Navigating the Four Phases of "Fail-Fast-Fail-Often" for Product Managers
Written on
Understanding the Four Stages of "Fail-Fast-Fail-Often"
In the realm of product management, every day presents an opportunity to learn about new challenges and devise solutions. This learning process typically involves engaging with team members, executives, customers, and analyzing competitors. Different methodologies for learning come with varying levels of costs and risks. Some product managers may inadvertently take on excessive risks or expenses, concluding with the mindset of "we learned this doesn't work," which is essentially a form of failure.
The role of a product manager is to achieve success, even if it means incurring some cost-effective failures along the journey. While failure is inherent in the learning process, it's crucial to manage its costs. Product managers leverage knowledge to mitigate risks associated with their initiatives.
Achieving Certainty Through Knowledge Accumulation
To navigate from uncertainty to certainty regarding a product's outcome, knowledge and data accumulation are essential. This progression can be visualized along an x-axis, where movement from left to right signifies increasing certainty.
Two primary learning strategies exist:
- Self-learning through experimentation
- Learning from others by analyzing competitors' actions
The latter approach is generally more cost-effective, allowing for independent research or engaging external research firms. However, when self-learning is necessary, costs become a significant factor, demanding alignment between the benefits obtained and the investments made.
Aligning Learning Methods with Financial Resources
The stage of a company or product can be assessed based on its customer base and available budget. For instance, a startup typically has minimal earnings and should concentrate on a specific target segment initially. Conversely, a well-established company like Amazon, with its vast user base, operates from a position of greater financial flexibility when considering new product initiatives.
Startup Phase: Focus on Building Rather than Learning
A startup founder or a product manager of a new offering within a larger company must have a clear understanding of their initial customer base. Their proximity to the problem often translates to a wealth of knowledge, which minimizes learning costs. For bootstrapped startups, the financial resources are limited, making it imperative to prioritize building the product over extensive testing.
Example: Facebook's Early Days
Facebook's inception involved Mark Zuckerberg targeting university students, as he and his team were close to this demographic. This proximity allowed them to concentrate on product development instead of exhaustive testing.
Transitioning from Startup to Growth: Balancing Diverse Customer Needs
After achieving initial success, a product manager must now explore new customer segments through cost-effective testing, similar to a venture capitalist managing a diverse portfolio. Quick tests, such as customer interviews and surveys, become essential in identifying promising directions.
Example: Google's Early Development
Larry Page and Sergey Brin focused on building a superior search engine and acquiring users before engaging in extensive testing.
Expansion Phase: Achieving Statistical Significance
With a more established product and budget, managers can now conduct meaningful tests, including A/B testing to optimize existing products or broader surveys for new ideas. The choice of method should align with the goal, whether it’s refining a current offering or assessing the market appetite for new features.
Big Business Testing: Navigating High-Stakes Experiments
Leading tech companies often run thousands of A/B tests monthly due to their financial capacity to explore incremental enhancements. The ability to fund significant tests, like Google’s $1 billion Google Glass project, underscores the necessity of having a substantial budget for ambitious ventures.
The Importance of Balancing Learning and Financial Investment
For a product manager, integrating testing and learning into daily operations is vital. Advancing on the knowledge axis while aligning financial investments with learning objectives is key to success.
The first video, titled "Why YOU are supposed to FAIL? | Failure to Success Story," delves into the nature of failure and its role in achieving success.
The second video, "The Other F Word: Let's Talk Failure ft Brett Shellhammer," discusses the importance of addressing failure openly in the journey of product management.
Author
Yaniv Nathan is a transformative product leader with experience launching multiple product lines and features. He also has patents in financial services and blockchain. Yaniv assists businesses in enhancing their digital channels, processes, and product management methodologies.
Twitter: @PM_isBusiness | LinkedIn: Yaniv Nathan | Follow me: Yaniv Nathan