The Value of Making Smart Trade-Offs by Airbnb Product Manager
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The document discusses making trade-offs as a product manager. It introduces the speaker, Tyler Sax, an Airbnb product manager. It outlines common trade-off archetypes PMs face like engagement vs revenue and foundation vs growth. It provides frameworks for making trade-offs including using a unifying metric, considering incentives and alignment, and prioritizing vision over metrics. Examples are given around deciding how many ads to show on Facebook and whether to allow non-square photos on Instagram. The key takeaway is that PMs must make smart decisions on trade-offs and align stakeholders to those decisions.
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The Value of Making Smart Trade-Offs by Airbnb Product Manager
- 1. www.productschool.com The Value of Making Smart Trade-Offs by Airbnb Product Manager
- 2. Join 40,000+ Product Managers on Free Resources Discover great job opportunities Job Portal prdct.school/PSJobPortalprdct.school/events-slack
- 3. CERTIFICATES Your Product Management Certificate Path Product Leadership Certificate™ Full Stack Product Management Certificate™ Product Management Certificate™ 20 HOURS40 HOURS40 HOURS
- 4. Corporate Training Level up your team’s Product Management skills
- 5. Tyler Sax T O N I G H T ’ S S P E A K E R
- 6. MAKINGTRADEOFFSPRODUCTSCHOOLSF What does a PM do? MAKINGTRADEOFFSPRODUCTSCHOOLSF
- 7. MAKINGTRADEOFFSPRODUCTSCHOOLSF You exist to make hard tradeoffs.
- 8. MAKINGTRADEOFFSPRODUCTSCHOOLSF Challenge: launch ads in a product known for creative quality Challenge: show more ads without disrupting the user experience Challenge: connect travelers with the perfect place to stay
- 9. MAKINGTRADEOFFSPRODUCTSCHOOLSF archetypes Engagement vs. revenue Decide which feature to deprioritize given a new requirement Multiple low-confidence bets vs. few high confidence ones Foundation vs. growth Benefit user 1 vs user 2
- 10. MAKINGTRADEOFFSPRODUCTSCHOOLSF Convince yourself, and the people around you, how to make a difficult tradeoff C H A L L E N G E This is the central challenge of product management. Your success will ultimately depend on whether or not you make smart decisions, and can align other people to those decisions.
- 11. MAKINGTRADEOFFSPRODUCTSCHOOLSF frameworks V I S I O N I N C E N T I V E A L I G N M E N T U N I F Y I N G M E T R I C S U R V I V A L align your choices in the same value space, pick the one that gets you the best outcome watch out: might oversimplify the problem metrics can’t solve every problem - make the decision that best aligns with your vision for the product reminder: your product vision is really important think hard about the incentives you’re creating for yourself and for your customers, and how those incentives serve your goals read more: there’s an entire academic discipline called “systems theory” which studies this if you’re on a limited runway, none of the above matters
- 12. MAKINGTRADEOFFSPRODUCTSCHOOLSF E X A M P L E You are in charge of launching ads in Facebook’s News Feed. It’s going to be the company’s main revenue driver for years to come. How do you decide how many ads to show to users? U N I F Y I N G M E T R I C How many ads do you show in News Feed? F R A M E W O R K % ADS TIMESPENT % ADS REVENUE Solution: Run a series of experiments, exposing test groups to different levels of ad density. Find the revenue-maximizing point. You have successfully accounted for business outcome, and impact to users. Watch out: Does impact to time spent capture all of the user impact? Is short-term revenue the right thing to optimize for?
- 13. MAKINGTRADEOFFSPRODUCTSCHOOLSF E X A M P L E The square photo is a signature element of Instagram’s brand, but it adds friction to people sharing content by making them do more work. Should you allow vertical and horizontal photos? V I S I O N Should you allow non-square photos on Instagram? F R A M E W O R K Solution: Metrics won’t answer this question for you. Do you want to be a platform with more participation, or more curation?
- 14. MAKINGTRADEOFFSPRODUCTSCHOOLSF E X A M P L E You are in charge of a marketplace product (think: UberEats, Airbnb, Lime). Should you set your team’s goal on maximizing number of transactions, or total value of transactions (i.e. transaction volume * avg. price)? Should you goal on transaction volume or transaction value? F R A M E W O R K I N C E N T I V E A L I G N M E N T # $Incentive: make the product work for the most number of use cases Incentive: make the product work for highest value use cases Solution: Where are you in the lifecycle of your product? Do you have strong product-market fit? Is it more important to grow the base, or optimize for the business? Which is better for the supply side of your marketplace?
- 15. MAKINGTRADEOFFSPRODUCTSCHOOLSF go forth, and make smart decisions
- 16. MAKINGTRADEOFFSPRODUCTSCHOOLSF if you want me to talk more, try one of these: Important trends in society we should be paying attention to Important trends in technology Thoughts on PM networking What’s going on at Airbnb? In what ways are ads-powered products different from other business models?
- 17. www.productschool.com Part-time Product Management Training Courses and Corporate Training
Notes de l'éditeur
- If you’re interested to connect with other Product Managers, aspiring PMs, or those within tech, join our Slack community of over 40,000 professionals. It’s a great place to network and to find interesting content. We host a weekly AMA through our Slack channel on Tuesdays from 11:15am - 12pm PST. We have also recently launched the Job Portal where you can find the latest Product Management opportunities! As members of the Product School community, we'd like to provide you with these resources at your disposal.
