Product Strategy

The 3 Rules Behind The Most Successful Products

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The more connected we become to our tech products, the more we expect the same from them. They are essentially an extension of ourselves. In her talk, SC Moatti lays out the three essential rules that every product needs to follow to be successful, drawing examples from her work experience at Facebook, Nokia, and Electronic Arts.

Wes Bush:
Hello everyone. So I am Wes Bush, founder of the Product Lead Summit, and here we have SC. And so whenever I heard about SC. it was through her Products that Count Community. And the more I learned about this community, the more I was just amazed at how incredible of a community SC has really put together. It's over 200,000 product managers. And what's incredible about it is it's really just built around building products that count and deliver massive value. And SC also has founded Mighty Capital, which really just carries out that same mission by providing massive value to any companies you invest in by leveraging the incredible community she's put together by helping people find jobs and really scale their careers. So it is just incredible to have SC here, and I am so excited to hear this workshop from her about the three rules behind the most successful products. So with that, I'll let you take it away. SC.

SC Moatti:
All right. Thank you so much Wes. It's great to be here and hello everybody. I'm looking forward to this discussion. So I'll start by what I'm going to talk about, which is how to build great products using my product formula, which is something that I developed after a dozen years building products myself that are used by billions of people. I worked for Facebook and Nokia and Electronic Arts. And after I left Facebook, I was invited to write this book, interviewed a couple dozen product leaders. And that really helped come up with that product formula but that is also what started the Products that Count Network. If you want to check it out, www.productsthatcount.Com. That is really all there is to know about me on that aspect. And now let me jump right into some myths.

SC Moatti:
The first myth we have building products is that it's easy. All we have to do is we follow the consumer journey, which is this beautiful yellow brick road. As we all know, it's not like that at all. In fact, this is more how it looks like for a customer to go through the consumer journey. It's very, very anxiety driven. It's not a pleasant process and our job as product managers or people who want to build great products is really to turn this into a great experience and that kind of experience. So we came up a few years ago with a notion that we call, product market fit. And product market fit if you ask me is a myth. Why? Because what it says is, Ooh, there is such a thing as building a product that eventually meets a certain demand and we call that product market fit.

SC Moatti:
And from there on everything is awesome. Well, everything is not awesome from there on, because the minute you hit product market fit, you actually lose it. You're going to have some performance issues because you get more customers using your product, or you're going to have new customers who are going to make new requirements. And one thing after the other, you're going to lose product market fit immediately, and you have to find it again. So the skill is not about let me first find product market fit, and then everything will be different and I can focus on growth, but rather let me master the science of continually looking and finding and reinventing product market fit. So I say there's more like 50 shades of product market fit. You got it. Okay. So if we cannot rely on this idea of product market fit, then what is it that we can rely on?

SC Moatti:
And this is really what I learned writing my book, which is that we like products... Technology has become an extension of ourselves. So we love products that are basically identical to ourselves. So when you think of what does it take to build a great product? You want to think, what makes a great person? Now surprisingly, there aren't too many frameworks describing what a great person looks like. So I'm going to sound very Californian right now and I'm going to say, I use the mind, body, spirit framework to describe a great person and therefore to describe a great product. And so this is my formula. The three rules behind the most successful product. First of all, they have to... I'll start with the bottom. They have to use the body rule. Which is, the best products operate by beauty.

SC Moatti:
We all want to look very good. And we expect that our technology is also going to be beautiful. And what does beauty mean? We're going to get into that in a minute. It's not about the pretty picture. It's a lot more than this. It's about efficiency. It's about, "Whoa." That's the first rule. The body rule. The second rule, I am working my way up there, the spirit role. We all want to have meaningful lives. We all want to find that our lives have something special to them. And we expect exactly the same thing from our mobile products. That they're going to give us meaning, they're going to be super personalized. But then as they get personalized, they suck up a bunch of our data. What does that mean? How do we handle that? How do we protect ourselves from that type of issues?

