2024-10-15 08:00:00
The e/acc movement has become cringe because the creation of a movement is the last step in the creation of a startup/ecosystem.
Steps for building a startup: Find an inflection, uncover a novel insight, test a bunch of ideas around that insight, build and scale one of them, and start a movement (h/t Mike Maples).
e/acc jumped straight to the last step without building anything. Co-opted by clout chasers who found it easier to change their twatter user name than shipping anything of value.
P.S Even the Bitcoin Bros used their laser eyes after years of growing the crypto ecosystem.
2024-10-14 08:00:00
You want the transaction to happen as quickly as possible without distracting the user when designing for a high intent product.
For ride-hailing, you want the transaction to happen as quickly as possible for a user who is going to the office in the morning. Reduce the entire journey to a single tap if possible.
For medium intention use cases like food, you as a PM, want the user to feel like they are getting a good deal. So playing on price perception from home page itself is important. If you are providing a voucher, tell the users they have it and will get a discounted price. If you are running a 1+1 offer for some restaurants and you have tagged a user as price sensitive, try to show case items with that 1+1 offer as early in the funnel as possible.
For ecommerce, as it is low intent you can do gamification as well as other jazz. Let users unlock coupons by spinning a wheel. For apps like Temu the game is to make the user feel like they are getting a good deal and increase their intent to transact.
A lot of Chinese apps lean heavily on gamification. Shoppee and Temu look very different from, say, Zomato or Swiggy. And that is intentional.
2024-10-12 08:00:00
At some point, every executive has to ask what is holding back their growth.
A few years ago, a lot of cloud infrastructure companies (Azure, GCP) stumbled upon the same growth secret: If you can invest in fast-growing companies and get them to move their infra, it doesn’t take long to get that investment back. They were essentially underwriting their future revenues. Look at Microsoft and Google’s billion-dollar investments in various ride-hailing companies, and how they got those companies to move from Azure and GCP to AWS.
Zomato has exhausted their base of regular customers and your price has reached a point where they can’t unlock the next 10 million customers (which can be classified as the affordable/economy segment). The only way to unlock this segment is to lower price.
Of course, they can lower their delivery costs by making better use of their supply. There are dozens of supply-side optimisations that any on-demand business can do. And the more volume one does, the lower their quantum spend, because both fixed costs and variable incentives can be spread across orders. The more Blinkit grows, the better Zomato can drive utilisation.
But how much more?
Zomato will still need some demand-side incentives. How do they get restaurants to subsidise orders? Participate in discounts. Run more ads. Even carry more inventory as demand scales.
How can Zomato help with working capital for restaurants?
Lending.
Microsoft and Google invested billions and got their money back through infrastructure spending.
Zomato does not have the balance sheet/free cash flow to do that. But they can definitely partner with NBFCs to help their merchants with their working capital needs.
That money will come back to them. Merchants will order raw materials through Hyperpure. They will advertise on Zomato. They will even subsidise discounts to create demand.
If I were Zomato, I would even put a clause in these loans so that most of the money is used through the Zomato ecosystem and not through Swiggy. Can they do that? Who knows. The investment in cloud companies definitely came with clauses around infrastructure spending through them.
This is pure guesswork at this point, but my guess is that over the next few years, Zomato will make a big push into lending. First to restaurant merchants, and then to Blinkit franchisee owners.
P.S. I don’t work at Zomato and most of my posts are about what I would have done had I been in charge of a company’s strategy. That’s why despite Zomato recently withdrawing their lending licence, I still feel they will eventually go after lending.Toast has done the same in the US.
2024-10-11 08:00:00
Product builders need to have an opinion about the things they build.
Many of them don’t.
Let’s say you are the PM who is in charge of the home page at Zepto. Your company spends a lot of money on acquiring new users every month.
Do you have an opinion on how the first transaction of a new user should be carried out? Do new users look for items via search or do they go to the categories on the home page? Or do they find the relevant SKU on the home page itself because your feed recommendations are so good?
If it is the search, have you made the search more prominent for the new user and reduced the other elements that may just be noise?
What’s the right time to sell them ZeptoPass? Before they have even added a single item? After they have added 1 item? Do you throw a pop-up and when they click on the shopping cart icon ? Or when they land on the cart?
What is the right communication on the hero banner on home?
What do new users care about most? Is it the lowest price for items? Is it free money in their wallet? Is it free shipping on first X orders? Is it reliability? Reliability in terms of delivery time or reliability in terms of finding the item they are looking for (because Zepto has the largest SKUs (assumption)) or is it reliability in terms of items being fresh (for groceries) or delivered in the right condition?
Is the hero banner on the home page talking about what is most important to a new user?
