Digital Disruption

00;00;00;17 - 00;00;22;02

Geoff Nielson

I'm super excited to be talking today with Marty Kagan, founder of the Silicon Valley Product Group. Marty is an all time one of the greatest product management gurus of all time. We're going to talk about the state of product management today, and what it takes to build the product centric organizations of the future. It should be an amazing conversation.

00;00;22;05 - 00;00;30;17

Geoff Nielson

Can you tell me a little bit about the state of product management in 2025? Like where where are we right now? What's going on?

00;00;30;19 - 00;01;02;24

Marty Cagan

Well, I would say we're in a, pretty fundamental shift going on right now. Mostly, of course, by because of generative AI and how that is, not so much yet. It hasn't really changed things yet, but many of us, myself included, do anticipate more significant impacts over the next few years, probably over the next five year time frame.

00;01;02;26 - 00;01;20;12

Geoff Nielson

So let's let let's maybe dig into that a bit more and start there. So within the context of, you know, product management and the product management processes, like forget the actual products for a while. You know, how do we see AI changing the game? Like where is it now and where is it going?

00;01;20;14 - 00;01;52;00

Marty Cagan

Yeah. And the reason this is kind of a very messy question is because there are actually three very different models of product management out there today and have been out there for, honestly 20 years. So, I impacts each of those differently. So, and it's a very, almost religious topic with a lot of people. They kind of have their favorite of the three.

00;01;52;02 - 00;02;14;08

Marty Cagan

But sort of taking religion out of it to the degree we can. There are these three very different models. One of them is sort of more dominant in Europe. And it's referred to as the product owner model. Another one is very dominant actually in the US it's referred to. I refer to it as the feature team model.

00;02;14;11 - 00;02;39;25

Marty Cagan

And then there are the, the, the form of product management that's used really by the top product companies in the world. And, and I refer to those as the empowered product team model. But each of those three are pretty fundamentally different. The roles they play not only on the team but in their companies. In fact, the role of innovation in the companies is very different.

00;02;39;25 - 00;03;21;20

Marty Cagan

So because of the different contexts, the different needs, there's very different, you know, responsibilities they have. And based on those responsibilities, the technol, the, the, the new tools. That's the biggest impact really of these, generative AI technologies. When we talk about how it impacts people and teams on product teams is, it's very different. In some cases, I think, especially in that first of those three models, I'm very I think it's entirely likely that those role, those jobs will be largely disrupted.

00;03;21;23 - 00;03;47;15

Marty Cagan

I have been trying to I have a lot of friends and actually hundreds of friends that are in that model, and I'm trying my best to encourage them to upskill, so that they have, a future in that role. Of course I could be wrong. And, and I, a large part of me hopes I'm wrong about that, but, but I think the writing's on the wall for that one.

00;03;47;17 - 00;04;00;18

Geoff Nielson

So why why is it that the disruption is like, you know, primarily hitting that product ownership model? Like, what makes it what about that model is unique to that? And you know what? What does that upskilling look like in your mind?

00;04;00;20 - 00;04;28;24

Marty Cagan

Yeah. Well, because fundamentally the difference is the product owner role is a much more junior role. It's a much lower level role just like today. I mean, pick any headline, in the technology space. And you'll see very likely that the more junior engineers developers are already feeling threatened. And in many companies, they've stopped hiring that level person.

00;04;28;26 - 00;04;54;14

Marty Cagan

On the other hand, the more senior people are making more money than they've ever made there, because the companies realize they're actually more valuable, not less. So there is that just disruption happening on the engineering side? I think the same thing is just starting to really happen on the design side. And in the product side, we don't map exactly to that same sort of spectrum, but it's comparable.

00;04;54;17 - 00;05;18;25

Marty Cagan

And the product owner model is a very it's a much more junior and a much more administrative and a much more project management like role. And so these are things that the tools I mean, I've been asked to look at, I don't know how many more than 20 prototype tools, beta tools. And this is the easy target for that.

00;05;18;27 - 00;05;46;23

Marty Cagan

Yeah. Right. So this is sort of where I think they're starting. So I yeah I'm genuinely worried about that. And there's more to it always, you know, another layer. But the, that product owner role is tied very much. Not really the product management, but to process, process is you know, increasingly people are realizing that's really not the solution.

00;05;46;26 - 00;05;57;01

Marty Cagan

And, and there's a lot of baggage associated with that. So there are other factors at play for that role. More than just generative AI.

00;05;57;03 - 00;06;25;17

Geoff Nielson

So so is it fair to say that, you know, as process becomes more streamlined, more automated, that, you know, as these roles look to upskill, they need to start becoming more visionary. They need to start be more forward thinking in terms of like, what could the future of these products be? And you know, how, like, really sell that kind of product model at the firm level versus being tucked away in a corner?

00;06;25;17 - 00;06;27;26

Geoff Nielson

Is that is that this idea?

00;06;27;29 - 00;07;02;19

Marty Cagan

I mean, in the, in the product world, each of these for each of these terms has very specific meaning. So the visionary side is really the leadership role. And that is, like you're alluding to that is increasingly important. But even at the individual contributor level, there is always some mix of strategy and execution and the jobs that are really at risk, from this disruption are the ones that really are all about the execution.

00;07;02;21 - 00;07;26;19

Marty Cagan

And what it points to is there's a big question, though, and this is what the more advanced product managers focus on. The question of really what to build, not how to build. Right, what to build, what problem to solve or who and how. And these are these are difficult decisions, very subjective decisions. And a lot of judgment goes into them.

00;07;26;21 - 00;07;32;28

Marty Cagan

And that's where the more experienced product people have a very large advantage.

00;07;33;01 - 00;07;47;28

Geoff Nielson

Right. So what does this look like? You know, you know, in the the middle model you described the feature model that's, you know, more popular, you know, in America. What what does that look like in that model. And what's the what's what what's the threat level.

00;07;48;00 - 00;08;11;05

Marty Cagan

The threat level I think is a little lower than it is in, for the product owners, for sure. It's kind of a, hybrid model. The person, the product managers in that model that are not responsible for the level of, innovation that we are talking about on that more advanced model. But they do have some.

