5-Bit Friday’s (#15): Snackable insights, frameworks, and ideas from the best in tech
On: Community-led product development, The retail revolution, Conservation of Intent, Zoom communication mastery, and Good product team / Bad product team.
Hi, I’m Jaryd. 👋I write in-depth analyses on the growth of popular companies, including their early strategies, current tactics, and actionable business-building lessons we can learn from them.
Plus, every Friday I bring you summarized insights, frameworks, and ideas from best-in-class experts to help us become better builders.
Happy Friday, friends! 🍻
If you missed this weeks deep dive on how LEGO grows, you can catchup below. We looked at lessons on values, thinking big, innovating inside the box, customer-centricity, genius content marketing, and the timeless way of building.
Plus, we’ve got an on-theme giveaway in the works: if you’re a subscriber, and you like and sharethe post on LEGO — you could win this 4,000 display-piece Batmobile, or any other set you want valued up to $270. 👇
Otherwise, welcome to the 15th edition of 5-Bit Friday’s! For all the new folks who’ve joined in the past week, this weekly series brings you summarized insights, frameworks, and ideas from best-in-class experts to help us become better builders. As the name suggests — each week I round up 5 bits of info for you.
While these shorter pieces are nowhere near as intense as researching/writing the main deep dives [30ish hours] — they’re still a fair amount of work. If you’re enjoying them, the best way to support this newsletter is by spreading the love and letting some other folks know. ❤️
Conservation of Intent: The hidden reason why AB tests aren’t as effective as they look
How to show your seniority in meetings
Good Product Team / Bad Product Team
Let’s kick it off today with a great piece by Peter Yang.
Why Community-Led Product Development Wins
In short, Peter holds three beliefs which he’s formed over his product career at Roblox, Reddit, Credit Karma, Twitch, Twitter, Facebook, and Microsoft. (How’s that for a resume... 🙃)
They are that:
The customer is the most important person on the team.
You cannot build empathy for the customer by only relying on secondary sources, you have to immerse yourself in their problems by talking to them directly.
You should build a community to have daily interactions with customers about the product and their lives — it helps you build better products.
And with these two ideas in mind, let’s introduce the concept of community-led product development. Simply, it’s when your customers become an ongoing center of innovation and an “extension of your team”. [We actually saw a great example of leveraging the crowd with LEGO]
If you’re a founder or a PM, you’ve had no shortage of advice to go and speak to customers. That’s just law of the land now, and nobody dares to break it.
But, in his essay, Peter notes something interesting. And given his expansive career, I’d say he has some solid experience to back this insight.
This concept [of community-led product development] is nothing new for startups. Founders talk to customers all the time and build products with their feedback.
But many builders stop talking to customers as a company scales. Instead, they only rely on stakeholders, research decks, and A/B tests for feedback.
That’s unfortunate because community is a superpower.
— Peter Yang
And thankfully along with this insight, he’s also found some trends in why builders stop talking to customers as companies scale. Tl;Dr — they’re just excuses, like:
"It's not my job."
People often rely on research decks, metrics, and feedback from other teams as their source of user insights.
"It's too much work."
Large companies often have more lengthy processes to follow before talking to customers, which turns people off from the whole thing. Leading to the last excuse…
"It’s not a priority right now."
If things take more time, people end up investing their time on more immediate things they can control like moving metrics and working with internal stakeholders.
But — the big but — your scale should have no correlation on the cadence of speaking to customers. From idea, through all your Series-N and beyond, the tighter the feedback loop with customers, the more empathy you’ll have and the better products you’ll build. Period.
So, besides just making sure you’re running regular user interviews, etc — how can you go about building a community of customers, and using them in your product development process?
Peter, as always, gives us the goods:
Here’s how you can invite customers to be an extension of your team: Create a community. Announce your product early and invite interested customers to join an online community (e.g., Slack or Discord). Ask them to introduce themselves and start building trust.
Build in public. Ask customers about their pain points and share product ideas and designs early and often. Give them product demos and show them how you're making adjustments to your roadmap based on their feedback.
Don't just talk about the product. Build a casual environment where customers feel comfortable talking about anything. This is the best way to uncover new pain points and walk in your customer’s shoes.
If you do this well, you'll build a thriving customer community that you (and the rest of the team) can talk to daily. Equally important, customers will feel like they built the product with you. This sense of ownership will encourage them to adopt the product early and spread the word to others.
