Magnets & Repellants

Giff Constable culture, product management

There were lots of takes on Basecamp’s (formerly 37Signals) latest announcement on internal company policies. Ben Thompson was interested in the work-life separation inside the large tech companies and how the lack thereof is coming home to roost at places like Google. Melissa Perri noted that the “no politics” policy could have an impact on ethical design (or the lack thereof). But the take that got my wheels turning wasn’t about the policies themselves (since Basecamp often makes me roll my eyes), and it came from Gib Biddle:

I think the concept of magnets and repellants is a powerful one, both for company culture and for product strategy. It is no surprise that two of the most innovative and successful companies of this era — Amazon and Netflix (I’m midway through No Rules Rules and enjoying it) — are known for strong cultures that some love and some hate. Both companies have basically said, “We don’t need everyone to like working here, and we believe that is a strength not a weakness.” For that matter, Zappos was exactly the same.

The more you try to please everyone, the more you dilute your culture and values into meaninglessness. When a company lacks real, non-generic values to guide behavior, they instead compensate with bureaucracy.

I was once at a company caught in a cultural transition. For years, it had been led by a very mission-oriented founder. Then the company brought in a very commercial CEO who was all about the numbers. Either lane — mission or commercial — could work, but not both lanes at the same time, at least not without a more explicit prioritization. The mishmash and confusion and contradictions just made people unhappy and hurt productivity. The choices weren’t clear.

An interesting question to ask at the executive level: “do we have any values that some people would object to?” If the answer is no, that’s a sign you either haven’t pushed your thought process far enough, or you aren’t being honest with yourselves.

I would never work for Basecamp — they have interested and repelled me in equal measure over many years — but I respect the fact that they made decisions and were transparent about it. Now people can decide: do I want to work for, or buy from, this company? It doesn’t matter that this latest announcement from the company is intended to draw attention and elicit strong reactions. This has been Basecamp’s marketing modus operandi from the beginning. While their often-smug pronouncements have irritated me, the tactic has brought them lots of success. Granted, some of their choices have made it harder for them to stay competitive as their field has gotten more crowded, but I’ve always respected that it was their company and their choices to make.

As a leadership team, it is harder to take a stand and own it than to play it safe. With the former, some people will get unhappy. You’ll receive public criticism. Both of those things will happen almost no matter what stance you take. But the flip side is you will differentiate your company and create a stronger culture. The important thing is being honest about it so that potential employees know what they might be signing up for. And if you take it too far and nix diversity within your employee base, that will only come back to hurt you.

How does this connect to product strategy?

If you try to please every customer and every use case in equal measure, you also end up with mediocrity. This is true at a startup level, where you usually have to pick a very narrow customer segment (far narrower than most founders are comfortable with) to establish a beachhead. This is also true at scale, when you have a broad mix of customers. Even though you can support far more customer segments at scale, you still can’t make everyone equally happy.

Take multi-sided marketplaces as an example. In theory, you should love both sides of the market equally — after all, supply and demand are coming to the market for each other, not for you. In practicality, loving both sides equally is hard to do. If you end up being more of an “aggregator” marketplace, to use Ben Thompson’s term for markets that aggregate and control customer demand (think Uber and Airbnb), your suppliers are usually frustrated with your policies. If you build more of a “platform” marketplace where you connect the two sides but don’t try to own the customer relationship (think Shopify), then the suppliers are usually your more important customer.

You can see this play out in the extreme when companies are “crossing the chasm“. As companies make the leap to the mainstream market, the early adopters and power users often feel neglected (and usually they are!). Sometimes a company even has to “fire” their early adopters in order to embrace a bigger market. This all needs to be done with intent.

In other words, when you are developing a product strategy, you can’t just think about goals and feature prioritization. You also have to make explicit choices about which customer segments and use cases are most important at a given time. Likely it’s a moving target.

Similar to the culture/values question above, you can ask yourself, who among our potential addressable market are we not a fit for? If the answer is, “we’re an amazing fit for everyone!” then, again, you’ve probably either not pushed your thinking far enough, or you’re not being honest with yourself.

Whether culture or strategy, what are your magnets and repellants?

When you are very clear about what you are for, versus not-for (doesn’t have to be “against”), it might feel like you are giving up opportunities and optionality, but usually the greater clarity, focus, and differentiation that comes with the choices more than makes up for it.

Top image by @davidclode on Unsplash