SC Moatti:
And then last rule, the third rule, the mind rule, is all about learning and growing. If you're listening to this session, that's because you want to learn and grow yourself. And we expect the same thing from our technology. We expect that they are not going to be this static thing that then becomes clunky, but that we expect that they're going to learn and evolve as we use them. So for the rest of this presentation, I'm going to dive into these three rules, body, spirit, and mind. And starting with the body rule. So think about this for a second. What happens when you're having dinner at a restaurant with a friend of yours and then somebody beautiful walks in? What happens is everybody starts looking at them. The jaw-dropping Wolf in the [inaudible 00:06:25] cartoons. That's what happens. Everybody looks at them because there is this wow factor.

SC Moatti:
If I ask you, now describe that person. Some of you may say, "Ooh, they're very tall." Some of you may say, "No, they're not tall at all. They're very cute." Some of you may say, "They have very symmetrical features." Some of you may say, "Oh, they have this beauty mark right here. It's totally asymmetrical." So actually defining beauty rationally is very hard to do. And even if... When I was writing my book, I went and I looked at history like, how do people define beauty historically? Bright people like Pythagoras and all these luminaries. And this is what I found. There's two camps. One is the camp of the scientific folks. And I'm an engineer so I'm going to put myself in that camp reluctantly because there's another camp which is more the artistic one, which has some really interesting perspective as well.

SC Moatti:
So the scientific folks they say, "There is a formula for beaut." For example, the golden mean. That's an age old formula for building beautiful buildings with perfect proportions or harmonics. You take a string, divide it into regular intervals when you play music of, it plays beautiful music. That's very rational. In the 20th century, there's even a guy called [inaudible 00:07:51] who said, "There's a formula for beauty, beauty equals O over C. Order over chaos." So it's really bringing order out of chaos. All about efficiency. So if you want to build a beautiful product for the scientific type, it has to be efficient. It has to get you from point A to point B the fastest way possible. Now the second camp, the more creative artistic camp is a camp where it says, you know what? Your definition of beauty is irrelevant because beauty is in the eyes of the beholder.

SC Moatti:
So it's not about what you create and decide or not is beautiful. It's about what somebody sees and decides whether it's beautiful or not. [inaudible 00:08:41] in that camp, he would hold manifesto on beauty. And if you want to satisfy the camp of the more creative types to build something beautiful, you have to have that wow factor that you get when somebody beautiful walks into a restaurant. Wow. And it skips your consciousness. You cannot help it, but everybody feels it. It comes from the guts like, "Whoa, this is awesome." Not "uh-huh (affirmative) wow. This is awesome." And that's not how it happens. It's completely guttural. So remember, the rational part and the creative part. Now, how do you apply that when you're building a product and you want to go under the hood?

SC Moatti:
Well, there are two types of design elements. One which is design to help you focus. So that's the rational side and one which is designed to help you expand. And that's the wow part, the more creative side. So focusing design elements meant to drive efficiency, onboarding, you want an amazing onboarding experience that's going to add value before you ask for value, like an email address or something like that. Then once you've onboarded a user, you want to get them through this single task. Make them successful as quickly as you can. And once they have completed that first task, then you can show them other tasks. Other tasks in very, very clear swim lens. So that it's very easy for them to say, "Oh, now I'm doing this thing. Okay, now I'm doing that thing." So navigation is very, very critical to build a great product. Now, the next element is, you want performance. Remember at the beginning of my presentation when I said, "The more users you get, the more your performance is going to be affected."

SC Moatti:
Well, once you start onboarding new people, getting them through to your first task, showing them other things your product can do. You get more and more of these people. You don't want your product to crash. That's the best way to get people to not use your product anymore. And then particularly with mobile products, which is pretty much every product these days, I get often the question like, "Hey, do I need to invent a new gesture?" And the quick answer to that is, no. Don't try to invent a new gesture especially, I know many of you are building SaaS products, be just so predictable and keep it simple. Having the double heart or the swipe left and right, is not going to make or break your product at this stage in the mobile cycle. And especially if you're building an enterprise application. By the way, one thing that I want to point out throughout this talk, I'm going to be using a lot of consumer examples.

