869 – Radical Product Thinking with Radhika Dutt

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Episode highlights:

02:25 – Why our current guest is on the show. James doesn’t let just anyone appear on this podcast.
04:20 – What we want to happen today. There are ways you could improve your product design that you may not be aware of.
07:50 – What is a good vision for your company? Your idea of a good vision may be out of touch with the product market.
12:53 – Local maximum versus global maximum. What kind of perspective makes for good product development?
21:20 – An approach to prioritization. This is how you know where to focus.
28:03 – The cautionary tale of an airline. Are you milking an old idea beyond its worth?
31:32 – Disease as an analogy in product creation. It’s still a good metaphor, despite the pandemic.
33:22 – A sum-up of the episode. This is what you want to take away.

Create offers that resonate with your target audience, with James’s help

This episode’s topic should be of interest to any business owner, because James and his special guest are talking about product design. Radhika Dutt has just published her book, Radical Product Thinking: The New Mindset for Innovating Smarter, and she and James will be digging into some of its highly relevant thinking.

Why our current guest is on the show

As many listeners may know, getting onto the podcast is not easy. James’s team keeps a substantial spreadsheet of people vying to get on, and of that list only two have made it, says James, Radhika and one other.

James looks for guests who will benefit his clients and listeners in their business/life journey, whose material, he says, will add next-level abilities and transformations to his audience.

Radhika’s book played a good part in her selection. James received an early draft, which he read and liked very much. It was three years in the making, and is more than just a book about products, says Radhika. It actually highlights an approach for systematically creating change wherever we want to create it.

What we want to happen today

James thinks Radhika’s book topic is just to the side of what his audience is aware of. They could already be doing some of what she talks about without knowing it. He’d like to put a label on that, then give them things they’re not aware of that can improve what they’re doing.

Radhika loves that. And one of the things she thinks is relevant is the common practice, taught in The Lean Startup, of putting things on the market to see how they do, and iterating from there. And especially today, the tools at our disposal allow people to do that much faster.

In her book, however, she describes iteration as like having a fast car. And driving fast is only useful when you know where you’re going. Radical Product Thinking is about setting very clearly where you want to go. And then it’s great to drive fast.

Pivot, she and James agree, is an overused word. You can change direction and iterate all you want, but without a clear direction, you’re just spinning wheels.

Radhika’s company did quite some pivoting. From aiming to be the next VISA of the world, they sought to become a loyalty solutions provider for merchants. That market was crowded, so they pivoted again to being a credit solutions provider.

What you’re really looking for with all those tests is, what do your customers really need? What is the problem they’re facing? And what is your solution that’s going to help them out? That’s what the vision boils down to and what you want to put on your brochures.

What is a good vision for your company

People confuse a tagline with a good vision, says Radhika. We hear that a good vision is this big, hairy, audacious goal (BHAG).

That vision of being a leader in the market, or of reinventing whatever, doesn’t tell you what you’re solving, or who you’re solving it for, or what kind of world you envision. Without knowing that, you’re again spinning wheels.

A good vision is not about your business goal. The starting point of it all is what the end user really needs.

First, you have to define, whose world are you trying to change? You can’t market to everyone – you’ll just run out of money trying to do that. You have to figure out who exactly is your target, and be very specific about defining that.

The second question is, what is their problem? And as part of that, what are they using today to solve that problem?

The third question, to Radhika, is probably the most important, which is, why? Why is the status quo completely unacceptable? And if you cannot answer that, she says, there may be no reason for your product to exist.

The fourth question is, when will you know that you’ve arrived? Meaning, what will the world look like when you’ve provided your solution?

Then it’s time to talk about your solution.

So a good vision has to answer who, what, why, when and how. That is the crux of what marketers need.

It crashes heavily, says James, into the opposing concept of, I want a membership. Who can I sell it to?

That attitude, Radhika says, rears its head not just in marketing but in building product. People create or start with a great technology, and start looking for nails to hammer.

It’s the Segway dilemma, a technology in search of a market. And does anyone really use Segway besides tourists and airport policemen?

