Bad Products
Less Is More

Many potentially great companies fail because they deliver bad products to market. Not because the product doesn’t fit the market, but because the product doesn’t work. It’s hard to use, it breaks, or it doesn’t do what the user thought it would.

To get people to buy or use something you’ve built, it has to be truly great. Large, established companies can get customers to buy bad products. But the tactics they use don’t work for startups. Building a house of cards doesn’t work either. Sure, you can spend a lot on sales and marketing to drive rapid customer adoption; but ultimately, those customers won’t stick around, and neither will your company.

That’s why customers and users have to love your product. Not only will they use it, but they’ll get others to use it too.

No one sets out to build a bad product. So how do bad products end up getting built, and what can you do to make sure yours isn’t one of them?

Falling Victim to Product Blindness

There is no substitute for building a product you love to use. When you use your own product, you experience first-hand the rough edges, the details, and the bugs that separate great products from bad ones.

Yet even those who use their own products deliver bad products to market. That’s because everyone suffers from product blindness. Product blindness occurs when you use your product so much that you subconsciously work around the difficulties. Too hard to sign up? No problem—use an existing account for testing. Trouble finding your site on the Web? Not a big deal—you already know your site’s address! Occasional data-reliability issues? Not an issue for your test account, because you just reload the data.

Using a product means really using it. Not for testing, not with test data or test accounts, but using it day to day. If you’re building a game, that means actively playing the game, not just watching from the sidelines. If you’re creating a product that serves businesses, it means running your own business using your product.

What should you do if you’re not building a product you would use every day? Think twice about whether to build that product!

If you’re still intent on building that product, either find at least one use case¹ in which you can use your own product, or partner with a customer to find that use case. Most often, this challenge arises in a business-to-business company that is building a product for other companies to use. Examples include applications such as HR, accounting, and inventory-tracking systems built for large organizations, as well as infrastructure products like storage systems. In these cases, it behooves you to build a key application you can use daily to test out the system, or to partner with a customer to build that application to address a key use case for them.

Consider the case of Company S (a composite), a storage company. The operations of the company weren’t dissimilar from those of other startups—storing files such as customer presentations and product specifications. Yet the company was building a high-performance storage product for large amounts of data, intending for the product to be faster than any other on the market.

What did the company do? It partnered with a large customer that had years of data to work with.

Company S’s engineers spent months working on-site in the customer’s labs, using actual customer data to test the performance of the storage system. Members of the customer’s team worked alongside Company S’s engineers testing the product. Before the product was released to the broader market, Company S worked closely with the customer and a handful of other early-adopter customers to deploy the product in those customers’ production environments.

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It wasn’t the same as every employee at Company S using the product daily, but it was a close second. As a result, when Company S delivered its products to market, they had already been tested in real customer environments.

Why did these customers agree to let Company S use their resources, which included space, infrastructure, data, and people? Because Company S created an exclusive early-adopter program, which provided access and discounted pricing to its upcoming product. But that alone wasn’t enough. The real secret was that Company S was building a product that—if it worked—solved a very real pain point² for Company S’s customers.

Had Company S’s engineers built the product in the absence of the early-adopter customers, they would have become highly susceptible to product blindness. In comparison, the early adopters had no problem being incredibly blunt with Company S about key product issues. After all, they were consuming valuable time and resources working with the early versions of the product. The engineers at Company S fixed the product issues as a result.

How Bad Products Get Built

Now consider the case of Company T (also a composite). Company T spent years building incredible technology. The concept was powerful. Both investors and customers loved the promise of the product.

The reality, however, was another story. In practice, Company T’s product failed to deliver on its promise. The product worked flawlessly for a very narrow set of use cases. But it didn’t fare so well when faced with the breadth of use cases thrown at it by millions of users.

The company had unparalleled technology but couldn’t make it accessible to users. The founder of Company T was an excellent technologist. He later said that he wished he had focused on real-world use cases sooner. Instead, like a moth to a flame, he was drawn to ever-newer innovations.

