Can't Predict the Future? Think Again!

Alright, so finally back to our remote setup. I'm quite excited, there was a lot of progress in the last couple of months when it comes to recording software and stuff. We're playing around a little bit with different tooling. We can give you an update when we see what works and what doesn't for anyone interested in having their own series or episodes. People will get the update latest when we start inviting people from the tools that we're using to the podcast. I think it's a little bit similar to what we discussed yesterday. I think tooling is currently evolving a lot and AI is obviously the main driver for this and there's a lot of AI in these things. A lot of it is still in beta, obviously, but when it comes to a good and intuitive solution, I would say that's miles apart. I think there's some good progress at solving some issues that other tools didn't solve, but then still UI-wise. To be honest, I'm a user and as a user, I don't give a shit about the problems. I just want to have a tool where I record and automatically upload a good, defined podcast episode. Ideally, it uploads on all channels, also social media channels. I just want it to be easy. I don't want to do any work. Now I have a philosophical question. My two cents on that. Let's do something. You said, I am a user. Today I had a conversation in the office discussing terminology. A lot of people say you shouldn't call your users users. That's like making them objects. Users use drugs. Addicted people are users. I don't know where I read that. I haven't heard that, but okay. I think it was more about the mindset of it's not a user, it's a client, it's a customer more than that. Or maybe there's even better words to politically correct address a customer. You can't say collect, Alex. That's not correct. So you see yourself as a user. That's good. This all started because there was an article that was saying our most valuable asset is you. I was like, I don't know if I want to be addressed as an asset. A company that sees me as an asset, that's kind of weird. There's a nice quote, right? If you don't pay for the service, you are the value behind the service. Yes. Example? I'm a human being, not an asset. I'm not an object. It's a little bit the same conversation why companies don't call their HR teams HR teams because a human is not a resource. However, we should still call them HR teams because the most HR teams are just useless. I mean, maybe, but I have to say with all the prejudices and so on, our people and culture team, especially the person that I work with directly, he does a really good job. Shout out to Danny. I'm not sure if he's listening to it. Danny is a really cool guy. And I think it also comes down to how those teams are structured, right? Because, for example, I mean, we recently were interviewing a head of product from Google. It doesn't matter which product he works on and so on, he has been there for quite some time. I think the cool thing is there with an organization that big, you have a business partner for every single aspect of the company. So you have someone in the HR team that's like your business partner for development, someone for coaching, someone for salary bands, someone for if there is some interpersonal issues. So you have all these specialized people that are here for you as a leader to kind of help you work through your stuff. And I think I would love having support on a couple of these topics. I think that's where I'm also saying Danny is doing a great job because we work on salary bands, we work on career ladders and so on, which if you're alone with it as a manager, it's kind of difficult to just work on it. And I mean, I think there is obviously a lot of prejudices because a lot of people or HR teams are not set up like this. Yeah, exactly. They're like really just operational and then a lot of them like see themselves as like the company police and they need to regulate everything. And I mean, that's where they put themselves into like a kind of difficult position. That's where it starts. Where a lot of people don't like them and I think that's where it comes from. I know so many people who don't like HR because they only know them as like, oh, they are the ones who slap my hands if I do something wrong. Yeah, or they are not there when I need them. Or that. I think these are the most topics that I have seen when it comes to HR. That the power is missing on a certain level. Anyway, terminology and HR teams. Were actually not the thing that I wanted to talk to you about. Let's put that aside. Okay. No, like one thing that caught my attention was Notion app. Right. A lot of people hate Notion. A lot of people. I think there's more people who love Notion than they hate Notion. A lot of fanboys. You say no. I have mixed feelings, but go ahead. Well, so I started like following a little bit more the whole like investment space, VC space and so on. So I came across the story of Notion. Because I think they were in the news. I don't know if they re-raised or if they had like a really good valuation. So yeah, pretty much the VC was like telling the story of like how Notion in the first place pitched their idea. Which was very unconventional from pitches that you would usually see. So the founder pretty much brought a piece of paper. And he told the story of the flexibility of a piece of paper. You can do everything with it. You can write on it. You can draw on it. You can build something out of it. You can cut it. Like it's a very flexible tool with pretty much no limitation. Right. Yeah. And so without the pitch deck, without like bringing crazy numbers or anything, that was enough to secure the first investment. Which as a story on its own, it's quite interesting, right? It's a good storytelling. It also shows how important a strong vision is. Because there wasn't a product in place. There was just like this idea of I want to create something as flexible as a piece of