Let's address a few common objections with this process:
"Customers don't have time to talk to us every day." From my experience, customers who care about your product (e.g., early adopters) will be more than happy to talk to you regularly.
"Doesn't this lead to the loudest voices in the room problem?" Yes, but you can mitigate this by recruiting a diversity of customer segments to your community. It’s ok to be a little biased though - if you’re building a 0-1 product, the early adopters in your community will be the people who spread the word.
"Are you saying we should ignore other feedback channels?" Not at all. You should still pay attention to stakeholders, research, A/B tests, and more. But I've found that having a place to talk to customers daily accelerates the feedback loop dramatically.
By building a community, you’re basically plugging yourself into a constant source of innovation, feedback, and awareness to evolving behaviors and needs. This supercharges the velocity of your feedback loop, which, you guessed it, really matters.
Shopping has always been a thing, going all the way back long before the advent of money. But with the internet, phones, greed and individualism, and relentless advertising — we’re a long way from trading cows for corn. Today, commerce is a $26 trillion global market, and ecommerce makes up about a quarter of that.
So, it’s pretty important to be in the loop with how things are changing in this gigantic market. Luckily, Rex Woodbury from Digital Native has his finger on the pulse — and in his latest essay, he unpacks 10 forces changing commerce.
In short, they are:
Power to the People
Gen Z Interns & Viral Marketing
The CAC Rules No Longer Apply
Influencer Commerce & Celebrity Brands
Self-Expression
AI 🤝 Retail
Immersive Shopping
B2B Commerce Makes Life Easier
Sustainability
Don’t Discount Discounters
Let’s go through them. I’ll give you my favorite excerpt, and the main takeaway:
#1: Power to the People
One of the challenges of online shopping is the omnipresence of dark patterns.
A “dark pattern” is a tactic used by a retailer to trick the consumer into doing something that benefits the retailer more than the consumer. Most retailers accomplish this with misleading web and app design. Examples include sneaking extra items into your cart, or using confusing language when you go to cancel an order—“Do I click ‘Cancel’ or ‘Ok’ to complete cancellation?” 🤔
A study by Merchant Machine found that Amazon—famous for its customer obsession—is the worst culprit in retail, with 11 identified dark patterns. The most infuriating one that I consistently come across is the default to “Subscribe” to recurring purchases, versus complete a one-time purchase; here’s what it looks like when I go to order Whey protein:
Dark patterns may succeed in juicing short-term numbers, but over time they erode customer trust and tarnish a retailer’s reputation. One of my long-held beliefs about commerce—and about consumer-facing technology in general—is that power is always shifting to the customer. The arcs of technology and business bend toward customer-friendly products. This is especially true in today’s world of abundant consumer choice.
💡 Takeaway:
There’s a broad trend in commerce (evident by brands like Catch, Safara, and Beam): power is shifting to the people, and the brands that win will be the brands that deliver a more affordable, convenient, and enjoyable shopping experience — not the ones that trick customers and take advantage of the sneaky defaults and people’s naivete.
#2: Gen Z Interns & Viral Marketing
Last summer, 20-year-old Mary Clare Lacke interned at Claire’s, the teen accessories retailer that was once the go-to place for any 90s-baby looking to get her ears pierced. Claire’s revenue declined throughout the 2010s as the brand struggled to stay relevant in the digital age. One of Lacke’s tasks as an intern: inject fresh energy by running Claire’s nascent TikTok account.
In an 11-second video, Lacke riffed on a TikTok trend called “krissing”—a bait-and-switch type of video, inspired by Kris Jenner, that misleads the viewer and then reveals the fake-out. Lacke used #krissing to reveal that Claire’s did indeed still sell gummy bear earrings. The video generated 1.5 million views and 20,000 new followers for the company’s TikTok account.
This story speaks to a new phenomenon: the rise of the Gen Z TikTok intern.
Mary Claire Lacke is now one of four TikTok “college creators” that work for Claire’s as interns during the school year, producing new TikTok videos each week. Other brands are following suit, leveraging young people’s digital fluency to stay relevant.
The payoffs can be immense: while a 30-second Super Bowl ad would have cost you $7 million, the 11-second Claire’s video reached millions (with much better targeting to boot), and likely cost just a few hours of hourly wages for a college intern.
