Founder’s Guide on Product management (COVID edition)

Background: We are now 6 months into a global pandemic. If I look back at February when it really hit the mainstream in the US, a lot has changed. The Coronavirus crisis is different from other recessions in the US, the chart below illustrates the challenge and the opportunity for founders.

1/ Early Stage founders have an advantage, because you engage w/ end customers directly and have meaningful conversations about business value and can adapt value prop quickly (compared to later stage competitors and incumbents).

2/ Self-Serve onboarding wherever you can. Digital adoption will accelerate as everyone is WFH.

3/ Prioritize PLG (product-led growth) since you cannot travel to prospect sites and hand-hold them. PLG-based public SaaS companies are trading at a higher revenue multiple than non-PLG on the public markets, highlighting their importance in this environment.

PLG companies have outperformed other SaaS in public markets

4/ Prioritize prospects that have structural and cyclical advantages in this env, eg,

- Gaming, Video Streaming, Online education, Collaboration s/w, TeleHealth, FinTech, Online grocery, meal kits.

This is a good viz to see the S&P 500 is doing post-Covid (as you are prioritizing prospects).

Focus on industries that have a tail-wind from COVID.

5/ Handling Procurement → you lost a deal b/c budget was frozen or prospects cannot add a new vendor right now → List your offering on the cloud providers marketplace (AWS, GCP, Azure, DigitalOcean). You can now offer your software as part of the already committed cloud spend for the year → You just show up as a line item in their cloud bill. This can work for renewals as well.

6/ Handling Procurement → If a customer asks for deferred payment, ask them to commit to a longer time-frame (eg 2 or 3 yr instead of 1 yr) in return or a promise to increase spend in yr.

7/ Hone in on the 3 WHY’s → In times like these, when the customers’ priorities have shifted and there is a tougher filter on differentiation, you need to really have an answer for the 3 WHY’s (Why buy anything? Why buy now? Why buy this product?)

8/ Time to play offense → For some founders, I would suggest it’s time to play offense. Gartner says IT spending will increase in 2021, despite the rocky economic climate.

Continued IT spend despite economic uncertainitiy, according Gartner CIO survey

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