how to build a customer-driven product team

How to Build a Customer-Driven Product TeamDavid Cancel Business of Software

About David Cancel

• 5x Founder / 2x CEO

• CEO/Co-Founder, Drift

• Chief Product Officer, HubSpot IPO: HUBS

• CEO/Co-Founder, Performable acquired by HubSpot

• Owner/Founder, Ghostery acquired by Evidon

• CTO/Co-Founder, Compete acquired by WPP

• Investor/Advisor/Director to Various Companies and VC Funds

Why do we need to listen to our customers?

Here’s why

EMV cards solved one customer problem (security), but at the same time they created an entirely new problem …

Ugh.

Being customer-driven today means putting the needs of the customer first.

It’s not about coming up with the solution that you think will work best …

It’s about continually communicating with your customers so you can understand what solution will work best for them.

And for software companies today, that means avoiding Waterfall and Agile.

What's wrong with Waterfall and Agile?

They’re outdated

Waterfall and Agile made sense in an era when talking to customers and getting feedback was hard.

But today, there’s no excuse.

Why build software in an internet-connected world and not lean into the advantages of that ecosystem?

The bottom line: customer expectations have changed.

Do you honestly think customers are going to stick around until you fix that bug in your next release cycle in six weeks?

Your customers don’t operate in six-week release cycles.

They don’t think about weekly sprints.

They don’t want to hear, “It’s on our roadmap for next quarter.”

Ultimately, every company is here to serve customers.

Discovering the Customer-Driven Approach

In 2009, I started a company called Performable.

And we had the same problem in the early days that all software companies have.

A product manager or myself would try to convince an engineer that we had to do x, or do y, or that we had to fix this thing.

Of course, engineers are usually skeptical, so they would push back and say it was going to take too long and this and that.

But because we had more customers than employees, everyone at the company — including engineers — had to do support.

And all of a sudden, the things that we were trying to get engineers to do, they started doing on their own.

And they were doing them immediately. It would take them 5 minutes when before they would’ve argued for weeks.

So we started to ask them, “Why did you do that?”

And they’d say, “Oh, well I talked to three customers and they all had this problem, so I went in and fixed it.”

This was a breakthrough moment.

Our engineers had the autonomy to go and solve problems that they were hearing about directly.

So we started to build a methodology around this idea of having engineers linked directly to our customers.

Customer Feedback: The Old Way

Customer Support PM Engineer

Customer Feedback: The New Way

Customer Engineer

Sure, cool idea. But does it scale?

In 2011, Performable was acquired by HubSpot, and I went on to lead product there as CPO.

I built that team from about 50 people to around 200 by the time I left (which was a few weeks before we went public).

When I first got to HubSpot, I asked myself: “How do we build teams so they are as autonomous as possible?”

So at one point, I just made it up …

We’re going to have engineering teams that consist of three people.

The Three-Person Team

Engineer Tech Lead Engineer

With just two people to manage, tech leads could spend 80% to 90% of their time (if not more) coding.

The small team sizes also meant that everyone on a team could sit together.

As a result, most teams did away with traditional meetings and daily stand-ups.

So we had these three-person teams, and each team owned a complete, customer-facing product …

… from the presentation of that product, down to the operation of that product, to the support of that product.

We paired up each of these teams with a product manager, who would usually work across multiple three-person teams.

Then for each PM we had a dedicated designer, as well as a dedicated product marketing manager.

Designer PM PMM

Engineer Tech Lead Engineer Engineer Tech Lead Engineer

The Customer-Driven Product Team

In order to scale, we needed the engineering teams to own the solutions.

The PM, meanwhile, owned the customer, and worked with the designer and PMM to process feedback and iterate/prototype.

This structure allowed the people closest to the problem to come up with the solutions and then test those solutions with the actual customer.

Getting Buy-in

In order to get company-wide buy-in for this approach, we needed to have accountability alongside autonomy.

There is no autonomy without accountability. That’s something totally different—that’s anarchy, not autonomy.

So all the teams were accountable and transparent about the metrics they were driving toward.

One thing we did that really helped:

We had metrics that measured teams not only on the success of their external customers, but also on the success of their internal customers.

There were point people across the organization that worked with Product to make sure we hit our internal goals.

So each three-person team had a counterpart in Sales, a counterpart in Support, a counterpart in Success, and a counterpart in Marketing.

Sales Support Success

Engineer Tech Lead Engineer

Product’s Internal Customers

Marketing

And each team shared public internal metrics with each of their counterparts.

Example: Support. Each team was measured on decreasing the call-drivers on the list that their Support counterpart had created each month.

Example: Sales. Each team was measured on fixing the issues and adding the features that their Sales counterpart had prioritized based on win/loss data.

That shared accountability, coupled with transparency, bought us a lot of freedom …

… including the freedom to not have things like roadmaps and version numbers.

The way I think about it: those things (e.g. roadmaps) are company problems, not customer problems.

Customer needs will inevitably change over time, which means your product will need to change too.

There is no real end-goal. The end-goal is evolution.

The only thing that I pushed for was that teams shipped as soon as possible.

I eventually got to the point where our teams were shipping 500 to 600 times every single day.

Instead of having two to three releases per month, we had thousands.

We put products into the hands of beta users immediately so they could help us correct and iterate on our direction.

The proof of this new approach was in the results, and those were results we saw directly from customers as well as from within the teams themselves …

After implementing the new structure, our product team had the highest employee NPS score of any team in the company.

My Framework for Processing Customer Feedback

Every company in the world will tell you they are customer-driven.

But unless you actually make the structural decisions to ensure it, it’s meaningless.

In addition to structuring your team to solve for customers, you also need to put structure in place for processing customer feedback.

I like to think about customer feedback as falling into three buckets:

1. User Experience Issues

• How do I …

• What happens when …

• I tried to …

2. Product Marketing Issues

• Can you/I …

• How do you compare to …

• How are you different than …

• Why should I use you for/to …

3. Positioning Issues

• I’m probably not your target customer …

• I’m sure I’m wrong but I thought …

Separating customer feedback into these three buckets can help ensure you’re using your time effectively.

People often misinterpret being customer-driven as focusing only on major improvements/features.

What I have learned is that customers appreciate an incremental approach.

An incremental approach shows customers that you are listening to them and making changes based on their feedback.

Remember my example from the beginning?

No one was listening to them.

Need help becoming a better listener?

Check out what I’m up to at Drift.com