- Product School’s Product Management Certificate Path comprises of 3 part-time courses for professionals with strong technical or business background who want to further explore Product Management at software-based companies. During Product Management Training you will first learn Product Management fundamentals to understand the software product lifecycle and what it takes to successfully transition into a product management role. You’ll then be trained to retrieve data, understand its value and make impactful decisions with SQL, data visualization and Tableau. Learn to understand your users to deliver exceptional UX/UI design and develop a robust digital marketing plan. During the Full Stack Product Management Training, you will deep dive into the technical knowledge to enhance your ability to work with agile teams. Finally, Product Leadership Training will elevate your product knowledge to become an effective Product Leader. You'll do an in-depth analysis on how to implement best PM practices on a strategic level to significantly impact your company’s portfolio and revenue. Learn the soft skills to manage product teams and manage stakeholders to deliver performing products.
- As well as individual courses we provide corporate training across the world! If you’d like to upskill your product team this is the best option for you. We have trained employees from multiple companies such as Deloitte, Salesforce, JP Morgan, Bank of America amongst many other companies across all industries.
- Tonight's talk is “ [TITLE] ” with [NAME]. Welcome, [NAME].
- - great topic, time to catch up later, lots to be excited about - what does a pm do? So many answers to this question. You think: project timelines, understanding the customer, leading a team, managing a backlog, brainstorming new features. All are correct, which makes none of them comprehensive. Those are important activities, but I’m going to try to persuade you that you have only one job: making hard tradeoffs.
- This is the one idea I hope to drill home tonight, and I chose this because in my view it is the one unifying way of explaining everything about product management. When I realized this in my own career it was a moment of clarity. I started to see things differently. And I hope to impart that on you. To get us there, I’m going to tell you a bit about my background, share some of the common kinds of tradeoffs I think you will see in product work, some frameworks you might use to think about them, and finally some real examples of real problems I’ve seen that we can walk through together. After that, I want to hear what you have to say.
- Lucky to get to work on some cool products, and I’ve learned a lot from doing so. There’s also a tremendous amount I don’t know. Many of you have probably worked in startups before - an environment that has a very different set of tradeoffs. I’ve also spent 90% of my career working in ads-powered businesses. At airbnb I’m quickly learning that ads-powered businesses have some very specific dynamics that don’t translate elsewhere. Computer Science/economnics background. econ is how to analyze and describe complex systems, CS is how to build systems using computers. I believe there’s something powerful at the intersection of these disciplines, and I pursue problems that help me understand that intersection better. Briefly, a few of the problems I’ve found most interesting:
- What are the kinds of tradeoffs we expect to run into as pm? Here are a handful that get repeated a lot. [elaborate] These are all tradeoffs you will be asked to make in your roles.
- The callenge, then is [….] That’s what it all boils down to.
- Having some practice in these will help you when you’re faced with difficult decisions, and will help you convince others by applying structure to your thinking.
- Here’s a real problem. Also the kind of hypothetical you see in PM interviews. Intro How would you think about this problem? Good candidate for unifying metric. Let’s talk through why model : people don’t come to facebook to see ads, they come to see friend content. Each additional ad you show (let’s use % of total news feed that is ads) you’re showing someone something they did not come to the product for. So we can draw a curve to model this idea. As you go from 0% ads to 100% ads, peoeple will value facebook less and will spend less time in the product, going all the way to 0. Any ideas on how we might solve this problem now? What happens to revenue in the process? At 100% ads, you have 0 time spent, so revenue is 0! Economists call this a laffer curve. You know it’s 0 on both ends, therefore there must be some point in the middle that maximizes value.
- Any of you with a good memory may recall the day when photos on instagram had to be square. This was a signature feature of the product, part of the brand. But now the question was on the table: should we stick to the square (maintain the roots of the product) or eliminate the restriction, reducing friction to people sharing more? Good candidate for vision. This is something that metrics and charts will never answer for you, like the last problem. Instead, it required thinking deep about your identity and your vision - what you want the product to be. Cropping is extra work. That was necessary in the beginning to make it a place where people put thought into their photography, ensuring higer quality content, and distinguish the product from similar services. But what about once you’re the dominant photo sharing network in the world? At that point the problem is no longer how to distinguish, but rather how to enable more use cases, how to be more inclusive, how to build a product where everyone from a freelance designer in brazil to a grandmother in desmoines to the CMO of proctor and gamble sees Instagram as a place to tell creative stories. Bonus: what are the other reasons why this made sense for IG? Video and ads.
- metric design. Very important part of product management. Also something you are likely to see in interviews. Should a marketplace platform (could be Uber Eats, Airbnb, X) goal itself on number of bookers, number of bookings, or on booking value? What incentived do you create in each case? It might depend on where you are in your lifecycle. If you’re just trying to establish product market fit, you might want to focus on number of bookers. If you’re in growth phase, you might want to focus on the number of bookings (incentivizes you to grow your base, focus on all of your customers big and small).
- SO that’s your new toolkit. 4 frameworks, 3 real examples, and hopefully a motivation to think in a structured way about the decisions you will ultimately have to make. You are in the driver seat, and I can’t wait to see what all of you accomplish.
- Feel free to speak with me and I can point you in the right direction (explain where to apply). Or you can visit www.productschool.com Have a good night!