Escaping the Build Trap
Authors: Melissa Perri
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Overview
In “Escaping the Build Trap,” I address the common pitfalls companies face when they prioritize shipping features over delivering real value. This book is a guide for anyone involved in product development - from aspiring product managers to seasoned executives - who want to create products that customers love and drive sustainable business growth. I reveal how the “build trap” emerges, where companies go wrong, and how to shift towards a product-led organization that prioritizes outcomes over outputs. Throughout the book, I use real-world examples and actionable frameworks, including the “Product Kata” and “Value Exchange System,” to empower teams to discover the right problems to solve and build products that truly matter. I break down the complexities of product strategy, emphasizing the importance of aligning teams around a shared vision and goals. This book also explores the crucial role of experimentation, data-driven decision-making, and customer centricity in building successful products. It is a call to action for companies to change their mindset, embrace uncertainty, and empower their people to create products that make a difference.
Book Outline
1. The Build Trap
Many companies fall into the build trap, prioritizing output over outcomes. This leads to a decline in real value produced, leaving them vulnerable to disruption. Breaking free requires a shift to intentional and robust product management practices that maximize customer and business value.
Key concept: The “build trap” is when organizations become stuck measuring their success by outputs rather than outcomes. They focus more on shipping and developing features, losing sight of the actual value those features produce for users and the business.
2. The Value Exchange System
Understanding the value exchange is fundamental. Value is not inherent in products and services themselves, but in their ability to solve problems and fulfill customer needs, driving business success.
Key concept: Companies operate on a “value exchange.” Customers and users have problems, wants, and needs, while businesses create products and services to address them. Value is realized only when these needs are met, leading to benefits for both sides.
3. Projects Versus Products Versus Services
To be product-led, companies must shift from a project-based mindset to a product-based mindset. Products are designed for continuous value delivery, while projects are finite endeavors. This distinction is crucial for sustainable growth.
Key concept: Companies often confuse project management and product management. Products deliver value repeatedly without needing to build something new each time, while services primarily use human labor to deliver value. Projects are discrete scopes of work with specific aims, often used within product development.
4. The Product-Led Organization
There are four types of companies: sales-led, visionary-led, technology-led, and product-led. Product-led companies are the most successful because they prioritize product success as the key driver for growth and value.
Key concept: Product-led companies prioritize, organize, and strategize around product success. They understand their products are the primary drivers of growth and value.
5. What We Know and What We Don’t
Product development is full of uncertainty. It’s crucial to distinguish between what we know and what we don’t know. By recognizing and investigating these unknowns, product managers can reduce risk and build the right products.
Key concept: “Known knowns” are facts gathered from data or customer requirements. “Known unknowns” are clarifications or assumptions that can be tested. “Unknown knowns” are intuitions based on experience. “Unknown unknowns” are unforeseen surprises discovered through exploration.
6. Bad Product Manager Archetypes
Many companies have a misunderstanding of what the product manager role entails. They are not mini-CEOs with authority over people. Good product managers possess deep user understanding, business acumen, and the ability to collaborate and influence across disciplines.
Key concept: Effective product managers are not “mini-CEOs.” This common misconception leads to arrogant product managers who dictate instead of collaborate. The role is about influence, not authority, requiring deep user understanding, strategic thinking, and collaboration with the business, technology, and design teams.
7. A Great Product Manager
The real role of the product manager is to work with a team to create the right product that solves user problems while meeting business needs. It involves understanding the market, the business, the users, and collaborating with the team to build the right thing.
Key concept: Product managers own the “why” of a product, not the “what.” They understand the product vision and goals, ensuring development aligns with company strategy. They connect the dots between user research, market data, business direction, and experiment results to inform the product roadmap.
8. The Product Manager Career Path
Product management is a career with a clear progression. The responsibilities change depending on seniority, moving from tactical execution to strategic leadership and organizational development.
Key concept: Product management is a career, not just a role. The responsibilities evolve as you gain experience, moving from tactical tasks like feature development to strategic work like defining product vision and coaching teams. This career path typically includes roles like Associate Product Manager, Product Manager, Senior Product Manager, Director of Product, VP of Product, and Chief Product Officer.
9. Organizing Your Teams
Organizing your teams around value streams is a more effective approach than organizing around features or technical components. It optimizes the flow of value to the customer.
Key concept: “Value streams” encompass all activities needed to deliver value to the customer, from problem discovery to product delivery. Organizing teams around value streams fosters efficiency and clarity, ensuring work aligns with the overall customer journey and value creation process.
10. What Is Strategy?
Good strategy is not a detailed plan, it’s a framework for making decisions. It connects the company vision and desired business outcomes to the product portfolio, individual product initiatives, and solution options.
