20 Product Marty Cagan on The Four Questions of Great Product Management, Product Lessons from Marc Andreessen, Ben Horowitz and eBay's Pierre Omidyar & The Difference Between Truly Great Product Teams and the Rest

In a comprehensive discussion on the "20 Product" show hosted by Harry Stebbings, Marty Kagan, founder of Silicon Valley Product Group and a revered figure in product management, delves into the essence of product teams and their critical role in developing great products. Kagan's journey from an engineer to an influential product leader involved working with industry giants like HP, Netscape, and eBay, alongside visionaries like Mark Andreessen and Pierre Omidyar. He emphasizes the importance of product teams over individual product managers, the necessity of direct customer engagement for product discovery, and the pitfalls of prioritizing secondary risks over primary product risks. Furthermore, Kagan critiques the over-reliance on process-driven operations in product development, advocating for a balance between art and science in the field, and underscores the significance of empowering engineers to fully leverage their potential.

• Great product companies value engineers beyond coding; they see them as critical to product development.
• Engineers contribute more than just technical skills; they bring problem-solving and creativity to the table.

"It's one of the most obvious differences between great product companies and the rest, how they think of their engineers. We say if you're just using your engineers to code, you're only getting about half their value."

This quote emphasizes that successful product companies recognize and utilize the full potential of engineers, which extends beyond just writing code to include their ability to innovate and contribute to the product development process.

• Marty Cagan is a highly respected figure in product management and the founder of Silicon Valley Product Group (SVPG).
• His experience includes working with industry leaders like Hewlett Packard, Netscape Communications, and eBay.
• Cagan has collaborated with prominent figures such as Mark Andreessen, Ben Horowitz, and Pierre Omidyar.

"Marty is the founder of Silicon Valley Product Group. Before founding SVPG, Marty served as an executive responsible for defining and building products for some of the most successful companies in the world, Hewlett Packard, Netscape Communications and eBay."

This quote outlines Marty Cagan's professional background and his significant contributions to the field of product management, highlighting his role in shaping products for major tech companies.

• Marty Cagan's interest lies primarily in product teams rather than individual product managers.
• He believes that great products are a result of collaborative efforts from cross-functional teams.
• Cagan's early career at HP Labs influenced his perspective on innovation and the importance of interdisciplinary knowledge.

"I've never seen a product come from a product manager. I've only seen great products come from product teams."

This quote conveys Cagan's belief that the collective work of product teams, rather than the efforts of a single product manager, is what leads to the creation of outstanding products.

• Mark Andreessen is described as incredibly intelligent and knowledgeable about the industry's future.
• Pierre Omidyar is highlighted for his vision and passion, which is contagious among startup founders.
• Both leaders are admired but are distinct in their approaches and contributions.

"Two great people, but totally different. Mark Andreessen is literally, I think, the smartest person I've ever met...Piero was really a different kind of person. But I loved what he's trying to do for the world."

This quote compares the leadership styles of Mark Andreessen and Pierre Omidyar, noting their unique qualities and the impact they have had on the industry and on Marty Cagan personally.

• The importance of recognizing what you cannot know is a key lesson from Mark Andreessen.
• Ben Horowitz is praised for his product mindset and the influence of his mentor, Bill Campbell.
• These lessons have shaped Cagan's approach to product discovery and leadership.

"The most important thing, is to know what you can't know."

This quote reflects the humility and openness to learning that Mark Andreessen advocated for, which Marty Cagan found to be a critical mindset for successful product development.

• Cagan's passion for working with product teams led him to found SVPG.
• His experience with Netscape and eBay positioned him well to assist early-stage startups.
• The timing of SVPG's founding coincided with the rise of influential tech companies, allowing Cagan to leverage his network and expertise.

"After eBay, I wanted to get back to what I really loved, which was working with startups. I started SVPG as just a way to work with a bunch of startups."

This quote explains Cagan's motivation for starting SVPG, which was to return to his passion for helping startups and product teams thrive.

• Founders often focus on risks they are comfortable with, such as business models or monetization strategies.
• Primary risk involves creating a product that people are willing to buy.
• Secondary risks, while relevant, are inconsequential if the product itself is not valuable to customers.

"My point to them always is, look, all this other stuff is only relevant if you can come up with a product that people are willing to buy, full stop."

This quote highlights the necessity of prioritizing the development of a valuable product over other business considerations, as success hinges on whether customers find the product worth purchasing.

• Product discovery requires deep engagement with customers to understand their needs and problems.
• The critical questions in product discovery revolve around whether the solution addresses a real problem and is better than existing alternatives.

"I do not know how to do product without intense immersion with customers."

This quote stresses the importance of customer immersion in the product discovery process, as it is vital to ensure that the product meets real customer needs and stands out in the market.

• The four questions are critical in determining the success of a product.
• Question 1: Is the product valuable to customers?
• Question 2: Is the product usable for customers?
• Question 3: Is the product feasible to build with the team's skills and technology?
• Question 4: Is the product viable for sustaining a business?

