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Experimenting allows you to grow fast or fail fast: Dexter Zhuang

William Blake said, “The true method of knowledge is experiment.” And product veteran Dexter Zhuang strongly believes this. “Experimenting allows you to grow fast or fail fast. Considering the success rate of experiments is 1-4%, either way, it’s good for you. Because you’ll gain insight and have greater control over utilization of resources,” he says. 

Dexter is a product coach, an early member of Dropbox’s growth team. He helped scale the unicorn SaaS business on its trajectory to IPO. Currently, he is the director of product management at Xendit, an Indonesia-based payment gateway. 
 
As part of Crayon’s Lighthouse Fireside chat series, he talked about his experience in building and scaling products at both Xendit and Dropbox, and took us on a deep dive into some of his learnings. 

The journey toward product-market fit 

This was one of the main points of discussion in the session (which was moderated by Chinmoy Rajurkar, product manager at Crayon). Startups struggle with achieving a product-market fit. Many of them don’t even know whether they’ve attained this fit. Dexter believes that’s because it’s not black and white. Often, it’s not a ‘either you have it, or you don’t’ scenario, he says.  
 
“Product-market fit is a map; you start where you are and move towards where you want to be. To know if you’re heading in the right direction, measure your month-on-month growth rate,” said Dexter. 
 
Here’s the breakdown as he sees it: 

  1. Stay curious: practice the art of customer discovery  

You don’t know what you don’t know! But by asking the right questions, you can learn the real, tangible experience of your customers, and understand what makes their experience painful or desirable.  

  1. Look for market signals 

Once you’ve established your target users, feedback is a great indicator of market acceptance. You want to create “wow” moments for them. If your ideas are met without much excitement, it’s time to head back to the drawing board. 

  1. Opportunity scoring 

Now that you’ve identified your users’ pain points, you can plot it on a graph to visualize which of the customer needs are over- or under-served. Solving an under-served customer need? You may have hit the gold mine! 

  1. Distribution 

After months grueling over identifying the needs, and building the product from scratch, you may think the struggle is over. Distribution, contrary to popular belief, is just as hard as building the product. Your distribution channels build the rails to deliver to your product.  

Dexter also shared some key takeaways from his time at Xendit and Dropbox.  

  1.  Retention is your north star  

The number of active users within a defined period a.k.a customer retention is a great indicator of a healthy product. Because it reflects strong product market fit. If retention is poor, fix it before you refuel for growth. 
 
For instance, Dropbox’s secret sauce is freemiums. This model provides a frictionless sign-up, sticky user retention, and tailormade upgrades. 

  1. Create growth path with nudges 

Nudges are a great way to remove points of friction and engender growth. When users get touchy-feely with your product, they are more likely to indulge in a purchase.  
 
Growth = Product Value – Friction 
 
Because their barriers to entry are reduced. Among other benefits, good nudges usually help users:  

  • Experience value,  
  • Notice big impacts, and  
  • Improve discoverability  

Dexter says, “Think like a behavioral economist.” Because they seek to understand motivations of the people, and these motivations help reduce friction.  He also advises not to get spammy in the name of nudges. 

  1. Create a diversified portfolio of bets and move the needle from 0 to 1 through experimentation. 

Most efforts to drive business outcomes fail, but experimentation is the key to staying motivated. By focusing on accelerating learning cycles.

You can start a dedicated experimentation team as Xendit does, or adopt a ‘test and learn’ as Dropbox does.

At Dropbox, Dexter says each of the product growth teams have sandboxes. These teams were razor-focused on achieving numbers. Dropbox went from running 2-3 experiments per month in 2012 to running ~80 experiments per month in 2017.

  1. Build the machine that builds the machine  

Everything changes roughly at every third step, i.e., restructures will be in progress after your company triples in size. To avoid this Dexter advises to invest in platform tools that remove scaling bottlenecks. 
 
Through it all, Dexter encourages companies to rehearse for the next stage of their business. Not simply do what is required for the moment.  

More from our Crayon Lighthouse series here.

Author avatar
Soundarya Murugaiyan

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