Pareto Principle for Product Success




In late 1800’s an Italian economist named Vilfredo Pareto observed that 80% of Italy’s land was owned by about 20% of its population – the elite of the day. This concentration characterized by 80/20 distribution has now become the famous Pareto Principle (aka the 80/20 thumb rule). This 80/20 rule manifests itself in many areas of our day to day life. Some examples – for many non-fiction books, 80% of the main content is captured within the 20% of the pages, the rest is repetitive. For many companies, 80% of their sales income comes from 20% of their clients. In industrial environments, 20% of the hazards lead to 80% of the injuries.

Interestingly, this 80/20 rule can be used effectively to drive the strategy, execution & decision making when managing technology products & teams.


Product Market Fit: Most startups (& even established companies with emerging products) struggle for a while before they find their “market-fit” – i.e. they try pitching their product/service/technology in a variety of industries, verticals, use cases, price points, geographies etc. The lucky ones find the market-fit before the funding dries up and the no-so-lucky ones go belly up without ever discovering the market-fit.

It’s important to have a Go-To-Market strategy & target segmentation based on the attributes of your product/service. At the same time, during the discovery phase, it’s important to experiment & pitch your product for a variety of use cases – some of which should be outside your original target segment. If you are lucky, for every 10 attempts you make, you may find some semblance of market-fit in 1 or 2 cases (i.e. the 20% rule). VMware is well known for its virtualization technology. However, in the early days of VMware, they had to struggle for a long time to find the market-fit until their product landed in the hands of system administrators who were responsible for managing servers – the rest is history. To hear more about VMware’s early struggles, hear this interesting podcast interview with Diane Green (co-founder & former CEO of VMware)…


Product Usage: A typical technology product (software or hardware) contains many bells & whistles. My experience is (some anecdotal and some data-driven), most users (80%?) use a very small set (20%?) of the available features/capabilities on a daily basis. This provides a fantastic opportunity for product teams to derive amplified gains with minimal effort – identify the most used 20% feature-set and polish them to perfection leading to remarkable results! If your 20% feature set offers the best user experience possible, your users will love your product and think thrice before considering alternatives!


KPI’s: Product teams typically use metrics/OKRs/KPIs to measure & drive outcomes. These KPIs can take various forms like users, usage, transactions, customer satisfaction, NPS, repeat usage, DAU, MAU, geographical distribution, platform distribution, customer distribution, industry distribution etc. Depending on who you speak to within the company, the metrics list can be endless and it’s not practical to monitor and review all the metrics. A more practical approach to success would be to identify the top few metrics (the 20%) and drive those with a maniacal focus! Having fewer KPIs to monitor makes it easier for product teams to focus on those KPIs and drive the catalysts that grow those KPIs.


Key People in a Team: A typical product team (or a sub-team) consists of 6-8 people. If you are lucky, there is 1 person (i.e. 20%) who is a head-and-shoulder above the others on the team. If you are super-fantabulously lucky, you land a 10x person on your team. These are the people who can solve the prickliest of the problems or come up with ingenious ideas that take your product from mediocrity to superiority. Identify such key people and make sure that they are taken care of in every respect (i.e. compensation, assigning them non-mundane projects, protection from politics, etc.).


Innovation: Venture Capital companies are in the business of investing in innovative startups with the hope that they go IPO or get acquired. The reality is, for every 10 companies the VC’s invest in, about 2 of them find some success while the rest flop. Google is known as one of the most innovative companies with a string of “successful” products such as Search, Maps, Gmail, Chrome, Android, YouTube, Android etc. The reality is, 84% of Google’s revenue comes from its advertising initiative – the 80/20 rule at play again! Even successful companies like Google have to chase a variety of innovations before they can find a “hit”. What this means for corporates is, to drive innovation, you must have the willingness to stomach 8 or 9 losses before they can hit 1 or 2 successful products. Without this willingness to invest in losses, innovation cannot happen!


Use the 80/20 to find yourself 100% success!


Email is Dead! Really?


Email is the Jason Bourne of online – somebody’s always trying to kill it. It can’t be done!




