How we keep the momentum

A table read from Monzo's PM offsite

We recently had an offsite for the Monzo Product Management team. We kicked the day off with Lego charades. Once we were done with charades I kicked off the meeting with a table read. I’ve reproduced a (slightly modified) version of the table read below. It focuses on a series of seven things we can get better at as an organisation.

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This is an important offsite. Monzo, and Product Management at Monzo, are at a critical inflection point. We’ve stepped up the quality of both our thinking and our work. We’ve shipped good new products and improved some we already had. The graphs are going up and to the right.

This is the result of a lot of hard work from a lot of people over a long period of time. It would be easy for us to pause and rest on our laurels. Let's not. I see a world in which Monzo becomes the definitive financial app. And this team becomes the best Product Management team in Europe and beyond.

This future seems more achievable than ever and it can be ours with careful focus and dedicated effort. Today will be, in large part, about what focus and effort we need moving forward.

What has gone well

We should all be well versed in the list, but I'll enumerate some things I think are especially notable:

1. Our velocity is good. In the past three months we’ve shipped three Zero to One products: Monzo Flex, Monzo Pay and Monzo Trends. All three are performing well. We have also developed novel new solutions to critical infrastructural problems.

2. We have, for the first time, a strong Product Led Growth capability. The work across our Growth teams prove this. We are systematically moving graphs that matter to us and our customers.

3. We've hired a lot of excellent people this year. We've added three new Product Directors and a lot of individual contributors. You can see the impact of every single Product Director. Each area that's gained a Product Director is performing better than it was before. And the individual contributors who have joined are great and already having meaningful impact. We aren't fully staffed yet, but we're on our way.

4. The graphs are moving.

We've also stepped up the quality of our work. Our ways of working are better and I'm seeing more data-driven decision making. More intellectual honesty and flexibility. Higher quality product execution and increased velocity in our day-to-day work. There's still room for us to grow, and these improvements are still uneven. But they're deeply meaningful and you can see what our future will look like. It's exciting.

I see this change in Product Management, Product more generally, and increasingly in the company. The more the company adopts these ways of working the more powerful they become and the easier our jobs become.

We're getting better and better. If we keep going this will become a self-reinforcing cycle with a natural acceleration curve. The better we do the faster we will improve.

How we keep the momentum

I've been thinking a lot about what's gone well over the last half and what hasn't. I think there are some common themes, and that with careful work and attention we can make even more go well next half and have fewer things fail. In the process I think we'll also become a better team and a better company.

Here they are:

1. Customer first. Company second. Squad third.

2. Separate belief and empirical fact

3. Form a theory of the world

4. Start small, think big

5. Find the leverage

6. Execute with alacrity against clear goals

7. Continually learn and evaluate performance

Together I think these themes start to form a new Way of Working for Product Management at Monzo. A lot of today will be dedicated to exploring them.

The customer always comes first

Ben Horowitz succinctly describes our job as being "the CEO of the product."

There are two types of CEOs:

• Walt Disney famously said "We don't make movies to make money, we make money to make more movies."

• Jack Welch less famously said "Number one, cash is king... number two, communicate... number three, buy or bury the competition."

Disney is a product and customer-focused organisation. General Electric is focused on lucre and competition. I believe that one is clearly superior to the other. The evidence supports this conclusion. Disney's current market cap is $320 billion. General Electric's market cap is only $120 billion and it’s in the process of being broken up into three separate companies.

Monzo was not put on this Earth to worship cash. We were put on this Earth to build products that make our customers' lives better. To take the single greatest source of anxiety in people's lives and make it better. Only a third of UK adults say they feel in control of their finances but more than two thirds of Monzo's customers say they feel in control of their finances.

This is the source of our magic and I think this underscores the importance of being customer centric. Whenever we've tried to do things without the customer at the core we've failed.

I think this is also true when we try to build things for small, niche populations. We do best when we build easy to use products for broad customer segments. We have 5.3 million customers. That's more than 10% of the UK adult population. We don't have to build for all of them at once but there's still plenty for us to build for large, readily addressable customer segments.

The easiest way to learn how to do that and be customer centric is to talk to customers a lot. Learn what makes them happy, what causes them pain, and how they think about the world.

Separate belief from empirical fact

Belief and empirical fact are both important. You can't be a good Product Manager without both. But you must never confuse them. We've done well when we've differentiated between the two. I think Flex is a great example of this. There are other places where we conflated belief and empirical fact, or never did the work to anchor our belief in the first place. Those projects have almost universally failed.

If you separate belief from fact you can develop a couple superpowers:

1. You can easily build consensus with others and reason with others about your work. By saying things like “I believe we should go to the moon because of X and Y,” or “The data actually show X, not Y.” This will clarify points of agreement and disagreement, and ensure you operate from the same set of facts.

2. You can establish plans to test your beliefs. This will allow you to quickly change your mind based on new information, which is incredibly important.

3. You can easily debug things when they don’t work out — and put together a new plan — based on a new set of beliefs established from a new or additional set of facts.

If you don't separate belief from fact it’s hard to do any of these things. You'll move slower and you'll frequently reach the wrong conclusion without understanding why. Even worse, you'll often find out you were wrong way too late.

