This CEO wasn’t happy couch-surfing in this early room-sharing proof of concept. Too bad. Image via Midjourney.
Don’t prioritize your features. Prioritize your customers.
While it might seem hard to believe now, Airbnb initially struggled to gain traction after their 2008 launch.
By solving one deeply-felt problem in a new and compelling way, founders Brian Chesky, Joe Gebbia, and Nathan Blecharczyk knew the value of the small but intensely devoted user base they’d built. For the first time, people in tech who previously couldn’t afford to do so were able to travel and attend conferences in the prohibitively expensive San Francisco Bay area.
AirBnB created a frictionless win/win by matching guests who needed a place to stay at a reasonable rate with hosts who were able to earn money on the side for space they weren’t using.
The “Heart” of Product Strategy
Using the two key questions of the “Playing to Win” strategy framework, we can lay out the foundational choices AirBnB made that contributed to its success:
- Where to Play? (Personas, Geography, Channels) – Young, tech-savvy professionals via a beautifully-designed mobile app looking to stay in the San Francisco Bay area
- How to Win? (How will you differentiate?) – Remove friction from the marketplace matching people looking to book unique lodging opportunities at a range of price points with hosts with available space for rent through a secure platform informed by user reviews and ratings.
The AirBnB built their small but passionate user base by staying focused on specific user personas.
AirBnB’s “Product Win Zone”
You can sum up AirBnB’s “Where to Play” and “How to Win” choices in one graphic that shows what effective product strategy looks like from Ben Foster and Rajesh Nerlikar’s book “Build What Matters.”
Across the “universe” of potential choices, Ben and Rajesh represent these conscious “Where to Play?” and “How to Win?” choices in a clear mental model of what they call the “Product Strategy Win Zone” with the right user personas:
AirBnB created exceptional value by prioritizing the needs of both guests and hosts through a unique, mobile-enabled, end-to-end experience.
Building ideas into businesses
But for AirBnB, as for any startup, to go from a few passionate people sharing a dream to building a lasting business requires answering two questions:
- How might we continuously evolve to anticipate and exceed our users’ needs?
- How might we continue to grow and attract new users?
AirBnB grew by listening to and prioritizing the needs of both their best guests and as well as their best hosts. They stayed relentlessly focused on identifying and solving these users’ challenges with hosting and lodging through continuously improving their Product Discovery, Product Management, UX design, and Engineering capabilities.
This allowed the founders to exceed their wildest dreams to eventually become the largest hotel chain in the world.
Where Most Companies Go Wrong
For every AirBnB, there are countless startups and legacy Enterprise organizations that waste billions of dollars with little to show for their efforts.
Their biggest miss? They give all customer complaints the same attention.
As we’ll see, there’s a better way to decide what to build.
Growing our Product Win Zone
In “The Power of Moments: Why Certain Experiences Have Extraordinary Impact,” Chip Heath and Dan Heath share a breakthrough Forrester insight.
In Forrester’s customer satisfaction research, on a scale of 1 to 7, customers rated a product as a “1” if they were highly dissatisfied, and a “7” if they were extremely satisfied.
Forrester learned that even the most highly-rated, customer-centric brands like Porsche, Disney, Vanguard, Southwest Airlines, and Intuit historically tried to fix their biggest problem areas first.
All effort focused on people who don’t like you
Executives in these companies estimated they spent as much as 80% of their resources trying to address the complaints of their unhappiest customers.
Chip and Dan labeled this strategy of trying to move their “1’s” to “4’s” as “Eliminate the Negatives (Plan A).”
Visually, you can see they’re attempting to grow by addressing the orange choice boxes far outside of what would be their “Product Strategy Win Zone”:
It’s easy to understand why this is such a waste. They’ve already told us our product just isn’t for them.
This would be like AirBnB trying to build and manage luxury hotels, or create a chain of timeshares for retirees.
Forrester’s breakthrough insight
But Forrester found a different group of companies who took a different strategy.
Their focus wasn’t to please everyone, just people who “liked” the company and rated it a “4,”
Forrester called this approach of getting “4’s” to “7’s,” “Elevate the Positives (Plan B),”
In digging into survey after survey, Forrester uncovered something neither they nor any of the companies they worked with could have anticipated:
If you Elevate the Positives (Plan B), you’ll earn about 9 times more revenue than if you Eliminate the Negatives (8.8 times, to be precise.)
Heath, Chip; Heath, Dan. The Power of Moments: Why Certain Experiences Have Extraordinary Impact (p. 48). Simon & Schuster. Kindle Edition
It wasn’t even close.
Stop letting the wrong customers drive your product
Stop paying attention to people you’ll never win over.
First off, go to your roadmap, your backlog now, and rip out every feature requested by anyone who isn’t already a regular user who doesn’t at some level already appreciate your product and your brand.
As Forrester makes clear, you’ll never convince these people who dislike your product to love it.
Simply never going to happen.
Secondly, the amount of time, effort, and money you’re wasting trying to be all things to all people has major negative longer-term impacts on both your brand, and on your employees, as they struggle and come up short trying to please people who can never be pleased by your product.
Face it: you’re never going to be just one feature away from product success.
Getting people who like us to love us
When we instead decide to focus on getting “4’s” to “7’s,” or “Elevate the Positives (Plan B),” it might look something like this:
By focusing instead on the customers who already like us, it’s much easier to identify the choices that will actually expand our “Product Strategy Win Zone” and open the door to the consistent, sustainable growth we seek.
For AirBnB, this meant offering a range of new host tools, including the “Super Host” category, using AI to fuel the new “Guest favorite” listings, as well as offering unique local experiences to guests, which allowed them to attract new, like-minded users while still appealing to their original passionate user base.
Prioritizing the right users allowed AirBnB to create a new, larger “Product Win Zone”:
Notice that even though AirBnB has become the world’s biggest hotel chain, they still have a specific “Product Win Zone.”
A large measure of success comes because they know who their best hosts and guests are, and never try to please everyone.
The power of listening to the right customers…
Once you understand the concept of getting your 4’s to 7’s, you’ll never look at product management, product strategy, product discovery, or feature prioritization the same way ever again.
As you launch, iterate, and design strategy for your product, understanding this insight can help you waste less of your precious engineering effort, while allowing your product to achieve 9X more revenue.
The key to growing your user base will come by knowing who the customers are who already like your product.
And listening to them to understand what’s still holding them back from becoming raving, passionate fans.
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