Practical Product Management Advice on Developing a B2C Marketplace Experience
A 3 article series where I share my learnings
Over the course of my career I’ve Product managed a variety of marketplace experiences. Each one addressed the needs of a different industry and presented distinct value props to vastly different audiences. However, the fundamentals were the same. In this series I share tactics I use to develop Product strategy and roadmaps.
Ground yourself in a mathematical model
You don’t need to know everything, but you must always start with a mathematical model. The model doesn’t need to be sophisticated. However, it should represent the fundamentals of your Product hypothesis.
For example, at Brit + Co I led a 0 to 1 Product exercise. Our hypothesis was we could monetize the brand’s value by consigning handmade items by members of our online community. To be profitable our costs needed to be sufficiently lower than the LTV of our customer.
UE = LTV/Costs where LTV = Total purchases from a customer during a given period of time and Costs = CAC + COGs during that same period
As you can imagine LTV and Costs are highly unpredictable and variable in the early stages of establishing product-market fit. For this reason, the Product goal was to understand the inputs into the calculation as rapidly as possible. Doing so allowed me to position the right questions to my team, and inform leadership decisions.
How rapidly and cost effectively could we build a store front? as this was required for us to drive purchase conversion and build begin tracking LTV
How much should we invest in back-end technology to build the supply side of the business? as keeping costs down while rapidly delivering physical products was a key to customer retention.
How will we price products to cover the costs of the b2c marketplace and attract more sellers? as we understood there was a disconnect between our audiences willingness to pay and the actual or sometimes perceived value of the homemade items we were selling. Establishing quality Product experiments to gain learnings was critical.
GSD
An idea is only as good as its execution. Here are some practical tips on how to ground yourself in a model.
Ask your analyst, or CFO if are in a small company, to build you a UE model in Google Sheets or Excel. They may be tempted to use all of their accounting knowledge to make the calculation exact. Reassure them you need the model to be directionally right to get started. If it is too complicated to track or explain, you are doing it wrong.
Ask your PMs to report key inputs into the model on a weekly basis. This will require them to:
work with engineering to be sure tracking is in place
build relationships with internal stakeholders such as marketers and merchandisers to efficiently build out reporting
set aside time each week to analyze the data. It creates a natural moment for them to make iterative decisions on what work they are prioritizing in upcoming sprints
Socialize the metrics weekly. Use an existing meeting or create a new one to share your hypotheses on how Product strategy and execution are contributing to the trends you are seeing. Doing so will allow you to influence executive leadership, and develop trust with your Marketing counterparts.
In the next article, I’ll share how to explore Product strategy questions on investing in supply vs. demand sides of a b2c marketplace. It is always a contentious internal topic.