance and identify improvement opportunities, and then leveraging the specific strategies and tactics I’ve outlined above, you can find ways to accelerate the growth of your own consumer subscription business. ## **📚 Further study** Other great resources for consumer subscription businesses: 1. [How to win in consumer subscription](https://www.lennysnewsletter.com/p/winning-at-consumer-subscription) 2. [Why Consumer Subscription Is So Hard, and What to Do About It](https://caseyaccidental.com/consumer-subscription) 3. [Lenny’s Podcast: How to grow a subscription business](https://open.spotify.com/episode/2cZovNhRNv0s3M7kW0arEL) 4. [The most important consumer subscription metrics to track](https://www.lennysnewsletter.com/p/the-most-important-consumer-subscription?nthPub=211) 5. [Easily Measure the Profitability of Your Consumer Subscription Business](https://techcrunch.com/2015/10/05/easily-measure-the-profitability-of-your-consumer-subscription-business/?guccounter=1) 6. [Consumer Subscription Benchmarks: Retention, Engagement, and Conversion Rates](https://medium.com/parsa-vc/consumer-subscription-kpi-benchmarks-retention-engagement-and-conversion-rates-9ac13b57c3d3) 7. [RevenueCat’s 2024 State of Subscription Apps Report](https://www.revenuecat.com/state-of-subscription-apps-2024/) 8. [GP Bullhound’s 2023 Consumer Subscription Software Report](https://www.gpbullhound.com/articles/consumer-subscription-software-2023-enhancing-everyday-life/) ### **Acknowledgments** Thank you to Matt Glotzbach and Nitin Gupta, who hired me at Quizlet and gave me the amazing opportunity to build Quizlet’s product growth team. Thanks also to Arjita Ghosh, Sal Bertucci, Mike Blau, Laura Oppenheimer, Cori Shearer, Gaelle Lauzier, Kara Hafez, Austin Bay, Ali Eslamifar, Vanessa Jespersen-Wheat, A.J. Ohiwerei, and everyone else who made Quizlet’s growth team “magic,” both while I was there and since I’ve left. You know who you are! Thanks to Brian Balfour for teaching me how to be a growth leader, both directly as a mentor and indirectly through Reforge. Thanks also to Casey Winters, Elena Verna, Yuriy Timen, Ravi Mehta, Adam Fishman, Ely Lerner, and the entire Reforge Partners network for all the support you gave me when I first launched my growth advising business last year. Your tips have been invaluable. Finally, a special shoutout to the current and former consumer subscription product, marketing, and growth leaders who made contributions to this article, including Mike Duboe (General Partner at Greylock), Gina Gotthilf (former VP of Marketing and Growth at Duolingo), Cem Kansu (VP of Product at Duolingo), Ravi Mehta (former CPO at Tinder), Arnaud Moline (VP of Product at Flo), Ozzie Osman (co-founder and CTO at Monarch Money), Parsa Saljoughian (VP of Strategic Finance at WHOOP), Ivan Selin (CPO at AllTrails), Ketty Slonimsky (Chief Growth Officer at Palta), Owen Smith (VP of Audiobook Product at Spotify), Martina Tam (former VP of Marketing at Masterclass), Jason van der Merwe (Director of Growth Engineering at Strava), Collin Walter (VP of Corporate Strategy at Oura), Dun Wang (former Chief Product and Growth Officer at Calm), and Brent Zajaczkowski (Senior Director of Product Growth at Noom). *Thank you, Phil! For more from Phil, check out his [website](https://www.philgcarter.com/) and [Reforge course](https://www.reforge.com/courses/consumer-subscription-growth/), subscribe to his [Substack](https://philgcarter.substack.com/), and follow him on [LinkedIn](https://www.linkedin.com/in/philgcarter/) and [X](https://x.com/philgcarter)!* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’m piloting a white-glove recruiting service for product roles, working with a few select companies at a time. If you’re hiring for senior product roles, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. Nobody gets your info until you allow them to, and you can leave anytime. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [44/61] How to communicate tradeoffs so leaders will listen We all know that sinking feeling you get when everything is on track, your team is humming—and then an exec drops a high-priority feature request on your team. How you handle that ask, and how well you’re able to articulate the tradeoffs required to take on this new work, is a PM superpower. It’s one that can save you and your team from unnecessary stress while helping you do what’s best for the company’s future. [Newsletter Fellow](https://www.lennysnewsletter.com/p/meet-your-lennys-newsletter-fellows) **[Tara Seshan](https://www.linkedin.com/in/tarstarr)** knows a thing or two about explaining tough choices to higher-ups. She spent seven years as an early PM and Business Lead at [Stripe](https://stripe.com/), was Head of Product for two years at [Watershed](https://watershed.com/), and founded a health-care startup as an early [Thiel Fellow](https://thielfellowship.org/). Below, she shares her hard-earned playbook for making tradeoffs crystal clear to even the busiest leaders. I wish I’d had this guide when I was a PM. *Tara is currently working on a new startup in the creative-tools space within [Sutter Hill Ventures](https://shv.com/), co-hosts a podcast called [The Red Queen](https://podcasts.apple.com/us/podcast/red-queen-podcast/id1744818916), and writes about the friction between our private and working selves at [Working Assumptions](https://worktopia.substack.com/). Follow her on [LinkedIn](https://www.linkedin.com/in/tarstarr) and [X](https://x.com/tarstarr).* ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/4b4e1be4-1b50-4b02-925b-f4640282990a_4000x2000.png) For years, communicating tradeoffs to senior leaders was one of my biggest challenges. While presenting the pros and cons between two priorities, I’d somehow always end up committing to doing *both*, and in less time than I had planned. As you’d expect, this usually went … badly. I’d burn myself out or, worse, burn out my team. But when I started managing, I finally understood why I had been so ineffective at it. Sitting on the other side of the table, I watched others make the same mistakes I had. I realized I hadn’t been framing tradeoffs correctly. For example, in an attempt to force a choice, I used to say things like: - *“We are thin on resources.”* - *“All of the engineers on the team are working on this other feature. Maybe we can sneak your thing in if they can do it in spare cycles.”* - *“I’m not sure if this is really high-priority.”* - *“I have many things higher in my stack rank [shows list].”* - *“Yes, we could deprioritize our new dashboard rehaul [or insert current project here]—what do you think?”* It turns out that statements like these are counterproductive. They actually *invite* leadership teams to avoid the choice you’re presenting. It’s clear to me now why the answer to my tradeoff presentations was always to “do both.” When I learned how to frame choices correctly, I was finally able to convince company leadership to make real, painful decisions. The first time I pushed a tradeoff using the techniques below, it was exhilarating! We only had to do the one most important thing! This led to many fewer late nights at the computer for me and my team, which made me a much more popular PM. These days, it’s a skill I apply in every tough product roadmap conversation. ## How to frame tradeoffs effectively ### **1. Repetition doesn’t spoil the prayer** If company leaders haven’t heard of or don’t care about your existing priorities, it’ll be inherently challenging to preserve them when an urgent request comes along. The more work that your team has done up front to bring leadership into the story of your priorities and strategy prior to this decision point, the less work your team will have to do when new requests come in. This involves a lot of repetition of your priorities, your projects, and your strategy (in that order). As Eric Schmidt, the former Google CEO, used to say, **“repetition doesn’t spoil the prayer.”** There are many ways to do this up-front planning and evangelism, but my favorite way is to create a public and ongoing stack rank (OSR) of projects: ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/8bd95e86-1e1d-4d6e-a588-e3b00d7102bc_1600x386.png) In your OSR, every discrete project is sequenced according to its priority, its resourcing, and its outcomes. It is complementary to your OKRs, which might be at a higher level and less numerous. With an OSR, it is clear when a specific project is “above” or “below” the resourcing cutline. [Here’s a template](https://docs.google.com/spreadsheets/d/1E_K0CIuREcBmKPHZbZ9-YKGOnVmurDdGC7NZv3bsCd0/edit?gid=1930726146#gid=1930726146) for an OSR (remixed from one created by my friend [Brie Wolfson](https://www.briewolfson.com/)). The OSR takes a common PM statement like “I don’t think this new request is a high priority” and puts it in the context of everything that *is* and *isn’t* a priority for your team. It changes the conversation with other teams from “Why can’t we do this one extra thing?” into “Do you agree that X is more important than Y?” I like to make the OSR document extremely accessible to everyone around the company. I present it at the smallest provocation. I always share it with the team during fortnightly GTM catch-ups, embed a slide version in executive presentations (right up front!), and email a set of short summary statements in our weekly team progress updates. I try to become the “repeater-in-chief,” as Jeff Bezos called himself. ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/98f53df9-e7c5-4981-b613-1c7f8a7234a4_1600x908.png) On one memorable occasion, I mapped the top 10 features on our OSR to the Billboard Top 10 and turned the features into specific song lyrics (“Metered billing-oh-na-na” to the tune of Camila Cabello’s “Havana,” anyone?). I will note that it was unbelievably cringe and that I still hate myself for doing this, but it was effective. Every single person on our broader cross-functional team remembered our 10 most important features. ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/0e3abcab-2428-43c0-b703-84daffad6f00_970x1014.png) ### **2. “Steelman the request” to find your blind spots** Imagine you’re in a big meeting with your company’s leadership team, arguing that the company should not do the new large user request. We should stick to existing roadmap item X, you say. But the CRO pipes up, “Wait. I just heard from the account manager that there are three other large customers who have this same request, and that it represents a meaningful percentage of our revenue expansion for the year.” “Ooh, those are great logos,” the CPO says. After some discussion, the group concludes that you should really do this new request—your case folds. And, of course, it’s expected that you should hit your team goals too. You trudge off to inform your team that you’re doing double the work. This hypothetical situation could’ve been avoided if you’d “steelmanned” the new request before the meeting. Steelmanning is a technique used in debate where you present the strongest possible version of your opponent’s argument before countering it. It makes you much more persuasive, and minimizes the chance that you get surprised by new information with the executive team. Because you’ve already thought through every angle, it positions you as the expert in the room and gives you the opportunity to explore counterarguments on your own terms. In order to steelman a request, you have to collaborate closely with the requester. Faire CPO Ami Vora, [in this clip from her podcast episode with Lenny](https://youtu.be/6UHAop9fhNU?si=GF3amwVxFLKxZqeo&t=595), suggests approaching requests with curiosity, and assuming the requester has insight and information that you do not have. It’s really hard to do this when you’re feeling defensive! In the moment, I remind myself that the most important first reaction is to pause, think, and then ask clarifying questions instead of reacting defensively. I might say something like “That’s interesting and new to me! Let’s find the customer call recording and then watch it together; I want to hear what you think.” If the communication is over email or chat, I’ve actually fed the email thread into ChatGPT[1](#footnote-1) and asked it to advise me as if it were my career coach. It does a surprisingly great job at helping me respond with curiosity. When you steelman a request, you’re not necessarily saying that the request is a good idea. Instead, you are saying that colleagues are smart and have information you do not. This technique helps you notice your blind spots, fill them in with research, and make a much more informed decision. And sometimes that decision is to do the request! An excellent example of this is from a [PM at Amazon](https://www.reddit.com/r/ProductManagement/comments/kwrtlz/a_product_lesson_when_i_got_a_from_jeff_bezos/) who once received the dreaded “?” email from Jeff Bezos, in reference to why screws were so hard to find in Amazon search. (Bezos was famous for forwarding customer requests sent to jeff@amazon.com with simply a “?” to the unsuspecting Amazon employee.) ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/60d66f9d-973c-4a37-8ee7-d3cb29851855_458x212.png) In this situation, most PMs would think, “How can I explain to the CEO why finding screws on Amazon.com is a low-priority, low-impact issue?” Instead, the PM steelmanned the request. He looked into the data and investigated the issue deeply, even though it seemed trivial. After he spent days digging into the data and talking to customers, he realized that the concern wasn’t just about screws. Screws were a representative problem. It turned out that *anything* on Amazon that was unbranded and “specification-driven” rather than “brand-driven” was very hard to find. Bezos’s instincts were right on this one, likely because he had expertise—or a very well-informed hunch—that the PM didn’t. By steelmanning the ask, the PM was able to discover a really important and widespread customer experience issue behind the seemingly trivial problem. Fixing this class of issue, rather than the specific issue of just screws, required a meaningful amount of engineering and product work. It likely derailed the existing roadmap to make that possible. But the PM now knew it was a problem worth solving. ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/d878db55-b789-4960-8800-51f6917d95f4_1600x589.png) ### **3. Company first, team second** Even though you really care about your team’s goals, leadership is always thinking about the company’s goals first. They will always respond better to a “company-first” framing of any decision. As a PM, you might assume that relating the tradeoff to your team goals would reassure leadership—after all, they might have explicitly approved of these goals during your planning season. But the company goals are more top-of-mind and important to them. Framing your tradeoff in terms of company goals means that they won’t have to do that same thing in their own heads. It reassures them that you’re making the best global prioritization decision for the company instead of a locally optimal decision for your team. And it means they’re more likely to side with your argument. When I was starting Stripe Billing, the subscriptions and invoicing product suite, it was hard to get my requests prioritized, no matter how well I argued my case. Stripe had been focused on global expansion. As a result, the payments leadership team would deny requests that distracted them from those goals. My team goals around adding subscriptions features weren’t going to directly and obviously support global expansion, so I was rejected in favor of other teams’ requests at every turn. At the time, I was incredibly frustrated. I had faithfully communicated my team goals and how these features achieved them, I thought. But I was completely missing the relationship between my team goals and the company goals in my communication. No wonder these teams didn’t think the tradeoff was worth it! Since my product really *did* help global expansion, I had to reframe and return in order to get the help my team needed. **Framing the decision in the context of company goals helps everyone in the room orient around what really matters.** And if you can show a more significant impact on the company goals than the alternative, it provides a very strong case for prioritizing your solution over others’. ### **4. Predict the future, just a little bit** Most incoming requests are framed in the context of a short-term goal. But as a leader on the product team, you should think long-term! Put on your fortune-teller hat and predict the future a little bit. If we decide to take this thing on now, what happens next quarter? Next year? What ongoing costs do we take on? What will happen to team morale if the team works nights and weekends for another quarter? Another two quarters? You should explicitly lay out these prioritization considerations to the leadership team. It’s doubly important to think this way while considering go-to-market requests. Revenue teams are often incentivized around a quarter, but product teams should think beyond that time period. Thinking and communicating about the long term will help you be more persuasive with leadership (who are usually desperately trying to balance “delivering quarterly results” with a big-picture vision). It can also help identify gaps in the plan that the revenue teams may have missed. When I was Head of Product at Watershed, which helps companies measure and report on their carbon emissions, a PM leader on my team named [Steve](https://www.linkedin.com/in/shind/) was frustrated that measuring a carbon footprint involved so much manual intervention. But the company wasn’t ready to solve that problem. Leadership was much more concerned with the upcoming seasonal demand surge. The default path to meet that customer need was to hire many analysts to manage the process manually, and have the engineering team build features to increase analyst efficacy. This approach was guaranteed to help the company meet the demand surge, but it would come at great cost to the long-term unit economics and product-building. Steve believed that we were making the wrong tradeoff, especially in light of technology developments in AI. Instead of accepting the company decision, he proposed a big intervention to automate Watershed’s measurement process. In the short term, this would potentially lower the quality bar of the user experience and impact analyst throughput. But in the long term, this reprioritization of efforts would be meaningfully better for the company. A more automated solution would dramatically lower marginal operating cost. It meant that the company would truly build toward becoming a software-driven solution, instead of a hybrid between software and services. To persuade leadership, Steve communicated two things: 1. A deeply detailed picture of what the 3- and 15-month outlook might look like if the company followed his automated-future vision 2. A roadmap of specific features that made the long-term path come alive, demonstrating how this path required a more minimal short-term tradeoff than everyone had assumed Steve’s argument was excellent because it soothed the leadership team’s core fear: that the upcoming demand surge would go badly if we didn’t take the manual approach. He was able to tell the leadership team, thanks to all his detailed work, that the tradeoff was less dramatic than they had assumed. He made it obvious that investing in “long-term automation” had just enough overlap with the short-term need to mitigate fears about the surge. Ultimately, company leadership decided to make the automation path the top companywide priority for the year. To put the cherry on top, Steve gave the new priority a catchy, memeable name (“Transform Measurement!”) that spread like wildfire throughout the organization. Next time you get a request to prioritize something that will hurt the company in the long term, challenge it! Leadership teams want to do the right long-term thing, but there might be a short-term-oriented fear holding them back. If you can lay out the long-term vision while striking at the core fear behind the short-term thinking, your vision becomes the obvious best choice. ### **5. Always communicate an opinionated decision** You have mastered the details, you’ve thought through the problem, and you’ve talked to a ton of stakeholders. But equally important is that you make an opinionated proposal for the solution. Teams often shy away from having a POV, deferring to leadership to choose between two unbiased options. But people forget that they have more context on the issue than anyone on the leadership team and are the best positioned to make a recommendation. Whenever possible, leadership actually prefers to endorse a team’s specific opinion. As a PM, you have ownership over execution, but you should also be invested in the decision itself. Presenting an opinionated decision can sometimes be tricky. In order to persuade leadership, I like to hammer home my point with a dedicated document and a meeting. I frame it using “[SCQA](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr)” to focus the discussion on the single request at hand. Here’s how I approach making a document like that: 1. As part of writing the document, I always put the decision right at the top—the “bottom line up front” (BLUF). 2. In the “Situation” section, I elaborate on the context of my roadmap and priorities. Make sure to frame the company priorities in this section and how they relate to my priorities. I highlight the part of the roadmap that is to be traded off against the new request. This should feel like common knowledge already, but remember, repetition doesn’t spoil the prayer! 3. In the “Complication” section of the document, I outline the request that my team received. I steelman the request and outline any data I might have collected. I use qualitative data heavily as part of my narrative because it makes the issue come alive for readers. I include any risks associated with not taking action. 4. In the “Question” section, I directly present the key decision as a succinct tradeoff to leadership: “We must choose between [X, new request] or [Y, existing item on OSR]. Should we do X or Y?” I then explain why it’s a tradeoff between those specific items. 5. In the final “Answer” section, I conclude with a more thorough explanation of my decision. I project the outcome of making this decision. I also try to answer any big open questions with a hypothesized outcome (indicating my level of certainty!). [Here’s a template](https://docs.google.com/document/d/e/2PACX-1vQDH0AX5FGuXrDLX3e7cT6KGo3dJAxm1IYFYRVs-MyCCqM6o1gC2EtqaVobaZ02CTuGxjm56IwHLXdt/pub) you can use for that tradeoff document, heavily based on SCQA. If I’m verbally discussing this document in a meeting, I’ll start the meeting with a quick orientation of why we’re there. Since I’m usually talking to busy executives who don’t do pre-reads, I’ll kick off with a silent reading period (about 8 minutes, depending on the length of the document). I’ll begin the discussion by restating my recommendation and outlining the decision-making period (“I’d like to gavel on this decision at the end of the meeting—the default is that we’ll move forward with this approach”) and then open the floor for new information. “Anything we didn’t account for in this document?” I might ask. If there is new data from the group, we’ll talk about it. Ideally, thanks to steelmanning the argument prior, there isn’t anything new! Three-quarters of the way through the meeting, I’ll know if it’s converging or diverging—that is, if it’s to end in a decision or if it will need further investigation. If the meeting went well, we’ll conclude with the decision and the next steps that I outlined. If the meeting introduces a lot of new information or seems like it isn’t driving consensus, I’ll try to flag that as soon as possible. I still try to end with some very specific actions, such as following up with the decision maker one-on-one, spending more time with the large customer in question to clarify the ask, and then coming back to the forum with an update. Of course, the only “bad” meeting in this context is one that ends *without* clear next steps and a timeline to get to a decision! ## Tradeoff traps Now that you’re armed with the tools to communicate tradeoffs and the terms of a decision, what could possibly go wrong? Unfortunately, there are a few tradeoff traps that are perfectly positioned to lure optimistic, productive, and structured product leaders. ### 1. The “peanut butter” trap Imagine an executive asks you to build this very exciting feature—it shouldn’t take the team more than a couple days to make, and it seems fun. You, brimming with optimism, add it to the list. However, even a small ask is never as small as you think it will be. And each request adds up. It’s easy to understand why the team wants to do these things: They bring delight to customers! Your team is staffed with optimists! But the insidious thing about these types of asks is that they aren’t quite big enough for you to say, “You need to pick between our top priority and this small ask” or “This small ask will delay our top priority by one quarter.” The team becomes “[peanut buttered](https://www.quora.com/Phrases-When-someone-says-dont-peanut-butter-it-do-it-with-excellence-what-does-that-mean)”—spread too thin—over a list of tiny requests. They find that their roadmap is suddenly made up of many cute features, leaving no capacity for the big and important work they need to do. By treating all of these small requests as real tradeoffs, you can keep the team on task. ### 2. The “just one more engineer” trap When Jeff Huber, a former Google SVP, asked the Google Video Product Lead if they should acquire YouTube, the product lead balked at the prospect. He said, basically, “I think we just need one more good Java/UI engineer and we’d be kicking butt vs. YouTube.” ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/6f3d414f-9782-436f-b87e-9d698c517f80_1216x1370.png) It’s funny to think about this request for one “Java/UI engineer” making Google Video competitive with YouTube, but this mindset is actually more common than you’d think. Every product team will always need “one more engineer.” However, adding more engineers to the team is not a good solution to a problem that requires a tradeoff. Productive team leaders often focus on adding more capacity in order to say yes to more requests. And while more capacity can indeed help teams do more, there is absolutely no amount of capacity that would eliminate the need to prioritize new requests. Planning will always scale to match capacity, and you’ll still always have more incoming requests than you can satisfy. Instead, you should prioritize requests based on their importance to the business first. Once you agree on priorities and tradeoffs, you should then ask for the capacity to execute on those specific priorities. A better answer with regard to YouTube might have been something like (based off [Chris Sacca’s response](https://x.com/sacca/status/1433946689061130243)[2](#footnote-2) here): > *“Positionally, Google is focused on trying to get all the world’s video on our platform, while YouTube is specifically focused on creating and hosting user-generated video content. Unlike YouTube, we, Google, have to play nice with the media and ISPs, while they’re making media companies mad by catering to users. The real question here isn’t about tech, or specific resources, it’s about position. We have a tradeoff to make: (1) we can buy them, once we have enough leverage to confront media companies directly, (2) we can take the same strategy, but we have to prepare the rest of Google for the fallout, or (3) we can pursue our existing strategy and lean into the advantages we have, like the recent deal we did at the Olympics in Torino. I think we should do 3. And if we do 3, we’re not staffed to do it well. I need [X] people to do it right.”* ### 3. The “but we have a framework” trap PMs love frameworks, which can indeed be helpful in making decisions. Frameworks help you order by relative priority, but you’ll still always be evaluating line items on the margin. Also, frameworks tend to be abstract. They can only be put into practice and adjusted through individual cases. Most importantly, business frameworks aren’t laws of physics. They may turn out to be wrong when new data comes to light. In the case of a contentious tradeoff, it can make sense to reference the existing framework as a start. But don’t stop there! Elaborate on the problem by raising details that don’t quite fit the framework. As part of steelmanning the argument, think about where the framework might be wrong. If it doesn’t make sense with new data, mention that and throw it out. A framework doesn’t excuse you from diving into the specifics on an important decision. ## **Trap examples** Now that we know the right way to communicate about priorities and understand what traps are out there, why were those initial examples wrong? Here’s my review. - *“We are thin on resources”*: This presents no options, with no context on existing priorities. The “just one more engineer” trap! - *“All of the engineers on the team are working on this other feature. Maybe we can sneak it in if they can do it in spare cycles”*: No options presented, and no context on the existing priorities. The peanut butter trap! - *“I’m not sure if this is really high-priority”*: It doesn’t provide details into what is a priority. The framework trap! - *“I have many things higher in my OSR”*: Closer, but doesn’t yet present a specific option of what might be cut. It’s the framework trap! - *“Yes, we could deprioritize our new list page”*: An option, but how is leadership supposed to know the value of the list page? Do they care? It’s the framework trap yet again! - “*No—to build the feature, which might help a sales demo with one big client, we’d have to push out support for single sign-on for enterprises for a quarter, which means these 10 clients won’t be onboarded in that time. I don’t think it’s worth it for the company; we won’t hit our usage and revenue goals*”: The exact right framing! A little OSR reference couldn’t hurt, but this is great. Ultimately, the best way to frame a tradeoff is to put yourself into the CEO role: If you were responsible for the overall success of the business over the long term, what would you want to know about a prioritization decision? What information or arguments would help you choose? Now jump back into your PM body and figure out how, when, and with what tools you can present that in a clear way to leadership. ## 📚 Further study - [Harrison Metal: Executive Communication](https://www.heavybit.com/library/video/executive-communication/) - [Lucy Spence: A Devilish Approach to Tradeoffs](https://www.youtube.com/watch?v=zNfoSKIobK8) *Thanks, Tara! For more from Tara, check out her newsletter, [Working Assumptions](https://worktopia.substack.com/), and follow her on [LinkedIn](https://www.linkedin.com/in/tarstarr) and [X](https://x.com/tarstarr).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 [1](#footnote-anchor-1) Prompt: Imagine you’re a highly competent and empathetic executive coach teaching me, Tara, how to be more curious instead of defensive. Await further instructions. Next prompt: Here is an email thread (attached) between me and our Head of Sales. How would you characterize the relationship? What can I do to make it more collaborative? Next: In reference to this specific request, I want to ensure that I have the most information to make the right decision instead of just agreeing to do what he asks. What’s the best way to elicit that information, if he’s reluctant to share it? Next: Now, help me edit my planned response to his request to be less defensive and to maximize curiosity. I want it to be informal and match the friendly tone of the emails. (Sometimes I’ll ask it to be “even more chill and friendly!”) [2](#footnote-anchor-2) Chris Sacca’s tweet, if you don’t follow him and thus can’t see it on X: ![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/075089a0-a070-4f43-bfe7-bc3034dcd101_1076x1892.png)![Image from How to communicate tradeoffs so leaders will listen](https://substack-post-media.s3.amazonaws.com/public/images/f7ba06f5-15c7-41ca-acfb-e17c4481329d_1046x1312.png) --- ## [45/61] Raising a seed round 101 > ## **Q: I’m a founder and I’m planning to raise a seed round. What do I need to understand to raise a great round?** Fundraising is arguably the most heartbreaking, confusing, and high-stakes part of a founder’s job. You have to learn how to do it from scratch, stay positive in spite of incessant rejection, and if you don’t get it right, your company dies. Then you have to do it over and over and over again. Don’t get it right once? That’s right, your company dies. Considering how essential getting this right is for most founders, it surprised me that I’d never come across a great, in-depth, practical how-to guide on raising a seed round—especially one written by people who’ve been through it hundreds of times. So I pulled in two of my favorite co-investors to write one: [Terrence Rohan](https://x.com/tmrohan) and [Jack Altman](https://x.com/jaltma). Terrence and Jack have been involved with over 1,000 seed rounds, and are my go-to people whenever I need fundraising advice. Below, you’ll learn: 1. **Should my company raise venture capital at all?** 2. **What do I need to prove to investors before I raise?** 3. **How much should I raise?** 4. **What should I know about seed round sizes and compositions?** 5. **How do I maximize the odds of raising a great seed round?** 6. **How do I talk terms in a seed raise?** 7. **How should I think about dilution?** 8. **How do I know if a fundraise is going well?** 9. **How do I choose the right investors?** 10. **Should I make an announcement?** To make this guide even more practical, they’ve integrated anecdotes and advice from the founders of some of today’s most iconic companies. If you’re planning to raise a seed round, this guide is for you. *Terrence is a seed investor building a new type of angel fund, [Otherwise](https://otherwisefund.com/). Previously he managed the seed practice at Index Ventures. He has supported companies like Figma, Notion, Vanta, Hugging Face, and Robinhood from their earliest stages. You can find him on [X](https://x.com/tmrohan), [LinkedIn](https://www.linkedin.com/in/terrencerohan/) and [trohan.com](https://trohan.com/).* *Jack is the founder of [Alt Capital](https://www.altcap.com/), a brand-new early-stage venture that raised its first $150 million fund in February. Before starting Alt, he was the founder and CEO of [Lattice](https://lattice.com/), where he currently serves as chairman. For more from Jack, [follow him on X](https://x.com/jaltma).* ![Image from Raising a seed round 101](https://substack-post-media.s3.amazonaws.com/public/images/42e59033-f889-41bb-a667-96a83caac2b8_4000x2000.png) We’ve watched this process play out from both the VC and founder sides. Collectively, we’ve seen over 1,000 seed fundraises—including tactics that work and tactics that are harmful. Although each situation is different, and there’s no one simple answer to these questions, our goal with this post is to help deepen founders’ understanding of the nuances of raising a seed round and help you take the right steps for your company. We reached out to some of our favorite founders to ask them for candid advice to supplement our own experience on both sides of early-stage pitches. Thank you to **[Christina Cacioppo](https://www.linkedin.com/in/ccacioppo)** (Vanta), **[Dylan Field](https://www.linkedin.com/in/dylanfield/)** (Figma), **[Eric Glyman](https://www.linkedin.com/in/eglyman/)** (Ramp), **[Ivan Zhao](https://www.linkedin.com/in/ivanhzhao/)** (Notion), **[Jason Fried](https://www.linkedin.com/in/jason-fried/)** (37signals/Basecamp), **[Josh Miller](https://www.linkedin.com/in/josh-miller-b31259106/)** (The Browser Company), **[Karri Saarinen](https://www.linkedin.com/in/karrisaarinen/)** (Linear), **[Mathilde Collin](https://www.linkedin.com/in/mathilde-collin-bb59492a/)** (Front), **[Max Mullen](https://www.linkedin.com/in/maxmullen/)** (Instacart), **[Tomer London](https://www.linkedin.com/in/tomerlondon/)** (Gusto), **[Qasar Younis](https://www.linkedin.com/in/qasar/)** (Applied Intuition), **[Siqi Chen](https://www.linkedin.com/in/siqic/)** (Runway), and **[Zach Perret](https://www.linkedin.com/in/zperret/)** (Plaid), who collectively have raised nearly $9 billion in venture capital. You’ll see insights from all of them incorporated throughout this guide. ### **Should my company raise venture capital at all?** Vanta founder Christina Cacioppo looks at it this way: “If you think you can build a business that makes hundreds of millions of dollars a year, you don’t mind ceding some decision-making to someone who doesn’t work at your company day-to-day, and you want to grow an organization faster than it would naturally grow,” then taking some venture might be the right decision for you. Seed capital has historically been the first formal round of venture capital (i.e. why it’s called a “seed” round). Smaller rounds are sometimes branded “pre-seed” or “angel” rounds, and larger ones are sometimes called “mango seed”—but all these fall under the umbrella of a seed round. A seed round typically entails raising $1 million to $4 million from a variety of investors and most likely doesn’t involve the creation of an outside board (we’ll break this down in more detail later). You should pursue raising a seed round if you have conviction on the following points: 1. **Scale:** You (and your co-founders) want to build a massive company, public or private, and aim to grow it as big as possible. 2. **Dilution (and control):** You are OK with selling off approximately 10% to 20% of your company to investors. (A VC board typically doesn’t happen at seed, but it could.) 3. **Funding:** You believe raising outside capital will have concrete upsides you couldn’t get with bootstrapping. For example, building an expensive product, outpacing competition, etc. If you answered no to any of these questions, seed capital might not be right for you, and that is OK. There are advantages to not raising (e.g. less dilution, more control, and fewer voices in the room). If you can manage it, there can also be benefits to delaying your seed fundraise. Jason Fried of 37signals advises, “Raising money too early teaches you how to spend rather than earn. When flush with cash, you’re encouraged to spend and raise more, practicing skills that won’t sustain your business long-term. Building a self-sustaining business requires practicing making money—a skill that, like playing an instrument, takes considerable time to master. The sooner you start practicing, the better. And there’s no better practice than having to make more than you spend right from the start, especially when it’s yours that you’re spending.” It’s worth noting that just because you raise a seed round doesn’t mean you need to raise tons more venture capital. VCs can commonly “over-prescribe” venture capital, both in terms of frequency and amount (if you are a hammer, everything is a nail). Just because you took a little doesn’t mean you’re obligated to take a lot. Related, it’s helpful to remember that focusing on the business and not on venture capital might be one of the strongest approaches to both. Ivan Zhao at Notion puts it this way: “You can decide your energy allocation between selling/socializing vs. building. At least for Notion, I believe if you built something great, the network will come and the investors will say yes. So we spent most of ours on the latter, as opposed to the tactics for the former.” ### **What do I need to prove to investors before I raise?** Every round of venture capital requires you to build a case to investors. For them to want to invest, they need to believe you are positioned to build an important and enduring business. Unfortunately, there isn’t consensus in the market for what that proof looks like or how far along you need to be in order to raise, and each investor has a different approach to picking their investments. Some founders raise a seed with a built product and paying customers; others simply have a deck and an idea. Generally speaking, before you raise, you should have taken the following steps: 1. **Proof of commitment:** You have left your old job and are fully committed to being a founder. You can’t expect to raise capital if you aren’t yet fully committed yourself. 2. **Proof of work:** You have done enough customer development and research on the problem to give yourself total conviction in the opportunity. Tomer London from Gusto puts it this way: “Validate the customer’s needs and your unique product insight. Speak with buyers (100+ in the consumer space, 30+ in SMB, 10+ in enterprise) to deeply understand their pain point, and offer them your solution in the most realistic way possible (a prototype is better than a pitch deck) and name a price. You’re looking for at least 40% of ‘wow!’ and ‘when can I get this?.’ Anything less is just people being nice to you.” 3. **Proof of insight:** You have some expression of your thesis. At the most, you have built a simple product and have some paying customers. At the least, you have a clear written memo and/or deck that outlines what you plan to build (more on this below). According to Ivan at Notion, “Notion was like a better mousetrap but built differently. (We wanted to decompose SaaS into software Lego blocks—text editor, databases, charts—and allow end users to create their own tools with our Legos. The value prop is to reduce their tool fragmentations and give them new power.) We knew, or at least we had the conviction, that if we build it, people will come. That first-principle conviction turned out to be true. It is also why we started the company in the first place.” Importantly, your own conviction across all three of these points might be the single most predictive variable in raising capital. If you truly believe in the opportunity, you will likely be able to convince someone to give you money. ### **How much should I raise?** A simple formula is to aim for *a 24- to 36-month runway, building in a 25% buffer*. Why 24 to 36 months? Generally, this is the right amount of time because it tends to be about how long it takes to hit product-market fit (and ideally become default alive) and/or raise a series A. As one data point, Carta has the median time from seed to Series A as 23 months. You also probably want a 25% buffer because unexpected things always happen. [Here’s a simple spreadsheet](https://docs.google.com/spreadsheets/d/1LIU-gXocWcKD5pCNXzFhL5TmKkbt3eUsFD7nA21AIS4/edit?gid=0#gid=0) illustrating how to model this out. Most seed rounds now are around $2M to $4M. Some companies require much less or much more to get going, so think carefully and use your judgment. As of today, a typical post-money valuation will be around $20M (in the San Francisco Bay Area). It is typical to sell around 15% equity in a seed round. If you want to raise $2M to 3M, it’s also better to say you are raising $2M than to say you are raising $3M. It’s always better to be oversubscribed than fail to reach your target. Here is a table outlining common dilution scenarios from a seed round. ![Image from Raising a seed round 101](https://substack-post-media.s3.amazonaws.com/public/images/6b0e961d-092c-47d7-bbc1-bd225a2d7775_1716x688.png) It’s worth remembering that when you take the venture path, outcomes tend to be sufficiently binary so that if you are the founder of a successful startup, you will end up with life-changing money regardless of the dilution you took. Taking on too little funding can limit your company’s performance, but taking on too much can have its own downsides. Too much capital, especially too early, can reduce urgency and innovation, and contribute to unnecessarily high headcount and burn. There are exceptions to every rule, but generally, if you raised 2 to 3x or more than a typical seed round for your category, you probably raised too much. According to Linear founder Karri Saarinen, “With each round, you want to think simultaneously that it is the last round you’ll ever raise—ideally you get to profitability and don’t need to raise— and that you’re raising enough to hit the milestones that you need to get to the next valuation range.” Creating a product customers love and pay for and keeping profitability as a plan B is more likely to maximize your company’s odds of survival as well as the odds of your raising your next round. “First and foremost, build a great business,” says Plaid founder Zach Perret. “Fundraising is easy if you identify a great market and find a unique customer insight, so do that first.” ### **What should I know about seed round sizes and compositions?