Pareto Principle for Product Success

 

80-20

 

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!

Advertisements

2 Sided Drums & 2 Sided Product Innovation Model

 

Mridangam2

 

In South Indian Classical music (i.e. Carnatic style), Mridangam is the primary percussion instrument used to keep the rhythm. It’s a 2 sided asymmetrical drum made of a single block of hollowed jackfruit wood with the sides covered with goatskin membranes. One side of the drum has a larger opening that produces lower pitch bass sounds while the narrower side opening produces higher pitch treble sounds.

A masterful Mridangam player uses a combination of fingers & palm to play the notes – on one side or the other. But, when both ends are played, you hear a beautifully balanced rhythm of bass and treble sounds.

What’s playing a 2 sided Mridangam got anything to do with 2 sided Product Innovation Model?

A lot.

Typically product teams use feedback from different sources (customers, user research, sales & marketing, analysts, customer care, competition, etc.) to drive their innovation and roadmap. To me, that’s playing one side of the drum – delivering what’s being asked.

What about the unspoken customer needs (that can be addressed by applying a technology) – the other side of the drum? Are there any unspoken customer needs that can be fulfilled by bringing to bear technology enablers? Can the user experience be improved & refined above and beyond what users ask for?

 

Here are a few examples of such technology enablers:

 

  • Twilio: What if you had a SaaS platform that provides you an easy way of sending & receiving SMS/calls as a part of your product user experience? From within your product, can users quickly text themselves names, phone numbers, urls, pictures, etc.?

 

  • Zapier: What if you had a service that lets you stitch and automate workflows  between your product and commonly used services like gmail, google sheets, slack, twitter, facebook, etc.? Does the free flow of information across your product & other services make it easy for your users to consume your product functionality?

 

  • UserVoice: Every product team has one or more channels (email, web forms, etc.) to collect user feedback. What if the feedback volume is large? What if you had a structured feedback platform where your users can add ideas, vote on existing ideas etc. Check out Microsoft’s skypefeedback.com that uses UserVoice platform to manage its feedback loop for the Skype product. Can such a platform enable you to better manage your feedback loop and roadmap prioritization?

 

These are a few examples where the innovation conversation begins with a technology (and not a customer need) and teams figure out a way to meaningfully use that technology to solve a problem or improve a product experience – i.e. playing the drum from the other end.

So, how do you drive technology driven innovation to complement the customer need driven innovation? Here are a few ideas that worked for me:

 

  • Imitate & Improve: When you use different products, services, apps & websites as you go about your life, pay close attention to details. You will see examples of how different technologies are used to enable & improve user experiences. You could think about how to do the same in your products. Heck, I even get ideas from spam emails that land in my inbox! This is a very common innovation model in the tech industry – giants like Apple, Microsoft, Google, Facebook, Samsung, Uber, Lyft, Snapchat etc. often borrow ideas from each other.

 

  • Trade Shows: These are good places to learn about new & interesting technologies that can spark ideas on how you could use them.

 

  • Platform/SDK Capabilities: This is arguably the nerdiest model for driving innovation. Most products are developed using an underlying OS/platform/SDK. These platforms come with SDK documentation outlining the capabilities. Developers are usually the ones that read such documentation when coding – and that can spark a few ideas. Recently my Android product team stumbled upon the Places API for Android. They came up with an idea of using this Places API to make it easy for the user to quickly search for a place and use its address to automatically fill the address fields in a form. This improved the user experience of filling a form in a certain part of our product flow! This is a classic example of technology driven innovation rather than a customer need driven innovation.

 

Summary: The end goal of every product team is to address customer needs, improve product experiences and drive KPI. To do that, driving product roadmaps using technology driven innovation to complement customer need driven innovation can lead to well-rounded product experiences!

 

 

Building Products & Saying NO

 

Learn to say NO to the good and the advantageous, in order to receive the best!

― Sunday Adelaja

SayNo

If your Product Management team is responsible for building products, features/ideas get thrown at you – by your product team members, sales/marketing/support groups, competitive analysts, customers, partners, executives, etc. On one hand, you have the responsibility to ship a well-rounded and a well-balanced product that serves the needs of your customers. On the other hand, you have the wish list fire-hose pointed at you.

Arguably the toughest decision a Product Management team makes is – what features to include and what features to exclude. What do you build now and what do you postpone? If the goal is to offer a well-rounded product experience to your customers, I would argue that what you say NO to is more important than what you say YES to.

