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 in their business reflect a microcosm of the factors that lead some industries to thrive and some to get dismantled during times of 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 example, offering 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 point here is achieving a new Product-Market fit and acknowledging that the fit is very contextual. One might be willing to pay extra for a Burger home delivered at 3 AM on a winter morning, but would scoff at the idea at 2PM inside a cafeteria.
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.
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.
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.
Collaboration will be the “new” backbone
SAAS tools talk so much about collaboration that it seems impossible that this term will gain further traction. But I think it will.
Stay with me.
Today when we say collaboration, we refer to permissioned access to our data for team members, all of whom can “add”, “edit” and “comment”. All Team Softwares are record keeping devices that *allow* multiple people to access the same view in the same manner.
For example, when all of my team members access JIRA, everyone has the same access, responsibilities and views. Is this the same in the real world?
JIRA is accessed by the engineers, the product folks, the support folks and the testing team - all of whom have very different perspectives on each feature. While the whole team sits in the same space, JIRA is a record keeping device.
All *real* collaboration happens in meetings. It is in the meetings that people question, clarify issues, present a different perspective of the problem and so on. Project Management only ensures that none of the important issues fall through the cracks. It does not ensure that everyone has the same degree of clarity on everything. We do that in conversations or on Slack.
How will this change Product Management: 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 Product Managers across the board will have to be aware of this change, and be willing to incorporate them in their roadmaps sooner or later.
We cannot yet predict what this will look like. It could be anything from built-in conversations, deeper slack integrations, flagging, tagging and so on.
Today, the methods adopted by the fully remote teams transcend the softwares they use. They set up their own protocols, processes and expectations in order to be able to function this way. All of those processes will need to find their way into SAAS tools, so that every team is able to collaborate seamlessly, and you do not always need a super-determined leader like the Zapier founders, to make remote work.
Product Managers will have to study those teams, those protocols, those methods and gradually incorporate them into their feature sets. This does not really apply to B2C PMs though.
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 various small things in the remote first Post Covid world.
Imagine a new world with Work From Home is a basic expectation of employees, working for multiple companies via gigs is commonplace, and therefore, collaboration (and not procedure) becomes the backbone of business.
For B2B SAAS products, this would mean that even in lower pricing tiers, customers would want not One account or “upto 3 accounts”, but substantially more number of accounts. This would be because while the customer is still the small 5 people startup, it now employs 15 other people for gigs, 6 of whom will need access to the Marketing Software your company sells. If your pricing tier makes it unaffordable to the startup, they will go elsewhere.
How will this change Product Management : Product managers will have to become super aware of the changes in their markets. Depending upon the company, PMs may or may not be responsible for or involved in pricing. However, the pricing model is no longer a solved problem in the Post Covid world. And like every unsolved problem involving the Product, this will also need to have a direct Product Management involvement.
Product Managers also need to keep monitoring churn, and adoption from an Expectation - Value fit perspective. 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 Manager from the Bad Ones. All of these skills are already part of what good Product Managers do. But these are one of the many skills that PMs should have, My point here is that these are the ones that will become the pivotal skills around which the Product Management industry, the interviews, the recruitments etc will happen. All the other skills will be secondary.
Analytical Skills because Product Analytics Will become Tactical: While Product Managers already analyse data to some 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 - eg which feature adoption reduces churn. Using this kind of knowledge, Product Managers will be expected to layout a measurable Product Roadmap, with outcomes that strongly align with business goals.
Systems Thinking Because Features (and not Marketing) Will Determine Business Goals: 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, or methods 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.
Better Methods of 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 these dimensions. The customers with greatest propensity to pay might not be the most ideal customers. Instead, the most ideal customers will probably be those who also have a high likelihood of promoting the product.
Of course this will vary from product to product, but word-of-mouth marketing, and communities are gradually becoming more important. Therefore, even Product Managers, in a post Covid world, will need to factor these while defining their roadmaps.
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.