I’ve always loved Joshua Arnold’s article Understanding Value. Arnold’s article describes four “benefit types”: increase revenue, protect revenue, reduce costs, and avoid costs. It is especially relevant, given that many companies are trying to simultaneously focus on increasing revenue, retaining cost-conscious customers (protecting revenue), and reducing/protecting costs. You can’t just focus on increasing revenue.
Too many founders and CEOs are addicted to short-term revenue. Gotta get that next deal to stay afloat (taking on both revenue and tech debt), and then when costs invariably rise they again follow the knee-jerk immediate action (staff layoff).
There's a lot of pressure on company CEOs and boards to keep the lights on, so the drive for revenue is understandable. Product people tend to think long term, which often clashes with the former. As in everything, there needs to be empathy and balance.
The point about leveraging value could also be looked through another lens. The 3Ms : Money , Margin , & Multiple. A decision may have an asymmetric impact on each of the Ms. Eg. A (leveraged) marketing spend may increase Multiple (uncertain), but directly impacts Margins & Money (certain). Its useful to acknowledge the downstream effects while making leverage trade-offs
Too many founders and CEOs are addicted to short-term revenue. Gotta get that next deal to stay afloat (taking on both revenue and tech debt), and then when costs invariably rise they again follow the knee-jerk immediate action (staff layoff).
There's a lot of pressure on company CEOs and boards to keep the lights on, so the drive for revenue is understandable. Product people tend to think long term, which often clashes with the former. As in everything, there needs to be empathy and balance.
Where does the strategy of bleeding costs to get more users fit into this?
The point about leveraging value could also be looked through another lens. The 3Ms : Money , Margin , & Multiple. A decision may have an asymmetric impact on each of the Ms. Eg. A (leveraged) marketing spend may increase Multiple (uncertain), but directly impacts Margins & Money (certain). Its useful to acknowledge the downstream effects while making leverage trade-offs