"there's really four questions that we always have to consider... The first one, is it valuable?... 2nd, assuming they want to use this because it does something that they need or they want, can they figure out how to use it?... The third, is it feasible?... And the fourth risks is, can this sustain a business?"

The quote outlines the four essential questions that must be addressed during product development. Each question pertains to a different aspect of the product's potential success: its desirability to customers (value), ease of use (usability), technical practicality (feasibility), and long-term business sustainability (viability).

• Distinguishing between features and products is crucial for founders.
• Features are outputs, while products should be about outcomes.
• A product aims to solve problems for customers and the company.

"I think the biggest problem that founders often most day, is they're building features, not products... What it's really about is solving problems for customers and for your company. And that's what we mean by outcomes."

Marty Cagan highlights a common mistake among founders: focusing on creating features rather than products. The distinction lies in the purpose behind the development—products should address customer problems and drive outcomes, rather than just being a collection of features.

• Product discovery is about validating value, usability, feasibility, and viability quickly.
• Good execution is not just about having resources but also about efficiently using product discovery techniques.
• Startups need to iterate quickly to find product-market fit due to limited time and resources.

"What makes a really great execution of product discovery versus average?... You will probably need to do between 51 hundred attempts before you get to product market fit. So you either need a boatload of money and time, or you better learn some skills."

This quote by the host emphasizes the importance of effective product discovery processes. Startups must iterate numerous times to reach product-market fit, necessitating efficient discovery techniques to conserve their limited resources.

• Qualitative feedback helps understand why a product might not be working.
• Quantitative feedback provides definitive data on whether the product is working.
• Good product teams use a combination of both to make informed decisions.

"The quantitative techniques are about collecting the data... But the qualitative techniques... they're much, much faster. And second of all, they do something very different. They tell us why our product is not working."

The host explains the roles of qualitative and quantitative feedback in product development. While quantitative data can confirm a product's performance, qualitative insights are crucial for quickly identifying and addressing the reasons behind any shortcomings.

• Qualitative feedback should focus on identifying issues rather than seeking affirmation.
• Techniques like payment card tests and letters of intent are used to gauge genuine customer interest.
• The goal is to discover all the reasons customers might not use the product.

"You're actually the opposite. You're going after all the reasons they would not use it. That's much more helpful to us."

The host stresses that qualitative feedback should be used to uncover potential obstacles to product adoption. Instead of seeking validation, teams should actively seek out criticisms and concerns that could prevent users from embracing the product.

• Product development is a blend of art and science.
• Qualitative and quantitative methods should be used together.
• The art lies in knowing when to rely on the science.

"I would say product development today is a great blend of the two... If you force me to pick one, I would definitely say it's more art than science."

The host describes the balance between art and science in product development. While data and metrics are crucial, the art of product development involves making judgments about when and how to use scientific methods to guide decisions.

• Founders should initially lead product development.
• The number of engineers determines when to hire product people.
• After a certain point, founders can't provide adequate guidance to a growing engineering team.

"There's different schools of thought on this. I'm a big believer in the founder as the product leader... once you get past about 25, 30 engineers, the teams are saying, I can't get enough time with the founder."

The host advises that founders should be the initial product leaders and only consider hiring additional product people once the number of engineers grows large enough that the founder cannot effectively manage product decisions alone.

• Companies with around 25 engineers typically have 3 to 5 product teams.
• Each product team should have a senior engineer or tech lead.
• Tech leads must maintain a close relationship with the founder.
• The tech lead is responsible for coordinating the division of work among engineers.

"What they are. They're naturally going to group around product teams. If you have 25 engineers, you've probably got a minimum of three, probably four, five product teams. Each one of those will have a very senior engineer. We usually call them a tech lead, but whatever they're called, it's those people that have to have that very close relationship with the founder."

This quote explains the typical team structure within a company based on the number of engineers and emphasizes the importance of a close relationship between tech leads and the founder for effective team management.

• Clarity on the type of product person needed is crucial.
• Decisions need to be made on whether to hire inexperienced university graduates to develop internally or experienced professionals for their expertise.
• Startups may need to find "diamonds in the rough" rather than established talent from incumbents.
• A compelling product vision is the primary tool for attracting strong product candidates.
• If hiring junior people, it's essential to have a senior manager in place to coach and develop them.

"Probably the most important, actually. Yeah. And I have this chat with a lot of founders like you about. Let's talk about what you really need. What kind of person are you looking for?"

This quote underlines the importance of understanding the specific needs of the company before starting the hiring process for product roles.

• Early-stage startups must attract talent with potential rather than established professionals from larger companies.
• A strong product vision can inspire great candidates to join a startup.
• Founders may need help articulating their vision to attract the right kind of people.

"The biggest reason somebody great would join your company is because of your product vision. You are trying to do something that inspires them."

This quote highlights the significance of a startup's product vision in attracting talented individuals who are passionate about the company's mission.

• Hiring for potential requires assessing innate traits such as work ethic and curiosity.
• There is skepticism about the effectiveness of tests or assignments in the interview process.
• Hiring inexperienced candidates comes with higher risks and requires a commitment to their development.

