Collapsing the Talent Stack, Persona-Led Growth & Designing Organizations for the Future
As we explore how organizational design and product building are evolving, it’s clear we’re overdue for change... Let's dive into Edition #8 covering the latest waves and the implications.
Edition #8 of Implications.
This edition explores forecasts and implications around: (1) how teams and organizations should be structured for the era ahead and the benefits of collapsing the talent stack, (2) what we learn from online social CEO dramas and the advent of “persona led growth” (3) refactoring organizations in the age of AI - including a “Four P’s” framework to make sure your team is leaning in, and (4) some surprises at the end, as always.
If you’re new, here’s the download on what to expect. This ~monthly analysis is written for founders + investors I work with, and a small group of subscribers.
If you missed the big annual analysis (shared more broadly), or more recent private editions of Implications, check out recent analysis and archives here. A few highlights worth checking:
OK, now let’s dive into the latest…
Imagining The Organizations & Teams Of Tomorrow
The next generation of teams and organizations will be refactored and structured in unrecognizable ways. Why? Because the way we build products and businesses has fundamentally changed, the implications of AI for every function of the enterprise are profound, and humans have also changed - we’re increasingly intolerant of friction and our expectations for the defaults of daily life have risen dramatically. Let’s dive into some details, and some implications…
The Shifts In Organizational Advantage For Building Products
There’s something in the air when it comes to rethinking how organizations and teams should be structured. Perhaps it is the post-COVID reconciliation of norms and preferences? Or perhaps it is the set of forcing functions companies have faced in an uncertain economy, paired with founders and CEOs willing to question conventions? Regardless, I get the strong sense that org structures, titles, roles, and management norms are on the verge of disruption. A few weeks ago I spoke at the Config conference on the topic of Adobe’s approach to generative AI and the growing field of ethics and governance over AI. One of the most thought provoking conversation at the conference was Dylan Field’s conversation with Airbnb co-founder and CEO Brian Chesky, a leader I have gotten to know and admire over the years. Brian’s questions and ideas about the traditional “product management” function in a modern organization made some waves (including questioning the traditional product manager role). But these ideas have been pretty pervasive over the last few years, and it is exciting to (finally) see a mainstream discourse reconsidering the roles and responsibilities within product teams. Consider the following assertions and implications that merit a grand rethink for how we build teams going forward…
The Product Experience Stack is Collapsing: In the era of web apps and “product led growth,” the marketing page IS the product’s first mile experience IS the core value and end-to-end experience. Today, most modern apps engage new customers with simple tasks and, through a series of tactics, help these customers find early success and further commit (and convert, and then help grow the product) over time. In a world where the many parts of a product experience have collapsed into each other, the organization that builds these experiences should follow suit. The old days of having a product marketer work in a different organization with a copywriter, having a separate general marketing team build campaigns for the product, and having a separate set of product leaders and designers and engineers in yet ANOTHER part of an organization building the product…well, it just doesn’t make sense. But this is the way most established organizations run. To accommodate the new world, companies have layered in more people and processes to serve as the connective tissue between all of these functions. As a result, we get more “Product Managers,” “Program Managers,” and games of operator with additional people required to coordinate across functions. What is liable to lost in the mix? Vision. Clarity. Simplicity. The value of design. Short-cuts to decisiveness. The product ends up looking like the org.
The Interface Layer rules the world, and modern technologies are increasingly built as APIs and then delivered to different teams to build product experiences. Well, I first wrote about interface layers back in 2014, and I have long said (and ruffled the feathers of my engineer friends) that a technology succeeds because of a user’s experience of the technology MORE than the quality of the technology itself. Fighting words, I know. But I say this because I’ve seen many examples of suboptimal tech winning based on a superior user experience but rarely the opposite, and I believe we’re living in the battle of the interface layers. Ultimately, whether it is natural language experiences or reduced and radically simplified mobile (and soon spatial) interfaces, every company will fight to be included in the interface you see every day - if not be the default. Especially in a world where technology must meet customers where they are, it isn’t enough to have your product simply live at one website. Your product must be integrated into other products, available as mobile apps, and perhaps soon available as plug-ins to AI-first experiences. So, the need to centrally build APIs that are consumed by many “client” teams will grow. Building APIs centrally and allowing your “client” teams to focus on the interfaces that surface these capabilities is the ideal approach these days. But what should these other “client” teams look like? If the APIs are the core tech, and every other team is working like hell to nail the interface, shouldn’t designers be driving these many “client” teams? The role of a “product leader,” a “designer,” a “product marketer,” and “customer research” should all be reimagined in a world of APIs, product-led-growth, and the battle to win the interface. In my view, product and product marketing should be one role, should scope work with engineering, and should look to leadership from design. Design should plant the flag and have final approval of anything that ships.
