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Crystal Widjaja unlocks the secrets of unmeasurable metrics and extracts lessons from Convoy's downfall!

Hosts: Brian Balfour & Fareed Mosavat

Topics: Data (unmeasurable metrics), Convoy’s Downfall

Release Date: Oct 26, 2023


This week, we are joined by Crystal Widjaja, a data-driven product expert. Crystal has held product and data leadership roles at various companies, including Kumu and Gojek, a super app and delivery and logistics platform in Southeast Asia. In these roles, she led data teams and product teams.

Crystal is also a prolific contributor to Reforge, providing valuable insights through our programs, blog, and artifacts. If you enjoy what you hear in the podcast, you can find more of Crystal's rich insights at Reforge.com.

This week, we will be discussing:

  • Jason Cohen's blog post on "Metrics That Cannot Be Measured Even in Retrospect" and the challenges faced by data-driven product leaders. 📊
  • The lessons that product leaders can learn from the failure of Convoy, a major player in the freight brokerage business. 💡

Challenges of Being a Data-Driven Product Leader

We're starting with Jason Cohen's article in which he makes three key points:

  1. Some widely discussed metrics, such as the impact of a single feature on product revenue, are not easily quantifiable. 🔢

    Why? Customers often ask for many features during the buying process, but they end up not using them. However, this doesn't mean that these features don't affect revenue or aren't important. ❓💰❗

    Our take? It's a bit crazy how many product management books and blogs tell you to measure the impact of a feature on acquisition, retention, and monetization. 📚📈
    • Instead, use TARS, a framework that stands for Target Audience, Adoption, Retention, and Satisfaction. ✨🎯😃
      1. Target Audience: Only measure with the context of who your audience is in mind. 🎯
      2. Adoption: Of the target audience, how many tried it? 🚀
      3. Retention: Of those people, how many come back and use it again? ↩️
      4. Satisfaction: This is the hardest to measure, but we want to know if they enjoy using it versus using it out of hated necessity. 😊😡
    • Or, instead of measuring the positive impact on revenue, Shashir Mehrotra suggests measuring the churn rate if you remove the feature to evaluate its impact. ⏪➡️⚖️
  2. Measuring the impact of incremental activities on customer churn can be challenging.

    Why? There's often a big lag between the action happening and the customer churning, making it impossible to measure the single action that caused the churn.

    Crystal thinks this is the wrong point to make. In general, there's a sliding scale of metrics from difficult to easy things to measure, but nothing is really impossible.
    1. There are some things that are really hard to measure. 😓
    2. There are other things that are easy to measure but not always reliable. 😬
    3. And there are things that are both reliable and easy to measure. 😄

      The real question is, for the impossible side of the scale, can we come up with a proxy that's good enough? Do I really need perfect data? "You can come up with a proxy for everything, right?" - Crystal
  3. Measuring the probability of risks is more of a "cover your ass" activity than actually being useful? 🤔

    Why? Whether something has a 30% or a 70% probability of happening, it could still happen. So, "don't put probabilities on the slide at all. Only list the risks that you feel are so important that they either merit action or awareness." ❌📊

    Fareed agrees - there are only two types of risks that matter:
    1. Ones with a very high probability of happening ❗
    2. Ones that are so severe that their impact is existential ❗

      Anything other than those two should just be a "deal with it when it happens" situation. 💼🕒

      Do a pre-mortem. Just sit down in a room and say, if this project fails, why would it have failed? Then figure out which of those fail points you want to try and preempt or solve against. 💭💡

      Avoid a "Bike Shedding Discussion." "You are designing a nuclear factory, but everyone's spending all this time deciding, where should we put the bike storage shed? That must be the most important thing to talk about and define, and I'm just gonna force the conversation on this smaller piece, versus the like, building of the nuclear factory." - Crystal 🚳🚲🏭

Crystal's Approach to Data: It's Like a Video Game! 🎮💥

Ready to level up your product game? Crystal has a mind-blowing strategy: treat your product environment as a metaverse game! 🚀

Step 1️⃣: Build a powerful heuristic map by diving deep into proxy metrics. Understand every aspect of your product and uncover hidden opportunities! 🔍

Step 2️⃣: Explore the metaverse using those valuable proxy metrics. Get insights into your product's performance, team focus areas, and hotspots on the map. 🌟

🏁 Start your exploration with retention and work your way backwards to activation and feature usage. This approach reveals normal behaviors and helps identify areas for improvement. 🏁

📲 While you're on this journey, assess the tools and intervention points at your disposal. Connect with users, send targeted messages, and gain valuable insights to supercharge your product! 📲

📈 Remember, don't get caught up in hypothetical risks! Focus on understanding your product and users through the exploration of proxy metrics. It's all about growth and improvement! 📈

Want to hear more on Crystal's metaverse approach to data analytics and discover why Brian, Fareed, and Crystal dislike benchmarks? Listen to the full episode! It's time to level up your product decisions! 💥

Unveiling the Hard Truths: Lessons from Convoy's Downfall

We all feel for the team at Convoy. But, let's not shy away from the lessons we can learn from their downfall. 📉

  1. Fly Wheels Can Reverse: In industries with massive externalities like marketplaces and SaaS companies, sudden revenue drops can strike hard. To weather uncertain times, it's crucial to anticipate and model potential revenue downturns. 💸
  2. Network Effects: Riding the wave of network effects during growth is thrilling, but be prepared for the unraveling during a downturn. The entire marketplace can take a hit, with transaction sizes, margins, and competition all feeling the blow simultaneously. 🌊
  3. Debt and Cash Crunch: Debt can be a double-edged sword, especially when combined with revenue downturns. Triggered debt covenants can snatch away control over valuable assets. It's time to master the art of debt management and gain a clear understanding of cash flow dynamics. 💼
  4. Planning for Scenarios: Product and data leaders must brace themselves for significant revenue drops. Crystal recommends modeling ultra-conservative numbers, unveiling the impact of macro market dips on micro revenue. Fareed urges us to think in ranges, ditching single estimates when considering runway. 🛣️

These invaluable insights from Convoy's journey serve as a wake-up call for founders navigating the delay in economic recovery. All the VC’s told us to plan for the market to bounce back in early 2024. Did they mean early 2025? 😭