The Melissa Perri Hypothesis: Escaping the Build Trap Requires Transforming Product Management Processes From Top to Bottom

Melissa Perri is the author of Escaping the Build Trap and founder of Produx Labs, a product management consulting company that helps organizations transform their processes from top to bottom. This week on the Product Science Podcast, we talk about how product and tech can work together to maximize synergy, how to avoid the traps that lie in wait for growth-stage and enterprise companies, and how Melissa’s unique background helped her succeed in product.

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Questions We Explore in This Episode

The Melissa Perri Hypothesis: Escaping the Build Trap Requires Transforming Product Management Processes From Top to BottomHow did Melissa go directly into product management straight out of school? How did both Melissa and Holly get to product management from initially studying chemical engineering? What is operations research? What are the advantages of coming from a waterfall product management background? What happened when she tried her hand at development?

What are the differences Melissa has seen between when product reports to tech vs. to the CEO? What happens when tech reports to product? What are the tensions between tech and product and how do you navigate them? What are the weaknesses of a developer-led process? How is the work of a product manager different from the work of a developer?

What is the “build trap?” Why is it a threat to growth-stage and enterprise companies? How do you scale as you add product teams? How did Melissa incorporate these ideas into her book, Escaping the Build Trap? What organizational mistakes did Melissa encounter in her consulting practice? How does she show business leaders what good product management looks like?

What modeling does Melissa use when she consults with organizations? How are tools from her engineering and operations research useful for product management? How can a coding background actually hold you back?

How did leadership help Melissa develop an experimental approach to product management? How did one of her experiments at OpenSky lead to a major pivot for the company? What was the timeline for that strategy pivot?

How did Melissa start as a consultant? How has she built Produx Labs in response to the needs of product management and leadership? How do they help companies become great at product? How can you work with their team as a CPO-in-residence?

Quotes From This Episode

My goal is not just to teach people how to do great product management, it's to get organizations set up really to do great product management. - Melissa Perri Click To Tweet I realized leaders have absolutely no idea how to make a strategy. They don't know how to deploy it. They don't know what a good product strategy looks like. They don't know how to anchor it to the vision. - Melissa Perri Click To Tweet I wanted to write a book on how to get an entire product management organization working top to bottom. How to build a bridge between what people do on a day to day basis with what you have to do at a leadership level. - Melissa Perri Click To Tweet

Transcription

Holly Hester-Reilly: Hi and welcome to The Product Science Podcast, where we’re helping startups, founders, and product leaders build high growth products, teams and companies through real conversations with the people who have tried it and aren’t afraid to share lessons learned from their failures along the way. I’m your host, Holly Hester-Reilly, founder and CEO of H2R Product Science.
Holly: In this week’s episode I had a conversation with Melissa Perri, most recently author of Escaping the Build Trap. Melissa and I talked about how her education in operations engineering led to her working in product management here in New York City and how she got to where she is today as the founder and CEO of Products Labs. Hope you enjoy.
Holly: This week on The Product Science Podcast, I’m excited to welcome Melissa Perri. Melissa, why don’t you start us off with a little bit of your background. I always like to ask my guests how they got to product management in the first place. So I’m actually going to ask you to start with that. How did you get into product management?
Melissa Perri: Yeah. So, I ended up falling into product management right out of school. I had been searching around for what I wanted to do and I was studying engineering at school, operations research, a lot of what I know you use, which is Toyota and lean principles there. And, I had been doing a lot of graphic design. I had absolutely no idea what I wanted to do, and a lot of my friends were going to work, Pepsi, to make their assembly lines better and more efficient. And I said, “There’s no way I want to work in manufacturing industry like that.”
Melissa: A lot of my other friends were going to Wall Street because that’s where you make money back in those days. And this is like right around the financial crisis, so good times then. But I was looking at options and I didn’t really know what I wanted to do. And I had a friend who was working at Capital IQ and he sent around that they were hiring developers and it reached back out to him. And I said, “I can code we took a lot of development classes in school and I could code pretty well, but it’s not really what I wanted it to do. What else is out there? What else is in software companies?”
Melissa: And he put me in touch with their hiring manager who was the head of the database. And I told him, the whole background I just said, and he said, “Oh, you can be a product manager here, you’ll sit between tech and you’ll sit between business and figure out what we should be building.” And I said, “That sounds pretty cool. Sign me up and let’s do it.” And I got in there and it was a very traditional waterfall style with product management, but really learned the basics. I learning how to really break down features and specs, come out and work with teams to get that done. So I got very lucky where I started doing the things that I loved immediately, right into my job.
Holly: So there’s something about that that really fascinates me, which is, that you studied operations research. I don’t know if all of our listeners are familiar with it. Can you tell us a little about what that means?
