“You should take the approach that you’re wrong. Your goal is to be less wrong.” — Elon Musk
The decisions you make as a product person are directly responsible for the success or failure of your product/company. but the question is how do you make those decisions?
what I have documented here is a case study inspired by real-life issues I faced and managed successfully while working for various startups, some with thousands of clients and doing a few million dollars in revenue. No answer is wrong or right, this is just a test of how to make quality decisions independently. Here we go 😤.
Case Study Question
You’ve been asked to manage API integrations for Robinhoods’s B2B clients. This integration allows clients to offer stock-trading to their customers and the integration process follows 5 main steps:
1. Robinhood generates a lead
2. Robinhood presents demo to the client
3. Client fills out integration checklist & documents are signed
4. Robinhood onboards the client
5. Robinhood developers work with the client’s team to integrate stock-trading on their platform
You are currently managing 3 clients
1. OPG Capital (The biggest Asset Management firm in the United States). They are on step 3 of the integration process. We think they can add $20,000,000 to our annual revenue
2. AOT Invest (A fast-growing Fintech company). They are very keen to work with Robinhood and want to complete the process ASAP. They are on step 5 of the process. We think they can add $5000,000 to our annual revenue
3. KPK Group (A small fund management firm). Representing Robinhood’s ideal customer segment. Their process has moved 3 times faster than the other two clients, they are currently on step 4 of the process. We think they can add $3000,000 to our annual revenue.
Instructions
Assess the questions carefully and approach your solutions as freely as possible, using your knowledge of prioritization. Include your decision(s) and the rationale in as much detail as you feel is necessary. You are not required to have any prior knowledge about an integration process.
Question
After a long and painful integration process, AOT is getting weary about working with us. To placate them, you have deployed all our engineers to work on AOT’s integration and promised them that we will complete the process in 1 week.
However, the next day, you are informed that there is an issue with KPK’s onboarding that may result in Robinhood losing them permanently as a client. To resolve this issue, you will have to pull some engineers off AOT’s development to work on KPK. If you do so, you will not be able to fulfill your promise to XYZ.
What will you do? And why?
My Thought Process
I would approach this challenge in 2 steps -
- Risk assessment: What are the tradeoffs and the opportunity costs?
- Crisis management: through clear and transparent communication and collaboration will manage stakeholders, adopting damage control techniques.
A product person should be able to review a scenario and evaluate what needs to be done immediately. Your ability to identify and clearly define problems for what they are helps you know what needs to be done. THINK AGILE, DO AGILE.
- RISK ASSESSMENT
I will find out the following:
LEVEL 1 RESEARCH
- Team and Resource Evaluation: Will engineers focusing on XYZ alone guarantee meeting up with the 1-week deadline or will they face unforeseen blockers that may extend the deadline beyond a week? this makes the promise a 50:50 gamble. Does Robinhood have the resources to incentivize engineers to work overtime?
- Difficulty level and relevance: How long will it take to fix the OPM blocker? is it a little bug or something that will require an overhaul of the entire backend architecture? Is it something that is not relevant and can be patched temporarily?
Asking the right question is on way to assess risk, especially if you find yourself in a position that requires immediate
LEVEL 2 RESEARCH
“90% of startups fail, and only 40% of successful startups eventually turn profitable” — CBN insights, February 3rd, 2021.
Though AOT is fast-growing, it is still very volatile and may fail due to issues within and outside of its control such as Government policies, market trends, Acts of God, amongst others (differs according to demographics). While KPK is “not a startup” so it is relatively stable.
Contextual thinking is invaluable in decision making, and things like geography, demographics, etc must be considered in decision making. For instance, on the 5th of February 2021, the Nigerian government banned cryptocurrency without any prior warning and started freezing the bank accounts of individuals who engaged in crypto activity (some had tens of thousands of dollars in in their accounts). If you cannot think in contextually, you may easily be caught unawares.
SIMPLE RISK ANALYSIS
- High risk, good outcome: Gain lifetime value of XYZ (only if it succeeds) and LOSE OPM ($300 + lifetime value). This is eventually a 50:50 gamble depending on the success of XYZ, but let us assume that XYZ has a 100% chance of success.
- High risk, bad outcome: Forgo OPM but fail to meet XYZ deadline because of unforeseen blockers like a server being down or a difficult bug, thereby LOSING BOTH CLIENTS.
- Moderate risk, good outcome: Support OPM (which is 3 times faster than XYZ), appeal (and pacify them with damage control techniques) to XYZ for an extension after showing a live demo of the progress report. GAIN BOTH CLIENTS.
- Moderate risk, bad outcome: Support OPM ($300,000 + lifetime value) and LOSE XYZ ($500,000 + lifetime value) for missing the 1week deadline
Protip: Risks are to be taken based on the less terrible outcome possible and not the best possible outcome. If you’d like to know more on this, read research papers by KPMG, Deloitte or PWC.
Actions and Recommendation
Upon completion of risk assessment, I would:
- Present my findings (opportunity cost), recommending that Robinhood works with both clients (this is my personal choice, you will find out why soon).
If my recommendation gets approved, then I begin crisis management.
2. CRISIS MANAGEMENT
- Contact KPK, evaluate their problem, and negotiate a convenient deadline to fix It.
- Keep AOT up to date with biweekly reports and a live demo presentation at the end of the week showing how close we are to finishing up their work.
- Make an appeal for an extension with AOT and supplement it with damage control techniques such as an apology mail, discount for the delay, or a free product maintenance coupon for a period of 3–6 months, amongst others.
- Reduce cycle time by incentivizing engineers with a work/salary bonus to work through the weekend. This would cost an almost insignificant fee to Robinhood and buy them 2 days of productive time if both the management team and engineers buy into it.
As a Product Lead, you are literarily the heart of the product and team. Skills such as negotiation, clear communication, collaboration, time management, customer relations, amongst others cannot be compromised and are pivotal to your success and the success of your company. How to learn this? internships, field practice, Lean Six Sigma, amongst others
RATIONALE BEHIND MY DECISION TO SUPPORT BOTH COMPANIES
- Opportunity cost: Startups are highly volatile and the probability of encountering a profitable startup is 1/25, not neglecting the facts that focusing on AOT alone does not guarantee that the 1-week deadline will be met because if anything goes wrong (which is outside our control e.g AWS server crashes), we could end up losing both clients. Hence my decision to go with both while putting STRONG CONTROL MEASURES in place.
- Time/effort requirement: It has already been established that KPK takes 1/3rd the amount of time it takes to build AOT and the other, so resolving the onboarding issues should not take up to two days and may not have a significant impact on the delivery time of AOT.
- Lifetime value: Though KPK is a small fund management firm, they are growing and have the potential to get bigger. Ignoring them doesn’t just mean losing $300,000 but also forgoing the lifetime value of whatever they become in the future.
- Mutually exclusion: Forgoing KPK means we will lose them by all means but appealing for an extension of 24–48 hours from AOT after showing them a live demo of their product does not mean we will lose them (already in the final stage of their product development).
- Customer success optimization: XYZ is already dissatisfied because the damage has been done, however, to protect the Robinhood brand from negative media mentions, Damage control techniques have to be deployed. One company that has mastered this is Amazon where they were able to listen and support customers to the point that already offended customers who should be defaming the company voluntarily go on social media to promote the company for an impeccable customer experience. This is a live example.
At the end of the day, you must stay composed, confident and prepare for the worst while expecting the best. Hope you enjoyed this, if you have questions or need to discuss products, kindly reach out to me on Twitter.