Key concept: Strategy is not a plan; it’s a deployable decision-making framework. It helps achieve desired outcomes, constrained by capabilities and aligned to the existing context. A good strategy transcends the iteration of features, focusing on higher-level goals and sustaining an organization for years.
11. Strategic Gaps
Strategic gaps arise when companies view strategy as a plan, leading to miscommunication and misaligned action. The three key gaps are the Knowledge Gap, the Alignment Gap, and the Effects Gap.
Key concept: Strategic gaps occur when companies treat strategy as a plan. These gaps include: the Knowledge Gap (difference between what management wants to know and what the company knows), the Alignment Gap (difference between what people do and what management wants them to do), and the Effects Gap (difference between expected and actual outcomes of actions).
12. Creating a Good Strategic Framework
A good strategic framework should include both an operational framework (how to keep daily activities moving) and a strategic framework (how to achieve the vision through product development). Both are essential, but the strategic framework directly influences product management.
Key concept: Strategy deployment is about aligning the entire organization around a shared understanding of the strategy. It involves communicating the strategy at different levels, using tailored narratives and time scales relevant to each audience. For example, executives focus on multi-year strategies, while teams focus on monthly or weekly goals. This helps ensure everyone is working towards the same outcomes.
13. Company-Level Vision and Strategic Intents
A strong company vision provides meaning and direction for everything that follows. Strategic intents help communicate the company’s current areas of focus, aligning teams on how to achieve the company vision.
Key concept: A strong company vision provides meaning and direction for everything that follows. It acts as a framework for product development and decision-making. Strategic intents are concise, outcome-oriented goals that guide the company towards achieving its vision, focusing efforts on the most impactful areas.
14. Product Vision and Portfolio
Product initiatives are about translating business goals into tangible problems that can be solved with products, while product visions articulate the overarching value proposition and desired user outcomes.
Key concept: Product initiatives translate business goals into problems to be solved with products. They answer the question, ‘How can we achieve these goals by optimizing or creating new products?’ Product initiatives set the direction for product teams, providing a problem-focused approach to exploring potential solutions.
15. The Product Kata
The Product Kata is a cyclical, systematic way to uncover the right solutions to build. It involves four key steps: understanding the direction, analyzing the current state, setting the next goal, and choosing the right step in the product development process.
Key concept: The Product Kata is a cyclical process for uncovering the right solutions. It involves understanding the direction (vision, strategic intents, or initiatives), analyzing the current state, setting a next-level goal, and choosing the appropriate problem-solving steps: problem exploration, solution exploration, and solution optimization.
16. Understanding the Direction and Setting Success Metrics
To measure the success of product development, teams need to quantify their objectives, starting with understanding the current state and setting success metrics. These metrics should provide insight into whether we are moving in the right direction and should align with the company goals.
Key concept: Success metrics need to be established at every level of strategy - the strategic intent, product initiative, and option level - to ensure progress is measurable and aligned with the desired outcomes. Utilizing a system of “mutually destructive pairs” can provide balance by including both leading and lagging indicators, preventing a singular focus on easily gamed metrics.
17. Problem Exploration
Good product managers spend a lot of time in problem exploration, engaging in problem-based user research to understand the context and root causes of their customer’s needs. This is crucial for building the right solution.
Key concept: Problem-based research, unlike usability testing, focuses on understanding the “why” behind user needs and problems, not just how easily they can use a solution. It involves generative research methods like user interviews, observations, and customer feedback. Deeply understanding the context surrounding problems allows for the creation of more effective solutions.
18. Solution Exploration
Solution exploration is about validating whether a solution will work for users and the business. It involves generating multiple solution ideas and conducting experiments to gather data and learn from them.
Key concept: Experimentation is essential for validating hypotheses, reducing risk, and learning about user needs. Experiment types like concierge experiments (delivering the end result manually), Wizard of Oz experiments (simulating a finished product), and concept testing (gauging feedback on concepts) can be used to gain insights and iterate towards a scalable solution.
19. Building and Optimizing Your Solution
Building and optimizing a solution involves taking the validated problem and breaking it down into a solution that can be built by the team. Prioritization is key here to ensure you are getting the most important work done and reducing the complexity of the product.
Key concept: Prioritization frameworks like “Cost of Delay” help determine which features or solutions to ship first based on the urgency and value they deliver. By quantifying the impact of time on desired outcomes, teams can make data-driven decisions about what to build, ensuring the most valuable features are delivered to the market first.
20. Outcome-Focused Communication
Outcome-focused communication is vital to maintain alignment and trust within product-led companies. It involves establishing regular cadences for communicating progress towards goals and outcomes at different organizational levels.