Melissa: Yeah. Nobody knows what it means, including me. When I chose this major, I was studying chemical engineering and I took a chemical engineering class and they were like, “Oh, when you become a senior in school, you get to spend all day in the lab and like never see sunlight. And I said, “Absolutely not. I love chemistry.”
Holly: This is so funny because I also was in chemical engineering, but my reaction, that was the opposite. I was like, “Hell yes. I’m going to lab.”
Melissa: Oh, God. I was so opposite. So I was like, “This is so not me.” And we were calculating the flow of chemicals through pipes and it was like insane math. And I went, “No, no, no, no. That’s not what I like doing.” So, I was looking around for what else to do, because I liked the concept of engineering. I like the way it makes you think. I really liked on the bridge of the tech and the math and everything that goes into it. And my friends said, “Why don’t you check out operations research engineering,” which was a major at Cornell that I knew nothing about. But they call it the business of engineering. And I said, “That sounds better. That sounds more aligned in what I like doing.”
Melissa: And really, I didn’t know what it was, but what I came to understand is that it’s a lot about optimization and statistics. So it’s really looking at the whole of systems and trying to figure out how do you increase the optimization of a certain systems and how do you do the probability of it. So a lot of people go into financial engineering after they do operations research. That was like the master’s program for what we did.
Melissa: A lot of people will go to, like I said, assembly lines or manufacturing because a lot of what you learn is how to mathematically optimize different processes and what to create there. We did a lot of tech as well. We learn how to code. I got thrown into like really ridiculous coding languages that we had to do homework with. R was one of them I frigging hate R now because there was no books on R when we got started. There was a PDF that was like five pages long and they would say, “Okay, to do your statistics homework, you have to do it in R,” and we were like, “What is R? There’s no books on this or something around.” And we all had to teach herself that. So, it’s a lot about like, how do we make things more efficient? How do we make things better? How do we understand the systems and how do we apply on good principles and math and optimization to make those things work better.
Holly: Yeah. That’s awesome. One of the reasons why I wanted to ask you about that is because after I left chemical engineering and found my way into software and learn what product management was, I stopped and I thought, “Okay, if I’m going to go hire product managers, what are the majors that I would want them to come from?” And IOR, in my school, the department was called IEOR for industrial engineering and operations research. But the very first time I hired, in this case it was an intern, but the very first time I hired anybody to come work with me, I got them from that department because I thought this, this makes a lot of sense. It should be somebody who’s like studied systems and operations and all of that. I think it’s really cool that you have that background and I think as we dive into how you approach product management, I’m going to pull you back to it and ask you how that affects your thinking.
Holly: So, you found your way to Cap IQ, and they apparently had a somewhat traditional process. So tell us more about what happened from there. What happened next and how did you move forward?
Melissa: Yeah. I really liked my time at Cap IQ, everybody was great. I honestly was thinking about something I think is very controversial now, and I feel like we can talk about this a little later, but, where with the influx of agile everywhere and a lot of POs getting into product management from a scrum framework, I feel like people who came from a waterfall background, like I did, actually grasp product management a little easier, a little bit better because we had to do such rigorous specing and really considering every single little detail about a feature, in order to make it work in a waterfall environment.
Melissa: I came from that background, and maybe we could dive into that in a little bit, but when I left, I ended up leaving Capital IQ. And, honestly it was because I looked around and my friends were developers and they were making so much more money than I was. I said, “Oh, well I can code. I want to go make money.” And I went to Barclays Capital and I was a developer there and within two weeks I hated it. I absolutely despise it. I love developers, but I hate coding. I really don’t like the act of coding. And I did not like the things that we were building. I think it may have been different had I started in a startup rather than going to a large financial institution. But I was so bored. I was just like reading CNN every day. It was the only thing not blocked too. You know? That’s why. In the large banks, it wasn’t that I really wanted to read that.
Holly: This this before or after the financial crisis?
Melissa: This was after the financial crisis. So, this was when Lehman Brothers had just merged with Barclays as well. It was funny because when we went there too, a lot of the people who were newly put into this development program too, they got sent to London for like three months to go learn everything there and they got all expenses paid for it. And they were like with us going, “Oh no, you could just go to Jersey City instead.” And everybody is like, “Jesus, this is terrible.” Everything was not fun for us. But yeah, it was a rotational program for developers that I got into.
Melissa: And I really liked the concept of trying out a bunch of different teams and trying to figure out what we’re going to do. And, it was not for me. Within two weeks I was like, I know I do this, but I stayed for a year because I had a sign on bonus. And what I did is I weaseled my way back into product management the whole time because every time that we did a rotation, I would go up to my boss and say like, “Hey, can I do some more product needs stuff. I know you still need people to code, I’ll code, but I would love to get more involved in this.” And they kept telling me like, “No, only VPs do product management here. And like, you have to be a developer for at least eight years before you can touch anything with product.” Which I thought was just basically bullshit.