Email Tombstone



Not a week goes by without somebody at work throwing up hands that “email is useless”. Same thing with tech rags/sites/blogs proclaiming that email is dead. An occasional news story about a company that has completely banned email only adds to the hyperbole!

Every time I hear that, I’m thinking “BS!! Have you tried working without email for a week?

Don’t get me wrong. I love using IM, Lync, Hipchat, Webex, BlueJeans, Skype, Slack, Sharepoint, Wiki,  Confluence, DropBox  & any other tool-du-jour! Heck, I love meeting people face to face and even phone calls. But, I haven’t yet seen anything that’s as effective & well-rounded as email.

Don’t believe me?

Asynchronous: I can send emails during work hours or after dinner when the family has dozed off. Try doing that with other communication channels!

Thoughtful Communication: Without email ever tried to communicate a detailed strategy or proposal that requires long explanation, backup documents & spreadsheets?

External Communication: Tried working with people outside your group/function without using email? How about working with people outside your company (e.g. partners & customers)?

Cross Geography & Time Zones: Without using email try working with people in Stockholm or Bangalore while you are sitting here in California!

Meetings/Calendaring: Try setting up an hour long meeting with a handful of people without using email/calendaring!

Universal: Whether its work, family, friends, kids’ school or Amazon/Netflix/eTrade sending you notifications, email is a universal platform for communication.

Traveling: Some of my best productive moments happen when I am fly cross continent over to Europe or Asia. Without internet or interruptions, it’s a great time to catch-up on email, read analyst reports, absorb strategy decks, etc. By the time I land at the destination, I’m a whole lot wiser. Try doing all that without using an email product (e.g. Outlook) that syncs emails onto your laptop for offline use.

I rest my case!


Bottom-line: Can you reduce email? Are there better channels of communication than email for certain situations? Can the email experience be improved? Yes, yes & yes. Can you eliminate email in corporate? I won’t bet on that – I haven’t yet seen a realistic alternative that’s anywhere close to email!


It’s no wonder that email is the killer app of this century!!



Silicon Valley Engineering VS Wall Street Engineering

I think one problem we’ve had is that people who are smart, creative and innovative as engineers went into financial engineering.

– Walter Isaacson



What do Citrix & Yahoo have in common? Along those same lines, what do Facebook and Google have in common?

These companies typify the battle that’s brewing between Silicon Valley Technology Engineering & Wall Street Financial Engineering!

Since the early days of Silicon Valley with Shockley Semiconductor, Fairchild Semiconductor and Intel, our tech industry has been intertwined with venture capitalists & wall street. Technology companies need access to cash to fund the engineering efforts. VC’s are only too happy to supply the funds in hope of future payoffs. When that payoff happens in the form of an IPO, Wall Street too gets their pound of flesh. Over the years, asset management companies, LBO specialists, investment bankers, hedge funds & private equity funds too got involved in the game by investing in private & public companies, taking the public companies private, buybacks, special dividends, divestitures, spin-offs, mergers, etc. – quite a financial engineering bouquet.

In the recent years, beyond writing investment checks, some of these funds have been taking a more aggressive stance in dealing with the tech companies that they have invested in. Initially, they try to work behind the scenes with the company’s management team to drive the changes they seek. If that doesn’t work, they lobby & fight publicly (open letters to management, proxy wars, board room battles, lawsuits, etc.) to drive changes – hence the term “activist investors”.

Yahoo: Yahoo has been going through a turmoil in the recent years – revenue/profit drops, lack-luster product strategy, non-performing acquisitions & “acquihiring”, losing market share, talent exodus, competing with Google, Facebook & Microsoft, etc. Clearly, the investors who plunked money into Yahoo aren’t too thrilled. Hedge fund investors like Starboard Value are openly pushing for major changes such as selling Yahoo’s core business, layoff employees, replace executive management, etc.

Citrix: Meanwhile, Citrix has been facing its own share of pressure from its activist investor Elliott Management. Driven by Elliott, Citrix has been divesting product lines, spinning out its GoTo products, laying off employees, etc.

