Panel Discussion: The Importance of The Product Strategy @Product Conference Munich

So in this second round we want to talk about the importance of a product strategy and just to quickly reintroduce ourselves, we have Shigu here who is working in the healthcare space. So she's working at Nouricare which provides a healthcare app for people who are nursing their grandparents, for example, to make their lives easier. As well as Penkei who is working in the AI business and helps to digitalize requirements with an AI-based automated requirement analysis. So yeah, we have a lot of product knowledge sitting here and so we had a quick catch-up before because you told me that just in Germany we have 4.5 million people who are getting nursed and taken care of by their families, which is a lot. So you called it actually a pandemic because it's happening everywhere in the world. So therefore I think we can maybe kick it off with the question when we look at this market and this demand, why do product teams need a product strategy or why not? They definitely need a product strategy. Ah, come on. They definitely need it because it creates the vision and the road where people are trying to go and that's what I found from my team. So it explains the why. So my team is always asking me with everything that we do, why are we doing this? And so the product strategy has to explain the why and it has to explain the how. So you really need to know, you know, what's the problem that you're trying to solve? Whether it's a B2B or a B2C and we're doing B2C in this situation. It's an epidemic, not only in Germany but around the world, but it could be a B2B solution that we heard earlier today. So what is the problem to solve? Who are you serving? Why are you doing this? That definitely needs to be in there. And who is in the market? Do you have a place in the market? Is it saturated? Are you new? Are you innovative? Are there new innovations coming up? FBT is a competitor of ours today and to know that. And then it has to really define the how. How are we going to be successful in the market? You know, how do we launch it? How do we make sure that people are getting their hands on it, especially with B2C? What are our channels of distribution? Is it a purity like Instagram or Facebook or are we going with partners to rescale? How do we monetize that? How do we operate it? So these are all questions that the product strategy has to answer that really guides the team who is actually really thinking of the discovery part and implementing, launching it, getting it out there. So that's really important for me. I really think it's instrumental. Okay. What are your thoughts around the urgency or no urgency for the product strategy? Yeah, I mean, there's a strategy required for everything, even in life, you know. So you want to go to vacation, you still need a strategy. That's if you don't do it on time. So the idea is, yes, we need product strategy to validate or let's say there are three pillars of it, you know, one is business, you know, which is vision. What do you want to do? As she also said, customers, who is our audience? And that is the competition, you know, should we build this product or not? Whether this product already exists? What are the differentiators, you know, the product that we want to build, you know. So, for example, in our case, as you said, we have like the vision, like in our company, Drilco, is to digitalize industrial requirements, you know. I don't know how many of you have heard of industrial requirements. I don't know how many of you have heard of industrial requirements. Okay. How many of you have heard of tender analysis? Tender analysis. Okay. Bid management. Bidding process. Okay. So you see, we are already in a niche market. So, I mean, so we are trying to build a product that analyzes requirements from industrial documents. And we also identified ourselves as one of the key players and we are kind of replacing the existing ones in the market. So the idea is, in this case, we found a vacuum. We started this. We had this product discovery before. We made a product discovery for two years before we founded the company. So we went to the tender bid managers and understood how they make the bid, you know. So the idea was, let's see, one bid manager told me, we compare two documents, you know, they get a version of document. They put it on the window, you know, one page on this window, one page on this window and they see the difference, you know, what has been changed. The speed of rotation of a motor changes from 400 rpm to 600 rpm and it brings huge penalty to the manufacturer if they don't know about it, you know. So this is the product that we are building to identify what are the key requirements in the document that a manufacturer must fulfill, you know, else there is a huge penalty cost because you cannot build it, you know. So those kind of niche business we are in and everything is run by state-of-the-art AI. I mean, I'm not a product manager as such. I'm a research scientist by profession. I'm a PhD in machine learning and NLP, but as a startup, you have to do everything. So that's where I come from. And definitely customers, we identified our audience, like who is our champion, you know. So everyone must identify who is our champion. Our champion is a CFO of a manufacturing industry. Who is a CFO? CFO looks at the balance sheet and says how much penalty I have to pay on executing a project. Why? Because I cannot meet this requirement. I did not analyze it well and we found that even CFOs confirmed us 20% of their revenue goes into non-conformance cost. Let's say the revenue of a company is 10 billion. 