How to Monetize Your Product by Google fmr Product Manager

my name is venom Radha I work as a product manager and chief of staff at thumbtack and today I'm here to tell you about modernization and how you should think about monetizing your products so to get started I wanted to give you a little bit of a roadmap of what we're gonna talk about today so we're gonna start off by just like talking through like what is modernization when we talk about it and talk through like a very basic framework of at least how I like to think of it and then I wanted to walk through a couple case studies from my past experience both at Google and also working at thumbtack so fun fact about me I actually spent a lot of time growing up all over the world I was born in India and then I moved to Saudi Arabia New Zealand and moved around a bunch of the United States before settling at Stanford which is where I got my undergraduate degree in computer science after Stanford I worked at Google as an associate product manager I worked on two different teams when I was there the first team was the emerging markets team so basically the team that builds new Google products for emerging markets and the second team was the Chrome web platform team so this is the team that basically is pushing for just having a healthier web ecosystem and I was working on developer tools for developers who develop for the web and now I work at thumbtack so how many of you have heard of thumbtack before this is really cool awesome so thumbtack for those of you who don't know it is a local services marketplace essentially you can go to thumbtack and search for any kind of local professional in your area whether it's you know a handyman or like a DJ or a wedding caterer or whatnot I spent my first six months there working on our monetization team and I'll be talking a little bit more about that later today and then after that the team I'm currently on is our ranking team so essentially if you think of thumbtack as a search engine for local professionals it's a team that takes in whatever query the customer types in translates that to a list of pros and then ranks that list of pros accordingly so it's the team I work on as mentioned also I work as a chief of staff in my like 50 30 % 100 capacity to a head of product so if you're curious about what it is like being a chief of staff or how do I do two jobs at once feel free to ask me in the Q&A but I won't be going too much into that for the purposes of the so let's get to the content of what is monetization simply put monetization is figuring out how much you should charge for using your product and who you should be charging for and ideally you're charging for some kind of value that you're generating through your product and I like to think of like three different stages towards figuring out like a successful modernization model for your product so the first stage is product market fit and I think it's a term that probably a lot of us have heard before essentially what it means is you find a market basically a set of users that want to use your product and then there's a fit in the sense that the product is actually solving the problem that these that you've identified for the set of users so I like to break this down into like three specific steps that I think if you can answer the question - or validate your hypothesis our assumption for you've kind of found product market fit in a way so the first one is around like is there a big enough need so this is like the market that you're going after is this a big enough market I think oftentimes when we think about solving specific problems we think that oh you know just because the problem for me that means that it must be a problem for other people or that oh this problem definitely exists then and like people are motivated enough to like go spend their time like trying out your solution or even looking out for your solution and sometimes the answer to that is no so making sure that you've done your homework to understand that like this is a need that's big enough that would compel someone to go out and actually you know look for your product or try out your product is like a pretty big assumption that you should try to validate so the second one is why should people use your product to fulfill that need assuming that you have identified a need that people care enough about and this is often called like your value prop or your value proposition as a product so for some people this could be like oh I am the only product that that solves this particular problem or I do it in a way that is cheaper or that is faster that is more intuitive to use whatever that value proposition is make sure you're like identifying that early on so assuming that you know you have a need you found your value proposition the next step is around like is this value prop real for the customer that you're going after so essentially validating your value prop for a particular market one way that you could try to validate your value prop and this kind of goes into the next step of monetization is charging people for it so basically saying like oh I have this like cool new thing it's a lot faster it's a lot easier to use but you have to pay ten bucks and months to use it and that's a really easy way to know that like if people are willing to exchange value for the value that you're generating and therefore like answering this question essentially so that's step one of product market fit the next step is essentially like starting to charge money for whatever product you've built once you've thought product market fit now one thing that to note about this is step one and step two are kind of interlinked in a lot of ways and this actually happened to us a thumbtack which was you know as we were expanding into like a different stage of the growth for the company and we had different set of business goals we would often that it would often require us to either change the monitors your model or change the way that we were charging pros or it would require us to like change the product fundamentally so step one and step two I'm like clearly differentiating the two but I think an actual product development they're they're actually quite interlinked so once you've figured out like some kind of business model you found like your product market fit the next step is to basically scale of Li grow the business aka print money and I think this step is also a place where you might have to go back to step one and two depending upon whether your product is actually able to and the monetization strategy you've chosen for yourself are actually able to achieve whatever business goals that you've set up for yourself as a business so now I want to go to the case studies because I think this is like where the meat of the learning is at and I want to start off by first thing that these are my opinions not of googles and thumbtacks legal disclosure legal disclosure over I want to start off by talking about one of the products I worked on when I was at Google called Google station so Google station is a how many of you have heard of Google station I bet like no one has that's fine it's not a product built for San Francisco tech people so the Google station is a project at Google where we basically partner with local Internet service providers in emerging markets and basically provide fast you know free affordable five and the reason why we do this why Google has invested in a project like this is because what we discovered was a lot of our growth was coming from emerging markets countries like India Indonesia and Brazil and one