paper. Yeah. Because like a lot of the tools nowadays have limitations in mind, right? Like they're built for a specific thing. Which usually helps, right? The more target your product is, the easier it is to get it to the market. And it's super straightforward. But also it gets off the market if it becomes too flexible at a certain level, right? If you start over engineering it, which we see also many times. Yes. Yeah. Absolutely. Absolutely. Now, the thing that was interesting and that I will now use as an argument like also more and more in the future was that the notion what they did in the first place was they launched like this app or website builder, right? Yeah. A friend of mine just used it. You would drag and drop it. You would build an application. And their story was that like no limits. You can build whatever you want. And you have this like app builder. And they had zero success, right? Nobody really wanted to use it. The only people who were actually using it were the VC investors. Which kind of made it feel even worse because it felt like they are just using it for their pity. And so the guy had no funding. They had to lay off everyone. He moved to Kyoto or somewhere. And he sat down a couple of weeks and months to figure out how to save this product. And without changing anything on the product, on the fundamental product, only touching the interface itself, the front end, and twisting the story of what it is away from, oh, it's this like website builder or app builder into this productivity tool that you can take for taking notes, for creating your tables and so on. That simple twist saved the company and made them a massive success, right? So I think for me, this is the prime example of how important actually the interface design and the UI, because we talked a lot about like user experience. And I feel like design has this tendency of like not even wanting to talk about the visuals. But the visual design and the visual interface can make such a huge difference. Like your backbone and back end and like software can be as the best tool in the world. Think Notion, which nowadays I think a lot of people would say it's great. But if the surface layer isn't the right one, and if the messaging isn't the right one, it's like branding, visual identity, and so on. If those things are not there, nobody's going to use it. You're right. I mean, I'm looking at it from an additional point of view, which is I think the design helped to change the story and the changes that the founder made. But I'm also looking at it from a product market fit point of view, right? Because with changing the story, the use case of the product and what he has built has changed as well. So that means something that I'm observing is that it usually goes hand in hand with product. So product design and product market fit, finding product market fit goes to a certain level hand in hand. No, yeah, absolutely right. And obviously, there wasn't enough understanding also of the market and research and so on. Because if you try to build an app tool, and then at the end, you're successful on a completely different end by working on productivity tools, there was a mismatch. We don't need to argue on that, right? Which is okay, right? I mean, finding product market fit is not something that you usually do within the first shot. Yeah, I mean, of course, it would be nice. And you are the king or the queen when you get there. But I mean, that's something that we also talked about in the previous episodes is it's not easy to find product market fit in general, right? And I think, especially in these days where we have even more tools and even more different ways of approaching people, finding your customers and stuff like that, it gets tougher to find product market fit. But on the other hand, you can be really lucky if you find it, because then you have a very strong foundation you can build up on. So that means this whole product and market fit research process contains multiple iterations. So that's something that I'm observing. And yeah, sometimes you are closer than you think. And sometimes you are more far away than you think when it comes to identifying what the customers want and adapting what you have. But how crazy is it that at the end, by just changing this top layer, you can turn a failed company into an actual successful company? How much is there? How much products are out there that in theory would be the right product, but we never see them because they just like don't find the right customer segment to target and they don't have the right interface and people just don't want to use it. Especially with a tool that's that flexible, right? Because it's like it leaves it open for interpretation. You know what's funny is I had today, just a couple of hours ago, a meeting because I'm having a project with the university I studied with. And the students are getting a sustainable project to build a little product. And I'm supporting from a coaching point of view. And what I was doing today is I was giving a little introduction into product management. And something that I was sharing, that's something that I just scrapped out. There is a study showing that still, as of today, 90% of the startups are failing. And the fun fact is that 34% of these 90% of the companies that are failing are failing due to a lack of product market fit. And I'm just, as you said, curious to see what is missing to get to product market fit, right? So, I mean, usually you are closer than you think. But the question is, how do you target? How do you address? Or what needs to be adapted within your product? Yeah, I mean, it obviously also makes sense, right? Like product market fit is the core of success for product. If you have a product and there's no market for it. But you know what I found interesting? The questions from the students were, why is it still happening that 90% of the companies are failing even though we have so much knowledge about product development