Steve Lichtenstein

Product Stack Denver—Keynote

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Our first Product Stack event in Denver was a huge success! A large crowd of PMs and the PM-curious came out for a keynote from Jay Zeschin, CTO of Ello, as well as the full panel discussion. (There may have been some mingling and boozing as well; unconfirmed.) Here’s the full video of Jay’s talk about inflection points.

Product Stack Denver: Keynote from Pivotal Tracker on Vimeo.

We’ll share video of that panel discussion—emceed by Jay Zeschin, and featuring Jim Semick of ProductPlan, Dan Podsedly of Pivotal Tracker, Jess Sherlock of GoSpotCheck, Aaron Duke of CirrusMD, and Kevin Steigerwald of Notion—in the coming days.

Our sincere thanks to Galvanize Denver for graciously hosting our event and to Gregg Barclay for being our videographer.

Transcript

Jay Zeschin: All right, can you guys see me OK? Awesome. So, first of all, I’d like to echo Rhoda’s statement, thank you all for coming. This is the first time we’ve done this particular event in Denver and it’s awesome to see a fantastic turnout. Standing room only is all we could have hoped for, so thank you so much.

As Rhoda mentioned, I’m CTO of ELLO, one of the co-founders there, as well as one of the folks behind Denver Startup Week. How many folks, just show of hands, have heard of ELLO, or have some idea of what it is? OK. Awesome. Maybe about a third. How about, how many folks have heard of or been to Denver Startup Week? Excellent. Much more. Awesome. Well, so I think, this event and the product track in Denver Startup Week share some of the same origins. I think both were born out of this idea, or this idea, or you know, this understanding that it’s really difficult to figure out how to learn how to be an effective product manager. There are relatively few sort of courses and sort of good resources that you can take or a curriculum that you can follow that just sort of lands you in a spot where it’s like all the sudden, “I know what I’m doing.”

We started the product track at DSW two years ago and it’s become our fastest-growing track and one of our most popular ones, so it’s been really cool to see that grow. And, incidentally, you know, one of the things that I’ve found as CTO, as I’ve, as the company has grown and as my role has changed, one of the most important pieces I found for myself to get better for that job is building up a strong external peer group that I can work through issues with, that I can bounce ideas off of, that I can learn from. And I think that’s one of the best things we can do with this event, is continuing to help you all build up your own external peer groups to sort of work through those challenges that you’re running into in your everyday and all that sort of thing.

So, that’s the point of the beers and all that, but please do definitely take advantage of that. I think that’s one of the biggest thing we can offer out of something like this, is the ability to build those connections and build that strong network to help you out.

So, what I want to talk about tonight is inflection points, or the theme I sort of have for this is inflection points. They’re those times in the life of the company where the entire trajectory of a company, or a product, or a team shifts, usually fairly dramatically. Sometimes for the better, ideally for the better. Sometimes not for the better, sometimes for the worse. They’re really difficult because they always mean a lot of change and chaos and uncertainty. And I feel really strongly that figuring out how to navigate those well is a critical part of being successful as a project manager or as an entrepreneur. And I would make the argument that this is a subject for an entirely different talk, that if you’re a product manager at an early stage company, you pretty much have to be an entrepreneur to be successful.

So, in that vein, I want to talk a little bit about, specifically about ELLO and some of our, little bit about our story and some of our inflection points over the course of the last three years.

So, we started out as a side project for about three different companies, or three different groups of people. At the time I was working for a company called Modset, which sadly is no longer in existence, but a consultancy based locally that focused a lot on helping early stage companies develop products, get products from idea to market. We had had sort of a long-term, or long-term working relationship with a design shop out of Boulder called Berger and Fair. We’d worked on some client projects with them that’s run by two guys, Todd Berger and Lushun Fair. And one day we were in sort of, in between products and Todd hit us up saying that he had an idea that he wanted to talk over and wanted to come down and chat about it over dinner. Just sort of strange, right? This is sort of out of the blue, we had no background, nothing, nothing that indicated that something was up.

So, he and Lushun made the drive down to Denver, gave us the pitch on this idea that they’d been working on with their friend, Paul, sort of the third entity in the founding of ELLO, a guy named Paul Butnis who founded Kid Robot, a bike company that makes these beautiful all-titanium bikes and a few other things.

So the idea that they’d been kicking around was sort of born of a creative perspective on social networks. They were looking around at sort of the current state of social networking, Facebook, Twitter, Instagram, and none of them really sort of hit a nerve for any of those guys with the kind of interactions that they wanted to encourage. Social networks at the time now would argue, still now, tend to be fairly extractive, they’re focused on driving eyeballs and driving people to content, as opposed to driving creativity and creation, meaningful user interaction, positivity, all that sort of thing.

