“What’s your favorite product?”
A simple question reveals a lot
|Oct 12, 2020|| 12|
TLDR: a consumer thinks about how a product makes life better; a product builder thinks about the pixels and the bigger picture, and how it can evolve with time
“What’s your favorite product?” is a common interview question. It’s deceptively simple because it sounds like it’s asking for your opinion as a consumer. In reality, it’s a tool for assessing your product thinking. It’s also useful beyond acing an interview.
When you understand how to analyze your favorite product, or any product for that matter, you can build stronger businesses.
Let’s say Spotify is your favorite product. A typical consumer might say:
I love Spotify because I can listen to any song I want, whenever I want. It’s easy to use. It saves me time and money.
A consumer talks about how a product has made life better. It might even serve as compelling social proof.
A product builder appreciates the pixels of the experience, but also zooms out to see the bigger picture, and imagines how it can evolve. Rather than jumping right to the answer, she unpacks the original question into sub-questions. Here’s a guiding framework:
What is it? Be clear and crisp.
Why is it important? Show it’s worth caring about.
What is the unique insight? Describe why the product is a heavy hitter today, and why will it continue to be relevant.
Who is the target customer? They experience the problem most acutely.
Who is the expanded customer? Show there’s a market beyond early adopters.
How does it attract new customers? This fuels growth.
How does it retain existing customers? This sustains growth.
This might seem like overkill. You don’t need to go down each branch, but it shows you the breadth and depth of possibilities when evaluating any product.
The most common mistake made in interviews and real life is diving headfirst into an answer without fully exploring all the paths that can be taken. It’s useful to unpack a question with sub-questions in order to set up a more nuanced response.
Most of us approach problems like a test. You try to get to the perfect answer as quickly as possible. It’s easy to forget that the best explorations are a dialogue, not a monologue.
Let’s see the above framework in action, applied to Spotify.
Spotify is a two-sided service with consumers and artists, but let’s start by focusing on the consumer side. Spotify is also making a play into podcasts, worth discussing.
There are two problems: 1. Easily find and listen to any song; 2. Discover new music that fits your taste profile
Prior to streaming, there was a lot of friction in consuming & discovering music
Consumption was constrained by the à la carte model of buying or downloading a song. If you want to listen to more music, you have to spend more money. What if you offered access to a universal catalog?
Discovery was largely constrained by mainstream channels and friend circles. What if you parsed the DNA of every song to power recommendations?
Target customer: people who want easy access to music
Expanded customer: people who want to fill and enhance time with audio
For new customers: the entire music catalog is a single tap away. iPod came up with: 1000 songs in your pocket. Spotify is: infinite songs wherever you go
For existing customers: Spotify knows your audio taste profile better than you do. It consistently recommends novel and relevant content. It also shares nostalgic gifts from the past (e.g., Your Year in Rewind). Audio is tied to memories, and evoking memories is a powerful way to connect with people
A common follow-up question: what could be better?
What is the product / team uniquely able to do? There are many promising ideas, but the best one depends on what the team has built competencies and incentives around
How does it expand beyond its original target market?
What are your assumptions? Be clear about what you believe, and what you should probably de-risk before going all-in
What is your hypothesis on the biggest blocker?
How do you validate the hypothesis?
How do you solve the blocker?
Again, applied to Spotify:
Spotify has developed strong muscles in music recommendations, acquiring music rights, and creating a beloved brand for millions of consumers
Music, however, is but one slice of the bigger pie that is audio. Expanding into podcasts is an effective first step towards becoming an audio destination, particularly because demand is high but supply is highly fragmented, which suggests better margins than the well-consolidated music industry
Assumptions on customer value: Existing Spotify customers listen to podcasts, and would benefit from doing it all in one place. Podcast listeners not on Spotify would be interested in joining given the expanded offering
Assumptions on business value: Getting Spotify customers on the ads-supported plan to adopt podcasts unlocks new, under-monetized supply. The expanded offering also reduces churn of existing paid subscribers and decreases acquisition costs of new customers
Hypothesis of biggest blocker: Podcast listeners have already built a habit and library elsewhere
Validate: Compare % of customers that have listened to podcasts on Spotify vs. addressable population. Approximate addressable population by looking at % overall population that listen to podcasts. This serves as a floor. To get really precise on addressable audience, Spotify could survey its customers
How to solve the blocker: Port over my downloads from another app, or ask me what types of podcasts I listen to, and create a personalized library. Develop a cross-audio network effect — do music genres correlate with podcast genres? How can Spotify create world-class audio discovery?
The simplest questions reveal the most. There is no built-in structure, it’s up to you.
Most of life is filling in the pixels without questioning the bigger picture. When it comes to building products, it doesn’t matter if the pixels are perfect when the picture is incoherent. Start with the picture.
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Thanks for reading!