The world has changed.
Like never before.
And like all changes, this will lead to trends that will stick.
The Financial Meltdown of the previous recession of 2008 had one clear winner in the fast food category - McDonalds.
All fast food chains including Burger King shrank during the recession. That’s expected. But McDonalds grew in the same time frame. The changes that they introduced reflect the factors that lead some industries to thrive and some to die during a crisis.
The last recession also gave us Uber, Whatsapp, Slack and Groupon. So was there a common factor in these companies and McDonalds during recession?
Product Market Fit Will Change
McDonalds did something very interesting during the recession. It started Rapid Price Adjustments for the first time.
For example, it offered a 30% discount during lunch hours in some Chinese cities. This may remind you of Uber’s surge pricing and Groupon’s group deals that expire. The underlying theory - price-value equation is not static, even for the same customer. It was known before, but hadn't been practiced by businesses at scale. Recession made that happen.
Crises make consumers more value conscious, and these companies tried to fit in the new reality. The frontier of product-market fit moves, with market's expectations changing in the face of the new realities. Products that evolve and stay in sync, survive. Others die.
The Post Covid 19 World is the same in so many aspects, with one key difference. Value now includes the social aspects of being able to function at a distance.
Product Management will become Outcome Driven
Product Operations involve collecting ideas, prioritising, overloop development and launch. Typically, for most product teams, that’s where the role ends. Product adoption, sales, retention etc are taken care of by other teams in larger companies. The trendlines are already changing. Product Management has already become more about metrics than just a launch.
This new trend will pick up pace like never before. PM’s primary goal as launching the product will become a thing of the past - something to be remembered as an anomaly.
Marketing Moved from Branding to Performance
To understand why, let’s take a look at other verticals that went through a similar path of evolution.
There was a time that Marketing was mostly about branding. It was a commonly accepted fact amongst marketers that they don’t know which half of the marketing budget works and which doesn’t.
With online ads, marketing automation, better tracking and superior tracking tools, marketing today is more about metrics and numbers than branding. Sure branding is important, but marketers are expected to learn what their market wants and needs. The measurement methods are so well known that you can just google them and a Neil Patel article will take you through very detailed processes doing something very specific, in a very numbers driven, measurable manner.
Product Management may move from Release to Adoption
This decade, we will see Product Management experts offering similar advice. I will not be surprised if there are famed Gurus of Product Management offering great, numbers driven advice on how to track retention, churn, repeat usage etc. And that there are point solutions in PM space solving very specific problems.
Product Managers will be expected to know WHY some features worked and some didn’t, in order to factor this knowledge into the next sprints.
The meaning of Collaboration might change
In the real world, when people collaborate, they question, clarify issues, present a different perspective and so on. That is not how collaboration tools function.
Today collaboration, within products, means two things
- Sending and receiving of communication
- Permissioned access to a data view.
The second order effects of these 'features' help teams to stay aligned, negotiate decisions and deliver outcomes.
In the new world, companies like Zapier that are fully remote will no longer be exceptions. They will be the norm.
This means that SAAS tools will have to ensure a fine-grained level of collaboration, remotely, without needing to have verbal conversation. The new collaboration tools may handle the second order directly - and may not look like collaboration tools at all.
Team Sizes will Expand Dramatically - Think Gigs
Teams have been shrinking in size over the past decade. That trend might completely reverse - you will still have the same 5 people startups with (usually) lesser funding. But they might employ 15 gig workers for in the Post Covid world.
This will mean more "heads" and well documented processes. This will also mean that businesses will want more flexibility in "access control" features of all softwares they use. Access management may evolve into a plug-n-play software category of its own.
Product Managers will need to keep monitoring Expectation - Value fit. With the changing times, the expectations are changing, and therefore, so are the value perceptions.
Probably the best way to think about this is to assume that you are launching a new product in a new market and you have to gauge the market expectations from scratch. It’s time to unlearn some things that you may have learnt about your market in the old world.
New Skills That will Become Relevant
In the new world, many old skills will retain their value. But many of those will explode in their utility. These skills will differentiate the Good Product Managers from the Great Ones.
Tactical Data Analysis
Product Analytics Will become Tactical
While Product Managers already analyse data to a good extent, in the new world this won’t be enough. Data Analysis will no longer only be transactional (eg who churned) or strategic (what was the churn in the last quarter).
In the new world, data analysis will be tactical.
Tactical data analysis answers your daily questions. You "read" tactical data like you read a blog - consume what you need and discard the rest. For example - which minor change led to greater user adoption the past week.
Using this kind of knowledge, Product Managers will be expected to layout a measurable Product Roadmap, with outcomes that strongly align with business goals.
Product Will Meet Business Goals, not marketing, not sales.
A product is a fully connected graph with nodes representing features. Any enhancement, or addition has a rippling effect on every other node. This system relationship is something that Product Managers will have to keep track of in the post Covid world.
The outcomes of existing features, in terms of the metrics they impacted, will need to be factored into the next iteration. This would mean developing heuristics to include systems thinking into the product decision making.
In the post covid world, Product Led Growth is likely to become very central to most companies Growth Strategy. This is exactly the change that McDonalds also incorporated to ensure they thrive in the 2008 recession.
Behavioral Psychology and Customer Segmentation
Different customers use a product for different reasons. Likewise, they have different incentives to pay for the product or service, have different budgets and very different propensities to refer the product to others.
Product Managers will have to segment customers along all behavioral dimensions. Products will also have to decide which customers are most idea for them. Therefore, a greater alignment between business strategy and product will be needed.
Crisis Changes the World, in Some Ways, for the Better
I have been blamed to be an eternal optimist.
Like your-startups-not-working-your-gf-dumped-you-why-you-happy type of optimist. But looking back at the last recession, which corrected so many of the markets, how can I not be?
This time around there is again another systemic shock, which will yet again weed out the anomalies from the system. Think of these crisis like the seasonal flu, which in its wake, leaves a set of antibodies, ready to take on the next challenge.