2 billion, they are already paying it for 10 CCs penalties to meet the committed requirements. So and we say, okay, we save something for you on the cost side and automate as well. So yeah, and definitely you need a differentiator. So we are a platform. We do, yeah, I mean any AI that you say, we have 50 models running in the product. We are just three years old and yeah, I mean we build end-to-end platform and we automate everything, how tenders are evaluated. So these are the three pillars that you have to align with their vision, you know. So you have to build goals, sub-goals, you have to design sprints, go to the developers, also communicate with them what we want to build in the next two years, you know, and build the roadmap. So that's why the strategy is important. But there's a particular reason why I'm asking, why not? Because still these days I'm pretty sure you all have your product strategy in place, but I still see sometimes company product teams and also leadership teams who are not working with a product strategy or strategy in general because, you know, you have either a big demand of the product, so they're just pushing it through as much as they can, or they are just moving from one failure to the next success, to the next failure. So it somehow works, right? And I was just curious also to hear from you with your experience, how do you deal with such situations? I mean, you obviously are a fan of the product strategy, but I still see that sometimes there is no urgency or need or maybe understanding from some teams to work with it. Well, exactly. We're constantly picking. And you mentioned it, like it could be a weekly thing, it could be a monthly thing. It drives me crazy sometimes. If we see something that makes sense from a viability, a customer need perspective, and also from an effort perspective, we jump on it. Because in a startup world, it's live or die. You're living or dying from the next investment round. I'm looking at you because you know what I'm talking about. But I still think like a fundamental strategy and vision is important for the team that you have like this lighthouse that you're looking at. And that's important that we still have the fundamentals in place. But maybe the nuances here and there, whether it should like we've pivoted from going B to C down to B to B to C. And that happened quite quickly. And jump on that. We stuck with our product strategy, we would be losing. So it's a yes in terms of keeping that house and people engaged. But also you need to, I love the fact that we can pivot. I used to work in India and I used to hate that we couldn't pivot because we had to wait three months until we got the committee and got the approval from like a senior vice president. And now in a startup, we just decide, we get the go right away. And I think that's great. Nice. And at which levels do you say it's important to have like a product strategy in the company? My company is pretty small. We're like 18 people. So it's all of us. So everybody has to understand it all the time. And it's important that it's communicated and we talk about it. And it's the luxury of being in a startup that you can talk about it. It's a luxury, but it's also a two-sided thread because everybody has a say in it as well. How is it for you? Yeah, I mean, even we are smaller than you. So we are 15 around the globe. So I mean, the levels, I mean, founders, first thing. Second is like CEOs, if CEO is not a founder. And then until product managers. So this is the level that should be clear. And then sometimes to developers, the lead developers, it should be clear what is the strategy, where we are going to, whether we can actually implement what we are proposing in the strategy or should we build it or not. Let's say someone says to me, can you build a translation for me? I would say no, because I know how much does it cost. And if there is already a big player in the market, I will not do that. And we cannot do that. So such strategy should be clear, what product features should be clear to almost everyone, to the tech guys also. And I mean, I think it's obviously a luxury to some extent to be that small, where I think advocating for it is also easier. I think like the more a company grows, it gets exponentially harder to make sure that everyone has the same understanding. Because like, I mean, you can have this one phrase or the mission and the vision laid out and then like breaking it down. But it still comes down to like, everyone needs to have the same interpretation. And I think that also then with scale, it's important to have an overarching strategy in place. You also need to then like at a smaller product level or product team level have like individual strategies in place that come out of the larger strategy. So, I mean, I think like what I'm also wondering if we think of like, is it the product manager within its team or the executive, like for the whole organization? Like what are the steps that one should take in order to define the strategy? Yeah, I mean, generally in startups like us, you know, the higher management, we can say founders, generally our tech or business people, they are involved in building strategies, you know, even they are involved in creating the sprints, you know, so how it flows is like, you have to define your strategy and our strategies in industrializing digital requirements with AI, let's say that's our strategy. And you can build sub-goals to it, you know, how can we solve the problem, you know, what are the product features we should offer? So, you have to define these goals, you know, I mean, and then talk to the customers, build prototypes for it, validate your sub-goals so that you can jump into development, you know, so in development is something like you can define your sprints, you know, that kind of aligns with your product strategy, you know, but in startups, like small startups like us, which are bootstrapped, you know, non-VC backed still, so you still have to minimize the number of failures. So, that's the idea to first validate a bit, get some pre-development money from the potential customers, that's our strategy, you know, and then do the actual development of the product features. So, yeah, this is how we kind of build our product