Holly: Completely, yeah.
Melissa: But I kept Weaseling my way back in it. And then I eventually got to take on a lot more and their product management responsibilities kind of as a proxy through my boss. I remembered how much I loved it. So I left there. I went to ironically the CTO from Capital IQ had moved on, went to a place called Open Sky, and he was looking for product managers and he called me and he said, “Hey, do you want to come do what you were doing for us here?” I said, absolutely. I started there and I went right back into product management and I’d always been like a hybrid product and UX person too. So I did both of it and I didn’t know it was two separate roles.
Melissa: So at Capital IQ, we actually photoshopped all the screens as well. We didn’t just do the product specifications. So I did the same thing at Open Sky and built all the internal tools and the platforms that managed all the orders and all that returns and all the peoples information and how we uploaded all the products on to the site. It was new commerce site. We built it from scratch. which was actually pretty silly because there’s a lot of things you can buy to do that. And there were, at the time, they had already started building it.
Holly: That was going to be my next question. Were there, at the time?
Melissa: There were plenty and I ended up having to evaluate them for our needs about six months, seven months later. But they had already built that platform, when I came in and it was my job to make it better and enhance it. And then when we went to look at the ones that we could’ve bought, they would have fit our needs, but we would have had to set up our entire site differently to work with them. So we continued to roll our own in a and build it out. But yeah, that was my first like build verse buy experience where it was like, “Oh yeah, this would have been better.”
Holly: That’s awesome. I’m sure you looked at it from a business perspective and how was this decision made and everything and kind of learned that things aren’t always optimal decisions. Right?
Melissa: Oh yeah, definitely.
Holly: There’s one other element of that, that I’d like to hear about, which is, you mentioned that the CTO was looking for product managers. So was this a place for products reported to the CTO?
Melissa: No, there was, there was a VP of product management who reported into the CTO there, but what happened is the CTO from Capital IQ ended up leaving. He went to like head up, all products and tech in Blackstone. He’s still there. And then the VP of product started reporting straight into the CEO. So, that was a switch where that was made pretty shortly after I joined. And from then on out product always reported straight to the CEO.
Holly: Do you think you saw any effects of what it was like when products report it to tech or it was that kind of rectified by the time that you were really working there?
Melissa: I think it was rectified by the time, because I just started like when that switch happened and everybody was afraid I was going to leave because the CTO had left and I was like, “No, I love this place. I love what I’m doing, I’m staying.” But I have seen that happen since then wildly and I am a huge advocate now for like a Chief Product Officer position and having everybody report into the CEO from product and up through there because I work with a lot of growth stage companies now, and we actually structure most of our companies, where tech reports into products because I’ve seen so many issues with product reporting into tech and people building really cool tech for the sake of tech and not really looking at how does this fit into our strategy for growing our company and our products, and how does tech enable that?
Holly: Yeah, absolutely. It’s one of the things I wanted to ask for it because, I personally have never worked anywhere where product reported into tech, but I’ve talked to people who tell me that and I think I always kind of scratch my head and say, “Well, that seems strange.”
Melissa: Yeah, it’s a lot. But for example, one of the companies I know where even this one, huge enterprise, thousands of people and they had a platform strategy that was happening under the CTO and then they had the regular products that were more consumer facing or internal tools reporting into the CPOs. The CTO had this whole strategy for platform and it didn’t really match with the strategies for the product. So what would happen is they had over a thousand people building these tools on a platform that nobody was consuming on the product side. So, they had like completely different business strategies and product strategies, across those two and they weren’t really working together to figure out how do we all move in one direction. And I have seen that happen over and over and over again in companies where we just have a completely different product strategy happening over in tech that’s really not being beneficial over to product.
Melissa: So with a lot of the companies when they do a platform play or we work with enterprises like that, we make sure that there’s still a head of product over the platform strategy, even if it’s technical tools to make sure that they’re thinking about the rest of the company as their users and ask their customers too.
Holly: Yeah. I have seen that tension between product and tech. I’ve also never worked at a place where tech report to product. I’ve only ever worked at a place where they were two separate branches. I’ve definitely seen that tension that you described and I’ve seen it lead to bad decisions. I’m curious to hear, when you work with companies and get them to have a product person involved in the platform strategy, I think that’s an area where it’s not uncommon to get pushed back from the tech people. So how do you approach that?
Melissa: Yeah, huge pushback. The way that we look at it is, in a company we’re building products for a reason. It’s to serve our customers. So when you put a product person over a platform strategy, like the platform itself is a product, it’s a value stream and you have to think about optimizing it that way. And that doesn’t mean that we don’t put a technical person there. I would never put somebody who built a front end of the e-commerce site or worked in that type of thing over as a VP of a platform strategy. It’s a different thing. You have to understand how people consume that. And I think like, a more technical person would definitely be better in that area.