When the technology was 80% complete, for example, he moved on to the next problem. That by itself might not have been an issue—every organization needs forward-thinking technologists—but it set the tone for the rest of the organization that fit and finish weren’t important. Unfortunately, customers thought they were important.

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This is just one example of how bad products get built. To be fair, the 80% of the product that was built was incredible. It was the remaining 20% that failed. The products that Company T delivered never lived up to their promise.

Successful startups continually walk the fine line between delivering on the bleeding edge to get product into market, and sweating the details. Plus, it’s no easy feat to stay focused on delivering great product while operating your business. Fit and finish require a lot of attention to detail. If you don’t find those details interesting, hire or partner with someone who does.

Failure to Focus

As legendary football coach Nick Saban put it, the key to focus is to “eliminate the clutter.”

One of the biggest challenges I see in venture-backed companies is a desire to build more-more-more. When companies are flush with capital, the hard tradeoffs are easier to avoid.

The same phenomenon occurs in many bootstrapped startups under the guise of not committing to a single strategy. It’s good to change your strategy when it’s not working. But you have to commit to a strategy first—even if only until you prove that it doesn’t work. Some startups try so many different things in an incomplete way that they never truly get to test their product concept. Other startups simply don’t have a clear vision of what they’re trying to build.

The key to focus is to articulate succinctly what you’re trying to accomplish. Facebook connects people. Google lets you search. Amazon is the place to buy anything online. If you can’t make a similarly succinct statement about your mission, you’re not focused enough.

You may argue that mission statements are a load of BS for big companies and big organizations. There’s some truth to that—the mission statements on those big company web sites—“We strive to decrease the inefficiencies associated with…” are consensus-written hogwash that started out as good ideas but ended up badly.

When it comes to startups, however, a mission statement captures in a sentence or a phrase what it is you’re trying to do. It’s a rallying cry for your team, whether that team is 1 person or 100. It informs product tradeoffs, marketing messaging, and sales strategy.

Failure to focus comes in many different forms. When people talk about products that are too complex, have too many features, or—trying to be polite—do many things well, what they’re really talking about is a lack of focus.

Companies that fail to focus do so because they haven’t yet found their market sweet spot, their founders enjoy building product for product’s sake, or they’re not willing to let go of a product that is no longer core to the business.

Like many startups, after a few years in business, Company Y ended up with two main product lines. On the face of it, this was not a bad thing—the company was generating revenue from both. The products started out as one and then later split into two because a group of customers were interested in a subset of features from the original product.

Over time, the customer bases for the two products became more and more distinct, creating a real challenge for Company Y. The sales strategies and sales people were completely independent, as were the product teams. In reality, the startup was two startups in one.

Company Y’s competitors for the second product gradually and then more rapidly began beating Company Y to market. Although Company Y kept winning customers, the competition seemed to be a step ahead on feature set and sales. Engineers became frustrated as they were pulled back and forth between the two product lines. Company Y’s management team agonized for months about what to do—they didn’t want to “put the wood behind the arrow” of one product or the other; they still believed their original product was the bigger market opportunity, yet they couldn’t get themselves to give up the revenue from the second product.

The turning point came in the form of a 1-2-3 punch. The first punch was when a huge deal for Company Y to be acquired fell through because the acquiring company was only interested in the first business, not the second.

Punch number two came during an embarrassing board meeting in which the CEO indicated that both businesses were struggling. The mood in the room was grim.

Then came the third punch: another industry player eagerly wanted the second business, but not the first. The message to Company Y could not have been clearer: the two businesses together were worthless. Separate, they were incredibly valuable. The management team sold off the second business and went on to build a much more valuable company, but not before wasting a year of cash trying to keep both businesses afloat.

The lesson? Quickly take the actions that the market is eventually going to force you to take anyway; don’t want for external pressures to force decisions on you. Force them on yourself.

Whether you have too many product lines or too many features, it’s easy to deceive yourself into thinking that if your product or your company does many things, at least one of them will appeal to potential users.

