Product Development with Gayatri Sarkar

Hello everyone, welcome to Growth Strategy for Product Development in the Time of COVID-19. We are here to talk about some product development strategies today. I see everyone joining us. Welcome, please put in the chat where you're from. I'd love to hear from you and we have a very global audience and we know we talk to people all over the world. It's great to know where people are calling in from today. I'm calling in from the Bay Area from California today. My name is Rachel Shephard. I'm the Director of Global Marketing at Founder Institute and the co-creator of the Female Founder Initiative. The Founder Institute is the world's largest pre-seed startup accelerator, and we've launched over 4,000 companies around the world and in 185 cities and 6 countries— sorry, 75+ countries, 6 continents. If you're interested in learning more about Founder Institute, we're currently enrolling across all 6 continents. See the list of enrolling cities at fi.co/enrolling. But without further ado, I'm here to, I'm here to talk about product development today with Gayatri Sarkar. She is a VC startup advisor and podcaster and partner at Hype Capital. Gayatri is a partner at an Israeli tech VC fund investing in the future of sports. One of the first or few women of color is GP in the sports fund, currently investing in tech that's creating new market behavior. That's Gayatri's biggest interest these days. She's former Goldman Sachs, Federal Reserve Bank of Boston, as well as a two-time founder with 16 years of experience in venture capital and tech corporate consulting. She started her career as a database architect in the fintech industry, which gives her perspective in tech investing. She also tells stories of women and diverse GPs, institutional LPs on She VC Podcast, which we will put the link in the chat for you to check out, to make investing more accessible to women and diverse fund managers. She supports multiple companies and large asset management firms as a board member and advisor and is focused on diversity mandates through investments for women in diverse podcasting, of course, as well as with founders and in partnership with women in the VC community of over 2,500 fund managers and institutional LPs. She's also on the nonprofit board of Harvard Kennedy School NEA, and she's here with us today. So she is incredibly experienced and is going to share so much knowledge. Gayatri, is there anything I left out, anything you want to say to the audience?

No, I'm super excited to be here. So thanks a lot for the kind introduction, Rachel. And I think I got to know a little bit about Founder Institute, I think, before starting this video call. So definitely super excited. To be here and to connect with every one of you. I hope you all are doing well and keeping yourself healthy and safe during this uncertain time.

Yes, absolutely. And we see that we have people joining us from all over the world today. I see Canada's in the house, Morocco, Spain, Philadelphia, New York, Nashville, Brooklyn. Welcome everyone. We're so excited to have you all here. And I'm not going to keep delaying anymore because I know we want to hear from Gayatri and her amazing experience. So I'm going to turn it over to her for a quick presentation. While she's presenting and sharing something that's just truly, truly valuable, especially if you're building a product right now and you're having to make changes to your product right now, please do put your questions in the chat. We're going to be collecting those and going through the questions for about 20 to 25 minutes after her presentation. So Put your questions in the chat as they come up, and we'll be getting to those in a little bit. So Gayatri, without further ado, I turn it over to you.