Melissa: But the developers will push back because they see the tech in the platform strategy. It’s tech, right? I am building, APIs for developers. They’re my customers. Who knows them better than us? And that’s true. But you still need a strategy for how you build that. You still need a roadmap. And when developers lead that, a lot of times they’re not doing the product work needed to pull that together and make sure you’re building the right things at the right time to enable the rest of the product teams to do their jobs.
Holly: Yeah, I think that’s absolutely right. And one of the other things I’ve seen is that even if they put together a good strategy, there are still a lot of day to day tasks around the product management of a platform and the platform team that the engineering managers or leaders might not be skilled in. So, things like making stakeholders comfortable in responding to their requests and keeping them communicating with them and prioritizing and all of that, that maybe they’re not as skilled at it as a technical product person.
Melissa: Yeah, when I look at developers, and I met million developers who are phenomenal product people who’ve made the transition and they’re really great. Like one of our Chief Product Officers in training told me he is a horrible developer. He’s great. But I think the work of a developer is very different than a work of a product manager. And there was this whole thing in agile for a very long time about do we even need product developers? Like the teams can figure out what work they have to do themselves. I heard that come up at so many conferences over the years and to me, yes, you need a product person and it’s not that you need a product person to stand over your developers and tell them what to do. You need somebody who’s really working between the stakeholders, understanding all sides of things, they’re the system thinker that can look at the business and the marketing side and how do I commercialize this roadmap and what are my customers asking for? What am I competitive it was doing?
Melissa: And they need to pull that together into a cohesive strategy where you can look at things and say, Hey, first we’re going to concentrate on validating this problem or building out this product that’s already validated, right? Then we’re gonna move into this. Because if we do that, it’s going to produce more value for our customers and make them happier in the shorter term. Right? And it’s been produce more value for our business. And the thing is, if you don’t have time to do that work, that’s where companies get lost and get stuck in the build trap that I always talk about with my book is that they’re not doing the work to really figure out what they should be building when.
Holly: Yeah. So, tell us a little more about the build trap. What is that?
Melissa: Yeah. Build trap is an area that companies really get stuck in. It’s a state they get stuck in where they’re building, building, building, and they’re not really looking at what is that gonna do for my business and my customers. Right? Like what value am I actually creating? And I see it happen with every company really every stage. The fact is that you don’t see many startups stuck in the build trap because they fail early. They don’t have enough money to be stuck in the build trap. They will fail, they will go out of business. But we work with a lot of growth stage companies and enterprise companies. Enterprise companies usually get stuck in this when they make, what they call a digital transformation. They’re starting to figure out how do we build software and they’re seeing it as just code, code, code, release features.
Melissa: They usually have a ton of people in the company too, and they’re trying to keep them all busy, so they’re stuck in the build trap because there’s usually not a very good product strategy of why are we doing the things we’re doing and how the software enable the rest of our company to actually function better and be more efficient, really deliver value faster for users. So enterprise is making that transition, they’re usually very stuck there.
Melissa: The other side is we work with a lot of growth stage companies as well. And what happens with them as they scale so fast, and they bring on so many people that a lot of times the people will get ahead of their strategy. So they may have had a strategy that’s really good at getting them from let’s say $0 million to like $10 million, $20 million in revenue, but they’re not taking the time to really go, “Okay, what’s our strategy for getting us to the next phase? We have one really good product line. Do We build another one? Do we optimize that? What’s going on with that product line? How do we shore it for attention?”
Melissa: And that usually comes from a lack of leadership where the CEO or the CTO usually was the product genius that got them that far and they were doing really, really good job at that. But now their jobs have changed because you’ve scaled so significantly. You can’t have significant control over the product teams because now you’re going from two people sitting in a tiny room to 10 scrum teams. How do you have time as a CEO to go back and really do that product strategy? You start losing that. So when we have that gap between people who were the visionaries for products and the team and somebody loses the time to actually pull those product strategies together and crunch all the data, you have to, that’s where we get stuck in the middle trap with growth stage companies.
Melissa: So they have to really take, take a second and come back and say, “Okay, where are we now? We’re not where we were when we were making $2 million a year. We’re making 20, $50 million a year. Now we’ve got tons of clients. Where are we now and what’s gonna get us to the next level?” And they have to reset that strategy and redeploy to the teams.
Holly: Yeah. You recently came out with a book about this, so tell us a little more, how did that develop and what are the key things that you want people to know about it?
Melissa: Yeah. I was working on the book for three years, and I told everybody I was going to write a book, which was good because I don’t think if I hadn’t talked about it, I probably wouldn’t have finished it.
Holly: I heard that actually.
Melissa: Did you?
