Founder Fridays No. 34
Happy Friday.
This week’s briefing is on product. Enjoy!
Competing with Giants
Josh Miller is the CEO and co-founder of The Browser Company, where he helped build Arc, my browser of choice now. How has this founder built a product that’s challenging the dominance of Google and Microsoft? In this podcast, we get an inside look at the unique structure and values of The Browser Company and how their company culture has helped them land some of the best talent in tech. Josh shares ways that his company embraces experimentation, including their “optimizing for feelings” approach to building, and explains why extreme transparency is at the forefront of everything they do. Lenny’s Podcast (88 minutes)
Product Strategy
What is product strategy, and how does it create value in startups? Product strategy is a high-level plan that helps you realize your vision and that answers the following four questions: 1) Who is the product for? 2) Why would people want to use and buy it? What specific problem does it address, or which tangible benefit does it offer? 3) What makes it stand out amongst the alternatives? 4) What benefits does it create for the user? Product strategy is not static; it should be iterative, and it should be tested regularly to increase the chances of success. The four-step process to validate and change the product strategy includes identifying the biggest risk, determining the right method to address the risk, applying the method and evaluating the data. Solid product strategy can help product managers and founders create successful products. Roman Pichler (8 minutes)
Product Lessons From Duolingo
Many companies grow through paid marketing. But at Duolingo, their strategy is a little different! As of early 2023, ~80% of their users were acquired organically. They maintain this organic growth by building the best product they can and giving it away for free, then upgrading their core users to a paid version. Sounds great, right? But maintaining a healthy ecosystem of daily active users (DAUs) at various points in their lifecycle is a delicate balance. The more learners we have, the more diverse their needs become. To maintain organizational focus while serving this expanding, and evolving, population, we orient teams around movable metrics that matter, and then run hundreds of A/B to optimize for those metrics! But how do you decide on the metrics that matter? And how do you advocate for an organization to adopt new metrics? And what happens if existing metrics stop moving? The Duolingo Data Science team developed a growth framework that helped to grow DAUs by four times since 2019. Let’s explore the path that led us to that framework (the Growth Model), the tangible impact it’s had on their business and how to evolve the framework in a new phase of growth. Duolingo (7 minutes)
Founder FAQ: What Is a Liquidation Preference?
A liquidation preference determines the order in which investors are paid out in the event of a liquidity event, such as the sale of a company or its assets. The preference dictates how much preferred shareholders are paid before common shareholders such as founders and employees. This ensures that investors make money or at least break even. The impact of this term can be huge for founders during an exit. It can mean the difference between a modest payout and complete lifetime financial independence for you and your family. Therefore, it’s important to pay attention to this term. This article will explain the key terms that every founder should know about liquidation preferences. Westaway (8 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Move Fast. Don’t Break Things.
Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a 1-on-1 call with me.