Develop a theory of the world

The world is one big dynamic system. And it's dynamic systems all the way down. Kind of like turtles.

It’s possible to have limited impact without understanding an entire system. You can tweak one variable and pull a lever without understanding what they really do. But your impact won’t last.

The only way to make graphs go up and to the right for a long time is to develop a theory of the world that points you in a certain direction. Without it you're just throwing spaghetti at the wall. A solid theory of the world will systematically guide you from product to product, feature to feature, enhancement to enhancement, growth hack to growth hack.

This is what strategy is. It comes from developing a solid theory of the world.

Find the leverage

Every company in the world is resource constrained. No one can do everything.

We must always do the least work for the biggest impact.

Gather data and develop your theory of the world until you know where the leverage is. The Pareto Principle — the 80/20 rule — is real, and sometimes understates the power of finding leverage. I've found that you can often get 80% of the impact from one percent of the work.

Start small, think big

It's easy to develop a theory of the world based on solid belief and empirical knowledge and then spend a year building against it without any customer feedback. This might be an appropriate strategy in hardware but it is not a good strategy in online software.

Being in online software means that we can learn and change our work continuously, and we can test our strategies cheaply. We can learn about the world rapidly through experiments If we aren’t sure yet how something works we can fix that by building a bunch of small things and seeing how customers respond.

Our ability to start small, learn and iterate is a huge strategic advantage that we enjoy over traditional banks who think in big, monolithic waterfalls. We must seize every advantage we can.

Execute with alacrity against clear goals

Clear goals align people. They bring you and your squad together, bring your squad and your product area together, and bring your product area and the company together. They are the ultimate tool for generating alignment.

Just being open with your goals will quickly reveal poor alignment and point the way to fixing it. We can then measure alignment empirically — “Are our goals compatible?”

Clear goals also focus your effort. If you have clear goals you will find yourself naturally spending most of your time trying to achieve them. You will minimise distraction and churn and focus on the things that matter most.

Finally, clear goals help you know if you're doing a good job. The answer is clear. You’re either on track to hit your goals or not. Without clear goals it’s murky. Different people will have different opinions. Some will be more charitable and some decidedly less charitable. And it’ll be easy to lie to yourself about how you’re doing. That’s bad. With clear goals everyone can be aligned on where they stand, what’s going well, and what needs improving. This is a blessing.

Once you have clear goals it's important to execute with alacrity. Alacrity is "brisk and cheerful readiness." I think it's a good encapsulation of how a good team operates. Especially in the face of setbacks. Everything we do either proves or disproves our hypotheses, contributing to our theory of the world, and ultimately helping us hit our goals.

Continually learn and evaluate performance

Ultimately our jobs are about impact.

I'm going to borrow from our progression framework here:

Impact is the difference between this reality and the alternate reality that would’ve occurred if a [team] hadn’t done what they did.

It's important that we objectively measure impact. It's the only way to know if we're doing a good job. And you cannot do a better job without understanding whether you're doing a good job. Objectively measuring impact helps us determine whether our beliefs are correct, our theory of the world is accurate and our work is good quality. Without this knowledge — and the intellectual humility to accept it — we risk continually doing the wrong thing.

If we do the wrong thing for too long we will destroy customer value and enterprise value. If we do the right thing for long enough we will transform our customers' lives and build an incredibly valuable company.

There are many ways to measure impact, but three stand out:

1. User research and usability testing

2. Experiments

3. Graphs on dashboards

User research and usability testing

It's easy to build products which are beautiful but confusing. And when you're close to them it's hard to know for sure without user testing. So you should user test pretty much everything, even if it's just in the hallway.

I know there are never enough user researchers to go around, but that's not an excuse. You can conduct your own research. It isn't that hard and the excellent researchers we do have here can help you do it well. And we’re hiring more researchers.

Experiments

We know that all of the work our growth teams are doing works because we have experiments. We also know which of our tactics work best because of experiments. We can discard the things that don't work and focus on the things that do. This knowledge helps us refine our approach, develop new theories, and get better and better at Product Growth over time.

Not everything requires an experiment, but I think most changes should be wrapped in them anyway to understand if we accidentally cause any degredation of experience or negative secondary or tertiary effects. Over time we can refine the set of things that we wrap in experiments.

Graphs on dashboards

It's hard to measure a Zero to One product like Monzo Pay with an experiment. Thankfully, dashboards work really well for this. We know Monzo Pay is going well because all of its graphs are moving in the right direction. We can also evaluate our work in all of Borrowing, Business Banking, Personal Banking, Subscriptions and more with simple dashboards that show us how our graphs are moving. They also point to one of our key functions — to inflect the graph.

Next steps

I'm really proud of where we are as a team. And a company. Our velocity is good, we've built a good Product Led Growth capability, we've hired some excellent people, and the graphs are moving.

This offsite is structured around what we have to do next. We'll focus on the product process and themes outlined above, and we'll spend a short time on hiring. Both should be focuses for this team over the next six months. And then, around five o'clock, we'll go out for dinner and drinks and celebrate what we've accomplished so far and what we're going to achieve next.

I've led a lot of product management organisations in the last 15 years that have built literally hundreds of products for billions of people, and I've advised countless more. I think this is becoming one of the best. And as we do that we will all become better PMs and we will improve the financial lives of millions of people.