** [AngelList](https://stack.angellist.com/valuations) and Carta have good third-party data on the latest round sizes and valuations. Most rounds are put together with at least one big check (seed fund or multi-stage firm) and any number of angels and smaller funds. The big check is typically referred to as the “lead investor,” and the smaller checks traditionally provide an entry point for strategic investors who bring signal value (e.g. Elad Gil) or specific skills to the table (e.g. growth, distribution, hiring). There is no universal “right” way to put together a seed round. You can do it with a single seed fund, a constellation of angels, with a multi-stage VC, and everything in between. Below are some examples: ![Image from Raising a seed round 101](https://substack-post-media.s3.amazonaws.com/public/images/751d82eb-d7e5-44ba-8276-f7321a14bf22_1720x476.png) Rising above the numbers, Dylan Field of Figma advises, “Treat this as the start of a very long-term relationship, not a one-off transaction or optimization puzzle. Find people you love spending time with and want to learn from over time.” Seed-stage venture capital comes primarily from three different types of investors: angels, seed funds, and multi-stage firms. - ***Angels*** typically move quickly and bring highly relevant startup expertise but usually can only invest small amounts of $10K to $250K. Although they typically have less time to commit than professional investors, they are often the highest help per dollar on your cap table. Notable angels can also carry high brand signals that bring crucial early validation to your company. - ***Seed funds*** are set up to bring more capital than angels, typically investing $1M to $3M. They offer stage-specific expertise and typically provide a lot of direct support to their investments. Many seed funds also provide access to valuable founder peer communities that unlock useful resources and networks. These firms are more resource-constrained than multi-stage firms, and can’t continue to provide meaningful capital over time. - ***Multi-stage firms*** can offer bigger checks, from $1M to $5M+, but usually aren’t structurally set up to support their seed investments as much as their venture or growth investments. These firms usually have massive pools of resources and can support your company with capital as you scale. The flip side is that if they don’t support a future round, that can send a negative signal about your company’s prospects. To find investors, we believe the most comprehensive third-party resource is [Crunchbase](https://www.crunchbase.com/). We recommend one of two approaches: 1. You can find companies analogous to your own and see which investors backed those companies at seed. For a B2B SaaS company, here is an example of [Lattice’s seed round](https://www.crunchbase.com/funding_round/lattice-2-seed--6c81b79e). 2. You can go to the “[search investors](https://www.crunchbase.com/discover/principal.investors/8671ace8e1179c82a313d6d4c9aaa316)” tab and run your own custom query. Here is a list of the [most active angels](https://www.crunchbase.com/discover/principal.investors/eedb05c2995f1ccb26233a5d711d34c6) in the U.S., for example. *As a sweet bonus, Crunchbase gave us an exclusive discount for readers of Lenny’s Newsletter: Get 20% off your first year of Crunchbase Pro with code LENNY20.* ### **How do I maximize the odds of raising a great seed round?** To maximize the odds of a successful raise, you need to choreograph your approach to maximize the number of potential options. Raising a seed round comes down to activating emotional triggers in prospective investors, including the fear of missing an incredible opportunity. The most surefire to get a yes from many investors is to get a yes from other investors. In short, **you have to create FOMO among investors**. Here’s how to do that: #### **1. Plan your raise** You probably double the odds of success if you spend some time planning your raise. Carve out a two- to three-week window on your calendar to run your fundraise and speak to investors. Ideally, you want to speak to as many investors as possible in the shortest period of time. This compression of time creates the conditions for desire and scarcity, which can help prompt an investor to a yes. [Here is a link to a sample timeline](https://docs.google.com/spreadsheets/d/1A2e-zsITHUn8uI6NNjrmIJJc3IwbenJZBznWZMdzVBM/edit?gid=0#gid=0) you can use to plan your raise. Related, there is a common question about whether to build relationships with investors when you are not raising. Relationship building with investors “off-cycle” is fine, but don’t let relationship building turn into a situation where the investors gain control of your fundraise. The main principle around planning is that *you* drive and architect the process. As such, if investors are talking about a pre-emptive term sheet, be thankful and gracious, but then confidently tell them when you are going to be raising—and say that is the time when you are accepting term sheets (notice the power flip). This will not “turn them off.” In fact, it will likely have the opposite effect. The reason you want to slot even “pre-emptive” offers into a larger process is to weigh all potential options and potentially have more leverage on terms. #### **2. Do your research on investors** Assemble your target list and research each investor before your pitch window. Have they invested in similar companies? (Check Crunchbase and their LinkedIn.) What’s their check size and investment philosophy, and do they lead? (Check their fund and personal website.) What do other founders think of them? (Ask for references from other founders.) [Here is a spreadsheet](https://docs.google.com/spreadsheets/d/15yGGkdONWkN5FMNpx1YQnNykw_DocRxe4VocuOu8z4A/edit?gid=0#gid=0) to help organize your outreach. But all seed investors are looking for large return multiples on any investment—typically over 100x—and evaluate based on the caliber of the team, the size of the market, and the strength of the early product. #### **3. Prepare (well-crafted) materials** A minimal deck and/or memo with a simple budget is all that you’ll need at this stage. You need to show there’s a real problem to solve, in a big enough market, and that you’re the one to solve it. That’s it. However, the *quality* of this content matters a lot. The better crafted the materials, the more persuasive they will be, and the more likely they will result in capital. You should have all your materials polished and ready to go before your pitch window, and you should be ready to tailor your pitch to each prospective investor. Sequoia has a great template [for a deck](https://www.slideshare.net/slideshow/sequoia-capital-pitchdecktemplate/46231251), as does [YC](https://www.ycombinator.com/library/2u-how-to-build-your-seed-round-pitch-deck). And Rippling wrote the gold standard for [a memo](https://www.rippling.com/blog/rippling-series-a-pitch-deck-and-memo). (But craft doesn’t have to mean visual finesse. It’s more important for the deck to be substantive than beautiful. Airbnb’s [seed deck](https://www.slideshare.net/slideshow/airbnb-first-pitch-deck-editable/45768374) is a good example.) Remember to strive for honesty, not just optimism. Tomer at Gusto says, “Show your honest assessment of your scorecard,” while Dylan of Figma advises, “Be honest about what you know and don’t know.” #### **4. Get powerful, warm intros** *Who* introduces you to prospective investors matters a lot more than you might think. Take the time to consider your most powerful connection to each investor before you ask for introductions. High-influence intros for prospective investors include: - Successful founders in the investors’ portfolios (regardless of investment) - Other successful founders or influential operators - Investors (angels, seed, or multi-stage) who *are investing* in your startup Naturally, the stronger the relationship, the more powerful the intro will be. There are also low-influence intros, such as investors who are *not investing* in your company (politely decline these, as they are a negative signal), and lawyers or other service providers (these are typically harmless but usually not very helpful). Here’s how Siqi Chen from Runway puts it: “The most important thing is to make sure your warm intro is from someone genuinely excited about you. When an investor knows someone they respect is putting their social capital on the line, you get to break through the noise.” If you can’t find a warm intro, craft a good cold email. These don’t convert as well, but there is almost zero downside to sending one. #### **5. Practice and prep your pitch** Your presence in a meeting matters even more than your materials. Showing up as the best version of your authentic, relaxed, and confident self is key. And that’s not something you can wing. Here’s what to do and know before you start speaking to investors: - Prepare your pitch by writing a memo. Even if you don’t share it with investors, writing a memo is a great start to sharpening your ideas and communication. - Practice your pitch a bunch of times before actually getting in front of an investor. Start real pitches with less important investors so you can iterate. - Investors tend to overweight answers to their questions when evaluating your pitch, so answer their questions calmly and succinctly. If you don’t know, simply say, “I don’t know, but I’ll get that answer for you.” Preparing an FAQ can help. - Acknowledge competitors factually, including their strengths. Then promptly move on to your strengths and your vision. Avoid disparaging competitors or spending too much time on them. #### **6. Start small to build social proof** You don’t need a lead investor to start taking on capital in a seed round. In fact, it is often better to open a [SAFE](https://www.ycombinator.com/documents) (simple agreement for future equity) at reasonable valuation and start collecting the checks of smaller angels while you are having conversations with larger funds. Not only will you be taking on capital, but you’ll build social proof for the larger investors. #### **7. Follow up sparingly with investors, and never chase or “back-channel” them without strength** Interested investors will typically drive the process (more on this below). If you do have to follow up over email, do it sparingly, and don’t chase investors in a needy way. In such follow-ups, always pepper in some positive development, whether in revenue, a new hire or feature release, or additional angels closed (see above). Related, having an angel or existing investor check in, chase, or pressure lead checks often backfires. Savvy VCs and lead investors will take this pressure as a sign of weakness. If there is any sort of “back channel” that works, it’s having angel or existing investors saying they “vouched” for the lead check, as a type of reference. With this, you flip the power dynamic. #### **8. For bigger checks, never reveal who else you are talking to** Mystery is always more seductive than the truth. Never reveal the actual names of who gave you a term sheet. Just accurately describe them in the abstract (and never lie). #### **9. You don’t have a term sheet until you have an** ***actual*** **term sheet** Verbal commits are not term sheets. In seed, a term sheet is commonly a SAFE with a post-money cap. You don’t actually have a commitment from an investor until you have a term sheet or a SAFE. This carries through to every round you raise. #### **10. Your round is not closed until it’s** ***closed*** While less common at seed, rounds are actually not closed until the funds wire. Set reasonable but quick dates for closes (wires). Keep everyone moving toward those dates. This carries through to every round you raise. ### **How do I talk terms in a seed raise?** The only terms that really matter at seed are the post-money valuation and whether there is a board. Post-money valuation is the value of the startup, including the capital raised. Third-party sources like [AngelList](https://www.angellist.com/blog/the-state-of-us-early-stage-venture-startups-3q23) or [Carta](https://carta.com/blog/seed-valuations-q2-2024/), fellow founders, and advisors can help you triangulate a good range for your valuation. When negotiating the post-money, it’s helpful to remember that investors are primarily solving for ownership (i.e. free percentage of the company they’ll own), which is slightly different than price. Most seed rounds are done on SAFEs, which have the benefit of speed because you don’t need to negotiate terms other than the valuation, and there are typically no lawyers involved. A minority of seed rounds are “priced,” meaning investors buy preferred shares immediately. Priced rounds take a little longer to close and cost more, but they make the cap table and dilution more clear for founders because there’s no contingency on the next round of financing. Creating a board with an outside investor is less common at seed. It is usually preferable to avoid giving up a board director seat at seed unless someone truly remarkable wants to join your board. Instead, offer a board observer seat when an investor asks for a director seat. Directors have voting power; observers do not. #### **A note about dilution** To be sure, you don’t want to put yourself in a position where the cap table inhibits your ability to run the company. However, the most important thing is that you get the capital and partners you need to get the company to its next milestones. “My top advice to founders is to try to optimize their rounds to get the most helpful investors involved early, and to worry less about optimizing the price and other terms of the round,” says Instacart founder Max Mullen. You can only raise a lot of money and take little dilution if you are in an unusual position of strength (i.e. multiple term sheets), which is rare. As a rule of thumb in the early stage, it’s ideal if you can get through your series A with *less* than 40% dilution from investors. You’ll also incur a typical 10% to 15% of additional dilution from your ESOP (employee stock ownership plan), bringing total dilution to 50% to 55%. Less dilution is obviously better, but the higher-order bit is that you get the capital you need from the partners you want. You can see more about the range of founder equity ownership at IPO [here](https://www.saastr.com/at-the-top-saas-companies-most-co-founders-are-not-equal-and-thats-ok/). ### **How do I know if a fundraise is going well?** In a successful fundraise, you can typically feel a pull from investors who are ready to move. They follow up quickly, they pursue you, they introduce you to their broader team. They’re typically transparent about the process. These investors tell you they want to get the deal done and start talking in specific numbers. Things move forward clearly and quickly. “When things are happening logically, that’s good,” says Applied Intuition founder Qasar Younis. “When things are confusing, that’s bad.” When this pull isn’t present, things are usually slow and confounding. There are no clear next steps after a meeting, no specifics discussed. If this is the case, don’t be afraid to ask directly: “Are you interested in investing?” It’s much better to get to a no quickly than to kill time with a prospect who doesn’t intend to act. But sometimes it takes a lot of pushing to get to that pull from investors. It’s OK to sell during this process. It’s OK to share genuine momentum with other prospects by factually describing them. For example, you could say, “We’re having a third meeting with a top multi-stage fund tomorrow” without revealing their names. But it’s not OK to overplay your hand. Don’t lie about having a term sheet you don’t have, or drop names of investors who haven’t actually committed. Besides being unethical, everyone talks, and it’s a fast way to kill a process. Prior to a fundraise, it’s also wise to plan some downside scenarios if things don’t go well. This could include the minimal viable capital needed, a path to profitability, or even downsizing plans. It’s best to map these out before raising—so you are not emotionally caught up in the disappointment of a less successful raise—and execute them with calm conviction. ### **How do I choose the right investors?** The right investors are the ones who can help you move your company forward the most. One thing that most founders we know agree on is that you should always vet your investors before taking a check. Ramp founder Eric Glyman’s advice: “Talk to other founders and ask them who has been most helpful to their business. Founders will quite often tell you the blunt truth.” Talking to other founders can help you determine if a prospective investor will add value or friction, and if they can be trusted. “Trust is key,” says Front founder Mathilde Collin. “You trust them, they trust you.” With seed, you aren’t just taking a check from these investors; you’re inviting them into your company for the long haul. Eric recommends trying out what it’s like to partner with an investor before signing the check: “Get a potential future investor’s perspective on your business and give them a feel of what it would be like to partner with you to solve actual business problems together.” This approach may seem indirect, but it has the advantage of giving you a real sense of what it’s like to work with an investor. A good approach is to think about choosing investors like you’d think about hiring an employee who you can never fire. Don’t just accept a check from anyone. ### **I closed a seed round. Should I make an announcement?** Raising a round of funding is a significant inflection point for most early-stage companies. Announcing a seed round, particularly if there are notable investors, can help validate your company to potential customers and hires. It can also help boost your brand value and provide a positive signal that helps with later fundraising efforts. But a potential downside is that you could alert the competition. “The con of announcing right away is simple. It inspires VCs to fund similar things and inspires your competitors to raise,” says Applied Intuition’s Qasar, who delayed announcing his first three rounds by a year each. “The pro of announcing immediately is it helps credibility with customers and recruiting.” Josh Miller from The Browser Company advises founders to ask themselves, “What are the three biggest challenges for the company right now? If announcing the fundraise and the way you do it can help address one of them, do it,” he says. “If not, it’s a distraction.” ### **Closing thoughts** As you’ve gathered from this guide, there are things you can follow to increase your fundraising success, but your process and approach will ultimately be unique to your specific company and who you are as a founder. Having the right mix of early-stage investors can be a wonderful advantage as you build your company. Getting your seed round right can give you much more control over when, how much, and whose capital you take going forward. Ideally, it can also make the overall experience of building a company a bit more enjoyable. *Thanks, Terrence and Jack! For more from Terrence, check him out on [X](https://x.com/tmrohan), [LinkedIn](https://www.linkedin.com/in/terrencerohan/) and [trohan.com](https://trohan.com/). For more from Jack, [follow him on X](https://x.com/jaltma).* *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/talent/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [46/61] Get Perplexity Pro free for 1 year **The Perplexity deal has been deprecated in favor of a much better deal 👇** *If you have any questions, email support@lennyrachitsky.com.* --- ## [47/61] State of the product job market, part 2 Lots of questions came up after publishing [my last product jobs report](https://www.lennysnewsletter.com/p/new-data-on-the-product-job-market), so I’m back with a follow-up. This analysis is based on exclusive data from two companies that I’m partnering with: 1. **[TrueUp](https://www.trueup.io/)**, which tracks *new* *job* *openings* across all tech companies globally 2. **[Live Data Technologies](https://www.livedatatechnologies.com/)**, which tracks job changes (hires, departures, and promotions*)* across all companies in the U.S. Combining these two data sources reveals a whole new perspective on what’s really happening in the job market. #### Some of my biggest takeaways from this data: 1. There’s indeed a shift to hiring more senior PMs 2. Remote PM jobs are shrinking fast (down 35% from peak, and still shrinking) 3. More than one in five open PM roles is based in the San Francisco Bay Area (and still growing) 4. Bengaluru, India, is now the most popular location outside the U.S. for PM roles 5. The three most common hard skills that hiring managers are looking for from PMs are SQL, Jira, and experience with LLMs 6. The fastest-shrinking roles right now are diversity and scrum masters 7. Machine-learning engineers and data engineers are the most in-demand tech functions right now Loads more surprises and insights in the data below. I’m going to continue working with these companies to track job market data and share regular updates on what’s changing in the product hiring market every few months or so. If there’s any data or questions you want us to dig into, please let me know in the comments. *Big thank-you to [Amit Taylor](https://www.linkedin.com/in/amittaylor/) from [TrueUp](https://www.trueup.io/) and [Jason Saltzman](https://www.linkedin.com/in/jason-salt/) from [Live Data Technologies](https://www.linkedin.com/in/jason-salt/). To learn more about TrueUp, check out [this custom one-stop page](https://trueup.io/lenny) they made for me that includes every product and growth job at every top tech startup and big tech company (16,500 open roles). They scan every open job at every top tech company in real time and then use AI to categorize and tag each role. To learn more about Live Data Technologies, [check them out here](https://www.livedatatechnologies.com/). To collect their data, they use prompt engineering in major search engines (Google, Bing, Baidu, Yandex, etc.) to capture near-real-time data on employment changes in the U.S. Leveraging this publicly available information, they use a proprietary process to monitor the most up-to-date employment status for white-collar workers and millions of job changes monthly.* ## How’s the PM job market looking overall? ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/0657f3ee-8017-4452-88b7-8237fce3ad0d_1760x1712.png) We are in the middle of a slow recovery that started in Q1 of this year, and the recovery is holding steady. After a peak in early 2022 (with over 10,000 open roles) and a significant slowdown through 2023 (to about 4,000 open roles), there are currently 5,752 open product manager roles at tech companies globally. ## Has there been a shift to hiring more senior product roles? Indeed there has. But, the shift isn’t huge. Below are two charts showing roles by PM level at tech companies globally. The first chart shows the proportion of open jobs by level over time, and the second chart shows the absolute number of open jobs by level. The data shows that, yes, new Senior and above PM roles do appear to be growing at a faster rate than other levels. If you look at the light blue and dark blue segments below (i.e. **Senior** and **Lead/Senior++** roles), you can see they have definitely grown from early 2023 in the percentage of PMs being hired. In particular, **Lead/Senior++** roles are growing their percentage of open roles the fastest. And the share of **Entry/Mid-level roles** (the pink segment) has decreased the most since early 2023. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/3f6f7720-24cf-4dec-a65c-bc3b0635f914_1486x804.png) That being said, **Entry/Mid-level** make up over a third of open PM roles and are recovering at a rate similar to Senior roles. So there are still plenty of opportunities for early-career PMs. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/e45a1b59-d487-4ca4-b11d-d698a06e4724_1488x836.png) Drilling into the down-leveling question, here’s an amazing chart from Live Data Technologies showing **the number of hires who went down a level in their new job**. This down-leveling spiked in early 2022 and is now at nearly the lowest levels since 2019. That’s great news. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/545a19b2-bcbd-41c2-8ad3-60705b27d400_1588x1150.png) ## Which companies are hiring PMs most? If you’re currently looking for a job, here’s the latest data on which tech companies have the most open PM roles: ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/a5e5310a-0819-49c1-a16d-8181a93f8eaa_1760x3104.png) Here’s a bonus chart that will blow your mind: the top places candidates are coming *from* when they are hired at one of the top companies hiring PMs. The left side of the chart includes the top five places people come from, meaning that many companies hire from business schools, but for Amazon, it’s their number one source of new hires. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/a883c707-3b9d-4393-ae40-eba6e52989e1_1184x1600.png) ## Which cities have the most open PM roles? The San Francisco Bay Area continues to be the leading location for open product jobs at tech companies (see below). Seattle (mostly Amazon and Microsoft roles) is at #2 and New York is #4. Interestingly, Bengaluru, India, is now the most popular location for PM jobs outside the U.S., and the fourth most popular location globally (not counting “remote”). ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/2f673843-2543-4f4a-a84b-eb8d4b02f75f_1760x1836.png) The San Francisco Bay Area is ascendant. In just the past two years, the share of open PM roles in the Bay Area went from 15.4% to over 20%—up 25% year over year! Over a fifth of all open PM roles at tech companies are in the Bay Area, and that share seems to be growing. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/1be75ef8-3ae1-4381-96f8-0527f397a1c7_1760x1724.png) ## What about remote product jobs? Over a fifth of open PM roles globally are OK with remote, but this number is quickly declining—from over 35% of open PM roles two years ago to 22.5% today—nearly a 35% drop. This will be an interesting metric to track. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/50cb2c6e-8494-48b6-acd9-3b9a4b6e2af6_1760x1724.png) ## What hard skills are most in demand for PMs? Here are the most mentioned skills, technologies, and products in PM job descriptions: ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/a738634b-a85e-453a-9009-d0442e0a3350_1120x858.png) SQL is (and continues to be) the most mentioned hard skill in PM job descriptions. Although it’s declining over time, it’s still far above any other term. [Here’s some advice on getting more technical](https://www.lennysnewsletter.com/i/41371152/learn-the-basics), including recommended SQL courses. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/914c2e9e-71df-4fb5-81ce-f3ffe2112a76_552x420.png) The fastest-growing term in PM job descriptions is, unsurprisingly, LLMs. [Here’s advice for getting better with LLM tools](https://www.lennysnewsletter.com/i/146639061/how-to-set-yourself-up-to-thrive-in-a-world-of-ai). ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/6efbb1cc-6464-4673-bae4-8eeb238d0bac_552x420.png) Jira is staying strong throughout the turbulence of the job market, but there does appear to be a decline recently. . . ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/3d53f046-451f-4485-b733-aa75b8fd2b27_552x420.png) Blockchain was an extremely common term in PM job descriptions in 2022 and is now fading—though not as quickly as you’d expect. The TrueUp team’s theory here is that 100% of web3/crypto companies mention this term, which increases the absolute number of mentions of the term in the data. However, the number of roles at web3/crypto companies is down 40% year over year. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/f7412f74-aca7-42bb-9e8a-4d8a22e43427_552x420.png) Other common technologies that companies are looking for PMs to have experience with: - AWS/Azure/Google Cloud - Python - Tableau - Salesforce ## Zooming out, which tech roles are growing fastest, and which slowest? ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/34d74a79-7589-4ba6-9845-00d3ed048d24_978x1147.png) It won’t surprise anyone that machine learning and data engineering roles are the fastest-growing in tech right now, growing 79% and 55% year over year, respectively. This is building on the growth of last year, when companies were already getting excited about AI, so there’s only increasing demand for these roles. The next-fastest-growing role right now is, interestingly, recruiters. This because the role essentially fell off a cliff in 2022 (-73%), and it’s nice to see it rebounding. However, it’s still down more than 48% from its peak. Two roles that are shrinking the fastest are diversity and scrum masters. There are only 70 open “diversity” roles in tech right now, and 74 scrum master jobs (not a single one at a FAANG). Other functions that are growing slowest at tech companies currently: - Design - User research - Security (surprisingly!) Here’s a fascinating look at how various HR roles have fared over the past five years. DEI is 📉, while planning and analytics is 📈. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/65317ca2-64c6-4cb9-8fe0-78312edaff5b_1588x1150.png) If you read [my previous post on the job market](https://www.lennysnewsletter.com/p/new-data-on-the-product-job-market), you may be wondering why in that post I showed growth, user research, and product owners as the fastest-growing roles, while here we’re not seeing that. The explanation is that in my previous post, we looked at roles across *all* companies hiring in the U.S. The findings I’m sharing here are narrowly focused on just tech companies. So what this tells us is that there is indeed an acceleration in these roles—just not at tech companies. Instead, companies like banks, telecoms, and packaged-goods companies are hiring for these roles. More on this below. ## What have layoffs looked like over the past year? The good news is that we are on pace to have 30% *fewer* people affected by layoffs in tech this year. So far in 2024, there have been 859 layoff events at tech companies, with 213,879 people impacted. Still not great, but a positive trend. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/9b3cb108-ed25-4e7c-be6e-13ba9c163929_1486x956.png) ## I want to work in AI—what roles are AI companies hiring for? AI companies are hiring like mad: ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/9c6d4840-d3eb-4be8-9528-3e7aefcb8850_1588x1150.png) However, they are almost exclusively hiring engineers and data scientists. Of the [16,935 job openings](https://trueup.io/ai) at the top AI companies (including AI teams at non-AI-first companies), most of the open roles are engineering and data science, followed by business ops and then sales. However, there are [456 AI PM openings](https://trueup.io/ai/product), so if you’re a PM, there’s a chance. ## Are there any emerging job types I should consider exploring? Two that I want to follow: 1. **AI product managers:** Of the 456 open AI PM roles mentioned above, 178 are at AI-first companies, and the remaining 278 roles are at tech companies that are not primarily AI-focused but have PM roles dedicated to AI projects. It’ll be interesting to see how quickly these PM roles grow. 2. **Prompt engineer:** This is still a relatively rare role, but I want to see if this becomes a thing or stays tiny. For now, here are a few open roles for prompt engineers: 1. [Amazon—Sr. Prompt Engineer](https://www.amazon.jobs/en/jobs/2724134/sr-prompt-engineer-selling-partner-protection-operations-sepo-product-team) 2. [TikTok—Product Operation Manager, AI Ops (Prompt Engineering Specialization)](https://careers.tiktok.com/position/7353507805650127154/detail) 3. [Klarity—GenAI Automation–Prompt Engineer](https://jobs.ashbyhq.com/klarity/9b1a72b6-285a-4e07-91bd-c5300d2e684f) ## What’s going on with the product owner role? Finally, in the last report, I shared that [product owners are the third-fastest-growing role in tech](https://www.lennysnewsletter.com/i/146638817/product-owners-are-owning-it). Digging further with this new data, there are two parts to the story: 1. POs are indeed growing quickly at non-tech companies (e.g. banks, telecoms) 2. POs are essentially irrelevant at tech companies. There are only 230 open product owner roles at tech companies, and not a single one at a FAANG company Out of curiosity, we dug into what roles POs come from, and most of them were previously business analysts, project managers, and . . . product managers. ![Image from State of the product job market, part 2](https://substack-post-media.s3.amazonaws.com/public/images/7ac02bee-3208-4ce0-968b-af87a3a33cb8_1588x1150.png) I’m super-excited to be bringing you this data, and I’m going to continue doing it. If there’s anything you’d love to see more of or less of, or to dig into further, please let me know in the comments 🙏 [Leave a comment](https://www.lennysnewsletter.com/p/state-of-the-product-job-market-part/comments) *Have a fulfilling and productive week 🙏* ## 👀 Hiring? Or looking for a new job? I’ve got a white-glove recruiting service for senior product roles, working with a few select companies at a time. If you’re hiring, apply below. [Apply to join](https://www.lennysjobs.com/) If you’re exploring new opportunities yourself, use the same button above to sign up. We’ll send over personalized opportunities from hand-selected companies if we think there’s a fit. **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [48/61] A PM’s guide to influence [Jules Walter](https://www.linkedin.com/in/juleswalter/)*—*an illustrious [Newsletter Fellow](https://www.lennysnewsletter.com/p/meet-your-lennys-newsletter-fellows) and the author of one of my most beloved guest posts, [How to develop product sense](https://www.lennysnewsletter.com/p/product-sense)—is known for his ability to align difficult stakeholders on the gnarliest projects in record time. He’s developed this skill over his more than 10 years leading products and teams at YouTube, Slack, and Google Gemini, as well as mentoring hundreds of PMs through the [Black Product Managers](https://www.blackproductmanagers.com/) network that he co-founded. Below, Jules demystifies what might be the central skill of great product managers: influence. ***[Jules Walter](https://www.linkedin.com/in/juleswalter/)** is a product leader at Google working on Gemini. Previously he was at YouTube, where he launched Primetime Channels with more than 40 streaming packages, such as NFL Sunday Ticket. Prior to Google, Jules spent four years as a product leader at Slack on their growth and monetization teams. While there, he was a key contributor to Slack’s 10x growth. Jules is passionate about building helpful products at scale and improving inclusion and diversity in the industry. He serves on the boards of [CodePath](https://www.codepath.org/) and [Black Product Managers](https://www.blackproductmanagers.com/), two organizations he co-founded to support underrepresented people in tech. He lives with his wife and two kids in Berkeley, California. Follow him on [LinkedIn](https://www.linkedin.com/in/juleswalter/) and [X](https://x.com/julesdwalt?lang=en).* ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/d08b4f27-2d97-4ec4-9ff4-167fa7c75b43_4000x2000.png) As a product manager, or basically any leader, your ability to influence others can move your career forward or keep you stuck. And even though it’s such a critical skill for PMs, there isn’t much practical advice on how to develop it. Through years of trial, error, and mentorship, I got better at influence—so much so that a respected Google leader once told me that I “bend people to alignment.” At Slack, I successfully navigated a significant and controversial shift in the company’s monetization strategy. Later, at Google, I negotiated across teams to overhaul YouTube’s infrastructure, design, and policies, enabling it to support high-profile TV content like NFL Sunday Ticket. My ability to influence people has impacted not just the projects I’ve landed but also my reputation and career trajectory. And as I’ve advanced in my career, influence has only become more essential. In this article, I’ll share five proven tactics I’ve used to drive alignment on complex initiatives at Slack, YouTube, and now Gemini, that you can leverage in your own work. ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/82442f37-40d4-485f-ad10-50a33c0c18c7_1600x527.png) ## **Tactic 1: Seek intel on how each stakeholder makes decisions** To effectively influence stakeholders, the first step is to understand how each person makes decisions––what they value (e.g. goals, incentives), who they consult, and what they’re afraid of. I usually start by setting up one-on-ones with key stakeholders (or people who know them), to understand their POV. At YouTube, I needed the leads of a critical partner team to prioritize a feature that would otherwise delay my project by at least a quarter. I set up one-on-one meetings with the PM and engineering leads on their team. I explained to them what my project was trying to achieve, but also, more importantly, I asked questions such as: 1. **What are the top goals and OKRs of your team?** (I’ll later need to show how my project might contribute to those goals.) 2. **What projects do you think will contribute the most to these goals?** (These are the top projects I’ll be competing against.) 3. **What’s your process for deciding what to take on each quarter?** (I want to understand the steps I’ll need to go through and key deadlines I shouldn’t miss.) 4. **Who are the key decision makers? What do they each care about? Who do they listen to?** (I need to know which stakeholders to focus on, in what order, and how to approach conversations with them.) 5. **What concerns do you anticipate them having about my project?** (Getting ahead of identifying detractors and their arguments.) 6. **How might I frame my project to increase the chances they support it?** (An ask for advice from people who know the stakeholders the most.) When having these early discussions, I first focus on establishing rapport. I convey that I’m seeking information at this point and not trying to convince them, because for people to share intel, they need to feel safe. They need to know that I’m here to listen, not argue with them, and that the info they share won’t be used against them at a later point. I start with statements like “This conversation is meant to be an informal chat. I’d like to better understand your world and get your advice as I’m looking to [explain my goals] and make things easier for everyone.” Another way I find intel on stakeholders, especially executives, is to pay attention to what they say in other meetings and forums. I keep a notes doc where I write down the questions execs ask and the feedback they give. This helps me identify their patterns and anticipate questions and reactions for future discussions when I need their support. Below is what a notes doc might look like. ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/1aba7481-cacc-4ef0-897e-4d2cbf31f8e0_1272x566.png) Based on the intel I gathered about the partner team at YouTube, I realized it wouldn’t be enough to emphasize how strategic my project was to the company. The partner team had a long backlog of requests from other teams that I was competing against, and they needed more confidence in my project’s expected impact on a particular metric they cared about. So I decided to walk key folks on that team through my project’s detailed forecast model to show that we would contribute meaningfully to their goals. I also recommended specific projects they could potentially *deprioritize*. This informed approach made it easier to influence that team, and they decided to support my team’s project, which allowed us to launch on time. This experience was a good reminder that I shouldn’t assume that others will agree that my project is a priority for the business—a tendency we PMs have—and instead be prepared to think through the right framing for my ask and provide impact assessments and other info that can help make tradeoff decisions compared with other projects. ## **Tactic 2: Frame your message from their POV (not yours)** “Negotiation is the art of letting the other side have your way.” —Chris Voss, author of *Never Split the Difference* Once I have intel on how stakeholders make decisions, I try to reframe my proposal from their perspective instead of from mine (which is our natural tendency). It’s often more effective to speak their language and demonstrate how my proposal will help them reach their goals, not mine, because stakeholders are focused on their own problems and are more receptive to proposals that address what’s already top of mind for them. A few years ago, when I was leading Monetization at Slack, we began to encounter diminishing returns in our product iterations, and we needed to take a bigger swing to re-ignite revenue growth. To do that, I spearheaded a controversial project to experiment with a new approach to free-to-paid conversion. The CEO, Stewart Butterfield, had strong reservations about the project. I knew from his previous statements that he didn’t want the company to be thinking about ways to extract value from users, but rather ways to *create* value for them. We had scheduled a review with the CEO and a few of his VPs to discuss the proposal. Since he was intensely user-driven, I framed the entire proposal around the benefits it would have for users (the CEO’s POV) rather than emphasizing the revenue impact of the project (our team’s goal). I started the meeting by anchoring the proposal on user-centric insights that we shared in a deck: - “About 10% of purchases of Slack’s paid version happen from users in their first day on Slack.” - “Paid users find more value and retain better. Yet we make it hard for people to discover that Slack has a paid version that’s more helpful.” - “How do we help new teams experience the full version of Slack from the start?” Once we framed the issue with this user-centric lens, the CEO was more open to our proposal and let us try a couple of experiments in this new direction. This user-centric framing also got the cross-functional team more excited and set an aspirational North Star with clear guardrails, which then enabled various teammates to contribute productively to the project. After we tested two iterations of our monetization experiment, we landed on a version that resulted in a significant increase in revenue for Slack (a 20% increase in teams paying for Slack) and we used what we learned to shift Slack’s monetization strategy into a new, more successful direction. ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/d52fb8cb-6c79-47c8-b9a1-0dfc5494db2c_1600x1101.png) ## **Tactic 3: Prime detractors and champions alike in the “meeting before the meeting”** Imagine you have a controversial exec meeting coming up. You know that some people in the room are against aspects of your proposal and others have their own reasons for supporting it. If your plan is to just show up and hope the meeting goes well in full view of key decision makers, then you have a high risk of not getting the outcome you want. Instead, I prepare key attendees before the meeting, because my goal is to walk into the room with a coalition of supporters. I do this with both detractors and champions. I see myself as the conductor continuously moving people closer to alignment, even before the decision-making moment happens. First, I focus on the detractors. If possible, I meet with them ahead of time to deeply understand their concerns and POV. Sometimes I might be able to address those concerns and get them on my side before the meeting. Other times, they might still remain detractors, in which case I can steelman their argument, i.e. identify the strongest possible version of it (see Tara Seshan’s post on [How to communicate tradeoffs so leaders will listen](https://www.lennysnewsletter.com/p/how-to-communicate-tradeoffs-so-leaders)), and use that to come up with a rebuttal. Here are sample questions I might ask a detractor: - *“I want to make sure I fully understand your concerns about my proposal. Can you walk me through them?”* - *“Are you most concerned about [part A] or [part B]?” (e.g. “Is the issue that this is too much engineering effort or that it’s the wrong strategy?” to disambiguate what exactly they’re concerned about)* Once I understand key arguments from detractors, then I can think through the champions whose support will help the most. I try to meet with champions and ask questions such as: - *“Are you supportive of my proposal? Any lingering concerns?”* - *“I’m worried that [person X] might bring [argument Y]. Any chance you could chime in during the upcoming meeting or pre-brief [decision maker Y]?”* When I joined Google, one of my first projects was to write a strategy for a zero-to-one project. The strategy would be discussed at a summit with YouTube execs alongside strategies from various teams across YouTube. In the weeks leading up to the summit, we set up more than 14 meetings with key stakeholders to walk them through our draft and hear their concerns and elicit their support. We identified champions and were able to convert some detractors into supporters, especially when they felt that we incorporated their feedback into the strategy. Our plan was voted top 3 across all of YouTube, and our project was granted significant funding as a result. The work we did to prepare key attendees prior to the meeting played a big role in getting to those outcomes. ## **Tactic 4: Make people feel heard and validated** Managing emotions in the meeting is another critical aspect to driving alignment. People often won’t listen to you until they feel that you’ve fully heard *them*. When people don’t think you deeply understand their POV, they often become obsessed with repeating their points more forcefully instead of hearing yours. That’s because psychologically, people who feel dismissed or misunderstood are likely to go into a stress response state (fight, flight, freeze, or fawn) and become more defensive. They are also less likely to let you influence them if they feel you’re not willing to let them influence *you* (e.g. to listen to their POV). People want reciprocity. The most common way I try to make people feel heard is by playing back their statements in my own words, especially when they raise concerns. I use statements such as: ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/70a2cbd8-3db8-4093-89e9-3a35798be2e7_1600x452.png) I seek various points in meetings to synthesize the conversation to make various people feel heard and to ensure that everyone is following along and on the same page. I can surface any misunderstandings quickly and bring people back to the crux of the issue so we can make progress. This also helps me secure progressive alignment, which de-risks the decision-making process. Instead of waiting until the end of the meeting to confirm full alignment, during the meeting I might say something like this: ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/2050f88c-49aa-4d04-bdff-f14ac19f061f_1600x823.png) When Slack’s CEO had concerns about my team’s proposal to drive self-serve revenue growth, we made sure he felt heard by acknowledging his feedback through statements along the lines of: ![Image from A PM’s guide to influence](https://substack-post-media.s3.amazonaws.com/public/images/041bf471-0325-4b65-a2b0-e10644f42b7e_1600x827.png) ## **Tactic 5: Manage the clock** One of the most critical but also one of the trickiest elements of getting stakeholders to a decision is managing time in a decision meeting. I aim to be the conductor of the meeting, not one voice among many. Being in control of the clock allows me to ensure that all my points are clearly made and stakeholders feel comfortable making a decision. With senior executives, if you don’t exit the meeting with a decision, you sometimes might not be able to get ahold of them again for weeks or months. When I start a meeting, I explicitly state a concrete desired outcome up front, such as “Our goal today is to get approval on our go-to-market plan for our upcoming launch.” Having an explicit goal up front gives you more legitimacy later when you need to steer the conversation back to the decisions you need, if the discussion starts digressing. To help everyone follow along and ramp up on context quickly, I use straightforward and concise language (e.g. as if I’m talking to a teenager with no context in my area). To redirect or pause tangential conversations, I use statement such as: - “Thanks for bringing this up. I recommend we take that issue offline or come back to it after we get through the critical decisions for today, since we only have 5 minutes left.” - “Since we only have 8 minutes left, let’s jump to the discussion about [timely issue], which we need to resolve today to avoid delaying launch.” How I manage the clock changes based on audience and on the topic at hand. During reviews with Slack’s CEO, we would keep attendance as small as possible to enable a more candid conversation and faster decision-making. When presenting to him, I would skip through context slides and get to the crux of the discussion right away, because he processed info really quickly and wanted ample time to debate the proposal before making a decision. At Google, I’ve sometimes used a memo instead of a deck and asked execs to read it and add written questions in the first 10 minutes of the meeting. Then I synthesize and address those for the remaining 20 minutes of the meeting. Every situation is different, but I make sure to pay attention to the clock and plan how I’ll get a decision within the allotted time. ## **Practice your influencing skill** Mastering the art of influence is crucial for product managers, especially as you become more senior. To get better at it, look for opportunities to practice the tactics we’ve discussed: seeking intel, framing your message from the perspective of decision makers, prepping champions and detractors before the meeting, ensuring that people feel heard, and managing the clock effectively. If some of these tactics feel daunting or outside your comfort zone, find a low-stakes situation to practice them and get feedback from colleagues before trying them out in high-stakes situations later. These tactics have been game changers for me at Slack and at Google, and I hope they are helpful to you as well. ### 📚 Further study 1. [The Minto Pyramid Principle](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) (on communicating with executives) 2. [Pathwise Leadership](https://pathwiseleadership.com/about.html) (group coaching on influence in the workplace) 3. [Eigenquestions: The Art of Framing Problems](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems) 4. [How to communicate tradeoffs so leaders will listen](https://www.lennysnewsletter.com/p/how-to-communicate-tradeoffs-so-leaders) *Thanks, Jules! For more, follow him on [LinkedIn](https://www.linkedin.com/in/juleswalter/) and [X](https://x.com/julesdwalt).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Apply to join](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [49/61] Why cash is king Last month, I announced our inaugural Lenny’s Newsletter Compensation Survey, and the response was far beyond what I’d hoped for. Readers immediately jumped in to share raw numbers and what matters most to them when it comes to comp—and many told us things I didn’t anticipate. My aim with this survey series is to create a trusted compensation benchmark for tech roles, while also tracking changes in employee sentiment and priorities around comp. This first analysis focuses on the latter: a deep dive into what tech workers value most in compensation. With over 5,000 detailed responses, I haven’t seen another compensation survey reach this scale. To help me design and run this survey, I tapped my former colleague [Louise Beryl](https://www.linkedin.com/in/louise-beryl-13225833/), who recently helped lead the research team at Figma and, prior to that, was managing teams and doing research at Airbnb, Instagram, and Chegg. She’s my go-to advisor on all things surveys, and I’m thrilled to be collaborating on this work with her. Enjoy! ![Image from Why cash is king](https://substack-post-media.s3.amazonaws.com/public/images/8da1d451-f09e-4ace-b429-23d68b641407_4000x2000.png) When it comes to evaluating a compensation package, especially in the tech industry, everyone has their priorities. But what really matters to people today when they receive offers and try to negotiate? We analyzed just over 5,000 survey responses from this community (all subscribers of Lenny’s Newsletter, globally!) who are currently employed in full-time jobs (or have been in the past six months) and found clear—and surprising—trends that reveal what truly matters in compensation in 2024.[1](#footnote-1) ## What matters most: salary, salary, salary When evaluating a job offer, the most common priority for tech and other professionals is clear: **salary**. A significant 75% of respondents selected salary over equity as their top priority during negotiations (n=5,035) [see pie chart below that shows the breakdown of equity vs. salary]. This was surprising, given that in the tech sector, FAANG (aka the Magnificent Seven) stock has historically been lucrative and startup equity has been seen as the path to life-changing wealth. Just 13% of respondents selected equity over salary, while 4% highlighted several other considerations beyond salary or equity (and 8% indicated that the question wasn’t applicable or preferred not to answer). We are also surprised by the strength and clarity of their preference and reasoning, given the diversity among respondent demographic profiles (in gender, geographic location, years of experience, and education level) and professional profiles (industry, company stage, functions).[2](#footnote-2) ![Image from Why cash is king](https://substack-post-media.s3.amazonaws.com/public/images/0cd9bbe2-8c2e-4ece-be8c-ffee76e2285f_3840x2160.png) So why did salary dominate this survey? Our takeaway from qualitative answers is that after Covid, years of inflation, and a potential recession, people are ultimately looking for stability. They need to meet the demands of life, and many have experienced setbacks that make them approach compensation offers more practically than we anticipated. ### **1. Salary = stability** **“Cash is king.”** This phrase was echoed repeatedly by respondents in explaining why salary was their main priority. The predictability and security of a stable paycheck are vital. “Salary is guaranteed. Equity is not. I need cash to pay the bills,” noted one IC engineer at a late-stage fintech startup. Even an executive in product at a series B company put it, “My base salary is what I use to live life, and bonus/equity/etc. are not guaranteed.” **High cost of living and family responsibilities demand cash flow.** For professionals living in high-cost-of-living (HCOL) areas, the importance of salary becomes even more pronounced. As an engineer at a series A startup succinctly put it, “Living in NYC is expensive af!” The need to cover daily expenses often outweighs the potential future gains of equity: “Equity doesn’t pay rent,” a PM at a series B startup explained. The immediate cash flow provided by a solid salary is crucial for these professionals as they navigate the high costs associated with tech hubs like San Francisco and New York. Life stage also plays a significant role in shaping compensation priorities. For those with families or major financial responsibilities, the need for a guaranteed income often takes precedence over potential future rewards. “I have a family to support, and cash in hand is, well, necessary,” a VP of growth shared, emphasizing the importance of a steady paycheck in managing household costs. A marketing C-suite executive at a bootstrapped company with 100-499 employees said, “I’ve got little kids and need to live in an HCOL for work. I understand the upside of working for equity in a growth-stage company (and have benefited from it), but it doesn’t pay the bills,” highlighting the financial pressures that come with balancing a tech career and family life in expensive cities. ### **2. Equity skepticism is real** Equity, once considered the golden ticket to long-term wealth in tech, is now viewed more cautiously. Many respondents noted that they have had experiences where equity did not yield the expected returns, leading them to prioritize salary as the safer, more reliable option. A veteran senior director of product with 10-15 years of industry experience reflected: “Never had equity turn into anything in the past but hopes and dreams.” The experience of financial downturns, layoffs, or startups with no liquidity events has led many to prioritize cash, which offers immediate value over future uncertainty. The sentiment that “equity is a lottery ticket” captures the general mistrust and preference for the immediate, tangible benefits of a strong base salary. “Equity is Monopoly money,” quipped a female VP/head of product at a series C startup in the U.S. ![Image from Why cash is king](https://substack-post-media.s3.amazonaws.com/public/images/dc338a2e-c5f3-4d77-bd1c-8b91d003d412_3246x2500.png) “Equity is Mickey Mouse money and can be an amazing upside in the long term, but we can’t count on it,” echoed a male VP/head of product at a series C startup working from Brazil. And there are some who have stronger opinions: “(Hot take) I believe equity is a scam to get early-career employees to work more for less. Even in the best-case scenario, an IC at a seed startup, [you] might exit with enough to buy a car but not enough to buy a house. The days of becoming a millionaire through equity are few and far between. With a higher salary invested over time, you’ll end up with the same amount,” said a female senior IC working from Canada for a series A startup. With past experiences of equity failing to deliver returns, some have become skeptical of its potential. Salary offers the reliability needed, particularly in an uncertain economic environment, where equity may be less likely to materialize into tangible benefits. **Is this equity skepticism a new trend?** Since this is the first time we ran this survey, we can’t definitively say. However, anecdotally, from our experience in the tech world in the past 10 to 15 years, this narrative feels markedly different from the wisdom we used to hear: “Be a missionary, not a mercenary. Maximize your chance for life-changing wealth and ask for more equity.” Perhaps those with more years of experience in the boom and bust of tech cycles can attest to whether the predominant sentiment is brand-new or just re-emerging. Nevertheless, one thing is for sure: in October 2024, people are craving the stability and predictability of liquid cash compensation. We will continue to follow this prevailing sentiment as we benchmark this data going forward. ## Who cares about equity? Based on logistic regression analyses, several factors emerge as predictors of equity preference. **Gender** has the strongest statistically significant impact on the likelihood of selecting equity over salary, with men **2.3 times** as likely to prefer equity compared with women. **Job level** also strongly influences equity preference, with senior executives and founders showing a higher preference for equity compared with people managers and ICs. In fact, for each increase in seniority level (from IC to people manager to executive), the likelihood of prioritizing equity over salary increases by **a factor of 2.0**. When considering **years of experience**, employees with more experience are more likely to prioritize equity over salary compared with those with less experience. Respondents in the higher-experience groups (4-9 years and 10 or more years) are **1.53 times** as likely to prefer equity compared with those in the lower-experience group (<4 years). **Geographic location** also has an impact: employees in the **U.S.** are **1.75 times** as likely to prioritize equity as those outside of it. Respondents from Canada, Germany, the U.K., and other non-U.S. countries are statistically significant predictors of a lower preference for equity, with the U.K. having the strongest negative effect (0.44 odds ratio). Also notable, respondents in the European Union are 42% less likely to prioritize equity compared with those in other regions. **Company stage** (publicly traded vs. privately owned) also plays a significant role, with employees at early-stage companies (from pre-seed through series D or later) **1.34 times** as likely to prioritize equity, while those at publicly traded or later-stage companies tend to prefer salary. And finally, **company size** is a statistically significant, albeit smaller, predictor of equity preference—as company size increases, the preference for equity slightly decreases (**odds ratio of 0.94**). Overall, the interplay between a person’s demographics, experience, location, and company profile significantly drive equity preference. ## Beyond salary and equity: reminders of what else matters ![Image from Why cash is king](https://substack-post-media.s3.amazonaws.com/public/images/c31c39f0-a634-49bc-bf50-d34f8347ef3b_1296x1296.png) Although we asked respondents to primarily consider salary or equity as options, a few respondents (n=182) chose to write in their answer. These serve as a good reminder that there are other options to consider maximizing as part of a total compensation package. **Financial options** include sign-on bonuses, performance-based bonuses, and 401(k) or pension plans. Similarly, there are **benefits (i.e. non-financial levers)** to negotiate for, such as asking for more vacation days, certain work-life flexibility, or benefits like insurance or family planning. Moreover, some respondents called out the value of asking for things that help with **career growth**, including titles, mentoring opportunities, learning and development funds, and opportunities for early promotion. “I was hired a long time ago. What was important to me then, i.e. workplace growth [and] mentorship, did not have a monetary value. . . I prioritised growing my earning potential, as opposed to my compensation, at that point in time,” an executive in Australia noted, reflecting a long-term perspective that goes beyond immediate financial gain. Bottom line: It’s important to know what’s important to you, as well as what levers are available to pull to your advantage. ## Takeaway ### For job seekers: Is maximizing salary short-sighted? If you’re prioritizing salary over equity, you’re not alone—**75% of professionals do the same now, and for good reason**.With rising costs of living and past disappointments with equity, many value the stability and guaranteed cash that salary provides. But does this mean that you’re sacrificing future financial wealth? Not necessarily. While some may feel pressure to prioritize equity for potential long-term gains, salary can also serve as a key driver of financial growth. An engineering manager at a publicly traded company making $225K-$250K in the U.S. explained, “Bonuses were structured as percentages of base salary,” highlighting how a strong salary can amplify overall compensation through bonuses and raises. Salary often forms the foundation for other compensation components and can set a higher bar for your next role. So while maximizing salary may feel like a short-term move, it can actually support long-term financial success. By negotiating a strong base salary now, you’re setting yourself up for future opportunities—whether through bonuses, promotions, or increased leverage in your next negotiation. In other words, prioritizing salary doesn’t mean you’re missing out on long-term wealth. It can be a strategic way to build it. ### For founders: What would make a compelling offer? If you’re a founder trying to attract top talent, this data reveals that focusing solely on equity might not be enough. A stronger salary offer paired with meaningful equity can strike the right balance. Highlight how your company offers both **immediate financial stability through salary** and **long-term growth opportunities with equity**. Demonstrating a clear path to liquidity or how your company is positioned for success can also help turn equity into a more compelling part of your offer. Regardless of which side of the table you’re on, cash is clearly reclaiming its throne in 2024. Stability and security are at the forefront of most professionals’ minds, pushing salary to the top of the priority list. But the right balance of salary and equity can still create a compelling package for those seeking both immediate and long-term financial growth. Understanding what truly matters to today’s talent is essential for crafting offers that resonate. ## What comes next In our next newsletter post, we’re planning to dive deep into compensation numbers and touch on satisfaction levels and key negotiation levers that could boost your total compensation package. We’re hoping to have this out in the next few weeks. *Thank you to Jennier Sanders, Kate Rusk, and Matt Schulman for providing their wisdom and expertise on this topic and/or analysis, as well as respondents in New York and Austin, Texas, for providing early feedback on the survey.* — #### Respondent demographic and professional details - **Gender:** 64% male, 35% female, with 0.7% identifying as nonbinary or self-describing - **Geography:** 56% of respondents working within the U.S. and 44% of respondents outside of it (including 14% from the EU, 7% from the U.K., and 6% from Canada) - **Function:** 62% from product, 9% from engineering, and the rest spread across marketing, design, operations, and other functions - **Company stage:** 69% privately held vs. 28.5% publicly traded - **Company size:** 53% of respondents are at companies with fewer than 500 employees - **Industry:** 14% in fintech; 9% in health and biotech; 7% in social media, e-commerce, advertising, or martech; 5% in gaming, entertainment, and media tech; 5% in ed tech; 19% in other B2B, SaaS, or enterprise; and 41% spread across 34 other sectors - **Experience:** 26% having 3 years or less of experience, 28% between 4 and 6 years, and 26% with 10 or more years in their field - **Education:** 50% holding a college or university degree and 44% having pursued postgraduate education *Thanks, Louise! For more from Louise, follow her on [LinkedIn](https://www.linkedin.com/in/louise-beryl-13225833/).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 [1](#footnote-anchor-1) The results from this survey are primarily generalizable to this community of subscribers. However, given the sample size and the diverse distribution of representation across multiple parameters, these findings offer directional insights into broader trends within the tech sector and beyond. [2](#footnote-anchor-2) More details on respondent demographic and work profiles from this dataset are included at the end of this post. --- ## [50/61] Why no productivity hack will solve your overwhelm When I was working on a post about [productivity tactics](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually) (which went on to become one of my all-time most popular), I shared a draft with my Newsletter Fellow [Natalie Rothfels](https://www.linkedin.com/in/nrothfels). She is a former product leader and now a full-time exec coach, and I had a feeling she’d have thoughts. Boy did she: > “When people come to me with productivity questions, they can often recite many of the tactics you articulate, but they’re still unproductive, primarily because they are people-pleasing and have poor internal awareness of how much they can physically get done. It sends them into emotional overwhelm, which then sends them into internal shaming, which then is a huge, huge, huge blocker to any productivity.” I knew I needed to hear more. This post is Natalie’s answer to anyone who’s struggling to keep their head above water at work. It’s one of the most powerful posts I’ve published, and I truly encourage you to create space to read it. *[Natalie](https://www.linkedin.com/in/nrothfels) is an executive coach who works with co-founders and executive teams, helping them build interpersonal skills to become more effective leaders. She spent a decade as a product manager building educational tools at [Quizlet](https://quizlet.com/gb) and [Khan Academy](https://www.khanacademy.org/) and now helps leaders build their emotional intelligence, influence, relationships, and ability to navigate conflict. She is a certified Internal Family Systems practitioner and a facilitator for Stanford Graduate School of Business’s Interpersonal Dynamics course, aka “Touchy Feely.” She also recently launched [The Ripple Deck](https://rippledeck.com/), a facilitation tool for building connection. You can follow her on [LinkedIn](https://www.linkedin.com/in/nrothfels) and [X](https://x.com/natatouille).* ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/74fa8d2e-ac36-4227-9461-0f0585d3aaf3_4000x2000.png) My coaching clients usually come to me feeling stuck, burnt-out, and looking for productivity tricks. They are trying to strong-arm their way through overwhelm and exhaustion using coping mechanisms and tactics that were once effective but no longer are. So they bring their desperation to me, hoping for another framework for time management. But looking outside themselves to solve their overwhelm is a trap. Inner conflict is the major hidden driver of productivity and burnout issues at work—and the most common issue for the leaders I see. These folks are at a developmental edge. To get to the next level externally, they have to start by looking inside. As you turn your attention inward, you won’t find a singular *you* but instead many different parts that make up who you are. Some parts help you manage your time, and other parts help you lose track of time entirely; some think analytically, and others work intuitively and non-linearly; some strive for individual excellence, and others prioritize collaboration with your colleagues; some feel competent and confident, and others criticize you and tell you you’re not enough. ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/2bcc3617-c10d-45d7-83fd-1b440888fa98_2034x918.png) When these parts are especially loud or in conflict with each other, this is a predominant reason you find yourself stuck, procrastinating, overwhelmed, or burnt-out. This was exactly the case for Gustavo, a Director of Product who came to me saying, “I’m dropping balls left and right. I need help with time management and prioritization.” He could rattle off every productivity tool and how he was using them, but he was still ineffective at getting through his big weekly tasks. As we dug deeper, it became clear that one part of him (the same part that brought the topic to the coaching session) wanted better time management skills. But another part of him couldn’t fathom disappointing anyone and was busy building up an infinite, never-ending list of work by constantly saying yes. A third part of him was so ashamed of and exhausted by the constant battle between these two other parts that it was nudging Gustavo to give up on the job entirely and quit. Coaching Gustavo to [prioritize one big thing each day](https://www.lennysnewsletter.com/i/147172995/each-morning-write-down-just-things-you-have-to-accomplish-that-day) or [turn on DND mode](https://www.lennysnewsletter.com/i/147172995/keep-do-not-disturb-mode-on) at work did not solve his stuckness, because the core issue was not time management. It was an **internal conflict** that’s unsolvable by external productivity tools. What *did* work was helping him uncover and address his seemingly irreconcilable feelings, needs, and fears—the voices of his many different parts that were wreaking havoc on his productivity and mental health. If you relate to Gustavo, please know that it doesn’t have to be this way. [Internal Family Systems](https://ifs-institute.com/) (IFS) is a powerful method for uncovering and relating to different parts of ourselves (especially the ones in conflict with each other) and developing a more integrated, aligned, and collaborative self. Though developed in the context of personal therapy, it is a highly effective tool for navigating the workplace, too. Taking on a new project, negotiating your salary, handling a new promotion, delivering constructive feedback—these topics all tend to trigger inner conflict for most of us. IFS can help us turn toward that tension constructively so we can build the clarity and courage required for the next evolution of our professional development. That’s how it worked for Gustavo, who said: “I realized that it’s not about time management. The thing I’m actually working on is building my own tolerance of chaos at work. It’s about feeling less out of control and recognizing when I’m spiraling into unnecessary anxiety, so I can work with and comfort those parts of me. I think I was actually causing *more* chaos for myself and my team by sort of pretending that things weren’t chaotic and trying to keep it all together. Now I’m more focused on recognizing the chaos without it totally taking over the rest of my day.” In this piece, I’ll guide you through the same process I used with Gustavo to identify your parts and navigate the inner conflict that leaves you overwhelmed. You’ll learn how to notice and listen more effectively to the competing voices within you and then facilitate a more effective dialogue between different parts of you so you can break through stuckness, get on with your day, and learn to care for (rather than bully) yourself more in the process. ## A brief primer on Internal Family Systems Imagine you’re driving a bus. But it’s not just you in the vehicle—the bus is filled with different parts of yourself, each with its own perspective, needs, and fears. Some are shouting directions, others are arguing about the route, one is perfectly relaxed and chilled out, and a few are observing from the back, scared the chaos is never going to end. Frequently, one part runs up to grab the wheel and steer you in an unexpected direction. Soon, another part follows and shifts your course again. ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/051996d1-7035-4f80-9d0b-8b03db6d0de9_2048x788.png) This is the first key principle I want to highlight from the IFS model: **we all have many parts**.We are not just one monolithic self that’s the same in every context or has a fixed personality. If you listen to all the parts on the bus at once, it can sound like total mayhem and chaos. But when we take time to be with and listen to each part, one by one, we learn a second key principle of IFS: **all parts have positive intentions, hope, and wisdom for us** (including the parts that like to procrastinate or criticize us!). Let’s bring this to life with a personal example. As I sit down to draft this article, I’m aware of a variety of different parts on my bus. ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/d9106bb7-f35d-40f8-ac5c-330a5dbf83f3_2048x1258.png) **One part is hopeful and excited.** She takes the form of an inner cheerleader. I sense her in my torso nudging me forward with momentum. This part knows firsthand about the power of IFS and has seen hundreds of examples of it meaningfully impacting people’s sense of agency and fulfillment at work. This part hopes I can convey information well so that others may benefit from this powerful tool. Her motto is “LFG!” **One part wants the article to be perfect and artful.** This part is like an old-man librarian, fastidiously hovering above a desk. He is primarily concerned about quality and things being just right, and demands that I capture nuance well. His motto is “That’s not quite right.” This part keeps me working long and hard on the perfect sentence. **One part is nervous and anxious.** This part takes the form of a cricket, making loud noises and alerting me that something may go wrong, or that I won’t be effective at explaining this concept. It worries that I will fall flat, embarrass myself, or sound incompetent, so it ensures I do everything possible to avoid that. Its motto is “This is (going to be) bad.” **One part is concerned with having fun.** This part is kind of a hippie, and likes to frolic and play and not worry too much about work. Her intention is to ensure I don’t spend my entire life working tirelessly without enjoying myself, and has a motto of “Good enough!” (She’s often in conflict with the old-man librarian, which leaves me both paralyzed and overwhelmed.) **One part is focused, assessing and tracking.** This part sees the big picture and knows what’s missing, while also monitoring and assessing my progress at all times. His intention is to ensure the project gets done on time and to expectation, and his motto is “Let’s stay focused.” **One part is creative, and excellent at connecting dots.** This part reminds me of all the relevant examples that might be included in the piece and offers me lots of metaphors to try to convey the message more meaningfully. Her hope is that things *feel* right and coherent, and her motto is “Ooo, what about if [new idea here]?” As you can see, it’s quite loud in here! When I sit down to write, the biggest productivity battle is actually an inner conflict between the old-man librarian (who wants things to be perfect), the anxious one (who thinks I’m going to fail or embarrass myself), and the free-spirit hippie (who likes prioritizing play over work, so would rather I not write at all). Then there’s the one trying to keep me on track and noticing whenever I get even slightly behind schedule. These parts get *very* loud whenever I try something new or risky. The tension between these parts means that I spend a lot of time trying to write but instead end up procrastinating by doing unnecessary research, convincing myself I’m hungry, or opening up WhatsApp to chat with friends instead. This doesn’t feel good, and it doesn’t actually satisfy any of my parts. My ability to relate to them well (and integrate them rather than have them take over driving the bus) is the biggest determining factor of a productive writing day. This is a third key principle of IFS: **We all have a Self** that can help us relate to and integrate the various parts on the bus. Ideally, this wise inner Self is firmly in the driver’s seat most of the time. This is critically important. We move through inner conflict by effectively facilitating dialogue, which requires a calm, safe, and compassionate presence available to all of us. That’s where we’re headed in the rest of the article. Now that we’ve got a sense of some basic principles of parts, we can start to make progress on any inner conflict that’s leaving us stuck or overwhelmed. I know it can be hard to apply some of these concepts just from an article. To bring this process to life, Lenny and I recorded a small session to give you a sense of what the exploration can sound and feel like. I’ve included snippets of each step below, but know that getting through even just step 1 or 2 can provide great relief. First, let’s meet and get to know our parts. ## Step 1: Sense and name the competing parts Your parts are at play *all day*, so it doesn’t have to be a radical, huge conflict to recognize them more formally. Bring a challenge to mind and inquire how you’re feeling about it, and you’re likely to experience different parts of you reacting to that challenge. Here’s an example that will resonate with any startup operator: ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/9adc8145-9f8f-4db0-bc71-2073d80bf724_1634x2048.png) One part tries to help you focus on the big picture, and another part reminds you of all the small things you need to get to and the meeting you have in five minutes that you still haven’t prepared for. Observing this tension, a third part comes in and reminds you that you’re bad at getting stuff done and questions why it’s always so hard to be productive. The dialogue continues, and pretty soon the tension grows such that each part takes on an even more extreme version of their role. ![Image from Why no productivity hack will solve your overwhelm](https://substack-post-media.s3.amazonaws.com/public/images/7dbdb694-af4d-4bc3-8add-d7845e074960_1634x2048.png) Sound familiar? It’s common, it’s normal, and it’s exhausting. Every one of us has these internal dialogues, and they can get especially loud when we’re stressed, overwhelmed, or feeling any personal threat (aka: startups). I have clients visualize the conflict as one part on the bus grabbing the steering wheel and driving in one direction, only for a different part to grab the wheel moments later and take a completely different route. Back and forth, over and over again, and the bus goes nowhere. Acknowledging what parts are at play and naming the conflict alone can be transformative. When we see the tension clearly, that can sometimes be enough to dissipate it. This process of sensing your parts can be quite simple. Let’s look at how Lenny does it in this first clip. When imagining the upcoming [Lenny and Friends Summit](https://lennyssummit.com/), he quickly notices three different parts that show up in anticipation of the event. Here are some tools to sense your own parts: - Notice what’s happening in your body. Parts can reveal themselves as thoughts, images, words, visuals, sensations, and emotions. - Slow down so you can track what’s happening. Fast thinkers, especially, tend to go quickly over their own experience. Try to stay with it for a bit longer. - Imagine giving voice or a microphone to different sensations as you feel them. If this sensation had words, what would it say? - You might also ask yourself how you feel about a part that comes up. We’re looking for an open, compassionate heart. If you feel frustrated, annoyed, or judgmental . . . chances are you’ve found a different part that’s in some tension with the first. ## Step 2: Validate that each part of you is valuable and wise If you grew up in a house with siblings, you know that favoring one kid usually doesn’t end well. Yet most of us tend to favor one part of ourselves and shove the others to the side. That impulse is often driven by shame, guilt, or embarrassment. Gustavo wanted to see himself as someone who got stuff done, so he sided with the part of himself that confirmed that identity (the time management one) and pushed away any part of him that wanted to prioritize rest or work-life balance (like the exhausted one). He (really, another *part* of him) judged those parts as unproductive and shameful. But the parts that we judge, shame, or ignore actually tend to get *louder and more extreme* as we try to ignore them. The goal is to recognize each part as equally valuable, wise, and worthy of listening to. It’s a powerful healing experience to actually have our own experiences validated. This alone can create a shift and more ease without having to do or change anything. Once our parts feel heard, they are usually flexible and trusting of an adult in the room (you) to make decisions on their behalf. At this step, I tell my clients to bring the conflict to life using names or identities where resonant—as I did for the parts of me writing this post. For example: - “The ambitious part of me wants to take on more work. The balance part of me wants to prioritize rest and relaxation.” - “One part of me wants to make a strong and bold decision. Another part of me feels insecure about the decision and is scared I’m messing it up.” - “The warrior in me thinks I should give this feedback now while it’s fresh. The janitor in me doesn’t want to cause drama and experience discomfort so would rather sweep it under the rug.” Then notice if there’s one you favor, or one that usually “wins.” You can do this by imagining which voice on the bus is louder, or by having each part sit in your hand while you assess their relative weight. These are techniques for recognizing the polarization itself. What’s important is to *feel* it, rather than just intellectually understand it. In this next clip, watch how Lenny beautifully tracks the internal conflict as I mention there may be validity and wisdom to his fear. During this process, we’re shifting from a part that wants to fix and squash his fear to a more compassionate place of trying to validate and understand how the fear helps him. ## Step 3: Pull the bus over and listen When we work on inner conflict, the goal is not to override one side or let anyone “win” but instead to facilitate better ongoing internal collaboration so that they can work together on the same team. To do so, we need to listen to both sides. In IFS, we call this process “unblending.” In our bus metaphor, unblending is like saying, “Hey, part, I need you to step away from the steering wheel so we can pull the bus over and I can first understand where you want to go and why.” We do this with all parts involved in the internal conflict. I have my clients interview (not interrogate) the parts with an imaginary microphone and really get the full download. This can feel silly if you’ve never done it before, but it’s surprisingly powerful because many of these parts have never received undivided attention and curiosity. As you interview and listen to each part to understand its feelings, needs, and fears, it’s very common for another part on the bus to suddenly come in, grab the steering wheel and give you contrary evidence that proves, criticizes, or distracts. When this happens, imagine pulling the bus over again. We’re not driving anywhere else until we understand and listen to where everyone wants to go, but we have to do that one part a time. Interview as many of the parts as need to be heard in the inner conflict. These parts are trying to protect or serve you in some way—even your inner critic!