
My Billion Dollar Mistake - kristiandupont
https://producthabits.com/my-billion-dollar-mistake/
======
skmurphy
There are several good lessons learned presented that are generally
applicable:

"We should have spent more time figuring out what the problems were with
existing solutions and who specifically had those problems."

"The customers we targeted needed to be willing to pay for our solution."

"We hadn’t been committed to learning as much as possible about the market and
the customer. We were making educated guesses instead of coming to well
researched conclusions. This led us down the wrong path twice."

In his fourth point he correctly decides to benchmark against the status quo
but does not talk to people who are paying for an analytics solution but are
using Google Analytics, which was free at the time they were conducting
interviews.

"We needed to stop building what we thought the market wanted and get back to
basics. Instead of writing code, we went out and talked to customers. We spoke
with people who used our largest competitor, Google Analytics. We asked them
questions to better understand their needs and the current problems they were
having with analytics software. They had a lot to say, so we listened."

But they do find a pain point people are willing to pay to solve: funnel
design and management. So far so good.

But the next mistake is instead of focusing team execution purely on requests
from customers and prospects who match their target, Hiten Shah tries to move
faster by coming up with a stream of ideas (called "Hiten bombs" in the text).
He was slow to switch focus from exploration / discovery to execution /
delivery. Which is understandable because it was exploration that uncovered
the "billion dollar opportunity."

His summary is good and also points out a painful reality about "product-
market fit." It's not a one time winner take all event. Your early traction
invites competition that copies your success, building on it to raise the bar
against you.

"You can’t just capture the market once and expect to keep it. You have to do
it over and over again and faster than everyone else if you want to keep
distance from competitors coming up behind you and disrupting you. That’s how
you get ahead of the market.

We forgot the process that helped us deliver that initial amazing product
[listening to prospects and customers]."

~~~
duxup
I've been working on a project recently. Review after review with the
president of the company. He's a good dude but new ideas are frequent, and he
is almost too focused on what the thing should be / look like / etc. Same with
our customer paying for it (but who doesn't use it) who has strong feelings
about "if it does X, Y will happen".

They're all more experienced with the industry than I, but their explanations
didn't quite jive. I'm no user expert but I'm fairly sure some of their ideas
won't make the user make Y happen....

Finally last week I got to talk to someone who will USE THE THING on a daily
basis. In a 15 minute conversation with that dude I cleared up months of
confusion / questions and I feel like that would have saved us a lot of time.

Thankfully it happened and everyone was on the call and now is on board (and I
have direct contact with the dude), but man, I wanted to talk to that dude a
month ago....

------
AznHisoka
It sounds like they stumbled upon a great idea, built it quickly and then
slowed down. But that is natural when your team and product grows. There is
nothing to blame.

Also claiming you believe you lost out on a billion dollar opportunity is a
bit egotistical to say. Its the same attitude that makes one say you know
better than your customers/competitors and dont need no validation for your
ideas.

~~~
adventured
> Also claiming you believe you lost out on a billion dollar opportunity is a
> bit egotistical to say.

It's the failure brag. Pretty common ego saving device in the start-up world.
The first rule of a failure brag, is to make it really over the top. Something
like:

It was a trillion dollar opportunity. We were the first to invent [thing that
wasn't very important]. We could have easily smited every one of our
competitors, all we had to do is this one thing and poof, weaklings destroyed.
I merely needed to wave my hand at them, and I forgot to wave. That's how
powerful my wave is. Did I mention we invented [thing that wasn't very
important]? It changed the world, a world that was ours to own.

------
zarriak
If your head of product would rather write an internal memo addressed to the
entire company instead of coming to you and telling you to shut up you have to
wonder how you assume you could ever get to a billion dollars.

"I myself didn’t know what to do and which inputs to pay attention to. After
months of this and because of the memo, I found out that this was exactly how
the team felt too."

Can someone explain this to me? I genuinely don't understand this attitude. I
mean maybe a week of introspection and pondering is acceptable, but months?

At no point does it seem he truly understands that his leadership failed
completely. The only thing he tells you is "I’ve learned that the key to
driving growth on product is to create product processes that produce
repeatable wins."

This dude literally was so bad at management he tanked what he considered to
be a billion dollar company and doesn't even admit to it after the fact?

~~~
duxup
I think he does say his lack of leadership failed, but like his description of
the company it is a bit unfocused and all over the map.