Mastering social channels is crucial in today’s world. The Economist found that 50% of consumers have bought from a brand they recently discovered on social media.
💡 Takeaway:
Brands that want to be successful need to be tapped into the younger demographic of shoppers. It’s not even about going viral on TikTok with a new trend. It’s about generating earned media value — even if it requires hiring a Gen Z intern. With all the “noise” out there and rising acquisition costs, using relevant content to stay top of mind for people is key.
Any Gen-Z’s reading this have any ideas for me? 🙋
#3: The CAC Rules No Longer Apply
Apple’s App Tracking Transparency (ATT) changes have created something of a recession in digital advertising. The major ad platforms—Google, YouTube, Snap, Meta, etc.—are seeing slowing or even negative ad revenue growth. Digital real estate was finite to begin with, and supply-demand imbalances made sure that ad prices were steadily creeping up throughout the 2010s. Now, it’s harder than ever to measure those ads or ensure ROI. The old adage goes, “Half my advertising spend is wasted; the trouble is, I don’t know which half.” In a post-ATT world, this takes on new meaning.
Apple’s ATT has shaken up the mobile advertising industry, and has led to a big deterioration of direct response advertising. Because tracking users for conversions is so much harder, this has caused major customer-acquisition-costs (CAC) headwinds, which Rex calls out as likely one of the biggest shifts in retail right now. As a result, brands have to get more creative about how to refine and measure their ad spend, and about how to reach customers through new channels.
#4: Influencer Commerce & Celebrity Brands
With CACs rising, brands with built-in distribution are well-positioned. In other words, celebrity brands.
The celebrity brands that endure do three things right: 1) They’re authentic to the celebrity, 2) They have a genuinely unique insight, and 3) They move beyond the celeb figurehead.
I tend to be more optimistic about celebrities and influencers as brand curators than as brand creators. Only a select few can build enduring de novo brands. But millions can be arbiters of taste, recommending to their communities what to buy. This is the thinking behind Flagship. Flagship’s business model is designed so that creators do what they do best—offer trusted recommendations:
💡 Takeaway:
Similar to trend #1 — more power is moving to the people. Consumers keep shifting trust from corporations to people. Many folks would rather buy a MrBeast Burger over McDonald’s, or Dwayne Johnsons Teremana over Don Julio. We see this shift both in the rise of celebrity brands, and in “the long-tail curation of the influencer ecosystem.”
#5: Self-Expression
One of the biggest behavior shifts in Gen Z is a shift to more self-expression.
One interesting way this is revealing itself: weddings. The oldest members are Gen Z are 25, and they’re beginning to get married. A report last week found that a third of couples are choosing a wedding theme, up from 13% in 2017 — examples include “Taylor Swift and Cats,” “Roaring ‘20s with Star Wars influence,” and “Vintage Nintendo.”
We also see self-expression in the phenomenon of “committing to the bit.” Committing to the bit basically entails ironic consumption. […]
Many Gen Z-focused brands say something specific about your personality: Madhappy means you value mental health; Dolls Kill means you’re edgy; Nensi Dojaka means you’re a “cool girl.” Expressing personality through clothes is nothing new, of course—but the torrid pace with which young people embrace and discard both their clothes and their identities is new.
💡 Takeaway:
What a brand stands for and represents will matter more and more as people attach their identities to the things they buy. Being a brand know for sustainability, ethical manufacturing, etc will be an important factor when trying to win over younger (more conscious) shoppers.
Thanks for reading HTG! If this is your first time here, join thousands of others for free 👇
Conservation of Intent
If you run experiments, or plan to, then this ones for you.
In Andrew Chen’s essay, Conservation of Intent: The hidden reason why A/B tests aren’t as effective as they look — he argues that more often that not, results from experiments in the conversion funnel don’t materially impact the bottom line.
Why?
Because most tests that focus on areas around the top of the funnel (i.e landing pages, form entry, etc) only really move more low-intent people through. As he says:
For all your users coming in, only some of them are high-intent. It’s hard to increase that intent just by making a couple steps easier – that’ll just grow your low-intent users. Doing tactical things like moving buttons above the fold, optimizing headlines, removing form fields – those are great, but the increases won’t directly drop to your bottom line.
In other words, the total amount of intent in your system is fixed. Thus the law of the conservation of intent!