SC Moatti:
Not because that's the only companies type that my framework is relevant for, but because these are so easy for everybody to relate to. If I tell you Facebook, you're going to know exactly what I'm talking about. If I talk to you about some random tool that's a great SaaS product but nobody has heard of, then I'm going to spend half of my time explaining what it does and that's not a good use of our time. So I'm using consumer products as examples that it works just the same for your B2B SaaS products doesn't matter. And if you think it doesn't, if you think you don't need to build a great product, then you've just lost your competition. So second set of design elements, expanding design elements, and they build wow for you. So push and pull, these are two design elements. One is going to be asking you, "Hey, is it okay if I pull some information from you?"

SC Moatti:
Like your friends, your calendar, your house information, whatever your photos, because it will help me build a more personalized, better service for you. And there's an art to getting to people to say yes to that. And we'll talk about that in a minute. And then there's a push, which is, is it okay if I push information to you sometimes using push notifications or emails? Because I want to make sure that even when you're not using my product, you still benefit from the value that I bring to you. And we're going to talk about that as well in a second. All right. So let's now move on to the second rule, which is the spirit rule. So this is how the spirit rule works.

SC Moatti:
Remember when you met your significant other. Initially you spend all your time with them. You're completely in love. Eye in the eye, they guess your deepest desires, they finish your sentences. You've never met somebody like that. And it's pretty amazing. And that's the same thing we do when we first get our new gadget, whether it's a mobile phone or a watch or glasses. We have that sort of in-love moment with them at the beginning. And then that significant other, at some point we say, "All right, so we're going to introduce you to my parents, or I'm going to bring you to see a movie with my friends, or we're going to go to that work event with my colleagues." And then all of a sudden, your relationship has turned to a love-hate relationship with that person because sometimes they will really love your parents and it won't be reciprocated for some odd reasons or what have you.

SC Moatti:
Well, it's exactly the same, again with our tech products. We first were in love with them. We have this kind of completely immersed relationship like, "Wow, they suggested that cool music album for me and I love it." And then after a while, we're in public transportation listening and dancing to music and that's completely inappropriate and we get the looks. So that's exactly what happens with our products. We want them to be super personalized. We want them to give us meaning, but at the same time, we need to protect ourselves from the number of social norms and privacy, of course. So let's look at this. So personalization, first of all, what does that mean? Personalization? What is the essence of mobile, which is what everybody is using today to build great products? So if you ask me what it is, it's two things.

SC Moatti:
One is identity, and two context. Identity meaning it's me SC who has this smartwatch. It's me SC who's using this particular WhatsApp or Facebook or whatever. And then context, it's me SC here in San Francisco at this time of the day. So I know exactly who I am and where I am, and my friends, and my health information. All of that information. And the question is, what is the unique service that my company can provide using that information that no other competitor has ever provided before? That's really how you want to think about the essence of mobile and personalization. And so I encourage a lot of folks who ask me to build a list of all these permissions you can get on different platforms. Whether the platform is iOS, Android, of course on mobile, but also your mobile websites and so on.

SC Moatti:
And maybe some IOT platform and so on and so forth. Make a list of all these permissions and then ask yourself, would getting this permission transformed the way I provide my service? If I had access to SC's calendar, would I be able to make a recommendation that none of my competitors would provide for her? And if the answer is, yes, you put a yes. If the answer is no, you put a no. So you get a matrix. All the permissions, all the platform, yes, no, yes, no. Everywhere you get a yes, the next question to ask yourself is, when is the best time to ask SC that permission to collect that information from her? And the answer is either as early as possible, or as late as possible. Let me give you an example, because I realize this is a little bit abstract.

SC Moatti:
So we'll take WhatsApp. WhatsApp is that mobile messaging service. So critical piece of using WhatsApp is the ability for the two people, like say Wesley and I are messaging on WhatsApp. We need to make sure that we do instant messaging. So both Wesley and I need to have push notifications enabled for WhatsApp. So do you know what happens when somebody signs up for WhatsApp and they don't enable push notifications? They actually see a nice screen that tells them, "Sorry, you can't use WhatsApp." Because if I decide that I don't want to get push notifications, then when Wesley messages me, he's never going to know if I read the message, if I got it, if it's there or not. Versus if everybody on the platform needs to have push notifications enabled in order for the service to operate, then we all know that we all can participate in instant messaging.