Oh, thank you so much. So hi, everyone. Welcome if you are in the East Coast, West Coast, or any parts of the world. I work very closely with Israel, Germany, and obviously sometimes with Asia. So super excited just to be part of this large global audience. And to present today what I'm going to talk about, product growth strategy in times of COVID-19. So I'm going to share my screen with you guys. Just a minute. Okay, I'll put it in the presentation mode. Okay, I hope you guys can see it. So today I'm going to talk a little bit about Growth strategy for product development in times of COVID-19. I spoke about this at a couple of conferences, as I was telling this to Rachel, and I got a lot of positive feedback because this is something everybody's struggling, whether you're an early stage startup, whether you're a mid-stage startup, whether you are a late stage startup. Now everybody has to go through their own process of journey to understand what's good and what's bad. Every stage has a different kind of technique, but I'm going to talk about a few areas and few techniques that can be used in early stage product development also when you're still trying to figure it out that, okay, is this the right path to go when you're still trying to figure out product market fit strategy? So I'm going to take the example of Lego. I cannot do a poll here, but I believe every one of you over there has played with Lego. And we are super excited. When we were kids, enjoyed Lego as something that is a part of our recess time. You know, at that time there was not much of an Xbox or video games, and even now also kids are playing with Lego. And I'm going to talk how Lego has evolved as a company and how can it— how can that example be taken as a very good opportunity for us, especially on this platform, to talk about early stage product strategy. So this is obviously not me, but a child in his childhood memories, you know, building Legos. That's our favorite childhood memories. Alone in our houses, we have a pure joy of building new things. We were not, we never thought of ourselves as an entrepreneur at that time, but we just wanna build new things because that's a part of our DNA, who we are. And Legos have built some amazing, products around that line. And that's, I think, one of the beautiful memory that we have when it comes to LEGO. Now, in 2004, LEGO has filed for bankruptcy. They were almost at the verge of bankruptcy. They had a $300 million loss. And LEGO is not a public company, it's a private company. And that was a huge loss for a company at Lego size. So we want to understand that what they did during that time that changed Lego as a company, Lego as a product, and it became the company what we know today. So it became now the most powerful brand in the world. It has even overtaken Ferrari. In 2015, it surpassed Mattel, the largest toy maker, and the current revenue of LEGO is €5.2 billion, just only in construction toys. And you know what I mean by construction toys. So how did this journey happen? Like, how can someone become like somebody who is at the verge of bankruptcy to the most powerful brand in the world? So we're going to travel the journey with Lego and learn what are the things where they have failed and how can we bring that into our experience, into our product development. So when Lego declared bankruptcy, what they did during that period of time is that just like any other companies, they built closed-door products. So closed-door product development with no feedback loop from consumers. That means in those time they didn't ask the consumers or the customers, what do you want? I think the current trend is this, and I think I'm going to build something like this. And that is what is called a closed-door product development strategy. You hire some great, um, developers, you hired some great product strategists. They understand the market trends and they think like, okay, this is the market trend. This is my research. This is my data overseas. I don't know if that data has a direct loop, feedback loop from the consumers, the existing consumers. And they think this is a great opportunity for us to build a product and then they bring it to the market. So they have a very centralized sales channel. I would also like to talk about what do you mean by centralized sales channel? In olden days, centralized sales channel is almost like I have bunch of sales companies, sales executives, is it outsourced or within the company? And I'm going to ask them to go and talk to all the executives of other companies. So it's a very centralized channel. It's very top heavy. You talk to the executives and bring the product into the company, whether it's B2B or B2C, and you tell them, hey, this is a great product, use it. And then you just tell your consumers, use that, or tell your customers, So there's a big, big problem in that. Whenever you are asking your sales channel to be much more centralized, you have a very top-heavy approach and you rarely takes into account what does customer needs, what their customer wants. And that is not the way to build a great company. And nowadays specifically, this is very, very important because the entry to barrier has become almost nil. Creating a company is very easy. You can create an LLC or create an S-Corp, C-Corp very easily. There is not much of a dollar amount involved in creating early stage products. If it's a software product, if it's an app, because the early friction that was there, whether you're creating a website, of the servers, you have to physically buy things. Now it's not needed. You have AWS, you have cloud infrastructure. That's kind of making much more flexible. It's actually giving much more flexibility to the product development strategy and breaking all the entry barriers and making much more startups reliable and to come forward. And that's why we're seeing many, many startups becoming unicorn in a very short period of time. Whereas IBM and other companies like that in olden days took a long time to travel that journey. So how they changed their destiny, how they changed their, you know, the position where they were in at the bankruptcy or the verge of bankruptcy, $300 million loss, and became the most valued brand in the world. So I'm going to talk about that. And that's why I've given a love sign. How did their customers fell in love with them again? What we saw, the customers were not liking what they were building. So they had forgotten one of the most important thing that matters, which is one matrix that matters, which is build. Lego was literally created to build. Lego was actually built by, I cannot pronounce his name, Mr. Kirk. He cuts, he actually built this product Lego just as a construction toys so that people can build new things. That was the biggest matrix. For which Lego has— Lego was actually built. And this is something I would try to make you, all of you, understand, that when you are building a product, there are a thousand ways to do things, but you need to understand what's your number one, um, you know, focus area. What is your number one expertise that makes you different from any other competitors that are out there? And you need to focus on that. So what Kirk did He came back and he's like, you know, with $300 million loss and the verge of bankruptcy, I'm going to cut out 90% of the product strategy and focus on bricks. Bricks is the construction toys because that's the only reason Lego was built. So what they did over here is that they try to focus on things that are certain, try to focus on things for which people love them. Initially they were building a fragile company because they are trying to do like, okay, I'm going to do Star Trek toys, this toys, that toys, but they fail to understand the one matrix that matters, which is one thing that they have to build. So this is something very, very important. And we all know that in a fragile company, it's like you are building something that if I do 1 to 4 steps, then I'm going to get to the next 5 steps. But you are not considering some of the vulnerabilities that's gonna come not just from the market, not just from the consumer and the customers, but also from your competitors. It can also come within your company also, from your team also. You need to understand and you need to bring into effect the couple of other areas that can be vulnerable, that can produce fragility in your company. And I think that is very, very important to understand when you're building your product. So product which are built with high leverage, they generally have a very high burn rate. Now when I talk about burn rate, it is mostly for companies. People understand that, okay, burn rates are companies which has raised tons of money and they are burning money right now and that's why they have a higher burn rate. But it can equally go in similar direction for early stage companies. People fail to realize that because They think money is the number one asset. They fail to understand time is the most important asset. If you're spending your time, energy, and resources and a very little bit of money, you might be bootstrapping. You are not focusing on one matrix that matters. You are having a higher burn rate. Money is not always the factor. So try to understand the amount of time that you're spending on things that not— that does not matter. So your focus should be one matrix that matters, and your burn rate should be only focused on one, one direction. Okay, no path