00;08;11;07 - 00;08;41;11

Marty Cagan

So what they are really there's a lot of project management there. And that's the part will that will, you know, project management I think will there is beautiful opportunities everywhere for tools to improve that. Yeah. But there is still a role for judgment. There's a lot of decisions you make. And so I think the the strong feature team product managers will still, I think have more, time to contribute at their companies for sure.

00;08;41;14 - 00;09;05;27

Marty Cagan

It's still more vulnerable than I would like. And so I encourage my friends in that role to, to upskill as well. Plus, there's very there's almost no innovation in that in that model. Yeah. And my view and I sort of confess to being paranoid about this stuff I view is if you're not innovating, you're in trouble.

00;09;05;29 - 00;09;32;01

Marty Cagan

Yeah. Especially now. And so it while I think it is more, defensive role as a role, it's not tackling the hard problem that needs to be tackled. So I am hoping and I do spend a lot of my time trying to convince CEOs of companies that have that model, which is very much sort of top down and tell everybody what you want them to build to.

00;09;32;01 - 00;09;43;08

Marty Cagan

Instead, try embracing the idea of technology powered innovation. Try and embracing this other way of solving problems.

00;09;43;11 - 00;09;59;07

Geoff Nielson

Right. And that's the that's the empowered model that we're that we're talking about. Now. Do you do you have Marty within that model? Do you have any sense of like firms that you consider like kind of like true north for like these are firms that like, they've really figured out how to be product centric.

00;09;59;10 - 00;10;22;22

Marty Cagan

Oh, yeah. I mean, there is and they're not secret also, by the way, not an accident. They're really the most valuable companies in the world right now. Right. So, you know, we're talking about, Netflix, Amazon is a great poster child. Private company stripe. Apple is fantastic at this. Who else? Yeah. You know, Tesla is actually very good at this.

00;10;22;22 - 00;10;39;28

Marty Cagan

Space-x is very good at this. And I'm talking about brand names that everybody would know. Obviously, there's thousands of great startups that are working this way, but honestly, it's a lot easier for a startup to work this way. They kind of have to if they want to survive.

00;10;40;01 - 00;11;06;17

Geoff Nielson

Right? And they don't have to like, unlearn all the bad habits or, you know, you know, yeah, the the tenets about what product is and isn't that awesome. So so you know, thinking about the, the, the different models that you've got there, the, the role of, of what I'll call product leadership. And maybe that's not quite the right term, but, you know, the the person who's leading, you know, the product effort in the organization.

00;11;06;19 - 00;11;12;01

Geoff Nielson

What attribute would you be looking for in a product leader in 2025?

00;11;12;04 - 00;11;40;19

Marty Cagan

Well, first and foremost, they're they are the ones that if anybody is going to raise the skill level of the people we've been talking about, they're the ones that need to do that. It's that is their primary responsibility to coach and develop. And in fact, in, in virtually every one of those companies I just rattled off, they have they have written leadership principles where that is right at the top of the list.

00;11;40;22 - 00;11;59;21

Marty Cagan

You know, your job is to coach and develop your people so they can do these kinds of things we're talking about. So that's number one. Number two is, is really what you were alluding to before. You have to have, you have to this visionary element. You have to where is the market going in the next several years.

00;11;59;21 - 00;12;30;16

Marty Cagan

So is there some pretty big questions, especially with so many moving pieces of this? And, how will this how will your solutions improve the lives of your customers? That's product vision. That is, incredibly critical. That's what that's really what motivates the organization. That's what ties all the different teams together into creating something amazing. And that's in the product leaders responsibility.

00;12;30;18 - 00;12;42;21

Marty Cagan

And and then the third big one, which is really a more a function of the size of the company, the bigger the company, the more critical this is, is, is to really win the hearts and minds of the rest of the executive team.

00;12;42;23 - 00;12;43;22

Geoff Nielson

00;12;43;24 - 00;13;08;01

Marty Cagan

Because you really can't do what we're talking about here in a silo, right? You have to do it. It impacts marketing, it impacts sales, it impacts finance, it impacts H.R. And so the product leader has to make it a major priority. And it takes a different set of skills, as you know, to, to win hearts and minds.

00;13;08;04 - 00;13;28;25

Geoff Nielson

Yeah. No, it makes complete sense. And it resonates very strongly with my experience. And you know, I was thinking to, as you, you know, rattle off some of the names of these firms that have that have figured it out. They have like executive leaders, like they have CEOs and, you know, founders, chairmans whatever you want to call them, that are bought into this whole product notion.

00;13;28;25 - 00;13;35;27

Geoff Nielson

Right? Like it feels like even above the product leader, you need the whole organization rallying around it to be successful.

00;13;35;29 - 00;14;00;27

Marty Cagan

You do. You know, a little interesting factoid that not a lot of people realize is that literally, the founders of Apple, Steve Jobs, Amazon, Jeff Bezos, Larry and Sergey at Google, the founders, they were all coached by the same guy saying all that stuff. Bill Campbell, he was known as, in fact, there was a book written about him, called Trillion Dollar Coach.

00;14;00;29 - 00;14;24;08

Marty Cagan

The the leaders at Google wrote that afterwards after he passed away a few years ago. It's sort of a tribute to him. But literally the same guy was explaining to these people, essentially the product model. Yeah. And and why it was so important and how different it was than how most of those companies, you know, most companies in the world work.

00;14;24;10 - 00;14;36;00

Geoff Nielson

So, so, you know, being more familiar with, with, you know, Campbell's work, do you I mean, can you see the through lines across those organizations, like what lessons can you tease out that are like, yeah, that's Campbell right. Yeah.

00;14;36;01 - 00;14;44;15

Marty Cagan

See it all the time. And I I love that. I'm, I met him several times, but I was never coached by him. I wish I was.

00;14;44;17 - 00;14;46;08

Geoff Nielson

He'd be $1 trillion richer, right?

