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Why Product Discovery is Key to Sustainable Startups with Jim Morris
Jim Morris
Execution really matters. Like, can you get it to market? Can you find that product market fit? And then once you get Product Market Fit, can you scale it? You know, someone like Cheryl Sandberg went to Facebook and she was able to really scale this I'm sorry, went to Google. She was really able to scale that Google Ad sales team, right? And that's what really gave them that and that initial boost. And now 97% of Google's revenues from that ad team.
Desmond Dixon
You yo, yo, yo. What's up, everyone? Welcome back to Campfire Capitalism. I'm your host Desmond Dixon, and today we have a superstar guest in the room at the campfire that's going to share with us some amazing things regarding product discovery, product market fit. So if you ever is interested in a startup or building a business using technology, this is the podcast for you. We're going to go into all the details, talk about all the great stuff regarding product management, product Market Fit, and have a little blast. So let me just kind of give you some details of the guests today before we jump in. So Jim is a coach for product management, leaders in teams at early stage startups, tech companies, and Fortune 100 corporations. Jim co founded Power Reviews, which grew to 1200 plus clients and sold for $168,000,000. He product managed and architect one of the Internet's first ecommerce systems@fogdog.com that went IPO at a $450,000,000 valuation. Those are a lot of zeros, both for those companies. So woo woo. These days, he coaches companies to find Product Market Fit and accelerate growth in health or sorry, in digital health, financial services, ecommerce, internal platforms, machine learning, computer vision, energy, infrastructure, and more.
Desmond Dixon
He graduated from Stanford University with the Bachelor of Science in Computer Science and lectures in product management at UC Berkeley. Jim, man, welcome to the campfire.
Jim Morris
Hey, thanks for having me, Desmond.
Desmond Dixon
Speaking of campfires, have you been to anywhere cool lately? Camping. So I know the last time we talked offline, you're big into the outdoor life and camping and all that. So have you been anywhere interesting recently?
Jim Morris
Yeah, we went to Salt Point a little while ago. It's up here in the California coast, and they have honest to goodness tide pools with all kinds of creatures in them. And we timed it just right. And it was amazing to camp and then walk from the campground to the coast and walk on the rocks at low tide and just peek into the little glass not glass, but that water bowl, that natural water bowl of these tide pools and see crabs and seeing enemies and urchins and all kinds of stuff.
Desmond Dixon
Oh, man, I could only imagine that's so cool, man. So I got to ask you this. So let's just dive in a little bit so before we make sure that we were in alignment with the audience and they're aware of the jargon that we're going to use, can you just Explain Very Lightly what Is Product Market Fit and What Is Product Management? And then we can kind of go into the details and why it's important.
Jim Morris
Sure, yeah. I'll start with the product management part. In the beginning, we had engineers building concepts. And sometimes these concepts work, and sometimes they didn't. They hit the ground running and people really adopted them. Those are the companies we know and love and hear about. And the ones we don't hear about are where the product didn't fit the market and there wasn't anybody in charge of making sure that happened. And so product managers really are the connective tissue between that business and the engineering efforts so that we can address a customer need. We can do it in the businesses interest, so that employees have paychecks and there's a reason for the company to exist. And it's this combination, this intertwining of those business and technology needs. It's really product management. And then in terms of product market fit, it just has to do with is your product being adopted to the point where you feel that there's enough of a market to support your company? And it's a little bit like if you have to ask if you have hard market fit, you definitely don't have it right because you can feel the pull in the market right?
Jim Morris
And you do a lot of work with salespeople. And so you know the difference between push and pull when you've got to push hard on a concept, you may not have product market fit yet. Now people are resistant to new things, and they're resistant to change. So initial blocking of your idea by people may not be the end result. Right. You may have to push through some of these barriers. I mean, the car versus the horse and buggy. I'm sure a lot of these new technologies were thought of as strange and weird, and no one would ever adopt them. So product market fit is really about finding that connection in the market with enough people that your business can survive and you can start to kind of feel confident that you would actually hire more salespeople, that you could actually have this reason to be in the market. If you hire a lot of salespeople and you don't have product market fit, it'll be really hard to sell the product. It'll be especially hard to renew the product, because even if you've sold it, people may not use it. And so product market fit is like a phase change in a startup or in a division of a big company with a new product where you feel confident.