~~~
zarriak
It just seems odd when he is one of the people who founded this blog it is
posted on. I'm sure he has great stories to tell and things in hindsight do
seem more clear even if I find it odd in the first place. Like you said it is
unfocused and that disappoints me when this is his own blog.

I'd really like to hear the story of what running a startup is like when your
main competitor is Google.

~~~
pm90
Its seems bad writing. Good writing is quite hard actually, and he may not
have even realized that what he wrote is unfocused or may not really convey
what he wants to convey. That's the charitable interpretation.

The not so charitable interpretation, which to me seems likely, is that he's
using this "blog" as part of a campaign to create a new identity for himself,
the "almost-billionare startup founder", who has great stories to tell and
advice to give so can you please hire him on your company board because he's
so well known in the community right?

He also seems to suffer from a profound lack of the ability to listen.
Literally all the issues seem to be one of him being unable to comprehend
reality because he's not listening to the customers,or to the industry trends;
he's focused only on creating some mythical product which will be so amazing.
Every little success he has buttresses his idea of himself as a visionary, but
after that instead of continuing with the good ideas, he goes off on a tangent
trying to fulfill this myth.

------
m0zg
Yep. I'm consulting for a company that has this ailment. Everyone is trying to
do 10 things at the same time, none of them matter worth a damn, and they're
failing at it. Everyone is overworked and demoralized, revenues slipping, the
company is not building product equity, just trying to churn butter out of
bullshit by thrashing wildly.

Worse yet, I'm not in a position to tell them they need to change, so I take
their money and do what they ask me to do, even though I know full well it's
basically a waste of time and resources for them.

~~~
pm90
How does an organization like that continue to exist in today's competitive
environment? i.e. won't they lose clients and business to competitors that are
cheaper and more nimble?

~~~
m0zg
Hot field, lots of froth, clueless investors.

------
puranjay
KISSMetrics was the poster child for a lot of people on the SaaS marketing
front. Their content marketing game was the best in the business and they
tested landing pages aggressively.

But I guess there was a mismatch between the product and the marketing

~~~
jgalt212
Yes, very slick. We almost went with them, but this was around the time their
evercookie was exposed. After that, we went with GA and Mixpanel.

[https://www.wired.com/2012/10/kissmetrics-
tracking/](https://www.wired.com/2012/10/kissmetrics-tracking/)

[https://news.ycombinator.com/item?id=2824318](https://news.ycombinator.com/item?id=2824318)

[https://news.ycombinator.com/item?id=4696441](https://news.ycombinator.com/item?id=4696441)

------
cialowicz
It took me a while to figure it out, but a "Hiten Bomb" is a reference to the
name of the founder of KISSMetrics, Hiten Shah. Oddly enough this website
doesn't have a by-line to indicate who the author is.

------
testmasterflex
Tbh it sounds like he never understood his customers. He should work on a
product he is the customer of instead of looking at competition and worry
about their features.

~~~
JamesBarney
Or just spent more time taking to customers and less time innovating.

~~~
inetknght
Spending more time talking to customers is usually good. But at the end of the
day, talking to customers isn't a sure way to understand their needs.

~~~
omarchowdhury
Giving a customer a base product and understanding their needs _in practice_
is the way to go.

------
no1youknowz
What happened to kissmetrics.com? On their twitter they claim to have sold it
to neilpatel.com.

Instead it's now kissmetricshq.com. Also there doesn't seem to be a way to get
new customers. Looks like they only service old ones?

Did they secede from the market entirely? And this guy is offering coaching
the kissmetrics way? Amazing...

Their twitter is also all over the place, lots of retweets and content from
other SaaS providers, looks like they are shilling based on whatever
reputation is left on the brand.

Starting to get the idea why they went under as that's what it looks like from
an observer.

~~~
jumpbug
[https://neilpatel.com/blog/buying-
websites/](https://neilpatel.com/blog/buying-websites/) Looks like this link
explains it a bit. Neil Patel bought the blog for 500k

------
gorkemcetin
Now I understand the reason behind why Kissmetrics died: egoism and not
listening to customers. It is the same way this article is written with such a
headline.

------
StavrosK
I remember when KISSmetrics was much better than MixPanel, they really were
fantastic. It's too bad that they squandered the opportunity, they were the
best by some margin.