So, they started from this sort of utopian place of how do we build a social network that actually promotes positivity and creativity in some form or another? And they actually got pretty far with just an idea. They turned it into a slide deck and some sort of basic UI designs, and took it to a few different investors and got about $200K committed with nothing more than a slide deck. But, they’re savvy enough to realize that in order to actually build this, this sort of grand vision that they had for the product, they were going to need a lot more than $200K and a slide deck. They would need to actually build out something that was more of a real product and that was going to cost quite a bit more money, which is how we entered into the equation.

So, long story short, we sort of went back around a little bit. You know, Modset was not usually in a position to take equity in projects, but we decided that, what the heck. It sounded like an interesting thing, it was people we trusted. We are working predominately with early stage companies that, I mean, seeing the venture funding, the fundraising side of things from sort of an external perspective, but having a front row seat and being able to see that directly we thought would make us better consultants, more empathetic consultants. So we decided to go for it. Incidentally, I would say this was the first inflection point from ELLO, moving from something flat on paper to something that was 3D, and also a major inflection point for Modset.

So, from there, we spent about six months, say on and off, spare cycles, down time, time between projects, all that, working on building out sort of a prototype quality of what would become ELLO. Something to show earnestness, something to show investors that we actually had some idea that what we were talking about and could actually, you know, have the ability to execute something if they gave us some money. And lo and behold, it worked.

We got a couple hundred people on the prototype for that. We ended up doing, I think, about 120 different pitches, or pitched to 120 different investors, and ultimately raised a few hundred K and seed funding to actually make the thing real. So, we did.

We spent six months actually building out a nonprototype version of the product, getting to ready to launch it to market. And in early July 2014, we finally made this whole thing live.

And as anyone who’s sort of launched a product out into the world without a whole lot behind it knows, you sort of, there’s this moment where you open the doors, you throw open the doors and you expect something to happen and it’s just sort of, all of the sudden it’s there, right? There’s no, there’s no magic, there’s no sort of choirs of angels or anything like that. You’re just sort of now in the hard part where no one’s using your product and you have to figure out how to make that happen.

So, so we sort of immediately switch modes into doing that. How do we actually get people to use us? We had the foresight to build some sort of, some marketing campaigns out ahead of time that gave us a little bit of a kickstart, but for the most part it was, it was the usual startup grind of, you know, becoming the person that every single one of your friends hates because they’re pestering them to use your product and pestering for feedback on it. “Hey, have you tried ELLO, yet? What did you think? What features did you like? What didn’t you like? Why aren’t you using it still?” That sort of thing.

So, we started a couple of months doing that and becoming the worst enemy of all of our creative friends, or the person that all of our creative friends would dodge so they wouldn’t have to ask, or answer questions about ELLO.

And then, so fast forward a couple of months to mid-September, 2014, and we were starting to get to place where we had a little bit of traction, we had some folks on it, a few thousand people, we had actually just had an influx of users from Germany, which is a really interesting experience for us. We had, maybe, a couple thousand folks join all at once, giving us a lot of feedback, and providing a lot of activity on the network, but it was all in German, and none of us spoke German. Literally, not a word. So, I think we spent a few weeks just living in Google Translate trying to make heads or tails of what was going on. And if you haven’t ever tried that, it’s a hell of a thing. You sort of start to question your reality because of the way that the grammar comes back.

But anyway, we were at the end of our, end of our funding, and we were starting to have some very serious conversations about what’s next for ELLO. We had this fledgling social network that had some traction, had some popularity, but it wasn’t enough to support any one of us, much less the entire group of seven of us and really have sort of a team working on it full time. So, it was almost immediately after having one of those conversations that we went back to look back at our traffic logs and noticed that we had had, traffic that day had doubled for some reason. That’s, that’s odd. Maybe not, you know, it’s a little anomalous, it’s not that crazy, but yeah, we’ll keep an eye on it and see. And, the next day it doubled again, so four times a week then had been the previous day, and that’s sort of, it was nothing it couldn’t handle, but it led to a little bit more head scratching.

And then, over the course of the next 24 hours it doubled again, and we started panicking. We, so it turned out what happened is Facebook, unbeknownst to us, Facebook had started to enforce a “real names” policy across all of their properties and it was, there was a lot of backlash against that for a variety of reasons. But, the one most salient to us, was that that really resonated with the drag community in San Francisco. And it just so happened that that community was already, enough of them, were already on ELLO, had been active ELLO users that they took that as an opportunity to jump over to ELLO instead of to Facebook for most of their, their sort of social networking needs. And because it was sort of a big enough movement, they pulled a lot of other folks with them and made sort of a big media splash about it. And then as soon as they started, the alternative press caught wind of it, then the creative press, then the tech press, then the mainstream press, then the whole thing snowballed.

