The importance of thinking in outcomes
When Gaurav Munjal, the founder and CEO of Unacademy was pitching to Nexus, he was asked - how could a company offering video test prep solutions scale in a country with such poor internet bandwidth (this was the pre Jio era)?
He simply pointed the committee to the fact that the lessons were not a video - they were instead a slide deck with a pointer made to look like a video! He could have switched on mumbo jumbo mode and talked about fancy compression algorithms for running videos on low bandwidth that would give Pied Pipper a run for its money, but instead he was thinking not about features, but about the outcome - which at the end of the day was to help people crack UPSC and not stream high quality videos.
As founders and PMs it’s often that we get lost in a complexity of our own design and forget to think about the problem that the company/ product is trying to solve. We get obsessed by features.
When I asked Pratik Poddar of Nexus Venture Partners, our guest on this episode of the podcast about his thesis for evaluating companies, his answer was quick - Is the company/product outcome oriented? And that got me thinking, just as for a company (for a founder) it is important to think about outcomes, for us as PMs it becomes imperative to ask ourselves - will this feature/ product solve something or is positioned in a way that the user feels an intrinsic need to use the product?
If so, then the outcome of using the product will automatically be clear to the user - enticing a willingness to pay/ try out the product. Not only that, it would also lengthen the average time spent by the customer on your product.
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Personally, I’ve seen the massive difference this approach brings. When we started indiagold, we set out to build a Gold backed Open Credit Enablement Network (GOCEN) offering gold loans. But in order to increase our topmost acqui-funnel and encourage word of mouth, we offered a product called Digital Gold. Now, digital gold is something you can find on almost all major apps like Paytm, Google Pay, etc. People buy and sell gold - mostly with a trader mindset. But that is not something we wanted. We asked ourselves, what is the intrinsic motivation for Indians to buy gold and how do we replicate that virtually? We found the answer in the fact that deep down in the our minds, gold is a form of savings for an Indian household. We immediately changed the positioning of the same product designed for a trader mind to that for a savers mind. We pictorially depicted a user’s progress in saving gold in grams which encouraged them to keep buying again and again in an amount of their choice like ₹50,₹100, ₹200 (rather than trading in a one of instance). We also gave the option to a user to convert this digital gold into physical gold (again, the emotional satisfaction of holding physical gold in your hand bought out of your own savings).
This encouraged stickiness.
And it’s abundantly clear that VCs like Pratik value that. Which is something he also talked about on the podcast on the 2 kinds of business models that he looks out for.
Now, to listen to the 2 kind of models, you will have to listen to the show. It’s a ~30 odd minutes episode and very insightful. You could listen on the audio file above or on your favourite podcasting app. Let us know what you think! Share it with your friends if you like it - you could forward this email/ share it on Twitter/ do you thing buddy - get those bragging rights!