Rather than making ad-hoc YES/NO or NOW/LATER decisions, here is an objective framework that mitigates the subjectivity in this decision-making process using 6 vectors of evaluation:

1. Revenue/business Driver (or not): I don’t think this needs much explanation.

2. Utility Value & Breadth of Impact: This one is fairly straightforward. For the feature in question, ask yourself (from a customer perspective) 2 questions – (1) how useful is this feature (2) what % of my user-base will find this genuinely useful. Where possible use data to support your decisions – e.g. you could analyze your Google Analytics stats to understand how often a similar feature is being used in your existing product. These questions will help you weed out “pet projects” or cool sounding features that have little or no utility in real world.

3. Table Stakes: In late 90’s, much before Bluetooth and USB became popular, some computers offered IR (infrared) ports so that devices like PDAs could wirelessly connect to computers. In reality, these IR ports were rarely ever used. However, because an IR port was a common requirement in the corporate purchase checklist, most laptop manufacturers would include the IR port in their corporate class laptops even though they were rarely ever used – i.e. the IR port became table-stakes in the corporate laptop market.

Another contemporary example is the phablet product.When Samsung launched their Note phablet in 2011, it became a runaway success. Apple on the other hand, stayed away from phablets given Steve Jobs’ disdain for the large devices. Samsung Note was capturing so much market share (especially in Asia), after 3 years of resisting, Apple capitulated and launched their iPhone 6 Plus phablet in 2014 – they needed a phablet in the product lineup to stay competitive.

In your market, is the feature under consideration table-stakes based on customer requirements or competitive positioning? If so, you may no choice but to offer that feature sooner or later.

4. Basic VS Advanced: A few months ago I upgraded my audio receiver to a Sony DN1050 – I needed a receiver with AirPlay support. The DN1050 is a pretty sophisticated receiver that supports AirPlay, NFC, multiple zones, 4K scaling, Bluetooth, Wifi, DLNA, Pandora, Spotify, etc. BUT… it only supports 2.4Ghz wifi – no cigar with 5Ghz wifi support. Arrrgh. Why would a world class company like Sony build a sophisticated $600 consumer electronics product that relies on wifi and yet exclude 5Ghz support. My $50 Echo Dot supports 5Ghz!

This is a classic example of a somewhat disjointed product that supports sophisticated features and yet misses the basics (5Ghz wifi channel support) – that’s a head scratcher.

When building products, it’s important to cover the basics before you start considering advanced/complex features. This is a fairly simple principle and yet it eludes so many products!

5. ROI (effort vs benefit): Every so often you come across a feature that sounds useful – but expensive to build (in terms of time & resources). If that feature is applicable broadly, benefits a wide swath of your user-base, or gives your product a strategic edge, it may warrant making that investment. Otherwise punt it for later!

6. Strategic Importance: When Apple launched Siri in 2011, it was labeled as a beta. As far as I know that was the first time Apple released a feature labeled as beta (while embedded within a mainstream product) to general public. Apple knew that Siri was not fully ready for prime-time and yet they released it early on because of its strategic importance. By releasing it early and collecting anonymized voice samples, Apple was able to iterate and improve Siri over time. Now Siri is an integral part of their iOS, macOS, watchOS and tvOS.

Summary: For every feature/capability on the product roadmap, it’s important for Product Management teams to consciously deliberate on the YES/NO decision based on objective criteria that suit your needs (market requirements, competitive situation, strategic importance, product maturity stage, etc.). Without this deliberation, if every idea gets a YES rubber-stamp, products runs the risk of becoming a disjointed mishmash that could earn your customers wrath!

Partnerships, Product Launches & Pain Management

 

We must all suffer one of two things – the pain of discipline or the pain of regret & disappointment!

– Jim Rohn

 

partnership

 

Technology companies launch products/services using their own technology/IP. Occasionally, such products/services are launched based on a partnership between 2 (or more) companies. The nature of the partnership can vary – a partner relationship where both company names are visible (e.g. Powered By) or a white label relationship where only one company’s name is visible.

Partnerships are explored and established typically at C level with involvement from business development, finance, legal, product & engineering. Agreements are inked to settle details such as revenue share, IP ownership, product development, legal liability, customer support, marketing, etc. More often than not, deals are painted in broad strokes (and a generous measure of good faith) while the finer points are left for the product teams to figure out along the way.

Launching well rounded products is hard enough. Launching a product hinged on collaboration across two different companies and teams, the complexity & pain increases threefold because of the challenges involved around less transparency, less control, varied priorities, cultural differences, etc. This blog post attempts to put a framework around what it takes to develop & launch partnership based products/services while minimizing the pain along the way – a useful structure for product teams to ship a well-rounded product.

 

  • Functionality Brief: This is arguably the most important first step. After the deal is signed, Product Heads on both ends should work together a produce a “Functionality Brief”- a 1-2 page document (or a couple of slides) that broadly lists ALL features/functionalities that the partnership intends to deliver. It’s a simple document with one bullet per product functionality. The intent of this brief document is to broadly establish the complete scope of the deliverable – not a long MRD/PRD. The brevity of this document allows the team to see the “forest” without getting lost in the “weeds” of BRDs/MRDs/requirements.