To the membership question, James asks, do your clients have a recurring problem, or is it one-time? If it’s a one-time problem, why would they want to pay ongoing? If there’s no need, there’s no sale.

Local maximum versus global maximum

One of the big ideas worth taking away from Radhika’s book, says James, is the difference between local maximum and global maximum. It explains why people following an iterative process wind up with lesser results than if they’d been vision-led. He’d like to talk about that.

Radhika obliges. One of the things that happens, she says, is with all the data gathering tools available, we can easily see what’s working and what’s not. And if a thing’s not working, we make small tweaks to improve it. This is the local maximum.

If you think of it as a chessboard, local maximum is focusing on your pieces that are under attack, or on the pieces you can use to capture your opponent’s pieces. But that’s a short term way of thinking, and not the way to win a match.

A good chess player considers the whole chessboard and puts together a strategy, even sacrificing some of their own chess pieces, to win the game. That’s the global maximum.

So instead of just looking at data, and constantly trying to optimize for metrics and where you are today, Radhika suggests rethinking what the problem is. Like, what is the problem the customer is facing, and what’s your solution for it?

Going to the fundamentals and thinking about that problem, envisioning a solution, really arriving at what’s unacceptable about the status quo, and then finding the right way to solve it – that is approaching things at a chessboard level and finding the best possible move.

James thinks of it as zooming in or zooming out. He’s always been more zoomed out with his business. And when clients come to him with minutiae to consider – this email, or that one? – he’ll advise them to zoom out: what are we actually trying to do here? Get the right strategy first.

Short term business needs can take over our lives, says Radhika. But if you zoom out, if you’re able to connect the details with the right vision and strategy, they take on so much more meaning, and you can actually achieve something.

One of the keys to James’s business has always been sustainability. He’s seen other operators left along the roadside, because they focused on vanity metrics – more followers, more downloads, a bigger email list.

Those popular metrics, Radhika says, carry assumptions that may or may not be right for your business.

They’re not true, says James. He himself is not famous. He doesn’t have a huge following. But he has a great audience who turn up and listen to the show, and a handful of members who he helps in their mission, and who provide him a great income. There are people with six-figure databases and millions of followers who make surprisingly less profit.

He credits Peter Drucker, who said, it’s about doing the right things, not doing things right.

Exactly, says Radhika. You have to derive the right metrics for your business. And it has to be based on, what is your vision, what is your strategy? Think of your vision and strategy as hypotheses. Your stake in the ground and your metrics are helping you validate it – is it working or not?

And based on your strategy, what you measure will be different from someone who has a different strategy.

An approach to prioritization

Rhadika has mentioned two of five elements – vision, and strategy. Now prioritization, says James, is close to his heart, and where he does the bulk of his work. The underlying focus of his book, Work Less Make More, is to weed out what doesn’t matter, and focus on what’s essential.

Two thirds of our results come from four percent of the things we do, which fascinates him. How does Radhika approach prioritization?

We’re always balancing the long term against the short term, says Radhika. That’s the reality of how we intuitively make decisions. In the radical product thinking way, she uses that intuition, but makes it explicit. She recommends actually drawing it up on a whiteboard and talking about how you’re making those tradeoffs, so that everyone on your team develops the same intuition.

In the book, Radhika conveys tradeoffs with an x and y axis. The y axis is your vision, the long term. The x axis is survival, the short term, the urgent business need. If you’re a small company, this need may be financial – you need money to survive.

Solopreneurs exist in the survival mode and rarely get out of it, says James. At the other end of the spectrum is I-can-do-this-forever mode, where you can have a great life. He’s fortunate to be there – surfing every day, working with clients he loves, and interviewing guests who interest him and who are experts at topics his audience needs. He’s glad Radhika is speaking to that. He guesses we want to get out of survival mode as soon as practical.

Exactly, says Radhika. The short term or x axis may be different now for James, like continuing his better quality of life.

It’s health and fitness and well-being, says James. Money and time are what he helps people with, and once they’ve achieved that, there’s the layer of relationships – who do you want to spend your time with?

