Mike Hudack: How Facebook, Monzo and Deliveroo Build Great Products | E1201

Intro (0s)

• The ideal product team size is six to eight people, with a majority being engineers. (10s)
• A data scientist and a designer are essential members of a product team. (16s)
• A product manager is considered optional on a product team. (20s)

“Founder Mode” Insights: Experience at Top Firms & Founding Startups (1m32s)

• All founders operate in "founder mode" to some extent, engaging in behaviors like skipping levels and getting into details. (1m55s)
• The effectiveness of "founder mode" can vary depending on the company's size and the founder's skills. (2m23s)
• "Founder mode" is essentially a new term for existing behaviors and is unlikely to cause a significant increase in negative behavior from founders. (2m48s)

Lessons from Leading Ads at Facebook (3m10s)

• The ads organization at Facebook was tasked with accelerating revenue growth after a lackluster IPO. (5m17s)
• A small team rebuilt the Facebook Pages Insights product, focusing on simplicity and ease of use. (6m24s)
• Simplifying products is generally better, as it helps users achieve their goals with minimal effort. (7m23s)

Lessons How To Structure Different Teams (8m14s)

• Ideal product teams consist of 6-8 people, primarily engineers, potentially including a data scientist and designer, with a product manager being optional. (8m30s)
• Product teams should focus on outcome-based goals that prioritize user satisfaction and sales growth over simply shipping products. (8m48s)
• Before building a product, it's crucial to have a clear understanding of the target user, their needs, and a well-defined theory of how the product will meet those needs and achieve business goals. (10m11s)

Biggest Product Mistake at Facebook (13m6s)

• A product called Audience Insights was built at Facebook to help marketers drill down and find their audience. (13m37s)
• Audience Insights was a "nice-to-have" product that required a lot of resources to build and maintain and did not create meaningful value for users. (14m9s)
• The speaker learned that "nice-to-have" products have a higher cost than anticipated and a lower value returned. (15m42s)

Talk vs. Dictatorial Vision: What's Best for Teams? (15m47s)

• It is important to have quantitative, objective measures of success and goals when debating what to do. (16m18s)
• Product development is more art than science, but it has to be managed through data. (18m12s)
• The only real measure of value in a product is whether people use it and get value from it. (19m47s)

Leading Product at Deliveroo (25m20s)

• Deliveroo operates in real-time, with orders being placed and delivered constantly, making logistics a crucial aspect of the business. (26m8s)
• Deliveroo faced challenges meeting its brand promise of fast delivery, with orders being late 40% of the time, leading to customer dissatisfaction and churn. (29m13s)
• To address delivery delays, a team of engineers developed a machine learning model to accurately estimate order lateness, resulting in improved delivery times and customer satisfaction. (31m50s)

The Best Product Decision Made at Deliveroo (32m53s)

• A trip to Madrid revealed that customers living on the outskirts of the city were willing to tolerate longer delivery times to access desired restaurants, challenging the initial assumption that delivery distance should prioritize food quality. (33m3s)
• This experience highlighted the importance of customer choice in product design, emphasizing that providing sufficient information empowers users to make informed decisions, even if it means opting for a potentially less-than-ideal outcome like a soggy burger. (35m15s)
• Finding the right balance between offering too many and too few options is crucial in product development, with the "art" involving selecting the appropriate features and the "science" involving data-driven evaluation and adjustment based on user behavior and preferences. (37m3s)

When Data Led to the Wrong Conclusion (37m24s)

• It is difficult to accurately interpret data and avoid misrepresenting information to oneself. (37m32s)
• Data can be misinterpreted when the full context is not considered, leading to inaccurate conclusions. (38m6s)
• Data abuse is prevalent in customer service, where metrics can be manipulated to present a misleadingly positive view of performance. (38m40s)

Lessons From Competition (39m23s)

• It is important to respect competitors, recognizing their intelligence, capabilities, and shared goals. (39m53s)
• Many companies undervalue their competition, failing to acknowledge the reasons behind their competitor's success. (40m7s)
• Oracle, despite having a complex and potentially cumbersome system, serves as an example of a successful company that should be respected, even if its operational methods differ from one's own preferences. (40m43s)

How Quickly To Know If a Product Doesn’t Work in Consumer Apps (40m52s)

• Deliveroo uses controlled experiments to determine the effectiveness of new features and products. (41m25s)
• These experiments involve giving the new feature to a portion of users and comparing their experience to those without the feature, measuring specific metrics like "Rider experience time". (41m31s)
• Based on the experiment's results, Deliveroo decides whether to release the feature to all users, make adjustments, or discontinue it entirely. (42m48s)

Lessons on Product Building at Monzo (42m51s)

• Working at Deliveroo provided valuable insights into the distinct financial habits of British people, particularly their monthly payment cycles, which contrast with the bi-weekly norms in the United States. (43m27s)
• The heavily regulated nature of the banking industry significantly impacts product development processes at Monzo, demanding a cautious approach to mitigate risks and ensure the stability of the financial system. (43m40s)
• Regulatory constraints within the banking sector, particularly those related to licensing, posed limitations on expanding Monzo's services globally, a strategic goal that was hampered by these restrictions. (45m4s)

Is the US the Right Move for Monzo? (45m28s)

• The United States is a large potential market for banking products, but banking practices and regulations vary significantly between the US and the UK. (45m38s)
• Mortgages, credit cards, debt, savings, investments, payment schedules, and bill payment methods all differ between the two regions. (45m52s)
• Successfully adapting a banking product for a new market requires local expertise to understand and incorporate regional differences. (46m24s)

How Mike Reacted When Competitors Ship Products Faster (46m41s)

• Different companies have different philosophies, and some companies would not have shipped the same products as their competitors. (47m3s)
• It is important to have a theory of the world and to do fewer things well, rather than to just ship as many features as possible as quickly as possible. (50m0s)
• It is important to ship products that are meaningful and that move the company in a specific direction. (50m21s)

Best Monzo Product Success & Biggest Flop (50m41s)

• Flex is a successful product. (50m44s)
• It is important to set ambitious goals but temper expectations and be prepared to iterate on products post-launch. (50m47s)
• Teams should be emotionally prepared to critically assess their work and make improvements to products after launch, even if it means abandoning the original idea. (51m46s)

Leadership (53m30s)

• Leaders should inspire their teams but also be realistic about the challenges they face. (53m46s)
• Two ways to improve morale in a product team are to give them a win and a reason to work hard. (54m42s)
• It's important to connect the team's daily work to a positive impact on the world, such as helping people or businesses. (56m44s)

Exceptional Execution as a Founder & Being a Great Parent (58m10s)

• Children can improve work-life balance by providing a reset after a long day. (58m50s)
• It's important to involve children in aspects of work life, such as discussing projects and decisions. (59m10s)
• Obsessing over work, such as constantly checking metrics, can be mistaken for hard work and lead to burnout. (1h1m15s)

Quick-Fire Round (1h2m21s)

• A time when there was a disagreement with a manager was regarding the mechanics of sharing on Facebook. (1h2m31s)
• The biggest advice for angel investing is to invest in people you believe in and to not mistake good managers or ICs at a large company for people who will do well in a startup. (1h3m6s)
• The advice given to a CPO before their first day at a new job is to move fast, ship fast, and get an early win. (1h5m39s)