for monetization. People are again going to ask the question, okay, am I— I'm building a product right now, I need to find out product-market fit, why should I care about monetization? I need to first find out "If my customer is going to like my product and if they like it, then only I'm going to think about monetization." And I think that's a huge problem. Monetization is the first thing that you should think from the very get-go, the moment you are creating a product. The moment you're thinking, "Okay, I'm going to create a product. I'm going to bring it to the market. What's the path for monetization?" You need to understand the moment, if it's a B2C or a B2B product, the moment you have one consumer, two consumers, after a certain amount of consumers, you need to give them, you know, that opportunity. You need to give them that slight, you know, inclination that this is the time you, you need to buy this product. This is the time you can buy this particular package. You're at a basic package, you can go in a premium level package. You need to find out that, that classic balance where you are not alienating your customers. You just give them a little bit of interest of something that they like, and if they want to be more involved in that, they need to pay for it. If they don't pay, they need to have an opportunity. Okay, I'm not paying, I'm going to bring more customers. So you need to build that traction, you need to build that path for monetization from the very get-go in your product development strategy. You don't have to do it immediately, but it should be a part of your strategy. Higher churn rate. Now, a lot of people may not understand what does that mean. It means the amount of customers that are coming in, in your product as someone who is a, you know, I love this product, I want to use it. And then the number of customers are like, you know, I like it, I used it, I don't want to be part of it. So you need to understand what's your churn rate, even if you have 1 or 2 customers, even if you have your mom. Your grandma using it and after some day your grandma is like, you know, I love you, my dearest grandchild, but I don't want to use your product. I think this is not something I want to use it daily or monthly or whatever. So you need to figure out at an early stage, super early stage, or it's a mid-stage, what's your churn rate and why your customers are not staying. And if you think that suddenly you got really great customers, 10, 10,000 customers or 100 customers, and after a month they're not using your products, you need to go back and ask them what's the problem. And those kind of products are built, are called fragile company. And also low ARR. Obviously, annual recurring revenue is not something an early stage company has to worry about, but some of you may have some kind of a revenue that you have already started to build, and you need to understand if you're that, if you're that monthly revenue or, you know, weekly revenue or bimonthly revenue is going low, what is the reason? Ask that question. The most important thing, if you see in this ranking, I have not put number 1 because the number 1 thing that only matters over here is that betting on certainty. What I said before is that you think you're going to do like this and the next step will be this. So you need to understand you are building a fragile company, you're focusing on that. Now I would love to talk a little bit about what are the key elements for building antifragile product growth architecture. If you have not read the book of, you know, Nassim Taleb on antifragility, I will strongly recommend you to read that book. It's a great book to understand how to build a product, how to build a company. Even just in person, how to build an antifragile mindset. So there are 4 ways to look at it in, in your product growth architecture: decentralization of product community, agile product, interoperability, promise-market fit. I'm going to deep dive into each of these right now. Decentralization of product community. So we talk about decentralization a lot, specifically after blockchain, but people did not realize that decentralization is something that came into our life when we had The moment internet came, we actually created global consumers and we created a platform where everybody is at equal footing. You know, they can play equally. And I think that is very, very important when you're building a product and creating a community. People fail to realize that how important it is to create a community. You need to find people who love your product, who vouch for your product. And they're like, hey, This is something I like. This is something that's great. And you need to have a very decentralized community. And by decentralization, I mean why you should not have a centralized, like a top-heavy community instead of a decentralized community. I'll go into that in detail. But first, I would like to talk about how LEGO used a decentralized product community to build their product architecture and get back in their zone and became one of the love— beloved product company. So what they did is that they did— they crowdsourced their venture. They created an open innovation policy through Lego Ideas portal, and they used user input to generate product ideas. So obviously they realized that 90% of their product strategy is not working. So that means they have a closed-door product development strategy, what they did, they opened it up. They created a decentralized platform and they have the open innovation policy where anybody can come and put ideas in their portal and they will select that what are the ideas that they wanna work in. So this is creating a very open loop channel where people can come and give them feedback. Hey, this is what I wanna do and this is what I think that Lego is great. They actually welcomed adult Lego builders. You know, as we, as I said, like, we have a lot of great memories as a child during our recess time using Legos. But what Lego did fail to realize that the same children were at their basement creating Legos. They have become adults and they're still playing with Lego. There are a lot of artists that are playing with Lego. There are a lot of artists that are actually building Lego. There are a lot of architectures that are built on Legos. Architects are using these opportunities. And then there are a lot of people that are using Lego just as a good time to play with their children or to use some other work-related projects. So what Lego did is that they tapped into that decentralized product community to get that ideas from them and what's the next thing that they can build. Now, before I go to the agile product with feedback loop from customers, I would love to go back and talk a little bit about the decentralization strategy. That for an early stage company, what you can learn from that. And you may ask this question to me that, you know, we are early stage companies, our customers, consumers are not aware of who we are. How can I just have a crowdsourced venture? How can I have open innovation policy? Your platform is something like that, that you need to create an open channel and ask those questions to consumers, to customers who don't, who, who they don't know, like who don't know who you are. And also the fact that they don't know what you're building. So it's always important to engage in a social media. Right now, social media is the best option. I will not ask you to go out, venture in the open and ask people, but Create a community, find out a community where they are feeling the pain point of certain things that is not happening and ask those questions to them. What kind of things that you want to find in a product? And when you build a beta product, send your beta product free to a lot of people and ask for advice. I think that creates an open door feedback loop. And you can understand that why that is important because when you have a very decentralized community, people want to be very participating. You want to make your customers and consumers feel a part of their product, as if this is something that they want to be a part of. I think Slack also has a similar mentality, and that's how things started in Slack. I would love you to go back and read the case studies on Slack. They did some great, amazing opportunities when it comes to decentralization of product community. Now, agile product with, with feedback loop from customers. So what LEGO did is that they created a rapid prototyping philosophy. Only develop few key features that are needed, develop in smaller parts requiring less commitment. A typical engineering mistake is wanting to invent all the things the product might consist of in one go. This is the biggest problem with any engineers, any developers, you know, any tinkerers who wants to build. They think that, you know, I think my customer wants this, my customer also wants this. So if I build A and then I can add B to it and then can add C, maybe it will be a great product. I'm giving a full solution to my customer, but that's not your job. You need to understand what one thing that your customer is missing focus on that. Don't build 1,000 things. Then what happens is that people get distracted, you get distracted. So that's what Lego also did. Instead of doing 1,000 things, they created a rapid prototyping philosophy. They found out some of the key features that's gonna work, they build it very, very fast, and they immediately went ahead and