—and your goal is to help them feel known and understood in their efforts. Often these parts will share fundamental concerns (even if they respond to those concerns in opposite ways). Let’s see how Lenny does this with the part of him that’s scared about the Summit, and the part that motivates and pumps him up to do a good job. You’ll notice how the different parts express themselves through Lenny’s body. The fear part is quieter and speaks more slowly (3:40). The excited part speaks fast and moves quickly and animates Lenny fully (8:50). The goal of this step is to really allow the parts to show you who they are and to feel understood by you. Here are some starter questions to begin the conversation with your parts: - How are you trying to help me? - What’s so important about that? - If you didn’t do that role, what are you worried about happening? Repeat back what you’re hearing and check to see if they feel heard, or if there’s something more, before moving on to the next part. - It sounds like your role is [x], and you feel like you have to do that in order for [y bad thing] to not happen. Is that right? - Is there more you want me to know? Here’s another real-life example to illustrate the end state of this step. My client Rebecca was offered a promotion to a COO role that she’d been working toward for years but was somehow paralyzed and unable to accept. As a new mom, she found herself strapped for time and wanting to prioritize different aspects of her life. We started to disambiguate the internal conflict and listen to the various parts involved in the decision. An ambitious part is really excited for the promotion. It sees the opportunity for growth, increased influence, and the chance to make a career-level impact. It worries that if she doesn’t take the role, there won’t be another obvious opportunity like this in the next several years unless she moves companies. A cautious and skeptical part is worried about the increased responsibility. It fears that she might not be ready for the role and could fail spectacularly, damaging her reputation and self-confidence. Rebecca had pushed this part away because it felt weak and shameful. A part that advocates for more balance in her life is concerned about the longer hours and increased stress that might come from the new position, especially as a new mom. A loyal part feels guilty for leaving her direct team and is worried they’ll feel disappointed by her decision if she accepts. Rebecca was familiar with this part but realized it wasn’t as loud or forceful as she had anticipated. Once Rebecca could see all the parts on the bus, that already unlocked a ton of emotional energy. There was so much going on inside her, no wonder she was stuck! It’s common at this point for people to want to fast-track to solutions, but the trick is to not try to resolve the conflict as a third party. Instead, Rebecca needed to create the environment for the parts to have a conversation with one another. ## Step 4: Facilitate internal dialogue and problem-solving Once the parts feel heard by you, have them speak to each other. Yes, we want to get unstuck, and this step of the process is about building internal relationships rather than enabling growing factions. Imagine them sitting on the same bus seat or in a circle, facing one another. Tell them the goals: you want them to understand where the other is coming from, and recognize the ways that they’re on the same team. The rules of the game are: no disrespecting each other, no debating who is right or wrong, no persuading of the truth. These parts often have black-and-white thinking and have never seen good examples of connection across differences. Here are some facilitation tips: - **Help the parts recognize shared goals or values.** In Rebecca’s case, all parts want her to feel successful and fulfilled in her career. - **Encourage non-zero-sum problem-solving.** Invite them to collaborate on solutions that address multiple concerns. For instance, Rebecca’s parts thought about negotiating a phased transition into the COO role, allowing her to gradually increase her responsibilities while ensuring that her current team felt well supported. - **Practice self-compassion.** Don’t beat yourself up about the conflict. All the parts of yourself are super-smart and, when given space, come up with creative ways to support each other, so you don’t need to force solutions. Again, the goal here isn’t to silence any part or to force a compromise. Instead, it’s to create an internal environment where all parts feel heard and valued, and where they can work together toward common goals. In this clip, I ask Lenny to begin to facilitate this internal dialogue by having each part hear the other. Even in just a few moments, you can get glimmers that both parts are invested in the Summit being very high-quality (even though they ensure that in completely different ways). ## Step 5: Decide on and commit to the destination and the route Often, steps 1 through 4 are enough to provide clarity or relief. Sometimes, though, inner conflict shows when there’s an important decision or commitment to make. In those cases, the goal is to incorporate the wisdom of all the parts rather than ignoring or overriding some voices. This is no different than effectively leading an *external* team at work through a decision. Gather input from all the stakeholders (your parts), synthesize them from a place of clarity, make the call, and then inform everyone about the decision. In this last clip, you’ll notice Lenny beginning to integrate the needs of the fearful part into his plans for the Summit. Notice the specificity of its requests, which are simple, clear, and totally reasonable. If we invalidate or avoid the fear, we also miss out on the gifts and wisdom that part brings us. To do this yourself: - Imagine the different parts of you sitting around a table. One by one, ask each part: “What do you need from me or any of these other parts in order to make decision [x]?” - Once you’ve gathered the data and heard from all parts, make a decision. You already know how to do this if you’re a product manager. Gather input, and then make a call. - Follow up with your parts on the decision. Some parts of you may not be happy with your decision and may feel betrayed, anxious, or even angry. It can help to clarify how you made the decision and why you made it. Again, this is just like working with an external team at work: don’t burn people by asking for input and then never following up about your decision. Don’t do that with your internal team either. Here’s how this looked for Rebecca. She realized that she could accept the promotion while also negotiating for support in areas where she felt less confident. She committed to maintaining her existing boundaries to protect time with her new baby and created a transition plan to ensure that her current team felt well supported. Rather than framing the question as “Should I take this promotion?” she shifted it to “What do I need in order to feel more confident and clear about saying yes?” All the voices got on board. ## Applying parts-work at work Getting to know your parts is powerful for a wide range of issues at work, because workplaces are hotbeds of performance stress and anxiety. If you’re anxious about hitting your goals and worried about work outcomes, it’s likely that a part of you is scared and could use some attention and comfort. If you’re struggling to make decisions effectively, that’s usually a sign of an inner conflict of parts that want to make decisions from different criteria (e.g. one part wants to maintain connection with others first and foremost, and another part wants to avoid failure regardless of the impact on others). If your mind is totally cluttered and overwhelmed with tasks, you may have a lot of chaos on your bus that’s worth taking a moment to hear out and sort through. If you spend most of your time navigating alignment friction, you may have a lack of tolerance of external conflict. Parts of you may be overly concerned with making people happy versus building the right product. Think about your current challenge at work, and investigate what parts of you are at play. You may be surprised to find a hidden inner conflict that makes it hard to mobilize with clarity. ## Tying it together The process of working with inner conflict is repeatable across many scenarios where the problem is rarely solved with a pro/con list. But it requires a willingness to start looking *inside* yourself when you’re stuck, rather than outside. When we practice hearing the inner polarization and facilitating dialogue among our parts, there are two added benefits. First, we’re building internal capacity. It’s not just a one-time process for decision-making but rather the development of a more integrated way of navigating complexity. Gustavo and Rebecca are learning how to draw on the wisdom of all of their internal parts regularly, leading to more confident decision-making and less internal thrash and anxiety. Second, we build capacity and tolerance for conflict in our external worlds too. You’ll develop significantly more empathy and a stronger radar for team polarization, noticing when your colleagues or reports are voicing concerns from different “parts.” You will be able to create more space for all voices and encourage team members to express their perspectives without judgment. And when disagreements naturally arise, you’ll have more tolerance and skill in facilitating productive dialogue rather than letting things overheat or trying to cool the room down prematurely (which will only lead to it getting hotter again later). This kind of tolerance and comfort with facilitation through conflict is actually an enormously useful leadership muscle to develop—the kind of skill that Gustavo and Rebecca need to take their careers to the next level. Remember, inner conflict is not a flaw or a weakness. It’s a natural part of our experience of navigating ambiguity and complexity, and it comes with the territory of leading others. The key is to learn to navigate those conflicts with compassion and clarity, and to treat it as an ongoing practice. ### 📚 Further study 1. Jay Earley’s description of the [seven types of inner critics](https://static1.squarespace.com/static/5c03ced75ffd204418037b7a/t/5c3fe62b7ba7fc1e43005c7f/1547691563363/Seven+Types+of+Inner+Critics.pdf) 2. *[No Bad Parts](https://www.amazon.com/No-Bad-Parts-Restoring-Wholeness/dp/1683646681)* by Richard Schwartz *Thanks, Natalie! For more from Natalie, check out [The Ripple Deck](https://rippledeck.com/) and follow her on [LinkedIn](https://www.linkedin.com/in/nrothfels) and [X](https://x.com/natatouille).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [51/61] How much do U.S. product managers really make? *👋 Hey, Lenny here! Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career. If you’re not a subscriber, here’s what you missed this month:* 1. *[Why no productivity hack will solve your overwhelm](https://www.lennysnewsletter.com/p/why-no-productivity-hack-will-solve)* 2. *[A PM’s guide to influence](https://www.lennysnewsletter.com/p/a-pms-guide-to-influence)* 3. *[State of the product job market, part 2](https://www.lennysnewsletter.com/p/state-of-the-product-job-market-part)* 4. *[Why cash is king](https://www.lennysnewsletter.com/p/why-cash-is-king)* *Subscribe to get access to these posts, and every post from the past 5+ years. I guarantee that you’ll get a 100x return on the spend of this newsletter in terms of impact on your product and career—or your money back.* *For more: **[Lenny and Friends Summit](https://lennyssummit.com/)** | **[Hire your next product leader](https://www.lennysjobs.com/)** | **[Top Maven courses](https://maven.com/lenny)** | **[Lennybot](https://www.lennybot.com/) | [Podcast](https://www.lennysnewsletter.com/podcast) | [Swag](https://lennyswag.com/)*** I’m thrilled to share part two of the Lenny’s Newsletter Compensation survey results. I suspect this is the edition most of you have been waiting for: in-depth compensation benchmarks for product manager roles by level. Also, a few surprises. Credit to [Louise Beryl](https://www.linkedin.com/in/louise-beryl-13225833/) for designing, analyzing, and articulating the most interesting findings from this (massive) survey. Also, a big thank you to [Pave](https://www.pave.com/benchmarking) for helping us sanity-check these numbers. ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/ba580a7a-9986-47b0-8695-9a52e9d9f80a_4000x2000.png) Salary transparency is an increasingly important topic in tech, as professionals are keen to maximize their compensation, and companies are looking to hire and retain top talent. Many states have also recently passed pay transparency legislation in order to promote more equitable outcomes for workers across industries. With comp on everyone’s minds, we want to help U.S. product managers at all levels understand current salary trends and provide useful benchmarks to guide discussions and career planning. We recently analyzed over 5,000 survey responses from Lenny’s Newsletter subscribers to answer the question: “How much do U.S. product managers really make?” We are focusing on U.S. product managers at all levels as they are one of the larger segments represented in this community (n=1,740). And we’re focusing on salary because our recent analysis revealed [a strong preference for salary](https://www.lennysnewsletter.com/p/why-cash-is-king) over equity when evaluating what matters most to professionals in their total compensation at the time of hire. In future articles, we will take a look at total comp, including equity and bonuses. We uncovered a number of insights in the data, but the biggest and perhaps most unexpected theme is **the rise of the IC career path.** As product managers move up the ranks, salaries predictably increase, especially for individual contributors (ICs). **But one surprising twist is that senior ICs often out-earn managers, challenging the assumption that management roles always pay more.** This trend suggests that the value of ICs is rising, a shift further reinforced by recent layoffs disproportionately affecting middle managers, thus “flattening” organizations. As Mark Zuckerberg [argued in 2023](https://www.bloomberg.com/news/articles/2023-02-07/meta-to-ask-many-managers-to-become-individual-contributors-or-leave), and many other companies have followed suit, employees need to “get back to making things.” All the insights that follow, drawn from those who are currently employed in full-time roles or have been within the past six months, shed more detailed light on salary benchmarks and other unexpected patterns in 2024. ## Key trends in salary data When it comes to analyzing and benchmarking compensation data, we learned that function, geography, and level have the biggest impact. Let’s dive into these trends and numbers (and make sure to check out the table below for reference): #### **1.** **ICs can achieve significant salary gains** We found that leveling up within the individual contributor track can lead to significant pay gains. Entry-level ICs earn around $112,500 annually, but as they progress, mid-level ICs see an increase of $38,350 (median salary: $137,500), and senior ICs make $187,500—nearly $78,000 more than entry-level peers. These findings show that staying on the IC track can yield impressive salary growth, often matching or exceeding managerial compensation. **Does the company’s stage affect higher senior IC salaries?** Yes and no. Among senior ICs at private companies, those earning in the 75th percentile or higher typically work at Series C or later-stage companies, which makes sense given that these companies have more funding to offer higher salaries. However, when comparing senior ICs at private versus publicly traded companies, there isn’t a major difference in the percentage earning higher wages—**33.44%** at private companies versus **36%** at publicly traded ones. This small difference is mainly due to a few senior ICs at publicly traded companies making $300K to $400K, a salary range not seen among private companies in our dataset. ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/5990e974-fb58-4f49-9a88-e2cfa1a0abfe_2592x1862.png) #### **2. There’s a surprising dip in salary at a manager level** One of the more unexpected findings was a salary dip when moving from senior IC to manager. When comparing median salaries, senior ICs significantly earn $26,920 more than managers (manager median salary: $162,500 vs. senior IC median salary: $187,500), which defies the common assumption that management roles always pay more. **Why?** [Many companies now recognize and value experienced ICs who can drive substantial impact](https://www.lennysnewsletter.com/p/the-super-ic-pm-tal-raviv). One senior IC, Tal Raviv, who appeared on a recent podcast with Lenny, offered this advice: “There’s a really good analogy here in engineering: … You shouldn’t have to rise into management in order to increase your compensation. You’re equally or just as valuable not as a manager [but] as a domain expert. And that’s step one, understand that you’re really, really, really valuable as an IC.” Check out the interview with Tal where he shares tactics for how he [negotiates with recruiters](https://www.youtube.com/watch?v=wFhurV1l6Jk&t=144s) to capture his market value. **Which level in management matches the numbers we see for senior ICs?** Senior ICs are most closely matched to senior managers, particularly comparing quartiles and median salaries. That said, senior ICs still have a higher mode salary band of $175K to $200K compared with $150K to $175K for senior managers, and senior IC roles have a tighter salary range between the low and high points in the range than senior manager roles. ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/6dbaa03b-d04d-49fc-8fa4-42cb1b5793c8_2160x2186.png) To be sure, more senior and executive levels of management outpace on average the senior IC roles surveyed here; nevertheless, the data reveal that senior ICs are well compensated for their high level of expertise. #### **3. Satisfaction is only moderately correlated with the total compensation package** Does money buy happiness, as the old adage goes? In our data, the correlation between total compensation package (salary, equity, and bonus) and satisfaction is 0.31, indicating a moderate positive relationship. This suggests that **as compensation increases, satisfaction with total compensation also tends to increase, but the relationship is not overly strong, as you might expect.** And interestingly, negotiating total compensation—which many believe would increase satisfaction—showed no significant impact on how satisfied respondents were with their overall compensation. Other variables within our dataset (gender, leveling title, years of experience, and company size) showed only a weak correlation to satisfaction with total compensation or no correlation at all, in the case of states within the U.S. ## Benchmarks for base salary for U.S. product managers Let’s further break down base salaries for U.S. product managers, starting with ICs and moving up through management and executive roles. ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/13eb0c3f-6184-48e0-af44-64ca79323a79_2160x2696.png) The box plot above shows where the bulk of our data lies and provides a snapshot of its spread and variability, making it easy to compare different datasets. Here’s how to interpret the key parts: The “box” in each column identifies the interquartile range (IQR), which gives you a sense of how spread out the middle 50% of the data is. This can be more informative than just looking at the range (which is sensitive to outliers). The outer edges of the box identify the 25th percentile (meaning 25% of data points are below this value) and the 75th percentile (meaning 25% of data points are above this value). The “median” is the line inside the box that marks the 50th percentile, or midpoint of the data. If it’s not centered, the data may be skewed higher or lower. The “arrow” inside the box identifies the average. It’s best to focus on the median instead of the average in box plots, because it is less affected by outliers and skewed data, providing a more accurate representation of the central tendency. The “whiskers” extend from the box to the smallest and largest data points (that are not outliers) within 1.5 times the IQR, showing the overall range. The small “circles” identify the outliers beyond the whiskers and are plotted as individual points, highlighting unusual data values. The box plot shows a wider distribution of salary midpoints for more senior roles (C-suite, VP, etc.), with outliers (the little circles) that push compensation into the $600,000 to $1M range. On the other hand, entry-level and mid-level ICs have far more consistent salary distributions, with less variance and fewer extreme outliers. Below is a different view of the same data on the distribution of salary for U.S. product managers across levels. It shows key statistics, such as lowest and highest salary bands reported and percentiles, including the median salary band (or 50th percentile). For example, the C-Suite has a median salary band of $275,000-$299,999 and a wide salary range from $50,000-$599,999. In contrast, Entry-level IC roles have a median salary band of $100,000-$124,999 and a tighter salary range from $49,999 or less to $175,000-$199,999. The data highlights the progression of salaries across levels, with higher-ranking roles generally having higher medians and wider salary ranges. ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/1159d899-de41-4f86-8a27-026da2ccdf5f_4198x1862.png) ## How we created the benchmarks As we mentioned at the outset, function, geography, and level have the biggest impact on salary. At a high level, the charts below show the distribution of salary bands (annual cash only in USD, not including equity or bonuses) for product managers at three different levels—individual contributor (IC, does not oversee people), people manager (oversees ICs), and executive (oversees people managers)—and compares those who work from the U.S. to those who work outside of the U.S. Even with a quick glance, you can see how the U.S. salary bands (orange bars) skew higher than salary bands for those working outside of the U.S. (blue bars). ![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/b7435801-0a3c-4211-9006-793e55fa2249_1600x954.png)![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/be7fe444-1dac-42da-87b5-01e7a3784a9f_1600x954.png)![Image from How much do U.S. product managers really make?](https://substack-post-media.s3.amazonaws.com/public/images/e95f4432-3ce8-4972-8ab0-626e669111e6_1600x954.png) **Job levels vs. years of experience:** Years of experience—often assumed to be a major predictor of salary—is actually an anti-pattern when it comes to compensation. CEO Matt Schulman at Pave explains, “Here’s why: A product professional with 10 years of experience could be at an IC 5 level at one company and an IC 3 level at another. So saying, ‘This is how much someone with 10 years of experience makes’ implies a direct relationship between experience and compensation. But in reality, the more important relationship is between level and salary, and years of experience is only a correlated variable to job level.” **Standardizing levels through job titles:** Levels are difficult to standardize across different companies and industries. Even among the big tech companies, levels don’t necessarily map one-to-one. In our survey, we addressed this challenge by creating a cascading hierarchy of job titles, and respondents were asked to select the leveling title that best represents their current (or most recent) position: entry-level IC, mid-level IC, senior-level IC, manager, senior manager, director, senior director, vice president / head of, senior vice president, or C-suite (CEO, chief product officer, chief technology officer, etc.). This proxy for job levels is not perfect, but it generates more valid and reliable data from which to create salary benchmarks, showing more granular differences among levels. ## Takeaways for product managers #### How can job seekers maximize salary? For **job seekers**, the data shows that **job level** is one of the strongest predictors of salary. This means that if you want to increase your earnings, focus on advancing your role, whether through a higher IC level or transitioning to management. To do so, President of Product and Technology [Tamar Yehoshua](https://www.linkedin.com/in/tamar-yehoshua-886217/) (of Slack, Google, Amazon, and Glean) suggests in her chat on Lenny’s Podcast *not* focusing on which company is going to pay you the most but rather finding companies that have a “[nexus of great people](https://youtu.be/ZoSeOltKqQk?t=1120&si=cI8b535ASs3VuN07)” where you’re going to learn the most. She also emphasizes the importance of “[moving the business forward](https://youtu.be/ZoSeOltKqQk?t=573&si=yHwfRL2VEJy25F6c)” (as opposed to hitting your goals or demonstrating skills at the next level): “One of the things that I think is overlooked is, [do a really good job at whatever your job is at that point](https://youtu.be/ZoSeOltKqQk?si=jXA0NtENpmQFdNrn&t=150) … however simple, however easy it may be for you, do a great job.” However, don’t assume that management always means higher pay—according to our data, senior ICs often out-earn managers. If you’re an experienced IC and enjoy it, leverage your expertise to negotiate a strong compensation package without feeling pressured to move into management. Senior IC Tal Raviv [suggests in his chat on Lenny’s Podcast](https://youtu.be/wFhurV1l6Jk?si=x38frGXAm5LswD0x&t=760) that advocating for more differentiated senior IC titles at your company to create that career path, and thus compensation progression, for yourself (and others): “I think having good titles that are clear that you can move up into, first of all, creates an idea that there is progress. Creating clear levels and rubric just like you would for within any level or within any title, saying it out loud, recognizing it. At the end of the day, we all want respect, we all want to feel that we’re growing, we all want to feel that we’re recognized. So I think putting it into words goes a really long way.” That said, our data highlights that **salary isn’t everything**. While higher compensation is moderately correlated with job satisfaction, negotiating for more money won’t necessarily make you happier in your role. [Consider other aspects of your compensation package, such as equity, benefits, and work-life balance](https://www.lennysnewsletter.com/p/why-cash-is-king), to maximize overall satisfaction. #### How can employers attract and retain talent? For **employers**, understanding the value of **experienced ICs** is crucial. Senior ICs play vital roles in driving product success and can command salaries that rival management roles. Offering competitive salaries and clear growth paths for ICs can help attract and retain top talent, especially in a market where specialized skills are increasingly valued. Finally, as pay transparency laws continue to spread, it’s important to provide clear and competitive salary information in job postings. This not only builds trust but also ensures that your company remains competitive in attracting the best talent. By focusing on the job level and offering a well-rounded compensation package, both job seekers and employers can create win-win scenarios in today’s competitive market. ## What’s next For round three, we plan to team up with [Pave](https://www.pave.com/), domain experts in the compensation space, to share data (including equity and bonus benchmarks) and trends related to this segment and others. Make sure you’re subscribed to the newsletter to avoid missing future posts in this series. *Thanks, [Louise](https://www.linkedin.com/in/louise-beryl-13225833/)! Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [52/61] Five proven prompt engineering techniques (and a few more-advanced tactics) ### ❤️‍🔥 A quick note on the Lenny and Friends Summit 1. The inaugural Lenny and Friends Summit was a smashing success. I shared some reflections on [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_some-reflections-on-the-lenny-and-friends-activity-7256770312699076609-zxJQ) and [X](https://x.com/lennysan/status/1851004994901999989). 2. If you couldn’t make it, videos of the talks from the Summit will be going up on [my YouTube channel](https://www.youtube.com/user/lennyrach?sub_confirmation=1) over the next couple of weeks. Subscribe to catch them as they come out. 3. My live podcast recording with [Shreyas Doshi](https://shreyasdoshi.com/) will be coming out this Thursday as an episode in your regular podcast feed. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/89e0f5c4-017a-41f3-abe5-09c81420ddb8_4032x3024.jpeg) I’m constantly hearing about people doing mind-blowing things with AI, like building entire products, offloading big parts of their job, and saving hundreds of hours doing research. But most of the time when I try using ChatGPT/Claude/Gemini, I get very meh results. Maybe you’re having the same luck. The difference, I’m learning, is in crafting your prompts. The nuance and skill needed to get good results became clear to me when [Mike Taylor](https://www.linkedin.com/in/mjt145/) published his guest post “[How close is AI to replacing product managers?](https://www.lennysnewsletter.com/p/how-close-is-ai-to-replacing-product)” and included prompts that did unexpectedly well in a blind test vs. human performance. I wanted to learn more—and so did many readers who emailed me after that post came out. I asked Mike to write a deeper dive just on prompt engineering. Mike is a full-time professional prompt engineer. He [wrote a book for O’Reilly](https://www.amazon.com/Prompt-Engineering-Generative-AI-Future-Proof/dp/109815343X) on prompt engineering and created a [course on AI](https://www.udemy.com/course/prompt-engineering-for-ai/) taken by 100,000 people, and over the past few years he’s built up a collection of techniques that have proven useful again and again. Below, Mike shares the five prompting techniques he’s found to have the most impact when prompting LLMs, plus three advanced bonus techniques if you want to go further down the rabbit hole. *For more from Mike, check out his book,* [Prompt Engineering for Generative AI](https://www.amazon.com/Prompt-Engineering-Generative-AI-Future-Proof/dp/109815343X)*, and his AI engineering studio, [Brightpool](https://brightpool.dev/). Follow him on [LinkedIn](https://www.linkedin.com/in/mjt145/) and [X](https://x.com/hammer_mt).* ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/b22fec3b-2cd7-4a43-a20f-1ec1b9a681e8_8000x4000.png) Much like how becoming a better communicator leads to better results from the people you work with, writing better prompts improves the responses you can get from AI. We already know that people can’t read our minds. But neither can AI, so you have to tell it what you want, as specifically as possible. Say you’re asking ChatGPT to write an announcement for a new feature. You want to make sure the phrasing is attention-grabbing and factual but that the message is also authentic to your product and customer base. Naively asking ChatGPT to do the task without giving it any real direction will likely result in a generic response that leans too heavily on emojis and over-enthusiastic corporate speak. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/5f7a958e-f1a3-4bf1-b5c2-17df7efd2c0a_1484x742.png) With no stylistic direction, you’ll get one of these fake, corporate-sounding responses, because that’s the average of what’s out there. The same thing might happen if you delegated this task to a member of your team without being clear about what you actually want. One quick trick: ChatGPT is capable of emulating any famous style or format—you just need to specify that in your prompt so it knows what you’re looking for. Something as simple as appending the words “in the style of [insert famous person]” can make a huge difference to the results you get. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/4dd75738-ecd8-4189-a3e9-39cbb787200e_2364x1454.png) Specifying a style is just one tactic, though, and there are hundreds of [prompt engineering techniques](https://arxiv.org/pdf/2406.06608), many of them proven effective in scientific studies. The good news is that you don’t have to read through all those papers on ArXiv. Every week, I spend a full day researching and experimenting with the latest techniques, and in this post, I’ll walk you through the five easy-to-use prompt engineering tactics that I actually use day-to-day, plus three more that are a bit more advanced and tailored to certain circumstances. What’s more, I’ll give you plug-and-play templates you can start using today to improve your own prompts. ### My five favorite prompt engineering tactics ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/85b96d8b-3b29-4906-a7fb-d257134cd6c4_2364x1582.png) These techniques work across any large language model, so whether you use ChatGPT, Claude, Gemini, or Perplexity, you can get better results. I’ve included examples of how these techniques work, what problems they solve for, and when to use them. Most are backed by scientific evidence, so I’ve also linked to those papers for further reading. With today’s latest models, there’s a lot less need for prompting tricks than there was back in 2020 with GPT-3. However, no matter how smart AI gets, it’ll always need guidance from you, and the more guidance you give it, the better results you’ll get. The types of tactics I’ve focused on in this list are ones that I anticipate will continue to be useful far into the future. ### Tactic 1: Role-playing Role-playing is the technique we already demonstrated, where you instruct the AI to assume the persona of an expert, celebrity, or character. This approach leverages the AI’s broad knowledge base to mimic the style, expertise, and perspective of the chosen role. By doing so, you can obtain responses that are more tailored to the specific domain or viewpoint you’re interested in. For example, asking the AI to respond as a renowned scientist might yield more technical and research-oriented answers, while role-playing as a creative writer could result in more imaginative and narrative-driven responses. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/c784a7de-3455-44b8-887d-9a01812cffa0_2364x1616.png) - **Prompt template:** “You are an expert in [field] known for [key adjective]. Help me [task].” - **Example:** - **Situation:** You’re preparing for a crucial meeting with the engineering team to discuss a new feature’s technical feasibility. - **Problem:** You’re not confident in your ability to articulate the technical requirements clearly and persuasively. - **Prompt:** “You are an *expert software architect* known for bridging the gap between product vision and technical implementation. Help me prepare talking points for a meeting with our engineering team about the technical feasibility of our new AI-powered recommendation engine.” - **Try it with ChatGPT:** - **Source**: ### Tactic 2: Style unbundling Style unbundling involves breaking down the key elements of a particular expert’s style or skill set into discrete components. Instead of simply asking the AI to imitate someone, you prompt it to analyze and list the specific characteristics that make up that person’s unique approach. Then you can use those characteristics to prompt the AI to create new content. This technique allows for a more nuanced understanding and application of the desired style. It’s particularly useful when you want to incorporate certain aspects of an expert’s method without fully adopting their persona, giving you more control over which elements to emphasize in the AI’s output. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/9e564b44-53c4-4b53-8352-79b23a32d9f2_2364x1690.png) - **Prompt templates:** - “Describe the key elements of [expert]’s style/skill in bullet points.” - “Do [task] in the following style: [style].” *Note: The key-element bullet points we get in response to the first prompt go into the second prompt as the style guide.* - **Example:** - **Situation:** You admire how a competitor’s product manager communicates product updates, but you don’t want to copy their style directly. - **Problem:** You’re struggling to pinpoint what makes their communication effective. - **Prompts:** - “Describe the key elements of Apple’s product announcement style in bullet points. Focus on how they communicate new features and benefits to users.” *Note: the output of this prompt becomes the bullet points in the second prompt below.* - “Write a product announcement for our new project management software feature in the following style: *- Simplicity: Clear messaging without technical jargon - Storytelling: Narratives highlighting user benefits - Visuals: High-quality demos and graphics - Live demos: Showcasing features in real time - Customer focus: Emphasizing personal benefits - Key features: Highlighting important advancements - User testimonials: Reinforcing value through experiences - Comparative context: Showing improvements over past models - Emotional appeal: Connecting technology to lifestyle - Call to action: Encouraging audience engagement*” - **Try it with ChatGPT:** - **Source**: ### Tactic 3: Emotion prompting Emotion prompting is a technique that involves adding emotional context or stakes to your request. By framing the task as personally important or impactful, you can potentially elicit more careful and thoughtful responses from the AI. This method taps into the AI’s programming to be helpful and considerate, potentially leading to more thorough or empathetic outputs. However, it’s important to use this technique judiciously, as it can sometimes have the opposite intention and lead to worse results. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/3224788f-296b-4a1f-a0ed-85aba177a016_2364x1702.png) - **Prompt template:** “Help me [task]. Please make sure [attribute]. This task is very important for my career.” - **Example:** - **Situation:** You need to write a compelling product roadmap presentation for the executive team. - **Problem:** You’re concerned that your presentation might not convey the urgency and importance of your proposed initiatives. - **Prompt:** “Help me draft a product roadmap presentation that will resonate with our executive team. Please make sure it conveys a sense of urgency and highlights the strategic importance of each initiative. *This task is very important for my career.*” - **Try it with ChatGPT:** - **Source**: ### Tactic 4: Few-shot learning Few-shot learning, also known as in-context learning, is a technique where you provide the AI with a few examples of the task you want it to perform before asking it to complete a similar task. This method helps to guide the AI’s understanding of the specific format, style, or approach you’re looking for. By demonstrating the desired output through examples, you can often achieve more accurate and relevant results, especially for tasks that might be ambiguous or require a particular structure. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/a72de3e1-5d1b-43aa-b4db-d3e3d4391543_2364x1666.png) - **Prompt template:** “Here are some examples of [task]. Generate a [task] for [new context].” - **Example:** - **Situation:** You need to write user stories for a new feature, but you’re new to the team and unsure of their preferred format. - **Problem:** You want to ensure that your user stories align with the team’s existing style and structure. - **Prompt:** “Here are some examples of user stories from our backlog: *- As a user, I want to reset my password so that I can regain access to my account if I forget it. - As an admin, I want to view user activity logs so that I can monitor for suspicious behavior.* Generate a user story for adding a new ‘dark mode’ feature to our mobile app.” - **Try it with ChatGPT:** - **Source**: ### Tactic 5: Synthetic bootstrap Synthetic bootstrap is a practical technique where you use the AI to generate multiple examples based on given inputs. These AI-generated examples can then be used as a form of in-context learning for subsequent prompts or as test cases you can use as inputs for your existing prompt template. This method is particularly useful when you don’t have a lot of real-world examples readily available or when you need a large number of diverse input examples quickly. It allows you to bootstrap the learning process, potentially improving the AI’s performance on the target task even without the help of a domain expert. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/a8bc604b-312a-479e-912e-7590271fc9ac_2364x2554.png) - **Prompt templates:** - “Generate ten examples of [examples] for [context]. Here are the inputs: [inputs].” - “Generate [task] using [examples].” - **Example:** - **Situation:** You’re creating personas for a new target market, but you lack real user data. - **Problem:** You need diverse, realistic personas to guide product development, but you don’t have the resources for extensive user research. - **Prompts:** - “*Generate ten examples* of user personas for our new fitness tracking app. Here are the inputs: - Name and age - Occupation - Fitness goal - Current fitness routine - Technology comfort level - Key pain points in their fitness journey” - “Generate potential customer feedback on our idea to track calories burned during work meetings, *using our user personas*.” - **Try it with ChatGPT:** - **Source**: ## BONUS: Three more advanced tactics If you got this far and still want to push your prompting skills further, the next level up is learning ways to split up the task into multiple steps. Rather than trying to do it all in one prompt, most professionals in the AI space build a system that corrects for the errors AI models commonly make. These tactics can take more time or be harder to implement—particularly if you can’t code—but they can make all the difference when AI is failing at a task. With better structuring interactions with AI, you can leverage its strengths, mitigate weaknesses, and create more robust and reliable outcomes. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/631f1db4-f177-4a12-a7b6-ae9c03e90376_2422x2594.png) ### Tactic 6: Chain-of-thought The chain-of-thought technique encourages the AI to break down complex problems into smaller, more manageable steps. By prompting the AI to “think through” a problem step-by-step, you can often obtain more logical, transparent, and accurate results. This method is particularly effective for tasks that require reasoning, problem-solving, or multistep processes. It not only improves the quality of the final answer but also provides insight into the AI’s reasoning process, making it easier to identify and correct any errors in logic. Many AI tools have baked this into their system already (OpenAI’s [o1-preview](https://openai.com/index/learning-to-reason-with-llms/) has it trained directly into the model), but I often like to separate planning as its own step, so I can vet the plan before I decide how to proceed. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/011d1b83-fb2a-40ff-9686-f5db8c965663_2364x1710.png) - **Prompt template:** “Think this through step-by-step: [describe problem].” - **Example:** - **Situation:** You’re trying to decide whether to prioritize feature A or feature B for the next sprint. - **Problem:** The decision is complex, involving multiple factors such as development time, user impact, and strategic alignment. - **Prompt:** “*Think this through step-by-step*: We need to decide whether to prioritize feature A (advanced reporting) or feature B (integration with a popular third-party tool) for our next sprint. Consider development time, potential user impact, strategic alignment with our product roadmap, and revenue potential for each feature.” - **Try it with ChatGPT:** - **Source**: ### Tactic 7: Retrieval-augmented generation (RAG) RAG is a technique that involves providing the AI with relevant contextual information before asking it to perform a task. This method combines the AI’s general knowledge with the data contained in your files and documents and with externally sourced information, allowing for more informed and accurate responses. First, you search for relevant documents (or parts of documents) and then add them to the prompt. RAG is particularly useful when dealing with specialized topics, niche events, or specific datasets that might not be fully covered in the AI’s training data. By augmenting the AI’s knowledge with relevant context, you can obtain more precise and up-to-date outputs. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/7dc6d9b5-2ac3-452f-8060-286f341fcc43_2364x1750.png) - **Prompt template:** “Based on [relevant document(s)], answer this question: [question].” - **Example:** - **Situation:** You’re drafting a competitive-analysis report, but you’re not sure you have the most up-to-date information on the market. - **Problem:** You need to ensure that your analysis is based on current market conditions and competitor offerings. - **Prompt:** “Based on Seeking Alpha’s Tesla report, answer this question: How does Tesla’s performance compare with competitors like BYD?” ([source](https://seekingalpha.com/article/4666977-tesla-stock-q4-earnings-results-still-long-term-buy)) - **Try it with ChatGPT:** - **Source**: *Note: In this example, the full PDF is inserted into the prompt, but in many systems (including OpenAI’s custom GPTs), only the most relevant parts of the report will be retrieved to insert into the prompt. This is done via a vector search (searching by similarity to the user question being asked).* ### Tactic 8: LLM-as-a-judge Human feedback is expensive and slow, so it’s common practice among AI practitioners to use an AI model to evaluate and rate the quality of outputs, either from itself or from other sources. This method leverages the AI’s analytical capabilities to provide a more objective assessment of content quality. It can be particularly useful for tasks like content moderation, quality control, or comparing multiple AI-generated outputs to select the best one. However, it’s important to remember that the AI’s judgments are based on its training and may not always align perfectly with human assessments. ![Image from Five proven prompt engineering techniques (and a few more-advanced tactics)](https://substack-post-media.s3.amazonaws.com/public/images/2bb867f5-9a4b-4a44-966d-aa8a5f714aab_2364x2848.png) - **Prompt templates:** - “Generate [task].” - “Please rate the output on a scale of 1 to 5 based on [criteria]: [output of task]. For each rating, provide a brief explanation of the score.” - **Example:** - **Situation:** You’ve written several versions of a product description for your landing page. - **Problem:** You’re not sure which version will be most effective in conveying the product’s value to potential customers. - **Prompts:** - “Generate five diverse product descriptions for a pair of shoes that fits any foot size.” - “Please rate each of the product descriptions on a scale of 1 to 5 based on clarity, persuasiveness, and how well it conveys the product’s unique value proposition. For each rating, provide a brief explanation of the score.” - **Try it with ChatGPT:** - **Source**: ## Conclusion Mastering these prompt engineering techniques will significantly enhance your ability to leverage AI. By writing good instructions, providing more context, and designing better systems, you can overcome many of the common challenges people face when using (and struggling with) AI tools. These methods allow you to tap into the full potential of AI, whether you’re drafting user stories, conducting competitive analysis, or making complex product decisions. Remember, the key is to experiment with these techniques and adapt them to your specific needs and contexts. As AI continues to evolve, staying updated with these and other strategies will help you maintain a competitive edge. While AI won’t replace you directly, those who use AI effectively will have an advantage when going for that next promotion or applying for that next job. So bookmark this guide, practice these techniques, and don’t hesitate to iterate on your approaches as you discover what works best for you and your team. *Thanks, Mike!* *For more from Mike, check out his book,* [Prompt Engineering for Generative AI](https://www.amazon.com/Prompt-Engineering-Generative-AI-Future-Proof/dp/109815343X)*, and his AI engineering studio, [Brightpool](https://brightpool.dev/), and follow him on [LinkedIn](https://www.linkedin.com/in/mjt145/) and [X](https://x.com/hammer_mt).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [53/61] On being funny at work *Reminder: If you live in the U.S., [don’t forget to vote](https://vote.gov/guide-to-voting) today!* Matthew Dicks is the author of the single most actionable and practical book I’ve ever read on the skill of storytelling—*[Storyworthy](https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/dp/1608685489)*. He’s also a record 61-time Moth StorySLAM champion, 10-time GrandSLAM champion, and [beloved past podcast guest](https://www.youtube.com/watch?v=J4wguyJZI6A). He just published a new book, *[Stories Sell: Storyworthy Strategies to Grow Your Business and Brand](https://www.amazon.com/Stories-Sell-Storyworthy-Strategies-Business/dp/1608689042),* which teaches you how to use the power of storytelling in business. My favorite part of Matt’s new book is very practical and actionable advice about how to be funnier. Who doesn’t want to be funnier? So I asked Matt to share his favorite advice here in the newsletter, and he generously agreed to cover seven of his favorite techniques—including tons of examples, simple frameworks, and ideas you can put into practice immediately. I hope this post makes your work life just a little bit more fun. *[Matthew Dicks](https://matthewdicks.com/) is an internationally bestselling author and award-winning slam storyteller with a record-breaking sixty-one victories at the Moth StorySLAM competition and ten victories at the GrandSLAM. Matt [teaches storytelling](https://www.storyworthymd.com/) and public speaking to individuals, corporations, nonprofits, universities, and schools around the world. His clients have included Amazon, Google, Microsoft, Salesforce, The World Bank, Harvard University, and the FBI.* ![Image from On being funny at work](https://substack-post-media.s3.amazonaws.com/public/images/73437c28-bcdc-42a2-abf6-9a2b68d5d776_4000x2000.png) I have good news. Humor can be taught. It’s not some natural talent or gift offered by the gods. It’s a learned skill, generally mastered by four types of people: 1. Those in desperate need of attention, probably beginning at an early age 2. Those who obsess over comedy 3. Strategic listeners 4. Those who study comedy and put in the time to learn how it works That means that you too can be funny. And when you’re able to make people laugh, they like you more, you set yourself apart, and you become a more effective leader. ### **The life-changing power of being funny (even when you’re a meathead)** When I was 32 years old, I went to an art museum for the first time with a woman I loved who did not love or even like me. But she loved art, so I didn’t tell her that I had never set foot in an art museum before. I was hoping she might someday fall in love with the person I wanted to be instead of the meathead I was at the time. I was standing in a gallery that was supposed to be filled with “Grandma Moses” paintings, but I couldn’t find a single one. I was standing in front of a beautiful painting of a little town, falling in love with fine art for the first time, but still in search of a single “Grandma Moses” painting. ![Grandma Moses, Grandma Moses Print, Country Decor, Primitive, Folk Art, Americana, Circa 1950, Vintage Book Page Print image 1](https://substack-post-media.s3.amazonaws.com/public/images/8bd01392-f6aa-4e86-a34a-10c0fdea1741_794x615.jpeg) Then it occurred to me: “Grandma Moses” paintings are not paintings *of* Grandma Moses. They’re *by* her. Again, I was 32 years old—a college graduate teaching elementary school and writing my first novel—and I thought paintings were of the painter of the painting. Again, I was a meathead. I was married to this woman for three years before I finally told her the truth about that day in the museum: “It was my first museum ever.” “I didn’t know what I was doing?” “You kept saying the word *docent,* but I couldn’t figure out what that word meant.” “I was searching for Grandma Moses paintings of Grandma Moses.” “Can you believe it?” My wife’s response: She laughed. That was my goal. It’s always been my goal. It’s this kind of humor that first attracted her to me—and keeps her attracted to me even now. You probably like me a little more, too, after reading that story. In fact, when Elysha was asked (in my presence) when she first started falling in love with me, she said it all began during a dinner at Chili’s—our first meal together. “Ask Matt a question, and he tells you a story. He told lots of stories that night, and I never stopped laughing. I realized that he was unlike anyone I had met before. And I knew that if I married him, I’d never be bored.” That’s the power of humor. And if you’re not naturally funny, you can learn to be funny and get that power for yourself. Humor is simply deploying strategies to make other people laugh. Strategies. Just like the ones you learned to grow your business, drive a car, and avoid Phil while at work. This is profoundly good news in the business world because the benefits of making people laugh are enormous. In addition to getting people to like you, humor is a highly effective means of holding an audience’s attention, convincing people that you can be trusted, and ensuring that you are remembered. It’s also perceived as a sign of intelligence, so making people laugh will cause them to view you as smart, even if you’re a meathead. *Forbes* recently identified “a sense of humor” as the fourth most important quality in a leader. (Even better, the business world—with the exception of advertising and the Berkshire Hathaway annual shareholders meeting—is often devoid of humor, which means if you are funny or even mildly amusing, you will have a significant advantage over the competition.) There are a kabillion reasons why you should be funny. Here’s one: Making someone laugh alters a person’s brain chemistry. Laughing swaps the cortisol in our bloodstream with dopamine, oxytocin, and endorphins—three powerful chemicals that every leader and public speaker should want in their audience’s brains. Why? 1. Dopamine can enhance learning, motivation, and attention. 2. Oxytocin is considered the “empathy hormone.” When it enters the bloodstream, it creates feelings of connection and relatability to the person producing the effect. 3. Endorphins trigger feelings of pleasure. Other health benefits from laughter include stress relief, reduced anxiety, a sense of safety, and improved mood. ## So how can you be funny? Let’s start by understanding humor better. Many things can be said about how to make a person laugh, but it essentially boils down to one thing: surprise. Humor is the strategic assembly of specific words, spoken in a specific way, to create a surprise that produces a smile or a laugh. It’s the same basic principle behind a jump scare in a horror movie, the weeping you did at the end of *Titanic*, or your spontaneous cheering at the end of *Jaws*. It’s surprising when [Christopher Walken asks for more cowbell in the classic](https://vimeo.com/406011330) *[SNL](https://vimeo.com/406011330)* [skit](https://vimeo.com/406011330) (after Will Ferrell’s character has already pounded the hell out of the cowbell). In any normal situation, the Walken character would say, “Too much cowbell!” or “Ditch the cowbell!” so when he asks for more, it’s surprising and, therefore, funny. It’s the way he asks for the cowbell, too, because it’s the words we choose and the way we say them that produce a laugh. This is why this post would be infinitely funnier if I were speaking the words to you instead of your reading them yourself. It’s a hell of a lot easier to be funny aloud than on the page. [When Wanda Sykes tells the audience](https://www.youtube.com/watch?v=Q437SK-j0zk): “I got a nice gut going on. Yeah, Esther is out of control. Yes, I call her Esther. When I was in my 40s, I got this little fat roll. I just named it. That was Esther. And now Esther is spreading. Esther is roaming around my body there. Esther’s all creeping around my back like, ‘Hmm, what’s back here? Let’s see what’s back here.’ ” … it’s surprising for lots of reasons. First, she’s acknowledging her gut, which isn’t something people typically do, at least not publicly. She also uses specific language. “I got a nice gut going on” is funny. We might say, “I have a nice vacation going on” or “I have a nice career going on” or “I’ve got a great pot of stew going on,” but she applies these words to her gut. Surprise. She’s also named her gut—Esther. That’s surprising. Some weirdos name their cars and even their houses, but their belly fat? That’s surprising. Then she personifies her gut in the final sentence by giving Esther voice, intention, and even locomotion. It’s all something we have never heard before in terms of content, language, and characterization. It’s funny because it surprises us. If you heard her speak these words aloud, it would be even funnier. How do people like Wanda Sykes and Christopher Walken produce comedic surprises? There are many ways. I currently teach 27 different strategies, but I’m always adding to the list. Whenever I laugh, I ask myself how the person speaking made me laugh. If the strategy is new, I reproduce it and teach it to others. As long as people are making people laugh, new strategies are being invented all the time. ## Seven strategies to be funny in business ### **1. Nostalgia** *When I was a kid, my family owned a VCR that weighed about 750 pounds and was attached to the remote control by a cord as thick as a toddler’s forearm. When I wasn’t using it as a remote, it doubled as a trip wire that I would use to knock my brother, Jeremy, on his ass when he ran through the living room.* *We watched movies by inserting film encased in plastic shells into that machine, sitting beside decorative ashtrays made in middle school art class, eating gluten-packed Vienna Fingers, and drinking Capri-Sun on an orange shag carpet that literally needed to be raked once per week.* That is nostalgia. If you remembered any of this, it likely made you smile. Nostalgia produces comedic surprise because it startles us into realizing how quickly the world has changed. This strategy is useful in business because we often reference the past when discussing our products and services. It’s a good idea to show clients and customers how our products, platforms, technology, sectors, or company have evolved over time, and that is when we can deploy nostalgia. - We once were this. Now we are this. - The world once looked like this. Thanks to us, it now looks like this. - Remember how happy we once were. Let’s be happy again. Even when nostalgia does not produce a laugh, it is still informative. It doesn’t sound like a failed joke; it’s simply relevant historical information. But when done well, it’s often hilarious. - [Spotify featured characters (and the original actor) from the 1984 film](https://www.youtube.com/watch?v=6paMSllCtjw) *[The NeverEnding Story](https://www.youtube.com/watch?v=6paMSllCtjw)*to highlight the extent of their music collection. - Microsoft’s Internet Explorer is a thing of the past, [but this 2013 ad for the web browser](https://www.youtube.com/watch?v=qkM6RJf15cg) used amusing nostalgia to win over users. - [Volkswagen introduced its 2012 Passat with a Super Bowl ad](https://www.youtube.com/watch?v=1n6hf3adNqk) featuring a boy dressed as Darth Vader trying to use the power of the dark side to manipulate objects and even his dog. His father finally uses the car’s remote to give his boy satisfaction, reminding us of how we once believed in the Force, too. ### **2. Exaggeration** Exaggeration is only funny when it’s clear that you are exaggerating to produce a laugh. Exaggerating in the hope of getting people to believe it is true is called lying. For example, my VCR did not weigh 750 pounds, and the remote control cord wasn’t as thick as a toddler’s forearm, but that exaggeration produces a laugh because the numbers and sizes are so outrageous that the audience can only assume it’s an exaggeration. I also exaggerated when I said there are a kabillion reasons to be funny. I also used the word “kabillion,” which was also surprising. “Kabillion” also starts with a K, which oddly increases its chances of being funny. Words beginning with a hard K tend to be funnier than other words, probably because that sound is the most surprising of all sounds. It punches us in the face. Steve Jobs used a visual exaggeration in his 2007 iPhone launch when he showed an image of the new iPhone on the screen: a janky-looking iPod with a kitchen timer. Everyone knew that it wasn’t real but a silly exaggeration of what they all wanted to see. ![Image from On being funny at work](https://substack-post-media.s3.amazonaws.com/public/images/fe77356b-7902-48ca-8640-55502336f0c5_660x396.png) The result: a big laugh. Dopamine. Oxytocin. Endorphins. Brains primed for his message. Other examples: The Snickers “You’re not you when you’re hungry” campaign:These commercials exaggerate what a person feels like when they are hungry, before a Snickers bar returns them to their former self. - [A hungry football player plays the game like Betty White](https://www.youtube.com/watch?v=dbpFpjLVabA) - [A hungry college student acts like an angry Joe Pesci while flirting with a girl](https://www.youtube.com/watch?v=MixNh9L7G5M) - [Hungry Marcia and Jan Brady from](https://www.youtube.com/watch?v=m-LBqv0xNIo) *[The Brady Bunch](https://www.youtube.com/watch?v=m-LBqv0xNIo)* [are replaced by Danny Trejo and Steve Buscemi](https://www.youtube.com/watch?v=m-LBqv0xNIo) All exaggerations of what it really feels like to be hungry. Old Spice commercials featuring Isaiah Mustafa: [This ad features a series of exaggerated scenarios designed to make you laugh](https://www.youtube.com/watch?v=owGykVbfgUE) while underscoring the effectiveness of Old Spice deodorant, thus launching a dusty old brand into the modern world. ### **3. One of these things is not like the other** *Sesame Street* used to have a segment called “One of these things is not like the other.” They would show three objects, and one would not fit. It was designed to teach categorization to children. But comedians use this all the time. [My favorite example of this comes from my favorite storyteller, Steve Zimmer](https://www.youtube.com/watch?v=E5K4fQJ4iRw). After his family isn’t invited to the neighborhood Hawaiian luau, they have their own barbecue the next week, featuring canned pineapples, ham, and *despair*. Two things are in the same category, and then a third that rightly applies to the situation but is as far away from the other two as possible. *My daughter, Clara, is brilliant, keenly observant, and the loudest human being on earth.* *My son, Charlie, is a fantastic musician, a surprisingly adept catcher, and thinks he lives in a restaurant where all bowls and plates will be cleared and cleaned by some mythical, unseen busboy after he’s done eating.* This strategy is useful in business because we often describe products, services, and the like. We can do so while also being funny: *Our meal kits produce efficiently cooked, incredibly delicious meals that—if you’re sneaky enough to hide the evidence of the meal kit in your neighbor’s garbage—can fool your partner into believing you made dinner from scratch.* Or… *We’ve added a new feature to our platform that will simplify workflows, shorten the sales cycle, and bore your family to death when you tell them about it tonight.* Now that I’ve highlighted this strategy, you’ll hear it all the time. It’s the bread and butter of stand-up comedy, but it’s also an easily deployed strategy in the business world. ### **4. Definitions** Imagine that you have a colander. It’s a magical colander because it’s capable of sifting anything—sand, Key lime pie, or your mother-in-law’s passive-aggressive sarcasm. See what I did there? When it comes to using this strategy, you need to imagine taking an object or an idea or even a person and sifting them through that colander to extract their essence. You’re looking to define them by a single attribute. Steve Jobs did this when he described the iPod as “1,000 songs in your pocket.” It wasn’t funny, but it was a simple definition, and it was incredibly effective. ![Image from On being funny at work](https://substack-post-media.s3.amazonaws.com/public/images/a7df719a-ad53-4576-afbc-43713a17f3ea_316x160.png) Much better than *A portable digital media player that stores large amounts of music, videos, and photos, all controlled via click wheel.* We do the same thing when we call Phil a moron. Phil is probably many things: cockapoo owner, ankle sock enthusiast, origami artist, persistent sufferer of irritable bowel syndrome, Professional Croquet Association fan, communist. But when we call him a moron, we reduce him to a single attribute. It’s not funny, but if we choose the right attribute, it could be funny. Allstate has turned disaster into a hilarious character entitled Mayhem who embodies every possible accident facing customers. ![Image from On being funny at work](https://substack-post-media.s3.amazonaws.com/public/images/f77020ad-0d3e-4bcb-9d26-412b5b7894d6_1200x630.png) We can do this with almost anything. A chair, for example, is an antigravitational device designed to keep your ass suspended in midair. It’s also a surprisingly fragile weapon when used to clobber someone in the movies. A chair is also one of the most simple, ubiquitous, and ancient pieces of furniture on the planet, yet I could never come close to building one because my hands do not function as hands. In each case, I strained a chair through my magical colander to extract one essential truth that I found most amusing. Sometimes we can sell products, services, ideas, and even ourselves through a single quality. When that quality is accurate, impactful, memorable, and amusing, we have struck gold. For example: - When I was a teenager, Jordache jeans were ass-enhancing denim. - A puppy is many things, but if you have small children, a puppy is a video game without a screen—a means of occupying your little monster’s attention so you can poop in peace. - An airplane is a time machine, transporting you long distances in short windows of time simply by taking a seat in a long, metal tube alongside your underwear, your toothbrush, and a bunch of Phils. See what I did there? I also brought back Phil, which is known as a “callback.” A bonus strategy for you. An especially effective strategy when used against your competitors is “definitions.” It can provide an amusing, clear-eyed view of your competitor’s foibles, flaws, and failures: - Elon Musk is the smartest, richest, neediest 14-year-old boy on the planet. - A Volvo is the perfect vehicle for someone who values safety over sexual partners. - Fiji water is a rectangular prismatic means of identifying yourself as a douchebag. ### **5. Specificity** Years ago, I was telling a story about my mother. In the midst of the story, I mentioned that she enjoyed Blue Nun wine. The audience roared with laughter. I still don’t know why, except I know it was specific, and specificity often produces humor. I’ve been using specificity throughout this post. For example: *We watched movies by inserting film encased in plastic shells into that machine, sitting beside decorative ashtrays made in middle school art class, eating gluten-packed Vienna Fingers, and drinking Capri-Sun on an orange shag carpet that literally needed to be raked once per week.* Vienna Fingers and Capri-Sun are both specific brand names that may have caused you to smile or even chuckle. Even if you didn’t, you can see how these specific names have the potential for humor. I mentioned that the ashtrays were decorative, which is also specific and nostalgic. Now I’m stacking strategies and increasing my chances of producing a laugh. Phil was not a dog owner. He’s a cockapoo owner. He’s not a croquet fan. He’s a Professional Croquet Association fan. He’s not a sock enthusiast. He’s an ankle sock enthusiast. This specificity increases my chances of making you laugh. I’m writing this part of the post on an airplane. Sitting in the seat beside me is a Jack Russell terrier in a small crate that keeps barking. Her name is Ginger. She is cute, but I want to kill her. Did you see how “Jack Russell terrier” has so much more humor potential than “dog”? And “Ginger” is hilarious. If you didn’t think so, you’re a soulless monster. Probably a friend of Elon Musk. Look. Another callback. The beauty of specificity is that when you use it and it fails to produce a laugh, it’s rarely perceived as a failed joke. It’s simply a specific detail, provided to produce a clearer image in the audience’s mind. You don’t have to worry about being embarrassed that the joke wasn’t funny, because your audience won’t necessarily perceive you as trying to be funny. It’s humor without risk. ### **6. Stating the obvious** This strategy requires you to notice the world around you and use your observations to reveal its truth in a humorous way. The poet Billy Collins wrote a brilliant poem titled “The Death of the Hat,” where he wonders where all the hat racks have gone. There was a time when every man wore a hat when he left the home, and hat racks were everywhere. But no more. Where the hell did they all go? Collins looked around at the world and made an observation that was fairly obvious but also, when stated well, quite amusing. Often the things we see every day—objects, decisions, or decorations that we have been staring at for our entire lives—are amusing, make no sense, or are absolutely ridiculous. When we point this out to people—things right under their noses that they may not have noticed—we can come across as very funny. Try this: Choose a space in the world. It could be a type of room or building or public space. Then take a mental (or physical) walk through that space. Note each object and feature. Do any strike you as odd, arcane, inexplicable, or less than ideal? These might be opportunities to state the obvious. For example, if I were to take a mental walk through my kitchen, I might point out that: 1. Some people hide their trash can under the sink like a pregnant teenage girl in the 1950s—hidden away from the public eye. 2. Lazy people allow pots to “soak overnight” in the hope that they might die in their sleep and never need to be scrubbed. 3. The refrigerator is the only object in the house where we will allow a plumbing company, a florist, and a hardware store to display a bit of their branded decoration because it is also a magnet, and we stick that eyesore onto our fridge *for years*. 4. Why does my microwave need a clock? And my oven? And my toaster oven? And my refrigerator? Why is time so damn precious in the kitchen? 5. Why were there so many enormous wooden forks and spoons hanging on kitchen walls in the 1970s and 1980s? 6. The people who leave the butter in a dish on the counter are quite smart but also considered disgusting by those who keep it refrigerated at all times. 7. If the villains in a *Mission Impossible* movie really wanted to torture Ethan Hunt, they would open the freezer door, insist that he bend over to grab a McIntosh from the crisper, and then stand up, hitting his head into the open freezer door. Nothing hurts as much. Note the specificity used in the last example. In business, this strategy can be used at almost any time as either a bit of amusement about the space you’re standing in or about the work you do, the product or products you produce, the services you provide, or your competitors. Look around. Ask yourself what seems logical only because it’s the way it’s always been. In those cases, pointing out that it may not actually be so logical can be quite funny. ### **7. The Unexpected** The trick with deploying the unexpected is the placement of the words. My son understands this concept exceptionally well. He recently told me, “Dad! I got the new Minecraft update. I played it a little. Then I woke up.” See how he sequenced the sentences to produce the laugh last? Most people would say it this way: “I dreamed last night that I was playing the new Minecraft update.” See the difference? Less funny. Here’s another: “I was saved from homelessness by a family of Jehovah’s Witnesses who invited me off the streets and into their home. I shared a room off their kitchen—a converted pantry—with a guy named Rick, who spoke in tongues in his sleep, and the family’s indoor pet goat.” See how the funniest word in this true story from my life—“goat”—is spoken last? But most of my friends say this: “Hey, Matt. Tell the story about the time you shared a bedroom with a goat.” My response: “I think you just did.” They spoil the story by making the unexpected expected. They lead with the funniest thing instead of waiting for me to say it. The trick is this: Identify the funniest part of the moment, then say that part last. Here are three unexpected moments from my life. Try to write them in the funniest way possible. All three are true stories. #### Example #1 - I sleepwalk a lot. - I often seem completely awake when I’m sleepwalking. - My wife has carried on full conversations with me while I’m sleepwalking. - I eat a lot of cereal when I sleepwalk. - I cook meals while sleepwalking. - I fold a lot of laundry while sleepwalking. - One night I wrote the first 500 words for a new chapter of a book I was writing while sleepwalking. - They were the same 500 words that appear in the published book today. #### Example #2: - I spoke to the executives at Smucker’s for two hours with my fly down. - My friend and primary contact at Smucker’s, Tom, took me aside during a break to alert me to this wardrobe malfunction. - I acknowledged it to the executives after the break and turned it into a teaching point. #### Example #3 - My daughter’s lamp broke. - I can’t fix anything. - My friend Jeff can fix everything. - I hand Jeff the lamp and ask him to fix it. - He hands it back the next day. - “I changed the bulb,” he says. - Three years later, the lamp stops working again. - I check. It’s not the bulb this time. - I hand it to Jeff and ask him to fix it. - He hands it back the next day. - “I changed the bulb again,” he says. - He’s not kidding. Here are the ways I would tell these stories. Note the way I delay certain bits of information, altering the chronological structure of the event to preserve the amusing part until the end. #### **Example #1:** A bowl filled with milk and a few stray Cheerios sits on the table. The spoon is half submerged in the milk. I’d normally be annoyed to find a bowl like this sitting on the table. My kids are famous for leaving a mess behind, but it wasn’t them this time. Beside the bowl is my computer. The cursor flashes at the end of a long section of text. More than 500 words in all. The first 500 words of chapter 8 of my manuscript. I read them and am impressed. They actually work. The writing is good. It’s weird to think this since I wrote them, but I only kind of wrote them. Just like the Cheerios I kind of ate. And the conversation I had last week with my wife when I kind of agreed to host Thanksgiving at our home. I did all these things—and many more—but I didn’t do them, too. You see, I sleepwalk a lot. Except unlike many sleepwalkers, who find themselves sleeping on the couch or dozing in a comfortable chair or mumbling incoherently about laundry, I fold the laundry while sleepwalking. I cook and eat full meals. I talk to my wife so coherently that she often asks me, “Are you sleepwalking right now?” even though I say yes even when I am sleepwalking. I’m the most productive sleepwalker I know. I get stuff done. But this one is new: Last night, I ate a bowl of cereal and wrote the next 500 words of my novel. When the book publishes a year later, those are still the first 500 words of chapter 8. When people ask me how I manage to accomplish so much, I don’t tell them about the sleepwalking. It’s not replicable. #### **Example #2:** My friend and liaison at Smucker’s—a man named Tom—approaches me during a break in my lecture. I’ve been speaking for almost two hours before finally sending the executives off for a brief respite. Tom whispers earnestly in my ear. I smile. When the executives return, I open by saying, “OK, so it’s come to my attention that my fly was down for the last two hours. You probably noticed. You’ll probably never forget it. Why should you? The guy who stood in front of you for 120 minutes had his fly wide open. Why is this fantastic?” #### **Example #3:** My friend Jeff hands me the lamp. My daughter’s lamp. One of her favorite things in the world. “I changed the bulb,” he said. “Not possible,” I say. “Possible,” he says with a smile. When my daughter told me the lamp was broken, I knew I couldn’t fix it. I can’t fix anything. My hands do not build and repair. They purchase and replace. But I wasn’t dumb enough to ask Jeff—who can fix anything—to repair the lamp without checking the bulb first. Except apparently I had. I swear I checked the bulb, but somehow, someway, it was the bulb. I’m the guy in all the “How many people does it take to change a lightbulb?” jokes. Except I apparently don’t even belong in those jokes. But here’s the thing: This happened three years ago. Lamp broke. Handed it to Jeff. He handed it back with a new bulb. But it’s also happening now. Three years later. A second time. Jeff has fixed the lamp again by replacing the bulb again. He still talks about it a decade later. Let’s be clear: None of these jokes would make it onto a Netflix comedy special. As a stand-up comedian, I’d never tell anything like this on the stage. Laughs would be furtive at best but probably nonexistent. But in a humor-free environment—as most businesses are—the tiniest bit of amusement can produce a knowing smile, the hint of a chuckle, or perhaps an honest-to-goodness laugh. And even a slight laugh can alter brain chemistry in incredibly powerful and beneficial ways, making your audience trust you, believe you, and feel better about the world around them. It would be crazy not to deploy humor given its benefits. Warren Buffett, Charlie Munger, Sara Blakely, and Steve Jobs all regularly used humor. Bill Gates is unintentionally funny. Mark Cuban tries really hard. Elon Musk fails constantly. But they all understand its power. Remember: Humor, like most things, can be learned. Simply assemble words strategically and speak them strategically to produce a surprise, and you will make them laugh—and maybe even like you. Maybe like you a lot. Do this often enough, and you will be considered funny. And funny, at least some of the time, is something we should all want to be. *Thanks, Matt!* *For more from Matt, [check out his storytelling courses](https://www.storyworthymd.com/), and his books [Storyworthy](https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/dp/1608685489)* and *[Stories Sell](https://www.amazon.com/Stories-Sell-Storyworthy-Strategies-Business/dp/1608689042).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [54/61] Product manager is an unfair role. So work unfairly. I believe the future of product management looks like [Tal Raviv](https://www.linkedin.com/in/talsraviv/). He’s an individual contributor (IC) PM who leverages AI tools and a suite of productivity systems to get more done with fewer resources (and management layers). Throughout his more than 10-year career, Tal has actively chosen to stay an IC and, over that time, has honed a set of productivity practices that give him tremendous leverage and impact—beyond what many traditionally believe ICs can achieve**.**In other words, he’s become a “super-IC.”Below, Tal shares seven of the unique productivity tactics that have gotten him to where he is today—and might help you become a super-IC too. *Tal was an early PM at Patreon, Riverside, Wix, and AppsFlyer. For more from Tal, check out his [63 free video tutorials](https://talraviv.co/) on using AI agents at work, his other popular guest post on [building your AI thinking partner](https://www.lennysnewsletter.com/p/build-your-personal-ai-copilot), and his [episode on Lenny’s Podcast](https://www.lennysnewsletter.com/p/the-super-ic-pm-tal-raviv). You can also book Tal for an [AI build sprint](https://talraviv.co/build-sprints) with your team.* ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/e6321b91-d622-4e28-9439-0a582a297684_4000x2000.png) Product management is unfair. We’re expected to be on both a [maker](https://www.paulgraham.com/makersschedule.html) *[and](https://www.paulgraham.com/makersschedule.html)* [a manager’s schedule](https://www.paulgraham.com/makersschedule.html). Nothing is planned around “PM capacity.” We can’t hire or fire but are expected to make things happen (and fast). We are the cushion for organizational dysfunction. Any PM reading this could add a dozen more reasons. And this is in the best-case scenario—assuming you’re on an empowered product team with a clear strategy, inside a business that’s growing. Unfortunately, it’s only going to get harder from here. In the past few years, we’ve seen the “[great flattening](https://www.lennysnewsletter.com/i/150339479/theres-a-surprising-dip-in-salary-at-a-manager-level)” of tech: rising expectations of fewer ICs to own larger swaths of the product and manage multiple teams while staying hands-on. Rapid advances in AI are only accelerating expectations of what one PM can handle. “Fairness” isn’t coming. The good news is that great PMs are making it work.In this newer, flatter tech industry, PMs who thrive will be the ones who build their own systems, methodologies, and tools to make the job work for *them*, not the other way around. They’ll start working “unfairly” today to lead successful teams without sacrificing their own well-being. Some of these strategies and boundaries may seem selfish or weird. Remember: keeping you healthy, engaged, and committed to the job is essential for the success of your entire team—and the product and company too. ## 1. Get out of tasks before they even reach your to-do list (or anyone else’s) **😑 Unfair:** I’m staying late because even though my meetings are done, I have a bajillion tiny tasks that are both urgent and important as a result of all those meetings. **🤠 Work unfairly:** Instead of adding action items from meetings to a to-do list, do the action items *live in the meeting*. With everyone watching. While screensharing. Let’s use “sending out a meeting summary” as an example action item from a meeting. Instead of spending valuable time after the meeting reviewing notes and drafting a summary, do the work in the meeting itself. In the screenshot below, I am screensharing my Slack, open to the channel of this initiative so everyone in the meeting can see. And I’m drafting the bullet points of my summary and action items. When the meeting has come to an end, I ask everyone to take a look at the screen and make sure that I got it right. Once we have a consensus, I hit “enter” on the spot and stop the screen share. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/b236a231-bebb-4288-bd5b-481990a2d454_1600x963.jpeg) Sounds selfish to do this in front of everyone, right? Turns out colleagues and stakeholders appreciate it. From their point of view, you’re taking the lead, bringing clarity, getting it done immediately, and aligning with them—all before hitting enter. Extend this approach to other meeting action items: - Write that Jira (i.e. screenshare and say, “Let’s make sure I got it right”) - Ping a colleague for input (i.e. screenshare and say, “I’ll try to quickly get a response while we’re still in the meeting”) - Schedule the next meeting (i.e. screenshare the “find a time” screen that can be moved: “Let’s make sure we get this on the calendar and move anything we need to”) ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/319f0780-d5ec-4abe-83f5-4c0557868e3c_603x251.png) ## 2. Cheat your way out of meetings with “59-second Looms” **😑 Unfair:** People throw 30-minute meetings on your calendar whenever a decision, communication, or collaboration gets too complex for Slack. **🤠 Work unfairly:** Half of those meetings can be [pivoted](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually) into an asynchronous communication. The other half can be fast-forwarded by setting up attendees to enter the meeting with context and prepared thoughts. **Use a Loom (or a Slack video clip)** when the reason for a meeting is to communicate a nuanced, high-bandwidth concept. Treat your audience like, well, an audience; be intentional about converting them to view and click. Remember that receiving a Loom can initially feel like a burden. - Aim for under a minute (make it feel lightweight) - Film two takes (or more) to get your message clear and succinct - In your message, pitch the brevity and time ROI for everyone: ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/ab02f1e7-3c0a-4a3b-8c2e-51d29a79e26f_1600x900.png) Most PMs still don’t do Looms outside of major announcements or bug reports. I get it. Treat this as a core PM communication skill. Whoever gets over the awkwardness will have a huge productivity advantage. ## 3. Hide, ignore, and automate Slack **😑 Unfair:** In my experience, PMs get tagged on Slack far more than any other role in a startup. (OK, maybe we tie with engineering team leads.) To anyone outside the product team, we *are* design, engineering, QA, data, knowledge team, and often marketing. And in the chaos of a fast-growing company, it’s hard to follow which PM owns what. It’s easier to reach out to “that PM you know” than keep track of who owns that feature now—so we also wear the hat of “phone operator.” **🤠 Work unfairly:** Implement Slack rituals and norms to create boundaries and make sure you don’t spend your entire day playing digital Whac-A-Mole. 1. Don’t go into Slack for the first half of your day (or pick the best window for *your* time zone, cadence, and teammates). This has been my ironclad rule since 2016, at three hypergrowth companies, while PMing multiple teams at once. And it has never once gotten in the way of supporting my team or achieving my goals. 2. When you do go into Slack, put it to work for you: configure Slack sections to compartmentalize and help you prioritize where to look first, and collapse everything that isn’t urgent. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/03d6984f-1c77-4638-9827-ae0f741eebd7_548x354.png) Once I’ve taken care of the critical channels where I am a bottleneck, the pressure goes down, and I can calmly and intentionally scan the rest. 3. Hide read channels ([how to do this](https://slack.com/help/articles/212596808-Adjust-your-sidebar-preferences#choose-which-conversations-to-show)). This feature makes Slack feel smaller and a lot more manageable, which makes a big difference when you’re getting a million pings a day. I’m always surprised how few people turn on this setting compared with the number of people who complain about “too many Slack channels.” If I use sections and combine it with hiding read channels, my Slack looks like this in the middle of the day: ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/ae2a1ed1-f781-4bc0-ad3a-81ec7fb52a89_559x872.jpeg) 4. Let Slack reminders be your robot executive assistant. I love how [Lenny put it](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually): “One of the most important habits of highly effective PMs is creating an aura of ‘I got this,’ and the best way to build that aura is to never drop the ball.” A sizable fraction of threads you start will get ghosted, and no one will care that the other person dropped the ball. Use Slack reminders to give folks a “friendly bump.” You’ll appear to be the most “on it” person in the company, and you’ll actually be doing your job well—busy team members rely on PMs to keep them on schedule and aligned. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/2012c22e-377c-4b0d-a1ac-d3a1cec6c515_842x212.png) ## 4. Cultivate a team that operates without you **😑 Unfair:** Because the PM’s responsibility is to close any gaps on the team, it’s easy for someone to throw up their hands and say, “That’s product’s job” or “I’m waiting on product.” And it’s never a good look for a PM to directly disagree with that. **🤠 Work unfairly:** Create a self-reliant team by empowering your teammates as experts in their disciplines, encouraging them to think like PMs and keep initiatives moving when you’re not in the room. As PM, you might be the orchestra conductor, but your teammates are the star musicians. I have no problem telling new teams I lead that: 1. Incredible products have been built without a PM 2. The most impactful, money-printing initiatives my teams have ever shipped were never my ideas When people ask you for decisions, use the opportunity to remind them that they are the expert and ask what context they need from you to make their recommendation. Did somebody on your team just do something that’s technically your job (e.g. QA doing data analysis, support agent proposing a feature, designer going right to a stakeholder, data analyst identifying a problem to solve, engineer directly interacting with a customer)? *Shower them with positivity.* Make it clear how much you welcome that proactivity. [In the words of](https://maven.com/p/f2b97e/how-to-scale-yourself-as-a-product-leader) Max Eulenstein, co-head of product at Instagram: “Turn everyone into a mini-PM. That’s the way that you maximize leverage from your entire team. Don’t view your cross-functional peers as stepping on your toes as a PM.” For example, if a UX writer identifies an impending design conflict *and* corrals multiple product teams to reconcile it, make sure they know how much you appreciate their leadership. Or when a data analyst comes back with experiment results *and* several ideas for follow-up A/B tests, make sure they know you’re seriously considering those ideas—and hungry to hear more. Use these “micro-interactions” to shape a culture where *product isn’t a role; it’s a team*. This even hinges on the words we choose, like in this story I shared with Lenny: [Watch on YouTube](https://www.youtube.com/watch?v=wFhurV1l6Jk) Since so much happens in Slack, it’s a huge lever for promoting team autonomy. As much as it makes you feel special and needed, remember: **DMs are the devil.** Anytime somebody sends you a direct message (and it’s not confidential), your reflex should be to ask them to repost the same message in a public channel. Not only are public channels more transparent, collaborative, drive faster resolutions, and easier to find later—it also serves as a cultural example for others to do the same. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/43131f11-4d90-4a85-b73a-274c03ea2407_1600x362.png) Yes, this can be uncomfortable. But imagine this: it’s been hours of back-to-back meetings, the sun has already set, and you exhaustedly pull up Slack. Would you prefer to see: (a) A bunch of direct messages collecting dust, where you are the bottleneck (and probably weren’t the right person anyway) or (b) A bunch of vibrant threads in public channels where teammates and stakeholders have already jumped in, added context, raised tradeoffs, and distilled the precise decisions they need from you (if any)? Putting our own productivity aside, the team in (b) is at least half a day ahead of the team in (a). ## 5. Get a head start on discovery with product scrapbooking **😑 Unfair:** Every founder and product leader wants their product managers to do discovery and strategic planning, gathering clear-cut customer evidence for every recommendation. That said, they don’t want it to take any time. **🤠 Work unfairly:** Save insights, ideas, and evidence way in advance by “product scrapbooking.” Company roadmaps might be linear, but customer insights from outside the building are (rightfully) a jungle. So I keep a **Notion database** of feedback screenshots, charts, support tickets, links to Gong calls, Slack threads, you name it. These are all organized by swim lanes (e.g. monetization, onboarding, internal tooling, virality, technical debt. . . ). Every time something comes up in the regular flow of work, I “scrapbook” it for future planning. I keep the notes lightweight, I collect clues from all over, and I don’t invest a lot of time in organizing the document, because I don’t know if an idea will ever get prioritized. I mainly make sure to give each “scrap” a good title so that future me can find it easily. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/b8bb9f94-f33e-45b2-bbe1-2f8d3ad49568_551x990.png) If someone suggests a solution and it reminds me of something I’ve already been tracking, I can share real-world context on the spot. If this idea becomes a prioritized initiative, I already have the juiciest bits of a kickoff presentation. Over time, product scrapbooking pays dividends. When kicking off a new initiative, onboarding new PMs to opportunities, or getting research off to a running start—I save so much time when I start with a broad set of customer clues (instead of a blank document). If I scrapbook consistently, I’ll have a head start on quarterly planning too. Say leadership hands me a theme: I head to my initiatives database, filter by swim lane, and quickly get in the mental context from raw customer signals. This helps me think way more clearly and strategically in very little time. Bonus: Your stakeholders quickly pick up on the fact that you’re that PM who’s truly listening, which makes them excited to send more insights your way. ## 6. Let AI write for you (but don’t let it read for you) **😑 Unfair:** Product managers need to do a ton of writing, from PRDs to detailed updates to go-to-market plans and Jira tickets. PMs are also expected to spend a huge portion of their days in meetings. Just great. **🤠 Work unfairly:** Use speech-to-text features and focused prompts to harness AI for writing documents, without watering down your product insights and intuition. The first time I discovered this strategy was when my team moved to a strict scrum model, and I had dozens of Jira tickets I needed to write in a short time. Oleksii, my eng lead, saw me sweating. He showed me how GPT-4o could write them for me—as long as I provided roughly the same amount of context that we provided the engineers in a kickoff. Using ChatGPT in this way, not only did I write those tickets in a fraction of the time; it was a lot easier for me to share product context, let AI do the heavy lifting, and lightly edit the results. PMs have a ton of context and spend all day sharing it, if not always in written form. Luckily, LLMs do their best work when provided with a ton of context. The more context you can provide to AI now, the less hallucination and editing you’ll deal with later. “That sounds like a lot of typing into ChatGPT,” you might say. Well, PMs are great at talking. Speech-to-text dictation has dramatically improved in recent years with the advent of context-based models such as OpenAI’s **Whisper model**. You can invoke Whisper anywhere you’re typing, with lightweight tools like [BetterDictation](https://betterdictation.com/) or [Superwhisper](https://superwhisper.com/) (or ChatGPT’s native desktop and mobile apps). Mac OS and Windows free, built-in dictation have improved dramatically as well. Not only will you write more in less time (or wrist strain), you’ll be able to transfer context to LLMs in the same natural way you do to your teammates. Plus, your writing will likely sound better in your natural speaking flow. *I recently did a live, hands-on demonstration of how I use these prompts. [Watch the recording here](https://maven.com/p/74ac37/how-experienced-product-managers-use-chat-gpt).* #### 1. Write a PRD by stealing this prompt (4o and up): `You are an expert product manager and I need your help to articulate my thoughts into a PRD. I’m going to give you the template and then I’m going to later tell you all the context that I have in my head, and you’re going to help me structure the document. Do you understand?` *[hit enter]* `# Objective` `# Target customer` `# How this connects to company strategy` `# What we believe` `# Solution constraints and principles` `# [other sections from your preferred template]` *[hit enter]* *[dictate your thoughts on the above sections using speech-to-text]* #### 2. Write user stories by adapting this prompt to your team (4o and up): `You are an expert product manager and product owner. I will describe functionality to you, and you will provide a user story following the user story template that follows, paying close attention to line breaks. Do you understand and are you ready?` `User Story Template [pick your favorite]:` `# Story` `As a ,` `I want to ,` `so that I can .` `# Objectives` `` `# Acceptance criteria` `1. Given ,` `When ,` `Then ` `2. …` `# Tech notes` `(leave empty)` `# Grooming Q&A` `(leave empty)` *[hit enter]* `[Look at the Figma prototype in another window for convenience, and describe out loud one user story at a time using Whisper speech-to-text, then hit enter]` #### 3. Let AI write a blog post (or any document) using your own original wording (GPT o1): `Please help me take my dictated notes and organize them into a well-structured blog post [optional: adding/changing headings where necessary]. Retain as much of the ideas in my notes as possible so they’re all included in the final product. Maintain the authentic tone and phrasing I would use—do not make it sound like it was written by an AI or ChatGPT. Preserve any quotations or citations of others as exact quotes. Otherwise, please make this as well-organized, cohesive, amazing, and readable as possible.` `---` `[Optional section] Use these headings:` `# first heading` `# second heading # etc.` `---` `Here are the notes:` `[open an outline and/or verbalize your thoughts out loud using Whisper speech-to-text]` But don’t go too far with AI just yet. I would avoid letting AI get between you and the raw data. It’s very tempting to let an LLM summarize Slack threads or support tickets or user research transcripts. But our competitive advantage as product managers is staying in the weeds when it comes to absorbing customer insights and building product intuition. ## 7. PM your own brain’s freshness **😑 Unfair:** As a PM, there’s never a good time to take an unplugged break. Not for 10 minutes, not for a day off, and not for a vacation trip. **🤠 Work unfairly:** Disconnect from work with the same discipline and commitment you bring to your job. While it’s important to sprinkle short breaks throughout the day to keep attention high, actively plan long, complete disconnects that allow your brain to bring a different perspective. I’ll reach a higher peak of creativity and fresher perspective on Monday morning when I fully disconnect on the weekend after working a little harder for five days straight: ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/569a39d6-f051-4fe6-8bed-66c06f93d41c_1234x395.png) I’ll feel more refreshed in the morning if I work a little later and then fully log off for the night: ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/a8548431-71d6-4cde-9293-f0eeabcb8450_702x659.png) While it’s great to take a bunch of one-day vacations, I get a different level of clarity when I step away for at least a week of contiguous, unplugged PTO. You get the principle. *Disclaimer: This isn’t a universal prescription. Aside from the fact that it isn’t always a choice (e.g. kids, caretaking, time zones), it’s also not always right to optimize for peak creative freshness (you might prefer availability, supporting your team, product launches, etc.). That said, this is a pattern you can apply when you need it.* We might work hard, but when you take a break, well, **rest hard too**. Here’s how I improve the *quality* of my resting time: 1. **Uninstall the Slack mobile app.** That way, I can’t accidentally get sucked back in once I leave the office. Out of the past decade since Slack became commonplace, 99.9% of that time I’ve been without the app on my phone. (I was inspired by working with [Erica Baker](https://x.com/EricaJoy), who joined Patreon after leading the infrastructure engineering team at Slack itself. If she could do *that* role, and at *that* company, without the mobile app, I had no excuse.) 2. **Change your display name to the form “**`Tal Raviv OOO until Nov 15`**.”** If you’re gone for a day or more, I’ve found this reduces the number of DMs and tags I get while I’m gone. It’s more effective than a status, because as people type your name, they immediately see that you’re out—and when you’re back online. Most people will think twice, weighing if it’s worth sending the message while you’re on vacation, or qualifying how urgent it is. (It also gives me peace of mind knowing that I’ve set an expectation and no one is wondering why I’m not getting back to them.) 3. **Choose physical transitions.** Sitting in the same chair staring at the same monitor, doomscrolling social media instead of your email inbox, isn’t very refreshing. Instead do a yoga stretch, play guitar, or walk to a café or convenience store. (I ride my skateboard around the office, but please don’t try that at home.) “People don’t get a chance to psychologically detach from work. When you can’t psychologically detach from work, it’s a lot harder to psychologically reattach to work the next morning.” —[Gloria Mark](https://open.spotify.com/episode/4QJB8UrYUHvNSyfucr0xmo?si=p2ZAzYGfTNSFScM7pLvXgA), U.C. Irvine professor and author of “Attention Span” Speaking of Slack, their San Francisco office was known for the mural “Work hard and go home,” reminding employees that the best way to sustain their energy is to separate the parts of their day. ![Image from Product manager is an unfair role. So work unfairly](https://substack-post-media.s3.amazonaws.com/public/images/cd387d87-4152-4b36-9eb3-641b275119b9_1600x1200.png) ## In closing Product management might be an unfair job, but PMs who go beyond making it work—and thrive in the face of unfairness—have always been disproportionately valuable to innovative, fast-growing companies. Great PMs aren’t only leading product development; they’re the ones who redefine work norms. PM versatility in the face of uncertainty is why our role is [best positioned to thrive in an AI world](https://www.lennysnewsletter.com/p/why-pms-are-best-positioned-to-thrive). Said another way: Even if you implement all of the above strategies, the real value is in the “hacks” you discover yourself. What in your own team’s workday can you revisit and question? And if we take a step back, I believe many of us would realize that we chose this role (and so many others aim for it) precisely *because* it’s “unfair.” The job of product manager demands immense responsibility and radical adaptability, and it rewards those skills as well. The “unfairness” of the job may actually be a feature. *Thanks, Tal! For more from Tal, he teaches one of the fastest-growing courses on Maven, [Build Your Personal PM Productivity System](https://maven.com/tal-raviv/product-manager-productivity-system?promoCode=LENNYSLIST), which includes 40 in-depth lessons and 23 projects across 8 modules and 6 live sessions. The course is live, cohort-based, and hands-on, with small-group learning and accountability, and direct WhatsApp and email access to Tal for help unblocking as you implement your productivity system. To get a taste of the course, check out his free 30-minute lightning lesson, “[Build Your Personal PM AI Copilot](https://maven.com/p/508884/build-your-personal-pm-ai-copilot),” scheduled for November 22.* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [55/61] How to become a supermanager with AI [Last week’s guest post](https://www.lennysnewsletter.com/p/product-manager-is-an-unfair-role) about tactics for becoming a “super IC” is on track to being my most popular post of all time, so I’m thrilled to bring you a follow-up that’s designed specifically for *managers*. In spite of what you may hear, we will still need (great) managers in the future—to scale (well-functioning) teams, to mentor and coach individuals, and to think beyond the day-to-day. Below, [Hilary Gridley](https://www.linkedin.com/in/hilarygridley/), director of product management at WHOOP, shares strategies she’s learned to leverage the latest AI tools to not just become a better manager but to level up her entire team. These tactics and tools are practical and actionable, and you can start experimenting with them today, even if you’re not managing. This post blew my mind when I first read it, and I’m very excited to share it with you. *[Hilary Gridley](https://www.linkedin.com/in/hilarygridley/) is the director of product management at WHOOP, where she oversees the core product team, including AI, Health, and Coaching initiatives, specializing in combining AI with evidence-based approaches to help millions improve their health and performance. Previously, she was a senior director of product at Big Health, a product marketer at Dropbox, and designed youth advocacy campaigns with major brands like H&M and 3M that engaged millions of young people.* *For more from Hilary, check out her [newsletter](https://hils.substack.com/), and follow her on [X](https://x.com/yourgirlhils) and [LinkedIn](https://www.linkedin.com/in/hilarygridley/).* ![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/c822459d-bc8f-4227-ab28-c68d2da7197d_4000x2000.png) I love managing people. My team inspires me, and it’s a genuine honor to help them sharpen their skills, build resilience, exceed their own expectations, and find meaning in their work. Yet, like many managers, my calendar is packed, my unread Slack messages seem endless, and my attention is pulled in countless directions. I’ve been intrigued by the potential of AI to help managers like me spend more time coaching their teams, but most resources I’ve seen focus on productivity for individual contributors—so-called “super ICs.” This year, I fully embraced AI as a management tool, and the results have been transformative. Our team’s performance, productivity, and NPS have all reached all-time highs. One PM on the team, [Alexa](https://www.linkedin.com/in/alexa-j-murray/), says, “The team has 10x’d in efficiency and skill. Now that I have experienced AI-augmented product management and leadership, I don’t think I could work for a company where AI wasn’t allowed. It would feel equivalent to being asked to handwrite my PRDs—in cursive.” If 2024 was the year of the super IC, I predict 2025 will be the year of the supermanager. A supermanager harnesses AI to amplify their impact while fully embracing the human side of management. By scaling their efforts, supermanagers can effectively oversee larger, flatter teams and extend their coaching beyond just direct reports, fostering a culture of continuous learning throughout the organization. The skills that make for great managers—providing clear, consistent feedback and articulating the difference between good and excellent—translate remarkably well to creating GPTs that can give your team nearly unlimited access to your insights. And by helping your team develop a natural instinct for collaborating with AI, you’re not just improving their productivity; you’re building a more capable, adaptive, and high-impact product team. In this post, I’ll share the strategies that are turning this vision of the supermanager into reality for my team—and how you can do the same for yours: 1. Level up your team’s writing skills 2. Turn your team into debate champions 3. Help your team master synthesis skills 4. Build a custom GPT that thinks like you on-demand 5. Teach your team how to use AI as a thought partner ### **Strategy 1: Level up your team’s writing skills** Communication is a superpower in any role, but especially for product managers. A PM’s ability to drive clarity across different functions, explain decisions, and inspire their team can be the difference between high performance and burnout. To nurture my team’s writing instincts, I spend a lot of time explaining the “why” behind my edits to their documents/emails/decks/etc. While this personalized feedback is key to improving the writing *and* the writer, it is time-consuming, often delaying the team from getting their messages out swiftly. To scale myself, I distilled my most common writing feedback into a GPT called “The Executive Editor” (try it [here](https://chatgpt.com/g/g-67328e9be4988190baa9b07a00b2628c-hilary-s-executive-editor)). This tool allows my team to paste in their emails, decks, or Slack messages and receive a letter grade on structure, clarity, level of detail, and tone, along with actionable recommendations for improvement. Here’s an example output: ![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/db2e1cf8-8208-4103-a042-de7c8cc00e76_1470x878.png)![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/c1722abf-eb63-489d-865e-9f898cd3d74e_1586x1110.png)![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/24d2b3b1-71d9-4639-95c2-9a22467df09d_1606x1142.png) Six months ago, I didn’t think this could work. But I’ve learned that LLMs are [only as effective as the prompts they’re given](https://www.lennysnewsletter.com/p/five-proven-prompt-engineering-techniques). If you don’t know what makes writing good, it’s tough to teach a model how to evaluate or generate quality writing. However, if you’re skilled at explaining something to people—as many great managers are—you’re well equipped to teach it to an AI, allowing you to create effective GPTs that give your team unlimited opportunities to get your feedback. And while this may sound like a chore (who enjoys being graded?), my team has found it invaluable. Previously, in order to avoid becoming a bottleneck, I could review only high-stakes communications, like emails to the CEO or all-hands presentations. Now my team can receive ongoing feedback from “me” on any message they want to send at any time. One PM told me she keeps the tab open in her browser at all times. Another PM on the team, [Sam](https://www.linkedin.com/in/sampropis), said: “I’ve been using this as my first (and second) pass on emails and decks, and it has reduced the frequency with which I run things by Hilary. It has already leveled up my game. Beyond just editing, it’s transformed my approach to executive messaging.” Creating a tool like this has a few benefits: 1. My reports can receive feedback multiple times a day rather than once or twice a week, greatly accelerating their growth. 2. The impact scales beyond my team; colleagues across the company have adopted The Executive Editor. 3. I’ve noticed that, org-wide, communication is getting clearer, whether it’s an email to the C-suite or a quick Slack note explaining a controversial decision. Of course, I’m still available to review work—and I do. But I no longer have to provide the first-round feedback I once did, since the draft has already undergone several rounds of what are essentially my suggestions before I even touch it. This allows me to dive straight into the specifics of the project, ensuring the team is getting maximum Hilary Per Minute (HPM). You can implement a similar approach in any area where you provide consistent feedback, such as PRDs, presentations, or roadmaps. The goal isn’t to remove yourself from the process; rather, it’s about ensuring that the time you do spend giving feedback is high-leverage and impactful. By empowering your team to improve their writing skills independently, you help them communicate more effectively, fostering a culture of continuous learning and growth. *You can use The Executive Editor [here](https://chatgpt.com/g/g-67328e9be4988190baa9b07a00b2628c-hilary-s-executive-editor), find the prompt I wrote for it [here](https://docs.google.com/document/d/1PyfwLZcSxENRc3CGptPKRWS7k33vf2h_ELG4lA2AZD4/edit?usp=sharing), and instructions for creating a custom GPT [here](https://zapier.com/blog/custom-chatgpt/).* ### **Strategy 2: Turn your team into debate champions** Many people are drawn to product management because it’s likened to being the CEO of a product. However, the reality sets in when they find themselves in meetings with actual CEOs, who have strong opinions and an intimate knowledge of the business. It becomes clear that your power lies in your ability to influence—advocating effectively for your perspective, both on paper and in real-time discussions. The good news is that anyone can learn the logical reasoning skills needed to build a solid argument. I created a GPT specifically designed to help product managers strengthen these skills through scenario-based simulations that mirror real-world situations, such as feature prioritization or balancing competing metrics. You can try it out [here](https://chatgpt.com/g/g-673290301700819084afa36bdbcdfa3b-product-management-logic-coach). I love scenario-based learning because it helps people apply theoretical concepts to real life, with immediate feedback that creates a fast, repeatable learning loop. Here’s an example output from the GPT: ![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/b2ed51d7-f56e-4875-802b-d74bbed95e1e_1400x1414.png)![Image from How to become a supermanager with AI](https://substack-post-media.s3.amazonaws.com/public/images/390a7319-4424-458a-a716-e1c91267fde2_1346x1212.png) While we wait for everyone to join our weekly team meeting, I’ll pull up this GPT to generate a discussion question for the team. It’s a fun, low-pressure way to sharpen our live debate skills while fostering team camaraderie (and requires no preparation from me). We decide on an answer, enter it, and the GPT provides a breakdown of the reasoning behind why each option is correct or incorrect. This allows us to learn from both the answer and one another’s thought processes. After I began integrating this GPT into our regular meetings, team members reported feeling more confident when presenting their ideas and have been more successful in influencing executives. And they can continue enhancing their skills together without time-consuming training sessions. You can implement similar AI-driven coaching tools to help your team build confidence in areas like strategic thinking or decision-making. By providing consistent, targeted practice, you empower your team to grow while you focus on the high-impact coaching moments. This approach not only elevates individual skills but also fosters a culture of learning and support within your team. *You can use the logic coach [here](https://chatgpt.com/g/g-673290301700819084afa36bdbcdfa3b-product-management-logic-coach) and find the prompt I wrote for this GPT [here](https://docs.google.com/document/d/1PyfwLZcSxENRc3CGptPKRWS7k33vf2h_ELG4lA2AZD4/edit?tab=t.0#heading=h.g0bsru2fvrfw).* ### **Strategy 3: Help your team master synthesis skills** AI-generated meeting notes are a popular tool, but in my experience, they often miss the mark. They tend to drift toward broad abstractions rather than providing clarity and nuance. Good meeting notes confirm whether everyone in the room arrived at the same conclusions, which is not always obvious from transcripts, and they allow people who were not in the room to quickly understand the points of view expressed and why the room gravitated in certain directions. For PMs, synthesizing meeting notes isn’t “just admin work.” It’s a critical skill. PMs attend meetings that others don’t—like customer calls, executive strategy reviews, and technical discussions. Their synthesis of these meetings allows them to update their own perspectives and share key insights with others, so that thoughtful decisions aren’t reduced to “We’re doing this because the CEO says so.” Effective synthesis prevents miscommunication, aligns teams, and sharpens strategic thinking. However, teaching synthesis is challenging. The process of how I arrive at my own notes isn’t always clear for people who weren’t in the room. And when PMs lead meetings, they’re usually focused on immediate follow-ups, which leaves little time for practicing this skill. That’s where AI can help, but only with a balanced approach that ensures the team stays actively engaged in the synthesis process. Here’s how I encourage my team to use AI as a tool, not a crutch: 1. **Write a prompt that articulates the specific goals of the summary.** I loaded [this prompt](https://docs.google.com/document/d/1PyfwLZcSxENRc3CGptPKRWS7k33vf2h_ELG4lA2AZD4/edit?usp=sharing) into a custom GPT that my team uses, which I’ve found gets better results than a generic, out-of-the-box summarizer. 2. **Write the first draft for three takeaways.** Before looking at AI-generated notes, I ask team members to write down the top three takeaways they personally find essential from a meeting. This approach encourages them to prioritize, reflect on what truly matters, and sharpen their instincts before comparing their takeaways with the AI’s draft. By doing this, the AI acts as a secondary perspective, not the primary one. 3. **Focus on “why” and “how,” not just “what.”** I challenge PMs to go beyond just documenting what happened by clarifying why key decisions were made and how these decisions will impact the team’s priorities. This helps deepen their understanding of the discussions, creating notes that provide richer context for other teams to foster alignment across the organization. 4. **Adjust your approach based on the meeting.** For recurring updates or straightforward topics, the AI can handle the note-taking. But for strategic insights and more nuanced conversations, PMs should spend more time editing. The AI handles the grunt work; PMs layer in the strategic depth. ### **Strategy 4: Build a custom GPT that thinks like you on-demand** When I first started working with AI, I was skeptical that it could ever replicate the feedback I give my team. But I’ve realized that if you’re good at teaching people how to do something, you’re also extremely well suited to teaching a robot. This realization has been a breakthrough. With my “Executive Editor” GPT, for instance, my team now has access to feedback that is remarkably similar to what I’d give. They get real-time guidance on going from 0 to 80, which means I can focus my time on getting them from 80 to 100. At the end of the day, they are getting to higher-quality, faster. The coolest part is that the AI can help you, as a manager, articulate standards that feel intuitive but are hard to put into words. Explaining precisely what “good” means to you can be challenging, especially if you’ve developed a gut sense of what works. To make this easier, you can reverse engineer your own feedback: upload examples of work you consider high-quality and low-quality, ask the AI to identify the specific differences, and then have it create a prompt that could transform the “bad” examples into “good” ones. Here’s a simple guide to creating a GPT that thinks like you: 1. **Identify what kind of feedback you are best at giving.** If you’re unsure, try prompting the AI, *“I want to create a custom GPT that helps my team upskill in an area where I am uniquely strong. What are some examples of skills or areas where [product] leaders might have unique expertise they could teach an AI?”* 2. **Translate this skill area into a GPT concept.** Let’s say you love getting into the details of UX design. You could create a GPT where your team can upload wireframes to get a first round of feedback, or it could generate thoughtful questions to ask during usability testing. If you’re not sure, upload a PDF of this post into the AI and say, “*I’d like to focus on [x domain]. Read this document and then give me 10 new creative ideas for GPTs I could create to help my team upskill in this area.”* 3. **Teach the model to think like you.** Start gathering examples of “before” and “after” work, where your input has improved the final product. Or simply identify a few examples of best-in-class work in your eyes. Use the AI to analyze the differences to identify patterns in your feedback and edits. You can prompt it with *“Describe in detail the differences between the ‘before’ and ‘after’ versions.”* Drill in and be more specific, using my favorite prompt: “*Be 100x clearer and more specific.*” 4. **Ask the AI to write a prompt for you.** Once the AI understands the patterns, ask it to help write a prompt that would output work that meets your standards for excellence. For example, *“Write a prompt that would make an AI turn a rough draft like the ‘before’ example into a polished version like the ‘after’ example. Explain the why behind any recommendations with extreme specificity and detail.”* Use this as a starting point, and then refine it yourself. Test the prompt by running “before” examples and seeing what it outputs. 5. **Create and share the GPT.** [Follow these instructions to create your own GPT](https://zapier.com/blog/custom-chatgpt/). Load your prompt in, and add any helpful documents to the knowledge base. If you’ve written any blog posts on this subject, for example, you could load those in. Then publish and share it with your team. Emphasize that you’re still available to provide time and feedback but that this tool makes your insights accessible whenever they need it. This practice doesn’t just scale your skills—it also challenges you to articulate exactly how you approach things, making you a more reflective and effective leader. For more inspiration, check out more examples of custom GPTs [here](https://www.lennysnewsletter.com/p/you-should-be-playing-with-gpts-at). ### **Strategy 5: Teach your team how to use AI as a thought partner** Upskilling your team on AI is one of the best things you can do as a PM manager today. Strong instincts for collaborating with AI can help you solve problems faster, see around corners, and communicate more effectively. You won’t get there by copy-pasting long, single-use prompts or using pre-built GPTs, as helpful as these can be. Your team needs to treat AI as true collaborators—engaging in back-and-forth iteration, asking insightful questions, and prompting the AI to help uncover the right path forward. To build these instincts, I created a 30-day “Collaborate with AI” program: a hands-on, practical learning journey designed to teach effective AI co-intelligence in just a few minutes each day while making it a habit. This program uses micro-assignments that encourage you to engage deeply with AI—iterating, adding context, and refining prompts to significantly improve results. As a result, we’ve all become better problem solvers. We now use AI as a thinking partner that challenges our assumptions, sharpens our communication, and helps us make well-informed decisions and recommendations. [Anjali](https://www.linkedin.com/in/anjaliahuja/), a PM on the team, says that “using AI to weigh trade-offs and anticipate questions from different team members helps me bring refined ideas to the table, making cross-functional time more effective. By the time I share with my manager, I’ve already eliminated weaker ideas, and I’m ready with answers to drive alignment.” Here are some examples of micro-assignments from the program. You can find the full program, including prompts, [here](https://docs.google.com/spreadsheets/d/1zJ4rbi9YcQuGqGxc6-AQD0-44oT9l4Eyono0AdpgJbA/edit?gid=0#gid=0). **Get better outputs by providing context.** Learn how providing detailed context to the AI can significantly improve the relevance and specificity of its answers. 1. Prompt, *“Help me plan an upcoming vacation. What information can I give you that would be the most helpful?”* 2. The AI will respond with a variety of follow-up questions. Answer as many as you like and see what sorts of answers you get. 3. Prompt, “*Let me tell you about some of the best vacations I’ve ever had.”* Add specific context, like the names of hotels or restaurants you’ve enjoyed. 4. Prompt, *“Your suggestions are too \_\_\_\_\_, make them more \_\_\_\_.”* Use a variety of adjectives: too generic, expensive, touristy, predictable, etc. Notice how this changes the output. 5. Prompt, *“Let’s go with [destination]. Ask me three questions that will allow you to build the perfect itinerary for me.”* The AI will ask you three questions and then suggest an itinerary for you. 6. Prompt, *“Make this 100x more specific.”* Notice how this changes the output. **Provide colleagues with the best answer to their questions.** Learn how to break down a question, arrive at an answer, improve it, fact-check it, and anticipate objections. 1. Prompt, “*I am a product manager who just received this question from an engineer and I want to ensure I come up with the best possible answer in the next 3 minutes. Provide a step-by-step guide for how I should determine the answer: ‘What’s the acceptable latency threshold for [feature], and what’s our plan if latency increases during peak usage times?’ ”* 2. Prompt, *“Can you suggest an initial target based on similar features or benchmarks? Show your work so I can validate it.”* 3. Prompt, *“Give me a better answer, and explain why it’s better.”* 4. *Prompt, “I want to confirm that everything here is accurate on my own. How can I do that?”* 5. Ask, *“Imagine you are the engineer who sent me this question. What pushback might you have to this response?”* **Create a growth plan for yourself.** Create an actionable, personalized growth plan with a clear deliverable that will help you improve a specific skill. 1. Prompt, *“I am a [product manager] focused on [domain]. I would like to improve my [strategic thinking] over the next three months. What specific skills or behaviors will help me do this while making a tangible impact in my role?”* 2. Prompt, *“Suggest 3 specific deliverables I could work on over the next month to practice these skills in a way that adds value to [my company].”* 3. Prompt, *“Make this 100x more specific.”* 4. Choose one deliverable and ask, *“Is there a more lightweight way to approach [idea] so it doesn’t become a big project that distracts me from short-term execution?”* 5. Prompt, *“Can you suggest questions I could ask my manager to get feedback on my progress along the way?”* ### **Conclusion: Supermanagers don’t do it alone** AI isn’t here to replace managers. It’s here to make us more effective. By building tools that provide real-time feedback, guide skill development, and enable independent growth, you can empower your team to reach new heights without sacrificing the personal connection that defines great management. Embracing AI allows you to focus on the high-impact coaching moments that truly make a difference, while your team gains the tools to improve and succeed every day. *Thanks, Hilary!* *For more from Hilary, check out her [newsletter](https://hils.substack.com/), and follow her on [X](https://x.com/yourgirlhils) and [LinkedIn](https://www.linkedin.com/in/hilarygridley/).* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [56/61] Lenny’s Newsletter holiday gift guide 2024 *👋 Welcome to this month’s ✨ **free edition**✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career. If you’re not a subscriber, here’s what you missed this month:* 1. *[Product manager is an unfair role. So work unfairly.](https://www.lennysnewsletter.com/p/product-manager-is-an-unfair-role)* 2. *[How to become a supermanager with AI](https://www.lennysnewsletter.com/p/how-to-become-a-supermanager-with)* 3. *[Five proven prompt engineering techniques (and a few more-advanced tactics)](https://www.lennysnewsletter.com/p/five-proven-prompt-engineering-techniques)* 4. *[On being funny at work](https://www.lennysnewsletter.com/p/on-being-funny-at-work)* *Subscribe to get access to these posts, and every post. For more: **[Lennybot](https://www.lennybot.com/) | [Podcast](https://www.lennysnewsletter.com/podcast) | [Hire your next product leader](https://www.lennysjobs.com/)** | **[My favorite courses](https://maven.com/lenny)** | **[Swag](https://lennyswag.com/).*** Can you believe it’s already holiday time? Absurd. Somehow I’ve created a tradition of doing an annual gift guide (this is my fourth year in a row), so here we go! 🎄🎅🕎 The list below is a combination of practical and fun ideas. As in my newsletter, I’m indexing on useful, timeless, and high-quality things. I’ve included products I regularly use and love, products my podcast guests [have recommended](https://www.lennyslightninground.com/products/) (courtesy of super-fan [Borko](https://x.com/borkod) 👏), cute shit my wife suggested, and a few things I’ve recently discovered from y’all on these [X](https://x.com/lennysan/status/1857471184092409893) and [LinkedIn](https://www.linkedin.com/posts/lennyrachitsky_thinking-about-doing-another-gift-guide-this-activity-7263237059195076608-19yv) threads. I’m not making any money off anything here, and there are no affiliate fees on any of these links. For the couple of products where I have a connection (i.e. I’m a tiny angel investor or they’ve sponsored the podcast in the past), I note that with an asterisk (\*). Enjoy, and happy holidays! P.S. Don’t sleep on [my swag store](https://www.lennyslightninground.com/products/) for that special PM or growth friend in your life! ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/df4eef87-9c76-4b89-ae03-1a0152872f3f_1456x728.png) ## Household 1. **[Aarke stainless-steel hot water kettle](https://www.amazon.com/Aarke-Kettle-Stainless-Steel-Swivel/dp/B0CWHK6XZP):** Plastic-free, beautiful, and fast. I love it. ![Aarke Electric Stainless Steel Kettle](https://substack-post-media.s3.amazonaws.com/public/images/cbfb72a3-49e9-47ab-b65e-2fce32f2478a_1500x1500.webp) 2. **[HOTO portable tire inflator](https://www.amazon.com/HOTO-Inflator-Portable-Compressor-Motorcycle/dp/B0CQ1RCJV7):** You’ll never want to inflate your bike tires, car tires, or balls any other way. HOTO has [all kinds of other cool stuff](https://hototools.com/) too. [Thanks, [Anirudh](https://x.com/anirudh_twt/status/1857536319922057605), for the tip.] ![HOTO Air Pump Pro, Portable Tire Inflator](https://substack-post-media.s3.amazonaws.com/public/images/5be10a96-08d7-4e03-b14d-1564eac84d2f_750x1000.jpeg) 3. **[Corrugated-cardboard cutter](https://www.amazon.com/dp/B008RIS0UY?th=1):** Makes breaking down those Amazon boxes a breeze. It’s one of those small things that once you try it, you’ll want to give one to everyone you know. Somebody on Twitter recommended this to me (I forget who 😬), and now I can’t stop recommending it. 4. **[Glerups slippers](https://www.glerups.com/collections/slip-ons):** My favorite slippers. Cozy, cute, and durable. I buy extra pairs for when visitors come over. These are also loved by both Wirecutter and Tim Ferriss. Not cheap, but they last. 5. **[Quarterly ceramic cup club](https://www.cloutierceramics.com/limited-edition/cup-club-2025):** From Bay Area artist Julie Cloutier. Receive four unique handmade ceramic mugs over the course of a year. [Thanks for the tip, Rebecca!] 