Where To Fish To Land a Unicorn with Oji Udezue, Twitter

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Startups if you want to start a company, focus on high intensity niche workflows. These are an easy place to attack, easy place to go Calendly When I was a Chief Product Officer at calendly we had five ICPs. Scheduling is done by almost everybody and anybody. But we broke down our ICPS and we focused on those people who found it mission critical. So we focused on sales, we focused on marketing. Our product strategy depended on high intensity niche feature development. So we nailed sales, we nailed marketing and we did not nail CEOs. We did not nail freelancers. I need some traction. You need some traction. Lets get some traction.

Hey what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host Lloyd Lobo. We're a community of over 100,000 people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before like Shopify, Twilio, Asana, and many more.

I want to talk about a novel way to think about opportunity that I think will be a useful shorthand to think about product features, product investments and even actually company investments. I have this really nice picture of a unicorn for you here because everyone wants to get a unicorn or build a unicorn so I think this is super relevant. First, About Me My name is Aji Udaiswe Phonetic in front of you. A product manager, occasional marketer, designer, founder, investor. The name Audrey is actually the Iroko Tree in West Africa is significant to my tribe. It represents strength and wealth and lives up to 500 years. I'm very proud of that name professionally. Why should you listen to me at all? A product and design leader, I've had small tours of duty in marketing and sales x Twitter, Calendly, Atlassian, Microsoft, Bridgewater From 2013 to about 2016 I built a startup that I sold and I spent a huge amount of time in startup mentor land and investment land as well. And I actually love acquiring companies either for the companies I'm with. So at Twitter for example last year acquired about five companies to help us drive our strategies forward. So who is this talk for specifically so it's really for product managers, it's for founders, and it's for investors. And what I'm trying to talk about is a different way to understand your addressable market, a different way to think about which kinds of customers to focus on. And I think the combination of those things will help you steer your feature strategy, your company strategy, without a lot of the voodoo that happens when we talk about product strategy. So the first thing is the first concept we need to understand. I think this is crucial to what I'm going to talk about is thinking about workflows, right? A workflow in the enterprise, whether it's mid market startup, encapsulates the way people work, right? Sometimes it just involves a worker getting results by doing something a certain way, or sometimes they pass output to somebody else. So my workflow turns into your input and you take work to the next level. This is pretty common. Or maybe it's a workflow that involves a whole team, right? But I guess what I'm trying to communicate is in product, we talk a lot about stories or scenarios and so on and so forth. But I want you to really understand that what we are doing is optimizing workflows. In fact, a workplace can be summed up as X people doing Y workflows. That's it. There might be many of us doing that, and frankly, it's not mutually exclusive. So multiple people sometimes share workflows. But that's what it is, that's what a workplace is. Some workflows are specific to certain departments, some are everyone does them, for example, email, everyone does that. And different kinds of workers may share workflows. Now I'm going to make a provocative statement and say compressing or eliminating workflows is how we add value via software. We remove painful ways of doing things and replace them with CPU and computers. And frankly, the other side of that is that when we do that really well, we also potentially can give people superpowers. So let's give a couple of examples I'm going to draw from consumer world. Uber, right? If you think about what Uber does for you, we've been hailing taxis for over 100 years, since basically the car was invented and you hailed a car, you told the driver where you're going, you got in the car, when you got to the end, you paid them. Now what Uber did was essentially compress that into nothing, right? All the hailing, the paying, all of that description of where to go, done, right? So Uber created value by compressing a workflow that millions of people have done for 100 years and. And they created value. Let's think of another example. Gong. Does anyone here know Gong the software? Okay. GONG helps you record sales calls and so that they become transparent and so you can coach on them. In reality, that workflow was only accessible to a few people, maybe a sales supervisor, a sales chief, sales officer, whatever that is. GONG made that workflow simpler, accessible to a lot of people, and so it made it faster for people to coach. So again, the point being, if you make workflows better, unlock parts of workflows, and give people superpowers, you're cooking with gas in terms of your software. So if that's true, if you accept my premise, which workflows are worth solving for profit, and how can you tell which workflows to focus on? Now, this is a very important question because I really believe that the kinds of workflow or the kind of problem you solve is by far the most important thing that you can do as a founder, as a product manager. Now, I don't. I think there are two levels to this. It's at a feature level, right, because you get to decide what features to build, but also at the company level, what you focus on. So another quick example. Atlassian, circa 2018, the company was reorganized in recognition of this workflow reality. There's a part of the company, Jira BitBucket, that focused on tech teams, so they created a tech