asked for feedback. And that is very, very important. One of the most important thing I want to tell when it comes to product development is agility, not perfectionism. People want to be perfect. Perfectionism is not the way to achieve. You can never be perfect. If you ask Mark Zuckerberg or anyone who's building any kind of product, think about the early days of Facebook, Twitter. The, the— whenever you're building a product, your focus should be on traction, getting customers, okay? Don't try to focus on building a perfect product because there's no such thing as perfect product. Just there's no such thing as absolute truth. So it's very important for you to understand rapid prototyping philosophy is very important. When you think this is something good, I'll build it very fast, get to the market, get feedback. If it's working, great. If it's not working, why it's not working, which part needs to be fixed. Developing smaller parts requires less commitment. This is very, very important. This is where you can check your burn rate because your time and resources is very, very important. If you develop multiple key features, you will not be able to keep up with your own burn rate because you will be getting frustrated that why you are unable to achieve what you're supposed to achieve. So agility in pricing strategy. This is also something very important for early stage, mid-stage, and even for late stage companies. Consumer feedback is power. I think people need to realize that when you're building an agile product, the pricing strategy should be built inside the company, inside the product architecture. And you need to understand what's the consumer feedback. You need to understand that when you get your consumer feedback, that is the most important, powerful thing. And that's the only thing that should matter to you. If your consumer or your customers, you know, is a large company, big companies partnership, understand what they need and why you're unable to deliver it. Or why you're able to deliver it. Monetization from the go is the new go-to-market strategy. As I said before, the monetization part should be a part of your product development strategy. You're giving basic product for free right now, but you need to understand if not now, maybe in 5 months, 6 months, or may— after this many consumers are gathered, there should be a path to monetization for that particular product or for your platform or for your app, whatever you're building. Continuously assess your pricing strategy. Don't leave money on the table. This is a very important factor. People don't understand, but if they do not continuously assess pricing strategy, they leave a lot of money on the table. They are working hard, they are having a higher burn rate, but they are unable to make any money because they are giving their products for free. So this is very, very important. Interoperability. This is something, as I said, like this is something, another, you know, feature. People talk about this a lot during blockchain movement, even now. But interoperability is something that people need to understand that LEGO used in order to move ahead in the brand development strategy. Because what LEGO did is that they didn't want to bring another toy. They wanted to build a system. System of toy, which is if you, you cannot buy one construction toy, one brick, and go to your home. It's like, hey, I'm going to build a product. You need to build it. You need to buy a ton of the similar things and then match them together. Similarly, whenever you're building, taking your product into the market, you need to understand who are your customers, how you can work with your customers, how you can work with your partners. Partnership is very, very important, and that's where the interoperability lies. You may find a lot of your customers and consumers directly from your partners. Some of your partners may already have existing consumers, existing customers. How can you leverage that and build your product on top of it? And that is the power of interoperability. As you engage consumers to buy more, they see multiplication of opportunities. So the moment you engage your customers, they will see that, oh, there's an opportunity for me to buy more of this. So engage is the number one criteria in this line. Ability to share information and services built into your product architecture requirement is very important criteria for interoperability. Why is it so? Is that the moment your consumers, your customers, your partners are using your product, there should be a way they can share information and services. Because that's how you are building a stack of layers on top of each other. You know, that's where you're building partnerships ahead in creating an interoperability. The puzzle is coming together. You're not alone now. You are building a community, not just of consumers, customers, but you're also taking help of others to move ahead. This is very, very important. How do you work well with others? So this is a part of the interoperability. If you are an early stage company, you need to understand that, you know, we always sit en, en out there looking for fundraising, and then there are companies that are raising money, tons of money, and we are like, hey, we are sitting in silos. Are we the only one who are unable to raise money? The difference is that You feel you're in silence. Rest of the others, they are working with other partners, with other people. It's very important for you to understand how well do you work with others. Learning through adoption is a number one criteria. Staying relevant in the crisis is a number one criteria. Creating partnership with companies that are enabling new market behavior, very important. Not all growth is success. So going back through that is that try to adopt ideas very fast and develop those ideas very fast and try to adopt great strategy with other partners. You need to stay relevant in this crisis. Even if you think that your product doesn't have a relevance during this crisis, your product is suppose a brick-and-mortar, you need to find an opportunity how to digitize that. Okay. And you need to find some way to stay relevant that people needs to talk about you. The moment people are not talking about your product, your consumers, your customers, even if you're a B2B, your partners, they're not talking about your product, that's not a good sign. You need to find out a way to stay relevant. Creating partnership with companies that are enabling new market behavior. This is very important. This is all about growth mindset, not just for your product, but for founders also. You need to find, go out there, create partnerships, and, you know, enable this new market behavior for your companies, for your product, and see what are the opportunities that lie there. And not all growth is success. You may talk to 1,000 customers, 1,000 consumers, or 1,000 partners, but you need to understand, again, one matrix that matters. You, if you are trying to establish yourself in one particular vertical and you think that's the only thing that matters to you and suddenly there is a growth opportunity that is coming in other sector and you're trying to pivot, that's good. But you need to understand that if that growth is important for you and if that growth matters, you need to also figure it out. There are a lot of yes you may hear, but you also need to say no to hear a lot of nos. Because you have to focus on one matrix and all growth is not success. So a lot of lateral growths may happen and that may not end up in success and that may only end up in higher burn rates. So LEGO found its truth in adult fans. Adult fans of LEGO for the design team, they found these adult fans and began to crowdsource new toy kits. and that is their biggest truth. So the promise market— that this is a very important criteria that I want to talk about— loyalty, trust are built into the product system architecture. And if you're gonna ask me, what is loyalty and trust and how can you build that into the product architecture? You can talk about your product a lot, but if your customers, if your consumers, if your clients do not have a trust factor, do not find this is something that I want to put my name with, this is not the product for them because you're not building a promise market fit. We talk a lot about product market fit, but promise market fit is something that the customers feel proud to be associated with. Understand consumer behavioral economics is tied to innovation. Everybody is a part of innovation model right now, even if you're not realizing it. But we all are taking a very, very small step or sometimes a larger step towards innovation. And you need to understand the behavioral aspects of your consumer, how your consumer spends, how your consumer thinks, how your consumer's gonna act during this crisis, after the crisis. So understanding your consumer's mentality is very, very important. And that should be tied in your product architecture, in your innovation. And that's the promise market fit that you are building for your consumers. So this is my, I know I kind of, I think I went a little longer with my presentation, but you can follow me on Twitter, but GS_VCActivist. I will put this presentation on the Medium. You can follow me on Medium and you can find more, much more details about this particular presentation. How it can help your early-stage startups in building some great product. Thank you, guys.

