The Builder's Guide to the Tech Galaxy

99 Practices to Scale Startups into Unicorn Companies

Martin Schilling, Thomas Klugkist

• Publisher: Wiley
• Year: 2022
• Print ISBN:
  9781119890423
• Edition: 1
• eBook ISBN:
  9781119891598
• Topic: Business
• Subtopic: Business General
• Index: Business

Learn to scale your startup with a roadmap to the all-important part of the business lifecycle between launch and IPO

In The Builder's Guide to the Tech Galaxy: 99 Practices to Scale Startups into Unicorn Companies, a team of accomplished investors, entrepreneurs, and marketers deliver a practical collection of concrete strategies for scaling a small startup into a lean and formidable tech competitor. By focusing on the four key building blocks of a successful company – alignment, team, functional excellence, and capital—this book distills the wisdom found in countless books, podcasts, and the authors' own extensive experience into a compact and accessible blueprint for success and growth.

In the book, you'll find:

• Organizational charts, sample objectives and key results (OKRs), as well as guidance for divisions including technology and product management, marketing, sales, people, and service operations
• Tools and benchmarks for strategically aligning your company's divisions with one another, and with your organization's "North Star"
• Templates and tips to attract and retain a triple-A team with the right scale-up mindset
• Checklists to help you attract growth capital and negotiate term sheets

Perfect for companies with two, ten, or one hundred employees, The Builder's Guide to the Tech Galaxy belongs on the bookshelves of founders, managers, entrepreneurs, and other business leaders exploring innovative and proven ways to scale their enterprise to new heights.

FUNCTIONAL EXCELLENCE IN SCALE-UPS

5
Product Management Excellence
Launching products that create value for customers

With Johnny Quach and Sven Grajetzki

Note: The product and technology functions in startups collaborate closely and sometimes will act as a single combined function. In this chapter, we assume a product-led model in which business-focused goals (e.g., acquisition, conversion, NPS, etc.) are addressed by autonomous product and technology teams led by product managers. Technology-platform-related topics, such as security, quality assurance and reliability, are covered in the Technology chapter.

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Key pitfalls for scale-up builders

• Working with a blurred product vision or without one at all
  Some startups do not invest sufficiently in clarifying the core issue they want to solve for their customers. A good product vision articulates the reason WHY the product exists, rather than a detailed plan on WHAT and HOW to build the product. It is important to ensure teams can always refer back to the core issue they are trying to solve and see the product as a vehicle that delivers value to customers (see Practice 27).
• Expanding into new regions or new segments too quickly (or too late)
  Once a company enters a new market or takes its product into a new customer segment, they are slowing down learning curves in its core business. Strong retention and operational efficiency metrics, as well as favorable unit economics in the core markets, are a good sign of a readiness to expand. However, a market that will be divided amongst few players might necessitate regional expansion sooner (see Practices 24 and 29).
• Not focusing enough on rapidly bringing users to the “magic point”
  The magic point is when customers realize the value of the product for the first time. This point is often hidden behind a sign-up process or lengthy tutorial. After having found product-market fit, delivering the magic point as early as possible in the customer journey is a key driver for growth (see Practice 24).
• Failing to identify the one defining part of the product which drives user delight
  Many scale-ups have few components of the product that truly matter to delight customers. This might be the mobile app for a FinTech or supply chain software to drive up the delivery experience for an eCommerce company (see Practice 30).
• Focusing on shipping features over customer value creation
  Setting up the product function purely as a feature factory involves shipping a high volume of products without actually improving the lives of your customers. A product function in a scale-up needs to combine a reliable factory that can ship the right features at the right time with missionaries who care deeply about the outcomes they achieve. Amazon's internal press statement process is a prime example of this (see Practice 28).
• Failing to align stakeholders on a shared perspective for mid-term success
  Some product managers do not understand the objectives and key results of the business functions they work with enough (e.g., sales or operations). Sometimes the product and the business functions will develop separate perspectives on the joint output and outcome metrics to achieve. Ideally, the product teams will work with the business functions to define OKRs and North Star metrics (e.g., reorder frequency, share of wallet), which are stable enough and do not change too much on a quarterly basis (see Practice 28).
• Setting up product and technology teams that are too dependent on each other
  A need to frequently shift developers between teams or a high volume of complaints about dependency conflicts are signs that the product and technology teams are not set up to be independent enough. One way to resolve this is by dividing them into tooling and product-focused platform teams, experience teams that ship features to customers and growth teams that work cross-functionally (see Practice 25).
• Lacking strong product culture rituals
  Failing to embed strong rituals into a product team will erode your results-focused culture. By implementing quarterly kick-offs, quarterly retrospectives and bi-weekly demo days, a company can build a strong sense of ownership within its product team. Aligning all roadmap items to company-level OKRs will reinforce the sense that product management plays a critical role in the growing organization (see Practice 27).

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The best performing product management functions are central hubs for customer value, not feature factories. Of all the teams in a scale-up, the product team needs to be most closely aligned with the company's North Star metric (as discussed in Chapter 1).

Many product functions in tech startups have to deal with shifting objectives. In the early startup phase, a company will usually focus on reaching a product-market fit fast – as measured by improving retention rates on a cohort basis. Once this point is reached, many companies will “pour fuel into the fire” by investing more in customer acquisition and activation. Depending on the business model and current funding needs, monetization and internal efficiency or expansion (entering new markets and/or launching new customer segments) will become critical. This is captured in our formula for product-led growth (Figure 21):

Figure 21: Product-led Growth Formula

This formula can be turned into objectives and key results (OKRs). Figure 22 is an example of a list of possible product OKRs for a FinTech.

OKRs

Practice 24: Establishing the right product OKRs

Typical Annual Product Objectives and Key results for a FinTech Scale-up

Figure 22: Product OKRs: FinTech

Now let's take a look at each objective and the key results in more detail. These objectives are illustrative of product functions. However, they will vary depending on context and can change over time.

O1. Acquisition and activation: Are your customers experiencing the “magic point” fast enough?

Bubble.io is a no-code product that allows anyone to build web applications through a visual interface. Its “magic point” is when a visitor realizes that they can build almost any web application without code by using the service. A perfect example of reducing the space between entry and magic point is the “Edit this page to see how it works” link on the bubble.io homepage. By clicking on it, the link will send users forward to Bubble's demo editor tool that invites them to edit the Bubble homepage with the entirety of the Bubble toolkit. There ...

Table of contents

• Cover
• Table of Contents
• Title Page
• Copyright
• Dedication
• The Builder's Guide Partners
• Forewords
• Forewords
• Introduction
• NORTH STAR
• PEOPLE & MINDSET
• FUNCTIONAL EXCELLENCE IN SCALE-UPS
• GROWTH CAPITAL
• Contact Us
• End User License Agreement