Marko Perisic is Chief Product and Technology Officer at Zellis.
This article is adapted from his talk given at Product-Led Summit, London 2019.
"I have about 20 years of experience in billing and shipping software. The last 10 years have been in SaaS services, but I've worked across different backgrounds and different contexts. I had two successful startup exits. I had a very successful startup failure. This failure, though, made me who I am today.
I spent over a decade in a company you may have heard of called Microsoft. We spent 12 years running global business application services. This was another formative experience. I felt that I had to be part of something big and really understand how parts of design were built and shipped.
I thought that was going to be University 2.0 for me, maybe a couple of years. But, 12 years later, I left Microsoft, and joined a company called Zellis.
We are a clear market leader in what we do, which is payroll services. We have approximately 1200 major large accounts in the UK and Ireland. Every month we pay about 5 million people. 33% of FTSE 100 companies are served by us.
I've learned some best practices through the process of building and shipping software products at scale. I’d like to share some of those with you.
If you think about the general process of building and shipping products, it goes from left to right on this graph.
It starts at the standard building of a product and writing test-driven development around that.
Then you start refining and you are able to define its successful criteria. Next, you do the the big launch and ship the product. You provide some marketing collateral and write a press release to define its functions to the market.
You launch it, you ship it, then you want to promote it. You want to tell the world about it. You want to build an online presence.
And finally, last but not least, there's the exit pitch. The selling of the business and committing that business to a new owner.
Every business is for sale sooner or later. Even if you privately own a business, unfortunately none of us live forever. Every business is, at some point going to go through an exit pitch.
This is how you typically build software.
The thing that I'm here to share is that the way you execute, should not be the way you plan.
The way you plan should actually take a completely different direction. You should be doing it backwards.
Let's explore this.
Start at the End: Plan backwards
Step 1: Write the exit pitch
It sounds strange, but in order to build the best product, we're going to start by writing the exit pitch for your software business.
Imagine. You have a new potential buyer. You're presenting your company.
'This is why this business is great. This is why it's valuable.'
But, in order to do that, you need to understand a lot of things.
First, you need to understand the context of the business. This impacts your work as Product Manager more than you think.
How many of you are knowledgeable of the equity structure of business you're working for? Who owns it? Is it a private or a public business?
At Zellis, we have capital loans, and we know that private equity companies typically have exits within three to five years. This means there's no chance we can build major frameworks or invest in major refactorings without a clear outcome on those investments.
That impacts how we coordinate our efforts. If you are in a privately owned business, maybe even one that you own yourself, you need to start thinking, 'Why am I here? Why am I doing this? Why is this important to me?’
Recently, I was asked to consult a selling process. A company was successfully sold, and as a result, a lot of money was made. It was an interesting process to witness. There's a lot of tension, a lot of anxiety and a lot of emotion invested.
In the end, the owner got a really great price for the business and just like that, became extremely rich. I congratulated him, asked him how he was feeling, expecting a large smile in return.
'I feel empty.’ He said. ‘I feel like I lost my identity. I've been working this business for the last decade. I've been working up to this moment. I don’t know what to do with myself now.'
I said, 'Okay, look, I know you have enough money to fulfill your time. Why don't you wait a few weeks and then see how you feel?'
So, he did that.
And two weeks later he came back and said
‘You know what, I still feel lost.’
This person had been narrowly focussed on the exit deal. But he never had a long-term personal mission understanding why this whole motion of selling the business was so important to him.
If you're going to start thinking about product, you need to jump to the end and envision the potential buyers of the business.
The way to do it is to write the exit pitch. This is a snippet from a mock version of one we did at Zellis.
'At Zellis we have completely changed the UK employment market by digitally transforming company employee relationships through the use of data. In the last 4 years, we have grown market share in payroll by 40% enforcing our market leadership position by a factor of 3. With that we have measurably increased the satisfaction of 15 million people in the UK with their employers measured by the employee appreciation index, which has risen in the companies using Zellis products from -40 (UK average) to +60.'
Describe how you've changed the world. Put in some percentages and numbers to see what you want to strive for. Let those be your leading KPIs of your product success.
