There are three reasons to make your product better:
— Kjetil Holmefjord (@kjetil1) November 18, 2019
1) reduce churn
2) increase conversion and/or market
3) increase revenue of existing base
I tweeted this a few days ago, and one of the responses I got was that I was stating the obvious. Most reasonable things are, but that doesn’t mean they shouldn’t be communicated repeatedly and clearly.
Increasingly, I’m learning how important it is for founders to communicate clearly (see another argument for this here). Clear communication is necessary to convince investors, employees and customers to join, and it is also very important for building the best possible product.
My tweet was directed at the latter; how to build the best possible product. At any given point of time, you’ll have to prioritize how to further develop your product; what features to build, what bugs to fix. This quickly turn into a question of why “job A” should be prioritized before “job B”.
The decision is much easier to make if you clearly state the different reasons to build something, as per the tweet. Generally, I would argue you should prioritize jobs reducing the probability that customers churn (obviously only to a certain point). Second, I would prioritize jobs makeing your product attractive to more customers, and third jobs that increase the revenue per customer. All exceptions apply of course, but this would be the rule to break.
With clear communication around what each job entails and why it should be prioritized, the probability of building a great product increase. And with it the chances of succeeding.