The most obvious way to see this is to test something high up on a funnel, for example maybe the landing page where a new user hits, or an email that a re-engaged users opens – you can see that a big lift on the top of the funnel flows down unevenly. Each step of friction burns off the low-intent users that are flowing step-by-step.
So, to unlock increases to your bottom line, you need to figure out what’s really blocking your high-intent users (i.e, the ones who’d like to flow all the way through your funnel, but for some reason hit friction).
You obviously get real net incremental increases on conversion the further down the funnel you go. By that point, the low-intent folks have burned off. You’re closer to the bottom line. Look the steps right around your transaction flow – for ecommerce sites that might be the process to review your cart and add your shipping info, or the request invoice flow for SaaS products, etc. Think about high-intent scenarios, for example when you hit a paywall or run out of credits/disk space/resources/etc. All of these can be optimized and it’ll hit the bottom line quickly.
💡 Takeaway:
This definitely doesn’t mean don’t test the top of the funnel. That’s still important and your testing roadmap should still have ideas for how to get more folks coming in (just be real about what the end-impact will be). But, your testing plan should prioritize ideas around how you can build the intent quickly for low-intent users (i.e time to activation events), and unblock high-intent users from transacting.
Aakash Gupta — the product growth expert who’s spent 13 years in the trenches at companies like Affirm, Google, and Epic Games — recently posted his thoughts on how to improve your meeting presence to show your level of thinking, and seniority.
This should come as no surprise here, but people will just naturally judge your leveling and seniority by how you run, and show up, in meetings. Think about when a senior leader hops on a call — there’s a feeling they instill.
This is especially true in “thinking” and strategic jobs like product management. Which means that in a Zoom-first world, having a strong presence here, as Aakash argues, is “one of THE most important skills.”
So…how can you improve yours and work towards Zoom communication mastery?
I’ll let Aakash explain:
[There’s 3 levels:]
(1) Effective
(2) Influential
(3) With Gravitas
[Number 3] is tough - but possible. This is how how:
Control the Meeting
Ask about Alignment
Listen Presently with Intent
Speak Concisely with Confidence
Jump Out of the Box
Control the Meeting
There’s this incredibly delicate balance of not interrupting (often) but still controlling the meeting. You need to set a scope for the meeting that is achievable - and then drive to it. Driving to an outcome is hard when time is ticking down.
Sometimes, you may even need to very kindly end a topic or interrupt someone. The grace and strategic nature with which you do so separates the top 10% from the top 1%. You need to be able to guide conversations through the tough topics and to resolution.
Ask About Alignment
One of the easiest mistakes over Zoom is to assume everyone has more alignment than they do. The most effective technique to remedy this error in judgment is to ask. “Since we’re coming up on time, I wanted to ask: how aligned are we here?”
This is one of the most underused but effective techniques to drive self-awareness of alignment. Look for straight answers and even ask focus to quantify on a 1-10 scale. “James, where are you 1-10 on this plan?” This helps you uncover and discuss unsaid cons.
Listen Presently with Intent
As much as possible, avoid multi-tasking. Listen with as much as presence as you can. Do this with intent: the speaker should be able to see you listening.
Taking notes - physical or digital - is a great tool here. If they can see you adding notes to the doc or writing by hand, they know you’re listening. It makes you an active participant, even when someone else is talking.
Speak Concisely with Confidence
Dominating the meeting is the anti-pattern. Instead, focus your communication on concise, well formed thoughts. Concision is rare and immediately stands out.
Jump Out of the Box
Finally, and perhaps most powerfully, use the power of constraint. It’s every artist’s best friend. Literally become larger than the four square zoom box. Use volume and gesticulation to land a memorable point.
The idea is to “break the frame.” You want to do something sufficiently outside how everyone else is speaking. Being memorable brings emphasis to your points. You are the one who everyone remembers a week later.
That’s some excellent, highly tactical, advice on how to level up your meeting performance. For more posts on product and growth by Aakash — you can check out his Substack here.
Good Product Team / Bad Product Team
There’s been a book sitting in my Amazon cart for some time now. For no particular reason, but I just haven’t pulled the trigger. You might be familiar with it— Inspired, by Marty Cagan.
Well, I came across this article from a few years back by Marty, and let’s just say I’m inspired to go checkout.
