"The Playbook for Building a Multi-Product Roadmap" with 1Password's CPO | SaaStr Annual

To the stage. Steve wong, cpo at 1password. All right, good morning everyone. Lots of screens. My name is Steve Wan. I'm the Chief Product Officer at 1Password. And just before we start, I want to give a little bit of background on myself. I've pretty much worn every go to market hat. I started my career in support doing sales, doing customer success, and then jumped into product management and was able to scale a product at Duo from then on. And I've always thought about products philosophically as the connective tissue for the organization. That's something I got from my mentor Jim Simpson at Duo Security. And that really explained this first, first principle that we have, which is product as a virtuous feedback loop. You know, very often you could think about product as oh, products like the ivory tower that tells us what's being built and what should be sold and how to package and so forth. But in my experience, what I found is the most effective product organizations are the ones that deputize the rest of the organization to contribute to product. And how does that work? Everything starts from the customer. I feel like people take the wrong lesson when people say, hey, Steve Jobs, not my namesake. By the way, Steve Jobs is the ultimate product person. Steve Jobs wasn't the ultimate product person because he was 100% right about his convictions. Steve Jobs was the ultimate product person because with better data he'd make better decisions. Right. And that's the goal of products. If you think about R and D, sort of the top half is diagram go to market. The bottom out of this diagram, what does go to market do every single day? They're talking to the market, they're talking to customers, they're talking to prospects, they're talking to frustrated folks. If you're on the support side. And what is R and D doing every day? Their main communication with customers is shipping product shipping roadmaps to internal folks. You need to create this feedback loop where customer success, support, sales and marketing is bringing all that quantitative data from the at scale conversations they're having with customers. And then marry that with the qualitative feedback that your product people, your designers, your engineers are having daily with customers to get a better and better understanding of the customer and their problems over time. Right. So the way I love to think about this is quantitative is sort of metric based and allows you to keep your head smart. Qualitative allows you to understand the motivation of the customer. Understand at a deeper level. And this is especially relevant when you think about iterating on an existing product versus building a net New product, a product without customers. So if you're iterating on an existing product that's at $100 million revenue, you have a ton of quantitative data to build off of. And frankly that's a position we've been at with One Password, right? We've had millions of users, we have hundreds of thousands businesses. But as we think about our new product, this opportunity with passkeys and passwordless, we realized we have to have more of the benefit focused on qualitative, understand the problem to be solved. Because guess what? No customer is coming to us and saying hey, we need passwordless. Hey, we need passkeys. What they were actually coming to us and saying was hey, passwords are hard. Getting started with a password manager is also really difficult and it's a pain and I don't have time to do it. And then the industry as a large was saying, hey, ever since, ever since we've been tracking basically like credential theft or stolen password based breaches. They used to be about 75% of breaches 20 years ago, thousands, actually hundreds of millions of dollars spent on multi factor authentication, on identity and access management, on all these security tools. And now it's at close to the high 80s where the 88% of breaches come from credential theft according to Verizon. So we're doing a worse and worse job. That was actually the problem. That was a qualitative insight that we got from customers. So how did this sort of relate to our core principles at 1Password? Our first principle, we're 18 year old company which is sort shocking I think actually literally Today is the 18th year of our company. We started as a consumer business. Our default has always been how do we make security simple? How do we make things easy by default for folks. The second principle that we had was this problem of credential theft, of passwords being hard to use, of literally I was helping my wife yesterday because she was locked out of her healthcare instance. We actually need to. We're playing this whack a mole game of trying to put multi factor authentication on or putting complicated passwords in and it just is not working. We need a better technology that actually eliminates the treasure of stealing credentials. Nobody was asking for passkeys, but passkeys we saw was an opportunity to actually build that solution. Have an authentication method where there's literally nothing to be stolen. And then the third signal that we got was we were part of industry alliances. We were hearing from Cupertino and Mountain View that they wanted to adopt Fascis for consumers. Now a bulk of our business is B2B. Why was that relevant to us? Well, guess what? Google has I think 2.6 billion users. Apple has 1.3 billion users. We're a pretty big company, but they dwarf us. The influence that the platforms have is real and it was an opportunity to actually embrace and ride that market shift and take advantage of it. So thinking back to sort of the history of 1Password, like I mentioned, we're an 18 year old company. We started off by building products for, for individuals and consumers. And then we sort of had that first initial shift into a second product basically about five, six years ago where customers were saying, hey, I, as an individual user, I'm bringing 1Password, the consumer app, to work because it's convenient, because it allows me to be productive and