Your Product is Your Business
Many startups are founded based on old-fashioned principals of how a business is put together. Founders imagine that they’re building a widget, and then they’re going to open a store and sell the widget. But these days, more and more, the widget is the store. Or the store is the service. Or the advertising in the product itself. Essentially, the new model is a hybrid of product-marketing-business model. And organizing the company as if these are different departments slows and often kills a startup.
The typical technology startup org chart looks something like this:
That looks reasonably organized according to roles and responsibilities. After all, one side of the business is building the product and the other side is selling it. Then you put the apple in the store and customers buy it. What could be more natural?
We No Longer have a Product and a Store
Except that we don’t build separate products and stores anymore. In fact, often our product is also our store. Customers find us, play with our software, make a purchase, come back to buy more, or complain, or ask for new features, and it’s all happening online. The product is the store.
This often leads to confusion behind the scenes where we make artificial divisions of labor that only complexifies the conversation.
Say an advertiser wants a feature on our website to show a slideshow. This requires ad sales talking to product management about building this new feature. Then they talk to marketing about promoting the product. Marketing talks to SEO to make sure the new feature gets ranked high in the search engines. SEO has to go to UX to make sure that the design for the feature meets SEO requirements. Sales also goes to UX, to be sure the client is getting the feature he wants. And advertising wants to run a campaign about the feature, so it has to talk to product and sales people too.
At the same time, our account executives are frustrated because customers aren’t happy with an existing feature. They report this to the VP of marketing, who tells the VP of product, who tells the PM who tells UX, who tries to tell the engineers how to fix it. All the while the engineers are chugging along with their product road map, oblivious to the conversations that the marketing, advertising and sales folks are having because what the heck does any of that have to do with engineering–at least until a feature request is created.
The results of this convoluted discussion are about what you’d expect. In the old economy, an entrepreneur opened a store, bought some apples from the local farmer, set out a cute sign in the window, and people came in and bought the apples. If they liked the taste, they came back for more. If the store owner wanted to sell more apples, he might take out an ad in the local paper, or if he’s really fancy, on the television. Not so today. Welcome to the new Apple Store…
Your Store, Your Brand, and Your Commercial
Today, the apple is your store! If you’re selling, let’s say, iPhones and 90% of your business comes from the Internet, then what you’re really selling is your website, your mobile site, your iTunes store, your cases, cables, services plans and your iPhones. It was not a coincidence that Steve Jobs was a master of marketing. Or that every Apple product is so solidly branded (you know an Apple when you see an Apple). Jobs knew he was selling the brand, not just the product.
To do that, you need some internal rearrangement too. You, the CEO, must be the brand manager. You are responsible for the business model, the advertising, and the product development. And you need to be making decisions about all three. All communication goes through you, and you make top-down decisions that integrate product and marketing into one beautiful apple store.
See how I did that?
Previously published in Starting from Zero.