Product definition is a challenge for any startup. But it's significantly harder for a company that is in an evolving market.
Ben Horowitz - in his new book 'The Hard Thing About Hard Things', makes a compelling argument for how not to define product strategy.
In making the transition from Loudcloud to Opsware, Horowitz was performing what has now become known in startup circles as a pivot. It's a fork in the road where the company must change or fail. It's not easy.
Explains Horowitz; "The product plan was weighed down with hundreds of requirements from our existing customers. The product management team had an allergic reaction to prioritizing potentially good features above features that might help beat Blade Logic (a competitor)."
This makes total sense of course. The product team is on the front line - they were the ones who heard the product requirements from customer. Customers who pay the bills. Customers who know their names.
Horowitz explains the logic this way: "They would say 'how can we walk away from requirements that we know to be true to pursue something that we think will help?'"
This is the challenge of all tech companies in emerging markets. And Horowitz is spot on when he says, "figuring out the right product is the innovators job, not the customers job."
The customer knows what their needs are today - or yesterday. It's the product team's job to innovate and build for the future. For the next need.
"innovation requires a mix of innovation, skill and courage", says Horowitz.
Ted Turner famously said that before CNN was launched, if a focus group of cable customers had been asked if they wanted 24 news, they would have voted thumbs down. Customers know what they have, not what they might want to have.
There are plenty of hard things about being a CEO. Seeing around corners is part of the job. Not just predicting the future, but inventing it and building it. Having customers is great, listening to customers is important, but counting on their product needs to help guide product is a recipe for disaster.
Which is why Horowitz gave 'the speech'. He told his team: "I don't care about any of the existing requirements. I need you to reinvent the product and we need to win."
In 2007, the company founded as Loudcloud in1999 had evolved into Opsware and sold to HP for 1.6 billion dollars in cash.
There are plenty of hard things about being a CEO - but balancing market demands with product vision is the true test of what a CEO and a company is made of.
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