Great article, thanks for posting it!

~~~
Aeolun
They were also _way_ more expensive.

We used Kiss for a while, but Mixpanel was free for the same volume and just
as good if not better.

------
yesimahuman
I found this post really curious because he points to some competitors that
have _also_ been out-competed, but neglects to mention that and seems to act
like they just beat KM and it was game over. Also uses funding raised as a
proxy for success which I know he knows does not tell the full story.

However, there was something in here that I think a lot of companies struggle
with: how do you keep evolving when you start to calcify around a product and
use case, without throwing the company into disarray? Tech markets are brutal
and the competing need to stay the course but also continuously evolve and
even reinvent yourself is really hard to navigate for all but the most obvious
of rocket ship companies.

~~~
KaoruAoiShiho
Who has outcompeted mixpanel and heap?

------
gesman
I can see that most of the examples presented here is a various flavor of a
typical mistake:

Building "solution that is looking for a problem".

------
eruci
A solution seeking a problem has little chance of becoming a billion dollar
solution.

~~~
m1sta_
This might look true in retrospect because you'll always be able to point to
the problem that a successful solution solved. Lots of solutions have been
successful after being created with an ambiguous or only just emerging
problem.

------
qwerty456127
Why has this been posted 8 times?

------
thisisit
Sometimes I wonder about what exactly is the line when it comes to listening
to customers or looking at your competitors, for ideas?

As the Hiten Shah puts it he got ideas or Hiten Bombs by watching
_competitors_ , investors, advisers and some which he thought of himself. And
he also notes later in the article, they saw Mixpanel doing mobile apps, they
saw the freemium option etc. So, the feature generation process was correct.

What went wrong was Kissmetric's estimation of the success of different ideas.
They decided to pass on building mobile apps or giving freemium because they
thought it would cost them too much. The question is - What kind of intuition
was at play to make those decisions? IMO there aren't many ways to intuitively
know when something will work or not.

------
kreetx
An interesting read!

Who is the author?

~~~
tqkxzugoaupvwqr
As implied in the article, Hiten Shah from KISSmetrics.
[https://hitenism.com/](https://hitenism.com/)

~~~
bmmayer1
It's implied, but this site doesn't have a byline on posts, or a publication
date. It's very annoying.

------
mathgenius
Ugh. I've worked for, and with, people like this. Never again. It's clear from
this article that he still has no idea why he "failed". Apparently his failure
was too many ideas, and yet later on in the article he says they failed
because execution slowed. Finally he admits it was magic lost, ie. he has no
idea.

The best solution he comes up with amounts to better planning and "Decide
where to focus limited resources." Duh.

This guy is ernest, but clueless. If you meet someone like this, run for the
hills. They should not be in charge of anything apart from the excel
spreadsheet in front of them.

~~~
Redoubts
“”” I divide my officers into four groups. There are clever, diligent, stupid,
and lazy officers. Usually two characteristics are combined. Some are clever
and diligent -- their place is the General Staff. The next lot are stupid and
lazy -- they make up 90 percent of every army and are suited to routine
duties. Anyone who is both clever and lazy is qualified for the highest
leadership duties, because he possesses the intellectual clarity and the
composure necessary for difficult decisions. One must beware of anyone who is
stupid and diligent -- he must not be entrusted with any responsibility
because he will always cause only mischief. “””

~~~
loap
This is true except for the "clever and lazy" part. In reality this should be
"intelligent but with no skills, let more accomplished people do the work but
take the credit".

~~~
siidooloo
Someone has a job that makes them push a button every 5 minutes. They write a
script so they never have to push a butten again. That person is clever and
lazy. That is who you want.

~~~
alexanderdmitri
I would say that person is clever and resourceful. Usually the task is still
manual because of potential gotchas and you'll need a diligent approach to
automation to take those into account.

Most lazy people I know will stick to manual action rather than take the time
to script it out, mostly due to that initial overhead or having to potentially
iterate on the logic due to future unknowns.

~~~
rossenberg79
No, that would be stupid and lazy. The cumulative effort of pushing the button
is far more than the initial overhead and they just can’t realize that because
they are too stupid.

------
earenndil
I thought based on the title that this was about
null—[https://www.infoq.com/presentations/Null-References-The-
Bill...](https://www.infoq.com/presentations/Null-References-The-Billion-
Dollar-Mistake-Tony-Hoare)