strategies. So, I go the other way around. So, I used to work in a big industry and just recently in a startup and I'm a big believer in design thinking, so I'm sure a lot of you know about design thinking methodology and there are a lot of critics about it, but if you really live and breathe it, it can create some powerful insights in terms of not only product strategy but business strategy as a whole. So, whatever I do and I encourage all product people to do it is go heavy on design thinking. That's what I mean by that is speaking as many people and immersing yourself in the lives of your end customer and everybody that is along the way of the value chain. So, for instance, in our line of work, we're speaking with family members and so we immerse ourselves. I love to go to their houses, but because of COVID we couldn't, but we go into their living rooms and we see how they're doing it, their bedrooms, but we're also talking to doctors, we're talking to nurses, we're trying to understand the entire ecosystem and the whole value chain. We're trying to understand from insurances what is their angle in it and how can we get their buy-in because it's important for remuneration as we're speaking to big corporate industries who want to offer this perhaps a benefit to their employees. So, I always go and immerse myself in whatever it's doing, whether it is in a B2B context or in a C context because I've worked in B2B as well and did that and always went heavy, hard the first three months of whatever I'm doing in that and that gives them the insight into my product. What is the problem I want to solve and try to figure out what are the features and services that I need to offer and it's enormous. I would come back with a hundred different product ideas, but then we have to validate, right? So, we have to validate those ideas with data, with KPIs, and then we go into business modeling. I love the business model canvas, but we use the data to really help us validate it and then we're able to eliminate a lot of ideas and products and services and really think to ourselves, okay, and we even go to a feature level and really decide, is this really valuable at the end of the day? Are we going to make money with this feature? How much does it cost for us to actually build this and what technology do we need to use to build it at the end of the day? What channels of distribution do we have to actually push even by a feature basis? And so, that's what I do in terms of really defining that product strategy. So, working on the design thinking, give you a lot of great insights, not just from a user, but from a business perspective and then using the business model canvas to really hone out that strategy. So, those are the two big tools that I often use in B2B and B2C. One thing I would like to add. So, you said from top to bottom, but in our case, as I said, in startups like us, we generally follow bottom top strategy to validate the idea with the customer itself. And yes, I mean, the design thing is always important as we also do with the product features that we want to build and validate with the customer. But yeah, I mean, this is one of the tricks that we always do. Go to the customer, show a prototype and say, do you need this? Solves this problem for you. This paid points for you. Give me money. Next six months, you will get discounts and license. Give me pre-development money. We do the development for you. So, these are the tips that we do in our development. And whether it's a top-down approach or a bottom-up approach, I see that your product strategies are covering two important things. First of all, we're having a plan. And the other thing is the alignment around the plan. So, to make sure that everyone is on the same page. And I think whether you are a 20 people startup or a 2000 people organization, the successful companies have regular conversations and also fights around the product strategy because everything falls or rises with product strategy. So, that's at least what I'm getting out from what you're talking about. And the question I'm still having is when it comes to the key parts of strategy to fulfill or to have as key information, what do you say are the key parts that need to be covered in a product strategy? So, again, for me, it's the why, the how, and the what. Or the why, the what, and the how. So, why are we doing this? So, everybody in the company, like I said before, they're always asking why. Why are we doing this? Even down to a minimal feature. I need to explain them. I have to have the customer needs. I have to have the KPIs or the data to validate, okay, this is why we need to do it. So, first is to explain the why from a contextual point of view as well. As I said, 4.5 million people in Germany are in this situation and they have no support. So, looking at the industry, looking at the customer to explain the why. Also, to understand then that target group. Who is the target group that I'm looking at? Who are they? What's important for them? What is the problem that I'm trying to solve for them? And do they have other solutions? Are the competitors out there that are providing the solutions that they need? And how saturated is that? Or do I have like a very unique niche solution like you do? We have a niche solution because everything is paper-based and very, yeah, you have to go to different like Amts in Germany to get everything you want. So, we're offering individual solution. So, you have to look at your competitors. First, explain the why. And then from the why, explain the what. So, what are we doing to actually solve those problems? What is the product? So, that's the product roadmap. What are the features? And like I said, why are those features important? So, prioritizing the features from a viability and an effort point of view. I think everybody knows that. To really then make sure, okay, we're going with this feature instead of that because there are 100,000 features we can implement. And