Product Mindset

For product-focused companies, the foundation of their business is the attitude (product mindset) to accurately and deeply grasp user needs, design solutions based on those needs, and create user value. However, as market conditions shift, cost pressures rise, or sales become more target-driven, the product mindset often gets overlooked.

For example, while demand is growing, SaaS companies are being scrutinized more harshly in the stock market, with increasing pressure for profitability and growth. It is precisely because of these market conditions that we need to take a fresh look at this issue, and this article will summarize the product mindset as one of the starting points to which we should return.

What is Product Mindset?

1. Creating user value through products

The product mindset does not focus on sales and profit, but rather on accurately grasping user issues and needs, and creating user value through the product.

2. Design for purpose

The product mindset is the exact opposite of project management, where the objectives are set and the resources and schedule are designed and planned to reach those objectives. User issues and needs are constantly changing, so it is necessary to constantly think about what kind of user value should be created. Therefore, the objective itself must be continually redefined, and the mindset must be how to get closer to the goal within the given resources and time. The variable nature of the objectives themselves can sometimes be an environment for innovative ideas.

For example, in project management, if there is a lot of rainy weather and the objective is to make 100 umbrellas, the rest of the time, the idea is to think about how many people with what skills are needed each month, design the flow of the production process, and actually make the umbrellas. On the other hand, the product mindset is, in the first place, to carefully understand the current situation, whether the rainy weather conditions change with the season and how much rainfall there is, and to verify that, in fact, light rainfall is common in some seasons and that it is not a problem if it can be covered with a simple raincoat or hood instead of an umbrella. In this way, we increase the resolution of the purpose of the project in the first place and change the direction of user value. As a result, this approach can sometimes spark significant innovation.

3. Medium- to long-term perspective

It is important to think from a medium- to long-term perspective, as it is rarely possible to create user value in the short term. If you formulate a development roadmap or prioritize development from a short-term perspective, you will end up accepting a lot of individualized plug-ins, and you will find yourself in a situation where you cannot spend resources on essential product development. In addition, When development prioritizes sales, profit, and speed, technical debt accumulates, reducing the ROI of development efforts and leaving the company stuck, unable to move forward.

As described above, the product mindset is based on the creation of user value through the product, and the major point is to think from the perspective of objectives and work from a medium- to long-term perspective. This mindset should not be held only by product managers, but also by those involved in product development, as well as marketers, salespeople, and others on the business side, and should be viewed as part of the culture that the entire company should have. Product challenges aren't solely the responsibility of the product team but form a core foundation of the entire business. By having a product mindset on the business side, for example, even a single user feedback can change.

Rather than simply communicating requests received from users to the product manager, the business side should consider the abstract needs of users based on their individual requests and collaborate with the product side, leading to discussions with an eye toward the formulation of future development roadmaps.

Two major barriers to a product mindset

There are two major obstacles to maintaining a product mindset: one arises in the growth phase after achieving PMF, and the other after an IPO, when financial disclosures increase pressure to meet numerical targets.

1. After PMF

Until PMF, the company is often a startup with 20 to, at most, 50 employees, or is operating the product as a new business. During this phase, the organization remains open, with close face-to-face collaboration, allowing teams to fully focus on achieving PMF. However, once we win PMF and enter the growth phase, we have the opportunity to regain our grip on the current winning track and increase both sales and the number of companies that have adopted the product. Simultaneously, budgets for large B2C projects and web advertising expand significantly, and before long, the focus shifts from users to numbers. As the number of users grows, so does the focus on selling and getting the organization to implement. And as the number of users grows, each function becomes more specialized and siloed in order to grow the organization. As a result, coordination costs rise, work becomes more project-oriented, and the product mindset fades.

2. After the IPO

After the IPO, the company will disclose its goals externally through IR and disseminate segment-specific PLs. Of course, internal goals are typically set more aggressively than publicly disclosed goals and have a buffer, but the IPO is an opportunity to increase commitment to goals. In the midst of this external pressure, the situation we saw during the Growth phase becomes more colorful. The IPO is a further step from the Growth phase through the Scale phase, and in the process, the organization grows larger, becomes more siloed, and the product mindset diminishes. As the organization grows, just adjusting and completing the work becomes a big task, and a sense of accomplishment is felt. However, the coordination itself does not lead to an accomplishment; it is an accomplishment only when the product reaches the users.

Striking a balance to maintain the product mindset

There are three major ways to deal with this.

1. Culture

As mentioned at the end of "What is Product Mindset," the first approach is to incorporate a user-centered approach into the culture. In fact, this approach is the main axis and should be the first thing to be considered. The first step in the culturalization process is to verbalize what values are important to you. We need to verbalize what values we want to emphasize, stick to them word for word, and create a form that can easily permeate the organization. Once it is in shape, consider how to communicate it to the organization. This could be done by adding them to the company's core values, or by incorporating them into regular training programs, etc.

In some cases, it is not only communicated, but also incorporated into personnel evaluation criteria as a code of conduct to include a feedback mechanism. Since this is a very coercive approach, it may be a good idea to start by incorporating feedback in the course of work, rather than in the form of evaluations.

2. Leadership Support

People are greatly limited in their thinking and actions by KPIs. Simply asking them to raise their eyes will not change anything. Therefore, we need the opportunity to go back to the vision, go beyond its limitations, and re-examine what we are doing and for what purpose. It is difficult for an individual to go beyond the constraints, so it is important to establish a process whereby leadership continues to communicate the vision, the field interprets it, and it is reflected in the product.

3. Collaboration among teams

Collaboration among teams is essential in product development. By collaborating with members of different functions and teams working on other products, they can support each other and sometimes act as peer pressure. If nothing is done, the organization will become siloed and collaboration will disappear, so designing meaningful collaboration is vital. For example, it is important to gather all the team members together to read the mission and vision, to share starting points such as roadmap sharing meetings, and to share each other's perspectives on common themes such as workshops, training, and participation in overseas conferences. This is a way to share our perspectives and impressions with each other.

Conclusion

Just as a car can run on bad fuel, a product can be operated without a product mindset in place. However, accidents will happen in the near future. The ability to keep the product mindset and focus on user value is the foundation for the evolution of the product. Additionally, the post-PMF and IPO stages are particularly challenging for maintaining the product mindset, so it's crucial to focus on embedding it in the company culture early on.