The reality is, users don’t use a product for its breadth of features. They use it or buy it because it does one thing really well. It solves one huge pain point. When that pain point or unfulfilled need is the same for thousands of customers or millions of users, it creates the potential for a very successful startup.

Too Much Friction to Achieve Adoption

Frequently, companies build products that have the potential to offer tremendous value—if only their users could get started using the products! Consider all the web sites with long sign-up forms, or sites that require users to enter lots of information manually before they can derive value. In contrast, consider a site like Facebook, where a simple address-book import unlocks the majority of the site’s value. Once connected to their friends, users can see a steady flow of photos and updates; only later do they need to start making their own posts and uploading their own photos.

For startups selling to businesses, many products require so much setup and customization that potential customers simply aren’t willing to make the required up-front investment. Compare Siebel—a sales-management system that required on-premises installation and significant customization—and Salesforce.com, now the dominant sales-management system, which requires no installation and comes preconfigured.

If it takes a long time or a big investment of people or capital to derive value from your product, you need to rethink your product strategy. No amount of marketing and selling can take the place of an easy-to-adopt product that delivers value quickly.

Products That Don’t Acquire More Users

In Web 1.0, marketing and sales were almost completely independent of product. Products were built, marketed, and sold—although not necessarily in that order. Some companies pre-marketed their products long before they were available to the public, generating demand. But product was its own thing; sales and marketing were “those people over there.” Engineers didn’t want to have much to do with marketing and sales, and vice versa. In Web 3.0, product, sales, and marketing go hand in hand.

Today, product innovation is critical to your acquisition strategy. The dawn of Web 3.0 has made designing user acquisition into your product from the get-go paramount. This book digs deeper into how sales and marketing relate to product later on.

Companies have long spent the vast majority of their money getting the word out. The Internet opened an incredible new path to the consumer, and although advertising became much more targeted, the value exchange remained the same: spend money to drive brand awareness or to acquire individual customers.

With the advent of the social web, things changed. No longer were marketing, sales, and product separate. Facebook (the product) sold itself—existing users invited new users, creating a new zero-cost user-acquisition model. Gaming company Zynga lets users choose between paying actual money for items and inviting friends in order to obtain those items.

Obviously, not every company can benefit from this kind of pure network effect.³ But there are many product lessons to be learned from these companies, and this one is the key: today, great products market and sell themselves. A truly great product isn’t just one that people want to tell their colleagues and friends about; the product also makes it easy to do so.

Later in the book, I get into some specific tactics for making products of any kind more viral—moving through the market in a way that increases the customer base dramatically. But the core point is that your product not only has to be designed from the outset with marketing and sales built in, but it also has to incent existing users to market your product actively to other users because they derive real benefit from doing so.

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Simple, Universal, and Viral

Great products are simple, universal, and viral. This applies to consumer products and to business-to-business ones as well:

• Simple: The product is easy to use. Its functionality is accessible. It may have lots of features, but they’re under the covers, discoverable by users later.
• Universal: Whatever you’re building is broadly applicable. You can build a good product that only a few people use, but the definition of a great product is one that’s adopted by many.
• Viral: Your product markets and spreads itself.

Consider Twitter’s 140-character limit. Users don’t have to think too much about what to do because they’re limited to 140 characters. A link is a very easy way to share something you’re interested in with others. The product is incredibly easy to use. And users see other users using it, producing a network effect.

Pandora is another great example of sheer simplicity: the Thumbs Up / Thumbs Down buttons as a way to indicate what you like and dislike are brilliantly simple. The rest happens under the covers based on that simple action.

What’s an equivalent in a business context? Anti-spam products. Such products of course rely on lots of complex algorithms, models, and data. But they also rely on another very simple action: the Delete key. Delete a message without reading it, and chances are, it’s spam.

How can you implement viral marketing in a business product? Granted, it’s harder for business products and even more difficult for infrastructure products—products that aren’t visible to end users, such as storage and networking gear.