Thank you so much, Gayatri. And I have some follow-up questions from the audience from this great presentation. So to kind of kick it off and to talk a little bit more about promise market fit really quickly. So a lot of founders may be familiar with the term product market fit. How can— can we dig in a little further on the difference between product market fit and promise market fit and 'Cause promise market fit may sound to some people like it's specific to impact companies, but as we discussed, it's not. So can you dig in a little further on that real quick?

Yeah, sure. So I, and actually Rachel had this discussion before everybody came in. So promise market fit, are we talking about impact growth companies? I said, no, actually product market fit is something which is the number one criteria because at the end of the day, either when you are building a venture growth companies, you need to understand that you need to find your way into the market. You need to have a market which is bigger, a market which is much more, you know, something that can— people feel like, okay, it's a bigger market, we can give you money and you can scale. So I think the scalability factor, the fit factor always works with product and market. But the promise market fit is that when you enter the market with your product, you're gonna attract consumers, customers, partners, you know, so all different kind of people. And similarly, you're gonna attract investors also. But what promises are you giving it to your customers, your consumers? You will find a lot of companies that are coming in the market and they immediately go off because their consumers and the customers fell in love with them, their partners fell in love with them. It's a B2B. They're like, oh, I love that product. But they also fell, fell out of love because they did not find there's a trust factor involved in it. There's a loyalty factor involved in it. I'll give you a great example of what is going on with Facebook. When Facebook started, we all loved it, you know, but how many people nowadays trust Facebook? You know, nowadays mostly our grandparents are using Facebook just to keep a tab on what's going on, you know, in our lives. But I feel trust factor is very important. Do not build a product where you're doing some kind of a non-ethical thing. Do not build your product where you do not tell your customers what you exactly doing with their data or how you are managing that product. I think that is very, very important. The moment your product comes into the market, your customers, your clients needs to trust you, needs to love you. I think that is an important factor, important criteria, and you should always keep that in mind.