00;14;46;15 - 00;15;09;02

Marty Cagan

Yeah. I did work for three different people in my career that were coached by him. So, I felt like I grew up learning these lessons and, so that was a real gift. But, there's several examples. One of them I already alluded to, he's famous for a line which is you cannot be a good manager without being a good coach.

00;15;09;05 - 00;15;39;25

Marty Cagan

That's one of his lines. Another one single most important thing. And by the way, this is probably it's anybody listening is like, wondering what the key to innovation really is, he argued. And I think he was spot on. He argued the single most important role, single, most important thing is empowered engineers. Yeah. And what this means is engineers are not there just to build what you're telling them to build.

00;15;39;27 - 00;16;02;27

Marty Cagan

There's a great Steve Jobs quote, which was, we don't hire all these smart engineers in order to tell them what to build. We hire these engineers so they can show us what's possible. And that is so different than, you know, you pick your big organization that has thousands of engineers, many of which are outsourced and they're just they're just there to build what they're told.

00;16;03;00 - 00;16;24;25

Marty Cagan

They're never. And you know, this is I, this is obviously a, an a more important topic. But if you look at all the companies today turning out very impressive new enabling technology products, which you I they're the ones that have been using their engineers. They're the engineers are the ones that came up with these solutions.

00;16;24;28 - 00;16;52;00

Geoff Nielson

Well and that's really interesting to me, Marty, because, you know, when you think about some of the, mythology around, you know, guys like jobs or guys like Musk, you know, you mentioned Tesla. I feel like they have a reputation as like the visionary leaders who are like, we're going to do it this way, damn it. And they kind of, you know, impress on the engineers what's going to happen that it sounds like there's more to it than that, and there's actually more of a back and forth behind the scenes.

00;16;52;02 - 00;16;53;16

Geoff Nielson

Do you believe that?

00;16;53;18 - 00;17;22;19

Marty Cagan

It's a it's a common misconception. Now, the truth is, Steve Jobs and Elon Musk are two completely different people. Sure. In situations. Yeah. And and a few years ago I thought I understood Elon Musk, haha. Now I don't pretend to. Sure. So there's other things going on there. I do know a lot of people that work in these companies that are, you know, they're you have to realize there is no way at those scale.

00;17;22;19 - 00;17;46;05

Marty Cagan

Just look at Tesla and SpaceX together. There's no way for him to be micromanaging all those people is not possible, and it's really not how it works. Now, Apple is a much better example because actually Steve Jobs was he was visionary. Absolutely. But it's a really a fundamental misunderstanding to think that meant that he was telling people how to build what they needed to build.

00;17;46;07 - 00;18;09;26

Marty Cagan

In fact, it was very much the opposite. He would he would expect he would ask you and they would come to him every week with prototypes of what they think is a good solution. And he was very good at pointing out where those prototypes were lacking. Yeah. And saying like, this is not good enough. You know, we just we cannot ship this.

00;18;09;29 - 00;18;37;29

Marty Cagan

We cannot and he set a very high bar. He didn't know the solutions to any of this stuff. Yeah. He just knew what would make a great product and what wouldn't. And for anybody who really. Because this is a common misconception, and I think it's a really dangerous misconception because so many people think that. Oh, well, I'm going to act like Steve Jobs and boss everybody around, but that is not how he worked at all.

00;18;38;01 - 00;18;58;25

Marty Cagan

Anybody? There's one book you know, all of, in my experience, only one book out there that actually shows what it was really like. You know, it was written by one of the senior engineers from long time at Apple, actually the one of the key engineers working on the original iPhone and one of the engineers behind one of the biggest innovations in the iPhone.

00;18;58;25 - 00;19;26;27

Marty Cagan

And he wrote a his name is Ken Kissinger. He wrote a book called Creative Selection, which is describing how the product discovery process work at Apple under Steve Jobs. And with hundreds of stories, and in none of them was he saying, like, you build this, you do this into this. He was instead saying, you know, we have to figure out a way to do a 100% touchscreen device.

00;19;27;00 - 00;19;44;00

Marty Cagan

And that means we've got 100 problems to solve. In order to do that, and you need to solve these problems. Here's the problem. And they're not easy problems. Otherwise lots of other people would have done them. So that's more of what it's like.

00;19;44;02 - 00;19;53;00

Geoff Nielson

Yeah. So so he he would push them to, you know, the limits of what's possible. But he would let them he would let the solution kind of emerge and have them show off.

00;19;53;00 - 00;20;14;22

Marty Cagan

The thing about I don't even think it's about letting it. It's fair enough he knew enough that he knew. That's the only way it happens. Yeah. So yeah, honestly, it's the only way it happens. There he, you know, since we're talking about him, there is an amazing resource that was rediscovered a few years ago. It's called the Lost Interview.

00;20;14;25 - 00;20;21;02

Marty Cagan

And it was it was actually recorded in 1995, which is remarkable.

00;20;21;04 - 00;20;21;20

Geoff Nielson

Interesting.

00;20;21;20 - 00;20;43;04

Marty Cagan

Times have been kicked out of his company. And it was recorded way back then, and then it was lost was recorded for a public television show, and it was lost the actual, tape. And it was found after he died by one of the producers in his garage. And he just uploaded the whole thing. It's just over an hour.

00;20;43;04 - 00;21;07;12

Marty Cagan

It's on, Apple TV, it's on Google Play, it's on Amazon Prime, and it's literally $5. But it is a masterclass in this. And he talks about these issues. He talks about what people don't understand about how you create great products. It is probably the best resource I have ever seen out there from anyone.

00;21;07;15 - 00;21;29;14

Geoff Nielson

That's a that's a that's a really cool recommendation. I'm, I'm I'm gonna check that out. So I want to I, I want to ground the conversation a little bit. Marty and I could talk about Steve Jobs, you know, all day. And it's so interesting as as this kind of, you know, inspirational leader, one of the, you know, I spent a number of years advising executives kind of in this space, among others.

00;21;29;16 - 00;21;51;03

Geoff Nielson

And one of the most common pieces of feedback I got here is, wow, that would never work at my firm. Because, you know, my leaders are not Steve Jobs, and they they don't believe in, you know, the product model. You know, there's some sort of like executive level resistance. And, you know, their default posture is just like throwing up their hands, like, okay, well, that can't work here.