Jim Morris
Scaling and you should never scale until you feel like you've got it.
Desmond Dixon
Man. I think you hit it on the head. Because churn, especially when you're growing, is just the worst thing in the world, both financially for the business and then morality wise, especially as a sales team, because you have to replace that person and, like, 15, 20%, 30% more, month over month. It's like triple work. And then on top of that, usually when people churn, what's the first person they call or reach out to that they're churning that salesperson, right? And their buddies. Yeah. So you're not even getting that word of mouth thing. So I think this is fascinating, the product market fit thing. So let me ask you this. What are some of the most common, what's some of the most common mistakes that you've seen in terms of, for product management that you see that happens like a pattern that you see because you've been in this game for a while.
Jim Morris
People get really internally focused. Their bosses really demand the attention of product managers and engineers. The other internal stakeholders they try to dominate the conversation as if they know everything. And I just don't think the hit rate of your average executive is that high because most product people are out there, most startups are failing, right? So most ideas are not really working in the market. And so the idea that “my idea” is going to work is just probabilistically, not correct. And so what I want folks to do is really get out and talk to customers. I call them relevant strangers because they have to be your target customer, but you shouldn't know them like they shouldn't be your friends or your family. Friends and friends could work. Relevant acquaintances. And someone said this funny thing today when you find the relevant strangers and interview them, get that outside influence, you can start ignoring the relevant executives because they are really important in your life. But I do think that a lot of teams are inward focused too much. So it's not to say you shift all the way to the other side. You still have a lot of professional intuition and company history and knowledge about the market that you need to take advantage of inside your company.
Jim Morris
So that's a big thing. I would say number two item is my teams aren't focused on metrics. They are building software but they are not monitoring the software after it launches to see if they've had success or failure. And then they're not looking at that number of that metric to try to improve it. And so it's about building the software instead of getting that adoption of the software. Because sometimes people are just going through their roadmap and they're told internally to just success is you hitting these deadlines. But deadlines don't make money. Salespeople make money by selling your software that's relevant to the market. Right? And that's where I, as a young software engineer thought if I build it, they'll come use it. And as a mature software engineer and mature product person, I know it's way more complicated and then I'm better off getting it right than I am just launching something. So I'd say the inward focus and the analytics are two big ones that I see out there, man.
Desmond Dixon
I call it dark room. It's so funny and how there's so much crossover between privacy, product management and sales, because I've had thousands of sales calls with entrepreneurs, business owners, and the big difference that I usually see is the ones who are crushing it are action takers and get feedback from the market and just regroup. Even if they have something that's working, they're just optimizing it based upon what the market is telling them. And then you have some individuals that are stuck in a dark room, and they're always tinkering based upon what they think the market wants and never puts it in front of people. So I love how you say these strangers, right, these strangers that you don't know, right? Just getting your idea, getting your product in front of people and letting the market literally tell you what they want to buy. I think that's like the biggest hack from today. If someone was listening, it's like, hey, let the market build your product. And that's where the fun part is, let's say the adventure of it. Right? It's like the market, right, because you have more certainty. Yeah, this is interesting.
Jim Morris
Well, it also makes you find the market side of part of market fit. So I had an entrepreneur who built a site for $200,000. Nobody visited it because it was his dream. And somebody took the money and said, yeah, I'll build your dream. But he didn't do the hard work to go find out who would actually visit it. And so he tried to do marketing after he did product. And so what we do in product management is try to understand and develop the market as you go. And like you said, those folks can actually help you build a product, either consciously helping you or just through their feedback.
Desmond Dixon
All right, let's drill down on this. So what's a little bit about your philosophy, because obviously you're doing something right if you've been a part of all these massive successes. So just talk to us a little bit about your recipe or your belief system or philosophy around product management and let's unpack it from there.