also allows me to be secure. And then over the last year we sort of recognized this opportunity where consumer platforms are going to be driving passkeys and at the same time our customers are telling us, hey, we love using 1Password, but passwords are too hard. Passwords are not solving the security problem for us. So it was a sort of serendipitous moment where it was like, there's market momentum happening where folks want to evolve from passwords to passkeys and we're in a privileged position where we both have a consumer and enterprise business to take advantage of that. And the reason that's relevant is I've worked in security for 10 to 12 years of my career because we have this blended consumer. I think we're literally the only security unicorn with a consumer and enterprise business. The share of voice opportunity that we had of Business Insider, Wall Street Journal, all these top publications reaching out to us, we felt like we had an opportunity to position little old 1 password as equivalent with the Microsofts, the apples and Googles of the world, to actually be seen as a leader for this transition to pass keys. So that first principle of creating that righteous feedback loop of understanding the quantitative and qualitative feedback from customers, and especially when you're building a net new product to over index on qualitative feedback, understanding the motivations from customers cause they're not gonna tell you exactly what to build, right? The quarter inch hole example product's never gonna work period without this foundation. But you're also never gonna be able to build new products without that foundation. Okay, all right. Second principle, for many of y' all that are serial founders, serial leaders, you know, serial individual contributors as well, like, you know, the things that made you successful in certain contexts can actually be a weakness in a different context. Right? So for example, 1Password, about 1,000 people. We've gotten to the point in which we don't. We started with Swiss army knife people that were, hey, I'm doing marketing one day, product another day, engineering another day to having specialists. We have the advantage of being able to hire experts within their domains. But when you're building and iterating on a new product, you actually need to be mega flexible, right? Your goals and objectives might change on a week by week basis. And this is why a lot of companies struggle to innovate, right? It's because the incentive structures that exist are driven to revenue, to building an existing product. How do you actually create an environment to foster creativity and basically utilize the folks that are flexible to be able to figure out a net new product and initiative? So honestly, we struggled with this. So we started this initiative late fall last year. And then Jeff, my CEO and I sort of sat down and realized, hey, we're not making the progress we think we should be. And we recognized structure is actually hurting us because it wound up in a situation where, you know, all of our PMs designers have their own roadmaps and it makes sense. Like they have their incentive structures, they have their team structures, they're making rational decisions and when they're asked to trade off for a non revenue driving area, what do you think happens? That initiative loses. Right? It's like, well, that's not helping us reach our growth goals, that's not helping us reach this specific metric. So what we actually decided to do was one, set a very explicit goal of let's be first. That was the simple goal. With everything that we're building for this new product around passkeys, let's be first to market, let's be first to market with features, let's be first in share of voice. A second thing that we did is we designated a directly responsible individual, my VP of product marketing, Eileen, to be basically the enabler in chief, the person that was able to cut through the structure and say, hey, this is a top level company objective that we're going to execute against that's not tied to revenue. But we're going to have to make this successful for the future of the company because it sets us up for that. And the third thing we did was we set a company level objective that was specifically around passkey success or this, this net new area success that was not tied to revenue. It was around share of voice being top of share of voice. And we Aim to be equivalent with Apple and Google in every single publication. And the second goal was around customer adoption. Not revenue, just customer adoption use. Okay? And as we set those things into place, people sort of revealed themselves as, hey, actually there's this individual Grace who's very much like a Swiss army knife that can fit in and will be marketer one day and biz dev another day and product person another day. Or individuals like Mitch that were well connected or Nick that were well connected to industry and said, hey, I was just in a meeting with Google and they shared this. Let's actually switch the roadmap. Your roadmap's going to need to be open ended when you're building a net new product to assume that you have a very concise. All right, in the next six quarters we'll deliver XYZ quarter by quarter by quarter by quarter. That's never going to be right. What you need to do is set an objective, allow them to get stuff done like settle a path so that they're able to execute and then third, be comfortable with the fact that the goals are going to shift over time. So one specific example is we had a goal to launch a specific feature in the summer. Then we learned through some of our industry contacts that there was news coming out from some of the major providers that gave us an opportunity to actually launch earlier. And we'd get advantages in the press if we were able to launch earlier. So we actually cut off the rest of the roadmap to prioritize that one item because we knew that would have an impact with the consumer market. That's the flexibility that when you have an established $150 million plus product that you're not going to have, right? Because you're going to have, oh gosh, we