In the battle of interface layers, the modern organization is story first and design driven. During his Config talk, Brian Chesky talked about storytelling being the most valuable skill of product leaders and I couldn’t agree more. It all starts with a story informed by your love for a product and/or your empathy for those suffering a problem you wish to solve. Why a story? Because the reasons we use a product - and are drawn to a product - are driven by natural tendencies (aka the kindling for our human dramas). Our hopes and fears inform the product experience as much as the product’s promise and marketing (true for consumer AND enterprise products!). Make every product one grand story, starting with the flag you plant for the way you believe the world should be. Once you plant the flag, start building the road and course-correcting your decisions every step of the way via empathy with customers. For digital products, road building starts with incredible and scalable underlying technology (itself often encompassing a set of third-party subcomponents) with clean and clear APIs delivered to “client” product teams ultimately led by designers tasked with creating and iterating world-class interfaces. In such a world, consider making your product manager and product marketing leader the same person. Empower the design leader and their team to own the interface and conduct customer research (but always with the caveat: customer research tests for familiarity, not the effectiveness of innovation). For these client teams building interfaces, the power should tilt to the design side given the criticality of interface innovation. You must give ownership of a metric to whoever can move that metric the most. And in the battle of interface layers, the designer has the most power to move the needle. Get aligned around the story using advanced prototypes before building anything.
Collapse the talent stack every chance you get. As I reflect on the teams I’ve led and hundreds of start-ups I’ve worked with, there is a consistent unfair competitive advantage i’ve witnessed when the talent stack was collapsed - when the lead designer was also the product leader, when the front-end engineer was also a designer, when the designer is also a great copywriter, when the product leader was also the founder/ceo, etc. Tighter conduits for decision making and synthesizing information are an incredible advantage when it comes to crafting products. Many start-ups enjoy the benefits of collapsed talent stacks and then undo them as they grow (and most big companies just don’t understand this). In your hiring (and your consolidating), I encourage you to collapse the stack whenever you can. Especially given all the focus on “product led growth,” these days (which really means helping new customers feel successful more quickly, discover the benefit of sharing, people talking about the product doing things they didn’t expect), all of these are as much marketing driven experiments as they are “traditional product specs” and design explorations! Collapse the stack. While it might feel like “double duty” to your leaders, it works magic - especially in early stage products or periods of self-disruption where you need to speed up exploration and execution.
As every function becomes multi-player and AI-enhanced, let’s accelerate change. While I’ve shared some provocative assertions above, we all have undeniable fertile ground to reimagine our organizations. As the next section will explore, the time has come to refactor every function of a company with AI. Similarly, modern tools from sales to product development to accounting are being reimagined as multi-player web applications where everyone is a stakeholder. And, as we discussed in Edition #7 of Implications, management itself will become a hybrid human-AI discipline. It is my strong opinion that AI will help us collapse the talent stack as the medial parts of our roles become automated for us. Over time, we will have the opportunity to make some bold moves in organizational design that ultimately raise the bar in what we make and ship.
Persona Led Growth: The Personification of Companies, The Primal Pressure Points of Attention, & Meta Threads
Given this week’s launch of META’s “Threads” product and my long-standing rocky love affair (a few almost-hires roles under multiple regimes, and an outspoken voice on the potential of the product), I have feelings on this one that say more about us and the stage of tech we are in than the product itself.
The personification stage of a tech product is when it goes main stream, is fueled by pop culture, and the persona behind the company can help “keep it real.” First came branded accounts on Twitter getting a snarky first-person voice. Then CEOs like Elon Musk and other seized the opportunity of memes, meme stocks, and polarizing posts to command attention like a giant magnifying glass channeling the sun. We had a President and many in congress that got to power using many of the same tactics. Last month we saw Mark Zuckerberg challenge Elon Musk to a modern day duel that many media pundits project would be the most watched live-streamed fight in history. Is the fight challenging and meme hurling representative of the growing trend of personification of companies? Instead of being corporate, leaders are increasingly out front creating the gravity of attention for their companies. While much has been written about the polarization of media, I see much of this as the attempt to make a massive corporate brand or product more relatable and personal. As humans, we relate most to human drama. Even the best action and sci-fi movies feature the same redundant love stories and family dramas. These human dramas are what hooks us. What both Zuckerberg and Musk (as well as other big company and country leaders that have added their own likeness and voice out front) realize is that our very primal pressure point as humans for paying attention is triggered by a very human drama. Whether we agree or disagree, we can’t escape very human words and situations. I mean, how much more ancestral human drama can you get than challenging someone to a fight? As for the companies that fail to realize this in the modern day, well…they become corporate behemoths without any emotional allure or connection to customers (for better or for worse). The implication of all this is simple: We can expect more “people out front” representing companies in unexpected spaces. We can expect founders (and even non-founder leaders) to represent companies more personally as a novel growth tactic akin to product led growth. Perhaps we can call it “Persona Led Growth?
