Don’t outsource your competitive advantage
💡JC's Newsletter #126
Dear friends,
In JC’s Newsletter, I share the articles, documentaries, and books that I enjoyed the most in the last week, with some comments on how we relate to them at Alan. I do not endorse all the articles I share, they are up for debate.
I’m doing it because a) I love reading, it is the way that I get most of my ideas, b) I’m already sharing those ideas with my team, and c) I would love to get your perspective on those.
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💡Must-read
👉 What is “Seeing The Matrix” For A Product Leader (Medium)
Don’t outsource your competitive advantage:
That data helps you iterate, but only vision and clearly articulated strategy (and luck on timing) help you leapfrog. Both are important, but neither is sustainable on its own.
That you should never outsource your story or any component of your competitive advantage.
➡️ Do not outsource what is core to us winning, to our differentiation.
Outsourcing your press efforts to a PR agency robs you of (1) the practice reiterating and polishing your story, (2) the relationships that will serve you throughout your career, and (3) the chance of emotionally engaging journalists that are pitched all day. PR agencies can do blitzes, but you should do the important storytelling yourself.
➡️ Why I don’t believe in outsourcing PR.
Same goes for any other part of your competitive advantage. For example, if your product is defined by its design, do it in-house.
➡️ That is why our brand should be built more and more in-house.
Use Prototypes:
That a prototype is worth a hundred meetings, and almost all product meetings that aren’t grounded with a prototype are a waste of time (or worse).
➡️ I’d like us to do a lot more prototypes to discuss. That is why I have been pushing everyone to use Figma internally.
Delight and emotion:
That consumer (and prosumer) products ultimately succeed because of how people feel about themselves using them. Ego analytics, surprise and delight, and hooks to appeal to our laziness, vanity, and selfishness in the first mile of product experience are the biggest secret in product.
➡️ I really agree with this and the importance of focusing on how our product is going to make our customers feel.
That raising the bar of what your team ships is f*cking hard. It requires culture change, a few cycles of missed deadlines (which may frustrate customers), and career risk to set a NEW BIT for everyone. “Good enough” is extremely seductive for any business that seeks to ship on time, meet customers’ expectations, and manage risk. To raise the bar and ship something extraordinary requires unnatural motions, churn, and near-term disappointment. From what I've heard, Apple’s reboot was an iconic example. If you can survive, it is worth it.
That the best way to review a product experience is to ask 3 questions on EVERY screen: “how did I get here?” “what do I do now?” “where do I go next?” — these questions will reveal flaws in object model, UX, onboarding, and orientation.
➡️ Let’s keep pushing to ship great product.
The most powerful (and affordable) driver of product growth is surprise, delight, and intrigue.
People don’t rave about a product doing what they expected, they rave about it doing something they didn’t expect.
Think Tesla’s games, easter eggs in games, etc...these are viral growth tactics that don’t happen unless a product team prioritizes them.
➡️ How do we have more easter eggs, games, who will serve growth down the line even if a small portion of the member-base use them?
And yet we tend to ship products informed by customer research with “MVP” feature lists that seldom optimize for mystery, wonder and delight. Maybe we have it all backwards? Maybe we should make all products fun to breed engagement? You need to add some novelty, edge, and unexpected delight in there to avoid being the better product that nobody notices.
🏯 Other great articles on competitive advantages
👉 Spotify: A Product Story - Episode 1: How do you steal from a pirate? (Spotify Podcasts)
➡️ Ask open-ended and positive questions that gets people thinking.
I said it's never going to work. And Martin being Martin, he asked, Well, OK, well, but if you would do it, what would you do?
He asked very open-ended but positive-intended questions, which gets you to kind of start thinking. So I said, well, the only way you're going to actually solve this is I guess if you make a better product than piracy and Martin's next question was, OK. Well -- how would you do that?
➡️ Convenience trumps everything else is an excellent mindset when it comes to building products. If we become the most convenient way to access care and well- being, we will be the de facto one-stop health partner.
Convenience trumps everything. Daniel and Martin made a bet that people would keep pirating songs until something even easier came along. And once it did, they would make the switch.
Whenever you can make something faster, users use it more.
Every product needs a magic trick. It needs to do something that nobody thought was possible. It needs to pull off an illusion.
For Spotify, that illusion was the illusion of having downloaded all of Napster to your hard-drive, instantly accessible, for free. And it was totally captivating.
➡️ About the importance of going full-stack and building the hard stuff.
If you want to fundamentally improve something, you have to break existing standards and think full stack about your problem.
Spotify didn't really use any ready-made libraries for things. Everything was kind of custom-made. Which meant that we could control everything to a good degree.
This was really Spotify’s first key product decision. Building a proprietary full stack media distribution solution with its own streaming protocols allowed the team to seamlessly combine the scalability of peer-to-peer with the speed of client-server technology, and optimize the hell out of it.
➡️ How to attract great talents? Great problems and great team!
It wasn't obvious at all. But I think it comes back to your DNA as the founder and my DNA was I loved technology. And I loved technology even for technology's sake. So it just made it cooler. And I figured if it was more interesting and more cooler, we could also recruit cooler people and more talented people that can work on these problems.
