Despite shrinking budgets, can product teams still experiment?
by Ryan Lock ✦ 22 March 2024 ✦ 3 Min Read
If you’re a product leader, right now "do more with less" isn't just a cliché but your mandate.
Budgets are getting slashed all over the shop. Organisations were once champions of the "growth at all costs" mantra. Now they're pivoting towards a profitability-first approach. The message from business leadership is clear: positive ROI isn’t just preferred; it's required. In many businesses, we’re seeing less appetite for experimentation.
At our recent breakfast with product leaders from companies including GoHenry, Cashapp, Shawbrook Bank, Onfido, and Slice, we discussed methods for navigating these challenges.
The conversation left me thinking about a paradox. The push for immediate profitability and aversion to risk seems to discourage experimentation—a critical engine of innovation. But what if I told you that experimentation is not the enemy of efficiency, but its ally, especially in times of financial constraint?
Experimentation as a strategy, not a gamble
Experimentation can get a bad rap - and for good reason. If its purpose isn’t communicated well, it can be seen as wasteful spending, like a scatter-gun approach to finding out what’s valuable.
But there’s a distinction between wasteful spending and strategic experimentation. The latter, done correctly, means testing hypotheses quickly and cheaply, mitigating the risk of larger, costlier failures down the line.
The way experimentation is communicated is key. Product leaders should position it as a precision tool, not as shots in the dark.
When the pandemic kicked off, Airbnb faced a drastic drop in travel. So they doubled down on local experiences and long-term stays, a move that not only helped it survive but also thrive in a changed world. It wasn’t a blind gamble; it was a calculated experiment based on observing consumer behaviour shifts.
The super-user goldmine
In lean times, understanding and leveraging your super-users is your smartest priority.
These super-users are your product evangelists: those who are willing to jump on an hour-long call with you to talk about the product. Engaging with them can lead to low-cost, high-impact innovations that drive retention and growth.
“We know who our market is but we need to get the right people in first. We want to find the nerds, the super users”
At our breakfast roundtable, Ed Biden shared a case study of how Depop nurtured those highly invested early fans and top buyers as they scaled. They set up a Slack channel for top sellers, invited them to boot camps and all-hands with execs, and even hired them into the team.
The power of product sense
Your 'product sense' is your new best friend, especially when budgets are tighter than a millennial’s jeans.
Product managers often get caught in the trap of needing research to justify every decision. Sure, data is king, but there's something to be said for gut instinct and firsthand experience. Know when you’ve hit diminishing research returns, and make a decision.
*JFDI: Just Fucking Do It
The bottom line
The narrative that experimentation is a luxury we can no longer afford is fundamentally flawed. The reality is, we can't afford not to experiment.
The key is to do so thoughtfully, focusing on initiatives that align closely with user needs and business goals. In doing so, product leaders can navigate their teams through uncertain times, not just with the goal of surviving, but thriving.
The future belongs to those willing to experiment wisely and act decisively.
Being a product leader is a lonely job. We run exclusive breakfasts for a friendly group of product leaders to share stories and words of encouragement.
If you’d like to come along to the next one, get in touch here and we’ll reach out. Or you can chat directly with me Ryan, ryan@planes.agency
