Three Categories of Product Investment

In the Continuous Value Delivery form of the Product Operating Model there is an assumed maximum iteration investment of 8-squad-weeks (or 2/3 of a 12-week quarter). Anything more, is a smell for faux-confidence, confirmation bias, and is not living a culture of learning. We should never be so convinced that we can’t decomposed and ship a version of value that is 8-weeks worth of investment.

There are two types of investment (validation and appetite) and a focusing element in the strategic alignment.

Investment in Validation / Discovery:

This is the work before the work. But, in the book Inspired, Product-Sensei Cagan* Sensei? teaches us many techniques, many of which are “before you build” techniques.
The AR3 type of Product people lean heavily into continuous discovery (similar to what Product-Sensei Torres teaches in Continuous Discovery Habits).
You also may transcend validation being a thing that has a beginning and end and subscribe to the teachings of Sensei Gothelf, who in Lean UX says: “All life is an experiment. The more experiments you make, the better.”

• Pre-validation (no value delivered) must be 1/10 of the investment (so 1/10 if full 8 weeks)
  • 4 days of the prior quarter doing pre-validation to deliver on an 8-week appetite
• Build-to-Learn Validation (value evaluated) must be 1/3 of the full project)
  • ~2 weeks of the prior quarter delivering a live data or feasibility prototype where the full vision would take 8 weeks the following quarter
• Continuous Learning Validation (some value delivered)
  • Imagine every quarter spending 1/3 on one bet (likely in the Lab), 1/3 on another (likely in the Lab), and 1/3 responding to insights (either starting new or reallocating calories to begin the launch process of something worth GA launching

Appetite for Investment in Next Iteration:

This is how much of our “building” calories will be spent before we stop and have a conversation about if more investment is warranted. In poker terms this is how our type of Product people ensure we are never “pot committed”.
Even though I disagree with some of the recent stances taken by Basecamp, it must be mentioned; this concept of appetite and “circuit breakers” are inspired by ShapeUp.

We will use percentages of total quarterly calories a squad has as the unit of measure.

• 2/3 < Calories
  • Large sized appetite. Taking up the majority of our calories.
• 1/3 < Calories < 2/3
  • Medium sized appetite. Taking up around half of the calories we have to spend.
• 0/3 < Calories < 1/3
  • If the appetite is less than 1/3 of the calories, it may be viewed as a Continuous Learning Validation technique.

Investment relation to Strategy / Alignment

• Vision itself
  • This is a bypass. If an output is a centerpiece to the product vision, we may measure it, but it is a thing we will just do.
• Strong Alignment w/ strategy
  • When the hypothesis is: “if we do X, Y will happen, and the KRs of the strategy will be hit”
• Weak Alignment w/ strategy
  • When the hypothesis is: “if we do X, Y may happen, and the KRs of the strategy will be improved, but not dramatically”