These moves on the part of activist investors are designed to improve the company’s stock value & EBITDA multiples in the short term – leading to a higher ROI for the investors. However, these activist investors are probably not thinking about the long term impact on the company, employees, product strategy, synergies, customers and partners. These investors have a single minded drive of improving short term ROI and nothing but ROI – and it’s hard to fault them because that’s how the Wall Street gets compensated.

So, how are companies supposed to protect themselves from these short term ROI driven investors? How do they control their destiny?

Turns out, Facebook and Google have figured that out!

Facebook: Facebook instituted a dual-class stock structure years before the IPO – class A & class B shares where class B shares carry ten votes per share while class A shares carry one vote per share. Mark Zuckerberg owns class B shares while the rest of the mere-mortals gets class A shares. As of few months ago, Zuckerberg controls 55% of the voting power even though his share ownership is much lower. What this means is – Zuckerberg and his team have absolute control over the company strategy & direction. Investors and Funds have no ability to hold the gun to Zuckerberg’s head or do any financial engineering to drive short term ROI!

Google: Google being Google (aka Alphabet), takes this strategy one step ahead of Facebook. Google has a three class share structure – classes A, B & C. Class A shares (ticker:GOOGL) get one vote per share, class B shares get 10 votes per share while class C (ticker:GOOG) shareholders get zilch/zero/nada votes per share. Class B shares (with 10 votes per share) are owned by Larry Page, Sergey Brin, Eric Schmidt and a few other insiders. This structure puts Google’s reins firmly in the hands of the management team without any form of activist investor interference. This absolute control also makes it easier for Google to spend billions of dollars on the moonshot projects without having to worry about the second guessing investors!

While its reassuring to know that the likes of Mark Zuckerberg, Larry Page, Sergey Brin & Eric Schmidt have absolute control over their company’s destiny, over the long term, only time will tell whether that’s a good thing or not!


Hire the person that says – “I Don’t Know”

Teach thy tongue to say I do not know and thou shalt progress! 

– Moses ben Maimon (Maimonides)


Over the years, I have interviewed and hired (& sometimes fired) many people – including engineers, product managers, QA, marketers, project managers, senior leaders, etc. Whether it’s a startup or a multinational corporate, hiring is arguably one of the most important decisions for the company.

So, how to hire the right people for the job? How to separate wheat from the chaff? Here are a few things I look for when I interview & hire people:

Domain Knowledge: Whether you are running a refrigerated meat warehouse or building a Cassandra big data warehouse, unless you are hiring fresh grads, you need to hire people who have an understanding of your business, technology involved, industry knowledge, etc. Hiring people with the right domain knowledge mix allows you to build the correct product/service with fewer mistakes & iterations. There is a reason why companies like Apple, Google, Facebook, Netflix, Yahoo, Microsoft, Tesla, etc. pay premium salaries & sign-on bonuses while poaching from each other to get the domain expertise.

Basic Smarts: Don’t think I need to elaborate much on this.

Tenacity & Persistence: Great products/services don’t built in the first iteration – similarly tough problems don’t get solved in the first try. You need to keep going at it until you crack it. I look for evidence in the person’s resume/background that shows that the person has the persistence to keep going even when things get tough.

Details & Execution Strength: As they say, success is 1% inspiration and 99% perspiration. I like people who are willing to sweat the details and focus on execution (aka get stuff done) – I’m not a big fan of people who skim the details. If you don’t dive into details, whatever you deliver will be pedestrian quality that will crumble sooner or later. When Mark Hurd got fired from HP, he immediately got hired by Oracle with a $40 million pay package. Why? Mark had a reputation for detailed analysis and focus on driving results. Read more about my views on attention to details…

Thinking Patterns: I like to understand how the candidate structures his/her thinking on a given topic. To judge this, I sometimes ask candidates to share a non-confidential document/deck that they have authored. This also helps me gauge their communication skills.

Team Composition & Culture: You need to ask the question – how does this new person fit into the overall team composition? People-person vs lone-wolf, tactical do’er vs strategic thinker, leader vs follower, specialist vs generalist, academic vs hustler, etc. End of the day, what you want is a well-balanced and a well-rounded team that gets the job done.