Jim Morris
Yeah, I think for product management, my recipe for success is paying attention. It's obsessing over. Is it working? Does anybody want it? And I think that there's a vulnerability that comes with acknowledging that people may not want this thing. And so I can teach you all the techniques in the world, but you have to embrace the unknown. You have to embrace the vulnerability that you've got to pivot, that you've got to adjust as you go, like those folks you were talking about, and to stay away from the kind of the dark room where you're sort of tinkering and it's all about your vision and not about how the market is going to see it. So I think when I see folks, I try to imbue that optimism, that obsession. The other thing is there's a little bit of paranoia. When we started Power Reviews, our competitors started within one month of us, and we were in a bitter fight for seven years. And so when you have a good idea that could be a product of the time and the technology and the insights, and it may not be just your insight, right. The jet engine was built in two different continents at the same time.
Jim Morris
And so I think there's a paranoia that can power you to get something into market that can help you really understand. And sometimes the first movers win, and sometimes they don't. Nobody talks about MapQuest. They were the first great map out there. People don't talk about all the early mail clients that talk about Gmail. So Google Search was also second to all the other companies that maybe it was 10th on the market. But these folks all obsessed about the speed of the search, the quality of the search. They could tell when something was good versus bad. They had an opinion. And so I don't want people just to be operating a machinery like software engineering. I want them to be obsessed and I want them to be paranoid healthily. And that's going to drive them to really seek a win. And I think that's what most people want. And in startups, it's a little bit more visceral because you're a smaller company and you have to survive. In big companies, it's less visceral. So sometimes you have to kind of generate like, well, what is my competition today? What is my duty to my customer?
Desmond Dixon
Yeah, so this is interesting because I know as an entrepreneur, especially when I first started, I was always thinking about, what if someone steals my idea? What if someone takes my business model? What if they do this? But I feel like if people are trying to copy you or mimic you, then that means you're probably on to something that's evidence that there's something there. So I'm just curious because I remember we had a conversation offline a while ago about you guys started this company and then you found out about a competitor. So just tell us a little quickly about that story and what lessons you learned during that journey.
Jim Morris
Yeah, two of the founders were at some conference in the summer after we started, and they were sitting next to somehow the founder of the other company. And the founder of the other company just started talking about his company. And our founders were like, what? They kept it inside. So they did not acknowledge that they were a competitor and that they were also in the same market. They were just shocked. And they came back from that conference and we were all shocked and surprised and blown away. This competitor had been in a similar market. They'd been in the analytics market, and they'd learned about the concept of product reviews through watching the collective analytics of their clientele and so they had a bit of head start in the why behind product reviews, and they also had really good connections to clients. We were just four engineers. We were not that well connected to clients. We were connected in some places, but it was a big wake up call and just a tremendous surprise.
Desmond Dixon
Wow. Yeah. It's crazy, right? Because usually if you come up with a really good idea, the universe probably sent that idea to a lot of more other people. And it just comes down to executing to a certain degree. Right? Yeah.
Jim Morris
That's what I hear from my venture capitalist friends. It's about execution. Sure, if you can get a patent for something, but there are very few of those. It's very hard to get a patent that's totally blocking competitors. I have five patents, and they've all unsuccessfully blocked competitors. They're very hard to enforce. And it's something where execution really matters. Like, can you get it to market? Can you find that product market fit? And then once you get product market fit, can you scale it? Someone like Cheryl Sandberg went to Facebook and she was able to really scale this I'm sorry, went to Google. She was really able to scale that Google ad sales team.
Desmond Dixon
Right.
Jim Morris
And that's what really gave them that initial boost. And now 97% of Google's revenues from that ad team. Interesting execution.
Desmond Dixon
Yeah. So let's talk about this because I think this is pretty relevant, and I'm personally very interested in this space as an entrepreneur. Maybe wetting my beak, because I think that it's almost like the New.com and it's not crypto, by the way. So this whole chat GPT, right? You're up in Northern California. This is probably talk of the town.