Holly: Yeah. I haven’t told anybody I’m going to write a book, but I’m close to telling people that, I’m thinking like in the next several years. Right? Similar to what you said and somebody I was talking to where I was picking brains about should I write a book? When do we write a book? They said, “Well, somebody got me over the hump by putting a badge on me at a conference that said, ‘Ask me about my book and didn’t have the book yet. So then everybody asked them about their book and they had to stay there writing a book and then they had to follow through because they told everyone they’re writing a book.'”
Melissa: That’s exactly what I did. I had this rough draft that I really hated. And the reason it took so long is I was really trying to figure out what I wanted to say. And I also had that a little bit of fear too, that it’s all been said before and I was like, what’s my take on it, right? How is it different? And originally, I was thinking to write a very how-to book on product management. I do a lot of experimentation and then teaching people how to experiment and do discovery work. I said, “I’ll write a book on how to do great product management from a discovery perspective.”
Melissa: And I started writing that. And at the same time though, Produx Labs, my consultancy was growing like crazy. And we originally started out by coaching a lot of product managers. I’d go in there and I coached your product managers and they learn our way of working and doing great product management and they would be excelling. And I’d look around and I come back like, in six months and be like, how are you doing?
Melissa: And they were like, “Oh, well we stopped using those ways.” And I was like, why? And they’re like, “Well, leadership wasn’t responding to it or policies were not in effect or, we’re working out really good on this stuff, but we can’t show measurable value because there is no strategy aligned to it.”
Melissa: And it’s happened over and over again. My goal is not just to teach people how to do great product management, but it’s to get organizations set up really to do great product management. I want people to make the products. So with that goal in mind, I thought, well, if I want people to make good products, it’s not just working with the team. I got to go work with leadership. So I started changing the way that I approached engagements where I started working with leadership as well and I dive into that and we’d start training the teams and then I started looking at the strategy and I realized leaders have absolutely no idea how to make a strategy. They don’t know how to deploy it. They don’t know what a good product strategy looks like. They don’t know how to anchor it to the vision.
Melissa: And the strategy piece became like 99% of the problems of all the companies I worked with. Nobody was really doing the work to pull together a cohesive strategy, that pointed the teams in the right direction. I’m not talking about like a plan that’s like, here’s the features you want to build. But like literally a strategy of, when we grow up as a company, this is where we want to be, and that’s enterprise too. I had companies making billions of dollars and I’d go and ask the teams like, “What are you working on? Why are you working on this?” And what they were saying was completely different than what leadership was saying. Nobody was aligned.
Melissa: And so I started doing a lot more strategy work. So then I started looking at the book and I said, I can write a book on how to do good product processes, but a lot of people have done that already. What I want to do is write a book on how to get an entire product management organization working top to bottom. So how do you build that bridge between what people are doing on a day to day basis, talking to customers and experimenting, with what you have to do at a leadership level, which is really set the strategy, enable people to be more autonomous by deploying it well, track the right goals, understand how your team works, set the right processes and policies so people can go talk to customers, that’s a big one.
Melissa: The book became more of a, what does a good product organization look like? How does that help you escape the build trap? Because I believe fundamentally that’s the number one thing causing those people to be in the build trap. And then how do you set that up for you? Like what are the components you need and how do you set that up?
Holly: Awesome. Something I’ve come across, too, is even if I haven’t worked with somebody to help them learn the tactics, it’s also people saying I want to do these, but I don’t have the space. I can, no one will approve it. I think another common thing is, we have room to do that at the beginning of the project and then we don’t, and then my boss thinks we understand what we need to know and we shouldn’t bother anymore. I think those things all come together a lot. So, I’m curious, as you started to work with leadership more and look at this holistic picture of the product org and the product led organization, do you feel that you pulled back principles from your operations research perspective into how you design a product organization?
Melissa: Yeah, it was funny. I was speaking at a lean conference a couple of years ago. I think it was in 2014 and my friend Jane Bloom was there too. And I remember going in and being a talk that he was giving on a throughput in real options and I was just like, “Oh my God, this is my major like coming back to haunt me right now.” And it was all this stuff like we had learned in college and I was like, “Jane, my major wasn’t useless. Like all of this stuff relates back to software too.” And it was such a nice feeling to feel like it came full circle.
Melissa: I think the biggest thing that I learned in like operations research that’s helped me with product stuff is and all stuff it’s understanding value streams, how do you optimize that flow? It’s not really flow based stuff. We do a lot of statistics and probability, so we do a lot of modeling in our work now with companies, we do a lot of like really hands-on consulting where we play in term product leadership roles. So, a lot of the statistics came back to haunt me as well in the data. So really diving into the data, calculating out probabilities of like, what kind of goals we can hit or how do we monetize like roadmap, we’ve been doing a lot of work that way. When I set a value streams or I start looking at why are things not working in a company or how do I increase flow, I use a lot of the principles about like throughput and optimizing, optimizing processes and, and value streams for that. So those are the types of things that I really grabbed.