6. **[Talbot and Yoon Goober Candle](https://www.areaware.com/products/goober-candle?variant=1001524658180&country=US¤cy=USD&sc=ppc001)**: Delightful on any bookshelf. [This other candle](https://www.dsanddurga.com/products/big-sur-after-rain-candle) is also great. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/30911079-696d-48ad-9257-a9328d3ddc90_2700x1414.png) ## Gadgets 1. **[Teenage Engineering choir](https://teenage.engineering/products/choir):** “Wooden dolls made to serenade you with a repertoire of choral classics as well as perform your own original compositions through MIDI over BLE. Each member has their own characteristic vocal range. Individually one can sing a dynamic solo, together they perform an immersive a cappella concert.” Not cheap, but so cool. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/77da02bf-0de7-4ee2-b17b-75a3c264275d_2206x896.png) 2. **[Daylight](https://daylightcomputer.com/)\*:** Kindle meets iPad meets laptop. Elegant and practical. ![Write, draw and annotate on a fast, paper-like surface](https://substack-post-media.s3.amazonaws.com/public/images/fae22edc-dda1-4268-8a2e-f8cf30719d73_1174x726.png) 3. **[Nimbot wireless label maker](https://www.amazon.co.uk/dp/B09CM7Q3F7):** Print quick labels from your phone. For home organization, food containers, keeping track of documents, and so on. [Thanks for the tip, [Laurence Molloy](https://x.com/MolloyLaurence/status/1857472858835894507)!] 4. **[Aura frames](https://auraframes.com/gifting):** A beautiful smart digital picture frame. Easy to update the photos using your phone. A perfect gift for grandparents. 5. **[Elgato Stream Deck Neo](https://www.amazon.com/Elgato-Stream-Deck-Neo-Customizable/dp/B0CVY4566H?th=1):** Originally designed for Twitch streamers but so handy for launching my favorite apps, controlling speaker volume, and adjusting lights. There’s also [a smaller version](https://www.amazon.com/Elgato-Stream-Deck-Mini-customizable/dp/B07DYRS1WH), [a larger version](https://www.amazon.com/Elgato-Production-Controller-Streaming-Customizable/dp/B0BJL8SJ59), and [a very large version](https://www.amazon.com/Elgato-Stream-Deck-MK-2-Controller/dp/B09738CV2G). ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/520d1b5f-344f-4557-9553-11d1ed67b4de_1382x981.png) 4. **[Shure MV7 USB mic](https://www.amazon.com/dp/B0CTJ7PVN1?th=1):** A nice gift for that friend who’s thinking about starting a podcast—or is stuck on Zoom calls all day. It sounds great and works with USB. This was my first mic; I upgraded to [the XLR version](https://www.amazon.com/gp/product/B0CCSVYWMH?th=1) just last month, but that’s only because I do a podcast as a job now. 5. **[Anker Prime 100W USB C charger](https://www.amazon.com/Anker-Charger-Compact-MacBook-Pixelbook/dp/B0C4DGBHY2?crid=1OAEJV5UFCBNK&dib=eyJ2IjoiMSJ9.nTU1XqQtYYRyuW0xOzHGWpoic3aP814FF38aO-VRTAupsUGuS6EBYMtbr1YMZUJbyJ_JA40VC6DGAzhRFWFXo_KLdkWpe_eyzGuO6nINuEhIO5alTHZOg_WJRv0bLdSdlnIQN_HD6g79rnp1f_HCyOmDN72HMVknsYZfAwwjJZohaDhifPQhe0vUVsIWnt8ilH54e58MMs0T9y10yxPueI1iWGNMMZmXdXirnAyJ-I0.2_2N1XDmtKNvJT7HW6q_I3Q_xFMKQygKATXSSDzRGj4&dib_tag=se&keywords=anker+prime+100w+gan+wall+charger&qid=1732304119&sprefix=Anker+Prime+100W+GaN+Wall+Charger%2Caps%2C242&sr=8-3):** Best and most versatile portable charger I’ve found. Fast charging for your laptop, iPhone, iPad, or whatever else, in a super-compact form. This **[Anker USB C portable charger, 3-in-1](https://www.amazon.com/Anker-Charger-Charging-Portable-Foldable/dp/B0CFKSJMVJ?th=1)** is also awesome for on-the-go power, with built-in cord and display of how much power remains. [Thanks for the tip, [Brent Brookler](https://x.com/brentbrookler/status/1857477119582023800)!] 6. **[Ray-Ban Meta smart glasses](https://www.ray-ban.com/usa/ray-ban-meta-smart-glasses):** Feels like this platform will become a big deal in the coming years. You can get these as sunglasses, prescription glasses, or just clear lenses. ## My wife’s recommendations I sent a draft of this list to my [wife](https://www.amazon.com/stores/Michelle-Rial/author/B07PGC1PSX?qid=1732557697&sr=1-1&isDramIntegrated=true&shoppingPortalEnabled=true) and she said, “You need more cute shit”—so behold, some cute shit. 1. **[Pigeon Toe tumbler](https://pigeontoeceramics.com/collections/drinkware/products/biggie-tumbler?variant=37416293695676):** Cozy, cute cups for tea or coffee. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/cb0ecc3b-b71c-47f0-b384-00f74b817f0b_1100x1100.png) 2. **[Bathing Culture Cosmic Rainbow hand towel](https://bathingculture.com/collections/towels/products/organic-cosmic-rainbow-towel?variant=40445088235609):** For the friend whose bathroom only has soggy bath towels to dry your hands on. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/26dbe310-b240-462e-81c1-b1b5b1355514_1080x1362.webp) 3. **[Studio Inko cutting boards](https://www.studioinko.com/cuttingboards):** For the friend who has a display cutting board and a cutting-cutting board. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/e0d0c079-c193-45d6-b71f-cc4f7bb00a76_1046x1392.png) 4. **[Secondhand Heath Ceramics](https://passtheplate.heathceramics.com/):** The Bay Area’s favorite ceramics, at a discount. 5. **[Public Goods hand soap and refill set](https://www.publicgoods.com/products/hand-soap-refill-bundle?variant=43538961629322):** For the grandma who waters down her hand soap. 6. **[Everyday Oil](https://everydayoil.com/products/everyday-oil-mainstay-blend?variant=7540908227):** For your essential-oils friend. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/30dfd13b-caf2-4ef1-be00-1de868a1a976_1536x1470.png) 7. **[East Fork x Field Notes: The Dreamers’ Bundle](https://www.eastfork.com/products/the-dreamers-bundle?variant=42263298703439):** An Asheville, N.C.–based company donating their Black Friday sales to disaster relief. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/8efc69a4-e1a3-4591-8109-28b79e93bebf_1000x552.png) 8. **[“You’ll Think of Something” camp flag](https://oxfordpennant.com/products/youll-think-of-something-camp-flag):** For your artist friend who is out of ideas. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/589e80bc-1943-4990-ab92-c534923a3324_990x595.png) 9. **[Esqueleto gift card](https://www.shopesqueleto.com/products/gift-card):** For your cute-shit-loving partner ;-) 10. **[Segundo Madre tea towels](https://www.madrelinen.com/collections/tea-towels-1/products/segundo-madre-tea-towels?variant=44335785246881):** 100% linen, Oeko-Tex-certified, woven in a mill that runs on green energy. 11. **[Franca color-block pillar vase](https://www.francanyc.com/shop/pillar-vase-color-block):** For the friend who puts fresh flowers in a Nalgene. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/060ac61a-b3f2-4de6-ac5c-de395aac7286_789x377.png) 12. **[“Try not to lose it” keychain](https://buyolympia.com/Item/adam-jk-lose-it-keychain):** “A useful message for keys but also for everyone.” ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/4c2b391b-8b87-4dfc-bdc6-68ff2dc56164_1912x852.png) 13. **Whimsical art** 1. [“It’s a Miracle We Ever Met” by Hallie Bateman](https://buyolympia.com/Item/hallie-bateman-its-a-miracle-we-ever-met-print) 2. [“Hobbies” by Hiller Goodspeed](https://buyolympia.com/Item/hiller-goodspeed-hobbies-golden-screenprint) 3. [“Advice from the Beatles” by Michelle Rial](https://buyolympia.com/Item/michelle-rial-beatles-advice-color-print) (my wife!) 4. [Custom song painting by Kristin Texeira](https://www.kristintexeira.com/song-paintings/custom-song-painting) 5. [“Things Will Work Out” by Carissa Potter](https://www.peopleiveloved.com/collections/prints/products/things-will-work-out-print) (also comes in [card form](https://www.peopleiveloved.com/collections/cards/products/things-will-work-out-card)) 6. [La Slow Galerie](https://www.slowgalerie.com/en/14-eshop) (quirky original art, prints that aren’t from the poster club) 14. **Books** 1. *[Commune: Made in California](https://communedesign.shop/products/commune-made-in-california)*: For friends with an empty coffee table. 2. *[The Art Book for Children](https://www.amazon.com/Art-Book-Children-Ferren-Gipson/dp/1838667873)*: I learned a lot myself from this kids’ art book. 3. *[The Creative Act](https://sites.prh.com/thecreativeact)* [by Rick Rubin](https://sites.prh.com/thecreativeact): Everyone loves this book. ## Health and wellness 1. **[Cocofloss](https://www.amazon.com/COCOFLOSS-Coconut-Oil-Delicious-Dentist-Designed-Cruelty-Free/dp/B082BF4TYW?th=1):** Once you go Cocofloss, you won’t go back. The most luxurious floss you’ve ever tried. Feels good and tastes good. A great stocking stuffer. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/8bea9c9b-bce6-4550-8726-b96dbf875cd0_1500x1487.png) 2. **[WAOAW sleep mask](https://www.amazon.com/dp/B09712FSLY):** Will change your sleep, and thus your life. My wife and I both wear these to sleep every night, and it feels crazy to sleep without one. This has been a staple of my gift guides, and you’d be shocked how many times I’ve heard from readers that this one tip has been the most helpful thing they’ve read in my newsletter (🤣😭). 3. **[JOCO Flask Velvet Grip](https://www.amazon.com/JOCO-Flask-Velvet-600ml-Amberlight/dp/B088BBL41B?th=1) or [Owala FreeSip insulated stainless-steel water bottle](https://www.amazon.com/gp/product/B0C59B9VJ4):** I’m still looking for the *perfect* water bottle (e.g. straw and spout, no plastic, fits in a cup holder), but these are my two favorites right now. My wife loves the **[Klean Kanteen insulated water bottle](https://www.kleankanteen.com/collections/drinkware/products/insulated-water-bottle-tkwide-20-oz-twist-cap?variant=41374934433987)**. 4. **[Malin + Goetz shampoo](https://www.amazon.com/Malin-Goetz-Shampoo-Peppermint-16/dp/B00FA3QLUA?crid=1BI12YXOE57V5&dib=eyJ2IjoiMSJ9.bmsilCeMHUja_64b68ztVU0vxrfrNUKPoiUsEllURIPuNF7RT-dJjX5MK6bgz-bvatD8pX-1GHJf_jToEw2huhcN4HCUqovR-7nb8WaNpfZpEWRCujiWC69pIgmXNbMZ_ZzBEze74EyJGCEHhvH6x8pxxObUWlIRzo-fnMT5VzyrKCJKUSmO7hHs0KddBY38RsBI32ELsxyX07TrkkNG9J6vQ0EqaKHSK_CujU7u-K2vReTKjkRgSIpKPkPD6leooFVZ2izCDX_Mzt4juRkf5VvNQSTSvMQv6qWx0-sPsUQ.GEEDrcDMiuBrEm41T9ZgIRnL2tyPNfsUlfyRvrOu6zY&dib_tag=se&keywords=Malin+++Goetz+Shampoo&qid=1732294641&s=beauty&sprefix=malin+++goetz+shampoo%2Cbeauty%2C167&sr=1-5https%3A%2F%2Fwww.amazon.com%2FMalin-Goetz-Shampoo-Peppermint-16%2Fdp%2FB00FA3QLUA) and [body wash](https://www.amazon.com/Eucalyptus-cleansing-sensitive-irritation-Cruelty-free/dp/B07QQS24M8?crid=RH9FOFZ9SR4V&dib=eyJ2IjoiMSJ9.Ss7ncN9cyiH457xYVViL55uVdIB0rKo6wFDm9lWfjpk899H2ci5-0ig45Qo3l0N8G1Oj4-Od6PVSCHvPiMjkulhpqgMGc2k1VBt9nGR_g2TYqKZeOxNohECa3b8Ths9l4VlTM1yecaAeG582CG5-T-9NoF-RvpywGAQsCQ--XHMunRTKItMS-4HR_Pc0Sni-aLdlCLYQSCWioBvexeH78b4rm3QwNE6_cuoHvFD2xVW4hAzkoH1aquST_bTJUFqjcBkbtydoP2BUptgE9bnZi3x3_AO36ntgvj2qwvOPufw.qGlBaIwHmoaEOKIC7H6v6jnldd2Zbd9kG2NuEskmlTM&dib_tag=se&keywords=malin+goetz+body+wash+eucalyptus&qid=1732294595&s=beauty&sprefix=malin+goetz+body+wash+eucalyptus%2Cbeauty%2C159&sr=1-1):** A great gift for that guy in your life still using the 2-in-1 shampoo and body wash. 5. **[America the Beautiful National Parks pass](https://shop.usparkpass.com/products/america-the-beautiful-national-park-pass):** Give the gift of nature. For people over age 62, the pass is good for life. [Thanks for the tip, [Helen](https://www.linkedin.com/feed/update/urn:li:activity:7263237059195076608?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7263237059195076608%2C7263247716233682945%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287263247716233682945%2Curn%3Ali%3Aactivity%3A7263237059195076608%29)!] ## Kids’ stuff 1. **[Owala Kids insulated stainless-steel tumbler](https://www.amazon.com/Owala-Lian-Li-LANCOOL-MESH/dp/B0C768CWDF?th=1):** My favorite cup for our toddler. ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/76465ef0-394b-4e5f-b694-bb41161a30a3_1081x1080.png) 2. **[Uncle Goose wooden alphabet blocks](https://www.bellalunatoys.com/products/uncle-goose-classic-wooden-alphabet-abc-blocks):** Thecutest friggin’ blocks. The sides include letters, numbers, and animals. And they feel really nice in your hand. ![Uncle Goose - Classic Wooden Alphabet Blocks - Bella Luna Toys](https://substack-post-media.s3.amazonaws.com/public/images/312e0954-2837-4e6b-ad3c-ad89f53c03e9_1000x1000.jpeg) 3. ***[Animals](https://www.amazon.com/Animals-stylish-picture-Walker-Studio/dp/1406371742https://www.amazon.com/Animals-stylish-picture-Walker-Studio/dp/1406371742)*** **[by Ingela P. Arrhenius](https://www.amazon.com/Animals-stylish-picture-Walker-Studio/dp/1406371742https://www.amazon.com/Animals-stylish-picture-Walker-Studio/dp/1406371742):** Because it’s large (almost two feet tall), it’s super-cute when toddlers carry this around. [Thanks for the tip, Vanessa!] 4. ***[Ditty Bird](https://www.amazon.com/dp/B076Q4CW5H?th=1)*** **[musical books for toddlers](https://www.amazon.com/dp/B076Q4CW5H?th=1):** Our kid loves these little music books. So many varieties. [These are great too](https://www.amazon.com/dp/1734208910?content-id=amzn1.sym.386c274b-4bfe-4421-9052-a1a56db557ab&s=toys-and-games&sp_csd=d2lkZ2V0TmFtZT1zcF9kZXRhaWxfdGhlbWF0aWM). 5. **[Noble organic utility suit](https://shopnoble.com/products/noble-organic-utility-suit-in-frutas):** Matching jumpsuits for you and your kids. Cuteness overload. ![Noble Organic Utility Suit in Frutas](https://substack-post-media.s3.amazonaws.com/public/images/097ab88f-1426-4200-ae40-fdacff08f613_1200x1522.jpeg) 6. **[Dreamegg portable sound machine](https://www.amazon.com/dp/B0D4QFVDC3?th=1):** My favorite portable sound machine. The shushing sound is 👌. 7. ***[Listen: Five Simple Tools to Meet Your Everyday Parenting Challenges](https://www.amazon.com/Listen-Simple-Everyday-Parenting-Challenges/dp/0997459301)*****:** A podcast guest [(Joe Hudson](https://www.artofaccomplishment.com/about)) recommended this book, and it’s become my favorite parenting book that I recommend to everyone. 8. **[“Friend” baby onesie](https://jessicahische.shop/products/friend-baby-onesie):** Get one for your baby’s friends. Created by podcast guest [Jessica Hische](https://jessicahische.is/). [jessicahischeandfriends](https://instagram.com/jessicahischeandfriends) [![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/__ss-rehost__IG-meta-CybzlW7yDUk.jpg)](https://instagram.com/p/CybzlW7yDUk) A post shared by [@jessicahischeandfriends](https://instagram.com/jessicahischeandfriends) 9. **[“Love Your Mother” ringer tee](https://www.thebeeandthefox.com/collections/kids/products/love-your-mother-kids-ringer):** Melt your wife or mom’s heart. 10. **[Honest Company organic cotton onesies](https://www.amazon.com/HonestBaby-Non-Slip-One-Piece-Jumpsuit-Zip-Front/dp/B0CP2YLCCS?th=1):** These have become our go-to kid pj’s. Lots of different patterns. 11. **[Classic wooden play kitchen](https://www.bellalunatoys.com/products/bella-luna-custom-kitchen?tw_source=google&tw_adid=&tw_campaign=17870025074):** The easiest, most nontoxic way to get the kitchen of your dreams. ## Nutrition 1. **[Maui Nui venison stick](https://mauinuivenison.com/products/kama%CA%BBaina-sugar-free-pepper-stick-24-pack)\*:** 10 grams of protein in a delicious sugar-free, gluten-free meat stick. Makes a great snack I can throw in my backpack, and helps me get closer to my daily protein goal. 2. **[Magic Mind mental performance gummies](https://www.magicmind.com/lenny)\*:** I’ve been a big fan of [Magic Mind](https://magicmind.com/pages/mental-performance-shots-holiday-sale) for a while, but I’ve now completely switched to these gummies they just launched. I take some before every podcast episode and when I need to get some serious work done. Get 20% off if you use the link above. 3. **[Vital Proteins collagen peptides](https://www.amazon.com/Vital-Proteins-Nutrition-Collagen-Peptides/dp/B083LDJNPK):** Huberman [convinced me](https://ai.hubermanlab.com/s/oE_hLR5V) that taking collagen peptides daily was worth doing, so it’s now a daily habit. Goes well with **[LMNT](https://drinklmnt.com/products/lmnt-insider-bundle?variant=31177433382935)**. ## Meaningful gift subscriptions 1. **[Kindle Unlimited](https://www.amazon.com/gp/kindle/ku/gift_landing):** Givethe gift of reading. 2. **[Future](https://www.future.co/?code=basbn0&rdrorigin=%2Fbasbn0)\*:** Give the gift of workout accountability. (Use this link to get a month free.) 3. **[AllTrails](https://www.alltrails.com/gift):** Give the gift of hiking. 4. **[Duolingo](https://www.duolingo.com/gift):** Give the gift of learning a new language. 5. **[Happier](https://my.happierapp.com/gifts) or [Waking Up](https://app.wakingup.com/purchase-gift-card):** Give the gift of meditation. 6. **[ChatGPT](https://openai.com/chatgpt/pricing/)/[Claude](https://claude.ai/login?returnTo=%2F%3F)/[Perplexity](https://www.perplexity.ai/pro):** Give the gift of AI. (These don’t have gift options, so giving them isn’t as easy as the above. But worth it.) ## Don’t own yet but looks cool 1. **[Matic floor cleaning robot](https://maticrobots.com/):** A futuristic robot vacuum and mop with Tesla-FSD-level intelligence. Quiet, private, and good with kids and pets. 2. **[Bird Buddy smart bird feeder](https://mybirdbuddy.com/):** AI-powered smart bird feeder. Captures photos and videos of local birds as they visit 🐦. 3. **[Brick](https://getbrick.app/):** A device that temporarily removes distracting apps (and their notifications) from your phone. 4. **[Wildly Virgin olive oil](https://wildlyvirgin.com/):** Small-batch extra-virgin olive oil from Portugal, by a family who have been making it for generations, harvesting by hand. Created by two product people who moved to Portugal to help more people experience what real olive oil tastes like. — ## Remembering Enrique Allen ![Image from Lenny’s Newsletter holiday gift guide 2024](https://substack-post-media.s3.amazonaws.com/public/images/de78e2e5-d5a4-4a21-90d4-f8e7adb40337_3088x2316.jpeg) Finally, a gift that’s close to my heart: A dear friend, [Enrique Allen](https://www.designerfund.com/page/RememberingEnriqueAllen), passed away last week from an aggressive form of cancer. He was the best of us; the strongest, happiest, most generous person I have known. Warm, kind, enthusiastic, genuine, passionate about the environment—he’s an inspiration to me for how to live a good life. In the spirit of his generosity and dedication to personal growth, if you’d like to give me a gift, his family is raising money for [his son’s 529 plan college education](https://digital.fidelity.com/prgw/digital/familygifting/mlgLandingPage?uuid=1f7ae2d34c95429fb11519156ebf9337). If even 10% of those who see this put $10 toward it, we’d make a life-changing dent in his son’s life. Alternatively, you can help with child care, food, funeral costs, and life stuff by Venmoing his wife, @MajoMolfino ❤️ I’m going to match donations up to $10,000. Just mention in the memo/comments that you’re coming from this newsletter. *Hug your friends and family really tight this holiday season 🙏* **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [57/61] How GiveDirectly increased donations by over $3 million/year through experimentation Happy Giving Tuesday! Today is the biggest donation day of the year, and, to celebrate, I’m sharing a unique and inspiring guest post by the team at GiveDirectly, a nonprofit that sends cash directly to people in need. **I’m a huge fan of the work they do, so I’m [also kicking off a campaign through GiveDirectly to raise $100,000](https://www.givedirectly.org/lenny/) to bring a rural village in Kenya out of poverty.** All donations made to this campaign today, on December 3rd, 2024, will be *doubled* thanks to an anonymous donor matching pool (while funds last). [Donate now](https://www.givedirectly.org/lenny/) ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/267860f2-f535-4639-8b33-c5fa717c3d26_1600x900.jpeg) Your donations will help all 157 families in a village in Baringo, one of the poorest regions in Kenya. Each family will receive about $850 via digital transfer to spend and invest how they see fit. People living on about $1 a day know what they need, and they spend donations on things like eating more than once per day, sending kids back to school, starting a small business, seeing a doctor, and “simple” stuff like buying their first mattress. For less than half the cost of the average month’s rent in the Bay Area, you can give an entire family a life-changing opportunity. [Donate now](https://www.givedirectly.org/lenny/) Here’s the story of Rose and her family: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/42517880-369c-4c4b-8753-99c3f79ff6f7_1600x900.jpeg) > “With three children, no job, and divorced, I take on any manual work I can find to put food on the table. Some days, I wash clothes for other people, other days I gather firewood for restaurants at the local town center, and sometimes I fish to earn a living. When there’s absolutely nothing, I go to the lake, catch some fish, and prepare it for supper with my kids. > > I see the cash transfers from GiveDirectly as a real turning point for me. I plan to open a small retail shop to sell fast-moving goods, giving me a steady income and, hopefully, putting an end to the income uncertainties. I also plan to buy livestock, which I can raise and eventually sell at a profit.” —**Rose in Kenya** [Donate now](https://www.givedirectly.org/lenny/) Here’s the GiveDirectly team on the benefits of a cash-based donation approach—which I love: 1. ***Cash works.** It’s among the most data-driven ways to help ([more than 500 academic studies](https://www.givedirectly.org/research-on-cash-transfers/)—basically A/B tests for charity interventions), and GiveDirectly is building this evidence base by running the [world’s largest UBI study](https://www.givedirectly.org/2023-ubi-results/), among other research.* 1. *It’s proven to work in some ways you might expect—e.g. income, psychological well-being, food security, entrepreneurship, education boosts.* 2. *And some you might not—e.g. improvement in gender equity, reduction in domestic violence, reduction in alcohol and drug use.* 2. ***It’s tech-enabled.** Donations are sent directly to families in extreme poverty via mobile money technology, making it more scalable than other poverty solutions.* 1. *It also lends itself to innovative approaches, e.g. [using AI for targeting](https://www.givedirectly.org/hurricane-relief-2022/) to deliver emergency cash faster or even [before disasters](https://www.givedirectly.org/flood-pilots/).* 3. ***It’s respectful and anti-paternalistic.** Too often, “experts” have said people in poverty need [laptops](https://www.theverge.com/2018/4/16/17233946/olpcs-100-laptop-education-where-is-it-now?_hsenc=p2ANqtz-8xaRn9Gvc8DDjisHc2gr13NE60xo1Xe5aYwrKoXUhAdWD-SRCsNvwXZo0dqNqNhv1_6joF), [water pumps](https://www.theguardian.com/commentisfree/2009/nov/24/africa-charity-water-pumps-roundabouts?_hsenc=p2ANqtz-8xaRn9Gvc8DDjisHc2gr13NE60xo1Xe5aYwrKoXUhAdWD-SRCsNvwXZo0dqNqNhv1_6joF), or [chickens](https://www.vox.com/the-big-idea/2017/3/14/14914996/bill-gates-chickens-cash-africa-poor-development?_hsenc=p2ANqtz-8xaRn9Gvc8DDjisHc2gr13NE60xo1Xe5aYwrKoXUhAdWD-SRCsNvwXZo0dqNqNhv1_6joF)—top-down decisions that haven’t worked. Rather than [“teaching a man to fish,”](https://twitter.com/GiveDirectly/status/1630212646346653696) consider that often people know how to fish but cannot afford the boat. They want to sell cassava, say, or go back to school.* 4. ***It’s simple.** Sometimes people who don’t have money just need money!* My goal is to raise $100,000 and bring this village in Baringo out of poverty. Help me make this dream a reality. [Donate now](https://www.givedirectly.org/lenny/) *All donations are tax-deductible in the United States. GiveDirectly accepts all major credit and debit cards, PayPal, checks, wires, stocks, cryptocurrencies, and more.* Now, on to today’s post. . . ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/4439d043-afa3-47cc-a73d-987893fb66f1_4000x2000.png) Charities aren’t known for being the most tech-forward. Most nonprofit donation flows look like this: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/fd734d0a-9168-4542-b16a-fc694fc9c4f4_884x1600.png) At [GiveDirectly](https://www.givedirectly.org/), we asked: What would a better online donation experience look like? After only one year of experimenting with this one critical flow, we’ve raised $3 million more in incremental donations *per year*—meaning that about 3,000 more families in extreme poverty receive a life-changing cash transfer every year going forward. In your own product—nonprofit or not—you can apply the same strategy. Here are the experiments that worked for us (and some that didn’t) that you can try to optimize your own funnel: ## **Tiny changes can add up to a big difference** #### **1. 💳 Adding one-click PayPal and mobile wallet checkout options raised an incremental $1.3M per year (a 14% increase in online donations!)** Donors often don’t have their payment information handy, so we wanted to reduce the number of steps to complete a donation by adding an express PayPal option, Apple Pay, and Google Pay at the top of the checkout page. Not only did this make it easier to pay, but we didn’t have to ask for the donor’s name and email address, since we get their info directly from PayPal or the mobile wallet. We also think these brands help serve as a trust signal to donors; 20% of our online donations are now made through Apple or Google Pay. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/39e91c97-981a-4c86-ac7e-dd967f79fab0_1530x1032.png) We learned that adding more payment options gives donors the flexibility to use their preferred method, too. For example, adding ACH direct debit was helpful for donors giving bigger donations, providing an easier alternative to mailing a check *and* helping us save on transaction fees (the ACH fee is capped at $5, while credit card fees are about 2%). We estimate this saves **$50,000** per year in fees alone. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/2b72820e-5c4a-433b-9a9f-5063dc47c38a_706x1094.png) #### **2. 📧 Tweaking the copy asking donors to opt in to emails doubled the subscription rate, driving an incremental $400,000 a year** Email is our primary channel for telling donors about our work and asking them to give, so it’s crucial to maximize the number of donors who subscribe. Historically, only 25% of donors opted in to emails during checkout. After we changed the checkbox copy to be up front about how many emails they should expect to get and why they should subscribe, the share of donors who subscribed more than **doubled** to 55%: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/e5c5c850-6b8d-4be3-969b-073cebe6b5fe_1600x660.png) While there’s some selection bias in donors who choose to opt in, those who subscribe retain two to three times as long as donors who don’t. We conservatively estimate that the increase in donor email subscription rate drives **$400,000 a year**. ## **If a test fails initially, try a second version** #### **3. 🗓️ Encouraging monthly donations drove an incremental $500,000 a year** We estimate that the average lifetime value of a recurring GiveDirectly donor is **12 times** that of a one-time donor, so we wanted to test ways to prompt more people to start a monthly donation. ❌ **Didn’t work:** We tried showing a modal asking people to switch to a monthly donation of $X/12 after they started a one-time donation of $X: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/2cd8ace6-5afc-4035-94b3-fc1d03305ee5_1270x800.png) This made people seven times as likely to start a monthly donation, but one-time donation conversion decreased by 10%—likely due to the added friction of the extra step. The increase in monthly gifts wasn’t enough to compensate for the decrease in one-time gifts. ✅ **Worked:** We tested simply setting the default donation frequency to be monthly instead of one-time: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/dbe72e53-b768-4bb6-a741-6cc11be53b5b_1380x726.png) One-time donations still decreased slightly, but the lifetime value of the increased monthly donations outweighed the one-time donation decrease in this iteration. Smart defaults FTW! #### **4. 💸 Asking donors to cover transaction fees raised an extra $200,000 a year** We pay around $400,000 in payment transaction fees per year—that could go to life-changing cash transfers for 400 more families in poverty. We wanted to see if donors would be willing to help cover some of these costs. ❌ **Didn’t work:** We added a checkbox for donors to cover the payment processing fees for their donation, with the checkbox **checked** by default: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/af3e7619-bf5d-41c2-98ae-0c10db84afdf_702x248.png) Surprisingly, the donation conversion rate for the test group with this new checkbox was 6% lower than the control group without it. Our hypothesis: People were put off by seeing a different amount on the donate button than they had originally intended to give. However, 85% of people who completed a donation ended up covering the fees, showing that people were willing to “round up” their donation. ✅ **Worked:** We changed the checkbox to be **unchecked** by default: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/5eb0776a-f821-4aca-affc-db7826d522cd_696x236.png) The share of donors who covered fees decreased from 85% to 60%, showing the power of defaults—but the conversion decrease disappeared, so we shipped it. When it comes to product nudges and defaults, it’s worth testing a few iterations to see if you can find a win. Staying focused on our North Star metric (total dollars raised) also allowed us to recognize when to accept decreases in other submetrics. ## **Homepage design and interactivity matter** #### **5. 🎨 A homepage with a more polished design and embedded donation form raised an additional $700,000 a year (our second biggest lift ever)** GiveDirectly’s very small fundraising team only had the resources to maintain a pretty bare-bones website for many years. Even until 2023, it was still simple and—dare we say—boring: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/1177706d-40c4-4059-a7de-db89cf833d22_485x535.png) We knew it was time to upgrade our homepage, and used it as an opportunity to run a three-arm test. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/61acd964-c43c-4a99-a66b-7756ac2a552e_1600x655.png) Our goal was to find out: 1. Does a polished homepage with more recipient voices raise more money than a simple homepage? 2. Does embedding the donation form raise more money than a simple “donate” button? **✅ The result:** A website visitor was **35% more likely to donate** (that’s huge!) if they saw the new design with the embedded donation form instead of the old one. Conversion increased from 1.98% to 2.67% (strong for the nonprofit industry, which averages about 1%). Of this uplift, **20%** was driven by the embedded donation form, and **15%** was driven by the new design. Because of these results, we’ve made other web pages (like [this one about extreme poverty](https://www.givedirectly.org/poverty/)) more robust and are seeing them drive more donations. ## **Lessons from a big bet that failed: matching donors with recipients** We also tested a bigger swing to try to increase donations: trying to match donors with the recipient getting the funds. This is a pretty typical model in the nonprofit world, so we had high hopes. At some point in your life, a charity has probably asked you to “sponsor a child” in Africa. You could browse a “catalog” of children in need, and even filter by categories like gender and age: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/67289192-f65d-46de-9109-a2032aed54ec_1174x1086.png)![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/35b82b4d-0ee4-4621-9e5d-cfa04ea376f0_1600x1416.png) This has purportedly been a successful growth model for some charities. But is it actually real? And should we present people as “products” to be selected? Evidence has shown that donors can [feel](https://www.nytimes.com/2016/08/03/world/middleeast/worldvision-palestinians-sponsor-a-child.html) [tricked](https://mothership.sg/2021/02/world-vision-hong-kong-sponsor-a-child/) [when](https://winnipeg.citynews.ca/2022/07/09/money-charity-miseld-world-vision-canada/) they realize their money hasn’t in fact gone to the child they’re “sponsoring.” [Browsing bias](https://ssir.org/articles/entry/behavioral_economics_and_donor_nudges_impulse_or_deliberation) also means that donors may choose who to give to based on attractiveness or skin color. And in charities like Kiva that use a similar model, the featured borrowers [have usually already been paid](https://www.cgdev.org/blog/kiva-not-quite-what-it-seems) by an intermediary[1](#footnote-1). So the sponsorship idea is not even entirely honest. But based on the prevalence of this model, it’s clear that donors want to feel more connected to where their money is going. Could GiveDirectly create a version of donor-recipient matching that was truthful and respectful, and also raise more money for people in poverty? #### **How we tried matching donors and recipients—for real** ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/02dfd882-379c-43f4-abd1-7398852cc886_1600x930.png) We tested it out: Donors could fund a basic income for $40 a month, get matched with the person receiving funds, and receive quarterly emails with photos and quotes about how they were spending the money. How did we try to make our version different from other charities’? 1. **No choosing recipients:** You were matched with the next person in the queue to receive funds, based on our needs-based eligibility criteria. 2. **No [poverty porn](https://www.givedirectly.org/poverty-porn/):** We enrolled only adults, got their informed consent to collect photos and quotes, and didn’t edit their stories. 3. **No middlemen:** GiveDirectly runs our own operations end-to-end, so we knew exactly when cash was delivered and provided real-time updates. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/3289814e-114f-4647-8f57-82b86e0361d5_1600x807.png) However, there were a lot of operational challenges to make this product a reality: **🤳 Gathering content:** Our teams in the field had to collect stories from recipients every quarter, which involved visiting their villages to gather photos and quotes, translating their stories, and uploading them to our content system. Traveling to remote villages [can be difficult](https://youtu.be/mZKb-UQ5iK8?si=rrNGpdcGDAo0DmPo&t=143), and the team time was costly. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/84a65050-d70a-4216-ae55-da7c4430e862_1200x804.png) **👩‍💻 Manual QA:** The Product team had to monitor and troubleshoot any delays in transfers or content collection, make sure photo and quote updates were properly populated, and re-match donors whose recipients relocated. This took more than 20 hours each month. **🙋 High volume of donor inquiries:** The customer service team had to deal with a lot of inbound emails from donors wondering where their email updates were when there were delays, and manually manage people’s donation changes. ❌ **Ultimately, this product didn’t improve conversion, and retention benefits were short-lived** #### **1. There was no significant impact on conversion to donate** Our team ran a two-month A/B homepage test between the donor-recipient matching experience vs. a homepage asking donors to “send *someone* a monthly basic income.” There was no statistically significant difference in the percent of visitors who donated (p = 0.69). ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/2a39e6dd-23c6-426a-8da1-4996ac5ed589_908x666.png) #### **2. Any initial increase in retention eventually faded** The donor-recipient matching experience provided a short-term retention boost, but eventually donors who gave using this product churned at the same rate as other monthly donors. ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/4d6e6435-837d-4517-abce-c53b5e0b5cce_1446x708.png) Ultimately, **we decided to deprecate the product** in late 2023 because the added costs and complexity outweighed any initial retention benefits. #### ✅ **Using the lessons from this experiment, we successfully found a more cost-effective way to connect donors with their impact** We’ve since experimented with other ways to show donors the impact of their gift, but with less complexity. For example, could we link donations to a larger unit (e.g. a village, district, or country) rather than an individual recipient? We found that matching donors to a specific **village** was still very compelling, and was much easier and less costly. We tested an email telling donors their gift went to a specific village in Rwanda vs. an email telling them their gift went to Rwanda in general: ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/41db50ca-69d1-4b4b-8e3c-9577d775a70d_1400x1068.png) The village email had a **58%** higher click-through rate (huge!) and **more than twice** the rate of positive written responses. And the qualitative feedback was effusive: - “It is a very tangible token that our donation has been of help to people who really need and deserve it. It is an almost emotional experience to read their story and see their photographs.” - “I like seeing where my money is going. And living in the U.S., it’s helpful to be reminded of how others are living.” - “This brought me joy to read. It’s rare that we are able to see any real impact from donations, and I’m glad that I’m a monthly donor. Please keep these coming.” We’ve also applied this approach to our village fundraising campaigns with partners, like what you see today at [givedirectly.org/Lenny](https://givedirectly.org/Lenny). ![Image from How GiveDirectly increased donations by over $3 million/year through](https://substack-post-media.s3.amazonaws.com/public/images/c93a4d84-1d72-477d-8873-cb32eaed1152_2316x1750.png) ## **Our experiment takeaways** We’ve collected many lessons about the specific tests and levers, and also learned a lot about what works for our product experimentation strategy overall. These three main lessons might apply to your product too: **1. Balance small optimizations and big bets:** Running low-effort tests helps balance out the riskiness of a bigger bet, and also helps maintain team morale when experiments don’t go as planned. Getting the low-hanging fruit and basics right can have a bigger payoff than we expect. **2. Get out of the way:** Visitors to our website are already interested in helping families in need, but people have short attention spans. Removing steps in the funnel and providing an effortless checkout experience before a donor changes their mind is one of the most impactful things we can do. **3. Test ideas before building anything:** After our lessons from our donor-recipient matching experiment, we tested matching donors to villages, without engineers needing to write a single line of code. This helped validate that the direction would be valuable to donors before we invested significant resources in building anything. [Donate now](https://www.givedirectly.org/lenny/) *If you donate today, on Giving Tuesday (12/3/24), all donations to the campaign will be doubled from an anonymous donor match pool.* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 [1](#footnote-anchor-1) Kiva’s co-founder and CEO [responded](https://www.cgdev.org/blog/matt-flannery-kiva-ceo-and-co-founder-replies) that pre-disbursal of loans is better because borrowers can get their loans more quickly, and that the model they present to users is simplified for people unfamiliar with microfinance. Kiva ended up making changes to their [website](https://www.kiva.org/about/how) in response to the controversy. --- ## [58/61] Which companies accelerate PM careers most When people ask me where they should try to go work, outside of rolling the dice on the next rocket ship, I encourage them to find the company that (1) is best at teaching them the craft of product management and (2) has a track record of creating an inflection in the careers of the PMs who’ve worked there. The problem is, I’ve never really known which companies do this. Until now. I teamed up with [Jason Saltzman](https://www.linkedin.com/in/jason-salt/) and [Ethan Elias](https://www.linkedin.com/in/ethan-elias-70021472/) at [Live Data Technologies](https://www.livedatatechnologies.com/product-jobs)—which tracks hiring, firing, and promotion data for 160 million people worldwide—to see what the data tells us about which companies create the biggest acceleration in the careers of their product managers. To do this, we looked at six data points to understand which companies’ PM alumni go on to see: 1. **The most promotions** 2. **The fastest immediate promotion** 3. **The fastest rise to leadership roles (e.g. to VP, CPO, Head of Product)** 4. **The highest rate of becoming CPOs and Heads of Product** 5. **The highest rate of becoming the first PM at another company** 6. **The highest rate of becoming founders** Out of this, we triangulated a list of top 10 companies for accelerating your PM career. Below, I’ll share the raw data, but first. . . ### My biggest surprises and takeaways 1. **The new startup mafias:** Palantir, Plaid, N26, Ramp, Intercom, Revolut, Duolingo, Uber, Notion, and Coinbase. The standout company is **Palantir**, where almost a quarter of Palantir PMs went on to start their own company. Almost a fifth of **Plaid** PM alumni went on to start a company, which is also incredible. Of older and larger companies, **LinkedIn**, **Google**, **Intuit**, and **eBay** made it into the top 15. Impressive! Props to LinkedIn for being the most founder-friendly big company. 2. **Fintech is dominant—5 out of the top 10 companies!** Did not expect that. It’s probably no coincidence that the PayPal mafia has been so successful. One explanation, shared by my buddy [Dennis Yang](https://www.linkedin.com/in/dennisyang/) (PM at Chime), is that fintech nurtures strong product leaders because fintech work is on hard mode—lots of risk/fraud vectors, difficult stakeholders (e.g. compliance, regulations), and endless complicated tradeoffs. Another explanation could be that fintech PMs leave to join other fintech companies or start fintech startups, and since they know that space well, they’re more likely to thrive. 3. **FAANG companies lag behind.** eBay, Intuit, and LinkedIn are far ahead of companies like Microsoft, Google, Apple, Meta, and Amazon in these lists. One explanation is that PMs at FAANG companies learn how to operate well within that specific company and are less successful elsewhere. Another explanation is that the best PMs at FAANG companies are happy and don’t leave, and so we don’t see their trajectories in the data. 4. **There are an equal number of B2B and B2C in the top 10.** You can do great no matter which direction your career goes. 5. **The top two companies are based in Europe!