How to Lead Decisions By Following Market Problems
4 November, 2021
Don’t fall in love with your technology, fall in love with the problem you are trying to solve. I relate the lessons of transitioning from engineer to product manager as explained by a current market phenomenon: cryptocurrency. Cryptocurrency is in a state of extreme early adoption, arguably at valuations well beyond its practical value/utility. Many are enamored by the transformative possibilities with cryptocurrency with only a handful of projects surviving the chasm. With so many users invested in cryptocurrency, it is easy to be blindsided by its popularity. The major challenge of the product manager should be by following the market problem you are trying to solve rather than focus on the technology itself.
Bitcoin's volatile journey is a great extreme example of this. Its original purpose was to be a digital cash currency alternative that would, for example, enable the unbankable (3rd world countries) with a form of currency exchange with high liquidity. Indeed some time ago, it was a promising alternative to fiat currency. We’ve even heard the story of the 10,000 BTC pizza purchase. However, at current valuations and cost to transact (thanks to proof-of-work economics), it has become a very expensive technology to drive the transactional and cost expectations of a digital cash wallet. A product manager who follows the philosophy to solve the shortcomings of the technology, rather than identify the best way to meet the market need, may find themselves with a short-sighted product strategy.
Let’s say you hypothetically were the product manager for a digital wallet app that’s mission was to enable easy payment for goods and services for all. Let’s say that you bet its future on Bitcoin early on and was architecturally designed around transacting Bitcoin, with a full ecosystem of Bitcoin-only partners. In Bitcoin’s current maturity, a technology-driven product manager might be influenced to commit all of their resources and seek the expensive and costly path to improve Bitcoin’s blockchain, to make it more scalable to handle the demand of our digital wallet app which has millions of users. Since hindsight is 20:20, we would have learned this would have been a fatal mistake.
A market-driven product manager may have realized the headwinds in the technology early enough and identified that Bitcoin cannot scale for the commonplace user and would be instead of searching for a technology pivot: for example a re-architecture of the wallet to be currency-agnostic: to support other cryptocurrencies, or would have found its way evaluating potential alternatives, such as Paypal, Venmo, Google/Apple Pay, Amazon Cash, other cryptocurrencies like Stablecoins, or even the tough decision to halt operations.
In the case of Bitcoin, it has completely renewed itself as a gold-like reserve in the cryptocurrency world whose primary use case today is as an inflation-protected digital asset. Very few technologies get this kind of second chance. But remember, our mission wasn’t in the investment of inflation-protected assets. It was to enable easy payment for goods and services for all.
- As a product manager, make sure you are in tune with real-world adoption for the right use case. Using Bitcoin, there are a high number of investors, but few “users.”
- Your product may require an unexpected technology pivot if it is no longer serving the needs of your users. Follow the market problem, which should lead to necessary decisions in a product’s lifecycle.
- Product management is a journey, not a sprint. Although we measure ourselves in incremental objectives, having a long-term view will keep your head afloat and pointed towards your overall goal. Take failure in strides rather than a final result.
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