have like 10 deals tied to this or we have 20 deals tied to this. So actually freeing yourself from revenue goals gives you a lot of flexibility to execute. Okay, and the last two points here, holding strong to the courage of your convictions goes back to that quantitative qualitative balance, right. We didn't know and actually like even today we don't know what the adoption curve is going to be for this product. Right. Because frankly authentication that's based on the Amazons, The Googles, the TikToks, the services that you use, they need to make the decision to make the shift to a new authentication method for us to be successful there. Okay, what could we actually control though? What we could actually control is our perception in market. Right? We can't control customer adoption, but we can control perception in market. So that's where again, we're leaning on the qualitative over the quantitative. Because if we were obsessing over all the quantitative metrics, we'd very easily disappoint ourselves and get discouraged and choose not to prioritize this initiative. But we knew that the, this was the future of the business because we knew this was going to disrupt passwords. And we have that belief that we're going to continue to invest and make sure that this is a success at the top level. Okay, all right. So given that, something to keep in mind as well is what are the unfair advantages to bring to a table if you have an existing product trying to build a new product? And we had two unfair advantages that I want to specifically point out. The first is scale. We have millions and millions of users. We have hundreds of thousands of businesses. So being able to leverage existing customers to make soft intros to the net new product and help them understand the value of it and get validation, that's what a net new player, somebody that's brand new to the market doesn't have the ability to take advantage of. And the second unfair advantage that we have is like I mentioned earlier, I believe we're the only security unicorn that has a consumer and B2B business that gives us remarkable share of voice. We just frankly just get way more attention in major publications than others. We took advantage of that. So for example, you'll see some examples of publications here like CNET and Forbes. Wall Street Journal is another one. We were in Sunday edition back to back. We just went all out on immediate blitz. I think we had like a, we had a shared voice of like I think 80 or something. I forget the exact metric, but it was something in the 80s by the end of the year and we crushed that by May. And it's because of the unfair advantages that we had. We had an existing business that had a lot of clout and we have this consumer business that gave us a lot of interest from the CNET and the Forbes of the world to speak to us. And because we were first to market, we were first to market with this public resource called the Passkey Directory, allowing folks to understand what are services that are supporting this passwordless method. We were first to market with features around saving them and unlocking with them too. And frankly we knew we were early to market. We didn't quite know how early to market we were. We still don't frankly quite how early to market we are. But we knew we had to focus a Lot of time on market education to be seen as a leader for when market demand comes in, for the key brands to be like, oh gosh, I don't. I think we're ready to adopt now. Who did I just read about in the Wall Street Journal? Who did I just read about in Washington Post? Who did I just read about explaining this? We should go to them first. That was the opportunity that we had. All right, third principle, rallying the organization now, 1Password, 18 year old company, hundreds of millions of revenue. You can imagine the ratio of go to market to R and D is relatively even, right? How do you have a company level goal that's non revenue related and how do you continue to drive excitement around it? Right? How do you get people whose day to day paycheck relies upon the roadmap delivering the things that their businesses need to get excited about this shift, Right? So the most important thing is, and my background is in journalism and I think the one skill that you learn in J school is how do you take a message and adapt it to a specific audience. So we spent a ton of time, myself, Shiner CEO Pedro, my cto, we spent a ton of time basically proselytizing and making disciples across the business getting people excited about, hey, this is not something to fear. The end of the passwords is not something to be afraid of. It's actually an exciting opportunity where we can lead and we can provide the best user experience, just like we provide the best user experience in the password first world too. And along with that though, you need to be dutiful to understand what checkpoints you have to change course, right? Even if there's not a revenue goal tied to it, you need to be able to say, hey, is this being successful based on what goals we're trying to achieve? Are we being successful with the shared voice goal? Are we being successful with the adoption goal? Is customer satisfaction high as they're using the feature? And we spend a ton of time sort of building this internal and external community of early adopters to help inform how excited people were about the product. So for example, when we launched the sign in and fill feature with passkeys, we actually measured that people were about 25% more successful authenticating, which is pretty awesome. And then Google also shared some public research that were saying people were successfully authenticating 40% more often utilizing passkeys, which is pretty awesome, right? Imagine if you're in E commerce or imagine, I mean, I guess imagine you're a SaaS marketer and you think about sign up flow what would 40% do atop a funnel for you? Right. So that was a really exciting thing to learn about. And then the third thing that we did is constantly celebrate wins. So whether it's sharing user experience wins, or whether it's sharing customer feedback or