of the reasons why one of the reasons that was impeding her growth was the lack of affordable access to Internet people couldn't come online and so people can come online they can't use search they can't use search we don't make money so that's essentially the reason why Google was invested in building out this product and so there's a couple lessons that we learned as a result of building this out that pertained more to our business and modernization strategy so the first one is that Wi-Fi as a business is actually pretty hard to be profitable for and you can kind of intuitively guess why if you're gonna like provide Wi-Fi to people you need a lot of capital investment you need routers cables licenses so it's it's it requires a lot of investment in order to go in and and operate the business now as Google we were able to kind of get around it because we would partner with these internet service providers that had all of this infrastructure in place so we were just kind of providing a software solution on top but for a lot of these companies that we would partner with they wanted us to prove a business case before we would before they would actually agree to work with us they're like tell us how you're gonna make us money and so our answer usually was basically putting ads on the captive portal so the captive portal for those of you who are not aware is anytime you go to a public Wi-Fi place and you're trying to log in on your phone or your computer it's like the screen that pops up that says hey like accept our Terms of Service give us your phone number give us your email whatever and so basically by placing ads there that was essentially the way that we were gonna make money and the way the partner was going to make money but because we didn't have to we didn't have necessarily the capital expenditure it was a lot easier for us to convince ourselves that this would be a profitable deal for us but for partners it was really hard because they had all these like other expenses and they needed to worry about so that made it a little hard as a business model for us to go in and capitalize on so that's the first thing the second thing is the rise of mobile day so one thing that was interesting was when we were first starting this project access to Internet was really challenging for a lot of the consumers that we were targeting but there were a lot of like interesting like macroeconomic trends happening during the same time specifically in India there was a rise of this company called geo for those of you are not aware this is a new like telco operator that was started a couple years ago by Reliance Industries which is one of the biggest conglomerates companies in India and they were basically like they had spent a bunch of time like creating all this new infrastructure laying new cables new satellites and whatever and they had they had just basically created this like really fast and and they were based in when they started they were giving out data for free essentially and when we first heard about this we were like oh like how is it sustainable like at some point they're gonna have to start charging for it so like maybe once they start charging for it people are no longer gonna use it and we were completely wrong and so I think one of the things that we didn't take into account and this is like the first lesson that I would say is that make sure that you're keeping up to date with your market trends because they can severely impact your business model so one concrete example that I'll give about how geo impacted our business model is going back to the first point about how it's really hard to prove a profitable business case for a lot of these Internet service providers we would work with one of the options that we were exploring was like what if we like charge people for Wi-Fi right but when we have competitors like Reliance Geo that are giving out Wi-Fi that's really cheap Wi-Fi that or Internet that people can use anywhere versus public Wi-Fi that requires you to be in certain locations in order to use it that became like a really hard product for us to go out and sell and therefore that made the whole problem of proving that this that this deal was profitable for our partners that that problem became even harder so this is like kind of like an important lesson that I want to emphasize so the next lesson is around prioritizing depth versus breadth so by that I specifically mean like if you are like the lead for Google station you have this like existential question that you need to answer which is around like do you go into a bunch of different countries and do deployments there or do you go really deep in one country and then just try to like I don't know launch like thousands and thousands of Wi-Fi hotspots but our unit economics are really challenging because not only do we have to go in and prove to all these different partners that like hey like this is how we're actually gonna make you money and every country's like data and Wi-Fi landscape is completely different but even from a product perspective like going into a new country is not it's not cheap because it requires you to go in and understand the users it requires you to go in and make sure that the product that you have actually works within those markets which is not a trivial investment for you to make so because of those reasons it can be really hard to the the unit economics you have the monetization model you choose can make it really hard for you to understand depth versus breadth I think on Google Station we kind of when I was on the team we kind of chose both we were interested in going to a bunch of different countries and also trying to go deep within those countries whereas perhaps going deep within one market and just like really making sure we were owning that market could have been a better strategy for us looking back so one of switch gears now and talk a little bit about thumbtack so as I mentioned before thumbtack is essentially a search engine for local professional so you can go there type in personal trainer see a bunch of personal trainers find a personal trainer you like and contact them and hopefully hire them for whatever job it is that you want to get done so thumb tacks business model is actually very interesting we've taken a bunch of different twists and turns towards getting to this point but the place we're at now is what we call paper contact so what this basically means is anytime you as a customer decide to contact a professional we charge that professional for that contact you can kind of think of it as a lead gen business model we used to be in a world where was called paper quote in this world essentially the the time that we would charge the pro would be whenever so essentially you as a customer would submit a job and then the pro would decide hey like actually I want this job and want to quote on it and they were quote on it and any time the customer opened and viewed the view the Proust quote is when we would charge the pro for that quote and the reason why we moved away from paper quote to pay per contact is it's kind of the the main reason is we wanted to make sure that the charge point so the place the time at which we decided to charge the pro was aligned with what we felt like was the value that we were providing as a platform and the value that we really provide to pros is getting them hired like ultimately that's the whole point of the marketplace that's the whole point of the company and quoting is like super up the funnel where it's at that point like you know some customers might see the quote and then decide