… and now about that rare quality:

I Don’t Know: Professional and Intellectual honesty is one of the most under-rated qualities – it’s also a quality that’s hard-to-detect. Everything else being equal, when I find a smart candidate that says “I don’t know” for a question or a concept, I know I have found an intellectually honest candidate. This also affirms that the candidate is not a glib talker.

Hiring right is more of an art than science – hope you find the Yoda you’re looking for!

Driving Big Impact with Little Details

Little things make big things happen!

– John Wooden

Attention to Detail

Ever wondered what sets apart a 3-star Hilton from a 4-star Hyatt? A 4-star Hyatt from a 5-star Ritz Carlton? End of the day, they are all hotels with similar amenities – beds, bathroom, linen, TV, writing desk, swimming pool, front desk etc. So what gives?

Attention to Little Details!

Among other things, the biggest differences within different levels of hotels are the little details that translate to a more refined customer experience. As you go up the star chain, the attention to detail gets better – the guy behind the desk is better dressed and more helpful, the bed sheet thread count goes up, pillow menu – multiple pillows of varying softness, the room décor & accoutrements are more refined, swimming pool is better maintained, nicer landscaping, parking lots are better paved & lighted, etc.

However, when it comes to the technology world, for a variety of reasons, there is a lot of focus on ROI driven “big bang” features and functionality while refinements and attention to smaller details often take a back seat.

When using products (and driving my teams that build technology products), I tend to pay a lot of attention to little details. Here are a few that I love:

  • Palm Treo (RIP): The Palm platform had its own share of rabid followers until iOS/Android ate its lunch (and dinner). On the Palm Treo when you received a call, there was a little button on the lock screen that let you send a text message “Call you back in 10 mins” with one click of the button. That’s a clever little detail that I always wanted on the iPhone – Apple added this last year in iOS 8.
  • Microsoft Outlook’s Insert Screenshot: A lot of people in corporate world would rather give up their first born than give up Microsoft Outlook on Windows (I am probably in that camp). When writing emails, you often need to add a screenshot to illustrate your point. Outlook’s email compose window has the “Insert > Screenshot” menu to quickly add a screenshot. This is one of those little gems that saves the tedium of “capture screenshot > save image to desktop > attach image to email > delete image file on desktop”.
  • Apple Magic Mouse 2 “Sound”: One can’t talk about attention to detail without an obligatory mention of Apple! Recently Apple released the Magic Mouse 2. With all the changes they made, apparently the mouse didn’t “sound right” when it was moved around on the desk. The engineers had to continuously tweak the bottom polycarbonate runner geometry until the mouse “sounded right”. Read more here…
  • BMW 328i: Cars have 5 to 6 buttons on the dashboard to program your favorite radio station. BMW takes those 6 buttons to the next level with 2 refinements: (1) Those 6 buttons are touch-sensitive – if you lightly touch (not press) any of those buttons, the dashboard display shows the radio station (or action) assigned to that button. (2) You can assign different actions to those 6 buttons – not just radio stations. I programmed the 6th button in my wife’s car to the navigation system’s “Go Home” functionality. When driving in unfamiliar neighborhoods, to head home, all my wife has to do is press the button 6 and the navigation system fires up to head home. This really saves her the distraction of futzing around the multi-level menus when driving. Clever!
  • Google Express: Yesterday I ordered a few items on Google Shopping Express. When they were delivered in the evening around 7:45pm, there was a problem with one item in the batch – the lid for a liquid soap bottle was broken. At 8pm somebody from Google Express called to discuss the issue. Usually delivery services expect the customer to contact the company when there is a problem. In this case, Google Express proactively called me to discuss the issue. To make that happen, Google had to setup a process where the delivery driver notifies the back office about a problem & the backoffice calls the customer immediately (at 8pm) – providing that level of service requires a non-trivial investment of time and resources. Kudos to Google!

So, organizationally (not at an individual level), how to drive attention to detail?