Jim Morris
Right.
Desmond Dixon
You can't go to a restaurant without people talking about AI, right? And so I'm super curious about you being a product guy. Do you see layers of software being built upon this engine? Right. Like specialized software. Right. Because I think that, based upon what I know, it's like you have to be really good at prompting it in order to maximize the use. And let's be honest, 90% of consumers probably aren't that good in terms of, I hate to say critical thinking, but it takes them a ton of time and effort to figure it out. So there's probably going to be products on top of it that are specialized, like Tribe. Itineraries certain assistance. So I'm just curious to hear your take on where you think the ball is moving from a product perspective. And is this a market that entrepreneurs really should maybe take a look at? If they have some they should probably pursue? I'm just curious to hear your take on the subject in general.
Jim Morris
Yeah, I think one of the points, which is, can it be used as a hard to use? Maybe people need to be smart about how to use it. I think about Google, like, very few of us go to Google and just type in shoes, right? We might have done that a while ago, but we're going to type in soccer shoes. Adidas, black, size nine. We're going to go for this and see if we can find us a page. And so I think over time, we've learned to play Google like a little mini piano. And I think Google has learned through the scale something like spelling, right? So as we correct our mistakes, google learns what the right word is. They didn't have to make a spelling dictionary, we made it for them. And so the genius of Chat GPT is the scale of the usage they're getting, because people are telling them their use cases right now. In fact, Amazon sort of forbade their engineers from uploading code because everything you tell Chat GPT is going to be used to make it smarter. It's smarter from the AI point of view, but also smarter in the product point of view.
Jim Morris
Like, what are those use cases? Which ones are really working? So I think the basic textbooks about product management could be written by it. What are great product discovery techniques? It just popped out five of them and it's certainly regurgitating the internet, and I'm assuming that they're doing enough. If it's copyrighted material, they're only using pieces of it and things like that. So I think the usage of it, they're learning now. People are also learning. And so you're going to meet in the middle. I firmly believe that even though I want to go in there and I'm going to punk the Chat GPT and I want to make it look bad, and I want to believe that we're not going to have certain parts of society replaced by this stuff. But I also took a self driving car ride over the holidays. These things are coming. They'll be more assistive than replacing. It's going to be hard to replace us, I think, but again, where we can use that assistive help, like cars. I mean, I have an old car, I wanted to do cruise control, and when there's a car in front of me, just automatically slow down.
Jim Morris
I don't want to think, I want to stay in the lane, I don't want to have to worry about staying in the lane. Almost every car can do this now, and we're taking this stuff for granted. We don't need the car to necessarily drive us from point A to point B entirely right? Now, that might be nice. So I see this Chat GBT as coming in as an assistive force in our life that's completely unknown, but people are just for some reason, there's just not enough going on in the world that people have really gone into this and it's just good enough that people want to go back to it, right? And so they've done something and it's not perfect, right? They went to market and there's a lot of stuff wrong, but that's what I would say in product management is you got to get to market like that so that you get people to use it, and then they tell you where to go next. By their actions, I mean, we're not telling GPT anything. We're voting with our feet. And in terms of building on top of it, this is just going to be like the way VCs play the lottery with startups.
Jim Morris
Like, you're going to invest in 101 or two ideas will come out. So we're going to come up with hundreds of ideas, but most will be bad and some will be terrific. I'm not nostradamus. I'm not going to tell you what. I had my Berkeley students try to write cover letters with it. I don't know. I particularly hate cover letters because they're hard to write. They take a lot of time, and you never know if anybody reads them.
Desmond Dixon
Yeah.
Jim Morris
And a lot of these students are foreign born, and they're incredibly smart, and they'd be amazing employees, but they're not necessarily going to write you a great cover letter. And so it's a misrepresentation of their potential.
Desmond Dixon
Yeah.
