How to Setup Product Teams for Success

Having led and observed product development initiatives that took years to launch (IBM’s clients, Dun & Bradstreet), quarters to launch (, and months to launch (,  DreamIt Ventures), I’ve been amazed by the productivity of small product teams.  The article about PayPal’s reinvention being powered by small product teams, and of Shutterstock’s success being driven by small product teams, comes as no surprise.

If you want a high performing growth company, small teams (typically up to 15 people) is not the only answer.  Small teams need to be setup right, with the 4 R’s.  They need the Right People, Right Problem, Right Processes, and Removal of All Friction.

Right PeopleThe highest performing product development teams I’ve seen have a mix of skills and attributes.  They have someone quantitative, someone logical, someone collaborative, someone artistic, and someone good at user experience. They typically include a full stack of engineering capability, design/ux, a product manager, QA, and part-time marketing insight.    On some teams, design and QA can be part time, but once the changes get frequent enough or opportunity is great enough, it becomes very helpful to have both full time if you want more cycles of work released faster.  Teams running without design or QA can’t iterate as quickly and are likely mis-using precious development resources, or not allowing the product manager to stay one step ahead.

Right Problem.  The highest performing product development teams are focused on the right problem.  Typically, it’s quantitative.   Low performing teams often have feature launches as goals.  It’s too hard to judge success of feature launches, and they don’t drive business results.  Launch gets delayed because what matters is how good the feature is, not what results it drives.  Resources get allocated to a part of the feature that does not drive business results.  Another indicator of low performing teams is a lack of focus on a single problem.  If there is not a single job to be done, the team loses focus.  If the problem changes to often, there is not a chance to learn and improve. The right problem also motivates the team and provides a rallying point.

Right Processes. Teams need to find what keeps them humming.  I’ve seen KanBan work great for very small product teams, as engineers can easily see what everyone is working on and, once finished, pull the next thing off the queue.  Agile works well for larger product teams and projects, as the daily stand-up provides a rhythm and sense of shared commitment.  Both of these processes focus more on productivity than on overhead.  It’s important that the process not require much time spent providing progress updates and deadline estimates, as time spent on these activities doesn’t produce a better outcome faster.  Even when working with an outsourced or offshore team, I’ve found KanBan to be better than requirements documents.  Development processes also matter–how is code controlled, how is testing done.  Teams need to optimize (or ideally eliminate) each step in their processes.

Remove All Friction.  Ensure the small teams are not dependent on another team to get something done–put as much as necessary in the team’s control and allow them to work on the end-to-end solution.  Try not to have the team dependent on a shared resource, for which they must spend time queuing or requesting.  Provide all the resources they need, whether it’s software, testing devices, or stock photography.  Organizations of any size have people or processes that create friction.    Keep obstructions such as management requests for status updates or reviews to a minimum, or at the very least  focus them on a single team member.  Give the team goals and not flagpoles, as each flagpole introduces friction and delays progress.

If you follow the 4 R’s — Right People, Right Problem, Right Processes, and Removal of All Friction — your product teams will be motivated and set up for success.

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Better Product Management: Goals and not Flagpoles

Getting a sign off and blessing on a project

Requiring blessings and approvals delays hitting goals and devalues customer validated learning

As a manager, do you feel the need to control every resource and every action of your employees?  Do you want to know everything that is going on–and not just whether goals are being hit?   Do you put in place requirements for sign offs? If so, you’re likely get suboptimal performance from your team.

Often when mangers seek to control a process or know what’s going on, they introduce a sign off requirement.  Time spent getting approvals delivers little value unless it results in very meaningful change.  Instead, this act of ‘running things up the flagpole’ and ‘getting the Pope’s blessing’ mostly delivers value to the micro-manager.  Even if going up the flagpole changes the result, it’s often highly likely that both ideas we’re right–and no customer validated learning occurs to improve future decision making.

Recently a new product management process was provided to our team.  If someone wanted to start work on fixing a high priority bug–even one that affected 50% of online revenue, they would need to get 2 sign offs and alert a third person before work could begin.  This “flagpole” upon which a new activity needed to be run up and approved–provided transparency and control over resource allocation.  However, it means that bugs stay on the website longer, more time is spent getting sign offs, and less time is spent delivering value.