What attracts great talent is the level of ambition.
👉 The Collison Brothers Built Stripe Into A $95 Billion Unicorn With Eye-Popping Financials. Inside Their Plan To Stay On Top (Forbes)
Mostly that means focusing Stripe’s R&D teams—more than 40% of the company is still engineers, unusual for its scale
➡️ To keep building their competitive advantage.
👉 The Six Stories of Mercado Libre (The Generalist)
In its scope and ambition, “Meli” is a Borgesian perplexity. It is both an e-commerce store with endless aisles and a bank, offering an intricate lacework of financial products.
Meli describes itself as a composition of six core units: Libre (marketplace), Shops (storefronts), Envíos (shipping), Pago (payments), Crédito (credit), and Publicidad (advertising).
➡️ Not afraid of complexity.
Pago’s first solution was to develop an escrow service that relied on a network of collections agents. Buyers on Meli would pay for their purchase with a local agent who would log its receipt, prompting the seller to release the goods. The seller would subsequently receive the cash from a pick-up point on their end.
➡️ Not afraid of doing stuff in the real world, which I think should be inspiring for our health services.
👉 Antonio Gracias - Pro-Entropic Investing (Join Colossus)
Executives that are really good at doing both of those things, opening the probability tree and then knowing when to close it and execute really hard and then reopen it; we define that as pro-entropic thinkers.
You have to disrupt on both axes. You actually have to make the product a lot better for consumers and you have to make it cheaper. And cheaper can be measured as, it's not just absolute dollar cheaper, it's just a lot better money for value.
The iPhone wasn't cheaper than the Nokia I had right before my iPhone. But it was a lot better.
🗞 In the news
📱Technology
👉 An Interview with Okta CEO Todd McKinnon About Security in Supply Chains (Stratechery)
In January, there was a breach where a hacker got into a call center and is pretty — post facto, it’s easy to say this — but it’s a pretty standard breach. There was no MFA authentication on a VPN gateway, a hacker got in, got into some Windows boxes, used some pretty standard privilege escalation tools, and moved around in that environment, and also broke into some Office 365 accounts and compromised those, and did some various things. One of the things the hacker did when they were in this network is that they did a remote desktop session into a thin client of a support engineer that was working, supporting Okta customers.
This was an employee of Sitel and they were a contractor to Okta, so they were supporting Okta customers. They were working on behalf of Okta, but technically for Sitel. The hacker got onto this machine and said, “Oh, this looks pretty interesting, this support application. Let me see what I can do here.” They searched for a couple customers of Okta and tried to do some password resets and then searched in some other applications. They did a query in Slack and were basically trying to root around for any damage they could do and they also took a bunch of screenshots when they were doing this.
We reported the failed account takeover attempt to Sitel and we told them to follow up on it and investigate it. In hindsight, we definitely should have followed up on that thoroughly and made sure that we knew the full extent of what was happening in their environment.
➡️ How to manage stakeholders.
One thing this has exposed is that you really have to take that rigor and that focus to everyone in your value chain. It can’t just be your own company, your own product, and you can be impacted. Everyone has dependencies or uses third parties to some degree and you have to go all the way up and down the chain or you’re potentially at risk of things happening that you would’ve thought could only happen in your core.
It’s not enough to just trust that there was not a misconfiguration, it has to be technically enforced.
Look into the third parties and don’t make the mistake we made, which is focusing all your effort on your own company, your employees, your own software development life cycle. You have to look beyond that especially when you’re in a business like Okta, where you’re a critical dependency, it’s not enough to just keep your own core in order.
👉 NPM Sabotage, Convenience Matters, Moxie Marlinspike on Web3 (Stratechery)
Users of popular open-source libraries ‘colors’ and ‘faker’ were left stunned after they saw their applications, using these libraries, printing gibberish data and breaking.
The developer of these libraries intentionally introduced an infinite loop that bricked thousands of projects that depend on ‘colors’ and ‘faker.’
This convenience can, of course, be abused by malicious actors — attacking packages is called a “supply chain attack” — which is why companies generally maintain a private mirror of these packages for their applications; everything on these private mirrors is, at least in theory, fully vetted. In truth, though, it’s easy to let it slip, and hybrid feeds can be exploited; best practices include referencing one single private feed (instead of multiple), controlling scope via naming prefixes, and implementing client-side verification, including version pinning. Not everyone follows best practices though — it can be inconvenient!
➡️ Interesting way to breach security through open-source libraries.
🏥 Healthcare
👉 The Most Disruptive Big Tech Company in Healthcare (CB Insights)
The Covid-19 pandemic has overwhelmed hospitals and health systems globally. Providers have been burdened with increased patient volume and administrative tasks, leading to burnout.
To alleviate these issues, hospitals are rethinking operating models and looking to integrate emerging technologies that automate administrative work across various hospital functions, including: Scheduling, Digital front door, Patient engagement, Payments
👉 Digital contraceptives: Femtech company Clue raised $18M
to roll out a digital contraceptive. The company, which has provided a period tracking app since 2013, is now looking to leverage data on over 12M users to provide a direct-to-consumer medical device for contraception.
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A digital contraceptive? Not sure I would trust this!