not to move forward or like pros can quote on like you know tens and twenty and thirty and forty jobs and just like never end up getting any customer contact verses with customer contact there's more an intent of like oh I looked at your profile I saw you know I see all the things that you do a look at your reviews and actually like I'm interested in reaching out to you and like why don't work with you so it's a higher intent and it's more aligned with the value that we provide to the pro as like get in terms of getting hired so it's kind of a side exercise I thought it would be interesting to see like some other business models that we could do but reasons why we're probably not going to do them so the first one is around and this is actually something or pros asked about all the time is like having customers pay they say something like you know like why do I have to pay why can't customers pay to look at my information and there's kind of two reasons why I think that this wouldn't work so the first one is you look at any of four competitors they don't charge customers to look at pros so as a customer if I land on the site and they're like well you got to pay like five bucks to go search for a bunch of pros you're like well I can just go to handy or I could go to home advisor and I'm able to see pros for free so like why should I use your product instead so it's really hard to convince customers if the industry standard is not to do that but the second thing is that we are actually reducing the size of jobs on our platform and if our ultimate goal is to have the most amount of jobs done and to get pros hired this is kind of an antithetical way towards getting there because you're basically artificially reducing the number of jobs that you have in the platform because some customers are gonna pay and others are going to leave so that's one business model the other one is a subscription model which is also something our pros talk about they say like hey like why don't I just pay you 20 bucks a month and you just send me whatever leads you have and then you know it'll be great and the reason why this business model also doesn't work is for the same reason that the paper quote model didn't work and that was primarily because again we want to make sure that the charge point is aligned with the value that we're giving to our customers on the platform and in the subscription model you have the same issue of like you know some pros perhaps the pros that are you know in the top three or five positions are gonna see a ton of business because you know they're in that position and let's say they're paying 20 bucks a month so there are o I is gonna be off the charts and then there's gonna be some pros maybe pros who never show up who are still gonna pay this twenty bucks a month but they're gonna get nothing in return for it so you have this like extremely unequal distribution of RI for the pros on your platform and we wanted to move towards a model where like if we're charging you like we're delivering some value to you and we want to make sure that like you have some ROI for putting in that investment so this model doesn't really get us towards that so now I want to talk a little bit about what I did on a monetization team and what I learned so when I was on the monetization team we had switched towards this paper contact world we had just made the transition so that was like July of 2018 and we were in the process of moving towards so there were two things that I was helping the team with so the first one was around we wanted to have a infrastructure around the way we set prices we used to set them very manually people were going to spreadsheet and kind of like put some stuff in and we wanted to make sure that we were doing this in like a very principled approach because we were getting to the point where like this was just not sustainable if a price if like you know some pro reports at this price is whack then like we had no idea of like how you know it was really hard for us to like and understand like what was wrong in her system in order to like debug that issue and we were seeing a lot of outlier prices as a result of it so we just wanted to make sure we were thinking through principled and reasoned approach so we can go back and fix it the second one was around to explaining the pros the value that we were giving to them as a platform and explaining to them the prices they were paying why they were paying for this what they were getting out of it so doing a lot of pricing education for pros so this is actually a photo of a cake we had to celebrate once we shipped our initial version of like our first set of principled prices called base prices so now I'm going to talk through two lessons I learned through working on these kind of two buckets of projects so the first lesson I learned was around the psychology of price so one thing I did mention was as we moved from this like paper quote world when pros were charged any time a customer viewed their quote to this like paper contact world where pros were charged whenever a customer contacted them we actually changed the prices and specifically we increased the prices because we felt like we were delivering more value to the pro so it made sense that we wanted to keep the value or delivering at what we were charging proportional but in our mind it wasn't something that it wasn't like a price increase in the sense that we were increasing prices but giving the same value it was that we were just readjusting prices to account for the value that we were now delivering to the pro but to the pros it came across as a price increase they were like I used to pay five bucks for this why am i paying eight dollars now which is like a super real concern and it's not something that we did a really good job of taking into account so this is like an interesting dynamic as you think of modernization it's like how much do you think about you know your the the business goals and the principled pricing approach versus like the real human impact of like people have to pay this money and sometimes they think it's too much and sometimes they think it's too little so that's an interesting point to think about the other one is that the infrastructure you have for your modernization will change as the company grows this one is pretty true across like any kind of product development concept it's like you're in the beginning your infra icky and you're just trying to get things off the ground and then as the company grows you're like well we should do this part the right way and you go back and you and you and you fix it the right way and so on the monetization team we went through a similar experience where initially our prices were in these spreadsheets and we would manually go and change parameters anytime we wanted to update them and now you know just very recently we're moving towards a more principled like market market setting approach that I think will get us to get us to a better place so it's all the content I had thanks for your attention thank you you

Channel: Product School

Views: 5,947

Keywords: Product, Product Manager, Product Management, Product School, Data Analytics, Coding for Managers, How to get a job, product manager salary, product manager resume, what is product management, what is a product manager, product management training, how to become a pm, product manager interview, machine learning, ai, Technology, Career, PM tools, software, metrics, product management basics, growth product management

Id: UoqNRPQx17g

Length: 20min 42sec (1242 seconds)

Published: Fri Apr 12 2019