then how? How are we going to build it? So, what is the technology that we're going to use? Because there's a lot of technology that we can use. Are we going to use existing technology or are we going to build it ourselves? And how are we going to go about actually, you know, what do we need? What are the skill sets do we need? What are the content or expertise do we need? We need nursing expertise. We need people who are doctors to help us with the content. So, that's important. Also important, most or very important is the monetization. How are we going to monetize so that this product succeeds and lives and doesn't die and that we can continue to pay our employees and continue to exist is also important. That is important in the product strategy. And then how do you launch it? How do you bring it to market? Is it a marketing channel? Is it a partnership? Is it distribution? That's also important in the product strategy. And then how do you scale? So, you can have a great product, but then how do you scale? And what do you need to operate to scale? Who are the people that you need to help service if something is going wrong? And so, that whole operation, the first, the third level of support is critical. So, those are all the information or the details that I always make sure is included in the product strategy. So, I'm just having like this slide deck in front of my eyes that you were talking about. So, I see like there's a business problem statement or problem statement in general. So, you have the market research, the targeting or persona, so to say. Then you have profit and loss analysis as well, the go-to business model, the go-to market strategy. So, these are the things that you try to cover while you're developing the product strategy. Yes, and it's constantly evolving with us. It's bigger. So, as soon as we're done with it, we're starting on the next one. So, every quarter, you know, we're constantly evolving it and we're constantly communicating that to our team. Sometimes they're like, well, okay. How about you? Yeah, I mean, kind of similar. So, I mean, I would say business. First is like on the business aspects, what is the business model, you know, whether it's people use or like it's a subscription model or how you want to sell it or it's a perpetual license. So, you have to think on the business side first, aligning with your vision. That is what I can say on the business side. And on the customer side, I mean, again, as I repeat, who is the audience, you know. So, for example, I asked the question, how many of you use WhatsApp on mobile? Almost all. How many of you use WhatsApp on desktop browser? Still some. Okay. So, we know, I mean, the majority or major audience is on mobile, you know. So, it's kind of one of the strategy, part of the strategy, what is nice to have and what is must have, you know. Based on that, you can prioritize your customer needs, you know. That's where you can focus on. Prioritize it, prioritize it. And then again, monetization, how you get the money to develop it. How can you validate it? So, again, you have to think of what is the business model. You give the pre-development money. Again, I repeat, we give you a license, we give you discounts on the licenses when you buy. It means you will buy it, you know. You will not run around, you know, after just. Some customers linger, say, okay, window shopping, I need this, can you do this? We invest two months in developing a prototype and then they say, we don't need anymore. But if you ask for your pre-development money, they will not go away. They will use into their business processes, you know. So, yeah, this is one thing. Competitor is another thing. For example, customer requests something, you know. Say, can you do translation for us, you know. Because we also build on-premise solution. So, our solution is B2B. So, we can deploy it on on-premise or we can do it on cloud. So, it's completely cloud, you know, agnostic. And our platform is something like, we have bid managers from many countries like China, Sweden, we have from Germany, India, everyone working on the same paragraph, you know. And that paragraph could be in any language. So, they say, can you build a translation for me? We say, no. I mean, why? We say, you have people, you know. You have Google Translate. Why should we build for you? It's not a differentiator for us, you know. We can do something else for you, which might like an information extraction. We can understand what catalog, we can understand which requirement is critical for you. Can you build a tire of 10 centimeter or can you build a tire of 5 centimeter? This is what we can do for you, you know, to analyze your requirements, but not building the translation. So, this is important to identify the competition and also identify the niche segment where you want to build your product. And so, once you have the strategy in place, like how do you also make sure that your team follows it, lives by it and even like brings back to keep it updated and loops the feedback back so that you can continue to iterate on it? I mean, very simple answer, but very hard to execute. Communication, you know. So, you have to communicate a lot with your team, the strategy that you build or the sub-goals, you know, that you build. But it is always very hard, you know, people doesn't follow, you know. Answer is very easy to the continuous communication, you know. Iteration of your, let's say, you know, feedbacks from the customer, usage from it. Go to the development team, talk to them, like discuss the personas, what is the user flow, how do they use the product. Sometimes they use the product in a different way, even we don't know, you know. So, yeah, I mean, you have to go to the team, discuss, define the KPIs also. KPIs like, you can have KPIs like what is the usage of the product, you know. Usage, we are AI company, so we mostly measure our AI KPIs, you know. We do have like how many users are there, how