00;21;51;03 - 00;22;00;15

Geoff Nielson

So I don't have to push myself. Like I'm just going to make do with the status quo. What's your you know, what's your advice to people in that situation?

00;22;00;17 - 00;22;24;02

Marty Cagan

Well, first of all, I hear, you know, we hear that every day. Yeah. So you're not wrong. As far as what though, that is so common. In fact, the reason we wrote our latest book, which is which is actually about this topic, about how do you transform? We didn't intend to write that book. That was not part of the real plan.

00;22;24;05 - 00;22;43;24

Marty Cagan

But so many leaders said exactly that. They said it's not possible. It only works if you're born in Silicon Valley, you know, and you're a native company and you grew up this way. And of course, we knew that wasn't true, because for 20 years we've been working with companies all over the world to do this. So we knew it wasn't true.

00;22;43;26 - 00;23;13;00

Marty Cagan

But this is the prevailing opinion of so many people. And and it's understandable to if you've never actually worked in a place like that, you don't know, you just like and there's of course, hundreds of legitimate objections to anything. So unless you have good answers to that, you go nowhere. And in fact, there's a long history of companies hiring places like McKinsey and others and, and wasting the money.

00;23;13;00 - 00;23;35;03

Marty Cagan

It doesn't go anywhere. So the track record was not clear. So we said, all right, this is kind of ridiculous. And what we're going to do is share real stories with real names of real companies, and real people at those companies, none of which are Silicon Valley companies that have all been big old companies that had to change everything.

00;23;35;06 - 00;24;21;07

Marty Cagan

And not only did they change, but look what they were able to do once they changed. And so that's why we added up. We added a dozen case studies into this, book. And I would say for there were two things we did in that book that I feel like we're we're essential to this topic. One is the examples and the other was we just literally enumerated the objections that everybody has, literally objections from finance, objections from the board, objections from the, marketing objections from sales, even objections from customers, enumerated them all and then wrote how they're addressed so that because I feel, you know, we found a long time ago you you

00;24;21;07 - 00;24;42;17

Marty Cagan

can't just ignore the objections. You have to. They're legitimate objections most of the time. They're they're very legitimate of a CFO. They know how things have worked in the past. They usually don't like how they work, but they know them with a and unless you can show them a better way, they're like, they're stewards of the funds, right?

00;24;42;17 - 00;24;58;17

Marty Cagan

They're not going to just say do whatever. So they need they need it to be convinced. And so we put that in there. And I would say for most of these big companies, the objections and the case studies were really the key.

00;24;58;20 - 00;25;16;25

Geoff Nielson

I'm really glad, Marty, you brought up, transformed the, you know, your latest book. And, you know, for what it's worth, I definitely feel like this is like, this is the right book at the right time. I love, like, how it kind of progresses from, you know, some of the what and the why of this model to like the how and that that really resonates with me.

00;25;16;25 - 00;25;33;06

Geoff Nielson

And, you know, a lot of the stuff we're doing over here, you know, of the case studies there, you know, is there one that stood out that, like you find has actually, like, surprised people the most or resonated the most in terms of like, oh, you know, I didn't know that was possible in a place like that.

00;25;33;09 - 00;25;50;21

Marty Cagan

Yeah. Well, actually, that's, it depends on kind of what where they're coming from. For example, or one of the case studies is of, health care company, giant health care company Kaiser Permanente, and anybody who's worked in health care, most of them like like it's impossible there.

00;25;50;22 - 00;25;52;09

Geoff Nielson

Yeah, it can't be done.

00;25;52;11 - 00;26;29;18

Marty Cagan

Can't be done. And so those people were like, oh, maybe it can be done. I had no idea, you know, and so that, another one is there are parts of the world that feel like they've been left behind and it's impossible for them to catch up. And we we've highlighted a company based out of Saudi Arabia and so many people, not just in Saudi Arabia, but I just got back from Asia from, and I was a few weeks before in Brazil, so many people around the world, that's the one that resonated with that because they were like, wow, if a Saudi company could do what they did, it's kind of like we have

00;26;29;18 - 00;26;55;28

Marty Cagan

every advantage in Brazil, every advantage in China, right? That so, they realized they could do it. Probably the one that cited the most, is the train line example from the UK. That was, an example where a private equity fund, you know, how they work. They kind of buy companies that are they believe are. Yeah, not performing as well as they should.

00;26;56;00 - 00;27;16;04

Marty Cagan

And they believe if they can turn it around, this is a big payday. And that's exactly what happened. And they were you know, there's a lot of people, I think, that can relate to that. An old company that kind of joined and inherited all kinds of legacy. And it's so difficult to dig yourself out of those holes.

00;27;16;06 - 00;27;35;24

Marty Cagan

And this company in just a few years, became the biggest IPO in UK history at the time. So they, I think that one resonated probably the most so far. But, you know, it really depends on where you're coming from and what your biggest concerns are. But that's why we picked the range of companies like that.

00;27;35;26 - 00;27;58;18

Geoff Nielson

Now that's great. And I love that. And you know, as you said, it feels very much like depending on what sector you're in, depending on your geography, you, you know, you've got your own version of, of the pain you're feeling. And so yeah, I mean, it sounds like though, you know, Marty and you know, in this world you're describing like it's kind of a no excuses world, right?

00;27;58;18 - 00;28;11;28

Geoff Nielson

Like it's the days of being able to say like, oh, well, that would never work here. Like, I don't know, in in your mind, is there anywhere where it truly will not work or should there be a path there? You know, regardless of what type of organization you're in.

00;28;12;01 - 00;28;39;12

Marty Cagan

It's really hard for me to imagine a company that shouldn't work this way. But of course, unless you know every company, you can't really say that for sure. Yeah, they might be still, I don't know. But I do think that it used to be more of a debate right now. And when I mean now with generative AI, the that debate is largely going away.