team division. And as a part of the company, Confluence, Atlassian Stride, that focused on what they call all teams, because those tools were used by everybody. Right? So I'm basically proposing that you can be quite deterministic in helping people focus on the right things when you think of workflows. Now, a couple of quick notes. Workflows don't have workflows. Being the unit doesn't mean that a company focuses on just one workflow, for example, that's not what happens. But it's often the case that a company will focus on a cluster of workflows around them for economies of scale and economies of focus. And that helps you unlock value. So bottom line, some workflows are more profitable than others. And how can you tell ahead of time what those are? So prepare for simple. In this workflow, there are two things I want you to think about. The first thing to think about is who does this workflow apply to? On one hand, it can apply to everyone in the organization. On the other hand, it can apply to a niche set of people, either a department or a specific person. The second thing to think about in this framework is how often do people utilize this framework. So low intensity means that they do it, they perform the workflow, it's necessary to them, maybe once every couple of weeks, once every month, maybe longer than that. And high intensity means it's daily or weekly on the outside. Now if you combine those two things, you have a quadrant that goes with intensity on one side and niche on the other side and number of people that it affects. So going from left to right, you have what I call the high intensity. By the way, when I say intensity I just mean frequency. It really means how often is this workflow performed, day to day, week to week, month to month, et cetera. So from counterclockwise you have the high intensity everyone workflows, you have the high intensity niche workflows and then you have the low intensity niche workflows and the low intensity everyone workflows. So let's talk about these four things and this quadrant and then talk about how they represent opportunity. And we'll do a little bit of proof so you can understand how to use this as a tool for yourself. So we're going to talk about high everyone, high intensity everyone workflows. These are the most lucrative workflows because from the doorman to the CEO, people perform this, right? So basically you have all the seats in the enterprise times your subscription dollars. An example workflows for high ev, which means high intensity everyone workflows are communication, calendaring, writing, communicating ideas. Everyone does these things, right? And example tools you can see email, team chat, et cetera, right? And the companies that dominate these workflows 10 tend to be the really big companies. You can see a bunch of incumbents and also new entrants into that market from for high EV workflows. But generally this is a very competitive high capital segment to be in. And frankly I work for Microsoft and so I know that Google and Microsoft will never see this market because they understand how profitable it is. A couple other things related to this market is low user prices, product bundling, and because of the capital requirements, a high barrier to entry. And now there's a part of what I'm going to do with these four quadrants is just make some predictions because I'd love to test this framework for everyone in public. So you'd expect lower subscription prices because frankly it covers everyone. If you make it too high price, people won't buy it. You should expect the highest addressable market for a high end workflow workflows, right? And profits and enterprise value. You should expect medium growth, right? It's it's not like these are not. These are markets that have been around for 30 plus years in computer science and not as competitive because it's hard to enter this market. We'll pick up the pace here. High intensity niche workflows are the ones that in a department or a person. But they're done frequently, right? So think about engineering. Lots of people using Jira for example, or support. Lots of people using Zendesk, outreach people using customer success, et cetera, et cetera. Now there's no need to talk about the companies because the tools are generally synonymous with the company. So they're really easy to recognize. These tend to be expert tools, right? They're being used by a department. They have high configurability and relatively high per user prices because they essentially form the OS for whatever you're deploying it for. So a few predictions. You should have higher relative subscription prices because people want to extract more money from a department than if it's everybody. You should expect high TAM and high enterprise value, but lower than the high F segment. And it should be super highly competitive. Why should it be competitive? This HAINAI group is where there lots of innovation people unbundle big apps, people have new AI techniques so they're constantly trying to solve the same problem better. And that's what makes it competitive. Low intensity. Everyone workflows are moderately lucrative, right? Everyone does them. So that's all the seats in the company and there's some dollar subscription attached to that. And some of the examples are HR right now I don't know unless you're in hr. You use the HR tool when you need to. Right? And no more. Right. The HR department does a lot of it, but you don't. Expenses. End of the month recruiting when you need to recruit, workday when you need to do reviews. Those are some of the examples. And here you should expect relatively higher per user prices because it's not high intensity, it's low intensity. So people are trying to arbitrage or companies are trying to arbitrage. The fact that this is less important to some people. So here's some of the predictions for that. And then the last one is low intensity niche workflows. Now I have some advice for this. If you find yourself in this segment or your ICPS are in this segment, they're