Thinking beyond frameworks | Casey Winters (Pinterest, Eventbrite, Airbnb, Tinder, Canva, Reddit, Grubhub)
Lenny's Podcast features Casey Winters, a growth and product legend, discussing the 'zero interest rate phenomenon' PM, effective PM interviewing, AI's impact on product, leveraging network effects, and why consumer subscriptions are challenging.
Deep Dive Analysis
16 Topic Outline
Challenges and Longevity of the Chief Product Officer Role
The 'Zero Interest Rate Phenomenon' Product Manager
Advice for Product Managers to Avoid the 'Zero Interest Rate' Trap
Strategic Use of User Research in Product Development
Casey Winters' Contrarian Approach to Interviewing PMs
Impact of AI on the Future of Product Management
Balancing Founder Intuition and Team Expertise
Strategies for Influencing Founders and Leadership
Grubhub's Early Innovation: The Delivery Driver App
Understanding Different Types of Network Effects
How Grubhub's Network Effect Was Disrupted by Competitors
SaaS to Marketplace vs. Marketplace to SaaS Transitions
Defining Marketplaces and Their Core Value Proposition
Substack's Unique Approach to Content Discovery
Challenges of Building B2C Subscription Startups
Strategies for B2C Subscription Startup Survival
7 Key Concepts
Zero Interest Rate Phenomenon Product Manager
This describes product managers who have developed in an environment of abundant funding and resources, leading them to prioritize extensive research and perfect processes over shipping to learn, acting as if they work at Google with infinite time and resources, rather than making decisions under uncertainty.
Direct Network Effects
A type of network effect where every additional user makes the product better for all existing users. An example is WhatsApp, where more users mean more people to communicate with, increasing its value for everyone.
Cross-Side Network Effects
This occurs in two-sided networks where adding a user on one side makes the product more valuable for users on the other side, and vice versa. For instance, more restaurants on Grubhub create more selection for users, and more users ordering make Grubhub more attractive to restaurants.
Data Network Effects
When the quality or cost of a product or service improves as more data is collected through its use. Pinterest's recommendations, for example, get better as users save more content, providing signal on content quality and user preferences.
Asset Light Marketplace Model
A marketplace model where the platform primarily connects buyers and sellers and facilitates transactions, but does not own or manage the underlying assets or operations (e.g., Grubhub initially, where restaurants handled their own delivery).
Heavily Managed Marketplace Model
A marketplace model where the platform takes on significant operational responsibilities, such as hiring and managing delivery drivers or owning inventory, to facilitate the transaction (e.g., DoorDash and Uber Eats with their own delivery networks).
Net Dollar Retention (NDR)
A metric in SaaS where, as customers stick around, they tend to spend more over time by buying more seats or increasing usage. Consumer subscriptions typically lack this, meaning retained users usually pay the same amount year over year.
8 Questions Answered
The CPO role is challenging because it's hard to maintain product-market fit long-term as business needs shift, and any misstep can have major consequences. CEOs' visions can change, and CPOs don't get 'put on a pip'—if a CEO loses confidence, it's over immediately.
PMs should reorient their North Star to focus on adding value to customers that translates into business value, rather than just following processes or frameworks. They should seek companies where they can learn quickly and try things, and proactively push to ship to learn rather than over-relying on extensive research.
In consumer products, bias towards shipping and measuring impact, reserving research for confusing impacts. In enterprise, research is often direct with sophisticated customers. For hybrid models, focus research on B2B sides where problems are big but ill-defined, or well-defined but solutions are uncertain and have high leverage.
Founders should initially direct new hires until they demonstrate they can make better decisions, rather than delegating too quickly. As employees gain expertise, founders should recognize signals that their intuition might be less effective in specific areas and empower the team.
Employees need to understand it's the founder's company and they can run it as they wish. If confident in their expertise, employees should proactively signal their needs or capabilities and find ways to be contrarian and prove their point, whether through experiments, customer introductions, or external advisors, aligning with what the founder responds to.
Grubhub operated an asset-light model where restaurants did their own delivery. DoorDash and Uber Eats built heavily managed delivery networks, working with restaurants that didn't previously deliver and even delivering without agreements, dramatically expanding selection. This forced Grubhub to adopt a costly, operationally intensive model that didn't align with its public company promises of high margins.
