Lessons from Gusto & Square on finding your product wedge | Michael Cieri
Feb 8, 2024
59:08
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Michael Cieri, CPO at Gusto and former Head of Product at Square, shares key product strategies, building for SMBs, pros and cons of vertical SaaS, moving faster in product teams, developing intuition, and impactful individuals at Square.
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Quick takeaways
Starting small and validating ideas through small-scale testing can guide the direction and success of a product.
Implementing both horizontal and vertical strategies based on customer needs is crucial for product development.
A three-horizon framework for resource allocation balances investment in the core product and exploring new opportunities.
Deep dives
Start small and validate the problem
When exploring new product ideas, it is important to start small and validate the problem. This involves breaking down the idea into small, manageable steps or features that can be tested and validated with customers. By starting with a small, focused approach, it allows for easier experimentation and learning, while reducing the risk and resources required for a large-scale launch. This approach was successfully implemented at Square with the introduction of Square Capital, leveraging unique insights into business revenue to provide lending services. This small-scale validation helped guide the direction and success of the product.
Balancing horizontal and vertical strategies
Both Square and Gusto have implemented both horizontal and vertical strategies in their product offerings. While the core jobs and pain points of small businesses are often shared across industries, there are specific nuances and needs that vary between different types of businesses. Square addressed this by creating industry-specific solutions, such as Square for Retail and Square for Restaurants, to address the distinct requirements of businesses in these sectors. Gusto, on the other hand, has focused on building a suite of products to help employers manage their teams effectively. Balancing both horizontal and vertical strategies requires a deep understanding of customer needs and an iterative approach to product development.
Resource allocation and investing in the core and bold bets
Resource allocation is a crucial aspect of product development, involving a balance between investing in the core product and pursuing bold bets or new opportunities. Both Square and Gusto employ a three-horizon framework to guide their resource allocation decisions. The core product receives ongoing investment to enhance its capabilities and meet customer needs. Meanwhile, bold bets and horizon-three opportunities are explored to drive future growth and innovation. For example, Gusto considers different horizons to determine how much to invest in existing products versus exploring new areas, such as email marketing. While there is an element of art and judgment in resource allocation, starting small, validating customer needs, and leveraging data insights can help inform the decision-making process.
Importance of Long-Term Vision and Trade-Offs
Having a clear long-term vision is crucial for planning and making strategic decisions. Although constrained by a three-year timeframe, it is important to think big, explore new concepts, and consider the depth and breadth of the vision. Trade-offs based on business performance and customer pain points may be necessary for shaping the three-year narrative. Examples from Open Door and Gusto illustrate how a compelling vision guides decision-making and allows for innovative solutions to customer needs.
Success Factors for Product Teams
Exceptional product taste, empathetic curiosity, and the ability to make decisions are key traits of successful product individuals. Having a genuine care for customer success and being able to think from their perspective helps develop a deep understanding of their needs. The innate ability to assess opportunities and take risks plays a vital role in product intuition. Building a culture that rewards risk-taking, avoids penalizing failure, and has controls in place to manage risk allows teams to move quickly. Additionally, constantly improving the factory (team processes) and creating clarity in purpose, product vision, team composition, and self-sufficiency contribute to faster execution.
Michael Cieri is the Chief Product Officer at Gusto, an HR and payroll platform used by more than 300,000 businesses. With a decade of experience, he has led successful SMB product development and scaled high-performing orgs. Before Gusto, Michael was also the Head of Product at Square, where he led a team of 15+ PMs responsible for $600m in annual revenue. Michael was also the VP of Product Management at Opendoor.
