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Why Product Managers Shouldn’t Use KPIs, Socrates, And A Path Forward

Tony Hsieh, the now reposed and former CEO of Zappos, used to offer hires $2,000 to quit on day one. He wanted to test them to see if they believed in the mission. I wonder if doing the same for product teams now would have the same effect.

My Early Days Of Product Development

When I first started working in software product development, whether it was developing ecommerce stores or building custom applications, the measuring stick for success was all KPI driven. It was some combination of data driven development, time to market, customer adoption, and (if you really get into the weeds with Agile & Scrum, a popular methodology for developing software products, and the minutiae of software life cycle blah blah the KPI conversations are all about velocity, burn down rates, etc. I can’t tell you how many early discussions I had with customers that went something like this:

“So I want to develop a custom ecommerce store built with an integration to API X,” says customer. 
“Alright. How are you measuring success?” I ask. 
“Well, we want to get to market in six months and have sales by the end of the first month after going live. Oh, and we also want to gamify it.”
In my naivete, I'd usually respond, “Hmm, six months might be tough, but we will build the road map around that goal. We’ll need to have a burn rate of X to get there, which will help you get Z seed funds, so you can eventually exit.”

Beyond the sterility of this conversation, it turns out that these KPIs do not matter. 

Software Development KPIs

Example One Of Why KPIs Don't Matter

Allow me a short interlude and a quick comparison. When newly minted medical students graduate from medical school, they take the Hippocratic Oath, promising to do no harm. What really strikes me about the oath is how starkly different it is from that of the KPIs of product development mentioned above. It’s not just a difference in content; it's a difference in kind. The new doctor is concerned with the life of the patient; the new product manager is concerned with the lifeless quantitative indicators of the app. 

You might be thinking that the doctor has a unique obligation due to the gravity of dealing with health, life, pain, death, etc. Maybe you’d say that the calculations are categorically different because the profession is so different. Fair enough. But I don’t think you have to go far to find other comparable examples. 

Example Two

Take, for example, one famous scene at the beginning of Plato’s Republic. As Socrates is searching for the meaning of justice, one of his interlocutors (Simonides) says that justice is simply the act of giving what one is owed. On its face, that seems right and it’s clear that a large part of our economy operates that way. However, Socrates comes back with a clever response. He asks about giving weapons back to a mad man. Would that be justice? What if good product management isn’t simply building the custom application out of obligation or routine, but thinking about what sort of applications are actually going to lead to some abstract notion of the good?

It seems completely acceptable in product development to build anything, as long as it is profitable, has impressive adoption rates, has strong demand, and is scalable. It’s because as developers and product owners we’ve substituted KPIs for the actual substance of the product. Sure, startups and new products always have some sort of mission statement, but they are often thin facades. Imagine walking into a room to pitch your roadmap to seed funders and, instead of building it based on market opportunity metrics, you just spoke on the mission of the company. It wouldn’t go well. (Here are the early pitch decks for companies that now have over a billion-dollar valuations. See if you can spot the theme.)

How Many Flappy Bird Games Do We Really Need?

I believe that we, as product managers, have the opportunity to focus on building a healthy ecosystem of technology that actively contributes to the flourishing of society and culture. Or at the very lease we can ask should I really help build the 801st version of a flappy bird knockoff

Now, I understand that there are different views of what constitutes a healthy society and or a stable culture. I’m not planting my flag in a particular schema for how those should look. All doctors don’t agree on a particular definition of health, but they still have the general sentiment (in the form of an oath!) that they are working towards a higher good: health. Earlier in my career, I would have said that if the market demands it (the product), then it must be good for society. I was still in the KPI mindset. However, now using the example of Socrates and the Hippocratic Oath I see software development differently. 

Example Three

Another example I find useful is that of a teacher managing a classroom. Imagine if teachers built their curriculum based on product KPIs. They might put way too much emphasis on building curriculums that are popular and scale versus ones that actually impart knowledge and wisdom.  My students would love it if we ate Oreos and read only comics. They might love it if I gave them all As just for showing up, too.

So what’s the path forward? I don’t think it’s complicated, but it is hard. For me, it means less interest in traditional KPIs (time to market, adoption rates, velocity, etc.) and more investment in traditional KPIs. The sort of KPIs that the doctor, teacher, and philosopher think about: 

Does This Product Do More Harm Than Good?

Sure, this is a subjective measure most of the time, but if there isn’t at least a subjective assent that the product does more good than harm, then building it should give one pause. For example, I think Shopify does good, as it helps small businesses compete in an online world. 

Am I giving Weapons To a Mad Man?

It’s probably the case that the product managers who built TikTok (does anyone still think this type of content isn’t melting our brains??) or the FTX app were doing for the sake of innovation, profit, or simply because it was what they were told to build, but what would happen if we first considered the possible uses and long term ramifications of our products?

Does This Product Have Substance?

Again, this is subjective, but nonetheless worth considering. A solid curriculum has substance because it challenges and seeks to enlighten students and it does that as its primary task. Is the product I’m pouring my own time and identity simply an arbitrage play or does it go deeper? Google Scholar is a good example of a product that goes deep, provides real value, and adds value beyond trivial KPIs. 

Austin Klise


Essay Prompt: What's Wrong With The World
G.K. Chesterton: Dear Sirs, I am.
End Essay