We track Product so you don't have to. Top Podcasts summarised, the latest AI tools, plus research and news in a 5 min digest.

Hey Product Fans!

Welcome to a festive week of Product Tapas, I make no apologies for the terrible festive puns sprinkled throughout….! 🎅📰

🔔 Jingle Bells of Innovation: Today, we're unwrapping a diverse mix of product news and insights, from AI's latest feats to strategic shifts in popular platforms. Get ready to deck the halls with fresh knowledge and inspiring ideas!

🤖 GPT & Tool time Winter Wonderland: Explore the latest in time-saving tools, today we’re unwrapping how you can save time creating stock images, triaging bugs and taking notes. These tidbits are sure to light up your holiday spirit like a Christmas tree! 🌲💡

🎁 Gift-Wrapped Blpg Bites: Dive into our curated selection of articles that are as satisfying as a warm cup of cocoa on a cold winter's night. From deep dives into marketplace dynamics to strategic considerations for product expansion, we’ve got you covered. 📚☕

🎉 Festive Surprises: Remember, the festive season is all about sharing and caring - please get into the spirit by inviting friends to join our vibrant community 🙂 🌟💌

Let's unwrap today's exciting edition! 🚀🎁👇

📰 Not boring

• AI Chat Bots Now Outperform People in Solving CAPTCHAs

• Apple Announces ‘Contingent Pricing’ Feature: Discounts For Active Subscribers

• TikTok is pushing longer videos. Some Creators Worry About the Vibe Shift

• Spamouflage Dragon Infiltrates Internet With Clumsy Pro-China, Anti-West Messages - Dubbed Mold of the Internet

• Merry Christmas! ChatGPT Subscriptions Have Been Re-enabled After Sam Altman Said New GPUs Have Been Acquired

• Snap Now Lets Subscribers share AI-generated Snaps

• Realtime face replacements in live video 👀. Boon Time For Deep Fakes

• View more →

• OK one more, because it’s nearly Christmas

📰 Time-Saving Tools & GPTs

1. Google NotebookLM (US only for now); write notes, ask NotebookLM questions about your source to explain, summarise, brainstorm etc.

2. ANOTHER text to image app; Snapby creates photo-realistic images from simple prompts - no-more stock images

3. 🐞 Jam - "The Bug Whisperer" 🌌

   • Description: Jam, with its JamGPT feature, assists product managers in understanding and solving bugs. It enables them to share solutions with engineering teams and participate in technical discussions.

 🍔 Blog Bites

🌟 The Concept That Explains Everything About Marketplaces

Another one from Dan Hock - covering all you need to know about marketplaces (as the title suggests….).

📖 Read the full article here

📆 Published: 27 Jun 2023 ⏱️ Reading Time: <1minute. Time Saved 6 minutes 🔥 

What's The Buzz? 🐝 This article delves into the concept of transaction costs and their crucial role in understanding, building, and pricing marketplaces. Originating from Ronald Coase's Nobel Prize-winning theory, it explores how businesses reduce transaction costs, categorized into search and information costs, bargaining and decision costs, enforcement and policing costs, and distribution costs.

What's The Big Deal? 🌟 The article highlights how marketplaces don't sell goods or services but the reduction of transaction costs. It uses examples like Etsy, Uber, Faire, and Doordash to demonstrate how these platforms addressed different forms of transaction costs in their respective industries, thereby growing the Total Addressable Market (TAM). The evolution of marketplaces is linked to how they address these transaction costs, evolving from lead generation to heavily-managed marketplaces. The monetization of a marketplace is directly connected to the amount of transaction cost it eliminates, benefiting both buyers and sellers. The piece underscores the importance of marketplaces in taking on costs like enforcement and distribution, which are more challenging and defensible due to high variable costs.

For example

1. Etsy: Addressed search and information costs in the fragmented handmade goods industry by providing a platform for sellers to list items and buyers to easily search and filter options.

2. Uber: Tackled bargaining and decision costs in the taxi industry by offering upfront pricing, eliminating the uncertainty of metered fares.

