Why I think designers and PM's generally make for better early stage startup CEO's

I was watching this interview of Brian Chesky this past week and I was impressed with how he thinks about strategy and management.

To put it simply… It is ALL ABOUT THE USER.

A long time back he famously storyboarded the ‘ideal Airbnb guest experience” and piece by piece they’ve been implementing it.

They do not chase short term revenue.

They do not just do what the numbers tell them to do.

Rather they rely a lot on intuition and doing what they believe to be the right thing long-term.

And a lot of this he attributes to the fact that he is a creative at heart. He was always passionate about design and studied it in university.

If this approach rings a bell…. it’s also very similar to how other legends like Walt Disney and Steve Jobs approached company building.

While I wasn’t Brian’s biggest fan when I met him during an interview in late 2011 (he came off very cocky in my view)…. I gotta say it seems like he’s matured a lot. And has turned into a very unique and talented leader.

Product Managers and Designers tend to be very customer-centric

Focusing on the customer is how PM’s and Designers are taught these days.

It’s part of the basics to how to do the profession and be good at it. Kind of the way an accountant has to learn how to create financial statements.

And so when you hear good leaders in these areas talk.. they start to sound very repetitive.

I watch a lot of Lenny’s Podcast… probably at least 30-40 videos in the past year.

And his guests tend to be a lot of product leaders of top tech companies as well as some CEO’s (many of whom came from a product or design background like Karri Saarinen, CEO of Linear).

They repeat how important it is to talk to users… and use that as your guiding light. Making time to do it regardless of how big their company gets or how busy they are.

You need to talk to users. Period.

Commercial folks tend to be very budget and target-centric

First let me explain who I consider a ‘commercial’ person to be. It is generally a person that grew up the ranks on the business side.

Perhaps they were in charge of a business unit in a corporation. Or perhaps a strategy consultant.

I came from this background so I know the mindset well. I spent seven years in strategy consulting, was in charge of a regional business for Visa Inc, and was CEO of Groupon Ukraine back in the day.

I spent my days thinking about hitting my target and ensuring I was on budget.

What I didn’t really do much was talk directly to my users. Because I had budgets for market research for that.

I didn’t think about how to design the ideal customer experience… I thought about how I’m going to make an additional 10% bump this year in revenue.

Its a very different mindset.

I know because I had to make that mindset shift myself the past decade when I switched from commercial to product person.

To get ‘Product Market Fit’ it requires going deep on understanding the customer

Product Market Fit is kind of a mix of both art and science. You need to be data-driven and methodical… but at the same time you need to use a fair bit of intuition.

And you need to be highly driven by understanding your customer. Because you are making something to solve a pain point that perhaps hasn’t been solved in this way before.

You’re not just copy and pasting…. you are designing.

Its one of the reason in my view Rocket Internet was always bad at copying models that required a deeper understanding of the customer.

Because their approach was very linear…. set a budget, put some commercial people in charge, and give them a target.

Many ex-Rocket folks that started their own tech startups later on realized.. that this type of copy & paste just doesn’t work when having a deep understanding of the customer is key.

Which is actually most of the time.

Commercial leaders tend to be bad at attaining Product Market Fit (PMF)

Most instances I have seen of commercial leaders creating a brand new tech product or service have failed. At least initially.

Because they will often go at it the same way they were taught. By hiring a bunch of people, setting a target, and then throwing a bunch of money at it.

This money is typically thrown right down the drain. Because they’re not spending with a specific intent of learning about their customer.

In part because they are often not even really talking directly to their customer.

Rather they leave that to their minions and rather think that by pressuring those employees…. they will do the job for them.

Reality is.. that this rarely works. The CEO needs to roll up his sleeves and understand the customer himself to get initial PMF.

Hitting your targets initially without understanding your customer likely won’t scale

I’ve seen a number of instances in my career where a commercial leader will take the target & budget-driven approach and make some initial sales.

Meaning that with the ‘spray and prey’ marketing approach they end up selling something to someone. But they don’t understand why and they don’t really understand to who.

So they end up turning up the gas on the marketing spend to get more of this sales. In part because they are under pressure from the investors to.

And for awhile it might even work. But then it typically plateaus and even goes into decline.

Why? Because perhaps the customer need they were hitting was very niche. Or perhaps they burned through those first mover customers because the product didn’t solve the actual pain point.

The companies that scale will almost always be very user-centric

It is almost always the guy like Brian Chesky that win at this whole tech game long-term.

Because they prioritise listening to and understanding their customer.

Brian, for example, rents his spare room on Airbnb.

And Brian is worth north of $10 billion. But still allows the occasional stranger to stay with him.

I mean that is walking the talk.

Interested in collaborating? Check out www.endgameken.com.