delighted users or whether it's sharing news articles, I remember how exciting it was to be in back to back Sunday issues with the Wall Street Journal sharing those sorts of wins to say, hey, this is something that's cool. This is something that's exciting, that's galvanizing the market and really elevating our position as a leader within identity. That's the bully pulpit that you have as a leader that you need to take advantage of to drive excitement around new initiatives. Okay, all right. So a couple of takeaways. And the most important thing, if there's one thing you take away from this, is create a feedback loop around the customer. Your job as a chief product officer, your job as a product leader, your job as a product manager or product marketer is to galvanize the business to obsess about the customer and understand them, not only understanding, you know, the icp, but like, understand their motivations, understand their day to life, and really deputize the whole organization to feel like they're contributing to a better and better understanding of the customer every single day. Right. As marketers, as salespeople, as designers are working and talking to customers. Second is you need to be able to rally and excite the organization and galvanize. And that's not something that you're going to be able to do yourself solely as a leader. You have to create sort of that body of Swiss army knife people that are going to drive and be sort of like growth hacky in their mindset to drive excitement around it. Third is you got maybe be as explicit as, say, you got to recognize that the goal for a net new product might not be revenue to start with or might not be adoption to start with, but you've got to be flexible with what the outcomes are going to look like, but be crisp about the goals. So again, our goals were to be first, first to market with each of the launches, because that's something we could control. And first in terms of share a voice with market, because that's something we can control. We knew we could control adoption, and we think we're pretty well positioned to catch demand once it arrives. But we were sober about the fact about the things that we can control. And then, yeah, so that sort of fits into the prioritizing pace and proof of product to market versus structure and predictability. And then last but not least, you gotta celebrate progress over time. It can really feel like a slog when you're building new products and especially if adoption is not quite there. But you've got to celebrate progress in terms of what those wins might look like, which maybe vary from your first customer to market messages to features to customers being excited. Create that feedback loop. You as a leader can also create that feedback loop of making folks excited about what the outcomes look like. All right, thanks for your time. This is my email. Feel free to reach out if you have any questions. And I guess we'll open up the floor to Q and A. I think we have two mics in this lane and this lane, so. Do you mind stepping up to the mic, sir? Thanks. I was wondering, how does product marketing relates to product management? Is it all rolling up to you or do you have a separate stack where it rolls up to the cmo? And how do you think that has worked in your various roles in terms of seeing maybe both models at play? Yeah, for. For sure. So product marketing rolls up into me. So I have product management, product marketing, UXR and design that rolls up into me and the benefit that we had and honestly the opportunity that we had with product marketing and product management sitting together is, I feel like so often the most frustrating thing when you're a product marketer. My first role as effectively product marketer is when stuff is shipped over the fence to you and then you have to figure out how to sell it. That's just a really frustrating job. You're just doing enablement all the time. The benefit that I've seen in working together with product management is you can have product marketing at the front seats, understanding the validation of the problem and being there before even the product's being built to understand what problems exist. And if you have product marketers involved in the product development process, they can actually bring that story along to the sellers over time. So that's where I've seen benefit. I think over time, as you get more sort of mature with your product, there's more benefit for it to be aligned with marketing because there's more sort of verticalized attacks that you have to do to market. But when you're in discovery phase, there's so much value from product management and product marketing sitting well together. I don't think structure sort of inhibits that from working. Like, I don't think product marketing has to report into product management. Maybe the only benefit is the incentive structures can be More aligned to sort of product deliverable outcomes as opposed to, you know, go to market or revenue outcomes. Thanks.

Hey Steve, I have one question about a. I know on password has consumer product, has enterprise product. But typically when we're building a consumer product, right. So everything is a little bit easier. You got the customer base, you got the data. You're able to collect a lot of passive feedbacks. I mean you just put a feedback button for the consumer product. You get a lot of them. So you have a lot of information for decision making. But when you are pivoting to enterprise market, right. So there's a lot of one off feature request, there's a different onboarding, different implementation. So how to use. Do you have a system systematic way to balance. How do you justify the investment on enterprise? Because if I mean like, like us, we've been very comfortable with the small, small business market and consumer market. We feel very reluctant to go to enterprise because it's very hard to justify the investment on R&D's and energy as a product manager.

Right.

So how do you, do you have a systematic way to guide this resource alone? Location, prioritization and organization. How do you design define your organization?