Now, new users are not a homogeneous segment. The behaviour of new users may be different in different regions. As well as the segment they belong to (affordable vs normal vs premium). It might depend on the time of day, whether it is the festive season, whether your supply situation is good or bad at that time. But you still need a POV as PM if you need to have a high conversion at home.
If you are the pricing PM, do you show a discounted price with strike through on the base price, or do you mention that this is conditional and eligible above a basket value? Do you show the base price but mention in the banner that a coupon of value X will be automatically applied? Or do you automatically add the Zepto Pass and show discounted prices? Do you show free shipping + discounted prices? Do you show free delivery + auto applied voucher without strikethrough on the base and discounted price knowing that the customer might feel misled on the cart if you show that the prices are only relevant if the cart value is over a certain amount?
There is no right answer. And the easiest thing to do is to run a dozen experiments that lead to results that are statistically significant, but a combination that leads to a home page that delivers your org structure instead of what is most relevant to the new user.
How to have a POV? Think a lot about the different products you use. Keep thinking about alternative options in terms of design and strategy. And have people with whom you can discuss these opinions.
Recently I spent an hour with a friend debating whether a super app (Swiggy) was a better strategy or whether standalone apps were the way to go (Zomato).
Stand alone apps mean that every app owner has their blank canvas to work on. They can build standalone brands. They can have different social media strategies. You don’t have a dozen dependent teams to coordinate when you need to ship something. But you can’t also have a loyalty programme that rewards users for using multiple products in the super app. Communication to users is easier. You can send push notifications separately based on the JTBD. Users are less annoyed because they are not getting multiple notifications from the same app.
But there are drawbacks. If I buy a gift card with my credit card as a user, I can use it on either Blinkit or Zomato, not both. Zomato has to acquire users for both products separately. They can’t cross-sell easily. I remember for the longest time in my current company, we used to measure the percentage of MTU that was transacted across mobility, food and payments. We called it the golden triangle. Swiggy probably does the same. Look at what percentage of users of their food product end up using Instamart, Genie and other products. Swiggy has to spend money just once on acquisition, but can then cross-sell the same user to multiple products. Zomato has a deep tie-up with Blinkit, but when they launch District, they would have to figure out how to get distribution for District too. How they can cross-sell their current users and get them to install the new District app. But again, the District app owner will have full control over the customer experience. A different acquisition strategy. A different retention strategy and loyalty programme. They can move fast because it is like a new startup within Zomato. The Swiggy Minis or Genie PMs probably want better visibility at home and to do things differently, but they have to stick to the Swiggy design system as well as the various processes that have become standardised at Swiggy.
Of course, there are many more nuances. Why have super apps been so successful in China and South East Asia, but not in the US? A lot of think pieces have been written on why standalone apps are a better approach once Zomato becomes bigger than Swiggy.
Okay, I’ve gone on a long tangent, but yes, have a POV as a PM.
Caveat: Having a POV does not mean you always get to do what you think is right. A lot of organisational dynamics, including power plays between various people at the top, determine what decisions are ultimately made. It is a constant tug-of-war between product and business, various executives who sometimes have their own agendas. But despite all this, if you want to become a better product builder, you should spend a lot of time thinking about the product you are building, as well as the products you use every day.
2024-09-11 08:00:00
I saw a tweet comparing Airbnb’s stock price (founder mode) versus Booking’s (manager mode).
Airbnb has to be in founder mode because it is a seasonal business facing headwinds in terms of weakening consumer spend. They are generating more cash flow, but they cannot afford to be in peacetime mode. It is wartime for them. They have not been able to scale beyond their original short-term rental business. They tried to go multi-product, capture every transaction in the customer holiday cycle: announced flights (then did not launch), experiences (has not scaled), long-term rentals (TBD). Compare this with Booking, which has multiple portfolios and has (arguably) executed far better.
If you see tweets on Airbnb, it will mostly be people complaining about cleaning fees and how Airbnbs have become far more expensive than hotels.
Brian Chesky has no choice but to be in founder mode — or what Papa Horowitz calls wartime mode.
Instead of founder mode vs manager mode, it is better to frame it as wartime vs peacetime mode.
Low-margin businesses in terms of take rate with medium intent (food delivery, vacation booking) will probably always be in wartime mode. Deepinder will always run Zomato in founder mode.
While Google, one of the best businesses of all time thanks to ads, can afford to be in peacetime mode run by managers. Apple, which can launch the same products with different skins, can afford to be in manager mode. Facebook, in spite of Zuck, had somewhat turned into peacetime mode with high opex and huge employee bloat. Thanks to Apple making changes to ad tracking and thereby potentially affecting the Facebook ads business, and multiple public investors putting pressure on Zuck, Zuck cut employees and opex, got a whole PR makeover, and turned Facebook back into wartime mode.
And most companies, especially low-margin, execution-driven businesses, will follow this playbook now that ZIRP is over.