Another example is spending hours getting  approvals for website copy.  After 6 people spent about 6 hours each on copy, another 9 people spent two hours and a half hours in a room approving the copy.  Over 50 hours were spent on copy. The time would be better spent ensuring there was an A/B testing platform and regular usability testing.

Even a customer service organization can create the flagpole problem.  For example, often customer service representatives are required to get approvals for customer refunds.

A high performing company –without flagpoles–could solicit ideas in under an hour (instead of 50 hours), a/b test a few variations, get qualitative insights from usability studies and customer service feedback, and adapt on the go.   Ideas for copy from the 9 people could come via informal 5 minute meetings or emails.  The product manager would be learning faster, the results would be better and more repeatable, and 45 hours would be saved.  Another process done at one public high growth technology company is to have a daily 30 minute meeting with the most senior marketing person where they can provide input on anything launching–and it’s clear that they’re the gate preventing launch so it usually happens in a few days.

Perhaps most importantly, a flagpole process is not scalable.  A high performing 300 person or 1,000 person company should have too many website updates launching each week for 9 people to sit in a room debating for hours on end.  While it’s helpful to have some tone and style guidelines that fit the brand, long meetings for copy approval are not sustainable.

How do you avoid flagpoles?  Give the product manager measurable goals that are NOT just launching features.  The primary question is where are things tracking toward the goal, and what are the next few things being tried to hit the goal. With goals, it also becomes clear what matters more.  For example, if the goal is a conversion rate, the manager can focus on the emailed or verbal copy suggestions that will be seen by 95% of the users–where someone else in an approval meeting might spend precious time on the copy only seen by 5% of users.  And the answer is which copy converted better, not which sounded better (assuming it’s on brand).  With a goal of a conversion rate, the manager can also decide if the bug fix is worth the engineering time and disruption to hitting their goal. Of course, goals are not everything–for example, a product that grows revenue in the short term might hurt the brand and revenue over the long term–but they are very helpful.

Even operations teams can try to remove flagpoles.  For example, to remove flagpoles in customer service, consider allowing representatives to issues up to a certain dollar amount (e.g., $100) to streamline operations (credit to Tim Ferriss for this idea).

As you run your company, watch out for new processes that require approvals, as they can meaningfully slow down progress towards goals.

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Pinterest Was A Pivot From Mobile, With Funding in 2009

HelloTote was an iPhone app by Cold Brew Labs, the parent company of

I’m surprised that articles on Pinterest in Fortune and Business Week start the story with the launch of the beta launch in early 2010.  The story really starts in 2009 with a mobile app and seed funding.

The holding company for, Cold Brew Labs, was incorporated in 2008. One of the company’s first plans was to launch a mobile shopping app called HelloTote.  According to the SEC, Cold Brew Labs raised over $500,000 in July 2009 from investors.  I know this round included included the venture capital firm Firstmark.

HelloTote's Facebook group page, which has pictures of founders Paul Sciarra and Ben Silbermann, mentions using the app to save favorites.

According to its Facebook page, HelloTote was intended to be a “shopping catalog for the iPhone” where “you can browse items from dozens of retailers, save favorites, get sale notifications, and find nearby stores.”  The first version “…has women’s clothing, shoes, and accessories from stores like Nordstrom’s, Saks, Banana Republic, Shopbop, and J. Crew.”

Fortune must have been mistaken when they write that the Pinterest team was “hard up for cash” in January 2010, just 6 months after closing $500,000.  The small Cold Brew Labs team raised an additional $700,000 – $1,000,000 in November 2010, suggesting they were ran lean but never that close to bankruptcy.

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Steal Your Story Before Someone Else Does

Nick O’Neil does a great job explaining how captured 680,000 page views by posting a summary of a long article that appeared in The New York Times.  And nearly every day, websites are summarizing articles and interviews that appear on other news sources.

Today, I was surprised to see The Wall Street Journal blog it’s own article about  Upon reflection, I think this might be a great idea for news sites that do long form journalism.

Google search results now show up to 4 articles from the same domain.  So, the publisher can aim for all 4, or at least the top 2, which get the overwhelming majority of clicks.

If the publisher is big enough to get shares and links for both the blog post and summary, and has a high page rank, it will likely get the top 2 search results.  The primary negative of having both an long form article and a blog post is that the blog post could steal some inbound links, social mentions, and comments from the long form article, hurting is ranking in Google search results.

