🎙️ Pod Shots

We’re back with Lenny this week, with a huge episode that ran to over 2.5hrs. Jeff Weinstein, a former product lead at Stripe, discussed the importance of customer feedback and empathy in product development. He emphasises the value of direct customer communication and shares insights on measuring success based on customer perspectives. Jeff also touches on product-market fit and the significance of empathy in understanding customer needs. Additionally, he talks about his experience leading product teams at Stripe and the innovative solutions they have developed to streamline company incorporation processes through Stripe Atlas.

⚒️ Building Product at Stripe: Craft, Metrics, and Customer Obsession

🎥 Watch the full episode here 

📆 Published: July 11th, 2024

🕒 Estimated Reading Time: 2 minutes. Time saved: 152 minutes🔥 

🎨 Embracing Craft and Quality

The Value of Craft in Product Development

Jeff Weinstein underscores the significance of craft and quality in building products that not only solve real problems but also delight users. Craft is not just about aesthetics; it's about creating a seamless and enjoyable user experience. However, Jeff believes that craft should follow the identification of a genuine need. Craft without solving a burning problem is futile.

A personal story from Jeff illustrates this well. He co-founded a company based on his annoyance with the lack of version control for SQL queries. They built a tool that offered modern SaaS features for SQL, and while it was technically impressive, the product lacked a crucial element: urgency from users. When their service experienced a 20-minute outage, users were mildly inconvenienced rather than frantic. This lack of urgency was a clear signal that they hadn't hit the mark in solving a critical problem.

Key Takeaway: Focus on solving a real, pressing problem first. Once you've established that your product is necessary, invest in the craft to make it exceptional.

📊 The Power of Metrics

Choosing the Right Metrics

It’s clear that product managers are responsible for achieving product-market fit, and the right metrics are crucial to measure this. Jeff advocates for metrics that reflect the value from the customer's perspective rather than just internal operational metrics. For example, instead of measuring how many users log in, measure how many accomplish their intended tasks.

At Stripe, they initially faced challenges in scaling the number of payment methods they offered globally. They had to shift from a "go-go-go" mentality to a strategic, long-term approach. This shift was supported by the right metrics. For example, they measured how many users completed the onboarding process without needing support tickets, which directly correlated with customer satisfaction and referrals.

Jeff also introduced the concept of "users having a bad day" metrics, where they log events that indicate a poor user experience, such as a 404 error or a delayed payout. This helps in identifying and prioritising areas that need improvement.

Key Takeaway: Select metrics that represent the customer's success. These metrics should guide your product decisions and reflect the true value your product offers to users.

💬 Customer Obsession: A Direct Line to Success

Engaging Directly with Customers

Jeff’s approach to customer engagement is hands-on and immediate. He values the direct signal from customers and often interrupts his schedule to respond to customer feedback. This proactive engagement helps in understanding the real problems customers face and in building a product that truly meets their needs.

At Stripe, Jeff has cultivated a culture where responding quickly to customer feedback is a top priority. This responsiveness builds trust and can even turn negative experiences into opportunities for strengthening customer relationships. For instance, when a bug in Stripe Atlas affected legal document generation, the prompt and transparent response not only resolved the issue but also transformed a potentially disgruntled user into a valuable advocate and collaborator.

Key Takeaway: Treat customer feedback as a top priority. Engage with customers directly and promptly to build trust and gain valuable insights that can shape your product development.

🚀 The Go-Go-Go Philosophy

Balancing Immediate Action with Long-Term Strategy

Jeff’s philosophy combines immediate action with a long-term compounding approach. He encourages injecting energy into solving problems quickly while also maintaining a strategic vision for sustainable growth. This balance ensures that while you are making quick progress, you are also building a solid foundation for the future.

An example of this at Stripe was the global expansion of payment methods. Initially, progress was slow despite high effort. By shifting to a long-term strategy that involved building internal platforms and investing in deep market research, they eventually scaled from 10 to over 100 payment methods. This success was achieved by balancing short-term actions with long-term goals.

Key Takeaway: Adopt a dual approach of quick wins and long-term strategic investments. This helps in maintaining momentum while ensuring sustainable growth and improvement.

🛠️ Practical Tips for Founders and Product Managers

Listening Beyond the Pitch

Jeff advises against pitching to customers during initial interactions. Instead, he suggests listening to customers' real problems without bias. By understanding their top issues, you can align your product development more closely with their actual needs.

Key Takeaway: Practice active listening without pitching your solution first. Understand the customer's top problems to ensure your product addresses the most critical issues.

Speed in Customer Interaction

The speed of response to customer feedback is crucial. Jeff highlights the importance of responding quickly to customer queries and feedback, showing customers that their input is valued and acted upon.

Key Takeaway: Respond to customer feedback promptly. This not only helps in resolving issues quickly but also builds a stronger relationship with your customers.

Selective Attention to Feedback

Not all feedback is equal. Jeff emphasises focusing on feedback from paying customers as it represents genuine use cases and needs. Friends and non-paying users might provide helpful suggestions, but the real insights come from those who have a vested interest in your product.

Key Takeaway: Prioritise feedback from paying customers. Their feedback is more likely to reflect the needs of your actual target market.

Avoiding Perverse Incentives

While focusing on metrics, it's essential to avoid creating perverse incentives. For instance, reducing support tickets should not lead to making it harder for customers to contact support. Instead, focus on solving the underlying issues that cause support tickets.

Key Takeaway: Ensure that your metrics encourage positive behaviours and genuine improvements, not just superficial fixes.