00;28;39;14 - 00;29;03;05

Marty Cagan

Now, the question is different. Now, the question is, can we do this fast enough. Yeah. So it's it's it has really lit a fire under a lot of companies because for a long time it was really if you had a competitive threat like a company like Amazon was entering your space, then you were scared to death them. And then you were like, we got to change right away.

00;29;03;08 - 00;29;24;20

Marty Cagan

And there were always somewhere the, the investors, the board would say, you know, if we could show where, we know how to innovate, we could literally add a zero to our valuation. So because they could look at comparables out there and see, today those two things are still true, but they seem to be in the minority today.

00;29;24;20 - 00;29;38;26

Marty Cagan

It's like, all right, every you know, things are changing. Our organization is not set up to embrace and leverage that change. And that's what the product model is all about is is doing that well.

00;29;38;26 - 00;29;55;25

Geoff Nielson

Well, and with that in mind, like the thing that concerns me and I'm curious on your take on it, is that like, you know, with gen AI, with this kind of current landscape like it, it's not even like, hey, you can add a zero like, my worry is that if you don't do this, you're going to end up taking away a zero from the valuation of your organization.

00;29;55;25 - 00;29;58;00

Geoff Nielson

Is that, you know, is that a valid concern?

00;29;58;07 - 00;30;29;09

Marty Cagan

Absolutely. And and people are already worried about. Absolutely. So there's there's really two sides to it. One is responding to the threats effectively like we're talking about. And the other is taking advantage of the opportunities. Yeah. Interestingly, I mean, gen AI is the biggest test of all of our of our world, of our industry, for sure. Right before Gen I was the pandemic, of course, and the pandemic was, you know, an existential threat to a lot of companies.

00;30;29;09 - 00;30;58;24

Marty Cagan

In fact, a lot of companies, as everybody knows, they died because they could not adjust to the new reality fast enough. And, one of the things we decided to do in that book was to, highlight the companies that because they had moved to the model, they were able to not only adjust, but they were able to come out way stronger than and their competitors, most of which were, were literally destroyed.

00;30;58;26 - 00;31;30;25

Geoff Nielson

Yeah. So so, Marty, you, you know, your group, you know, sort of Silicon Valley partners, you do workshops in the space, you go in and you actually help organizations that, you know, that are looking for, you know, if I can call it a kick in the butt to get them on the right path here, you know, for organizations that are like kind of watching the tide of AI come in and are worried about, like, you know, either the threats or not capitalizing on the opportunities, you know, where do you typically recommend people start?

00;31;30;25 - 00;31;35;10

Geoff Nielson

How how do you, you know, kind of kick this off and get a lay of the land?

00;31;35;12 - 00;31;56;15

Marty Cagan

Will you recommend that you got to start with an assessment? And in fact, in the book, we included our assessment, the exact questions that we use, specific. And we encourage people to just do this themselves so they can absolutely do an assessment. And that assessment will give them the lay of the land. Where are they really right now?

00;31;56;17 - 00;32;25;19

Marty Cagan

The book describes where we think you want to get to. Yeah, but you need to know where you're starting from so that you know what particular situations you have to address. So what if you read the book and understand, like this is where we need to get to. This is not common between all the great companies we're talking about, whether they make cars or phones or, platform services like AWS, they all trying to get to this place.

00;32;25;21 - 00;32;48;04

Marty Cagan

And then, you need to see where you're at. And then that gives you, an understanding of how much work is in front of you and what kind of work is in front of you. And that's, depending on what that result is, sometimes you need help. Sometimes you can do it yourself. Sometimes just to, a coach for a specific thing is all you need.

00;32;48;04 - 00;32;50;25

Marty Cagan

There's lots of different situations.

00;32;50;28 - 00;33;02;02

Geoff Nielson

Yeah. Can you can you give me a flavor of, like, what are the most telling questions that really, you know, kind of help an organization orient themselves or help you figure out, like, how much help this organization's going to need?

00;33;02;05 - 00;33;25;02

Marty Cagan

Yeah. Well, there's sort of three meta questions that that drive everything. And those three kind of give us we can usually get a good answer to that in about 30 minutes. And then we can start drilling. So there's three questions. The first is how do they decide what to work on. How do they decide what to invest in.

00;33;25;05 - 00;33;31;12

Marty Cagan

There are it's remarkable how primitive so many companies are. They are just so immature.

00;33;31;14 - 00;33;31;23

Geoff Nielson

Yeah.

00;33;31;29 - 00;33;50;17

Marty Cagan

At this decision, they, they just make up these spreadsheets and they take wild ass guesses on how much money they make and let it go. And of course, it's sort of all garbage in, garbage out. But the point is, we need to know, how did they do that right now? How do they decide? Every company does this, right?

00;33;50;17 - 00;34;11;24

Marty Cagan

Every company you have, you have to decide. And in fact, every company has more things they want to do than resources to do them. So you have to decide. So that's the first meta topic, right? A second meta topic is once you decide you've got something to do, how do you actually solve that thing? How do you come up with a solution?

00;34;11;26 - 00;34;34;06

Marty Cagan

Do you just have, what you consider your smartest people say, this is what we should deal. Usually your executives or, you know, do you hire somebody to tell you this, an agency or something? What do you do? How do you solve those problems? And then the third is, okay, you've got a solution. How do you actually build, test and deliver that solution to your customers?

00;34;34;08 - 00;34;58;15

Marty Cagan

Those are the three meta areas we refer to them. How do you decide what problems to solve? How do you solve those problems, and how do you build and deliver your solutions? Some companies are good at one and not the others whatever. But you need to be solid in all three of those two and that at least gives us, an area.

00;34;58;17 - 00;35;01;07

Marty Cagan

Then we can go in, of course, drill deeper.

00;35;01;09 - 00;35;26;13

Geoff Nielson

Yeah. And it's so interesting. And I mean, these are these are such meaty questions. And they also strike me, Marty, as being like some of the hardest questions or some of the hardest areas to, like, actually mature and or change. Right. Like, actually like to transform what you invest in to transform like how you build this stuff. Like, yeah, I, I mean, I can't imagine that's something you're going to do, like, you know, by the end of the week, right.