However, the publisher can not only get two listings but also cater to two audiences–(1) those who want a summary; and, (2) those who want long form research.  I personally never use because the “story highlights” bullet points make me feel silly.  And I don’t like Huffington Post because it often summarizes news elsewhere, which I then have to go read.  But the idea of a trusted source doing a summary and a long form makes a lot of sense to me.

Interestingly, the blog post on the WSJ has a better ranking in Google, perhaps because its link structure includes keywords.  Most importantly, the blog article and the original article appear in the results above an article that mostly summarizes the original piece (though I must thank them for a kind summary and link).

Should news outlets blog and summarize their own articles?

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Bloomberg Gets Timing Wrong: The Short Was Already On

An article suggests that Treasury Secretary Hank Paulson leaked insider information.  It’s catchy headline says “How Paulson Gave Hedge Funds Advance Word“.  But timing of the trades shows the word was clearly not in advance.

According to the article:

  • From July 9 to July 14, short interest rose from 86.3 million shares to 163 million shares–that’s 88% in less than week
  • On July 21, short interest continued to rise, to 240 million shares–that’s another 50% in 1 week
  • On July 21, Paulson gave the notice to investors suggesting a short was a good trade
  • On July 24, short interest peaked at  262 million shares–that’s just a 10% increase after the meeting

I don’t understand how it can be construed that Paulson gave advance notice if the bulk of the shares sold short ( 240 million out of 262 million shares ) were sold before the meeting.

Disclaimers: This is just my opinion — I did not speak to my brother with the SEC. I do not know what other information may have been revealed by Treasury staffers to investors earlier in July, when there was a large increase in short interest.

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Delight Frequency vs Delight Depth

A friend in the VC community asked me to evaluate a mobile wishlist and deal finder.  Interestingly, that’s what SF darling Pinterest first raised money for with HelloTote.

I advised my friend to focus on how deeply and frequently consumers get delighted by the product.

  • Low delight, high frequency products offer a user low levels of delight daily. Facebook, Instagram, YouTube and Zynga are great examples.
  • High delight,  low frequency products offer delight a handful of times each year.  RentTheRunway and acted upon 50% off deals fall in this category.

If your product doesn’t offer over 50% off, you need to make sure it can deliver delight often. Delight can come in many forms:

* Getting a comment from friend and feeling a sense of connection

* Earning a badge and getting a sense of accomplishment

* Learning something

* Getting a laugh

* Showing something cool

What you don’t want to offer is a few dollars of savings or a few comments from friends a few times a year.  That is what a comparison search engine or mobile shopping tool might do.  Web comparison search engines like and need to invest heavily in advertising and search engine optimization because their product delivers only moderate savings and delight.  They struggle with retention.  A mobile app has an even more difficult time with retention because intent-based marketing opportunities like Search Engine Marketing on the web are immature on mobile.

And, of course, the deeper the delight you provide the more you can charge a consumer.

What impresses me about BirchBox is that they’re doing everything with their community, points, deals, instructional videos, and personality.

On the other hand, I fear Foursquare doesn’t offer quite enough delight beyond just badges with their low levels of interaction among the community and low monetary rewards.

Lastly, “time until first delight” is a metric that will drive retention and virality.  A wishlist and deal finder can  struggle to make a user delighted on their first visit.  On the other hand, a social site the lets a user interact with a friend or earn a badge, or a daily deal sites can offer 50% off, can do much better on offering some delight over the first 30 days.

How often do your favorite products delight you? Where to they fall on the chart?

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From Student Side Project to Apple “Staff Pick” with Elance

This post by me originally appeared on the blog of eLance, an outsourcing platform that I used to find contractors to build a prototype…and later to build KartMe’s first mobile app, which got a “Staff Pick” from Apple.  The post was shared over 600 times.

How did I graduate from Harvard with a live website and iPhone app, without spending my days programming? Mark Zuckerberg and Bill Gates dropped out of school to get their companies off the ground. But with Elance, I was able to get and KartMe Mobile running while still making it to all my classes and getting my homework done. Soon after launch, Apple awarded KartMe Mobile a “Staff Pick”. This led veteran investors to get involved. Before I knew it, I was living my dream of building a useful product used by thousands.