Wonderful. And so kind of along those lines is a follow-up question. How can a new company that's pre-product or maybe even prototype, you know, they're building it and they haven't gone live yet, start to build that brand trust and loyalty before they've had a chance to go to market?

So yeah, I think that's a very important question. Like brand trust, loyalty, You need to understand when you are at a very early stage game, we investors do not invest in the product. We are basically investing in you. So your brand, your product brand is you. So as a founder, you need to find your brand. You need to create that community around you that people say that, hey, this guy, John or Tom is building something. And I think he will be, he'll be doing great because I think I trust this guy. And the branding first starts with the founder and that's when, and the next is the product. So you need to start thinking about your particular branding. Are you a thought leader in your vertical, in your sub-vertical? Because as an investor, if somebody is writing a check or whoever is writing an angel check also, they need to understand that if they can trust you also. With their checks, with what you're doing, or even customers nowadays, you know, if you're building a product, you're asking people for their phone number, email addresses, whatever. Do I trust to send all this information to this particular company? So I think that trust factor is very important. Again, I'm talking about trust, but I think trust is very much involved with the branding.

Absolutely. And sort of a housekeeping question. So Nelson, David, and Abdul Jalil all wanna know, What is the name of the book you recommended? So the book you recommended during your presentation.

Oh, okay. I actually don't have the name of the book, but this is the funny thing. I created this presentation because one day I was sitting with my son. I have a 22-month-old and I was— I don't get a time to watch TV. And I was just going through the channels and on HBO they were showing Legos. I thought they were just talking about people building Lego and I was I was surprised they're actually talking about what I said in this presentation. They were actually, they were obviously talking like more like a movie, like how this is done, how that is done. I was like, that's an amazing story of product growth strategy and it should be put. And later on after I created the presentation, I found there's tons of books that are written on LEGO's product growth strategy. So if you go to Amazon or just search in Google that the books that are written on LEGO, I think you can find those books. I unfortunately, I do not remember the names and I haven't, I have not read those books, but there's one book that I talked about during Fragility and Antifragility. It's called Antifragile. It's by Nassim Taleb. He's a very famous economist and he's also a behavioral economist, you can say. And I think any startup founder should read that book, even if you are not a startup founder, You should think about how to build an antifragile character also. That's a great book to read.

Awesome. And that gets to our next question, which Alicia said, do you recommend any other books for product development or consumer goods?

I'm not. So this is the thing. I'm a big nerd on books, but I don't read typical books that come. But I think there are some great books written by— there is a recent book that came, the startup community, And this is by Brad Feld. You can read that book. Also, Brad Feld has written a couple of other great books also. I will also strongly suggest to follow a couple of important blogs, you know. I can give some, a couple of suggestions. It's not coming in my mind right now. But when it comes to book, I think the books, by the time you write the books and they come in the market, it takes a long time. You know, the market strategy has changed. So I will strongly suggest to keep up with the strategy. Follow some great product developers. They talk about product development and other things on Twitter. I think Twitter is a great source of learning. I know there are a lot of founders who are on Instagram because they want to showcase their product on Instagram, but I strongly suggest to be on Twitter because there's a lot of discussion goes on regarding product development, market strategy, and a lot of other things.

A lot of investment conversation as well. Yeah. Awesome. So do you have favorite examples of what you would define as open-door feedback loops with customers? So you talked about what a closed-door feedback loop can do to product development. Do you have good examples of an open door?

Yeah. So open door, the biggest example how LEGO did. So they created an open innovation policy. It's like, hey, anybody can come in and give me suggestions. What, how things can be done. And that is for a late stage, you know, a company like Lego. Now for an early stage company, the open door feedback policy is like, hey, can you, I'm building something. So one, create your own brand. You are a thought leader. And then it's like, hey, I'm creating a product. You can go to Product Hunt or anywhere and say that, hey, can I get some feedback? And it's better to ask your fellow product developers it's better to ask other folks and always ask for feedback. I think the feedback is very, very important. What we do is that we always drive for perfection. It's like, hey, this is not ready, as if I'm building a sculpture. And once the sculpture looks like, um, one have an angelic glow, I'm going to build it to the market and everybody's going to fall in love with it. That's the worst strategy. You know, don't, don't, don't be a sculpture when it comes to your product development. But even before your product comes into the market, even before you think about doing something, go and ask for feedback. Understand the market. Ask people. And, and I'm telling you something, nowadays the market is changing so fast. By the time the data comes out, things have happened. So it's better to be a part of a community. Ask what people are— ask the people, right kind of people. Surround yourself with the right kind of people. And at the same time, Also try to understand what are the right questions to ask. Sometimes we ask questions, but they may not be the right question. And I think for that, it requires a good amount of education in your particular verticals or sub-verticals where you're working to ask the right question.

Yeah, that gets to another question someone was asking me in the chat as well, which is, are there any incentives you recommend for getting people to give you feedback? Right. Very early on, especially before your brand's not well known. Thought leadership was a great suggestion and actually being a thought leader in the industry. Any other ideas along those lines?