 

  • Meeting of the Minds: While some amount of technology due diligence may have happened during the initial stages of partnership discussions, those discussions usually tend to be guarded. Now that the deal has been established, it’s time to open up the kimono and get down to brass tacks. It’s time to get the architects, subject matter experts and a couple of key engineers from both sides into a room to start whiteboard discussions on what it takes weave technologies from both ends.This sort of meeting MUST to be face to face – conference calls over Webex isn’t going to cut it. In my experience, this event works best when it happens over 2-3 contiguous days. The first day is usually spent with team members knowing each other and getting familiar with technologies on both ends. After the ice-breaker dinner & drinks together on the first night, rapport gets established & the discussions and white-boarding sessions are a lot more lucid and productive on days 2 & 3. By the end of day 2/3, product teams on both ends usually have a pretty good sense of the technology alignment and pitfalls if any.

 

  • Proof of Concept: Depending on the nature of the project & complexity, before beginning full scale product development/integration, it might be useful to do a proof of concept project. Any toxic asbestos or technology incompatibility is best discovered sooner than later.

 

  • Cross Functional Team, Roles & Responsibilities: Once a broad alignment of products/technologies has been established, it’s time to bring in the usual suspects to get the project going  – product management, engineering, QA, project management, analysts, etc. and assign clear roles & responsibilities. While BRDs, MRDs, PRDs, requirements, design documents, specs, etc. are useful to manage the execution within each function, the Functionality Brief that was developed as a first step keeps the team on the same page with regards to overall deliverable.

 

  • Customer Support: This item usually gets under estimated & ignored until much later. If company A has to provide support for pieces of product/technology from company B, it takes a non-trivial amount time and energy to get the customer support people trained. If the company A is a large global company with footprint in AMER/APAC/EMEA, the complexity gets further compounded. It’s best to involve the customer support team early on so that they can plan for training, documentation, escalation paths, etc.

 

  • DL for Communication: Create an email DL (distribution list) with members on both sides of the fence – makes it easy for everybody to communicate important details across both teams. While this may seem like a trivial tactical detail, without a DL, you can be sure that some members of the team will be dropped inadvertently on important communication and that creates a different dimension of pain (confusion, transparency, trust, etc.)!

 

  • Strong Program Manager: Given that there are 2 companies and 2 teams involved, its best to have a “stronger & savvier than usual” Program/Project manager who can deftly herd the cats while managing the scope, schedule, risks and resources.

 

  • Executive Sponsors: As product development/integration progresses, issues occasionally come up that require escalation & decision making at higher levels. Identifying executive sponsors on both ends upfront makes it easy to resolve the issues as they come up. Pick a sponsor that has the title/authority to make decisions, bandwidth to handle issues as they crop up and a temperament to work cooperatively with an external partner to resolve conflicts.

 

Delivering well rounded products based on partnerships can be painful but the above framework makes for a useful pain management!

 

Balancing Trains and Product Roadmaps

 

Balance to life is kale shakes and cupcakes!

– Unknown

 

Product Train

 

Founded in 1853, the state owned Indian Railways has one of the largest railway networks in the world. With over 71,000 miles of track spanning 7000+ stations carrying over 8.3 billion passengers annually, it employs over 1.3 million people. Indian Railways generates about 70% of the revenue from freight traffic while the remaining 30% comes from passenger traffic.

Given the socialistic background of the Indian government, freight business profits are used to subsidize the passenger ticket prices so that a common man can travel very inexpensively. You could travel by train from Mumbai to New Delhi (about 900 miles) for a super low price of around $10! To enable such a low price travel, Indian Railways has to balance many variables such as freight-versus-passenger traffic, frequency, route planning, staffing levels, passenger convenience, amenities, capital expenditure, service quality, safety, etc.

In many ways, balancing train operations is very similar to balancing product roadmaps. And yet, if you look around, you will find plenty of examples of technology products (especially from big companies) that are a bit of a train wreck – uninspiring, buggy, unintuitive, slow, clunky to use, etc.

 

Why is that?

Unbalanced Product Roadmaps!

 

As companies get bigger, there is a pressure on product teams to prioritize items that have a direct ROI. While that intent is noble, it typically results in a situation where new features/functionalities are given much higher importance. Every subsequent release gets stuffed with more and more bells & whistles to appease external customers & internal stakeholders (sales, marketing, execs, etc.) and also because it’s easier to justify ROI with new features.