generally not as lucrative. They're niche or their departmental seats and things that people do infrequently. Auditing, backup and archival content updates, surveys. Right? And what you would expect in this market, if you're predicting will be high subscription prices, lower growth rates, not as competitive. And one of the things I've observed in this market is use of analytics and AI because people need to prove that they've done work for you. You because you touch the tool so few times. A couple of quick exceptions because I want to make sure that you can use this tool properly. Infrastructure SAS is different. So when you think about databases, snowflake, things like that, they're really high intensity everyone workflows. But you can't see it because Twilio for example just works underneath the covers. So it's a little bit of exception to think about in this framework. And then of course there's vertical SaaS. Vertical SaaS different because vertical SaaS tends to recreate all the tools. So usually when you have a vertical SaaS company, you can see all four quadrants happening at the same time because they're happening in medicine or they're happening in construction, so on and so forth. So how do you test this? How do we know that this is predictive? One of the things that I did, as I said thinking about this and studying about this, was to take the top 50 B2B SaaS companies and overlay them on the quadrant and think about how many of these companies fit, do their target workflows fit into this quadrant and how much money do they make? What's the enterprise value? Right. And here is what I found out. So this is what it looks like. I think I restricted this particular one to top four 30, although I've done 50 and 100 and it holds up. And you can see that some of our predictions are borne out. High ev, the biggest companies in the world dominating those things. Hi naive, very competitive most of the rest. And low incidence in low intensity niche and low intensity everyone workflows. And so when I did the math and the analysis I found out that combined the EVs in the high EV quadrant is by far bigger than the enterprise value anywhere else. And also revenue, actually I did EV analysis, revenue analysis. And of course the next highest is the high niche workflows. So if you summed up that quadrant, it was bigger than that quadrant even though it contained more companies and the other two just contained only a few companies. So those just fall out by themselves. So I guess what I'm trying to say is using this workflow you can actually predict, using this framework you can actually predict the time, the opportunity in your B2B startup. That's what I'm trying to say. Now a couple of things I do quite a Bit of investing and founder help. So this matters to me. It helps me think about who to help, how I can help them, how I can steer them correctly. And I have a few recommendations actually. By the way, this is deterministic predictive where it doesn't seal the fate of a startup or seal the fate of a future by no means whatsoever is just another tool for you to use. So a couple of pieces of advice that I do for the company's advice is if you want to start a company, focus on high intensity niche workflows. These are an easy place to attack, easy place to go. Calendly. When I was a head chief product officer at calendly, we had five ICPs, right? It was basically a high F tool. Scheduling is done by almost everybody and anybody. But we broke down our ICPS and we focused on those people who found it mission critical. So we focused on sales, we focused on marketing. So even though we were a high F product or we could potentially be a higher product, which means high intensity everyone product, our product strategy depended on high intensity niche feature development. So we nailed sales, we nailed marketing and we did not nail CEOs, we did not nail freelancers, for example. Right? And so the advice basically is your path of travel is high 9 to high F, right? Or low intensity everyone to high F. That should be your trajectory of travel. As you find more success, you should certainly attack everyone workflow. Atlassian found success in tech teams and it launched Confluence which is a word replacement. And we tried to launch Atlassian Stripe which is a slack replacement, a teams replacement, right? So this a couple more things before I round this up. Finally, this is just a framework, it's not destiny at all. Pay a ton of your attention to your customers. If you feel like you have a company that is in a bad quadrant, what you should be thinking about is how do we steer into good quadrants for this? There's a company I'm advising and they're in the low intensity niche workflows, right? Well, they have some ICPs and high intensity niche workflows and I'm working with them to get them there to focus on that customer. So in general, move your solutions towards high F and use this to sense check your future investments. One of the things that a startup has to do or a company has to do, I don't care what stage really bracket your future investments because everything costs time and money and so you should be focused on directing your future progress. So let's recap. Thinking about workflows in a very specific way as a unit of productivity and enterprise is very important is a key way to unlock B2B strategy and undergirds the concept of ICPs. How many people in the enterprise and how often they repeated workflow is a very interesting way to think about opportunity and the size of opportunity that happens or that will unlock by your company or your product investments and a way to predict future enterprise value. You can also use this to shape your bets and to shape strategy. So that's it. That's my tech talk. Hopefully I've given you like a really very shorthand way to think about future investments. Think about company investments. Thank you very much.

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Thinking it was brilliant. Now I know that it's no way for you to.