Oh, that's, that's very interesting. I do not know what kind of product you have, so I'll not be able to suggest like, hey, you have this product, you're building some kind of a candy-related product. So just give out some candy like Monica and friends. But my suggestion will be like if you are trying to build incentives Try to build incentives around your product, around your company, around your vertical. Like, hey, there can be different kinds of incentives. Also, hey, if you're asking a couple of other product developers, like, hey, can you give me some suggestions on this particular thing that I'm working on? Maybe I can introduce you to some other great startups or some investor whom you know. So there can be different kinds of incentives. You are at an early stage, world is your oyster. You can adopt different kinds of things. I think incentive is a very good strategy because I have always seen people are doing an ask, but they don't return the favor. And this is a relationship-based industry. So if you always think about, if I'm doing this for you, what favor I can give it in return so that I can keep that relationship going.

Absolutely. That value-first communication, right, with customers is super important. And along those same lines, Daniel wants to know any tips or best practices on how to break into these online communities to engage potential consumers during product development.

So you— can you repeat the question? Sorry.

Sure. Yeah. So best practices on how to break into these online communities that you mentioned, like, you know, sort of reaching out to customers. How do you get into these communities? Where do you look for them to engage potential consumers during product development stages?

Yeah, I would strongly suggest like be a part of Reddit. Product Hunt is a great, you know, community. GitHub is a great community. I think it's important sometimes you don't have to be an active participator. Start being a passive participator, understand what is going on and just first try to participate and just be a part of the room where you don't have to be a speaker or anything. You just be in the room, listen what everybody's what others are saying. And as I said, just be a passive, you know, participator and be an active listener. Understand what others are saying. What is their tone? What others are understanding? And then there are different kind of communities and it completely depends on you. As I said, time is the number one asset. You cannot do 100 things and be a part of 100 communities. So you can spend your time maybe on 100 and then narrow it down to 1 or 2 and see, this is something that matters to me. I can get most value from this particular community and then focus on that. And most important, I will strongly suggest building relationship. There are people in those communities that you can start building relationships and authentic relationships. As I said, like the moment you, um, return favors, add values to certain conversation, people will always remember that. And I think that is very, very important thing. As a product developer, you need to understand relationships are important because down the line that will help you, not just in product, right? Maybe you can hire someone, you can find a co-founder, you can find a partner, strategic investor, strategic advisor. So building, start building that relationship, but also keep an eye on your burn rate.

Absolutely. And then Zayb had a follow-up question. It's very specific, but do you, do you think any companies or startups are using Slack to communicate with users and gain customer development feedback?

Oh yeah. I know tons of companies that are using Slack. I think Slack is a great channel, but again, now 100 people are using Slack and my Slack channel has become like totally like, I don't know which one to keep up with. But I think Slack is a great mode, specifically right now you cannot have events, you cannot go to any events. I definitely think Slack is a good community, but if you're an early stage company, it is difficult for you to attract people to come into your Slack. It's better for you to be part of other Slack and then, you know, plug in your products and plug in some ideas and build some relationships from there. Whenever you go to any product, this is one growth hacking of relationship I want to tell you. Wherever you go, and this is I learned from, you know, from a very well-known institutional investor. I have some great mentors in hedge fund manager and institutional investor, and I find them, they're the clever ones. They always told me that it's not what you say to people, it's how you treat them. So that's very important. And if you go to any meetings, if you go to any communities, and right now you cannot physically go, you can virtually go. Always try to find one or two relationships that you can cultivate from there and take it, you know, with you. So that is something you should keep in mind. And also before going and doing anything, you should ask your question, what can I get out of this that can help me in building my company? And also as a person, sometimes you go somewhere, you may not get anything for your company. Your product, but you can learn something as a founder. So keep that in mind too. Learning and I think feedback, taking, understanding the opportunity that there is a feedback platform and also the opportunity within you that you can take that feedback in a positive way, in a constructive way. I think that's very important.

Fantastic. And then Scott wants to know, what do we do when the customer expects most of the product to be free and non-monetized. Like for example, premium model.

Yeah, yeah, yeah. I think that's who we are. We always love free products. And that's one of the reasons like we know how evil Facebook is and we're still on Facebook. You know, so this is who we are. We love free products. Everybody loves free. Even if you're a billionaire, I have seen multiple times walked into a room, billionaires are there, there are free stuff, they're also eating nicely and they don't care. So everybody loves free, even if you're a billionaire, even if you are a homeless person, we all love free stuff. So I think that's a, that's a part of who we are as a human being. You cannot change that, you know. But I think you need to understand when you are building a product strategy, somewhere you need to put a path to monetization. Obviously premium is great. I'll give a nice example of what GitHub did during this COVID-19. They actually expanded their product strategy and made it completely free. So they actually just opened up their market, which they could not before COVID-19, but they can do it because they are a bigger company. But you need to understand in what ways and how far you can go with your premium. And what are the pros and cons? Obviously you have to keep a balance because you cannot be a free company all the way because then you're leaving all the money on the table and there's no way you can make money. You need to find a way. And I always say this, even if a lot of investors like, don't think about monetization, just build your product. You think about money later on. But I think if you have that strategy in your head, Maybe right now you're unable to introduce some kind of a profitability, path to profitability or path to monetization opportunity. But if you have that strategy in your head, at one point of time you will be. Sometimes it is a little bit difficult to engage customers, engage partners and convince them that, you know, I have built a great product and it's not free. You have to pay for it. They're like, hey, I'll go to Tom or John. And so it will take some time, and that's where it depends on your branding. That's where it depends on how convincing you are as a thought leader, what you're doing in the market, your market capture. It will take some time, but I think what I want is that just keep that in your mind, in your strategy, that premium is not something that you can keep up with it. Unless you're saying it's a freemium, but at the back door you're basically selling something which we are not aware of.