Melissa: I think the biggest thing that engineering really locked me with in that major too, was the problem solving, right? Like when you do the engineering kind of background like you just get thrown these problems that are like here, go figure it out and it teaches you a way of thinking that I think is pretty, pretty unique and really well suited for product management where you just keep digging into the problem, you try and get to the root of it and then go back and solve it. And that could be through customer interviews or pulling data or anything really. And that experimental nature that also comes with it of, use of data, test something, figuring out what happens, all of that I really got from my engineering background and I think that’s what’s really aided me a lot with product management.
Holly: Yeah. I like to sort of call out that you got that from an engineering background that wasn’t computer engineering or computer science Because I think people in our industry a lot of times, I remember when I was first applying for jobs with the product manager title, the job description said should have computer science or related to degree. And I was like, “Well, I went to engineering school, so hopefully that counts.” I think it should count and it does count and I have very similar feelings about what it taught me, but I don’t think all hiring managers do see it that way. So, I guess I’m curious if with the teams that you work with and the companies that you work with, what you see about the perspective on the necessity of a computer science degree, having an engineering degree or just, what kind of background you think great product managers can come from.
Melissa: I think to be a product manager you need a technical background, but that does not have to be super computer science related. When I first transitioned back at Open Sky from being a developer into being a product manager actually hurt myself because, I would be speck]ing these things out or working with the team to figure out what to build and I’d hold myself back because I couldn’t figure out how to code it because I was a really shitty developer. So I’d be like, “Oh, that seems really hard and it seems kind of impossible. I’m going to design it in a different way”. And my team had to be like, “Hey Melissa, we’re much better developers than you are, so just do it from an error of whatever you think it should be. And then we’ll tell you if it’s impossible. Don’t hold back. Like do it from what you think is going to make the customer that the most happy.”
Melissa: after that, we were doing great things, but like I second guessed myself because I didn’t know how to code it. So when I think about computer science degrees, I do not think they’re necessary for product managers. I think it’s really good to have. The most, I think product managers really need to understand is one, understand how long it takes to really develop software. And I was able to have really good conversations with my developers about that, right? They would say, well, if we do it this way, we’d have to change all this stuff on the backend.
Melissa: And I’m like, “Got it. That’s really difficult. What if we do it this way?” Right? And we were able to negotiate different ways of working or what would achieve the goal there to get it out faster. And then I was able to prioritize like is it better for them to change the backend because this is really, really important? Or is it, no, we can do this in a simpler way. So having those conversations was really important. I think also just understanding how the nature of how things work. Like what is an API? Why would you need an API? Right? Those types of things is enough for a product manager being able to have those conversations.
Melissa: And you, you know what? You should trust your developers enough to be able to come back to you and talk to you about those things. I think we positioned sometimes product management as like an overlord of development and I hate that. It’s like a partner, right? Somebody who’s going to, be able to talk to them about what to do. So whenever we work with developers who are returning product managers, right? We say it like you were in charge of really that, why are we doing the things we’re doing and helping to scope out what that was. Your team is giving inputs into the what is, everybody’s trying to figure that out together.
Melissa: But development completely owns how, you have no say over how that gets built. That’s development. UX is really helping you on the shaping the what we’re going to build. You’re really making sure that it meets the vision and the business side of it as a product manager. But development owns the how. So you don’t even need a computer science major for that, right? Like they need to be great engineers. And computer scientists and developers. But as a product manager, I don’t think he need that at all.
Holly: Yeah, that’s well said. So, I want to bring us back. You did bring up in there recently to Open Sky. I remember this goes back to your journey, We got up to the point where you talked to us through to getting to Open Sky. What happened after that?
Melissa: So I stayed there for a while and that’s really the place where I started doing product management like I do today. I was very, very lucky to have very open minded boss named Chris Keane who would like go learn everything you want to learn and go try different things, experiment, do whatever. And that’s where I started to learn about lean startup. So I went to the Lean Startup Machine weekend. I learned about experimentation. It clicked with me so naturally because I love chemistry and the whole hypothesis thing and the engineering stuff. It really like spoke to me and I was like, yeah, why are we just building all this stuff? And I have no idea if anybody’s using it. And I love the concept of data. I didn’t know those things were possible.
Melissa: So I went back to work and I said, “Hey Chris, I want to try some experiments around what we’re building. I don’t know if they’re the best things to build.” And he’s like, “Go for it. Do it.” And it’s funny because he actually sent me an email the other day and from like back nearly 10 years ago at Open Sky and we did a major pivot of the company and it was based off one of the experiments I ran and I didn’t know that until today. I actually ended up leaving the company right before they made this huge pivot. But, what happened was we were like a flash sale celebrity fight, right? So we had a bunch of celebrities on there, like Martha Stewart who would offer pans and pots and all that stuff that she loves. We would sell it through the site.
