How we want to build 0 to 1 products at Alan

JC’s Newsletter #190

Dear friends,

Every week, I’m sharing an essay that relates to what we are building and learning at Alan. Those essays are fed by the article I’m lucky enough to read and capitalise on.

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Introduction

In our recent team discussions about enhancing the member experience with our new health services, it became clear to me that it was important to share more context on how we build products at Alan. We don’t want to be prescriptive about this being the only way, but believe it is a recipe for success that can be applied not only to product building. 

In my opinion, we need to treat every new service we introduce in our bundle as if it's a mini-startup on the quest for product-market fit. This essay outlines why such an approach is vital and how to implement it effectively at Alan.

The dual objective: clinical impact & business viability

When we talk about our new health stories—be it for mental health, back pain, or daily wellness—, a new customer experience or a new insurance offer, the end game is twofold. 

Firstly, we aim to create a significant clinical and well-being impact for our members. 

Secondly, we must build a financially viable business model. We need to build a business where customers are ready to pay for our services, one way or another, like every company. 

Being focused on one side only is a mistake. A company that focuses solely on one aspect would find itself struggling for survival, let alone securing funding for growth.

The Alan approach: a retrospective

At Alan's inception, we proactively selected 30 companies, gathered invaluable information about their needs, current contracts, and decision-making processes. We even pitched our product ideas and prototypes to them before we had our insurance license. As a result, these companies became our first customers the day we became operational.

Andrew Chen, a renowned product thinker, encapsulates this idea in his concept of the "Atomic Network," which is "the smallest network where there are enough people that everyone will stick around." 

This philosophy aligns with our initial approach—if we can't make a service valuable for a small group (10 companies), it's very unlikely to succeed on a larger scale.

Leveraging our assets

Our relationship with existing companies and our understanding of their specific challenges—like claim typologies and absenteeism rates—are significant assets. These insights allow us to define what companies we want to work with on our new services, our first “communities”.

We should also create viral adoption effects within these organizations, as we have members and admins who love Alan.

A methodical approach for new products

Selection of Design Partners

We should identify 10 companies that align closely with the new service under development. Their needs and challenges should be the litmus test for our product's efficacy.

Pitch & Prototypes

Our pitches and prototypes should be so compelling that HRs/CEOs are willing to invest their time with us. If we can't sell the dream now, we won't be able to sell the reality later.

Do things that don’t scale

We should focus on high-impact, low-scale activities that drive adoption. These could range from in-person pitches during company lunches to gamification tactics among employees.

As Paul Graham (Y Combinator) says:

“You should take extraordinary measures not just to acquire users, but also to make them happy. (...) Another reason founders don't focus enough on individual customers is that they worry it won't scale. (...) I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy.”

For example, if you want to test in a few companies how you can increase adoption of a service, before writing any line of code in the customer-side, do things like on-sites, emails, slack messages, contests… If they work, then we productivize them. 

ROI Validation

It's crucial to measure the Return on Investment (ROI) and build compelling case studies with members and customers to facilitate broader adoption, later on.

Scaling

Once we succeed, we can think about scaling, rolling out to more and more members and customers.

Rebutting common objections

Some might argue that these focused efforts won't significantly impact our larger portfolio.

To that, we should remember that both Facebook and Stripe started with hyper-focused approaches one campus at a time, and one company at a time at Y Combinator respectively and only then expanded successfully. If our product can't win in a smaller arena, it's unlikely to succeed in a bigger one.

Being a customer-led company

We need to eradicate the imaginary boundaries between sales-led and product-led initiatives. 

Ongoing dialogues between sales and product teams can ensure that our offerings resonate with what the customers actually need. The voice of the customer should not only be heard but also acted upon to generate revenue and margin.

It should not stop us from having a strong vision on what we want to achieve, nor slow us down. We should not do what customers ask, we should

• Build our conviction on what to build for members

• Be great at convincing customers it has value. It forces you to write the pitch, to iterate, etc...

• Make it work within the realm of a few companies to have network effects and to do things that don't scale at company level (it is like Uber going on a specific street every night giving flyers for a month to launch). In our case, it is going to a company doing all the things that don't scale until we have massive learnings.

• if it doesn't work with the employees of 10 companies with the extra miles that don't scale, it will never work at portfolio level

At the beginning of Alan, we had strong opinions on the direction, made bold choices, but validated that we had a deep enough market for those. 

Conclusion: a note on quality

Steve Jobs once said, "Your aesthetics get better as you make mistakes. But the real big thing is: if you’re going to make something, it doesn’t take any more energy—and rarely does it take more money—to make it really great." 

Quality is not an optional attribute; it's a mandatory feature of any successful product or service. As we go about redesigning our approach to new services, let's remember that a little extra time and effort can transform our offerings from good to great, and ship product that we are proud of and that will create value for all stakeholders (members, customers and Alan).

Some articles I have read this week

👉Scott Belsky: Collapsing the Talent Stack, Persona-Led Growth & Designing Organizations for the Future (Implications)

• I agree 100% with the fact that every function is going to change 

• We are going to simplify the org. I believe the future is two-person product teams 

• Product and product marketing should be one role in many situations 

• I agree strongly with collapsing the talent stack - let’s have crews based on people not roles 

• Good position on emotions/drama, and how to not become blend 

• What do we think about product defaults? 

👉 Tweet by Scott Belsky about the future of data for health (Twitter)

• Interesting vision about what AI could do with our data. I’m not sure of the path to build that though

👉 How to Do Great Work (Paul Graham)

This article represents my view on how to innovate, and how to achieve great things. You need to fall in love with what you do, be curious, be an optimist, be consistent in learning. There is no magic in it, only building the right habits.

• Connect different fields, be curious

• Ask questions about things that everyone else took for granted.

• Work hard because you love what you are doing

• Try lots of things, meet lots of people, read lots of books, ask lots of questions.

• Have big blocks of time for uninterrupted work (for me every morning)

• The key is consistency: read a little bit everyday, write a little bit everyday.

• Build taste proactively

• Build instead of being cynical

• You will need some rule breaking

• Being prolific is underrated.

• Morale starts with your view of life: be an optimist.

• Walk more!!!

👉The Rise and Fall of ESPN’s Leverage (Stratechery)

• As we are in the business of membership fees, do we want an as diverse program as possible?

• It is really the definition of "marginal churn contribution" framework I shared in the past

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