With this intense focus on new features & functionality, 2 things usually get the step-child treatment:

 

  1. Infrastructure Improvements: Every technology product has frontend/backend infrastructure like databases, middleware, messaging, caches, security framework, identity management, UX frameworks, analytics, test automation, etc. Keeping this infrastructure humming takes a non-trivial effort on an ongoing basis. And yet, such infrastructure improvements typically take a back seat because improving/maintaining it is not as sexy as product bells & whistles.
  2. Refinements: This is polishing the product to a shine – bug fixes, performance improvements, UI/functionality tweaks, usability improvements, etc. It’s the little details that elevate the product experience. Again, this area typically doesn’t get much love.

 

Over a period of time, as the products get stuffed with more and more bells and whistles with little attention to Infrastructure Improvements and Refinements, the product becomes clunky. Technology industry even invented a term “technical debt” to describe this. It’s a fancy way of saying “we didn’t do stuff that we should have and we kicked the can down the road”.

 

What’s the mantra to prevent that?

Balanced Roadmaps!

 

When planning product roadmaps, management should mandate product teams to present a balanced roadmap. Every product release should offer a balance of Features and Functionalities, Infrastructure Improvements & Refinements:

 

Balanced Product Roadmap

 

Typically, I guide my teams to allocate about 60% of the bandwidth to Features and Functionalities, 20% to Infrastructure Improvements & the remaining 20% to Refinements. While this allocation can vary, in the long term, this structure allows product teams to deliver solid well-rounded products in a disciplined manner without incurring “technical debt”!

Methodically Ignoring Your Customers, Again?

Customers are like teeth. Ignore them and they’ll go away!

– Jerry Flanagan

 

Ignored Customer

 

You read that right! Many medium/large sized companies in Corporate America have processes that methodically (but unintentionally) ignore the customer – especially in the software technology space. Here is what I mean…

Consider a medium/large sized company Acme Corporation that is in the technology business (my domain). When the product teams (comprised of Product Managers, Eng, QA, UX, Marketing, etc.) plan the next big version of the product, they seek input from key stakeholders. Sales teams provide feedback on new features/functionality that lets them close more deals. Customer Support provides input to improve product quality & reduce support contact thereby bringing cost savings. Marketing provides competitive information and other inputs to better position the product against competition. Different stakeholders provide inputs that impact their groups. So what’s missing?

What about your existing loyal customers who religiously use your product/service’s existing functionality? These loyal customers are your bread and butter. Chances are, they are being methodically ignored during every product cycle – here’s how:

When existing customers or prospects request new features that are deemed “major”, such requests are usually acted upon. If customers complain about egregious problems, they get fixed. What about problems that are “minor” inefficiencies, irritations or improvements? Often customers don’t proactively complain about what they see as “little issues”. Even if they complain, often that feedback gets lost in the process because those issues are prioritized as “minor” and get ignored. Over a period of quarters and years, these “minor” product issues accumulate and the end result is a product that’s heading towards mediocrity.

Why does this happen?

Engineers want to work on cool new stuff. Product teams are pressured into working on items that affect the sales top line or cost savings bottom line. Items that make the teams look good in QBRs (quarterly business reviews) get a higher priority. Egregious problems do get fixed, while the “minor” issues/irritations/improvements often get ignored. As a result, without the product teams realizing, the product gradually creeps towards mediocrity.

Don’t believe what I am saying? Take a look at your company’s HR, Procurement, Contract, Inventory, Quoting, Payroll, Legal or such similar software. Barring an exception or two, chances as, these products have mediocre user experiences (clunky, un-intuitive, hard to use, missing functionality, etc.).

How to avoid this march to mediocrity?

There’s at least 3 ways to monitor & address this.

  1. Measure Customer Satisfaction: Senior Management needs to actively drive the exercise of bi-annual (or annual) customer satisfaction measurement. NPS (Net Promoter Score) is an industry standard methodology of measuring how likely your customers are to refer your product/service to others. NPS is a direct reflection of customer satisfaction. Management needs to measure NPS (or an equivalent metric) on an ongoing basis and make this score a part of the KPI (key performance indicator). This gives an incentive to product teams to pro-actively address the minor issues.
  2. User Research: Most companies under invest in user research – read more on this here. When user research investments & activities are increased, product/service niggles are uncovered that can be then proactively addressed by the product teams.
  3. Dedicate Bandwidth: Product teams should dedicate a non-trivial percentage of engineering bandwidth (e.g. 10% – 20%) and use this bandwidth to exclusively focus on improving existing product functionality (not new functionality). This forces product teams to proactively address  “minor” issues & details that often get swept under the rug. Click here to read more on the topic of little details.

 

None of this is rocket science. It’s a matter of Management and Product Teams deliberately setting priorities and allocating investments & resources to make sure that customers and products experiences are not getting ignored!

 

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

 

FinancialEng

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!