In the last part of this series we looked at the range of responsibilities Product Managers can cover. Next, in the 3^3 model, we’ll examine how those responsibilities are adjusted, based on the type of customer you are serving.
Customers fall into three major types
In 2012, I attended the Lean Startup Conference, and loved a distinction made by Marc Andreessen. In a small 2 minute snippet, of a larger 45 minute interview, he touches on three types of Product / Market fit — which map to types of customers.
I’ve queued the video up to this specific point in the interview, although I highly encourage you to watch it in its entirety.
So, let’s explore each of these three customer types in more detail.
1) YOU are the customer
This is the first category that @pmarca describes, or as he puts it “founder / market fit”. In a product management context, this is where the PM themselves is the user, and therefore can “scratch an itch” by realizing the product that she wants / needs.
Companies like Dropbox, 37Signals, Twitter, Facebook, and even Apple, are all good examples here. In such cases, the team’s knowledge of the solution is high, and their thesis is that if it works for them, it can be extended to others like them.
In this case, the key to product success is execution to rapidly implement & validate your hypothesis, and then continue development.
2) You are CLOSE to the customer
The next customer category is when a product is made for an “adjacent market”. In this case the PM is “close” to the customer, in their ability to empathize and relate to their needs.
In this case, the team has a strong understanding of the market, but augments a weaker solution hypothesis with a clear process to elicit feedback from the customer, and quickly assess the viability of their solutions. In some cases, the understanding of the market can help the team infer answers to fill in solution gaps.
Here, product success is based on empathy to truly understand your customer’s needs, and then design solutions to meet them.
3) You are NOT the customer
This third category requires the most product management discipline to follow a clear process, as this is where the team is “furthest” from the customer. In this case you are not, nor may ever, use the product yourself, as a Product Manager, such as the case with big enterprise software (or like a few years ago when I saw an influx of men pitching female fashion startups).
This customer requires a strong capability to rigorously uncover customer needs, with few opportunities to use your own personal judgment. As a result, these products can often lead to more lucrative ventures. So the key to product success in this arena is clear organization & discipline in the approach.
Example: a “tail” of two customer types
Here’s a non-technical example, which should help to further refine the concept of the “near you” customer type. Chateau Lafite Rothschild is an historic and prestigious winery in Bordeaux France; they are relentlessly traditional and if you don’t like their wines, well too bad it’s not for you. Meanwhile, in 2000 Australia’s Casella Winery, noted a gap in the market and developed their [yellow tail] brand, which strives to make great everyday wine for everyone to enjoy.
Where yellow tail was a response to a gap in the market, that could be served by Casella’s knowledge, Lafite marches, quite successfully, to the beat of their own drum. So, neither approach is inherently “better” than the other, but the difference between them serves to illustrate the nuances in serving an adjacent customer, that is close to, but different from yourself.