4 things come to my mind:

  1. Resources: You have the ask the tough question – do my teams have the people and resources to deliver attention to detail? Quite often, teams are spread thin – too few people doing too many things – structurally that does not lend itself attention to detail. In order to deliver attention to detail, you need to make sure that people aren’t spread too thin.
  2. Hiring Right: Hire the people with the right background, culture and mindset. Hiring a chef from Taco Bell for a job at Ritz Carlton doesn’t work!
  3. Balanced Roadmaps: As a part of product roadmaps, mandate your team to include refinements that improve user experience with little details. More on that here…
  4. Set the Bar: An expectation & bar needs to be set with regards to attention to detail – AND hold people accountable to that bar. For example – if your product/service doesn’t meet the expected bar, delay the launch. That puts the pressure on the teams to keep working until the bar is met.


Whether its products or services, B2B or B2C, in addition to ROI driven activities, features and capabilities, teams need to invest time & resources to pay close attention to detail. That is how products/services build a strong fan base that resist abandoning your product/service when a competitive product/service with a cheaper price comes along.

No wonder successful companies like Apple, Lexus, Ritz Carlton, Microsoft, etc. consider “attention to detail” a big part of their strategy to deliver great products/services!

Sharpening Axes & Chopping Trees – User Research & Building Products

Give me six hours to chop down a tree and I will spend the first four sharpening the axe. 

– Abraham Lincoln

Why do certain companies like Apple, Netflix, Google, etc. offer compelling product experiences (i.e. software features & functionality, user experience, etc.) while other companies just put out mediocrity? Most technology companies employ similar set of product teams comprised of engineers, QA, product managers, visual designers, etc. So what gives?

Everything else being equal, it’s the investments these companies are willing to make in User Research (not UX, graphic artists or Visual Design, but pure user research)!

Here is a figure that illustrates my observations and experience.

UR Investments

Engineers, product managers, product marketing and visual designers can only do so much with brainstorming, competitive research, market research, reading tea leaves in analytics data, etc. to drive good product experiences. To really elevate good product experiences to great product experiences, what’s needed is a healthy amount of user research.


  • Activity & Fitness tracking in Apple Watch: It’s a common notion to attribute Apple’s success to their stellar marketing. While it’s true that Apple’s marketing is second to none, it’s the product experiences that are central to Apple’s success – marketing just provides lubrication & acceleration for that success. To come up with compelling product experiences, Apple spends massive amounts of time and effort researching users, lifestyles, use case scenarios, etc. and that insight is used to drive the product’s functionalities. To drive the fitness and activity tracking functionality in Apple Watch, Apple invested in a 23,000 sq ft fitness lab and spent 2 years collecting 18,000 hours worth of workout data based on 10,000 sessions. The functionality that you see in Apple Watch today is based on those insights. Regardless of whether Apple Watch succeeds or bombs, its impressive to see Apple put in that kind of effort for just the activity & fitness tracking aspect of their product. More details and a video on this…
  • Moto X Active Display: If you are a Android handset maker, how do you differentiate yourself from other Android handsets that are all powered by Google’s Android? Motorola’s Moto X has a clever feature called Active Display that allows you to see the clock and notifications without turning ON the phone. This power saving Active Display capability came out of user research & observation that people turn ON their phones 40-50 times a day (and drain battery) just to see the clock and notifications. See Punit Soni (ex-VP at Motorola) talk about the user research that led to this innovation…
  • Netflix new redesign: We are all guilty of occasional indulgence in binge watching Breaking Bad, Game of Thrones, House of Cards, etc. In June 2015 we can do more of that when Netflix launches its major redesign in 4 years. This redesign was based on insights obtained by a dozen researchers conducting 1500 interviews in people’s homes to understand how they use Netflix. Netflix also sent out 15 million surveys to get an understanding on what it takes to get people to watch shows. All this user research takes a large amount of effort to eke out further improvements in an area where Netflix already has a monopoly. More details on this…

What happens to products developed without User Research? Products developed without the insights & context of User Research tend to become engineering and feature driven rather than user need driven!

That brings us to the point about axes and trees…

Before chopping a tree, spending hours to sharpen an axe is all about preparation. Similarly, to prepare for & to create compelling product experiences, companies (especially software companies) need to invest more in user research and use that insight to drive the functionalities & user experiences that make (or break) products!

So, how well does your company invest in User Research?