Product Help is The Underserved Need
Startups and product innovation teams at corporations can contract with firms to provide almost any style of labor imaginable: QA, design, marketing, engineering, payroll, sales, pitch decks, HR and more. Yet, conspicuously missing from this list is excellent product support. In fact, on LinkedIn, it’s not even a category of service a small business owner can select to promote — only “product marketing” exists on the list as if it’s worth it to market a thing that you’re not even sure is worthwhile. “Product Management,” “Product Strategy,” “Product Development,” “Product Design,” “Product Research,” and more just aren’t there at all.
It’s easy to understand the common thinking behind why product is an uncommon option for outside support. It’s integral to every business and entrepreneurs are taught not to outsource core competencies. Further, businesses struggling with their products may not have the cashflow necessary to support a market for product help. Finally, Founders and CEOs, whether in title or not, tend to be an early firm’s product people, and it takes a lot of humble self-awareness — often lacking among these roles — to acknowledge when the product is not living up to its fullest potential.
For businesses doing absolutely everything right every single day with the best people on the planet, there is some truth to this common wisdom. In those circumstances, an outsourced product expert might be an overpriced version of what a company could hire internally for less. From my experience, however, I’d argue that only about 0.5% of venture-backed companies or corporate innovation teams live in this territory. Fundamentally, firms don’t exist at a static level of quality, and even the best ones sometimes need to surge faster than hiring allows. Growth requires constant new innovation into adjacent markets. Scaling and new competitors bring about new circumstances. CPOs and VPs of Product prove not up to the job, Founders quit, and massive pivots can be required unexpectedly (ex: COVID). Additionally, a lot of Founders are far better storytellers, fundraisers, and sales savants than they are product masters. As a result, if we zoom-in closely, we find businesses all over the ecosystem at every stage whose products or product teams aren’t as perfectly suited to the market as they seem. Some leaders are aware of the problem but are embarrassed to ask for help, some aren’t aware of the problem and require a VC or a trusted advisor to nudge them toward help, and some are aware and seek help but what they get is embarrassingly low quality.
The most common “solution” to the problem is an outsourced development team led by an experienced Agile-trained scrum master. This is almost worse than not knowing you have a problem because before you know it, you’ve taken high burn with low rewards and increased spending to hundreds of thousands of dollars per person only to find yourself and your team extremely busy and productive but still without anything “real” to show. I’ve personally seen firms charge their clients millions of dollars for things like “porting the product to Android” when the existing platform it’s deployed on doesn’t have product-market-fit, and therefore there is no need to add support for another one. To put it in concrete terms with example numbers, a 30% increase in precision for a team of a few dozen engineers is a $1.2M/year win, and that doesn’t take into account the upside from delivering better value to the market and winning more customers at higher Lifetime Values (LTVs). To see how even a slight improvement in product strategy can save leaders immensely, we put together this handy calculator.
At its core, the trouble with these “certified coaches” is that they are overwhelmingly trained to optimize process results, not value delivered to a mission. Here’s an easy test — ask your “scrum master” if they will commit to doubling your user base by a certain date and watch them squirm. They can’t make this commitment because they are trained to be divorced from the value and the viability¹ of the solution in favor of things like the median number of tickets closed per sprint cycle. Don’t get me wrong, the original purpose of the Agile Manifesto is extremely well intentioned and valuable — it’s just that almost no firms live up to its mantras and all the output in the world doesn’t matter if you’re not building something people really want that deeply solves for that pain or opportunity.
What we’re doing at First Principles is the opposite of the conventional approach. Sure we can support companies with engineering talent,² but we don’t start there. WE LEAD WITH PRODUCT. That means we lead with embedding product experts in your existing business and we challenge them to ask critical questions to ensure that the company is building exactly the right things, that it completely understands its customers’ true needs (not their stated ones), and that it’s built up the right internal team architecture to deliver on those needs again and again in early phases or at scale, and that it’s taking it to market the most expedient way possible.
Perhaps the other crucial fallacy is that a company doesn’t need product help if it already has professional product people. Having hired, coached, mentored, and transitioned numerous people into the product discipline, I can share two findings emphatically: 1) product is 7–10 major disciplines, and each product expert has strengths in at most 2–3 of them and 2) most people in formal product roles are terrible at what they do outside of the top 0.5% of venture-back startups. Terrible may sound like a strong word, but let’s consider for a moment that a bad product person not only wastes engineering resources but can also derail the strategy of the whole company, stealing valuable time until fume date, creating weird shaped technical debt, and draining energy from every discipline from sales to marketing to design and implementing bad process that may live on after that individual is let go.
Overwhelmingly, this means that more likely than not, most organizations we know are silently suffering from at least some serious product problems that are slowly eating away at the business, and the staff’s blindspots are preventing them from raising these concerns. Yet, here they are, causing decay like a cavity in between visits to the dentist.
But can someone who doesn’t know a specific business really help? Yes, we can! In fact, we’re often better at parsing fact from fiction from the outside because we’re not blinded by existing assumptions. I learned this lesson firsthand very early at Palantir where somehow, we as a team of mostly ex-PayPal engineers (and a few ex-government civil servants like myself) with no knowledge of national security used a better process and better product instincts to re-engineer national security challenges like finding terrorists from the outside. As a collective of alumni, we’ve taken these deep learnings and translated them into over 170 successful venture-backed businesses now as famous as Anduril, OpenSea, Blend, and numerous others!³
To help a new business, first we treat each interaction or statement as a first principles research challenge. What is the root cause or deepest truth on a given issue? We start peeling the onion there and move up the stack only when principles are proven in the wild with real paying customers and real product. This takes patience and discipline and hustle as well as the ability to look in from the outside, and it’s one of the reasons why teams built entirely of complete insiders rarely succeed. There are some exceptions for extremely deep tech solutions, but generally when founders tell me it would take too long to come up to speed on their market, it’s really a shorthand for “we’re not quite sure what we’re building, what it solves, or who it’s for, and we’re embarrassed that if you ask us deep questions about it, it will reveal giant gaps we’ve neglected because it’s easier to just build, build, build!”
Finally, we see founders struggle with product and a first principles approach when they lie to themselves about their level of traction. The combination of venture backing or working in a senior executive position at a well known company can take even someone with a strong grounding and make them feel like they are invincible, and let’s face it, slogging it out growing one user or one order at a time is an incredibly harrowing experience, but it’s one every single successful founder or innovator has been through, and you don’t have to walk through this gauntlet alone.
If you want to know more about what a product firm does, please check out our website or schedule a call and I’ll gladly walk you through it. The short version is, we do anything a Chief Product Officer, VP of Product, or Product Manager would do, and we do it with the benefit of the principles that made Palantir great combined with all of the cutting edge product research available from the most successful builders. No phase is too early or too late, no topic or market is too complex. Let’s build something great together.
Hi! If you enjoyed these insights, give us a follow, and if you are interested in tailored support for your venture, please visit our website at First Principles, where we focus on product to help the world’s most ambitious Founders make a difference.
Footnotes
[1]: This is not to say that engineering talent is a commodity. To the contrary, great 10x engineers are also crucial to success. It’s simply that most businesses with needs and most suppliers to those needs start with engineering as the solution.
[2]: Credit due to Marty Cagan for articulating “The Four Big Risks”
[3]: https://www.protocol.com/newsletters/pipeline/palantir-pack-mafia