00;35;26;13 - 00;35;37;22

Geoff Nielson

Like these are, these are so ingrained in the DNA of an organization and so do most organizations. Start by like, how do I optimize within this? Like how do we where do we go from there?

00;35;37;24 - 00;36;03;11

Marty Cagan

It's a great question. It's and just to be clear for, you know, we're not talking small startups here. We're talking about bar companies. It's usually 1 to 3 years. Yeah. So realistically, 1 to 3 years in order to get to where you need to be, in order to be able to handle the changes that come at you, take advantage of the opportunities that come your way.

00;36;03;17 - 00;36;29;00

Marty Cagan

1 to 3 years. Now, here's the thing. Now, now I'm injecting a little bit of politics here. I've never met an organization that gives you one, two, three years worth of time to go and change everything. That's just not how it works. So rather than try to change everything at once, we always advocate this idea of pilot teams.

00;36;29;03 - 00;36;56;28

Marty Cagan

Pilot teams. You actually can make a real difference in in weeks or small number of months. Piloting says we're going to take a small subset of the organization, usually 1 to 3 actual product teams. We will staff them very intentionally with the people that are good examples of what you need in this, and we will do everything we can to set them up to succeed.

00;36;57;01 - 00;37;28;04

Marty Cagan

Meaning we'll make sure the management is supportive, you know, for that particular. It's just an experiment, right? This is a low cost, low risk, and quick way to see if this model works well in this company and most importantly, for the executives to see if this model will work in this company, if this is going to be good money to put into this, and, those pilot teams, I mean, there's a lot of thought that goes into them.

00;37;28;04 - 00;37;44;28

Marty Cagan

You want to make sure that whatever they do, if they succeed, you don't want the executives to say, oh, we could have done that anyway. That's easy. Yeah. You want them to say, well, that's actually something we probably couldn't have done before. On the other hand you don't want to set them you know they can't cure cancer in a quarter or something.

00;37;45;01 - 00;38;12;06

Marty Cagan

So you have to make sure you're something ambitious but doable, something that proves the value. Right. And then yeah there's a number of factors there to make sure that they do. But then that pilot team usually we say run it for a quarter. So you months usually if you're doing what you want to do, that's everybody's able to see what good looks like.

00;38;12;12 - 00;38;36;07

Marty Cagan

Everybody the company and and I'm not just talking about the executives here. I mean even other engineers, other product managers, they can see what good looks like. And now they understand where the bar is. Now they understand why this is such a big deal. And then we spread from there. So that's just one of those lessons learned. It's not the only way to go.

00;38;36;09 - 00;38;52;00

Marty Cagan

Sometimes companies have feel like they have an existential threat and they have like six months to change or they're dead. So you have to be a much more aggressive. But most of the time this is the way to go. A pilot team let it prove and grow from there.

00;38;52;02 - 00;39;08;19

Geoff Nielson

Yeah, I love that. And you know with that model you can like you can earn the mandate, right? You can earn the trust, you can demonstrate value. And yeah, I was going to say I hate this word. I'm sure you do too. I was going to say take a, take a, like a small a agile approach versus, you know, a big a agile approach.

00;39;08;25 - 00;39;09;25

Geoff Nielson

Yeah.

00;39;09;27 - 00;39;11;21

Marty Cagan

Yeah. Absolutely.

00;39;11;24 - 00;39;34;17

Geoff Nielson

Yeah. No, that's that's awesome. Are there are there organizations you see that like just like take the wrong lesson or just like try tactics where you're like, don't, don't do that. That is not the road to get there. Like what? What are the pitfalls you've seen along the way that you're like, that is not the road that's going to get you where you want to go.

00;39;34;20 - 00;39;58;03

Marty Cagan

Well, yeah, this is the this is a rough one. There's there's two big ones that happen honestly all the time in many companies, both anti-patterns happen the first one and I understand where this coming from. The first one is the company hut they hire somebody like McKinsey. I'm using McKinsey here, but it could be sure it could be Accenture.

00;39;58;03 - 00;40;21;27

Marty Cagan

It could be, you know, so so, and I understand why that happens, because who does the CEO trust? Yeah, right. That's why the problem is those companies. And by the way, there's stuff typically with very smart people. And that's not the issue. I love to hire from those places. But the issue is they they have never worked in the product model.

00;40;22;00 - 00;40;49;12

Marty Cagan

They literally don't know what good looks like. And so, they end up spending and I'm not exaggerating, millions, often tens of millions. And three years later they're still where they started. So that's the first anti-pattern. And I it's not be Kinsey's fault or any of these Bain's fault. It's that they they're doing what they do. The the issue is the company doesn't know what they need yet.

00;40;49;15 - 00;41;08;25

Marty Cagan

They it's yeah, they need people with the skills that they're trying to obtain. So that's a really common anti-pattern. The second one, you alluded to it just a minute ago. They think by moving to agile they'll be able.

00;41;08;27 - 00;41;09;08

Geoff Nielson

To do.

00;41;09;08 - 00;41;32;15

Marty Cagan

All this stuff. And of course, they mean capital A agile. And don't get me wrong, if you do that, the right the real kinds of agile, they're sort of fake agile, real agile out there today. But if you do real agile, it will help. But it'll only help. In the third of those three big areas, I described changing how you build, test and deploy.

00;41;32;17 - 00;41;58;16

Marty Cagan

And the problem is that's the easy one of the three. That's the problem. So a lot of companies bought into the whole we're going to transform and that means agile. And so they brought in agile coaches and they you know, hired all these roles like Scrum masters and product owners and they got almost nothing. Sometimes they got even worse than they were before.

00;41;58;18 - 00;42;19;06

Marty Cagan

And what they didn't understand was that they were not addressing the real meat of the problem, like we were talking about. Doesn't address it at all. It's just not even in the scope of it. So, and, you know, I feel for a lot of those executives put a lot of money into that and didn't get the results.