and research? What's your answer? I mean, interestingly enough… Tough question, right? Well, I can… I will almost take the same argument that I had today in our company, right? Like we're currently working on a new product. Hasn't been there. And we're doing research. Because the question is like, should we build this or not? It's a big investment. We already invested a lot of money. We're willing to, you know, just like abandon the boat and say, okay, maybe it is not the one thing that we need. But that's why we want to validate it. And now there's research. When I came in and there was a team was already working on the research and I started like looking at the results and I started looking at like the surveys that they run and the interviews that they run. And they asked me for my interpretation and my advice. And basically what I told them, and I think this can be applied quite broadly to also your students. The problem is we cannot predict the future. Humans can't predict the future. You can't say realistically what you're going to do tomorrow and how you are responding to certain things in the market and to certain features in the market, right? So the problem is with a lot of research and with research done wrong, which happens a lot of time, is you start asking hypothetical questions. You start asking the user for an interpretation or to like think of their future, right? Would you use this if you would have this or what would be more important? How should the user know, right? The best example is the Walkman example, right, if you remember. So back in the days when the Walkman was a thing for the younger generations who are listening and they maybe don't know what that was, but you know like this player that you can put on your jeans and walk around with and they designed the yellow one and they brought people in, showed them this device, a complete, I mean, a very strong yellow Walkman and asked them, would you buy that product? And everyone was like, yeah, for sure. I mean, it's yellow, it's cool, it's fancy. I still have it at home. Yeah, but honestly, who bought it? It was a failure because even though it looks fancy and people said they would buy it, they didn't because no one wanted to walk around with this shiny thing back in the days. Yes, and that's the key problem, right? And A, it's really like A, you can't predict the future. And that's the reason why companies fail. And then if you want to do research right, like if you want to do research right, you try to analyze existing behaviors. You can try and find parallels in their life to figure out if they are using a solution similar to the one that you're planning to build. It's maybe from a completely different space or you can try to see if there is already some existing workarounds that are solving for the thing that you want to build, right? Because if there is a workaround, there is high chances that if you solve that problem, people would use it. So you can do research, you can understand a lot of these things. But it will never tell you and it will never take this responsibility away from you. And now we're back at the responsibility that we talked about in the A-B testing session. It will never take the responsibility of you to take a decision and to say, okay, this is the data that we have. So at the end, it's up to you to then have like the vision of how this would be executed and you will have to take risks. Most of the decisions that we take in a company are risks. Now you can mitigate it, right? Like you can then, let's say, you want to have like more data, try to do a smoke test or a fake door test and show whatever you're trying to build to users and see if they would sign up. Because that gives you a real indicator, right? So if you can do that without building the whole product, do it and it helps you save money. Still, you might want to trust your guts and still build it. It might work and it might not work. Like, again, I mean, there is, back to the Notion example, you can have a tool that nobody buys and a small twist around the message solves that whole thing. Yeah. I mean, the way I look at it is there are two ways how you can do research, right? So you can either ask or you can observe. And I think it's, what helps me at least when I do user testing and user research is to observe behavior and try to derive patterns out of this. And that brings me to the next point and this goes hand in hand with what you're saying. You need to understand also, apart from the product market fit, product twist thing, you need to understand the human psychology and decision-making processes. So I have a friend who is a very successful salesperson and he told me, Christian, over the last couple of years, and he was selling many products, he told me, hey, Christian, I started learning to understand how the human brain works and how people making buying decisions, right? I mean, when it comes to, even though the product twist was happening, there must have something happened that made people buy or use Notion. So, I mean, of course it's nice that it went to the productivity tool, but why did I start using this productivity tool? For what reason? What were the thought processes that you have when you started using Notion? So, and understanding these things, even though you understand them, you cannot predict the future, but you can tailor a product to a certain need that the person has. And for sure, we don't know what's going to happen with the economy. I mean, if tomorrow the financial system breaks down, nobody will buy your products eventually. Yeah, for sure. That can happen. I cannot predict the future, but I can understand your needs and your behaviors and your patterns as a user, in quotes, to better build my product. Yes, but nobody will ever be able to predict the future. And that's the thing, right? Why did Notion work? And we can only make assumptions because we haven't been there. I would say it probably opened up the market of a