Lenny Rachitsky: recommendation

Transcript context

…conceived of companies to begin with. So maybe it's a little embarrassing that I had to be 53 years old before, I think, the scales fell through my eyes and I was like, "Oh, companies are equations." And so when we first started talking about lifetime value and customer acquisition costs and getting those two things balanced and just the thinking about the unit economics of the business, my natural instinct was to go immediately to the leaf nodes of the equation like, "Oh, what percentage of people do we convert from install to registered and from registered to trial," and these very way down at the bottom of all the funnels and to ask the product team like, "Let's try to optimize these." And in the process though of trying to understand where we could take the business as we optimize those various dimensions and trying to understand too which of the dimensions had the most leverage, I started building these ever more sophisticated models that describe the whole business. I mean, in startups, you get to wear a lot of hats. And definitely a hat that I'm wearing that I didn't anticipate at all is I'm the full-time FP&A guy for Zero. And so I built this spreadsheet that aggregates data from all of our business intelligence tools and raw data from our subscription transactions and looks at all of our historical results and all of our expenses and spend and then could use that to predict future scenarios by manipulating all of these variables. And it's just not at all the way I ever thought about products before. And I know that you've got lots of listeners like, "This guy's an idiot. This is a fundamental way to contemplate product work." But if there's anybody out there like me who thought of it as art first and then optimization in the details, it is really, really powerful to spend the time to create the model that describes the whole thing so you can identify what are the high leverage points to focus on. So been doing a lot of that at the company in the last two years and it's really starting to deliver incredible results. Like everything in life, I mean, you sign up for things so you can learn, and that's the big one for me in the last year. I really love that takeaway of as a CEO coming back to share, here's what you should be thinking about that the CEO is probably thinking about, as a product leader, you may not be, of trying to actually spend the time to think about the business model and understand it deeply because your founders are thinking about it all the time. And so if you're not, you're missing out on here's a way to influence them, here's a way to... It's so funny too because it's a thing I suddenly understand something that mystified me through my entire career, which was I'd go to board meetings and the investors would ask these probing questions, but they were really never about the product and what the product did and what the product roadmap was and what the features were and what this... It all seemed to operate at this level that was almost completely independent of the details of the "what is the solution you put into the world", which as a product-oriented thinker, was just completely baffling to me. And I now realize that they were tilling the soil that I'm talking about, they were tilling. It doesn't really matter what the screens are and what the features are. I mean, it certainly matters, but that there's another higher order way to look at a company, which is really about the optimization of this equation. And I think particularly, if you sit on 25 boards, it's probably a much more efficient way to evaluate how your companies are doing and where to spend your time and how to help by thinking about them abstracted up at that layer. So I will never stop thinking about software development as being an art form and I will never stop enjoying the days when I get to lean in on the details, but it's been pretty eyeopening.…

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