Yes. And similar to that too, how often should founders assess their pricing strategy? So assuming that they didn't get to go with the freemium model and they are sort of in the midst of building out their pricing strategy, how often should they assess it? And then how do they know when it's time to change their price?

Wow, that's a great question, and I think I do not unfortunately have an answer for that. It totally depends on you. I cannot say, hey, do it weekly. Obviously not. You can do annually, biannually, but I think you need to find out, you need to look at your, you know, data, at your financial reporting, and understand that the pricing strategy is something that needs to be assessed continuously because as I said, the money can be left on the table and you don't want to do that. But obviously the first step is path to monetization, include that strategy. Then the next step is price agility. And then when you are trying to assess your pricing strategy, you need to understand that you are definitely at a particular level where you have a continuous ARR and how to go to the next level to cross that threshold. I think that's when you need to assess your pricing strategy. If you go in that kind of stage, and I'm hoping you are at a mid-stage company, at that point of time, you need to work very closely, not only with your product developers, but also with your marketing companies and others and try to find out like, But at the same time, also, I think the competitors is a very good signal when it comes to pricing, you know, assessing your price. So take that also into account. But unfortunately, I do not have the answer if it's like, you know, every 6 months or every quarterly you want to manage that. It will totally depend on you. And I think that's where your your skill as a founder and how good you can be, how exceptional you can be. And that's totally up to the founder on the timing.

Yeah, absolutely. You may get some signals from your customers, but you want to get ahead of it before it becomes too obvious. Right. And that's a tough balance. Okay. And so this is our last question, believe it or not. We've had— this hour has flown by. But Meg wants to know, how can I energize developers at such an early stage to build a concept for the future? Hmm. So she's a specific example, if that's helpful. She says, I built School Listed to be a platform rather than a product, a channel, and developers are my customer. It seems that many parents are never going to go back to schooling in the same way. So I think this is a platform for parents to be able to used to help homeschool their children. So it's something that we're gonna need in the future.

And she wants to know how to energize their developers in building that platform. So you need to find out what are the incentives. You know, it's money is the incentive. I like one of the question was there, what is the incentive? I think we all are driven by incentives. That's our human nature. Soft skill is an incentive. Motivation is an incentive. I will always suggest that never fall short of motivation, never fell short of motivating other people. So you need to find out what are the incentives, talk to them. I think when you talk to people, your regular developers, you can understand what's their long-term strategy. Do they want to stay with your company or they want to go and start another company of their own? They just want to use this as an experience or they want to build something really great with you. Or they just want to change the world and have the similar mindset, mission, and vision. So talk to your developers. I know it's becoming much more psychological statement, but I think people are not sometimes motivated by money. They also motivated by association of mission, vision, and different kind of motivations are there. So talk to them and understand what excites them. If you don't think that the values align, I think it's better to cut that relationship off and find people with whom your values can align.

Fantastic. And do you have any final closing tips for founders at this time for all the early stage founders?

Closing tip. I think I will strongly suggest I have been a founder twice and I think it's a very difficult journey. I never wanted to be a founder. I was telling this before, it happened and I was, I felt that as if I'm working in silo, there's a huge burn rate and that's why I always said money is not always the factor of burn rate. It can be, you know, your time, your resources. Spend your time wisely. Spend a lot of time with your family also. I think it's very important. People are very focused on developing a product, sitting in your basement, in your one room, getting things done. And they forget small things like spending time with their family, taking exercise very seriously. Also, the most important thing, spending time with other founders, because your pain point will be, you'll not be understood by someone who's working at a corporate level, but will be understood by a founder. And they will be the right people to also introduce you to a couple of similar folks. So building that community of people is important and finding those people people. And, you know, sometimes ask those questions to them. You know, you should not feel that you're in a silo working alone and everybody else is raising millions of dollars. So that, that is not something that I think, especially during this COVID-19, the mental health is very important factor. So take care of your mental health. Very important. Great advice.

That's excellent. All right, everyone. So everyone will get a copy of this webinar in the next few days. You'll get it via email. And I want to thank Gayatri for her time and her expertise. Thank you so much for joining us today. This has been lovely. I've learned a lot. I hope all the founders on the call have learned a lot.