Distribution, Retention, and Experimentation
A simple framework for planning future product development work at early stage and growth stage companies.
Having spent the last 4-plus years working in a nascent industry (web3), I’ve recognized how often the landscape changes and how nimble companies in the space have to be to keep up. And during this time, I’ve developed an aversion to roadmaps. Roadmaps are important, but planning a year in advance with a product serving a market as fluid as web3 doesn’t make a ton of sense. In the early days, when it was just me managing product at the seed stage or when I was the founder of either of my past two companies, it was relatively easy to keep a loose roadmap in my mind while being flexible enough to work on something new if the market pulled me in that direction. However, as companies scale, a loose roadmap in the mind of one person isn’t the best strategy.
At Pinata, we went from a team of four to a team of 20 pretty fast. Then we went from a team of 20 to a team of 50 even faster. When you hire people from all different backgrounds and from various companies with differing structures, you quickly find that some form of product guidance is an absolute must. But for me, I still did not want to waste time on a long-term roadmap when I was 85% sure that roadmap would be thrown out and rewritten every few weeks. Engineers—architects especially—want and need advanced planning. Imagine them like the lead in every commando movie. They’re the ones peaking around the corner while holding a fist up to the rest of the team telling them to hang back until the coast is clear. They can only do this if they are put in a position to look around the corner, though.
When you have a team of product managers working with you, it becomes even more important to have some form of a roadmap. So, how do you balance the need for a roadmap with the high likelihood of that roadmap being useless within weeks or months during the early stages of a company or when operating in a nascent market?
A simple framework I’ve adopted (and thanks to one of my colleagues for helping name this) is Loosely Held Ideas. Roadmaps are too formal. They suggest that you need to have heavy documents and planning. They pull PMs in and suck their time away like a dementor sucking life away from poor British children in Harry Potter. A loosely held idea is something you can talk about freely. You might write it down so other people can enjoy your idea. They may even have their own ideas. But the expectation is not that you will build upon that idea. Instead, the expectation is that the company aligns around the directionality of the idea rather than the idea itself.
This gives engineers and architects enough to peek around corners. This gives PMs enough to build their own project- or pod- or squad-specific roadmaps (these roadmaps are more short-term and easier to adhere to). And yet, even with this Loosely Held Ideas framework, there’s still something missing. Product alignment requires a general sense of knowing what’s important. Even if you don’t have a long-term roadmap, knowing what’s important and what is not can be the difference between shipping a quality feature or rolling out a flop.
To help align on what is important, I distilled product work into three categories. I believe these categories apply to early stage and early growth stage companies. They may still apply to later stage growth and late stage companies as well but with some tweaks. The three categories to help define what’s important are:
Distribution
Retention
Experimentation
Let’s dive into each of these categories.
Distribution
When thinking about your Loosely Held Ideas or your product roadmap or just the next thing to work on in your sprint or cycle, distribution should be top of mind. Distribution is the process of getting your product in front of as many people as possible. What’s interesting about the intersection of product and distribution is that you can build features and product lines that actually help increase distribution. These types of initiatives create a flywheel effect.
As a simple example, we can look at Shopify’s app store. Shopify recognized an opportunity to increase their distribution through developers. In the early days they ran an affiliate campaign that provided discounts for each new store a developer agency onboarded. Later, they rolled out the app store. The app store buys Shopify distribution because every developer building apps for the store is incentivized to evangelize Shopify.
When my team thinks about what to prioritize, I always remind them to ask themselves if it buys us distribution.
Retention
Early stage companies tend not to think about retention. Trust me, I’ve been there. When it is time to think about retention, the proposition can feel daunting. This is why it is so critical for PMs to consider this topic in their product planning. Preventing churn can often be as important as onboarding new customers.
What features can a team build that helps improve retention? By really analyzing churn and talking to customers, PMs can discover areas where their product isn’t as sticky and start build for that stickiness.
Experimentation
The third category of this framework is also the most broad. It can mean many things to many different people. So it’s important to keep the spirit of the category in mind. In product development, everything tends to be an experiment. Some experiments, though, have higher confidence levels than others. When teams take small bets, they are empowered to experiment more.
This category, in spirt, is focused on more than just the small bets that inform most product development. This category is about taking a larger but controlled risk. For example, you may have been considering launching an entirely new product line. You don’t want to derail existing product work or sap resources. So, the experiment might be to build a standalone product through a completely different process. The experiment might be to extend the functionality of an existing product by opening up an API that was previously private. There are many ways to experiment while keeping risk mitigated.
Experimentation is so important to a product because it can yield ideas that otherwise may never have been discovered.
Loosely Held Ideas and categories of focus. These two concepts seem simple, but it takes company alignment to put them into practice. When you get that alignment, work starts to fall in place, areas of focus crystalize, and the machine begins to hum.
If you prefer concrete roadmaps, that’s fine, of course. Roadmaps are important. I reach for them occasionally even at early stage companies. The trick is to make sure you control the tool or process and don’t let the tool or process control you.