SC Moatti:
So the answer is to receive push notifications is essential to the WhatsApp service. So the permission needs to be asked as early as possible. On the other hand, let's say, I want to send Wesley a picture on WhatsApp. Well, it's only when I'm going through WhatsApp. I want to send Wesley a picture. "Hey, can you give me access to your camera or to your camera roll?" Well, of course, because I want to send Wesley a picture. So I'm going to say yes, because I'm already in the process of sending him a picture. So the answer there is as late as possible because at this stage, I'd already made my decision. So the permission is going to be a given. So remember, as early and as late as possible.

Wes Bush:
Yeah. This is a really great point, especially for software as a service companies, because I find that a lot of them in that initial onboarding, they try and do all of those little steps. Like let's say get access to the camera roll and everything else, but it's not actually needed at that specific point. And so, I just want to emphasize that point because it's so relevant for so many software companies. I only wish they took you up on that offer to implement it.

SC Moatti:
Yeah. Awesome. Cool. So that's the personalization side. And this is how you build a highly personalized with high engagement service. Now, on the other side, I mentioned already, if you're using your phone or using your tech all over on mobile, this is what it looks like. And a lot of people aren't used to it just like 50, 70 years ago, people weren't used to television. In fact, if you look at articles from way back then, there's articles that tells you, "Oh, television is going to suck your soul." The actual device itself is going to suck your soul into the black box. Well, we've all learned to live with television. In fact, we know that it's always on, but nobody pays attention to it anymore. Except when somebody scores a goal on sports.

SC Moatti:
And so we're also going to be learning to live with our mobile technology, just the same way. So this is a matter of being a part and watching for norms and rituals that are currently being set. But there's one thing that I want to talk about, which is your privacy and your users or your customers' privacy. And this is how I think about it. What is the risk of a breach of privacy? And they are three. One is an individual breaches privacy. Two a corporation, and then three a government. We'll take them one by one. So an individual breaches your privacy... We're actually very clear on that. We do not want identity theft as a society. So if you're building a product, you want to make sure that you protect against that. That's just a basic rule for what a great product is.

SC Moatti:
The next is a corporation. Well, we do not want to admit it, but we like it when corporations access our data. We like it because we want better ads more than we want that ads. We like it because we want free service more than we want to pay for a service. So even though it's not politically correct to say that, we actually don't mind and are fine when corporations access our data. And then lastly, government. So that's a little more tricky because on the one hand we know that, Oh, big brother is really bad and in history and in different countries, we know that it's really effected us in... Really in various ways. However, when I look at the way today, we protect our borders from terrorism. It's [inaudible 00:21:50] how rudimentary it is. People look at the color of your skin, your age, your nationality, your gender.

SC Moatti:
So some really, really basic rudimentary criteria that are a lot less reliable than things like, "Hey, are you calling terrorists?" Or are you meeting with terrorists? Which we can get from technology, which is so much more reliable. So nobody really wants to have the debate right now, but this is a debate that requires policy making. And we should have that debate because the way we handle privacy and government right now is broken. Anyways, so with that, I'm going to move to the third rule, which is the last one, the mind rule. Which is all about how we grow and how we learn. So I used to do martial arts. I used to practice Iquito and my master would always tell me, "Practice makes perfect." And so every morning, I'd go and I'd practice my moves and then sometimes I'd practice well, and then sometimes not so well.

SC Moatti:
And then sometimes I would feel great and sometimes I would feel discouraged. And then after a while, all of a sudden I would be at a completely different level without even really realizing it. And that probably sounds familiar to most of you because that's how we learn. We learn fast and we learn slow. And the fast way is very incremental and the slow way is very disruptive. And so what does that mean for our technology? It's about the same thing. It's like there's a slow way to learn and a fast way to learn. And the good news is, we've gone from an era of having no information, not able to measure anything, the madman era. To an era where we can actually measure everything, which is a massive improvement. And actually, I like to say that we went from mad men to mass women where we can measure everything.