"When you are hiring instead of experience, you're hiring on potential, which is what we're talking about, right? Based on potential, then you're making a bet on really more innate traits."

This quote discusses the different approach needed when hiring based on potential rather than experience, focusing on innate personal traits of the candidates.

• Managers should structure a three-month onboarding and development period for new hires.
• Onboarding should include customer visits, understanding the go-to-market strategy, and financial training.
• A mentor or coach can provide valuable guidance to new hires during this period.

"Please don't do that. Unless you have a director in place who knows it's their job to coach and develop those people. Don't do it. Otherwise you're just setting them up to fail."

This quote stresses the importance of having a director-level person to coach and develop junior hires to prevent failure and ensure their growth within the company.

• There is a debate about whether to hire product people with domain expertise or those with the potential to learn any domain.
• Innovations often come from teams with no prior domain experience.
• Understanding the difference between domain expertise and domain dogma is critical in product roles.
• Product people should be expected to learn the necessary domain knowledge quickly.

"One of the things that's critical about product is to be able to understand the difference between domain expertise and domain dogma."

This quote encapsulates the argument for hiring product people based on their potential to adapt and learn rather than their existing domain expertise.

• Product managers should be knowledgeable about the financial aspects and go-to-market strategies of their products.
• Managers should ensure that new hires receive education in areas where they lack expertise.
• Learning about customers and the market is essential for product managers.

"So he realized that I was totally incompetent around the financial side, which is pretty important when you're responsible for a product."

This quote illustrates the necessity for product managers to have a comprehensive understanding of the financial metrics and market strategies related to their products.

• There is a concern that the high demand for engineers and product people may lead to a lack of broader business knowledge.
• Great product companies differentiate themselves by how they educate and utilize their engineers.
• Engineers and product people should be encouraged to develop a wide range of skills beyond their technical expertise.

"It's one of the most obvious differences between great product companies and the rest, how they think of their engineers."

This quote points out the distinction between great product companies and others, which lies in the holistic development and utilization of their engineering talent.

• Empowered engineers are considered the foundation of successful companies like Tesla, SpaceX, Google, Amazon, Stripe, and Apple.
• Outsourcing engineering is viewed as a lack of seriousness about the business.
• Empowered engineers should not be seen as mere contractors but as integral parts of the company.

"There is nothing more important than empowered engineers. Tesla, SpaceX, Google, Amazon, Stripe, Apple. That's the foundation of every one of those companies, empowered engineers."

This quote emphasizes the importance of having engineers who are not just coding but are empowered to contribute significantly to the company's success.

• A comprehensive onboarding process is crucial for new employees to understand the company's customers, culture, leaders, and decision-making processes.
• Coaching plans should be personalized and aim to bring an individual to competence and, subsequently, to their full potential.
• Onboarding mistakes often include assuming that experience elsewhere guarantees success in the new company.

"Every manager that manages individual contributors is responsible for a coaching plan for their people at the beginning."

The explanation is that managers have a responsibility to develop a tailored coaching plan for each of their team members to ensure they reach the required level of competence.

• Alignment between product and sales is crucial for the success of both departments.
• The product team is responsible for ensuring the product's sellability.
• Product managers should actively engage with the sales team to understand and address sales challenges.

"The bottom line is the responsibility for the sales is on the product team."

This quote highlights that the product team, including product managers, has the responsibility to ensure that the product meets the needs of the market and sales team.

• There are three types of product leaders: visionary, craftsman, and operator.
• Operator product leaders are often criticized for installing red tape and lacking creativity.
• There's a distinction between operators who focus on scale through process and those who focus on scale through coaching.

"There are two kinds of operational people. There are those that believe in operation or scale, really what this is usually about with process and those that believe in scale, with coaching."

The quote distinguishes between two types of operational leaders, highlighting that not all operators are the same and that some focus on scaling through coaching rather than process.

• Empowered product teams are given ownership and responsibility, similar to a founder.
• Feature teams are contrasted with empowered teams as they do not have ownership and act as mercenaries.
• Empowering teams is about entrusting them with ownership and responsibility for the product's value and viability.

"In an empowered team, you are literally giving ownership responsibility to the team."

This quote explains that empowering a product team means giving them the same level of responsibility and ownership that a founder would have over the product.

• New product leaders should focus on building trust with company leaders and immersing themselves with customers.
• Eliminating the role of "product owner" as defined in Agile methodologies is seen as a positive change.
• Product leaders should focus on outcomes and do their homework by understanding customers, data, industry, and technology.

"The first and foremost thing is you have to establish that foundation of trust with the rest of the leaders of the company."

This quote suggests that for a product leader starting a new role, establishing trust with other company leaders is critical and can be achieved by becoming deeply familiar with the customers.

• TikTok and Tesla are praised for their impressive product strategies.
• Amazon's AWS and Stripe's continuous innovation are also highlighted.
• The focus is on companies that not only maintain their core products but also successfully launch new products.

"TikTok has been nothing short of amazing. I would say what Tesla has pulled off nothing short of amazing on every level."

The quote praises TikTok and Tesla for their exceptional product strategies, which have contributed significantly to their success.