Mastering the art of the big bet by Alice Newton Rex "Product people - Product managers, product designers, UX designers, UX researchers, Business analysts, developers, makers & entrepreneurs November 11 2021 False #mtpcon, Bet, Mind the Product Mind the Product Ltd 1468 Alice Newton Rex speaking about big product bets at mtpcon London Product Management 5.872

Mastering the art of the big bet by Alice Newton Rex

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Alice Newton Rex speaking about big product bets at mtpcon London

In this #mtpcon London+EMEA keynote, Alice Newton Rex, WhatsApp’s Product Director, explains the common trends adopted by those who’ve found success making big product bets, describing how great ideas can come from anywhere. 

Watch this video or read on for key highlights from the talk.

In brief

  • Deciding when to place a bet and validating it early is key to success

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In this #mtpcon London+EMEA keynote, Alice Newton Rex, WhatsApp's Product Director, explains the common trends adopted by those who’ve found success making big product bets, describing how great ideas can come from anywhere.  Watch this video or read on for key highlights from the talk.

In brief

  • Deciding when to place a bet and validating it early is key to success
  • Bottom-up bets will require a champion and a leadership sponsor
  • Top-down bets can be tested in-market and should be well-resourced
  • Winners of big bets often receive accelerated careers
Alice describes big bets as “innovation rather than an optimisation”, offering something more than a company’s core service, while simultaneously being high risk in terms of failure and potential reward.  “There is no single optimal playbook for making a big bet”, she explains, stating that while talking with industry experts you can, at most, understand “common themes, common patterns, and different pathways” to attaining success.

Betting on old ideas

“The ideas for big bets are rarely new,” Alice says, describing how “the person who takes the bet is rarely the first person to have come up with that idea”.  She gives two examples: 
  1. BBC iPlayer, the video on-demand service, was realised two years after the team decided to put radio online “and after that, putting TV online, it was kind of obvious”
  2. Facebook dating, was an idea so commonly discussed, it was a popular interview question for new product managers at Facebook prior to the team actually developing it
What’s key, Alice says, is selecting when to place your bet, “deciding the time is right, and giving it enough momentum to get going”. 

Bottom-up bets

Bottom-up bets are those which are championed by employees outside of management, frequently built within pre-existing teams alongside core services, later being accelerated after receiving business backing.  Alice provides some examples:

Deliveroo Plus

Deliveroo Plus, a premium delivery subscription service, was the result of a team brainstorming session. The idea was validated by offering users free delivery as a reward for a survey submission, which saw results quadrupling in just a few days. Shortly after, trials were rolled out with the subscription service marketed as a completed product, leading to a permanent increase in order frequency. The full delivery took several months from idea to conception with a rollout to the UK and four other countries.

Wise Borderless Banking 

Wise Borderless Banking was a bet that came from customer feedback, allowing users to simultaneously make or receive multiple international payments. The team pitched the idea to the compliance team and CEO, who approved the development, leading to Wise applying for a new licence, and increasing their market share of cross-border transfers.

Facebook dating 

Facebook Dating was a bet brought forward, initially, without a clear strategy, but a huge wealth of data and a good idea which got backing from management. By the time the product strategy and go-to-market plan were ready to present to the CEO the team had already found signs of success with some test participants asking if they could immediately use the product.

Lessons of bottom-up bets

  1. Ideas can come from anywhere, but require a “champion” who's willing to put themselves on the line to back the bet and craft the strategy.
  2. Bottom-up bets need to be validated as early as possible, in a cost-effective way.
  3. Recruit a leadership sponsor who will help accelerate the bet after you demonstrate the value for the organisation.

Top-down bets

Top-down bets come from management, Alice explains, describing how ideas are often validated in-market and teams are “able to sprint fast in those early phases, having senior support and proper resourcing. These kinds of bets tend to happen in two environments: older non-tech companies, or earlier startups with very strong founders”. She shares some examples:

Revolut 

Revolut CEO Nikolay Storonsky is renowned for pushing teams to deliver MVPs quickly and validating them in-market, meaning opportunity costs remain low. Teams are empowered to follow bets and deprioritise work of core products. “This is not a strategy for the faint-hearted”.

FutureLearn

FutureLearn, a digital education platform, was created in 2012 as a bet by the Open University. The venture was separated from the parent organisation, allowing the tech team to physically relocate and approach the bet like a startup which in turn protected it from any interference from the standard business priorities and to autonomously work to define a new experience for learning.

Travelex

Travelex, a company that offers airport currency conversion, requested the tech team build an online experience, expecting a mobile app that would support the existing service. After 90 hours of customer interviews, the team returned with a plan to adjust the top-down vision, delivering a travel budgeting app, showing users how much money they would likely need, and allowing them to reserve and collect the money from the airport. The bet led to increased engagement and greater transactions.

Lessons of top-down bets

  1. Top-down bets can work and can be as satisfying as those which come from team brainstorming or user research. 
  2. Be prepared to inherit an idea and execute it — executives can offer high-level perspective and vision, but may not be best-placed to decide on delivery.
  3. Once you have a bet underway, be sure to dedicate your team’s time and resources to see it to maturity and avoid getting pulled away from the work.

Launching early

Alice highlights how successful bets are often launched early, even before a product is truly ready, in order to get as much data as quickly as possible and to decide on the most cost-efficient way whether a bet will be successful.  She describes the extreme example of the energy provider Bulb, whose CEO interrupted a meeting in 2018 to announce that he wanted to share a new product at a conference in one week’s time — one that’d allow users to generate their own additional energy via solar and other sources, to export the excess to the grid. While the word “impossible” was initially used, the team managed to define and build an MVP that appeared to work in full, while having a large number of manual steps in the background, leading to a successful conference.  “It is a great reminder of how quickly you can get your product into the hands of real customers, if you're willing to fake it until you make it,” Alice says, while highlighting that the team spent most of the following year automating manual steps and creating a full service. 

Managing risk

With all big bets, the risk of failure is high and while it’s separate from the core business, “you have to be aware of the potential risks that you might be causing to that core product, whether it's reputational risk, customer risk, maybe even legal risk”. She gives the following advice for managing risks:
  1. Start betting early in your lifecycle as a company, then your customers are by definition, early adopters, and probably a good sandbox for experimentation
  2. Prepare to remove a bet and have a plan for how it should gracefully disappear if it's not going to be useful — for example, having a UI solution, or a new process that can be implemented to replace a bad bet.
  • Define success criteria and send resources towards the bet as soon as it starts working, to scale up, build quickly and launch so it has the best chance of succeeding.
Alice highlights that the most “wasteful and costly bets are not those that fail outright, but those that show some promise, but never really take off nor flunk out either”. While bets are by nature risky and different for each company, “a rule of thumb I am developing is that you should launch the product as early as possible, it should be showing some promise within six months, and it should be showing clear traction within 12 months, or it's probably not going anywhere”.  “Successful bets can cause a surprising amount of trouble,” Alice explains, describing how they create a “competition for priorities [and] can fundamentally alter the business model”. What’s needed is further investment, resources, and understanding when it’s time to “scale the strategy” and create a stable and sustainable product offering.

Big bets involve luck 

Alice finishes by reminding us that all bets are unique, and involve some luck, however, we can “make sure that if it fails, it fails for the right reasons, and not because of your own oversights and execution”. Those who have led on big bets have found accelerated careers and the winners are not “just the companies or the users, but also the individuals involved who are taking the bets. I hope that hearing these stories have inspired some of you to go out and take a chance on your own big bet.” See more #mtpcon video content

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