SC Moatti:
And what does that mean? It means that we've invented this methodology which I know both Wesley and I don't like called growth hacking. And so growth hacking is like, "Hey, implement a bunch of tools. And once you have them in place, look, you'll be able to put everything into a funnel." Let me see if I have a funnel. Yes. You'll be able to put everything into a funnel. Define your success metric, put everything into a funnel and then you'll be done. Well, what if I told you that actually, no, there is no such thing as a funnel. Because what you'll find is that if you do this, and if you don't do this by the way, you don't have a business. If you don't measure in today's world, you're back in the madman era and I don't wish that to any of us.

SC Moatti:
If you want to be in today's era where you want to measure everything, have a funnel, but then you want to sink outside the funnel. I'll give you a couple of examples. The first thing is, you want to find a way to make your funnel as short as possible. So there's not too many steps to get you to your goals. So you want to use what I call shortcuts, which are going to remove layers in your funnel. And that is a tool that I've used in the past that has tripled my conversion as opposed to 20% increment on conversion optimizations through growth hacking. So three times your funnel. And here's a great, very simple example where if you buy my book here on Amazon, immediately after it tells you like, "Hey, here are three books that you can buy. That are around the topic of product or that other people have a read after they read CS's book."

SC Moatti:
You don't need to go back and do another search and say, "What are some other great books on products? What other books has SC written?" And this, that, and the other. It's right here for you. So if you're a bookworm like me, you don't buy one book at a time, usually you buy three or four books at a time. Well, there goes your revenue. Thank you. You just made Amazon three times the revenue than they would have made without the shortcut. I guarantee you, you can implement that for your own product and that can triple your revenue. How cool is that? Now here's another tool that can increase the size of your funnel by five X. I call that a hook. So instead of making your funnel very narrow, it helps make your funnel very, very wide.

SC Moatti:
And sometimes you need both. A very wide and very narrow funnel is exactly what you want. That looks like pretty much a horizon line. Infinite and flat. That's your perfect funnel. So a hook is basically something that will make everybody want to use your product. And here's an example of that. If you use Zillow, and on average, somebody will buy a home every five years. So if you use Zillow this month, and maybe you buy a home, then "Hey, bye, we'll see you in five years." How's that for velocity. But if you have something that [inaudible 00:27:02] the Zestimate, which is a slightly inflated value of a home, then I guarantee you're going to be back probably multiple times a day. They only refresh once a day so, maybe once a day.

SC Moatti:
But you're going to look at the value of your home. You're going to look at, has it increased? Has it decreased? How does it compare to the neighbors? What about my boss's home? Is this too expensive or too small? What about my investor's home and so on and so forth. And you're going to be back on Zillow over and over and over again. You're going to build your own trend line and so on and so forth. So bottom line is, if a real estate company can come up with something as simple as a Zestimate, then probably for your own business, you can come up with a similar, very, very addictive type of indicator that will bring everybody back over and over again.

SC Moatti:
Again, summarizing the key points of my talk. You want a great product that follows the rules of great products, which is basically defined by what makes a great person. So body, spirit, mind. We all want to do good. We need our products to be beautiful. That's wow and efficiency. We all want to have meaningful lives. That means we want our products to be personalized. And that comes also with understanding social norms and privacy. And then we all want to learn and grow, and we expect that our products are going to learn and grow as we use them. And that's it for now. Thank you very much.

Wes Bush:
Perfect. Thank you so much for putting together this incredible talk SC. And just if anyone has questions, where is the best place for people to reach out and learn more about you?

SC Moatti:
Yeah, absolutely. So my website's down here scmoatti.com or if you want to join the Products that Count Network, productsthatcount.com that com P R O D U C T S T H A T C O U N T.com.

Wes Bush:
Perfect. Thanks so much SC.

SC Moatti:
Thank you.

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Gretchen Duhaime
SC Moatti
Founder of Mighty Capital
SC Moatti is a technology visionary, entrepreneur and investor. She is the founding partner of Mighty Capital, a Silicon Valley venture capital firm, and Products That Count, one of the largest communities of product managers, leaders and founders in the world.