Step 2: Define your mission statement
The mission statement is a distilled version of the exit pitch.
Why do you exist? Why do you show up at work every day?
It could be to make a salary. It could be to get rich. It could be any reason. But, it needs to be something that you can really anchor yourself into.
At Zellis, most of the management team is new. When we joined, we knew immediately that we wanted to be more than just a payroll company that takes money from a company and puts it in employees accounts.
We realized that our mission statement was to make people feel appreciated for the work they do.
Think, what kind of emotional impact do you have on your customers? A great mission statement will revolve around that.
Make it brief. Make it clear and understandable. You need to be able to continuously return it to it and double check that what you're doing is really fulfilling it.
My CEO and I had dinner and we're talking about a number of different ideas fro the company. Throughout the process, we're asking, 'Are these ideas really making people feel appreciated for their work?' Because, if they're not, then it's not what we want to accomplish.
Step 3: Press release
At Zellis, we're shipping major releases of software to market every six months. So, every six months ahead of time, we're writing a mock press release. We describe what we're trying to accomplish. And, we establish what we will tell the market when we do ship this release six months later.
I cannot emphasize enough how important this is.
You start by saying, 'What do we want to accomplish at the end of this period?' and fold everything backwards.
You accomplish a number of different things.
Within a fairly short period of time, whether it's six months, three months or one week, you are able to focus the organization.
We ship this product, this is what's going to happen in the market, this is the impact that's going to have on people.
It also has another really incredible effect. It allows people to solve prioritization discussions.
It's very easy for any product team to come up with 1000 ideas. What's really hard is to understand what you're not going to do. So, if you are able to agree what the press release says, you’re implicitly also agreeing on the ideas that are not in that press release.
Should this be in or out? Does it fulfill the press release? Yes or no? Granted, it's not always black and white but it certainly facilitates that discussion.
Write your press release as if it's published to the markets by a PR team.
'Zellis, the market leader in payment and rewards in the UK, has released a new product called Zellis Rewards, where it enables 5 million people employed in the UK, using Zellis software to have a single view of all the pay and benefits they get from their employers.'
Even think about adding mock quotes from a customer describing what impact that had on them.
'After the last two years of using Zellis Rewards, the key questions have been answered for me, that I was always wondering about: Am I being paid fairly? Are others paid significantly more than I am? Does the company appreciate my work? – Mark Dietrich, ACME Corp'
Your press release is another guide point for the investments you make in the particular periods when you're shipping the release.
Step 4: Success criteria
Now we distill that press release and define the epics that will fulfill it.
We start by writing these epics backwards. We don't start by saying, 'What should the user experience be?' We start by focussing on what the success criteria should be.
Write clear and succinct success criteria and in a measurable and binary way.
A great success criteria would be, ‘We're going to improve performance by 30%.’
A poor success criteria would be, 'It's going to run faster.'
Step 5: Acceptance Test Driven Development
We then define individual features, user stories and tasks. You’ll be familiar with all of this. It’s really about ATDD.
What is it that needs to come true on a specific feature level in order to close a particular task?
Start planning backwards.
You'll begin to widen your vision.
Think, what is the context of the exit of the company? What does success look like for shareholders? What's your mission? Where are you heading?
It gives you clarity of what you are able to accomplish
Make the broader context continuously visible
This point is really important. Even when you understand the context of the business, people forget what that conversation was six months later. That's why the mission statement is incredibly important because it gives you that sounding board to check if you're on target.
This is the customer-centricity that everybody talks about. It's such a repeated phrase. But at the end of the day, it really is about that.
Software and technology is complex and exciting and risky and it will bite you when you least expect it. We all get very easily drawn into the whole role of building and shipping it.
We sometimes forget, it's really about the impact we have on users and the markets. Maintain that outside-in view of how you plan and design software.
Involve the organization.
It's really important that you involve the organization from bottom-up in this process.
Now, of course, you might not have every single player in a company writing the exit pitch. But at least in terms of mission statement, success materials and press releases, the more people who feel involved, building from bottom up, the stronger your collective vision of success is going to be."