Jim Morris
And so why not upload your resume? Why not why not make a great cover letter writer that really does represent your potential? Right. So is it about your writing or is it about them understanding your potential? And so if it's about the writing, you're a purist, and that's not going to be the way the future goes. But if you give me a cover letter and I hire you, desmond and you're like the COVID letter, should I care who wrote it? Society seems to care. But why?
Desmond Dixon
Yeah. Maybe because it's once again the change word for right now, right. Until they start to get results in the benefits from this technology. I think that being international and traveling around, I see this technology helping more of the developing world and other countries more than exponentially than us. I think the US. Will like, it's going to be great. It's going to help us as a great nice to have something optimized. But in terms of skilled labor, I see this literally helping raise the value of the people within some of these other countries who don't have access to certain skills and resources. Right. So I've been reading a lot about reading George. I think it's Zehein. I think it's the last I can never spell his last name. And he talks a lot about how countries, every country has a certain development or level, intellectual level, based upon the products they produce for the world, for globalization, and how the United States and east Asia and west Europe we have lots of high skilled labor rights, which means we have the high skilled people, the develop, the industrialists, things like that, right? That create the machines.
Desmond Dixon
That create the machines. And I could see in five years that these AIS are essentially like Southeast Asia, India, like all these places using these tools to catch up with us, right, in terms of having that brain power, that knowledge power. Because most people obviously flock to Western Europe, flock to the United States. I don't know about East Asia, but I know that they come here for the opportunity, right, to use their high skilled labor. So I'm pretty interested. I think the world looks bright for us capitalists out there, us capital allocators. Talk to us a little bit about what you're doing now. Just curious, because you obviously've crushed it. You have a very fascinating philosophy around this stuff. So just talk to us a little bit about what you're doing now and what brings you fulfillment and then we'll end off with some fun travel stuff and wrap up.
Jim Morris
Sure, yeah. I work with product management organizations or product organizations to really improve the skills, techniques and collaboration of their product teams and their managers and their leaders. When you seek input from customers, it actually has a change to the entire organization because you cannot necessarily as a leader, start dictating down, top down features. And so when I work with teams, I also want to work with leaders to really let them know that you need to create the environment for innovation and that your teams will actually create that innovation if you provide them with a good problem to solve and you give them the resources to dive into the context, which is customers and data and subject matter experts so that they can start to generate those insights because they're the ones closest to the customer. And that's the part where when I work with an organization, I want them to slowly transform into data driven, customer driven, and slowly move away from kind of top down features and defining scope and really just trying to hit deadlines. Because if they can tie the success of the product to the success of the company, that's where you're going to start to have a lot of leverage in your organization as opposed to one or two people trying to do a lot of guesswork.
Jim Morris
And so I coach product teams of product managers, tech leaders and designers. And we add in maybe data scientists and other folks. I also coach product leaders, sometimes I coach engineering leaders. But it's mostly those cross functional teams and those product management leaders to really transform their organization to be discovery oriented, data oriented, customer oriented. And I do it with startups, what do we call it? Like scale up. So people are in that growth mode, they've already got the product market fit and then a variety of corporations who are really trying to bring innovation back and maybe tried innovation labs and tried a variety of techniques. And really it has to do with having great people. And so I coach their people. And one of my mentors says that ordinary people can become extraordinary if they're given the right resources and environment that's Marty Kagan and I firmly believe that when I see my teams, it's not necessarily about replacing your personnel. It's about giving them the space and giving them the coaching and training to level up. So I do that, work with teams and leaders, and it's a lot of fun.
Desmond Dixon
Let's go scale up startups and businesses looking to create the spark again, right, in terms of new products. All right, I have to ask you this. I got to ask you this first. So what has been your three favorite places that you visited around the world? Because I travel around the world, and I love asking our guests this. So your three favorite places that you've visited?
