This week's digest is a rather long one with some deep digging into Musk and Twitter and a special piece on Netflix and Gaming.
A big welcome to the new productnauts and thank you for joining the non for profit product digest cult.
Each week, I scour through content on the internet to look for insights, lessons and research to curate research papers, guides, articles on the world of business, product and tech with the key mission to enhance product people's careers.
Wesfarmers one of Australia's largest conglomerate, bought the funky "Catch Marketplace" for a cool 230 Mil and then killed it in true 🦖 dinosaur fashion with 2 years of losses in 40s of millions.
This recent article highlights how Catch has gone into losses post the Wesfarmers acquisition, specially in a time where online commerce was booming.
On the surface it looks like the Wesfarmers as an organization really struggles to learn how to go omnichannel.
Three years and one pandemic later, Catch’s growth story is looking more like a saga. Since its purchase, the business reported an inaugural full-year profit of just $1 million in 2020, before posting a $46 million loss in 2021 and a $44 million loss in the first half of fiscal 2022. And though the business’ revenue started strong, in the last half it fell by 4.3 per cent.
In bricks and mortars retail, some of the Wesfarmers brands are amazing such as Kmart, Bunnings and Officeworks as they offer a product range across multiple categories.
However, most of their digital experiences have been a hit and miss.
- Remember the Kmart online queuing page to visit their website from 2020?
- Or the poor search experience on Bunnings website?
- Or the poor experience prior to Officeworks making updates to its delivery options on their website?
- Or the poor purchase experience when you order from Kmart or Add to cart to find out at checkout or post payment that your item is not going to be delivered because its OUT OF STOCK?!
What this gives away is that Wesfarmers struggles to understand e-commerce at scale and innovate digitally because of old school IT practices and is waiting to be disrupted!
So the bigger question is - Why can't they change?
- All of these brands need empowered product teams
- They still currently run things in old school IT and project management fashion with command and control at every level
- any attempt of transformation seems to have failed because they like to scale by Process.
Marty Cagan always advises that any organization that wants to scale successfully should scale by Leaders rather than Process.
My view here is that these organizations have not understood the world of innovation yet and their product maturity is still low.
They might be able to make some changes if they hire right.
However, its highly likely that they will not get there but due to the sheer size of their organization and politics which act as constraints against innovation.
Wesfarmers share price overview - 1 Year view
On a sidenote, it looks like Wesfarmers shares have taken a dive in the last year from its highest ever price at $66 but as per market analysts it will recover to mid $50s. Link
(Image source Google)
👨🔬 Musk seems to be off the rails again - executing his hostile takeover with Twitter. Either which way he wins. (edit : Twitter board accepted his offer)
Next steps to seal the deal is to get approval of Twitter stockholders and pending regulatory approvals.
If this goes through, this would make Twitter the 3rd largest acquisition in tech.
The current share price at the time of the edit is $51.70.
The Twitter board counter
So if you have been following the news, you would have read that Twitter counters Musk with what is called a poison pill which basically allows shareholders to buy additional shares at a discounted price and dilute cap reducing Musk's control and increasing his purchase price if he wants control. link
Game of Thrones or should I say shareholders
Musk was the largest shareholder of Twitter at 9% till last week when the Vanguard Group filed in SEC that its now owns a 10.3% stake. link
Make it rain
It seems some big dogs are now backing Musk and given him access to buy all off Twitter. link
If this goes ahead he will be paying a price of $54.20 per share.
Either which way he wins as the price has gone from a low of $33 in March to $47 at current stage driving his net worth upwards.
So he wins whether he acquires twitter or not. Smart eh!?
Why is Musk doing this?
It looks like Musk wants to have the largest source of influential programing at his fingertips to drive his agenda forward. He is already into rocketry, AI, robotics and pretty much every other thing you can think off. Why not add an influential platform to the list.
Maybe he runs for US president next eh.
In a recent interview Musk mentions he wants to free the platform and share the algorithm to the WWW so that people can critique it and improve it.
Literally 5 mins into the video he says lets put the code up on GitHub and let anyone contribute to it. link Now that is one crazy open source mission eh but, if you ask me, that's definitely helpful.
Twitter share price overview - 5 Year view
(Image source Google)
👾 Microsoft Xbox free to play and adtech are flirting with ideas to boost rev. Is this the step forward for FTP games and metaverse buzz that is coming?
As per business insider, Microsoft is reportedly creating an ad program that will allow brands to advertise in free-to-play Xbox games! This is probably going to result in the metaverse of ad world growing drastically. link
Think of the next time you are in your open world FTP dungeon game and suddenly you see a Nike advert in the middle of a Dungeon siege!.... yup the new age of adtech is here!
Some games like Fortnite and Roblox already do stuff like this and brands are taking more interest into putting money into development and partnering with game studios.
Netflix lost 20% of its share price which equates to what it was 5 years back due to recent news of subscribers dropping, however they are now shifting their focus to new revenue sources such as gaming and ads.