We went from having a few thousand users and no traffic, to having millions of users and 120,000 requests per minute over the course of about 3-4 days. Yeah. We, so talk about an inflection point. I didn’t, so we went from this mode of, “Will the company survive? Can we actually sort of do anything with this? Is it going to continue to exist in any form? Will we run out of money?” To, “Holy shit! Now we have something that actually has legs, it’s a real product, it’s got some amount of fits. What do we do with it now?” The set or questions overnight changed from where does this go now to what do we do now and how do we build this into a real company.

We sort of had a choice, all of us individually. You know, some of us were running this consultancy, some of us were running this design shop, we had this suddenly red-hot social network thing on our hands. What do we do with it? So we, from an ELLO perspective, we moved that energy and we moved that direction into raising a Series A and actually turning it into a real company. And myself, and a few of my other co-founders had a really tough decision to make, our own sort of personal inflection point of what did we want to do.

Most of us decided to ride the ELLO rocket ship and see where it ended up. A few folks decided that their passion was really in consulting and they decided that they really wanted to stay there.

One way or another, we all of the sudden had a company to build around this whole thing, so we started to do that. We didn’t know anything about building a company. We didn’t know what it would take to service a product like this, but we knew that we would figure it out. So over the course of a couple of months, we hired a VP of engineering, we hired a head of people, we hired an entire marketing department, we went from having maybe 2-1/2 engineers working on it to having 7—a team of 17 people. We went from basically no full-timers, up to 31 people over the course of about 3–4 months, which is sort of head spinning. And we thought we did all the right things.

We worked really hard to finish this product that we had started. You know, the ELLO at the beginning was very skeletal—you could post and you could follow people, and that was pretty much it. There was no ability to repost. There was no ability to love. There were no blocking, or muting, or search functionalities, or anything like that. It was a very basic product. So, we spent a huge amount of energy just sort of finishing the product that we had started and launched. And we thought we were doing a great job. We thought we were sort of pushing this thing forward the way that we needed to, we thought that we were building the company that we needed to, to service this, to really fill this need that people had told us. That they wanted a new and different social network to take on Facebook.

And then, about 6-8 months after that, after that initial pop in traffic around June of the following year, we looked at all numbers. We looked at how things were going, we looked at where we were at. And we realized that none of it was actually working. We had built up this entire sort of apparatus, this company, this execution machine to make this product happen, and all with the best of intent, none of it was actually engaging with our users in a way that we need it to. We were trying to bottle lightning, to sort of take on this behemoth and really attract this, fit this need that the market had told us was there, and we had failed to do it. It wasn’t sticking. We weren’t keeping the users that we wanted to and it wasn’t sort of going the way that we needed it to.

And to make it worse, we were staring at a cliff, right? We were burning money way too fast. And we really only had a few months left before we would either be out of money or we’d have to raise again, and we didn’t think that that would be possible based on what we had going.

So we had a really tough decision: do we sort of go full bore at this cliff and hope that we can figure out some way to ramp it by the time that we get there? Or do we pull back? Do we put on the brakes and figure out a different approach, a better way to do this, a different market, something like that that would actually help us get to where we needed to but with a different way.

As our, at-the-time CEO said, you know, “The one thing that’s the hardest for startups to buy is time.” And ultimately that’s what we decided to do, but it was expensive. We laid off half the company, over half the company actually. We went from 31 down to 14, and decided to retrench and refocus.

So, we spent a little bit of time sort of wandering in the wilderness, trying to figure out what had gone so wrong when we were, you know, when we thought we were on the right track, and we thought we had built the thing that everyone wanted. That we had this huge explosion in traffic, this huge amount of interest, that people really wanted this product by all rights the market was clamoring for this. People really wanted it. People were super excited about it. What did we fail to do?

And we realized, we went back and looked at what was actually working on ELLO, the parts of the product that resonated well with people, and the things that we actually understood. And we realized that where we started was actually where we needed to be.

We started with creatives. Of the seven co-founders in ELLO, four plus are artists. Yet, it was a network that was largely built for artists, by artists, with artists’ needs in mind. And despite all of the hype around the sort of Facebook-killer thing, the artists had been there all along. They’d been producing work, they had been posting it on ELLO, they had been doing really cool things that were attracting people and it just sort of had gotten covered over by all this other stuff. These were the people that were finding value with our product. These were the people who were sticking around. These were the people who really wanted to be on ELLO and thought if giving us their time, giving us their attention had value, and could do something for them.