00;42;19;08 - 00;42;27;00

Geoff Nielson

Yeah, yeah. It's just it's just not the right place to start, right? Like, it's, a piece of the puzzle, but, you got you got to get the big stuff right first.

00;42;27;03 - 00;42;30;18

Marty Cagan

And you have to understand that bigger context.

00;42;30;21 - 00;42;53;08

Geoff Nielson

Yeah, yeah. I want to come back, Marty, to, really, really insightful, by the way, I want to come back to that the first one, which was the, you know, the the consultancy problem or, you know, the McKinsey problem, if I can call it that. To me, there's a couple of things wrapped up in there. One of them is you mentioned that the consultancies like, they don't follow the, you know, the product operating model here.

00;42;53;10 - 00;43;06;27

Geoff Nielson

To what degree like, is this a matter of of finding product centric consultancies or is like the use of consultancies itself, just like somewhat misguided. And this is more about just building those capabilities in-house in your mind.

00;43;07;00 - 00;43;28;01

Marty Cagan

Yeah, there is one dimension because we have, you know, most of the management consultancies there in the their their business model is in the do it for you model. Yeah. Right. And of course it's very profitable. I'm not questioning that for sure. That's why it's tens of billions of dollars often is it's a business. Yeah. Yeah it's business.

00;43;28;01 - 00;43;41;09

Marty Cagan

They have to provide an army of people. You know, it looks the sensors of the world, they're just huge numbers. And of course, okay, the problem is the company needs to build these skills.

00;43;41;12 - 00;43;42;06

Geoff Nielson

Yeah.

00;43;42;09 - 00;44;05;13

Marty Cagan

The company needs them. So to me, and I always encourage the CEO, whatever you do, you need to know your company. Your team needs to learn this stuff. So unless your team is learning it, you're not getting what you need to get. So then the question is, well, okay, who can teach you? The most important thing is someone who's actually done that.

00;44;05;13 - 00;44;30;11

Marty Cagan

Been there, done that. And most of the time, you know, business strategy is very different than product strategy. So most of the management consultancies are all around business strategy. Should we acquire this company? How do we, you know, expand our business into whatever part of the world that and the super valuable but not products. Right. That's a very different thing.

00;44;30;13 - 00;44;54;09

Marty Cagan

And so they're very different skills. Unless a somebody that's helping you is actually done a product vision. And let's say that a product strategy, unless they've coach product teams, unless they know product discovery, you how are they going to help you. Yeah. And so that's a different skill set. And the good news is there's lots of people with that skill set.

00;44;54;09 - 00;45;14;23

Marty Cagan

We we recommend coaches all the time. We don't have any financial ties with any of them. We just recommend them almost every day. We have a network of about 100 around the world. Because often that's what people need. They need somebody to stay with them. And, and coach them on these things.

00;45;14;26 - 00;45;30;19

Geoff Nielson

Yeah. No, no, I'm glad you said that. That's exactly what I was getting at. It. It sounds like you're a big believer in, like, coaching as a model rather than consulting as a model so that you can actually, like, educate, train up and build those skills in-house versus like, walk out the door with them.

00;45;30;21 - 00;45;31;24

Marty Cagan

Exactly.

00;45;31;26 - 00;45;55;14

Geoff Nielson

Yeah. No, I, I love that. And by that way, I'm, I'm an advocate for that as well. I'm just, you know, I'm conscious of time here, and I wanted to ask some, like, bigger, I guess, kind of bigger macro questions as well and get your perspective on them. We talked about Jen. I, you know, it's obviously impacting things in a number of ways, as are different, you know, emerging, technologies.

00;45;55;17 - 00;46;13;27

Geoff Nielson

I'm curious from your perspective, Marty, like, as you're seeing some of these trends emerge, you know, which in your mind are like, absolutely living up to the hype. And are there any that you think are kind of overblown or, you know, bullshit relative to, you know, what we're reading about?

00;46;14;00 - 00;46;37;14

Marty Cagan

Yeah. Well, this is, first of all, I would say, Jen, I is real. And I will, just sort of funny. I started my career almost 45 years ago, and in the first wave of AI, I literally was as a member of an AI team Carthage. Wow. The problem is, the technology was very different.

00;46;37;14 - 00;46;38;24

Geoff Nielson

Technology.

00;46;38;26 - 00;47;06;13

Marty Cagan

But now I believe it's really it's real. It's not a reach to say it is real. There are things you could do that we never been able to do before. So that's like, this is, I think, a golden era for products because of that. On the other hand, look at technologies like cryptocurrency. I still am looking for the problem that it can solve better than anything else.

00;47;06;13 - 00;47;19;25

Marty Cagan

I cannot find it. And I, I, I feel like there's a lot of, a lot of bad actors that are just using it as a vehicle to take money from you and give it to them.

00;47;19;25 - 00;47;24;12

Geoff Nielson

Well, that's that's exactly how it feels to me, too, right? It's making an awful lot of bad guys very rich.

00;47;24;15 - 00;47;41;25

Marty Cagan

Yes. Yeah, yeah. So that's, I mean, I'm, I almost I always hesitate to say there is no good use for this technology. Yeah. I will say it's been a long time and nobody has shown a good. Yeah, yeah, yeah. So, that's not that's not a good sign.

00;47;41;27 - 00;47;59;27

Geoff Nielson

Yeah. Have you seen, have you seen in your experience? One of the other ones. I'm personally skeptical about it. I'm curious from your perspective, is like VR or went through a bit of a hype cycle in the last few years, and honestly, I feel like it's died out a little bit hype wise since I came on. Have you found a really good use for that yet?

00;47;59;27 - 00;48;07;09

Geoff Nielson

That to me still, it still feels like a, like a, a solution in search of a problem.

00;48;07;11 - 00;48;31;22

Marty Cagan

Yeah, I'm actually much more optimistic. Like I would put it in between those two we've talked about. It's not the clear winner. That is for sure. But also it's not the clear loser that crypto is for sure. Yeah, there are real things that people can do today. I mean, is glasses are a good example. There's some really promising things you can see.