Marketplaces adding a SaaS component (e.g., Faire) are generally more successful and replicable, often using SaaS as a customer acquisition, workflow, or retention tool. SaaS companies trying to add a marketplace (e.g., Eventbrite) is harder, requiring a direct relationship with customers' customers, a discovery value proposition, and building entirely new skill sets.
B2C subscriptions lack the predictable, rational customer behavior and net dollar retention characteristics of B2B SaaS. Consumers retain worse, and typically don't increase spending over time, requiring annual retention rates north of 60-70% to scale, which is achieved by very few companies, often through massive OPEX, network effects, or bespoke growth strategies.
13 Actionable Insights
1. Reorient Product Management North Star
Product managers should reorient their focus from following processes or frameworks to figuring out how to add value to customers that translates into value for the business.
2. Bias Towards Shipping to Learn
For product managers, especially in consumer products, the fastest way to learn is often to ship and measure impact, reserving extensive research for areas of extreme uncertainty or high leverage.
3. Effective PM Interviewing Strategy
When interviewing Product Managers, present real scenarios from the role and assess how candidates approach them, rather than relying on practiced answers about past work history.
4. CPO: Company Exec First
Chief Product Officers (CPOs) must prioritize showing care and attention to the overall business (sales, marketing, legal) before focusing solely on their product teams.
5. Diagnose & Communicate Team Status
As a CPO, clearly diagnose the strengths and weaknesses of your team and product, lay out a plan with peers, and communicate the timeline to address gaps, especially to non-product executives.
6. Strategic Research Investment
In companies with scarce research resources, focus research efforts on B2B-side problems that are big but undefined, or well-defined problems where the solution’s effectiveness is highly uncertain.
7. Founder Direction for New Leaders
Founders should actively direct new leaders until those leaders demonstrate they can consistently make better decisions than the founder would, rather than delegating too quickly.
8. Proactively Signal Expertise as Employee
Employees should proactively signal to founders or leaders when they need direction or when they are confident in their own expertise and can be trusted to make a decision.
9. Contrarian Proof for Founder Pushback
If a founder refutes your confident proposals, identify what influences them (e.g., other CEOs, data, specific customers) and build a case through experiments, introductions, or external advisors to prove your point.
10. Overreact to Existential Threats
During existential threats from disruptors, assume the disruptor is playing an optimal game and base your strategy on overreaction, rather than assuming their business model is structurally unprofitable.
11. Marketplace-SaaS Integration Strategy
Marketplaces adding a SaaS component (e.g., for customer acquisition or retention) are generally more successful than SaaS businesses attempting to add a marketplace, as the latter defers the hardest part of the strategy.
12. B2C Subscription Pivot Strategy
B2C subscription founders relying solely on paid acquisition and freemium should pivot to incorporate organic growth loops or network effects (e.g., social features, supply-side referrals) to ensure long-term viability.
13. Designate a Project Driver (DRI)
In cross-functional teams, designate a Directly Responsible Individual (DRI) for each project; once the DRI makes a decision, the team should ‘disagree and commit’ without further escalation.
5 Key Quotes
I think we sort of forgot in the industry that many times the fastest way to learn is to ship.
Casey Winters
It's like most PMs are better PM interviewers than PMs now.
Casey Winters
I think if you thought the PM job was just filling in the latest, you know, Reforge or Shreyosh framework and then getting, you know, that automatic FANG promotion every year and a half, then yeah, you're going to get replaced by AI.
Casey Winters
But I think the real PM job is the least likely to get replaced over time because you need, you know, real subject matter expertise. You need to be trading off a lot of different types of things and making good decisions for the company and for your customers.
Casey Winters
Unless you have a real viable reason to assume otherwise, you got to assume the disruptor is right and base your strategy on them playing an optimal game.
Casey Winters
2 Protocols
Casey Winters' PM Interview Approach
Casey Winters- Do not ask about work history or perfectly practiced 'tell me about a time' responses.
- Give real scenarios expected from the role.
- Assess how the candidate would approach the scenario.
- Look for candidates who can come up with reasonable ideas and figure out how to test them quickly without analyst or research support.
- Observe if the candidate enjoys solving the problem in a practice scenario.
Pivoting a Failing B2C Subscription Business
Casey Winters- If your plan relies on paid acquisition on top of a freemium model with a percentage conversion and hope for retention, pivot immediately.
- Make the product social, encouraging users to bring in others.
- Introduce a supply side (e.g., content, education) and incentivize them to refer people.
- Build organic growth loops into the business.
- Build network effects into the business.