How much Money will
this Feature make?

​Dear Reader,​

"How much money will this feature make?" Raise your hand if you've heard this question at least once in your career.

Ok, you can take them down now and continue scrolling.

I for sure have. And, I get it. Money is what keeps the lights on, and in the midst of enjoying attaching fancy labels ​to obvious activities, product managers often lose sight of the point of their work. In essence, we try to solve people's problems to drive business goals. These business goals may not always be directly about money, but even improvements in internal efficiency or retention are expected to lead to increased revenue over time.

Why do I still think it's the wrong question? Because we need to separate what our solutions can influence directly from what they only contribute to.

When I worked in a B2C Premium Memberships team, we focused on imminent success metrics. Even as I was optimizing the design of a freemium feature aimed at luring in non-paying customers, we didn't use "money" to measure its success. We designed for, and measured how many more people this brought into the funnel. Yes, we observed how the variant cohorts performed mid- to long-term for upsell page and checkout conversion rates. But that is for what Rich Mironov calls "Money Stories."​

In this excellent talk at Product at Heart 2024, he acknowledged the importance of "SWAG predictions" - Stupid Wild Ass Guesses. We should be explicit about the (internal or external) customer behavior we want to drive, but also acknowledge the uncertainty in the exact ambition.

Even more, we should define the directional contribution we want to make, so that alignment with overarching strategic goals can serve as a guardrail.

Yes, an improvement in usability can lead to a mid-term increase in customer satisfaction, and, thereby, an increase in revenue from retention. BUT, if our goal is to increase revenue from NEW b2b customers this year, this isn't a priority for us at the moment, even if the influenceable customer impact is admirable.

This should lead to what I call directional narrative statements in the context of what you will work on, what you aim to influence, and what you want to contribute to:

So, the next time you're asked, "How much Money will this Feature make?" share a directional narrative instead of wasting hours on busywork calculating the direct revenue impact of the new dashboard.

Thank you for Practicing Product,

​Tim​

PS.: Don't forget to claim your spot for my free webinar on creating your pragmatic Product Strategy on Feb 11.

If you consume one thing this week, make it this...

Who is Tim Herbig?

As a Product Management Coach, I guide Product Teams to measure the real progress of their evidence-informed decisions.

I focus on better practices to connect the dots of Product Strategy, Product OKRs, and Product Discovery.