🧠 Atlas: Revolutionising Company Formation

The Origin and Evolution of Atlas

In 2016, Stripe employees, known as "Stripes," traveled globally and heard recurring stories from entrepreneurs. Many had to fly to the U.S. to establish companies and access U.S. financial systems. This clear and pressing problem inspired Stripe to develop Atlas, a platform that simplifies the process of starting a company with just a few clicks.

Jeff describes Atlas as a tool that radically lowers the barriers to entrepreneurship. For instance, Atlas automates complex processes like the 83(b) election, a critical IRS document for founders. Previously, founders had to navigate a cumbersome, manual process to file this document, which could significantly impact their financial outcomes.

With Atlas, these steps are automated. Founders can start a company, split equity, and handle all necessary paperwork seamlessly. The platform's integration with government systems and banking partners ensures that all legal and financial requirements are met swiftly, allowing founders to focus on building their businesses.

Key Takeaway: Identify and tackle significant, systemic problems in your industry. By simplifying complex processes, you can create substantial value and unlock opportunities for your customers.

A Broad Impact

Atlas has seen significant success, with thousands of companies formed and billions in revenue generated. The platform's automation has not only streamlined the company formation process but also encouraged more solo founders to start businesses. This trend highlights the increasing accessibility of entrepreneurship and the role of technology in democratising business creation.

Jeff shares inspiring stories of how Atlas has enabled founders from diverse backgrounds to start and grow their companies quickly. The platform's high Net Promoter Score (NPS) and rapid adoption rate are testaments to its effectiveness and the substantial impact it's having on the startup ecosystem.

Key Takeaway: Continuously improve your product to meet the evolving needs of your customers. High customer satisfaction and adoption rates are strong indicators of your product’s value.

🎭 Study Groups: A Unique Approach to Empathy and Quality

Building Empathy Through Role-Playing

Jeff introduced a novel approach at Stripe called "Study Groups." These sessions involve employees from various departments role-playing as customers to understand their experiences better. The key rules are that participants do not use any internal knowledge and do not attempt to solve problems during the session. This exercise helps in building empathy and identifying pain points that might not be visible through traditional methods.

Study Groups have become a popular and effective tool at Stripe, leading to numerous improvements in product quality and user experience. By embodying the customer's perspective, employees gain a deeper understanding of the challenges customers face, leading to more meaningful and user-centered improvements.

Key Takeaway: Use role-playing exercises like Study Groups to build empathy and uncover hidden issues in the user experience. This can lead to more insightful and impactful improvements in your product.

🏢 Getting Things Done in a Large Company

Strategies for Success in a Large Organisation

Jeff shares valuable insights on how to drive initiatives in large organisations. One key strategy is to bring the earliest customers into the room with your team as soon as possible. This direct engagement with customers creates momentum and ensures that the team stays focused on solving the most pressing problems.

Another crucial strategy is to storyboard the ideal solution. Use simple, visual representations to convey the vision of what the product could be without constraints. This helps in aligning the team and stakeholders around a common goal.

Jeff also emphasises the importance of showing tangible forward progress. By breaking down the project into manageable steps and celebrating small victories, you can maintain momentum and build trust within the organisation.

Key Takeaway: Direct customer engagement, visual storyboarding, and showcasing tangible progress are effective strategies for driving initiatives in large organisations.

Conclusion

Building a successful product at Stripe (and very transferrable elsewhere!) involves a blend of customer obsession, strategic metrics, and a deep commitment to craft and quality. By adopting these principles, founders and product managers can create products that not only solve real problems but also delight users and drive long-term success.

Want to know more quickly? Just ask the episode below [web only]👇️ 🤯 
or if you prefer, 🎥 Watch the full episode here 

📅 Timestamps:

• [00:02:09] Stripe Study Groups.

• [00:04:22] Alternative approach to science.

• [00:09:15] Liberal arts education journey.

• [00:12:44] Balancing short-term action with long-term growth.

• [00:14:31] Building for the future.

• [00:20:34] Focus on customer needs.

• [00:22:20] Listening to customer needs.

• [00:27:36] Customer feedback and iteration.

• [00:30:49] Responding to customer feedback.

• [00:36:26] Feedback from paying customers.

• [00:38:26] Customer feedback and iteration.

• [00:43:11] The importance of payment readiness.

• [00:45:33] Importance of metrics in products.

• [00:51:28] Customer support ticket metrics.

• [00:53:27] Importance of single metric.

• [00:58:23] Choosing the right metric.

• [01:00:54] Metrics for bad day analysis.

• [01:06:04] Aesthetic choices in metrics.

• [01:10:51] Metrics and decision-making culture.

• [01:13:18] Study Groups for Product Success.

• [01:16:44] Practicing Empathy for the Customer.

• [01:21:34] Theatrics in Product Development.

• [01:26:46] Obsession with user experience.

• [01:29:24] Product experience beyond software.

• [01:34:45] Cultural focus on product quality.

• [01:37:42] Atlas company creation explained.

• [01:41:30] Simplifying Company Startups.

• [01:46:21] Automating company starting process.

• [01:49:23] Startup growth during pandemic.

• [01:51:33] Commitment to long-term infrastructure.

• [01:55:13] Cross-border founding teams.

• [02:00:41] Solving problems for entrepreneurship.

• [02:04:07] Getting stuff done at a large company.

• [02:08:56] Leadership transitions in Atlas.

• [02:11:53] Fostering Healthy Competition in Business.

• [02:16:21] Involving customers in product design.

• [02:20:30] Customer-oriented approach in business.

• [02:23:26] Business strategy insights.

• [02:25:54] The power of differentiation.

• [02:29:30] Life mottos and advice.

• [02:33:22] Productivity advice and self-awareness.