Netflix currently has 222 million paying customers. It lost 200k subscribers reportedly in its first quarter which has dropped its share price by 20% almost returning it back to its price 5 years ago! link
This is definitely going to result in Netflix pivoting to look for new sources of revenue such as GAMING and reviewing its previous stances such as no ads on the platform. link
We think that we can build a big revenue and profit stream by adding games,” co-CEO Theodore Sarandos told investors.
But why mobile gaming you may ask?
- Mobile gaming has become the most popular vertical in app stores and probably why Netflix is rushing to build in-app games experience.
- Mobile gaming on both IOS and Android stores earns more money than non gaming apps.
New priorities for Netflix C Suite
As the Netflix's management receives pressures from the market and shareholders with its current drop in share prices, gaming will probably get more importance in the quarters to come for new features on Netflix.
- Netflix also seems to want to introduce ad-tech revenue by pushing forward different subscription tiers.
- In the next 2 years, Netflix may offer lower tiers with adverts, a stance they have previously refused to take up. link
“I’m a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising tolerant to get what they want, makes a lot of sense."
The company will work on creating an ad-supported version of the service over the next year or two, Hastings said.
Big money comes from the games on mobile devices and this is what Netflix is trying to jump on.
- Games account for the primary form of revenue generation for both iOS and Android at 67% of all app revenue and seems to be growing exponentially quarter on quarter. link
Gaming app revenues 2016-2022
How far in is Netflix's gaming strategy and how big is Netflix's gaming portfolio?
Not too far.
But it has a head start on all of its competition.
- Netflix currently has 17 games with 4 more announced for May. If you are interested to see full list of games click here.
- In Sept 2021, Netflix acquired Indie gaming studio Night School Studio. link Almost all of these games are in the indie category scene. This studio allows Netflix to build out its inhouse games and category faster.
Think of it like the Netflix originals with a game.
Diversification of the types of game will change as time goes on and their gaming portfolio and customer base diversifies.
What do games on Netflix cost?
For customers there is no additional cost to pay for these games where some might actually be paid games on other platforms.
From the VP of game development for Netflix, the expanding library of games will not be a separate subscription or off-shot of an existing membership: “Like our shows and films, these games will all be included as part of your Netflix membership — all with no ads and no in-app purchases.”
(Image source Netflix)
How is the gaming experience?
Mediocre as most of these games aren't embedded into the app experience and require a separate download increasing the friction for the customer to just click the play button to start a game. Since all the games are currently in the indie or low graphics category the games are quite for the casual gamer.
Netflix's partnership strategy with bigger game studios
What is worth noting is Netflix has also tried to partner with games like DOTA 2 and League of Legends both of which have a massive online multiplayer following.
They did this through producing anime content which they shared as mini series under TV Shows.
Game development strategy and gaming engines
Game development highly depends on gaming engines as gaming engines usually drive the world of gaming.
Netflix hasn't mentioned anything about a gaming engine yet.
It looks like Netflix is currently going with the partnership strategy and not embedding games on their app probably due to the limitations of their app and the devices.
I forecast this will change in the future and Netflix will become a multi entertainment platform from movies to games and something no one has cracked yet. A few have tried (namely Xbox and PS).
Potentially a super entertainment app with games and movies
Netflix might potentially build its own gaming engine or acquire one.
Maybe they already have started the process! Perhaps this is a perfect time for Epic Games or GOG and Netflix to join hands!
The natural progression might be a Netflix gaming console in the future.
Who knows! Only time will tell.
A different perspective on the fall of Netflix subscriptions
Interestingly, Mark Ritson's view of the lost subscribers is that it is normalization due to the hyper growth during COVID.
He calls it the boring brown line of extrapolation and expects that shares will bounce back.
See image post below and checkout his article on this here.
Share price overview - 5 Year view (Image source Google)
(Image source Google)
Stripe jumps on Crypto by partnering with Polygon technologies and Twitter.
Stripe has decided to utilise the partnership strategy over "build it" and partnered with ethereum scaling platform Polygon to allow customers to pay sellers, freelancers, content creators and service providers in crypto!
For now its only USDC stablecoins native to Polygon’s network and Polygon-compatible wallets are required. link
"It appears that Twitter will be the first company to try out the feature by allowing earnings to be paid out to content creators in crypto for users of the company’s monetization products such as “Ticketed Spaces” and “Super Follows.”
Opinion 1: Would you pick a disruptor or a bum on the seat for your product management role?
When you are faced with 2 candidates where one is a disruptor and the other is just an ideal bum on the seat types, which one would you pick.
The stable one that won't be a flight risk 6 months in or the one that might help disrupt the status quo however would leave in 12 months into a role for something more senior.
From my experience as a product leader, it depends on the organization you are in and what you need in the role, sometimes as a manager you have to make a stable hire and sometimes you need the disruptor.
Organization Product Maturity and Scale
Organization maturity and size makes a big difference in addressing your need.
If you do not have the organization product maturity you might require a disruptor who can bring that in. If you are however in a larger scale organization with higher level of maturity and need someone to execute on process then a bum on a seat might be the right approach.
Both candidates are good and often you will find a mix of both in people. As someone who has spent time as a manager I can tell you this from my short experience - its not easy to hire PMs. Furthermore, you cannot be very selective with a talent short market. If you are you lose a candidate in a heartbeat!