many users created the project, how many users uploaded different set of documents. Yeah, the KPIs, okay. But what is an AI KPI? Value proposition, you know. Value proposition is like you have an AI tool, AI assistance to tender managers, how much assistance it has provided. Does it save any cost on you? Does it save any NCCs or penalties on you? So, this is how we build our KPIs and communicate with the team also, so that they can better build the product in a way that AI assists the users and the customers. Yeah. So, that also means like KPI is another big part of like the strategy and how you validate and keep that. Yes, exactly. So, KPI is kind of a gold standard that you measure that my strategy is validated by KPI, you know. I mean, it could be usage, it could be value proposition, yeah, in different dimensions, yeah. So, as Pankaj mentioned, communication and KPIs, that's for us as well. So, communication, communication, communication. I mean, that's all we do. For a management team, we constantly have to make sure that the team really understands it because it's always lost in translation. So, by the time we've communicated strategy in the morning, in the evening, it's lost. So, we really try, we have weeklies. So, we have a weekly meeting where everyone comes together and we discuss, you know, if somebody doesn't understand anything, it's an opportunity to ask questions. And if they're too shy to speak in front of us, then they can write in a document or in Slack and we're able to see that. So, we constantly try to make sure that they understand the strategy. For us, we implemented this year OKRs. So, if anybody hasn't done it, it's a strenuous process, but it is a very, very good process, I think, because it's very top-down. So, but it keeps the focus. It was also strenuous for me. I had to buy into this new process, but I see a lot of value because whatever the team is working on, it goes back to our key objectives. So, we have four key objectives. One is acquisition, second is retention, third is monetization, and fourth is partnerships. And anything and everything that the teams do, and they can come up with their own ideas, too, that's fine. It has to come back to reaching those key objectives. And that's where we also instill freedom. So, we say to the team, OK, we want to increase our retention. And if they come up with an idea, great, you know, because it's reaching that goal. And it gives them that motivation to be creative as well instead of us being top-down and saying, OK, this is what you need to do. And that brings us actually to the last question for today, because you both mentioned that communication is key. And as product people, we obviously have to communicate into all directions, right? We have to talk to our engineering teams, design team, marketing, sales, obviously, but also upwards to the top management. And I'm wondering, what do you believe is the most important thing for a CEO or founder to give by into the product strategy? So, it's to listen. So, I think it's really important for CEOs and founders to listen to the team. And it's great because they do. So, we have two avenues. So, we have this regular review, so they're involved in that, so they know what the team is doing and can give feedback and also to be able to make sure that the team is fulfilling their expectations. The other side is if the team realizes that a decision that was made isn't right, that they have the opportunity to speak up. And oftentimes, they are right, and we have to listen to them. So, in terms of buy-in, the CEO and the co-founders have to trust the team when they say, okay, well, this technology decision was not right. And so, we have to make a different one. Or this feature isn't working. The KPIs are showing that only 5% of the users are using this particular KPI. Let's make that decision. Let's take it as painful as it is. Let's take this feature out because it's just maintenance point of view and no use from a customer point of view. So, I would say listening is the most important for getting buy-in. Yeah, one of the things is listening, but another thing is to participate. So, I'm in a startup, so founders are hands-on as well. Some founders are on the sales side, some founders on tech side. So, founders should have an understanding of what team is trying to communicate technically as well. So, let's say your team member comes and says, let's build a chance to be like model. Then a founder or a manager or management of the management should have an interpretation as well as understanding, should we do it or not? Can we validate it or not? How much cost it involves? Will it bring any differentiators? Will it bring more business to us? Can we compete with open AI? So, such decisions a founder should be able to make and a founder should also be able to find the right champions. So, this is one of the things that has been successful for us. It's like finding the right champion. As I said, who is the key user of the product? Who gets the value proposition? For us, it's a CFO. I look at the balance sheet, I get that much revenue, 10 billion revenue, but out of 10 billion, we as a company, as a customer, we are paying 2 billion euros just in NCCs or filling of the penalties. So, that's how the founders have to kind of identify such champions, which they see the value of the product. They don't see the product, they see the value of the product. KPI, you define it. You cannot calculate KPIs in just a year or something, especially with AI product because it learns over time and it brings more value as much as you use it. So, yeah, I mean, and also like, yeah, finding the leaderships also like great product managers who can, who understands it, who executes the vision of the company, you know, bring more initiatives into the company. So, these are the things that founders has to look into. Well, I would say great closing words. So, thank you very much and please give them a big clap. Thank you.