Dropbox is one company crossing the consumer/business divide with its file-storage and -sharing offering. Not only is the product simple to use, but it also gets users to spread the word, both by sharing files and by encouraging users invite their friends to get more storage space. Dropbox also fits a universal rule: everyone needs to store and share files.

What about infrastructure companies? Certainly viral isn’t easy to implement when end users aren’t involved. But Intel came as close as possible to viral for an infrastructure product—a hardware chip—through its “Intel Inside” campaign. It was by no means zero-cost user acquisition: Intel had to spend millions of dollars on the campaign. But it paid off.

When it comes to infrastructure, the proxy for viral is social pressure: thus you see ad campaigns like “9 out of 10 Fortune 100 companies use X.” These are what I call assisted-viral. The products themselves are by no means viral, but the companies running these campaigns take advantage of existing customer adoption to drive social pressure and thereby further adoption.

What’s more, product reviews are readily accessible online, and business colleagues are connected via networks like LinkedIn. As a result, the word on products—both good and bad—spreads like wildfire. It’s easier than ever to get the word out, but it’s also harder than ever to escape a bad review.

Whatever your business, make your product incredibly simple to use. The old saying “less is more” could not apply more strongly than to product design.

The Magic of Product Chemistry

The secret sauce of great products is product chemistry. Product chemistry is when all the ingredients of a product—all the features—work well together. It takes a lot of trial and error to get there. This seems obvious, yet it’s often overlooked. Far too many products consist of interesting features that fail to deliver a “sum is greater than the parts” experience.

When you have chemistry, you know it. You feel it—in your product, in your team, and in the entire execution of your company. If one company epitomizes product chemistry today, it’s Apple.

In contrast, the Apple Newton, an early personal digital assistant, was an example of a product that didn’t quite have chemistry. Although Apple invested some $100 million in Newton development, the product never took off due to delays, feature creep, and other issues. It was a visionary product that presaged what became today’s iPhone and Android devices, but it failed because it lacked product chemistry.

If you’re two or three years into the business, growing, but not where you want to be, it may be because you’re missing product chemistry. Perhaps you’ve built out a lot of features to meet the demands of users or customers, or you’ve wandered around in search of product-market fit. Regardless, to gain widespread adoption, you have to create the kind of chemistry that early adopters were willing to live without.

Just because you’re a product and market visionary with an incredible nose for finding product-market fit doesn’t mean you’re a great product designer. Great product design is about all the pieces fitting together, about style, about ease of use: bringing the core to the forefront while making more advanced features accessible but not intrusive. Product chemistry requires all the features not just to be designed well individually, but to be designed to work well together.

How do you know a great design? It just feels right. A great design is like a work of art; you can break it down into its parts and analyze what makes it great, but it can’t be reconstructed simply by putting all those components together. Great designs come from great designers.

If you’re a few years into your company, and you’re seeing adoption of your product, but it’s slow going, stop and ask yourself if your design is truly great enough to gain widespread adoption. If it’s not, hire a designer—and keep in mind that great design doesn’t come through consensus. People frequently comment about the elegance and simplicity of Apple products. That is a core part of the product focus and key to the greatness of the experience.

What’s more, in today’s market, product chemistry is expected. Apple has set the bar for well-designed products; and consumers, even when they’re in business situations, expect great design. They expect products to look and feel good and all the features to work well together. When it comes to gaining widespread adoption, don’t underestimate the importance of ease of use, great design, and the pieces all working well together.

Don’t Ship Too Early or Too Late

There are two schools of thought on product delivery. One is “Ship early, ship often.” The other is, “Don’t ship until it’s ready.” Both are right. Like so many things in startups, the challenge is finding the balance that works for you.

On the one hand, if you release a product to market too early—if it’s buggy or lacks critical features—potential users won’t use it. But if you wait too long, you may discover no one wants to use your product or that a competitor has emerged and taken the market lead, and you’ve consumed all your capital in the process.

