Leonid Igolnik brings over 20 years of product development and engineering experience. Most recently, as an EVP of Engineering, he drove technology development at SignalFx, a cloud monitoring platform, that received funding from Andreesen Horowitz, General Catalyst, and Charles River Ventures and later was acquired by Splunk for $1.1B. In addition, he is active as an angel investor, startup mentor, and advisor, and is the co-founder of Angelneers. In this episode, we talk about what does it take to bring a winning product to the market.
Key takeaways from Episode 01
- The most difficult task for new products is to gain an understanding of how to prioritize the time and to decide what to build. “I’ve never been in a situation where the product roadmap is not about two orders of magnitude longer than the current capacity of the engineering team. There is always stuff to build. The question really is how do you take this limited capacity, which is your ability to develop the product, and allocate it to the right things,” Leonid said. “The interesting part in this never-ending long list of things to build is identifying how to build the most impactful things. Knowing how to identify the most repeatable and reliable of those things? That’s what I’ve seen separates the most successful companies from the less successful.”
- To build what the customers want, you need to be customer-driven, getting validation of your assumptions and iterating rapidly on these assumptions. “Being responsive to what the customer needs is one of those themes. And the question becomes how do you find those things? Because quite often the customers will not tell you what they need in a way that you can act on”, Leonid said. “The worst thing to do is to let your customer say “Can you build a widget A for me? The more reliable way that I’ve seen is repeatably and reliably identifying the durable problems to solve. So the main question is how do you find the solutions which are 10x times better than existing alternative?”
- Successful products distinguish themselves by having features and functionalities that not only meet customer’s basic needs and expectations, but also include linear satisfiers that accelerate satisfaction and exciters that create a virality effect “Any capability of the product can be classified into one of three categories. First, your basic expectations, like brakes in the car. So when you build a product you must identify those basic expectations. Without them, you are not going to sell a car. Secondly, you have a set of features called linear satisfiers. They increase customer satisfaction, but they do it linearly, like the range of a Tesla battery charge. You need to meet these. But, they are not why customers get excited about your product. The third category is about things you didn’t know you needed, the exciters. This is where innovation tends to differ by time. Many years ago, power locks and windows in a car were exciters. Over time exciters become the basic expectation. You have to discover exciters that are relevant to your customers today,” noted Leonid. “So how do you find those exciters? The only way I have seen that works reliably is to observe your end-users in their natural habitat.”
How to convince users to switch to your product. “You have to be at least 10 times better. If you think about your end-users’ particular job … that they want to achieve by using your product, you need to convince them that they can achieve that job much faster and much easier with your offering in a particular environment and context. Let’s think about getting from point A to point B. I live in San-Francisco, a reasonably densely populated city. My options to get from A to B are by a car, public transport, ridesharing, shareable bikes or scooters. All of those competing to do the job. There are times and cases when getting on the scooter is 10 times better than getting an Uber. The solution will differ depending on my context”, said Leonid. “Convincing users that your solution is the best starts from the empathy between you and your users, and this empathy can only be developed through a common understanding. Most early-stage companies start in the markets where founders can relate to a durable problem. It is easy for them to relate to their end-users, but it becomes harder when they need to scale and hire the sales team. This empathy is developed through a deep understanding of the customer first. Once you got it, you can start recommending solutions that are 10 times better.”
Storytelling is one of the most underrated skills for founders. “It is incredibly important for two reasons, as an entrepreneur you are trying to sell a product to your customers, and you are also trying to sell your company to investors. Often have a very brief and constrained period of time to get your message across. No slides and two minutes to tell your story”, Leonid said. “Ability to effectively deliver your message once you discovered the durable problem, that’s the next skill I recommend to every entrepreneur to build.” “Humans in general love stories, we’d evolved telling each other stories, with the beginning, middle and the end. Once you identified all your basic expectations and exciters, spend some time and learn how to deliver your message well. It is very difficult to explain something that you are an expert into somebody who is not because you would tend to gloss over some basic things that you assume are naturally understood by that party, but they aren’t. That’s how you lose them.”
How nimble startups can enter relatively competitive markets and outcompete incumbents with significant resources? “I think what people are underestimating is the ability of a small company to execute a large company for two reasons. The incumbents often move slower because there have more decision-makers, and entropy, and, quite frankly, early on in some markets those problems are just not relevant to bigger companies. I’ve been in big companies for who a $35 million a year business is just a rounding error, it is not interesting. And a $35 million a year for a SaaS business could be anywhere from $0.5 to a $1 billion valuation depending on their rate of growth”, said Leonid. “You absolutely have to be executing and have to be incredibly efficient. One of my CEO’s used to say that the right to innovate needs to be earned. You have to both innovate and execute.”