3. Faire: Solved enforcement and policing costs in retail by offering online checkout, net payment terms, and free returns, thus reducing the risk for independent retailers.

4. Doordash/Postmates: Addressed distribution costs for independent restaurants by creating delivery fleets, saving restaurants the expense and hassle of delivery logistics.

These examples demonstrate the significant role of marketplaces in reducing various transaction costs, thereby expanding the Total Addressable Market (TAM) and evolving from lead generation to heavily-managed marketplaces. This evolution is not only about addressing transaction costs but also about the strategic positioning and monetisation based on the value added to both buyers and sellers.

Why Should You Care? 💡 Understanding transaction costs is vital for anyone involved in or interested in the marketplace industry. It provides insights into why certain marketplaces succeed, how to disrupt incumbent ones, and the future trajectory of the marketplace model. This knowledge is especially crucial as the industry becomes more operationally and analytically intensive.

What To Do With This Information 🔗 The article has some additional useful links for those looking for further insights into marketplace dynamics and transaction costs e.g. Bill Gurley's piece on marketplace conditions and Kevin Kwok's article on TAM growth. Additionally, exploring further materials on service industry marketplaces could provide a deeper understanding of untapped transaction cost opportunities.

📖 Read the full article here 

🌟 When and How to Build Second Products

This is a summary of a recent Casey Winters article on second products. It’s part three in a series presented at the TCV Egage Summit. It’s a useful one to read in conjunction with the recent growth loop article we posted.

⏱️ Reading Time: <1minute Time Saved >5minutes 🔥 

What's The Buzz? 🐝 This article, discusses the strategic development of second products in businesses. It delves into why and when companies should consider expanding their product lines and how to measure the success of these new ventures.

What's The Big Deal? 🌟 The discussion highlights several key points:

1. Importance of Diversification: Single-product reliance is becoming less viable for enduring success. Recent tech IPOs demonstrate a trend toward multi-product strategies.

2. Types of Product Expansion:

   • Geographic Expansion: Like Grubhub entering new cities, understanding local market nuances is crucial.

   • Category Expansion: Companies like Whatnot diversifying into new product categories to capture broader markets.

   • Format Changes: Innovations like Netflix's move to streaming, adapting products to changing technology landscapes.

   • New Value Propositions: Examples include Uber Eats, where companies develop entirely new services for their existing customer base.

   • Platform Creation: Developing platforms like the Shopify App Store that leverage existing products to create new opportunities.

   • Strategic Diversification: AWS and Cash App exemplify leveraging core competencies to enter entirely new markets.

3. S-Curve and Product Value: Transitioning to a new S-Curve of growth often requires innovative product development, as seen with companies like Eventbrite expanding beyond their original offerings.

4. Timing and Strategy:

   • Proactive Approach: Assessing market growth, competition, and business model to determine the right time for product expansion.

   • Business Model Considerations: Different models, whether B2B or B2C, demand different approaches to product development and expansion.

5. Case Studies for Insight:

   • Companies like Pinterest and Snapchat show varied paths in consumer spaces, with different strategies in acquisition, retention, and monetization.

   • SaaS examples like Figma and Canva demonstrate how competitive environments and target audiences dictate product expansion strategies.

6. Success Measurement:

   • The impact of new products on overall business growth is the real measure of success, beyond just achieving product/market fit.

Why Should You Care? 💡 For product leaders, entrepreneurs, and business strategists, understanding when and how to develop second products is crucial for staying competitive and driving long-term growth. This article provides insights into the strategic thinking required for successful product expansion.

What To Do With This Information 🔗 For further exploration, readers might delve into the previous parts of this series or seek out additional resources on product development and product-led growth. Understanding the specifics of different business models and market dynamics is key to applying these principles effectively in your own business context.

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That’s a wrap.

As always, the journey doesn't end here! Keep exploring, keep questioning, and most importantly, keep growing in your product journey. Until our next issue, keep savouring the bites of wisdom we've shared. 🚀👋

Alastair & the Product Tapas Team 🍽️.Second