It all started when I told people I’d be moving to Boston. Suddenly I received lots of recommendations–restaurants to try, books to read, movies to see, hotels, ski resorts, and more. At first, I saved these ideas on scraps of paper. Then in a draft email. Finally, in an Outlook contact that sync’d with my phone. Months later, I realized I never used these recommendations. When I was out and about in Boston—I couldn’t quickly see which restaurants were around me. When I was walking by a bookstore or planning to go to a movie, I couldn’t quickly pull up my “bucket list” (that is, lists of recommendations of things to do). That’s when I had the idea for KartMe: an Internet site for the creation of online lists, where recommendations, reviews, prices, and notes are at my fingertips. It would help me organize and save. When a friend asks, I could share a list. I could use it at home, work, in class, or on-the-go. Saved information would instantly be available on my iPhone, BlackBerry, or Android.

I wanted to get a prototype together quickly, but at the same time I didn’t want to spend my days in front of a computer. Class was interesting and meeting classmates was really fun. I’d only be in school briefly—and I wanted to make the most of it. I chose to outsource so that I could be efficient with my limited time in school. Elance was my first choice because of the number and quality of vendors who could bid on my proposal.

Using Elance, I started working with a firm in India to put together a prototype website. Before class at 7 a.m., I’d chat with them using Skype. Once we had a prototype, I’d sit in our student center and show it to passing classmates. Based on their input, I decided to pursue the idea further. Again using Elance, I hired a team to build a full website. As soon as we started getting free traffic from Google, I had another firm on Elance build the iPhone app and mobile website.

I launched the site upon graduation. In the course of 6 weeks, Apple twice gave KartMe’s mobile web app a “Staff Pick” and called our site “really useful”. We raised some angel funding and are improving and marketing the product.

KartMe has helped friends and families to save, organize, and share 20,000 recipes, restaurants, books, movies, home design ideas, wedding dreams, travel tips and more. We’ve served millions of webpages, partnered with iVillage, been featured in Cosmopolitan, and more. I’ve had a blast running the business – particularly as KartMe has deepened relationships between families and friends.

Going forward, we’re making KartMe better at delivering more value to our members. We’re making it possible to pass grandma’s recipes down from generation to generation, while also ensuring you can look them up on your iPhone. We’re helping bridal parties share style ideas from their phone. And we’re ensuring friends can exchange mobile travel guides. If you want to follow our progress, start cataloging and sharing your favorites at

About the Author: is Phil Michaelson’s first company. He started the website, built the mobile version, and attracted users and investors initially by using Elance. Use for free to organize your recipes, plan your wedding, collaborate on a home design project, or organize travel tips, books and more. With KartMe Mobile, you’ll never forget an ingredient and can easily share with friends your photos of cooked dishes or fashionable looks. age, been featured in Cosmopolitan, and more. I’ve had a blast running the business–particularly as KartMe has deepened relationships between families and friends.

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Notes from Steven Blank Talk on November 12, 2010

I’ve been a fan of Steve Blank’s writing for a LONG time.  I wished HBS would teach more about the search for a business model.  Where you need to get out of the office, and test and refine.

Today, I not only had the the chance to hear him speak, but I also won a copy of his product management book,  4 Steps to the Epiphany, by limbo-ing better than the rest. If a picture of my limbo-ing appears, I’ll definitely share it.

Notes from Steven Blank’s talk:

  • A startup is a temporary organization used to search for a scalable, repeatable business model
  • Great founders know how to search for ideas that work.  Someone needs to build the business. And then, great managers know how to execute the busienss.  VC’s might want someone different for the different stages.
  • Startup metrics:  Customer Acquisition Cost, Viral coefficient, Customer Lifetime Value, ASP/Order Size, monthly burn
  • Startup customer acquisition: early adopters, one-off deals, done by founders, pricing/features are unstable
  • Startup product management:  you talk about testing hypotheses, minimum feature sets, pivots, continuous deployment, continuous learning
  • Your organization should not be a startup forever…or even 10 years
  • Customer development solves for unknown risk.
  • Founder needs to get out of the building
  • More startups fail from a lack of customers than a failure of product development
  • It takes 3-5 times for a CEO/product visionary to hear why a customer thinks their product sucks! Humans don’t want to hear what’s wrong about their idea.
  • Startups have a series of crises.  That’s just what happens. Pivot is the process to deal with them.
  • Customer development reduces customer risk and market risk.  It doesn’t reduce technology risk.

Also, thanks to Gary Whithill for organizing the event–and getting such a great speaker.