Melissa: We were doing a test. I was running an experiment about, making the celebrities contact people in their feed worse. So putting them out there too to talk to their customers more or write conversations. And we had this hypothesis that was going to increase revenue and I random bunch of experiments. And we found that it just didn’t work. It just didn’t increase the revenue like we thought it was. And that actually made them rethink the whole concept of Open Sky and what it was today. So they pivoted the whole company to be more of a marketplace type thing, like an XE, and they ended up selling themselves to Alibaba about a month ago.
Melissa: So, he sent me the email with the whole digest of what my results were and how we found that it didn’t really increase revenue. And it started this whole conversation at leadership about are we actually building the company that’s going to be successful or should we start rethinking our entire strategy? And they ended up doing that and now they’re basically the US market marketplace for Alibaba.
Holly: Did you know before you left Open Sky that there were conversations coming out of this?
Melissa: Yeah, I didn’t know that my thing was the thing that triggered it, but I knew the conversations were happening. For me, like I was looking to work on something that … I was split between UX and product at the time too. And we had hired somebody at Open Sky to takeover all of the UX work. So I stopped doing that and I was like, I want my UX work back, like I’m going to go be a UX person again. And then I went to another company and I was only doing UX and I felt like product had such a big piece of it, like the product component was missing for me there. And I had no say over what we were building and I knew that we were building the wrong things. So now I’m getting torn where I’m like, I want my product responsibilities back. Like why are we separating these things?
Melissa: I ended up leaving Open Sky when they were making this big pivot because I was looking for something new and I’d been there for a long time and I wanted some of my UX work back. So I went completely the opposite direction and did only the UX and they saw me as a graphic designer and I had that whole experience where I was trying to teach them and what us really was. I ended up leaving there as well. But Open Sky, yeah, I ended up making the pivot afterwards. A lot of the people I worked with are still there, which is amazing. I love to see how they grew and got acquired by this awesome company. It’s just really, really fascinating there.
Holly: And how many years has it been since you left between that and getting acquired.?
Melissa: I left in 2013. Yeah, I left in 2013. Alibaba invested in them about three or four years ago, and then they, got acquired completely about two months ago, the whole transition into it.
Holly: I think it’s also interesting just because it also lays out how long, a big strategy pivot takes a really long time to work its way into the operations and the systems and everything of an existing company, right? Definitely takes while. So what happened after that? So then you did UX, the place wanted you to be a graphic designer that didn’t work out. You missed the product side. So then you went to another place?
Melissa: So I actually ended up in Italy. My friends from Lean Startup Machine were mentoring a startup accelerator run by the Italian government. And the premise was the throw a bunch of people together and they can use lean startup to create companies. And at the time I was like, yes, I’m ready. I want to do this. It’s gonna be great. It was not like that at all. It was a complete mess, 65 people from all over the place. Like you can’t just throw people together and have them create like awesome companies, especially like out in the Italian Alps. It was really hard to get in touch with users. It was really hard. I mean, I learned a lot about starting companies. I learned a lot about like raising money and that whole experience. And then, I got access to really cool mentors that started big companies.
Melissa: Learned a lot, came back and I started looking around for like a head a product position in New York and every time I was talking to these companies though, I found like they really didn’t understand product. Like they had no idea what this was supposed to do, they were looking for an order taker from the CEO. I just couldn’t find a place to go. So I started freelancing and consulting and I had been doing lots of speaking and workshops at the time. So people started calling me and saying, “Hey, can you come in to our company and teach us how to do experimentation? Can you teach us your type of product management?” And that just started taking off.
Melissa: I started doing a lot more workshops if they’re doing a lot more public speaking and a lot of consulting, and that’s really what started Produx Labs today. So it was just me for a while, kind of consulting around, sometimes taking like intirrum head of product positions or contracting at different companies. Other times it would be consulting, training, all that types of stuff. And then two years ago I did a massive product transformation with my team, in a healthcare company. So really taking 350 people you’ve never done product before, teaching them how to do product management and then setting up the entire organization. And that’s a lot of where I learned and experimented with our prophecies that we’ve tried and like different silos, but like brought it all together to make a product, and then coming out of that.
Melissa: Spent about about year and a half doing that. And then coming out of that we started a partnership with insight venture partners, to help their growth stage companies. So we hired a team in New York. We’ve got six people now who are dedicated to working with growth stage companies. We started a Chief Product Officer training as well. So our FTP is a product strategy or also in our training program to become Chief Product Officers of a growth stage companies because we just looked around and there wasn’t a lot of leadership out there. And we go in and we help these growth stage companies accelerate while they’re usually trying to hire our product leaders. So if you don’t have like a CPO, we come in, we play that role, we try to hire you one really fast. We spend like about three to four months with you. We try to set the teams on the right path. We do a big strategy, deep dive, and then we support them in hiring and getting their processes straightened out so that they can accelerate their growth faster instead of like waiting for somebody to come in.