completely new audience. Because if you want to build an app and you're an engineer, you can build your app and you don't need to have a fancy app builder. And if you're a normal user, you probably don't want to build an app. So even if it's like building an app, because you have your data stored in tables and you write down, or website, I think it was even a website builder, you create your website. But okay, I now twist it and it's like your note-taking tool and it's your personal, like you prepare your book or you prepare your documentation and it works way better than saying, oh yeah, now you're building a website or you're building an application. So I think in that case, it was probably opening it up to a broader audience or to the right audience, finding the right audience where the product is a fit. You could have probably investigated this earlier without spending all the money that was spent in building Notion, but it always comes down to there is no prediction of the future. When people were asked if they would want to use a phone with that screen, everyone said no. They love their BlackBerrys. There have been multiple companies who tried, not successfully, to build a phone with that screen. And then suddenly, iPhone changes the whole complete market. But remember, marketing plays a big part in this movement. Marketing plays a big part in the movement, the product itself and the execution. The iPhone was simply better than all other competitive products. It comes down to how they optimized for the keyboard, how they optimized to make sure that you, with your small little sausage thumb, can still type on your keyboard. There are a ton of different factors, but I think this is the answer. I'm just trying to also think of what I would have said to your students, to those kids. It's like, you can do research, but you can't predict the future. That's why companies fail. You can do research but you can have extremely strong indicators that something is the right thing and you build it and nobody uses it. It could be that there is strong indicators that it doesn't work and still people suddenly adopt and use it all over the place. It could often, unfortunately, often we also have human error. There is a shit ton of people who then make ego-based decisions and fuck it up. Yeah, fully agree. I mean, at the end of the day, it comes down to trial and error and to figure things out and most important, understanding your target group. Because you can have as many assumptions as you want. You will figure it out once you start understanding your target group and your users. That's the most important thing. Because you can have indicators that people would not, generally would not, I don't know, use a touchscreen, okay? But Apple fanboys and fangirls may still buy the product and use it. Even though if Apple is producing a shitty product, which they have, you don't know that until the moment you start selling it. Sorry, until the moment people start buying it. Yes, but I think on the Apple example, there is not many things. Apple was a bad example, you're right. And this also plays a big important role. This factor of trying to build excellence. You need to be obsessed about the quality of whatever you're building and it needs to work. And I think that's also a big problem of the MVP mentality of, oh yeah, let's just launch something and then people will use it. It needs to work. It needs to be extremely well executed because you don't have a second chance for a first impression, right? I mean, building MVPs doesn't mean to deliver shit. I know you know. I know you know. I guarantee you from all the people listening, how many companies use MVP as an excuse to ship a whole finished and half-baked product? A half-baked product and never ever touch it again. And that's not the ambition that someone should have. And that's the same thing. Like, have the ambition that you really understand your users, that you identify a problem and do everything to solve that problem in the best possible way. Yeah. Sometimes people give up too early, which is also a problem, right? I mean, for sure, we all have budgets and a certain limit of time and focus when it comes to delivering something and trying something out. But sometimes it's just not enough. Sometimes you need to invest more to get to the point where it starts running and people start using it. Yeah. And then the problem is, unfortunately, like, if we look at the media, we see only the things that were successful. Yeah. Right? Like, those are the big success stories and this is how much someone tried hard. Yes, I think you should try hard. But you also need to know when to let go. I think a lot of people fall in love with different ideas that they probably shouldn't have built in the first place. And again, that's this, like, human error beyond, like, all the research and stuff like that where companies fail because there are so many people who do research and interpret whatever they want to hear because they are not willing to give up on their idea. It's another problem. Don't we have an episode that is called Don't fall in love with your first version of the product? Do you remember? I think we do or Don't fall in love with your ideas. We should link it to this episode. Yeah, I mean, you're the master of, like, knowing where this episode is. You're right. I mean, now we are at over 120 something. Five, six, seven. Yeah, something like that. Anyhoo, we will link it. Yeah, we will link it. Otherwise, well, there is some other interesting stuff. So considering that you reached the end of this episode, try to scroll through the episodes and see if there is something interesting and feel free to subscribe and share it with your friends. With that said, talk to you soon, Alex. Thank you very much. Bye bye. This was the Product Bakery. All links can be found in the podcast description and make sure to follow and subscribe for weekly episodes on all podcast platforms as well as YouTube.