Yeah, yeah, it's a great question. So I'll answer the first part. First. I actually think it's easier to build B2B products than consumer products. And the reason is B2B customers. You're always going to talk to your seller or buyer, rather your buyer. Whereas with B2C products you actually very rarely get the opportunity to talk to your buyer and sort of like galvanize Personas off that. But regardless, the second half of your question around how do you balance enterprise versus like SMB and mid market where you're able to sort of hold to the roadmap a bit more. You've got to decide as an organization what your destiny is going to be. Right. If it's an organization, your goals and outcomes is dependent on, hey, we need to sign Fortune 500s, Fortune 1000s. You're going to create a different R and D organization that's more able to leave like 34% capacity to take inbound requests that help inform your roadmap to win those one or two or three key deals as opposed to hey, we're actually best situated to serve the mid markets and SMBs. And I've seen so many times companies be unnaturally pulled into doing enterprise too early or feel like hey, we have to start with enterprise to be real. You can build, absolutely build persistent businesses with mid market SMBs. And then also frankly, like enterprise is a monolithic. We have a lot of conversations about this of there are, you know, think about sort of regulated financial industry institutions which are going to behave very differently from a salesforce which might be similarly sized, similarly sized in terms of revenue, in terms of employee count, but are going to behave very differently in terms of how they think about compliance or cloud adoption and so forth. So that's really on the executive team to lay out what is our destiny as a business. What do we want to be and do we want to be concerted and thoughtful about going after these large customers or do we want to stay in mid market SMB and pick and choose sort of the cloud forward businesses that are going to be more nimble for us to work with as opposed to sort of the institutionalized businesses. You got to be really clear about that because if you're not clear about it, you'll always be led by, you know, folks that are closest as sellers to sort of bring those customers in. You got to be clear about who your ideal customer is. And that's really our product's job to partner with ELT to make that explicit. So when you're building something like a passkeys which is applicable to almost everyone, but let's say there is a feature which maybe in future is more is something that you might want to put behind a paywall, let's say to only the business plans and not to team plans. So how do you make that decision at the early stage whether this is supposed to be at a higher plan or lower plan or free tier. Yeah. So you're really asking about how do you validate the value of what you're building. So the philosophy that I like to do for that is when you're building new features, find a cohort of likely buyers. Identify. This is very much in like Marty Kake and Silicon Valley product Group philosophy which we use to a lot of success at Duo and we also use a 1Password. Identify co development partners. Identify 10 to 15 customers that you think are gonna fit within your ICP and you're gonna make a bilateral commitment of hey customer. You're gonna get direct access to our engineers and designers as we build this product. You're gonna get first rights to it customer, you're gonna buy this product possibly at a very steep discount, possibly for free. And you'll do case studies for us and you'll learn very quickly as you're developing the product and as those customers talk to other customers. If more customers than you can actually manage if you start with 15 customers, then like 100 customers want to sign on. Like we did a duo building our second and third products, that's going to give you a value signal in market. And the nice thing is because you're working with this cohort of customers where you both have scale in the game, you can validate pricing value with them over time. So you can say like, hey, we know we're going to give this to you for free for the first two years or first year or whatnot, but here are two or three usage based pricing structures or two or three sort of unit based pricing structures and use that to validate as you're building along. And again, it's awesome when PMM's in the room just together with PM as you're making those decisions because you're understanding, oh okay, you're actually pulling budget from MDM for this or you're pulling budget from Endpoint Management for this. You're actually able to understand how they're funding a deal to buy a new product that might not fit into a traditional category. Hey, how are you when you're launching new products? Let's say we have a multi product SaaS. So for example, if we launch, I don't know, the fifth product, do you recommend that to the product that is in charge of that new feature that you're going to launch being the sales call, or do you recommend that work to a sales rep or something? So yeah, maybe there's a more meta question there of how does go to market get involved in this process? When we're building these net new products, having whether it's like a seller or whether it's like a director, enablement or sales engineer, having someone on the go to market side be a part of those conversations and hear exactly from the customers how they're valuing it or how they're evaluating the solution helps inform what the value is going to look like for the customer. So again, going back to that feedback loop that's also incorporated when you're building that new products. You can't like I always sort of joke with the team of like we can't Tony Stark this. Like you can't go into a cave for like two months and then come out with like, look at our beautiful baby. You can't do that. You've got to work with customers. You got to work go to market who represents customers to actually build and iterate and be able to prove what that value looks like. Otherwise you're just going to wind up in a situation where you're constantly disappointing yourself. Okay, I think that's it for questions. You've been a great audience. Thank you for your time.