00;48;31;29 - 00;48;57;20

Marty Cagan

I'm actually very, intrigued is probably the word with apples developer platform for, for AR and VR. And this is there are it's not clear exactly which way this will go or should go, but it is there is no question it is able to do things we've never been able to do before, much better than we've ever been able to do.

00;48;57;22 - 00;49;17;05

Marty Cagan

So that's, that's very promising to me. There's nothing wrong, though. So some people feel very religious about this. You have to start with the problem and then you solve it. And some people are like, well, but a lot of times we start with a new enabling technology and then we see where it solves problems we've always wanted to solve.

00;49;17;07 - 00;49;49;19

Marty Cagan

I think there's a long history of both out there, so I'm not. I love when you look at a great product. What is it? It's a it's, a real problem that's solved in a way that's just now possible. That can come from either side. So it doesn't bother me. However, if you don't find a good solution for it, then that's a different thing, and I, I feel very optimistic that over the next few years we will see amazing applications of that enabling technology.

00;49;49;21 - 00;50;15;29

Geoff Nielson

Yeah. So whether it's AR, VR or just any kind of emerging tech, are there any emerging technologies or like like I guess let's call it like emerging use cases you've seen recently that just kind of were like hair, I was going to say hair raising, which is not a fair expression for either of us. But but like kind of goosebump moments of like, oh, wow, I didn't know we could do this.

00;50;16;02 - 00;50;36;11

Marty Cagan

Well, I do get a lot of that with Gen. I mean, that's sort of what keeps us all excited. I think about it, the different applications that come out just like, damn, that is a good idea. And I could absolutely see that. We have never even thought that was possible. You know, most of the time with an innovative product, the users had no idea it was possible.

00;50;36;14 - 00;51;05;22

Marty Cagan

So there's a lot of that going around. So we and since we already talked about that one, the another one I'm very bullish on, and I see a real future is, in general we've got solutions for consumers and we've got, you know, solutions and products for businesses. Historically the products for businesses have been the sort of, you know, ugly stepchild.

00;51;06;00 - 00;51;32;29

Marty Cagan

Yeah, right. They were just not very good. And largely you go into a business and go into their finance organization, you see what they're using. And it's like horrible, just horrible. And compare that to what we have on our phones, what we have, you know, for our personal life. And it's just like, what's going on? Like, why is so much of the talent out there focused on the consumer things and not on the business things?

00;51;33;02 - 00;51;59;03

Marty Cagan

And there is, there are examples today of that talent applied to business. And I and I might be a little naive here because I have done this before, but I'm very optimistic that we're going to see a displacement of these old, you know, the companies that really don't care about the products, they don't care about the users.

00;51;59;03 - 00;52;18;25

Marty Cagan

They do care about the buyer. You don't care about the people that have to use it. And I think we're going to see a displacement with, companies that do care. Yeah. And and it will not only make, businesses more effective, but it will improve the lives of the people that work in those businesses.

00;52;18;27 - 00;52;36;09

Geoff Nielson

Yeah. So, so the sales centric, like, you know, if I can be, you know, cynical for a moment and say, like, contract centric, like model is just going to, you lose out to the actual, like, increasing, you know, breadth of amazing products.

00;52;36;12 - 00;53;03;07

Marty Cagan

Yeah, absolutely. One there's one, enterprise software company that I, I, I was an investor into, so I'm clearly biased, but their products are literally their financial products for financial reporting to the SEC. Their products are rated higher by their users than Apple products. Wow. Think about that. Wow. You just would never hear that phrase anything in the past.

00;53;03;09 - 00;53;26;11

Marty Cagan

Never. But now you can. And that's I think that's a wonderful thing because, you know, maybe somebody spends an hour or two in the evening on their personal life stuff with, you know, Instagram or whatever they like, but they're spending eight hours or whatever on their work stuff in front of this horrible, you know, solution so often. And I really do feel for those people.

00;53;26;13 - 00;53;34;16

Marty Cagan

And I think, and, you know, we're talking millions and millions of people around the world, just around the world now,

00;53;34;19 - 00;54;03;05

Geoff Nielson

I, I do want to follow that, but there's one there's one piece that I, I've been meaning to ask you about, and I haven't really had a chance to. And it's that we keep talking a lot about, you know, businesses, about consumers, you know, to what degree do you see this? You know, the product operating model, this whole approach, being adopted by or working for the public sector, like, is there a use case there or are they using it, or is this really just kind of commercial applications now?

00;54;03;05 - 00;54;29;07

Marty Cagan

It's a great question. In fact, I, I, I have spent time with the US, the UK, the Australian Government Services because in a way they're they're like perfect example of why you'd want to do stuff like this. Yeah. And also product models about not wasting so much money. And of course most people would agree we don't want to waste taxpayers money.

00;54;29;07 - 00;55;00;19

Marty Cagan

Sure. So, I think there's a strong argument for it. In fact, I did a collaborative article with somebody who was, major advisor to the US Government Digital Services, called, the product model in government. It in theory applies. Fine. It's hard because, as you know, there are so many stakeholders and. Yeah, and there's so much, there's a lot of obstacles.

00;55;00;19 - 00;55;35;10

Marty Cagan

Now, most of those obstacles are to make sure people aren't like ripping off the government. Right? They're right. They're there for a good reason. But it's a lot easier to do this stuff in the commercial world, no question. Just easier. Yeah, but you could argue you get more impact in the in the public sector. So I think the public sector people I know they are, they're very passionate about doing this and they're there are good examples where they've done some very impressive things.

00;55;35;12 - 00;55;39;18

Geoff Nielson

Yeah. They just have to have the stomach for getting it off the ground.

00;55;39;20 - 00;55;50;25

Marty Cagan

Yeah, it's it takes a certain kind of grit to get something, you know, built, deployed, you know, in a model where there are so many interested parties.

00;55;50;27 - 00;55;53;14

Geoff Nielson

This has been super fun. I really appreciate it.

00;55;53;15 - 00;55;57;07

Marty Cagan

Well, thanks for inviting me, Jeff. I hope this was useful to your audience.

00;55;57;10 - 00;55;58;04

Geoff Nielson

Absolutely.