Opinion 2: Would you like your consciousness to live forever?
Having much thought into this, I would not bat an eye at this. Perhaps my relatives might find it odd.
World digital maturity
Some odd problems to solve using tech that's probably still to early for the digital maturity of the world. Perhaps by 2050 we might get there and stuff like this becomes the norm.
Maybe as the generations change and digital natives become the norm in the older age groups this will be normalized trend.
I don't see many baby boomers or gen x signing up for this but potentially millennials on wards.
Opinion 3:The way of no way. Have you wondered why Scrum , Kanban, XP etc doesn't work for you when it comes to delivery frameworks for software? The answer is simple and is found in the world of martial arts.
Style locked and understanding to break beyond the box
When a person learns a certain form / style they might be brainwashed to think their style is best. This is a normal thing. Its generally where cults form.
However, if they want to be "whole" they have to go beyond their style and fill the gaps when it comes to their styles weaknesses. They also have to pick and choose things in their style that work for them because soon they realize some of the BS just doesn't work.
How does this apply to software development?
'A Teams' I have worked with operate like this, they learn from frameworks and models and try to experiment with them and then they seek to go beyond and break all frameworks to find their own way.
Important: Don't just copy and paste
It is important to note that most situations in organizations are bespoke to that organization. Simply copy pasting a framework that worked for someone else will lead to a poor situation. A classic example to learn from is in the 80s when Hitachi spent millions to copy the Toyota production system (TPS) and it didn't work for them.
Beware of the consultants and listen to your team
Don't let overpaid consultants come in and tell your engineering and product teams how to work.
Ask the team how they want to work through 1:1 interviews and group surveys and votes. Then make the changes. Review and measure the changes and make changes again.
Perfection is overrated and command and control is overdone.
Marty Cagan on Common Transformation Pitfalls
Marty gave one of the best talks to date at the Product Tank in Olso while addressing some key topics on Common Transformation Pitfalls.
He explains a whole bunch of concepts from his 2 books Inspired and Empowered. I would highly recommend listening or watching this.
He definitely addresses the elephant in the room with the roles when it comes to transformation fails from the CDO, CIO, CFO, CTO to CEO.
As I watched this a couple of times, I felt a few moments from my travels of transformations come up to haunt me! Its crazy how what he describes is so true to reality.
Product Vision vs Product Strategy from Tim Herbig
Tim Herbig gives a short video on the difference between product strategy and product vision. This is a good starting point for everyone who wants to enter product management to understand.
Essential product manager reading
Book summaries by Toby Sinclair
Maybe you don't like reading books or prefer to speed through them or even wondering which one to buy, then check out Toby Sinclair's Book summary website. He has about 102 book summaries!
ROI of media content
Ryan Law wrote about the 3 frameworks in below article
1 the value-delivery arms race
2 the product dogfooding strategy
3 the post-IPO awareness play
Why Don’t They Build Cars in Sprints?
In this article, Raj Nagappan looks at why manufactures with mature production systems do not build cars in sprints which is an analogy for product development teams to not build in cyclic sprints but rather use continuous flow. Something I strongly advocate for. Article Link
“Why don’t they build cars in Sprints?” seems like an absurd question. Decades of manufacturing experience has shown that a continuous flow assembly line based on just-in-time principles is the optimal arrangement. So why don’t we apply the same thinking to software? Is software less complex? No. Does it require less skill or specialization? No. Is an optimized production process not a potential source of competitive advantage? No. As you may have gathered, I don’t especially like Sprints. I feel they represent a naive view of work and I find that the additional measures needed to get a Sprint to work just adds to my problems.
Did you know
Upcoming talk by Marty Cagan - Free signup
Marty Cagan, founder of the Silicon Valley Product Group, explores the nature of this craftsmanship, especially the critical collaboration between product management, product design, and engineering, and how strong product teams work to discover a great product.
Sign up today for free https://events.sendbird.com/productishard?
Social media posts of the week
The 3 value pillars by Andre Albuquerque.
Value is definitely in the eyes of the beholder.
Andre Albuquerque shared this framework which is quite interesting when it comes to looking at the value models your product takes under 3 pillars of cheaper, faster and easier for the customer. Next time you look at your product solving problems and adding value - give this a test.
REST vs GraphQL by Zeeshan Syed
If you don't already follow Zeeshan, you should. He is on a mission to help people up-skill their knowledge of tech jargon and really does a great job of breaking it down. Even if you have a certain level of tech knowledge, Zeeshan just adds to it.
NFT products the 2 extremes
Aatir Abdul Rauf does a great job of summing up the 2 types of extremes in NFT products.
Product-led sales (PLS) is the next big internal shakeup in B2B. PLS flips GTM upside down, starting with product usage, not ending with it.
Elena Verna shared this interesting post where she also visually sums up traditional enterprise GTM vs product led sales.
1- Want to indulge the curiosity in your brain and get stuck into 3000+ word research papers - checkout the research paper archive.
2- Want to improve your product management skills or disrupt your organization - checkout the guides archive
3- Missed a week - checkout the weekly digest archive