Jim Morris
I would say Bangkok, where you are right now, was just amazing for me and my wife. We traveled for eight months after we got married just on backpacks, about $63 a day on average. We kept track of every penny, and we went through Latin America. So central and South America New Zealand and Thailand. And Thailand. Bangkok, we spent weeks there, and it was the first non Western country I'd ever been to. And to me, it was eye opening because Central and South America are very similar to America. Not in every way, but so I love the difference. And then, of course, the street food was better than restaurant food. I loved the art and the architecture, the crafts. We still have fabric in our house from that trip, and the warmth of the people was incredible. Yeah, I felt very comfortable there. So that's Bangkok. I have to say, Easter Island is one of my favorite places. I was a college student in Chile, and Easter Island is effectively like the Hawai to Chile, like Hawai is to America's. Easter island is in Chile. It's sort of a territory of Chile, and I visited there twice.
Jim Morris
I took my wife back on this trip, and it's truly breathtaking just seeing the statues there. I've camped around the island, hiked around the island, and it's mesmerizing. And then I would say, going on a safari. I was lucky enough a couple of years ago to go take the family on a safari in Tanzania. And Tanzania and Kenya are connected with the serengeti. And it was amazing to see thousands of wildebeests sort of running here, running there, kicking up dust, thousands of zebras, hundreds of elephants, dozens of lions. Just the scale of it was amazing. Giraffes that eat spiky plants, I mean, what is that? Animals are amazing and surprising. They have, like, 900 species of birds, and seeing the incredible diversity of birds was amazing. Seeing the hippos that are super gross because they're in these big pools where everything's kind of mixed in. And so, yeah, those three places really stick out for me. And I've been lucky enough to travel a lot.
Desmond Dixon
Wow. I just added one thing to my list because of that. Easter island. Didn't even think about that. Never like that. That's. What I love about this pot, right?
Jim Morris
You learn new things when you connect around the South Pacific, man. You have to hop too long. So when you go new Zealand, Tahiti, Easter Island, santiago. That's your hop.
Desmond Dixon
Wow. That's the transition over the chasm, right? Going back.
Jim Morris
When you come back west, go south and then come over.
Desmond Dixon
Yeah. All right, last one, last one. What are three places that you're looking to go next that you have your eye on that's, like, top of your list right now?
Jim Morris
Yeah. It's places where they may not be the same pristine level they are now, like, in 20 or 30 years. And we love nature and water and I would say a certain amount of authenticity. So it's hard to go to places that are really touristy for us. And so I think the whole area about Indonesia, Borneo, Malaysia, that whole section there just seems amazing and beautiful. And we have a friend who lives in Kuala Lumpur who would give us a home base, and so we're thinking about there, I want to go to, say, like, China or Bhutan, somewhere in that area. They're very different countries, but those two places just walking the Great Wall would probably be pretty incredible and amazing. And let's see. Yeah, maybe I'll just say Bhutan, because I read about it a long time ago, and it was just too expensive to go as a backpacker because it required you to spend $100 a day back then, and you had to have a minimum stay. And so it's always seemed kind of mysterious and kind of interesting with the temples that are on top of mountains and things like that. Bhutan, China, and that whole Indonesia, Borneo, Malaysia area.
Desmond Dixon
Yeah, it's beautiful. Okay. Sweet, man. Well, I enjoyed you as a guest. This was so much fun. Tons of value. I definitely learned a lot. Hopefully our audience learned a lot. So how can people find you? What's the best way to get in contact? Is it going to your website, LinkedIn? What's the best way?
Jim Morris
Yeah, certainly productdiscoverygroup.com is my website. Easy to find me there, and then you can find me on LinkedIn, jim Morris. But there are a lot of us out there. You can type in some of my words from my bio, and that'll usually find me on the Internet. There's even a movie about a guy named Jim Morris who was a baseball pitcher. So very unfortunate. That's a generic name, but productdiscoverygroup.com works great.
Desmond Dixon
Awesome. And the links will be in the show notes. So, guys, you made it to the end of the episode. We're so grateful that you gave us your most precious resource on the planet, which is your time, and we will see you at the next campfire. Bye bye.
Jim Morris
Thank you, Desmond.