The Exchanges

Q What did the company do to start to think about what are the next few products and or business units we might want to create?

A I think the most important thing, as you begin to think multi-product, if you're a product that has Initial product market fit for a core. What else does that specific user want that would make their job better? Like the classic line of your B to B user wants to get promoted. What is the thing you can give them that helps them do so? And when Stripe was thinking about the second products, one of the like easy angles for that is who is our buyer? It's that developer who's like integrating payments early on. And like, what could you give them that same buyer to make their lives meaningfully better? And so that's how Radar, the fraud product came about, where it's like, well, all these people are taking payments on cards, and you know what sucks about doing that? Fraud. Let's, let's give them a tool, uh, that can make that a lot easier. And given that we had that focus, that our user was the same person who was buying payments, we were able to really, um, similarly narrow down the set of features that made a difference for that User. Certainly there's other dimensions that you can think about as you're trying to go multi-product. One is like, does going multi-product allow you to unlock a net new user base that you weren't targeting before? So that was Stripe Connect was the other kind of early multi-product bet that really worked out for the company. And that was, hey, we've been…

AI assessment note: “And when Stripe was thinking about the second products, one of the like easy angles”

Q of times you're intersecting them earlier in their career. They have a smaller body of work that could be a proxy for their ability. Like what is your own personal process look like? Or like, what's your internal algorithm in your brain? That's sorting someone from like, I need to hire this high potential non-credential person versus this other High potential non-credential person that I don't think is truly exceptional.

A So I think I have a few criteria. One is that the most important is probably do they show hunger? Like candidates have to show they care, which should separate them in that initial screen. So do they go above and beyond to show their interest? Do they message you repeatedly? Do they do something special to set you apart? Like I had a candidate recently that made me a YouTube video of why they want to work at Watershed, which sounds random, but these signals actually really matter. If they're hungry now, they'll be hungry in the job. Which is great for the company, and I think that's very key. Even if a candidate's coming to you through more traditional channels, like, do they show hunger from their past experience, or did they get their past job in an unusual way? Did they materialize an opportunity from nothing? Do they start stuff? Do they do a ton of zero to one hobbies to try to make their opportunities? They need to show a lot of hunger in the background. The second is high horsepower, and this is like a non-negotiable. If they don't show high horsepower in some way, then, like, It's a no. So, like, do they have a great side project? Do they write very excellent blog posts or documents or articles that show incisive analytical chops? And then there's a question that actually Chris Cox recommended to Watershed when I was trying to hire PMs really early, which is, like, get …

AI assessment note: “I think I have a few criteria. One is that the most important is”

Q I mean, you mentioned this a little bit, but what was going on that set you up to get that wrong out of the gate?

A I think it was because the, we were pretty new business focused. We were focused on the user at the moment of making the decision of whether to use Stripe or not for the cohort of businesses that were Stripe's core. So that is Like startups who are, you know, monetizing for the first time, who do they integrate to do subscription payments? And at that phase of company, that is the developer. That is like a, it's a tiny company. They have like four people max at the whole company, right? Or maybe 10 if they're growing and scaling and are lucky. Like Stripe was becoming more mature. We were selling to larger and larger companies over time, and those users were growing up. And so it was actually over the course of A couple years where the decision-making power sort of shifted in our existing user base to more of a finance buyer. And that Stripe was now because we had an official capital P product that was on the website with the landing page in the space, sales were also trying to sell this product out of the gate to larger and larger customers. And so it was like those two dimensions that changed who our user was and made it so that we not only had to address the needs of a, you know, nascent Just out of YC, a company that's trying to do SaaS, but also we started selling to Atlassian and their needs are just wildly different, uh, than, than that small company. And it just goes ba…

AI assessment note: “we were pretty new business focused. We were focused on the user”

Q categories of product. One is products over the same buyer, same customer. The second is same customer, the product sold to potentially a different buyer, overlapping buyer, overlapping constituent. And the third is this idea of unlocking net new customers that wouldn't have been customers before. In that latter camp, what's different about that in terms of people, org design, goal setting, sort of anything else that comes to mind?

A One of the organizational things that's really important is give that team, treat it like a business unit actually, like don't treat it like a product team. So give them their salespeople, give them their sales targets, give them like the full end to end. They should almost feel like a startup within the company. I know that's a hackneyed phrase, um, but they should really feel like their own entity. Like they have their own just about everything, including their, their marketing motion. I think also you really have to ensure that you're not Gaging their success the way you gauge the core business's success. So their sales targets look different. Their sales people should be like, maybe you release them from the same hardcore quota for a little while so that they can help find product market fit. Again, you like staff your like founder seller type seller on that product area. You do not staff your like traditional, like scaled seller on it. You put someone on there who can do their own sales enablement. The product manager might be doing sales and doing their own sales enablement as a part of that as well. So just a much, much, much stronger emphasis on these people basically have to act like a startup. Sure. The parts that aren't like a startup is they're not like going out there and raising money for their thing and finding their own offices or whatever, but in some ways they…

AI assessment note: “treat it like a business unit actually, like don't treat it like a product team”

Q Just on the point about monthly product reviews, whether it be in this style of product building or kind of, kind of working on the core, how have you ended up running them and designing those?

A I have a set of 12 questions that I ask in every product review, and there's a very strict guidance of, like, you cannot move on to question two until you've sufficiently answered question one, and question one starts off, like, very basically, who is, who is your target user? And I love to, in that context of who your, your target user is, bring in that classic enterprise rent-a-car example. I don't know if this is, like, apocryphal or a real story, but when I tell it regardless all the time anyways, Which is that when Enterprise Rent-A-Car was getting started, they were competing in a field with, like, Hertz and Avis, and those guys had the airport real estate, and they had the, like, Audis and BMWs, and Enterprise Rent-A-Car really had nothing. And so there was absolutely no way to compete building the, quote-unquote, best service or best product, because they couldn't afford the cars and they couldn't afford the real estate. So what they did instead is said, our focus user is going to be people who get into car accidents, And our great feature is going to be car crash pickup. And that means that we don't need great real estate. And actually the great car doesn't even matter because these people just want a car while their car is in the shop. And it allows us to like have a wedge in a specific market segment without being the best. And over time, certainly expanded. And I, I…

AI assessment note: “I have a set of 12 questions that I ask in every product review”

Q When you are spending time with customers, it could be an existing customer working on a new sort of part of the product. It could be a net new customer. Are there any little things or ways that you spend that time that you find really useful for informing what you're building, how you're building it, how you're selling it?

A Um, there's that like David Ogilvie quote that Executives use research rather than judgment when it comes to evaluating something akin to how a drunkard uses a lamppost for support rather than illumination. Like, I think sometimes, especially with enterprise, we over-rely on research or RFPs or the things that customers say. And I think in my mind, the best product stems from a very, very strong mental model of the domain and the users. Like, and UXR can help you get to such a model and validate it along the way, but it's important to view the sort Syllogism as UXR model product, not UXR to product. And the main way to do this is like, have your hypotheses and have your model prior to going into user conversations. And when you're in the user conversation, uh, you're looking for just a couple anecdotes, like a couple pieces that helps prove the user need. And then later on when you're like, when you've actually got the product, the user might be testing it or using it. Um, something that a really great user researcher once told me Is go into the, that meeting expecting the user to sell you on the product rather you selling them. Like your default skepticism should be so high that the user is actually trying to convince you that this thing is necessary. Um, and there's a bunch of tactics and ways to do that, but sometimes it ends up with the user being like, no, no, no, I promis…

AI assessment note: “go into the, that meeting expecting the user to sell you on the product”