Key concept: Outcome-focused communication involves establishing a regular cadence of meetings and reports that focus on progress towards strategic goals and outcomes, rather than just feature deliverables. Quarterly business reviews, product initiative reviews, and release reviews are examples of such meetings, ensuring transparency and alignment across different levels of the organization.
21. Rewards and Incentives
Rewards and incentives should be designed to motivate employees to achieve business outcomes, learn from users, and find the right opportunities. When you incentivize output, you get output, not outcomes.
Key concept: Reward structures should incentivize actions that move the business forward, not just output or feature delivery. Tying compensation to achieving outcomes, learning from users, and finding the right business opportunities fosters a product-led mindset. Evaluating and adjusting rewards systems is crucial to ensure they align with desired behaviors.
22. Safety and Learning
Safety and learning are essential components of a product-led organization. Empowering product managers to experiment, take calculated risks, and learn from failures fosters innovation and allows for faster learning.
Key concept: Creating a safe environment where experimentation and learning are encouraged, even if it involves smaller failures, is crucial for fostering innovation. Companies that celebrate learning, not just success, create a culture where product managers feel empowered to try new things, take risks, and push boundaries without fear of repercussions.
23. Budgeting
Budgeting should be approached like a venture capitalist, allocating funds based on validated learning and milestones rather than yearly plans. This allows for more flexibility and adaptation to market changes.
Key concept: Budgeting for product development should resemble a venture capitalist approach, allocating funds based on validated learning and progress towards goals. This involves funding the exploration of new opportunities, investing more heavily in promising areas as they become validated, and adjusting budgets as needed based on learning and market feedback.
24. Customer Centricity
Customer centricity is crucial for building products that people love and use. To be truly product-led, companies must understand and prioritize customer needs throughout the entire product development process.
Key concept: Customer-centricity involves putting yourself in the customer’s shoes, deeply understanding their needs and motivations, and prioritizing those needs throughout product development. Companies that prioritize the customer experience and seek to create products that truly delight users are more likely to build successful, valuable products.
25. Marquetly: The Product-Led Company
Shifting from output to outcomes requires a change in mindset for the entire company. It involves embracing uncertainty, empowering product managers, and rewarding those who drive real value for the business.
Key concept: Becoming a product-led organization requires a shift in mindset, culture, and practices. It involves embracing outcomes over outputs, fostering a culture of learning and experimentation, and empowering product managers to make data-driven decisions. While challenging, this transformation is essential for companies to thrive in today’s rapidly evolving market.
Essential Questions
1. What is the “build trap” and how do companies fall into it?
The build trap occurs when companies prioritize shipping features over delivering real customer value. This often happens due to a misunderstanding of the value exchange, where companies fail to connect their products and services to the actual needs of their customers. Overcoming the build trap requires shifting from an output-driven mindset to an outcome-driven one, focusing on solving problems and delivering measurable value for both the customer and the business.
2. What is the true role of a product manager in a product-led organization?
Product management is not simply about writing user stories or managing backlogs. It’s a strategic function that requires deep understanding of both the customer and the business. Effective product managers own the “why” behind a product, ensuring its development aligns with company strategy and delivers measurable value. They must be skilled in customer research, data analysis, and cross-functional collaboration to guide their teams towards building the right things.
3. What constitutes a good product strategy and how does it differ from a plan?
A good strategy is not a detailed plan, but a framework for decision-making. It should transcend the iteration of features, focusing on higher-level goals and sustaining an organization for years. Product strategy connects the company’s vision and economic outcomes to the product portfolio, individual product initiatives, and solution options. It involves continuously evaluating the market, identifying opportunities, and adapting to new information.
4. What are the key characteristics of a product-led organization?
A product-led organization prioritizes product success as the key driver for business growth and value creation. This involves aligning the entire organization around a shared product vision, empowering product managers to make data-driven decisions, fostering a culture of experimentation and learning, and measuring success based on outcomes, not outputs.
5. What organizational factors contribute to the build trap and what changes are needed to escape it?
Several organizational factors contribute to the build trap. These include misaligned reward structures that incentivize output over outcomes, a lack of safety for experimentation and learning, and budgeting processes that prioritize spending over achieving goals. Overcoming these systemic issues requires a fundamental shift in mindset, culture, and practices to enable a product-led approach.
Key Takeaways
1. Utilize the Product Kata for structured problem-solving and product development.
The Product Kata is a cyclical framework that helps teams systematically uncover the right solutions. It involves understanding the direction (vision, strategic intents, or initiatives), analyzing the current state, setting a next-level goal, and choosing the appropriate step in the product development process (problem exploration, solution exploration, or solution optimization). This iterative approach reduces risk and keeps the focus on achieving the desired outcome.