Marty Cagan (besides being an author) is the founder and partner at Silicon Valley Product Group, and former product leader at eBay, Netscape and HP. Which, as he says, has brought him a lot of insight into the difference between good product teams, and bad ones:
I’ve had the extremely good fortune to be able to work with many of the very best technology product teams in the world. People creating the products you use and love every day. Teams that are literally changing the world.
I’ve also been brought in to try to help with companies that are not doing so well. Startups racing to get some traction before the money runs out. Larger companies struggling to replicate their early innovation. Teams failing to continuously add value to their business. Leaders frustrated with how long it takes to go from idea to reality. Engineers exasperated with their product managers.
What I’ve learned is that there is a profound difference between how the very best product companies create technology products, and the rest. And I don’t mean minor differences.
And it’s the crisp differences he lays out for us that have convinced me to get to reading his book. Here they are, in Marty’s perfect words:
Good teams have a compelling product vision that they pursue with a missionary-like passion. Bad teams are mercenaries.
Good teams get their inspiration and product ideas from their objectives (e.g. OKR’s), from observing customers struggle, from analyzing the data customers generate from using their product, and from constantly seeking to apply new technology to solve real problems. Bad teams gather requirements from sales and customers.
Good teams understand who each of their key stakeholders are, they understand the constraints that these stakeholders operate in, and they are committed to inventing solutions that work not just for users and customers, but also work within the constraints of the business. Bad teams gather requirements from stakeholders.
Good teams are skilled in the many techniques to rapidly try out product ideas to determine which ones are truly worth building. Bad teams hold meetings to generate prioritized roadmaps.
Good teams love to have brainstorming discussions with smart thought-leaders from across the company. Bad teams get offended when someone outside their team dares to suggest they do something.
Good teams have product, design and engineering sit side-by-side, and embrace the give and take between the functionality, the user experience and the enabling technology. Bad teams sit in their respective functional areas, and ask that others make requests for their services in the form of documents and scheduling meetings.
Good teams are constantly trying out new ideas in order to innovate, but doing so in ways that protect the revenue and protect the brand. Bad teams are still waiting for permission to run a test.
Good teams insist they have the skill sets on their team necessary to create winning products, such as strong interaction design. Bad teams don’t even know what interaction designers are.
Good teams ensure that their engineers have time to try out the discovery prototypes every day so that they can contribute their thoughts on how to make the product better. Bad teams show the prototypes to the engineers during sprint planning so they can estimate.
Good teams engage directly with end-users and customers every week, to better understand their customers, and to see the customer’s response to their latest ideas. Bad teams think they are the customer.
Good teams know that many of their favorite ideas won’t end up working for customers, and even the ones that could will need several iterations to get to the point where they provide the desired outcome. Bad teams just build what’s on the roadmap and are satisfied with meeting dates and ensuring quality.
Good teams understand the need for speed and how rapid iteration is the key to innovation, and they understand this speed comes from the right techniques and not forced labor. Bad teams complain they are slow because their colleagues are not working hard enough.
Good teams make high-integrity commitments after they’ve evaluated the request and ensured they have a viable solution that will actually work for the customer and the business. Bad teams complain about being a sales-driven company.
Good teams instrument their work so that they can immediately understand how their product is being used and make adjustments based on the data. Bad teams consider analytics and reporting a “nice to have.”
Good teams integrate and release continuously, knowing that a constant stream of smaller releases provides a much more stable solution for their customers. Bad teams test manually at the end of a painful integration phase and then release everything at once.
Good teams obsess over their reference customers. Bad teams obsess over competitors.
Good teams celebrate when they achieve a significant impact to the business (outcome). Bad teams celebrate when they finally release something (output).
Of course, there’s a spectrum. I think if you’re hitting all the good ones — you’re probably an excellent product team. But, it’s unlikely that’s the case as all teams have some bad habits. This diagnosis though can certainly help guide a team to the top-end of the spectrum.
And that’s it for this week. Don’t forget to catchup on our LEGO deep dive if you missed it and give yourself a shot at winning that Batmobile. Only 8 entries so far — the odds are in your favor! Otherwise, I’ll see you next time.
Have a great weekend!
— Jaryd ✌️
Thank you for reading How They Grow. This post is public so feel free to share it.
If you’re always on the lookout for new business ideas, check out this newsletter I recently came across. It’s by Matt Bishop, and every week he writes about different business opportunities and suggests steps on how to pounce on them. Some great ideas in there for the entrepreneurial folks. 👇
