How to Build Winning Products

Underdogs like Zoom, Slack, and Amplitude have pioneered an era where the best product wins. By putting their product first, these companies have prevailed in categories where FAANGs seemingly possess monopolistic advantages, such as massive distribution and virtually free offerings.

This week on the Kauffman Fellows Podcast, SC Moatti, Managing Partner at Mighty Capital, welcomes Renee Niemi, Products That Count CPO, and Sami Inkinen, Virta Health Founding CEO. Together they discuss the many facets of a winning product including: a rockstar team, solid distribution plans, product-market fit, long-term relationships with investors, and more!

Tune in below or listen on iTunes, Spotify, and Anchor.fm.

This season of the Kauffman Fellows Podcast is produced in partnership with Mighty Capital. Together, we unravel what truly makes a great VC investor.

Logitech fmr CPO, now Products That Count CPO, Renee Niemi, on the Evolution of Product and Investing

Kicking off week two of her miniseries, The Age of Product: Outperforming in the FAANG Era, SC Moatti chats with Renee Niemi, CPO of Products That Count, an influential global network of product managers producing online and offline content for product managers. As one of the early CPO’s Renee is pioneering and defining what it means to be a Chief Product Officer today. In their conversation, SC and Renee discuss the evolution of the Chief Product Officer (CPO) role, how they define ‘the best’ products to invest in, and why finding the right team is more important than the perfect product.

Tune in and catch some of our favorite soundbites below!

https://open.spotify.com/episode/07Bz9MjnMRuNkgfsKP1Jx5

On the evolution of the Chief Product Officer (CPO) role

Debates between product, sales, and marketing teams used to be common as each had different ideas about what the customer wanted. As data and analytics have become more readily available, there’s significantly less ambiguity.

“In the age of big data and analytics, we’re able to look at usage. It’s now possible to look at the details of what price points say, when customers buy, how they buy, and how they use the product. We can take all this data now when we’re faced with a decision on what products to bring to market.

The anecdotes do not inform us. The data does. The conversation changes dramatically when you bring that to this C-suite. We can make informed decisions on what’s the right business for the future. That’s been a fundamental shift in the role of the CPO.”

On why investing in the best products is a winning strategy

Niemi argues that the best products win but also recognizes that it’s essential to define what it means to be the best product. To Niemi, the best product solves the right problem, at the right price, and creates a great user experience.

“When you think about the age of digital and the role that products are playing, it’s not just about the gadget or the nice to have. It now becomes a fundamental foundation for business growth.

You can have that great product, but that great product needs to be supported by an amazing flexible team that has a growth mindset and is constantly worrying about what’s next.

As an investor, make sure that you have a solid view of how to communicate that product and how to bring that product to market. You need all three elements to have a successful business.”

On what makes a great venture capital (VC) investor

Niemi believes it all boils down to a few key factors.

“I think it comes down to experience. The best, most successful investors I’ve seen have a mix of good people, instincts, solid business knowledge across functions, and a very clear vision for the future.”

On advice for VCs

For Niemi, it’s not just about investing in great products. It’s about finding great teams to build those products.

“I had an excellent teacher that taught me if you have a bad product and a good team, you can fix the product. If you have a good product but a bad team, a product will fail. Even though products are critical, investing in great teams is where the secret sauce is to success.

On staying sharp as a product visionary

For those expecting a brilliant technology bible, Niemi doesn’t have one. However, she did offer an excellent list for inspiration.

“I’m reading all the time. Multiple perspectives are healthy. People are the center of success in everything we do. I spend my time more on the people side. Of the two thought leaders that I follow religiously, one is Brene Brown. She’s a clinical psychologist that studied the power of vulnerability, and it has been a game-changer. She’s constantly rethinking how you show up in both your work and your personal life and the impact on your success.

The second is Simon Sinek. He focuses on the motivations behind the business as opposed to the nuts and bolts of the company. His famous book that I love is The Power of Why.”

Listen to the full episode above on Spotify or over on iTunes.

Virta Health Founder & CEO on Investor Relationships That Build Winning Products

Sami Inkinen, Founding CEO of Virta Health, a healthcare technology company, is known for creating positive, disruptive change in business and personal performance through new technologies. This week Sami and SC share the most critical lessons they’ve learned about balancing product fit with distribution, developing a rockstar team, and building long-term relationships.

Tune in and catch some of our favorite soundbites below!

https://open.spotify.com/episode/48XVC3JstphyeH79HJtxB6

On product vs. distribution

The answer to the question of what matters most, the best product or the best distribution, is actually all of the above.

“I’m a physicist by training. I think of things with numbers, formulas, and equations. When it comes to product versus distribution, it’s both. In terms of math formulas, it’s A times B. If one of those multipliers is zero, then the end result is zero. You can have the best product, but you make no traction if you can’t figure out the distribution. You have to figure out both if you want to succeed, whether it’s a consumer or enterprise business.

Why would you start a company unless you were trying to innovate and solve a specific problem with a product or better innovation? Why start something where you just cleverly try to hack growth through sales while the product doesn’t fundamentally change or help the customer more than the previous alternative? It’s very important to get the product and product-market fit, right.”

On building long term relationships

Inkinen offered two critical lessons for working with and seeking investors.

“Investor board members and listed investors on a cap table are with you forever. It’s like choosing your life partner or co-founder. You have to do it very carefully. Getting the money might be in the founder’s mind. Whoever is willing to give them capital becomes a board member, partner, advisor, and takes part in governance as a part of the package. It is imperative to realize that those people and that firm are with you, more or less, forever. It is challenging to get rid of them if things go wrong.

Think about building a company like going to the Olympic Games. You want to win the gold medal. To win a gold medal in any sport today, you need the best coach, the best nutritionist, the best support team, the best equipment, the best in everything. It’s no different with VCs. Within your category and needs, aim as high as you can.”

On how his relationship with investors has evolved

While his prevailing feeling is still a sense of duty to make investors money, some aspects of working with VCs have evolved for Inkinen.

“Now that I’ve been around and built one successful company, it certainly feels more like a peer relationship. I was much younger during the Truvia years, and I was fresh off the boat in America. It felt like it was a privilege to have somebody invest in me. It felt like the investors were on a different planet. Now it feels different. As a result of that, I feel like I have a much more productive and constructive relationship with my investors.”

On advice for VC investors and innovators

It may feel like a cutthroat world out there, but Inkinen’s advice is contrary to that culture.

“Kindness is an untapped force to make amazing things happen. Reputations are built over years and decades but destroyed in seconds. My advice, especially for the Silicon Valley move fast and break things culture would be to slow down a little bit. Be kind to the people you work with: customers, partners, board members, and entrepreneurs. Reputation follows you, and it follows more than ever right now because you can find every tweet and email from 10,15, 20 years ago. Be very thoughtful when it comes to interacting with other people.”

Listen to the full episode above on Spotify or over on iTunes.