So, we leaned into that. We said, “This is the segment that it works for, this is the segment that we want to go for, let’s really refocus and become the creator’s network. We’ve got a confluence of interesting things. We’ve got large base of users that came and disappeared but have an alternative mindset. So, they’re interested in art. They’re interested in design. They’re interested in all of these other things that our artists are producing. We can give these artists exposure. We can give them reach. We can give them the ability to sell their work and make a living.” All these sort of things.

We can use all of the, you know, all of the ashes of the first version of ELLO, the hype that we believed, and really turn it into something that potentially has staying power. And it’s not all sunshine and roses, right? We still have a lot of work ahead of us. It’s a very long journey to get where we ultimately want to go. But it’s a start.

And that’s a, I feel like that is actually the best kind of inflection point. It’s the one where you go from not having any idea what you’re doing, from searching for a reason for your company to exist and searching for a reason for your product to exist to seeing that glimmer of fits, of adoption, of interest from users, of real value that you’re generating. And seeing a way, a path forward where you can really have that take off. That’s the inflection point.

So, all that having been said, I wanted to talk about a couple of things that, leave you with a couple of things that I learned from going through that process. Sort of three big takeaways.

So, the first one is to invest early in a framework to support your growth. And the three sort of big things that apart of that, a set of consistent practices from a technology and team perspective. We’re big believers in XP, and I know the Pivotal folks are as well. As well, as a strong set of analytics tools and pipelines to be able to measure and understand what’s going on in your product and how users are using it. And finally, creating a culture of sort of closing the loop and reflecting on what you’ve built.

All of these things are hugely critical to your success to understanding not just what you’re doing, but why you’re doing them, and why users draw value from them. And they’re really difficult to build after the fact. You know, if you set that in your culture early on, that those things are important than they’ll serve you well. If you don’t, then you’re going to have to rebuild in a way that takes a lot of time and attention away from other things.

The second is to be clear and deliberate about the decisions you make. Whether you’re officially in a leadership capacity in a company, or more as a peer leader—and I would argue that as a product manager, you’re sort of always one of those two. Particularly in times of uncertainty and times of chaos around inflection points, your coworkers are going to look to you for guidance. And every time you decide to do or say something, or even when you decide not to do or say something, that telegraphs that guidance to your coworkers. And it’s a big responsibility. So it can be a powerful tool to motivate your team, to get everyone moving in the same direction, but use it wisely.

For instance, talk clearly about, you know, the directions you’re taking the product, the way that you’re wanting to move forward. But also be clear about the things that it’s OK, or that it’s OK to drop, that you’re leaving behind, that you no longer want to deal with. Giving people that flexibility to both explore new things, but also abandon old things is really key to navigating that successfully.

We use a management framework called Traction that talks about setting your rocks as a company. The analogy is that you’re filling a container and you’re trying to fit sand and rocks in there. If you put the sand in first and then put the rocks on top they’re not going to fit. But if you put the rocks in first and then pour the sand over them, the sand will fill in the spaces and everything fits. The idea is to have a strong framework for being able to set your rocks as a company, as a product, as a person, to make sure that you’re achieving those and not just filling up your time with the things that don’t matter quite as much.

Finally, and the third piece, and sort of the corollary to that, the third point in the corollary to that is that it’s 100% OK to not know what you’re doing, right? We’ve all been there. No one expects you to know everything that’s going on or to have an answer in every situation. That can be a tremendously powerful thing. Own it. Use that as a way to build rapport with your team, to build understanding with your team. To help grow through those decisions together. And don’t try to fool anyone, right? That’s, you know, that honesty that you’ll build as part of, part of learning together and part of sort of going through that understanding process together is key. But also, don’t let it be a crutch. Not knowing is only OK as long as you’re constantly searching for the answer. If you, if the answer to the questions is constantly eluding you, then maybe you need to be looking at a different approach.

So we’ve made a lot of mistakes in ELLO’s three-year existence. I’m not quite sure that we’re not done making mistakes yet. But, I’ll leave you with one of my favorite sayings on that front: “May all your mistakes be unique.” Right? The hope is that, particularly in this profession you’re always learning and growing and doing new things. You’re going to make lots of mistakes. You’re going to deal with a lot of chaos. And you’re going to deal with a lot of things that don’t go particularly your way. But as long as you’re moving forward and learning tools and techniques for being able to deal with that chaos well, you’ll continue to succeed and thrive as leaders in your companies, as product managers, and as other leaders in the community. So, that’s what I got. Thanks, everyone.

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