“The devil’s in the defaults” This is my favorite saying in the world of product that I learned from my friend Dave Morin during our early product conversations on many topics over a decade ago. Quite simply, it means that the default state of a product - including the default settings for notifications, the onboarding experience, the welcome message you get etc - determine the product’s fate. It’s the only portion of the product that EVERY user experiences, and it sets the bit for every behavior. So, whenever a new product emerges like Threads from META yesterday I get excited to see how the art of the first mile experience has evolved given friends and fellow product minds like Adam Mosseri and others working behind the scenes. While simple, the decisions to mount the Instagram graph and launch a simple product were smart and obvious. But I was also impressed with the default setting for every user to see the “first thread of anyone you know” on Instagram by default. Knowing that their first post was seen and engaged with by people they know drives instant ego gratification for new users.
Refactoring Organizations For The AI Era
Perhaps the most striking and shared excitement among both my hedge fund friends and leaders across a variety of businesses lately is the top line and bottom line implications of AI. The excitement stems from new and more effective ways of finding and converting customers and step-function improvements across top-of-funnel activities to completely refactoring various functions of the organization to reduce cost (not necessarily with fewer people, but far more effective people with far greater scale than ever before). Much like the ubiquity of automobiles transformed commerce and society, the cost structure and overall efficiencies of most companies will change materially in the age of AI. Lets discuss a few opportunities and tactics we need to be thinking about.
The functional refactoring is upon us, and we need to lean in. I know a number of companies where CFOs, for example, have charged their leaders of every function within their finance organization to come back with one way to refactor a critical and unreasonably burdensome or expensive part of their function. For example, procurement within a company being reimagined leveraging an AI-first solution like Globality. I like the approach of charging every functional leader within an organization to do the research, run a trial, and discover one material refactoring project within 90 days.
Ok, I want to use Generative AI, now what? This is a common question I get, as recently as last week during a fireside chat with the Chief Digital & Marketing Officer at L’Oreal. Great brands are eager to engage with this exciting technology but often debate how and where to get started. I proposed a framework that is (conveniently) four P’s: Play, Pilot, Protect, and Provoke. PLAY - since novelty often precedes utility, you need to allow (with the right guardrails) your teams to play with this new technology (given them access to ChatGPT or products like Firefly but with rules). PILOT - pick one particular low-risk project and task your team with doing it “the new way.” This could mean leveraging GenAI for social media marketing images instead of the old way…whatever this means for you, identify a pilot project. PROTECT - your team needs to be allowed to fail when trying something new, so define an incubation zone of sorts for your team to do their play and run this first pilot. PROVOKE - as difficult questions emerge, foster an environment where they can be asked and debated. This is transformative technology with many ethical and meaningful implications that must be discussed.
What the “AI will destroy jobs” pundits don’t understand: Higher IPP “Ingenuity Per Person” leads to hiring more people: As I have traveled and spoken with groups of customers and many journalists and industry analysts about the implications of AI, a common stream of concern is job loss. Obviously, there are some things humans once did that machines will do for us - as always. However, what most people overlook is the natural persistent human drive to do more that extends to organizations, brands, and companies. If forced to choose between (1) launching and managing more products per employee, achieving more and better marketing in less time, covering more regions, and expecting more ingenuity per employee, OR (2) cutting expenses…what would you choose? Unless you are a classic private equity shop disinterested in innovation and simply looking to squeeze pennies, everyone I know chooses #1. Perhaps this is why, after decades of engineers becoming more productive, companies keep wanting and hiring more engineers? My bet is that replacing mundane repetitive work with time for enterprising innovative work will ultimately increase the IPP “Ingenuity Per Person” that we get from employees. And once we do, we will want to hire MORE of these creative people. No doubt, we can expect slower expense growth especially during the three year “great refactoring “ period ahead of us as AI solutions for every function come online, but this relative percentage expense cutting will result from better (or eliminated) process, better speed, reduced error rates, and the growth of ingenuity and ultimately profitability.
Finally, here’s a set of ideas and worthwhile mentions (and stuff I want to keep out of web-scraper reach!) intended for those I work with and a smaller group of subscribers. We’ll cover a few things that caught my eye and have stayed on my mind from various conversations with people I admire, as well as my latest areas of interest on the angel investment front. Thanks again for following along, and to those who have reached out with ideas and feedback. -sb
Ideas, Missives & Mentions
Recent observations and things I am thinking about…
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