This is why you must have at least one user for your product. Sounds simple: one user! That user can be either you or someone else. If you’re building for yourself, of course, the process is a lot easier. You know what you want. The question is whether anyone else wants the same thing. But if no one is using your product—if it stays in the back room too long—you risk ending up with a lot of technology that no one really wants.

It hardly seems possible, but Startup A suffered from shipping both too early and too late. Startup A’s founder built the company’s initial product over a weekend. It was the classic Silicon Valley story. The product solved a personal problem for him. It turned out much later that millions of people had that same problem and were willing to spend money to solve it.

Unfortunately for the founder of Startup A, he wasn’t the one to benefit. That’s because his company never built a product that many other people could use. Startup A’s product had so many rough edges that although users were willing to try it—based on the promise that it would solve their problems—they weren’t willing to stick with it. Using the product was too difficult. By the time the founder of Startup A admitted this was an issue, the market had passed him by—he was too late. One of Startup A’s competitors grew to more than $100 million in revenue and recently filed to go public.

Startup B built software that worked with some of the largest hardware manufacturers on the planet. Unfortunately, Startup B was in such a rush to get its product out that when it landed its first big customer, the customer discovered tons of bugs in the product. To be fair to Startup B, the hardware partner didn’t commit sufficient resources to integrating the hardware and software—but the blame fell on Startup B regardless. How could Startup B have avoided the problem? By working a lot more closely with its big-brother partner to begin with.

Then there is the story of Startup C, which started out doing one thing, put it out there early, and realized very few people would use the product. The founders rapidly reframed the same basic product offering but with a different message and market. The result was tens of millions of very happy users. Had the founders waited, they might have missed the market completely.

If there is one company that represents perfection in products, it’s Apple. In reality, however, Apple has had years to test what works—and what doesn’t—from the original Mac to the Apple Newton.

When it comes to startups, it’s better to ship earlier than later. Once you’ve gotten market feedback, however, you must be willing to invest the time to take what is most likely an 80% offering (at best) and redesign it until it “just works.” Fail to tackle the remaining 20%, and the market will pass you by and adopt other products.

Products That Don’t Scale

Some products that appear ready for production are, in reality, prototypes. They were never built to support large numbers of users, the source code is hard to maintain, and they contain inherent design flaws that make them slow at scale. Yet designing and implementing for scale takes time and costs money. How do you avoid over-designing your product so that you can release it quickly and get real-world feedback, while still making sure the product can support millions of users if you attain the success to which you aspire?

Accept that your product will be rewritten at least once. I used to believe products could be and should be built properly from the ground up. But nearly every early-stage entrepreneur tries multiple product concepts before finding the one that works. If these entrepreneurs had over-invested in scale from the beginning, they would have run out of money before they had a chance to test the market for their product.

The challenge is that when a product takes off, it’s extremely hard to put the brakes on mid-scale. Friendster, one of the pioneers of the social-networking space, lost its market lead in large part because it failed to scale. Performance issues caused pages on the site to take so long to load that users abandoned the site. The company had clearly found a market need, yet it focused on adding new features rather than revisiting its foundation and architecture. The company also faced a challenge similar to that faced by other pioneers; not only did it have to find product-market fit and build its product, but it also had to build core infrastructure to support its product.

The answer to product scaling, then, is to design first for the fast discovery of product-market fit and then be not only willing but adamant about focusing on the design and architecture required to scale. The good news at least for web-based startups is that much of the infrastructure and expertise required to scale are available. The decision to stop adding features and invest in scale, of course, is one only you can make.

Summary

Great products are at the heart of today’s leading startups. No longer is product independent of sales and marketing. And well-designed consumer-technology products have raised the overall expectation of product simplicity, both at home and at work.

Bad products get built due to lack of

• Product vision
• Focus
• Users

These problems are solved through

• A succinctly articulated goal
• A great product that is broadly applicable
• Using your own product (or finding a close equivalent)