** [MEGA](https://levelsio.com/collections/eu-acc). ## The raw data ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/bcf63cf8-3cea-40fc-9e77-54e94b31b9bf_1457x2339.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/c854a9b6-5d60-414a-9aa0-c2bb512deb56_1457x2213.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/1f18cacb-df5b-466b-ac72-cc53121cb782_1457x2382.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/3f4e04a4-a501-459b-bdc1-856453a5c6c5_1457x2382.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/e9d85f2b-6a93-4bf7-8afa-0be4dcd6d530_1457x2226.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/a11d0488-c500-476a-a548-cbd593d456fc_1457x1919.jpeg)![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/91414096-5142-4c8e-8e76-03107b1cde4b_1457x2171.jpeg) ## Summary ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/b48a89c4-4536-447a-ac26-9f3929dc0170_2912x2126.png) ## **Top 10 companies that most accelerate a PM’s career** Here’s a best-effort ranked list of the companies that the data shows most accelerate the careers of their PMs, factoring in all of the above data points. For each company on the list, I’ll show the categories they ranked in the top 10 for. #### **1. [Revolut](https://www.revolut.com/)** Revolut, founded in 2015 and headquartered in London, is a global neobank and financial technology company, with around 10,000 employees and last valued at $45 billion. They topped the list with the most impressive all-around stats, ranking in the top 10 in six different categories. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/a648f015-1433-42a2-92ae-1262be697a1f_1457x2383.jpeg) #### **2. [N26](https://n26.com/)** N26, founded in 2013 and headquartered in Berlin, is a neobank that offers online banking services across Europe, with roughly 1,500 employees and last valued at around $6 billion. N26 is especially strong at launching product leaders, ranking first in both CPO rate and Head of Product rate, and in the top 10 in four other categories. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/479d17ff-7e49-49d1-a74e-786a45918858_1457x2383.jpeg) #### **3. [eBay](https://www.ebay.com/)** eBay, founded in 1995, is an online marketplace for buying and selling goods, with around 12,000 employees and a market cap of approximately $30 billion. eBay ranking this highly is one of the most surprising results from this analysis. It beat out every FAANG company and then some, ranking in the top 10 in four different categories, including first in most promotions after leaving. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/5202f851-47cb-4225-af5f-b8d91cb0fb7c_1457x1675.jpeg) #### **4. [Plaid](https://plaid.com/)** Plaid, founded in 2013, makes it easy to connect your bank to apps that you use, with around 1,200 employees and last valued at about $13 billion. Plaid is one of the smallest and also one of the newest companies on this list to rank highly, making it particularly impressive. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/0f32cdec-f57c-4e4b-8235-a5780c36c1b2_1457x1675.jpeg) *Not shown, but they were also 13th at Most Promotions.* #### **5. [Intercom](https://www.intercom.com/)** Intercom, founded in 2011, is an AI-first customer service and messaging platform, with around 1,000 employees and last valued at $1.3 billion. Intercom is one the smallest companies on this list to rank highly, and shows strength in many attributes. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/b2c6397c-fa0a-48ab-a27b-d548b975196c_1457x1675.jpeg) #### **6. [Intuit](https://www.intuit.com/)** Intuit, founded in 1983, builds financial software products such as TurboTax, QuickBooks, and Credit Karma, with around 20,000 employees and a market cap of about $180 billion. Intuit is the oldest and largest company to rank highly, and is especially good at incubating product leaders. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/2744014a-9527-4275-ad58-265780bae68c_1457x1675.jpeg) *Not shown, but they were also 11th at Founder Rate.* #### **7. [LinkedIn](https://www.linkedin.com/)** LinkedIn, founded in 2002, is the world’s largest online professional network, with around 19,000 employees and a market cap of about $30 billion. For a larger, older company, LinkedIn is notably impressive at minting founders, beating out companies like Uber, Meta, and Stripe. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/2821d10b-41d6-49cb-9197-45211cb40c05_1457x1674.jpeg) *Not shown, but they were also 11th at CPO Rate.* #### **8. [Palantir](https://www.palantir.com/)** Palantir, founded in 2003, builds tools for government, defense, health care, and private companies to assist them in integrating, analyzing, and deriving insights from vast amounts of complex data, with around 4,000 employees and a market cap of about $150 billion. Palantir is a standout at fostering founders (ranking first by far) and first PMs at other companies. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/246873fb-1fa8-4a1d-a0cb-7a1c186f2efd_1457x1674.jpeg) #### **9. [Deel](https://www.deel.com/)** Deel, founded in 2019, offers an HR-tech platform for global hiring, payroll, and compliance services, with around 4,000 employees, last valued at $12 billion. Deel is the newest company on this list to rank highly and, alongside Discord, seems to accelerate the rate of promotions of their alumni PMs most. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/a8630360-b610-4f0a-906d-cf16fcae0457_1457x967.jpeg) #### **10. [Discord](https://discord.com/)** Discord, founded in 2015, is a voice, video, and text chat app, with around 600 employees and last valued at $15 billion. Discord is the smallest of the companies on this list to rank highly, and is punching well above its weight. ![Image from Which companies accelerate PM careers most](https://substack-post-media.s3.amazonaws.com/public/images/d2bf6f95-49cd-4c70-a3df-2c2119b0961d_1457x967.jpeg) #### **Notable mentions** 1. **[Ramp](https://ramp.com/)** (~800 employees, founded 2019)**:** Particularly strong at creating founders—which is extra impressive since it’s so young. 1. Ranked 3rd at founder rate 2. Ranked 5th at first PM rate 3. Ranked 10th at time-to-next-promotion after leaving 2. **[Nubank](https://www.nubank.com/) (**~7,000 employees, founded 2013**):** Strong all around but not ranked highest on any specific dimension. 1. Ranked 6th at Head of Product rate 2. Ranked 7th at first PM rate 3. Ranked 8th at fastest risers 4. Ranked 9th at fastest promotion 3. **[Notion](https://notion.so/)** (~500 employees, founded 2013): Especially strong at creating first PMs at other companies. 1. Ranked 2nd at first PM 2. Ranked 4th at CPO rate #### **Disclaimer** Why you may not see a company you expect here (i.e. opportunities for future deep dives): 1. **We didn’t look at every company in the world.** We only looked at companies with enough history and data to reduce noise, and we handpicked about 50 of those companies based on feedback from readers. If you think we missed an important one, please leave a comment with the company name. 2. **We only looked at PMs who left the company.** For this analysis, we focused on finding companies that create the biggest impact on that person’s career *after* leaving. This means if a company is great at keeping their best PMs, we wouldn’t see that in the data. 3. **We are looking at historical data.** As you know, past performance is not a guarantee of future results. For companies that have been around for a long time, we are looking at performance across their entire history, which also means we don’t know if they’ve been getting better or worse. 4. **We can’t 100% isolate the variable that most contributed to the career trajectory.** It could be mentorship that PMs got at the company, or it could be that the company hires strong people. It might simply be that the company logo on a resume creates more opportunities. That said, for whatever reason, if you join the companies we highlight below, good things will probably happen for your career. 5. **The sample sizes are not huge.** Even large companies may not have tons of PMs, and so if a few of these PMs go on to do something great, it can make a company’s numbers look great. Also, if you leave and get a fancy title or many promotions at a lower-quality company, that’ll make the company you’ve left look better than it is. Broadly, this is our first shot at doing this analysis, and I’d love to hear what you think (for our next pass). ### Future deep-dive opportunities Every question we answered while doing this analysis created several more questions, so we forced ourselves get this first pass out. Here’s what we’re thinking we’ll do for V2: 1. Look at more companies. (Please leave a comment with companies we missed.) 2. Look at which companies are doing the best *lately* vs. all-time historically. 3. Look at trajectories *within* a company vs. only looking at alumni. 4. For “founder rate,” what’s the rate of *successful* startups, not just starting a company? 5. Look at case studies of some of these top 10 companies to see what they’re doing to help their PMs become great. 6. Look at other functions, like engineering, design, etc. We’d love your thoughts! Leave a comment. [Leave a comment](https://www.lennysnewsletter.com/p/which-companies-accelerate-your-pm/comments) *Thank you to [Jason Saltzman](https://www.linkedin.com/in/jason-salt/) and [Ethan Elias](https://www.linkedin.com/in/ethan-elias-70021472/)* *of [Live Data Technologies](https://www.livedatatechnologies.com/product-jobs) for the data and analysis, and [Ben Hawkins](https://www.linkedin.com/in/benhawkins0/) and [David Prentell](https://g-w.studio/) on design.* *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I’ve got a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), where I work with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [59/61] The Best of Lenny’s Newsletter—2024 Edition *👋 Welcome to this month’s ✨ **free edition** ✨ of Lenny’s Newsletter. Each week I tackle reader questions about building product, driving growth, and accelerating your career. If you’re not a subscriber, here’s what you missed this month:* 1. *[Which companies accelerate PM careers most](https://www.lennysnewsletter.com/p/which-companies-accelerate-your-pm)* 2. *[How to become a supermanager with AI](https://www.lennysnewsletter.com/p/how-to-become-a-supermanager-with)* 3. *[How GiveDirectly increased donations by over $3 million/year through experimentation](https://www.lennysnewsletter.com/p/how-givedirectly-increased-donations)* *For more: **[Lennybot](https://www.lennybot.com/) | [Podcast](https://www.lennysnewsletter.com/podcast) | [Hire your next product leader](https://www.lennysjobs.com/)** | **[My favorite courses](https://maven.com/lenny)** | **[Swag](https://lennyswag.com/)*** This was a big year for me—the biggest of my career: 1. We hosted the first-ever **[Lenny and Friends Summit](https://lennyssummit.com/).** It was a huge undertaking, and a smashing success. [I shared some reflections](https://www.linkedin.com/posts/lennyrachitsky_some-reflections-on-the-lenny-and-friends-activity-7256770312699076609-zxJQ/), and [most of the videos](https://www.youtube.com/playlist?list=PL2fLjt2dG0N4z9w9pkeMgdPq2xcpME_N2) from the Summit are now online. Here’s a photo of the audience when I asked who came from outside the Bay Area. ![Image from The Best of Lenny’s Newsletter—2024 Edition](https://substack-post-media.s3.amazonaws.com/public/images/fd3bb713-ca29-473b-a7ba-7957e6649eb1_4032x3024.jpeg) 2. [The reader community](https://www.lennysnewsletter.com/p/community) organized a record 287 meetups globally this year, including in cities like Cape Town, Cairo, Mexico City, Shanghai, Prague, Mumbai, Warsaw, Riyadh, and Zurich. 3. The [newsletter](https://www.lennysnewsletter.com) hit 900,000 subscribers, and continues to be the #1 business newsletter on Substack. ![Image from The Best of Lenny’s Newsletter—2024 Edition](https://substack-post-media.s3.amazonaws.com/public/images/ccc6a0e6-0812-470e-a767-3fb48e7c7df1_1312x972.png) 4. The [podcast](https://www.lennysnewsletter.com/podcast) crossed 10 million downloads, and is already approaching 20 million. It also continues to be a top-10 tech podcast globally. The two stats I’m most proud of: 1. A 5.0- and 4.9-star rating on Apple and Spotify, respectively. Few podcasts of this scale continue to be so highly rated. 2. It’s the #1 most listened-to podcast for over 25,000 people on Spotify 😮![Image from The Best of Lenny’s Newsletter—2024 Edition](https://substack-post-media.s3.amazonaws.com/public/images/b3cb17e2-dbbc-4b51-b4b0-30c108020bb2_1080x1080.png) 5. The [YouTube channel](https://www.youtube.com/@LennysPodcast) crossed 200,000 subscribers and 1 million hours watched. 😮 They sent me this fun plaque to celebrate 100,000 subscribers earlier this year. ![Image from The Best of Lenny’s Newsletter—2024 Edition](https://substack-post-media.s3.amazonaws.com/public/images/8cc750b7-f4c5-4ea2-9fc0-5627306c18c1_3072x4096.jpeg) 6. I launched [Lennybot](https://www.lennybot.com/)! I’m increasingly convinced this is the future of this newsletter, and that my job is to feed it more great content. When you play with it, make sure to check out the “call” feature. **Looking ahead, a few things I’m planning to explore in 2025 (no promises!):** 1. Launching a product 2. Launching a new newsletter or podcast vertical 3. Lenny and Friends Summit 2.0 (?) 4. Making the paid subscription an absolute no-brainer by adding more killer perks (in addition to [a free year of Perplexity Pro](https://www.lennysnewsletter.com/p/get-perplexity-pro-free-for-1-year) and [access to the community Slack](https://www.lennysnewsletter.com/p/community)) 5. Above all else—continuing to deliver a high-quality newsletter and podcast every week Now, on to this week’s post. Below I’ve collected my best posts and podcast episodes of all time—from day one until now—categorized by the problem you need solved. ![Image from The Best of Lenny’s Newsletter—2024 Edition](https://substack-post-media.s3.amazonaws.com/public/images/3e4c433e-6433-4d45-9f2b-a824dc70c517_1456x720.jpeg) ### I want to learn to build better products 1. How the best companies operate: [Linear](https://www.lennysnewsletter.com/p/how-linear-builds-product), [Perplexity](https://www.lennysnewsletter.com/p/how-perplexity-builds-product), [Stripe](https://www.lennysnewsletter.com/p/building-product-at-stripe-jeff-weinstein), [Figma](https://www.lennysnewsletter.com/p/how-figma-builds-product), [Ramp](https://www.lennysnewsletter.com/p/how-ramp-builds-product), [Shopify](https://www.lennysnewsletter.com/p/how-shopify-builds-product), [Notion](https://www.lennysnewsletter.com/p/how-notion-builds-product), [Wiz](https://www.lennysnewsletter.com/p/building-wiz-raaz-herzberg), [Duolingo](https://www.lennysnewsletter.com/p/how-duolingo-builds-product), [Coda](https://www.lennysnewsletter.com/p/how-coda-builds-product), [Deel](https://www.lennyspodcast.com/an-inside-look-at-deels-unprecedented-growth-meltem-kuran-berkowitz-head-of-growth/), [Palantir](https://www.lennysnewsletter.com/p/the-unconventional-palantir-principles), [Gong](https://www.lennysnewsletter.com/p/how-gong-builds-product), [Meta](https://www.lennysnewsletter.com/p/metas-head-of-product-naomi-gleit) 2. [Mission → Vision → Strategy → Goals → Roadmap → Task](https://www.lennysnewsletter.com/p/mission-vision-strategy-goals-roadmap) 3. [How to get better at product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy) (also check out [this](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-strategy-roger-martin), [this](https://www.lennysnewsletter.com/p/good-strategy-bad-strategy-richard), and [this](https://www.lennyspodcast.com/mastering-product-strategy-and-growing-as-a-pm-maggie-crowley-toast-drift-tripadvisor/) podcast episodes) 4. [How to develop product sense](https://www.lennysnewsletter.com/p/product-sense) (also check out [this](https://www.lennysnewsletter.com/p/building-beautiful-products-with) podcast) 5. [How to develop first-principles thinking](https://www.lennysnewsletter.com/p/first-principles-thinking) ### I want to grow my product 1. [The Racecar Growth Framework](https://www.lennysnewsletter.com/p/the-racecar-growth-frameworkexpanded) 2. [How the biggest consumer apps got their first 1,000 users](https://www.lennysnewsletter.com/p/consumer-business-find-first-users) 3. [Growth ideas](https://www.lennysnewsletter.com/p/growth-ideas) 4. [Growth inflections](https://www.lennysnewsletter.com/p/growth-inflections) 5. [How Duolingo reignited user growth](https://www.lennysnewsletter.com/p/how-duolingo-reignited-user-growth) (and [then accelerated it](https://www.lennysnewsletter.com/p/the-secret-to-duolingos-growth)) 6. [How to consistently go viral: Nikita Bier’s playbook for winning at consumer apps](https://www.youtube.com/watch?v=bhnfZhJWCWY) 7. [Crafting your positioning](https://www.lennysnewsletter.com/p/positioning) (also check out [this](https://www.lennysnewsletter.com/p/april-dunford-on-product-positioning#details) podcast) 8. [GTM motions of 30 B2B SaaS companies](https://www.lennysnewsletter.com/p/gtm-motions) 9. [How to describe your business as an equation](https://www.lennysnewsletter.com/p/the-math-formula-behind-your-business) 10. [A framework for growing consumer subscription businesses](https://www.lennysnewsletter.com/p/the-subscription-value-loop-a-framework) 11. [Five steps to starting your product-led growth motion](https://www.lennysnewsletter.com/p/five-steps-to-starting-your-plg-motion) (plus [this](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-adding-a-plg) podcast) 12. Specific growth tactics: [Conversion](https://www.lennysnewsletter.com/p/this-week-21-strategy-and-tactics), [Retention](https://www.lennysnewsletter.com/p/how-to-increase-your-products-retention), [Virality](https://www.lennysnewsletter.com/p/increasing-virality) (also, it’s a [myth](https://www.lennysnewsletter.com/p/virality-is-a-myth-mostly)), SEO [1](https://www.lennysnewsletter.com/p/the-ultimate-guide-to-seo-ethan-smith), [2](https://www.lennysnewsletter.com/p/rethinking-seo-in-the-age-of-ai-eli-schwartz), and [3](https://www.lennysnewsletter.com/p/crafting-an-seo-strategy-issue-34), sales [1](https://www.lennysnewsletter.com/p/building-a-world-class-sales-org), [2](https://www.lennysnewsletter.com/p/master-founder-led-sales-jen-abel), [3](https://www.lennysnewsletter.com/p/how-to-build-a-killer-sales-pitch), [4](https://www.lennysnewsletter.com/p/founder-led-sales-pete-kazanjy-founding#details), [paid growth](https://www.lennysnewsletter.com/p/mastering-paid-growth-jonathan-becker), and [launching on Product Hunt](https://www.lennysnewsletter.com/p/how-to-successfully-launch-on-product) ### I want benchmarks 1. [What is good retention](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29) 2. [What is a good activation rate](https://www.lennysnewsletter.com/p/what-is-a-good-activation-rate) (and [how to determine your activation metric](https://www.lennysnewsletter.com/p/how-to-determine-your-activation)) 3. [What is a good payback period](https://www.lennysnewsletter.com/p/payback-period) 4. [What is good monthly churn](https://www.lennysnewsletter.com/p/monthly-churn-benchmarks) 5. [How to measure cohort retention](https://www.lennysnewsletter.com/p/measuring-cohort-retention) 6. [What is a good growth rate](https://www.lennysnewsletter.com/p/what-is-a-good-growth-rate) ### I want to become a better leader and manager 1. [The power of performance reviews to become a better manager](https://review.firstround.com/the-power-of-performance-reviews-use-this-system-to-become-a-better-manager) 2. [The secret to a great planning process](https://review.firstround.com/the-secret-to-a-great-planning-process-lessons-from-airbnb-and-eventbrite/) 3. [How to become a supermanager with AI](https://www.lennysnewsletter.com/p/how-to-become-a-supermanager-with) 4. [My favorite decision-making frameworks](https://www.lennysnewsletter.com/p/my-favorite-decision-making-frameworks) 5. [Why most public speaking advice is wrong—and how to finally overcome your speaking anxiety](https://www.lennysnewsletter.com/p/master-public-speaking-tristan-de-montebello) ### I want to get ahead in my career 1. [The Magic Loop: A framework for rapid career growth](https://www.lennysnewsletter.com/p/the-magic-loop) 2. [How to communicate tradeoffs so leaders will listen](https://www.lennysnewsletter.com/p/how-to-communicate-tradeoffs-so-leaders) 3. [The Minto Pyramid Principle and the SCR framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) 4. [Learn to prioritize](https://www.lennysnewsletter.com/p/prioritizing) and [DRICE: a modern prioritization framework](https://www.lennysnewsletter.com/p/introducing-drice-a-modern-prioritization) 5. [A PM’s guide to influence](https://www.lennysnewsletter.com/p/a-pms-guide-to-influence) and [How to get better at influence](https://www.lennysnewsletter.com/p/how-to-get-better-at-influence) 6. [14 habits of highly effective product managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product) 7. [How become a more technical product manager](https://www.lennysnewsletter.com/p/become-a-more-technical-product-manager) 8. [Managing up](https://www.lennysnewsletter.com/p/managing-up) 9. [Product management career ladders](https://www.lennysnewsletter.com/p/product-management-career-ladders) ### I want to get smarter about AI 1. [How to use ChatGPT](https://www.lennysnewsletter.com/p/how-to-use-chatgpt-in-your-pm-work) and [Perplexity in your PM work](https://www.lennysnewsletter.com/p/how-to-use-perplexity-in-your-pm) 2. [Five proven prompt engineering techniques (and a few more-advanced tactics)](https://www.lennysnewsletter.com/p/five-proven-prompt-engineering-techniques) 3. [You should be playing with GPTs at work](https://www.lennysnewsletter.com/p/you-should-be-playing-with-gpts-at) 4. [Why PMs are best positioned to thrive in an AI world](https://www.lennysnewsletter.com/p/why-pms-are-best-positioned-to-thrive) 5. [Counterintuitive advice for building AI products](https://www.lennysnewsletter.com/p/counterintuitive-advice-for-building) 6. [How AI will impact product management](https://www.lennysnewsletter.com/p/how-ai-will-impact-product-management) ### I want to start a company 1. [How to kickstart and scale a B2B business](https://www.lennysnewsletter.com/p/how-the-most-successful-b2b-startups) (7-part series) 2. [How to kickstart and scale a consumer business](https://www.lennysnewsletter.com/p/kickstarting-and-scaling-a-consumer) (7-part series) 3. [How to kickstart and scale a marketplace business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace) (8-part series) 4. [Raising a seed round 101](https://www.lennysnewsletter.com/p/raising-a-seed-round-101) 5. [A framework for finding product-market fit](https://www.youtube.com/watch?v=yc1Uwhfxacs) 6. [How to find a breakthrough startup idea](https://www.youtube.com/watch?v=h9o6gPQA6LA) 7. [Lessons learned from a startup that didn’t make it](https://www.lennysnewsletter.com/p/lessons-learned-from-a-startup-that) 8. [Lessons from 1,000+ YC startups: Resilience, tar pit ideas, pivoting, more](https://www.youtube.com/watch?v=m7LvNTbaqSI) (plus [this](https://www.youtube.com/watch?v=ZoKLofsp8u0) podcast) 9. [The definitive list of successful pivots](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-1-the-definitive) (plus [how, why, and when to pivot](https://www.lennysnewsletter.com/p/the-art-of-the-pivot-part-2-how-why)) ### I want to hire the best people 1. [How to learn the most about a candidate from a single interview question](https://www.lennysnewsletter.com/p/how-to-learn-the-most-about-a-candidate) 2. [My favorite PM interview questions](https://www.lennysnewsletter.com/p/my-favorite-pm-interview-questions) 3. [How to interview product managers](https://www.lennysnewsletter.com/p/how-to-interview-product-managers) 4. [Hiring your early team](https://www.lennysnewsletter.com/p/hiring-your-early-team-b2b) 5. [Six rules of hiring for growth](https://www.lennysnewsletter.com/p/hiring-growth) 6. [When to hire your first product manager](https://www.lennysnewsletter.com/p/when-they-hired-their-first-pm) 7. [My favorite interview questions from 100+ guests](https://www.lennyspodcast.com/my-favorite-interview-questions-from-100-guests/) ### I want to get a job 1. [How to pass any first-round interview (even in a terrible talent market)](https://www.lennysnewsletter.com/p/how-to-pass-any-first-round-interview) 2. [Land your dream job in today’s market: negotiation tactics, job search councils, more](https://www.youtube.com/watch?v=OH3nzRdwYPA) 3. [The 10 commandments of salary negotiation](https://www.lennysnewsletter.com/p/negotiating-comp) ### I want to be more productive 1. [Product manager is an unfair role. So work unfairly.](https://www.lennysnewsletter.com/p/product-manager-is-an-unfair-role) 2. [Time management techniques that actually work](https://www.lennysnewsletter.com/p/time-management-techniques-that-actually) (plus [part two](https://www.lennysnewsletter.com/p/part-2-time-management-techniques)) 3. [My favorite product management templates](https://www.lennysnewsletter.com/p/my-favorite-templates-issue-37) 4. [The LNO framework](https://www.lennysnewsletter.com/p/episode-3-shreyas-doshi) ### I want to feel less stressed 1. [Why no productivity hack will solve your overwhelm](https://www.lennysnewsletter.com/p/why-no-productivity-hack-will-solve) 2. [How to know when to stop](https://www.lennysnewsletter.com/p/how-to-know-when-to-stop) 3. [On asking for help (even when you really don’t want to)](https://www.lennysnewsletter.com/p/on-asking-for-help-even-when-you) 4. [How to work through fear, and nurture innovation](https://www.lennysnewsletter.com/p/how-to-fire-people-with-grace-work) 5. [How embracing your emotions will accelerate your career](https://www.youtube.com/watch?v=DYkE1gf37ts) *Happy holidays! Have a fulfilling and productive week 🙏* *P.S. Overwhelmed by how much stuff there is to read and listen to? Just ask [Lennybot](https://www.lennybot.com/) what you want to know.* ## Hiring? 👀 I run a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), working with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [60/61] Top angel investors in the U.S. My popular post on fundraising, [Raising a seed round 101](https://www.lennysnewsletter.com/p/raising-a-seed-round-101) by [Terrence Rohan](https://x.com/tmrohan) and [Jack Altman](https://x.com/jaltma), shared advice about every aspect of early-stage fundraising, except one: *who* to try to raise money from. The [top funds are a known quantity](https://www.forbes.com/lists/midas/), but the top angel investors are not. And that’s who generally makes up the majority of early-stage funding and cap tables. Especially if you’re trying to bootstrap and take just a few small checks. So I teamed up with the folks at [Crunchbase](https://www.crunchbase.com/) to find out who the most active angel investors in the U.S. are. Crunchbase has the broadest dataset on investment and fundraising I’ve come across, and I’d never seen data on this before, so I was excited to see what we could find. We looked into three questions: 1. **Who have been the most active angel investors over the past five years** 2. **Who the most active angel investors are currently** 3. **Who have been the most successful angel investors historically** The results are fascinating! Below, you’ll find a list of the top angel investors, and a few of my takeaways from this data. When you go through the list below, you’ll probably be wondering, “But how do I contact them and pitch my idea?” The good news is that I’ve included a link to their contact form when they have one. The bad news is that, [as Terrence and Jack pointed out in their post](https://www.lennysnewsletter.com/i/148739654/get-powerful-warm-intros), the best investors look for warm introductions from people they trust, vs. cold emails. My advice is to make a list of folks you find below, and then find someone who knows someone who knows one of these people and try to get a warm introduction. I know that’s annoying, but there’s a reason the best investors operate this way—a warm introduction is an effective filter for the best deals, and it keeps them from getting overwhelmed. As Terrence and Jack also said, though, “if you can’t find a warm intro, craft a good cold email. These don’t convert as well, but there is almost zero downside to sending one.” ***How this data is sourced:** Crunchbase’s proprietary data is based on public fundraising announcements, along with firms and angels who opt in to contributing their cap tables. Since no one has access to the cap tables of every startup (and if they did, they wouldn’t be allowed to share the data), this is the best information anyone has about investors and fundraising. This data isn’t complete or perfect, since many deals are not announced, not all investors are mentioned in every deal, and the fanciest investors will get mentioned most, but it’s the best proxy anyone has. I sanity-checked this list with a handful of prominent investors, and they agree that this group of investors looks right. **Treat the numbers below as directional, not as exact figures.*** ## **The most active angel investors of the past five years** ![Image from Top angel investors in the U.S](https://substack-post-media.s3.amazonaws.com/public/images/71273b2b-30bf-454d-a361-c1d1d3192d16_2912x4810.png) #### 1. [Edward Lando](https://www.linkedin.com/in/edwardlando/) and [Nadav Ben-Chanoch](https://www.linkedin.com/in/nadavbc/) / [Pareto Holdings](https://pareto20.com/) 🥇 I hadn’t heard of Edward or Nadav before seeing this data, which makes this so interesting. Edward and their fund (Pareto Holdings) have invested in more than 1,000 startups, including over 25 unicorns, like Ramp, Mercury, OpenStore, Modern Treasury, Misfits Market, Truebill, and others. Nadav worked with Edward for a number of years and now runs a [roofing business](https://www.linkedin.com/in/nadavbc/details/experience/). Fascinating! [Learn more about Pareto and reach out here](https://pareto20.com/). #### 2. [Gokul Rajaram](https://gokulrajaram.com/) 🥈 Gokul is an investor, operator, and also just a super-nice guy. He’s an investor in companies like Airtable, BetterUp, Deel, Digital Ocean, Faire, Figma, Ironclad, Postman, Rubrik, and Vercel. He’s been a senior operator at Google, Facebook, Square, and most recently DoorDash. He’s also on the board of Coinbase, Pinterest, and The Trade Desk and is an excellent tweeter. Stud! His investments are fairly generalist, across B2B, B2C, fintech, infrastructure, and AI. [Learn more and reach out to him here.](https://gokulrajaram.com/) [Here’s my podcast episode with Gokul](https://podcasts.apple.com/us/podcast/gokul-rajaram-on-designing-your-product-development/id1627920305?i=1000566230788). #### 3. [Elad Gil](https://eladgil.com/) 🥉 Elad, like Gokul, is both a legendary operator and investor. His list of investments is what dreams are made of: Airbnb, Airtable, Anduril, Applied Intuition, Brex, Coinbase, dbt Labs, Deel, Figma, Flexport, Gusto, Instacart, Mistral, Notion, Opendoor, Perplexity, Pinterest, Retool, Rippling, Samsara, Square, and Stripe. He started two successful companies, Mixer Labs (bought by Twitter) and Color Health, and was a VP at Twitter. He also recently incubated a new company, [Braintrust](https://braintrustdata.com/), and has an amazing AI podcast with [Sarah Guo](https://www.linkedin.com/in/sarahxguo/) called [No Priors](https://www.youtube.com/@NoPriorsPodcast). He’s mostly focused on investing in AI startups these days. [Learn more and reach out here](https://eladgil.com/). #### 4. [Scott Belsky](https://www.scottbelsky.com/) 🏅 Scott is a product person’s product person. He’s the co-founder of Behance, spent five years as Chief Product Officer of Adobe Creative Cloud, and is currently Adobe’s Chief Strategy Officer and Executive Vice President of Design and Emerging Products. He is/was an early advisor and investor to Pinterest, Uber, Flexport, Carta, Airtable, Ramp, Eight Sleep, WorkOS, The Browser Company, and Sweetgreen. He’s also the author of *[The Messy Middle](https://www.amazon.com/Messy-Middle-Finding-Through-Hardest/dp/0735218072/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=&sr=),* *[Making Ideas Happen](https://www.amazon.com/Making-Ideas-Happen-Overcoming-Obstacles/dp/1591844118)*, and his newsletter [Implications](https://implications.com/). He seems to gravitate most to consumer products, which is rare these days. [Learn more and reach out to him here](https://www.scottbelsky.com/). [Here’s my podcast episode with Scott](https://www.youtube.com/watch?v=HCKosdV1J-8), and [his talk at the Lenny and Friends Summit](https://www.youtube.com/watch?v=XYMvtmPGcmU). #### 5. [Jon Oringer](https://www.linkedin.com/in/shutterstock/) Jon is the founder of Shutterstock and, interestingly, the co-founder of Pareto Holdings. Those guys are putting up some serious numbers. Jon is an investor in companies like Docker, OpenStore, and Misfits Market. But though he’s still actively investing, he has slowed his pace, with only two known investments last year. #### 6. [Charlie Songhurst](https://www.linkedin.com/in/charlessonghurst/) Charlie is a prolific British-born angel investor. He was GM and later Head of Corporate Strategy at Microsoft, and since 2013 has invested in more than 500 companies, including unicorns like EasyPost, Formlabs, Convoy, ClassPass, and Rigetti Computing. [This conversation with Patrick O’Shaughnessy](https://podcasts.apple.com/us/podcast/invest-like-the-best-with-patrick-oshaughnessy/id1154105909) is the best overview I’ve seen on how Charlie thinks about investing. #### 7. [Naval Ravikant](https://nav.al/) Naval is a legendary founder (co-founded AngelList), investor (early investments in Uber, Twitter, Perplexity, Replit, Substack, Opendoor, Vercel, Eight Sleep, and Notion), and also a modern guru. He shares mind-expanding wisdom on tech and life on [Twitter](https://x.com/naval), [his podcast](https://podcasts.apple.com/us/podcast/naval/id1454097755), and in [this fan-created book](https://www.navalmanack.com/). His investments are fairly generalist, but he and Scott Belsky are the two most frequent B2C investors on this list. #### 8. [Mark Cuban](https://markcubancompanies.com/) You’ve no doubt heard of Mark Cuban. He’s a “shark” on the show *Shark Tank*, part-owns the Dallas Mavericks, owns film studio Magnolia Pictures, is a multi-time founder (famously sold Broadcast.com for $5.7 billion in 1999), and an early investor in Box, OpenSea, Polygon, Yuga Labs, and many others. His investments are all over the place, including web3, DTC, hardware, consumer, B2B SaaS, NBA teams, movie companies. . . He wins for the widest spectrum of investment categories. #### 9. [Lachy Groom](https://www.linkedin.com/in/lachy-groom-b218895/) Lachy (pronounced “locky”) spent seven years at Stripe, where he was Head of Stripe Issuing, then became a super-active investor after leaving Stripe, and while continuing to actively invest, he co-founded [Physical Intelligence](https://π.com) (which wins for coolest domain name). He’s invested in companies like Figma, Notion, Anduril, Deel, NexHealth, Speak, WorkOS, and Mainframe and invests across B2B SaaS, fintech, infrastructure, healthtech, and AI. You can contact him at lachygroom@gmail.com. #### 10. [Sahin Boydas](https://www.linkedin.com/in/sahinboydas/) Sahin is the most surprising person on this list to me because (1) I hadn’t heard of him, (2) his list of investments is incredible, and (3) as you’ll see below, he was the #1 most active angel investor in 2024. Sahin is a many-time founder (his company RemoteTeam was acquired by Gusto), is currently on the Corporate Development/Strategy team at Gusto, and has invested in companies like Anthropic, OpenAI, Scale, Hugging Face, Postman, Front, WHOOP, Pika, and Eight Sleep. He seems to invest primarily in AI and B2B SaaS but does the occasional consumer product. [Learn more and reach out to him here](https://sahin.notion.site/Sahin-Boydas-Press-Kit-3cdfad4e6d8740908a72350da2285729). Here’s a fun visual of the above data over time: ## **The most active angel investors in 2024** ![Image from Top angel investors in the U.S](https://substack-post-media.s3.amazonaws.com/public/images/77bd2c75-a3de-490e-b1b4-bc32ea4b85f7_2912x4330.png) Congrats, [Sahin Boydas](https://www.linkedin.com/in/sahinboydas/), on being the most active angel investor in all of 2024 (based on the data we have)🥇 He and Elad Gil are killing it for non-web3 investors 🏆 I’ll skip giving background on folks I’ve already described above, so here are the new faces: #### 2. [Paul Taylor](https://www.linkedin.com/in/officialpaultaylor/) Paul seems to invest almost exclusively in web3, which tells me he probably made a bunch of cash from crypto early on. Nice! He’s a four-time national chess champion, spent four years at BlackRock (doing crypto investing), and has been in crypto since 2011. [Here’s a neat interview with him](https://www.brickken.com/en/post/paul-taylor-interview). You can see his list of investments [here](https://www.linkedin.com/in/officialpaultaylor/details/experience/) and find him on X [here](https://x.com/paultaylorvc). #### 3. [DCF GOD](https://www.crunchbase.com/person/dcf-god) DCF GOD is also exclusively a web3 investor, and as you do in web3, DCF GOD is an anonymous investor. Delightful. Since I’m not deep into web3, I suspect there’s more to this story, but [here’s an interview](https://www.youtube.com/watch?v=xOiHLEuc_Jc) with him, his [X profile](https://x.com/dcfgod), and [merch](https://www.dcfgod.com/). #### 5. [Anatoly Yakovenko](https://www.linkedin.com/in/anatoly-yakovenko/) Anatoly is the co-founder of Solana (one of the largest blockchains in the world) and a former engineer at Dropbox, Mesosphere, and Qualcomm. For a web3 founder, he refreshingly invests in other domains, including AI, fintech, cybersecurity, B2B SaaS, and infrastructure. [Here’s a recent interview with Anatoly](https://www.youtube.com/watch?v=qvxRSeMmXTA). He seems like a great guy. #### 7. [Nat Friedman](https://nat.org/) Nat is the former CEO of GitHub, a two-time founder, and one of the leading thinkers and investors in AI. He recently helped raise funds for a cool project to [use AI to read the long-lost Herculaneum scrolls](https://scrollprize.org/). He now mostly [co-invests with Daniel Gross](https://nfdg.com/) (who’s also on the list), primarily in AI startups. He’s invested in over 100 startups, including Eleven Labs, Character.ai, Retool, Scale, Vercel, Perplexity, AssemblyAI, Magic.dev, Apollo, and Sentry. He, Elad Gil, and Jeff Dean (below) should probably be on your cap table wish list if you’re starting an AI company. You can reach him at nat@nfdg.com. #### 8. [Roman Smolevskiy](https://www.linkedin.com/in/romansml/) I love Roman because he’s the most unlike anyone else on this list. He’s from the construction business and invests in three less sexy (self-described) categories: PropTech, ConTech, and RealTech. To make it more interesting, he’s also an investor in three of Elon Musk’s companies (SpaceX, Neuralink, xAI). Which tells me he’s buddies with Elon. Nice. #### 9. [Jeff Dean](https://www.linkedin.com/in/jeff-dean-8b212555/) Jeff is Chief Scientist for Google DeepMind and Google Research. Reading [his list of accomplishments](https://www.linkedin.com/in/jeff-dean-8b212555/details/experience/) will make you feel like you’ve done nothing with your life. I love that he’s angel investing, and anyone would be very lucky to have him on their cap table. #### 10. [Guillermo Rauch](https://www.linkedin.com/in/rauchg/) Guillermo is CEO and co-founder of Vercel, one of the hottest AI startups today (makers of v0). He’s also coming on the podcast early next year! His list of investments includes Perplexity, ElevenLabs, Scale, Honeycomb, Magic, and Runway. ### **Angel investors with the most exits in the past six years** ![Image from Top angel investors in the U.S](https://substack-post-media.s3.amazonaws.com/public/images/6328ac0e-cd11-4a7c-b10c-97919477e0f0_2912x4330.png) [Edward Lando](https://www.linkedin.com/in/edwardlando/) racking them up! With Jon Oringer at #3. Good work, team Pareto! Honorable mention to [Scott Belsky](https://www.scottbelsky.com/) 🥈 To me, the most interesting people on this list are the ones we haven’t seen on the other lists, because these people may have a higher hit rate. We can’t say this for sure because we don’t have data on their investing pace prior to 2018, but directionally it’s interesting. Props to **[Louis Beryl](https://www.linkedin.com/in/louisberyl/)**, **[Peter Thiel](https://en.wikipedia.org/wiki/Peter_Thiel)** (note this is just his angel bets, outside of Founders Fund), **[Nat Turner](https://www.linkedin.com/in/natsturner/)**, **[Jason Warner](https://www.linkedin.com/in/jcw148/)**, **[Zach Weinberg](https://www.linkedin.com/in/zachweinberg/)**, **[Wayne Chang](https://www.linkedin.com/in/waynechang/)**, **[Shane Neman](https://www.shaneneman.com/)**, **[Marc Benioff](https://en.wikipedia.org/wiki/Marc_Benioff)**, **[Constance Freedman](https://www.linkedin.com/in/cfreedman/) (**the only woman on the list 😭**)**, **[Wei Guo](https://www.linkedin.com/in/wei-guo-b9b76038/)**, **[Kevin Mahaffey](https://www.linkedin.com/in/kmahaffey/)**, **[Daniel Curran](https://www.linkedin.com/in/dancurran/)**, and **[Clark Valberg](https://www.linkedin.com/in/clarkvalberg/)**. ### Opportunities for follow-up posts 1. Who’s made the most money (i.e. return on invested capital) 2. Who’s got the highest hit rate (i.e. percentage of investments that exit) 3. Which investors founders love most 4. Who’s consistently an early check into the biggest successes 5. Why so few women on this list. Any other suggestions? Leave a comment! [Leave a comment](https://www.lennysnewsletter.com/p/top-angel-investors-in-the-us/comments) ### 📚 Further study 1. [Lessons from 140+ angel investments](https://www.lennysnewsletter.com/p/angel-investing) 2. [Raising a seed round 101](https://www.lennysnewsletter.com/p/raising-a-seed-round-101) 3. [How to Angel Invest, Part 1](https://nav.al/angel-1) by Naval 4. [How to Angel Invest, Part 2](https://nav.al/angel-2) by Naval 5. [How to be an angel investor](https://www.paulgraham.com/angelinvesting.html) by Paul Graham *Have a fulfilling and productive week 🙏* ## Hiring? 👀 I run a white-glove recruiting service specializing in senior product roles (e.g. Directors, VPs, and Heads of Product), working with a few select companies to fill their open roles. If you’re hiring, apply to work with us below. [Start hiring](https://www.lennysjobs.com/) **If you’re finding this newsletter valuable, share it with a friend, and consider subscribing if you haven’t already. There are [group discounts](https://www.lennysnewsletter.com/subscribe?group=true), [gift options](https://www.lennysnewsletter.com/subscribe?gift=true), and [referral bonuses](https://www.lennysnewsletter.com/leaderboard) available.** Sincerely, Lenny 👋 --- ## [61/61] Taking the week off 🎄🕎🎁 I’m taking the week off to rest, spend time with family, and reflect. I hope you have a chance to do the same. Happy holidays! And see you next week. P.S. If you’re looking for something to read or listen to, don’t miss my “[Best of Lenny’s Newsletter](https://www.lennysnewsletter.com/p/the-best-of-lennys-newsletter2024)” post. ![Image from Taking the week off 🎄🕎🎁](https://substack-post-media.s3.amazonaws.com/public/images/5bec1350-c197-4576-b7f1-15092bbbc32d_1170x1560.jpeg) ---