In terms of vision versus survival, says Radhika, sometimes you have to think about doing both – things that fulfill the vision and make money. But if you focus just on that, you’re still in survival mode, always thinking of the short term.

So sometimes, you might do what she calls investing division, something good for the long term, but maybe not helpful short term, like building out new features of your business so that you can, in the future, move out of survival mode.

Then too, you might do the opposite, take on vision debt, which is good for short term survival but further away from your vision. And if you do this for too long, you could incur what Radhika calls obsessive sales disorder, where you no longer know what you stand for.

There’s no right answer for what’s the right balance, says Radhika. It’s just important to talk about it and think about it, and consider how many things you’re doing in the different quadrants and find the right balance for yourself.

The cautionary tale of an airline

Radhika’s book mentions the case of an airline company that James would like to discuss.

The story, says Radhika, is about focusing on the short term to the detriment of the long term and the global maximum.

You’ve likely heard of the Boeing 737 Max crashes. And one could wonder, why even build that model? How did things go wrong?

Boeing 737, it turns out, was a platform they had for about four decades. For 40 years, they had been iterating it, making small tweaks but basically reusing the same platform.

Plans for a new plane were in the works, but it would cost money, and so it was put off.

Then Airbus came out with a competing product, which was 20 percent more fuel-efficient. Some of Boeing’s customers decided to add the new model to their fleet. That was Boeing’s wake-up call.

They decided to take the 737 again and put bigger engines on it to make it more fuel-efficient. That, unfortunately, made the low-frame model aerodynamically unstable. It was prone to stalling at cruising altitude.

Boeing had to create software to prevent that stalling. The system, unfortunately, lacked redundancy, which accounts for the crashes of Lion airways and Ethiopian.

This iterative rather than vision-driven approach illustrates the danger of focusing on financial metrics when you really need to step back and think, what problem are we solving?

It’s like the client who keeps testing and tuning their Facebook ads, says James. Then acquisition cost becomes too high and they need to turn it off. Or their Facebook account gets blocked. People get seduced by dependence on one system. This is why James teaches his concept of OwnTheRacecourse.

Disease as an analogy in product creation

It was kind of funny, says James, reading in Radhika’s book words like comorbidity. In the beginning, of course, she wouldn’t have known the significance of that in 2021. Did she ever think of changing the wording, or was it too far down the track?

It wasn’t about being too far down the track, says Radhika. There was just not a better name. She found that things like “pivotitis”, “obsessive sales disorder”, and five other diseases she spoke of truly are diseases that people catch accidentally. And they feel contagious – there is so much peer pressure out there to do things a certain way. It just felt like the right analogy.

A sum-up of the episode

What we’re really hearing in this episode, says James, is it’s dangerous to keep milking and fine-tuning a product, and focusing too much on the little stuff, when a vision-led approach might get you more optimal results.

In her book, Radhika talks about various stages of development – vision, strategy, prioritization, execution and measurement, and culture, three of which they’ve touched on in this episode. James wants you as the listener to get the book, because it will help you be a better product designer, something people don’t talk about as much as they should. It’s fully one quarter of the things he works on – the way that we structure our products and the strategy around it, like pricing.

It is funny, says Radhika, that pricing isn’t a more popular topic. People typically think they’ll build and market their product, then figure out pricing, monetization and business model after, like a sort of afterthought. All of that, she says, should be baked into the product.

It would be like building a house and then wondering who to sell it too, says James. In his own business, he’s always thinking about how the customer can be better off. If you want to get wealthy, create value for a lot of people. And you do that by solving their problems.

What sort of soundbite would Radhika like to leave on?

A lot of the ideas in her book, says Radhika, sound intuitive. But though she’d learned some of them through hard experience, the tools to actually do them was the hard part.

So in the book, she offers tools that take you through the steps systematically. With vision, for example, she has a fill-in-the-blank statement so that you don’t get stuck on words – it actually lets you answer the who, what, why, when, how questions.

Her whole goal with the book is to change how we build products and how we create change in the world through our products, being very mindful and systematic, so as to avoid wasting effort in trial and error.

If you want more information about Radhika and her book, you can check out her site, radicalproduct.com.

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