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Notes from Beauty 2.0 Meetup with PR Pro Deirdre Breckenridge

With KartMe’s coverage in Cosmo and focus on mobile clipping folders, I’ve begun learning about the beauty space.  A meetup group titled “Beauty 2.0” seemed the perfect fit. Upon arrival, it was fun to see a familiar face in Holly Chen from group sponsor MySkin.

The highlight was definitely a talk from Deirdre Breckenridge.

Here are my notes:

* Everyone now has the power to amplify your message.

* Listen and observe the conversations being had across all social networks for months before engaging.

* Emotional connections can be developed by providing useful information .  If your beauty tip on skin care for frequent travelers makes some think they’re gorgeous, they’ll feel a deep connection with you.  MichellePhan and UrbanDecay are good at this.

* Your goals should be the first thing a prospective PR firm asks about.

* The up and coming tier of bloggers should be targeted first.  They might have 1,000s of followers.

* Social media releases are different from press releases.  Give the online community something interactive that keeps the conversation going. Include graphics and video.  Look at the “social media release template” from Shift Communications. PitchEngine also has some examples.

* A social media policy helps your team know how to engage online. Might also help legally.

* Free tools to help you locate and listen.  Here is a list from Deirdre.

I look forward to reading more of Deirdre’s blog at and following her on Twitter.

To share your notes, please post or link to them in the comments.  Thanks!

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Boastful Boar’s Head Easily Delivers 50% of Daily Sodium at Lunch

Boar's Head Deception. September 2010.

Boar’s Head celebrates that they’re the first deli company to meet the New York City Department of Health’s National Salt Reduction Initiative (NSRI) recommended 2012 target levels for sodium in deli cold cuts and cheeses. The ad above appeared on a MetroNorth train from New York to New Haven in early September, 2010.  It makes a bold claim. So bold, that I’d expect to see a typical deli sandwich have less than 50% of my sodium for the day.  Sadly that’s not true. Boar’s Head is benefiting from not actually selling sandwiches.

Delis use 6 oz,  10 oz or sometimes even 1 pound (16 oz) of of meat per sandwich. So, when I let the deli make my sandwich, I’m getting about 50%-100% of my days sodium from just the meat. Let alone the bread, which can easily add another 10% of your daily recommended sodium.

“Maple Glazed Honey Turkey” is of my go-to deli meats . Yet, I don’t really know how that meat gets to my plate, as it doesn’t look like the turkey my mom makes on Thanksgiving.  Something happens along the way, which adds lots of salt.

Boar's Head Nutrition info

The nutrition info above is for 2 oz servings.  Yet, my sandwiches I make for myself are typically a  quarter-pound, or 4 ounces. Turns out that my conservative quarter-pound of turkey meat is giving me 36% of my salt for the day–before counting the bun.

Boars’ Head met the guidelines put out by NYC for deli meats ( NYC recommends 810mg of salt per 100 g of meat ). Yet, my complete deli lunch on a turkey sandwich can still contain 100% of my salt for the day. See how:

  • Boar’s Head Honey Maple Turkey (1/2 lb, 72% of daily sodium)
  • Arnold Kaiser Roll (1 roll, 1 serving, 11% of daily sodium)
  • Small bag of Lay’s Potato Chips (1 oz bag, 1 serving, 7% of daily sodium)
  • Can of Coke ( 12 oz can, 1 serving, 2% of daily sodium)

Unless Boar’s Head  encourages 2 oz or 4 oz servings of their meat, they should stop being so boastful.

This is a great opportunity for delis to make more money while making customers healthy. It’s simple: delis should advertise & price by portion size, using current prices for the small recommended portion size. Consider a deli menu offering 3 meat sizes, with prices relative to your current prices:

  • Healthy-size (4oz): less $0.50
  • Full-size (8oz):  plus $1.00
  • Super-size (12oz):  plus $3.00

What do you think?  Should Boar’s Head be less boastful?  Should delis standardize and charge for the amount of meat in each sandwich?

[UPDATE on 9/10:   3 oz of fresh turkey has 55g to 80g of sodium-- that's 90% less than Boar's Head's Low Sodium offerings! Put another way, Boar's Head's Low Sodium turkey has 500-1000% more sodium! So, my preferred outcome is that delis in NYC carry freshly roasted turkey that is free of the unnecessary sodium. ]

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