Melissa: So we do that with insights companies. We’re basically their product center of excellence. So we helped them with everything, product, all their companies have us as a resource to come in and use are our tools and our methods and bounce stuff off of us. So that’s been one side of the company. And then we do still continue to work with enterprise companies going through a transformation, just like the other company where we go in and we advise leadership and we help them get things organized around like roles and responsibilities and strategy and the right leadership and hiring the right people and getting the right processes set so that they can become a great product to work. So that’s what Produx Labs kind of turned into today, which is pretty exciting. So everything we do is to help grow a great product organizations and set them up well so that you track the best talent and really have thriving product management in your company.
Holly: That’s awesome. We definitely need lots more of that out there. I think, especially at the leadership level, because there’s a huge influx of people entering the lower levels of product management and an influx of hiring, but then they need bosses who understand what they’re doing, and that was kind of a gap. So I’m curious, is there a way, if any of our listeners wanted to apply to be a CPO and residents to your program, what does that look like? How do you get people in there?
Melissa: Yeah, We’ve been searching around, We have two right now and we will probably be hiring more, either at the end of the year or beginning of next year. We hire only people who have been a VP of Product before. So you have to have a lot of experience there, five to 10 years as the VP of Product in a growth stage company. You can apply through a site jobs at Produx Labs, and send your resume. We’re hoping to grow the program so that we can take more and more people on as we go. Right now. We’re fine-tuning it, working with the people we’d have, making sure that we don’t scale too fast and really lose what are our DNA is there and are in our culture and making sure that we have everything set up.
Melissa: But if you are interested, I’m always looking to connect with people who have that experience, who are, who are looking to make that next leap to really that C-level position from the VP position. So definitely send us your resume and some information at jobs@produxlabs.com and then when we have openings that will be popping up, we’ll reach out to everyone.
Holly: Awesome. And one of the ones that you have right now, he was already on the podcast because he’s a friend of mine from Shutterstock. So Tommi Forsstrom, by the time this episode launches, his episode will already be out because it’s actually coming out tomorrow as the time of this recording. So listeners, if you didn’t hear the Tommi Forsstrom episode, you can go listen to that. Now, I will note, we recorded that before he started working with Melissa, like literally the week before. So he’s learned a lot since then. And, so it’ll be interesting. Maybe we’ll have him back in the future to tell us how he’s grown in the time since he started working with Melissa…
Holly: Awesome. Well, I don’t know. I know we’re almost out of the time that we had scheduled, so I want to ask you some final questions and then we can wrap up. I feel like there’s so much more we could talk about and there’s a lot of details I wish that we could have more time to chat. But, I always like to ask my guests to share sort of what is one message, one take away that they want the listeners to have. In your case probably product leaders or people building product orgs. what’s the biggest message you want them to take away?
Melissa: Yeah, biggest thing is strategy is so important. I think a lot of people look at, okay, let me set the right KPIs are the right goals. It’s strategy, right? You have to bring it all together, and as a product leader that should be your absolute main focus is making sure that you have an up-to-date strategy and keep reevaluating it and assessing it and poking holes in it to make sure, because that enables the rest of the team. Without good strategy on the top, you can’t really move a whole team forward. So, if product leaders are listening, really don’t neglect your strategy, that should be most of your focus.
Holly: Absolutely. And a where can people find you and find out more if they’d like to follow along?
Melissa: Yeah. So, I’m on Twitter @lissijean where you could follow along. You can buy the book, Escaping the Build Trap on Amazon and please leave me a review if you read it. I’m trying to get more reviews. MelissaPerri.com is my website. My blog there. You can reach out through the forums there if you have any questions. But otherwise, I talk to a lot of people on Twitter, so feel free to start a question or debate or anything like that. I love talking to people there.
Holly: Awesome. Well thank you so much for sharing your time and insights with us today. It’s been a pleasure to talk to you, Melissa.
Melissa: Great talking to you too, Holly.
Holly: The Product Science Podcast is brought to you by H2R Product Science. We teach startup founders and products leaders how do you use the product science methods to discover the strongest product opportunities and lay the foundations for high growth products, teams, and businesses. Learn more at h2rproductscience.com. Enjoying this episode? Don’t forget to subscribe so you don’t miss next week’s episode. I also encourage you to visit us at productsciencepodcast.com to sign up for more information and resources from me and our guests. If you love the show, writing a movie would be greatly appreciated. Thank you.