Practical Application:
An AI product engineer can use the Product Kata to guide the development of a new AI-powered feature. They would start by defining the desired outcome (e.g., increase user engagement), analyze the current state of user engagement metrics, identify the biggest obstacle (e.g., lack of personalization), and then explore potential solutions through experiments, iterating until the desired outcome is achieved.
2. Embrace experimentation and data-driven decision-making to reduce risk and build better products.
Experimentation is crucial for validating assumptions and reducing risk. Concierge experiments, Wizard of Oz experiments, and concept testing allow teams to gather feedback from users early and iterate towards a scalable solution. By experimenting, you can learn faster and make data-driven decisions, even in complex industries.
Practical Application:
While developing a recommendation algorithm, the team could run A/B tests to compare different versions and measure their impact on user engagement and conversion. They could also conduct user interviews to understand how users perceive the recommendations and identify areas for improvement.
3. Align rewards and incentives with desired outcomes to foster a product-led culture.
To foster a product-led culture, reward structures should incentivize actions that move the business forward, not just output or feature delivery. Tying compensation to achieving outcomes, learning from users, and finding the right business opportunities promotes a product-led mindset and encourages continuous improvement.
Practical Application:
Instead of rewarding AI engineers solely for the number of models developed, incentivize them for the impact their models have on business outcomes, such as increased efficiency, reduced costs, or improved customer satisfaction. This fosters a focus on delivering value, not just output.
4. Prioritize customer-centricity to build products that truly meet user needs.
Customer centricity is essential for building successful products. It involves understanding the customer’s perspective, their needs, and pain points. Product-led organizations prioritize the customer experience throughout the entire product development process, from ideation to iteration.
Practical Application:
When designing a new AI-powered chatbot, product teams should spend time understanding the needs and pain points of the target users. They could conduct user research to understand how users currently interact with customer service and what they expect from a chatbot interaction. This customer-centric approach ensures that the chatbot is designed to solve real problems and provide value to the users.
5. Cultivate a culture of safety and learning to encourage innovation and experimentation.
Creating a psychologically safe environment is crucial for encouraging innovation. When teams feel safe to experiment and learn from failures, they are more likely to take risks, push boundaries, and contribute their best ideas. Leaders should actively cultivate a culture where experimentation is valued and failure is seen as an opportunity for learning.
Practical Application:
An AI product leader can foster a culture of safety and learning by encouraging experimentation, even if it leads to smaller failures. They can set aside budget for innovation projects and reward teams for learning from their mistakes. This creates an environment where engineers are not afraid to take risks and explore new ideas, leading to faster innovation.
Suggested Deep Dive
Chapter: The Product Kata
This chapter provides a practical, adaptable framework for AI product development, encouraging iterative learning, experimentation, and a focus on outcomes over outputs. This aligns perfectly with the iterative nature of AI model development and the need for continuous improvement based on real-world data and feedback.
Memorable Quotes
The Build Trap. 1
The build trap is when organizations become stuck measuring their success by outputs rather than outcomes. It’s when they focus more on shipping and developing features rather than on the actual value those things produce.
The Value Exchange System. 7
Let’s go back to the basics to determine what true value is. Fundamentally, companies operate on a value exchange.
The Product-Led Organization. 15
Product-led companies understand that the success of their products is the primary driver of growth and value for their company. They prioritize, organize, and strategize around product success. This is what gets them out of the build trap.
What Is Strategy?. 62
Strategy is a deployable decision-making framework, enabling action to achieve desired outcomes, constrained by current capabilities, coherently aligned to the existing context.
The Product Kata. 98
Product management is the domain of recognizing and investigating the known unknowns and of reducing the universe around the unknown unknowns.
Comparative Analysis
While many books on product management focus on tactical skills and frameworks, “Escaping the Build Trap” distinguishes itself by taking a holistic, organizational approach. Unlike books that solely emphasize Agile methodologies, Perri argues that Agile alone is insufficient for building successful products. She agrees with authors like Marty Cagan (“Inspired”) on the importance of customer-centricity and data-driven decision-making, but she goes further by outlining the systemic changes needed within companies to escape the build trap. Her concept of the “Product Kata” echoes the iterative learning principles found in Eric Ries’ “The Lean Startup,” but with a specific focus on product development. Perri’s unique contribution lies in her emphasis on organizational culture, incentives, and leadership alignment, highlighting how these factors can hinder or facilitate product success.
Reflection
Escaping the Build Trap