Stage VP’s Startup Growth Series with Karen Ellenberger, VP of Product at Till - Part One
We’re excited to welcome Karen Ellenberger to Stage VP’s Startup Growth Series. Karen is the VP of Product at Till, at Stage VP portfolio company. Till works with landlords and renters to help renters pay their rent on-time. This interview is the first of a two-part interview with Karen. In this one, we focus on what Till does, what product-led growth is, how to build a mission-driven product, and more.
SVP: Welcome, Karen. Why don't we start with you telling us about your background and what you've done in your career in product leadership.
KE: Yeah I’m going to go back a little bit before my product career, because it is relevant to how I think about product. My career actually started in sales and business development, and my very first job out of college was in leasing shopping malls. This is back in the day of enclosed shopping malls, and my primary responsibility was not leasing the actual store front, but trying to find creative ways to monetize all of the unused space in a shopping mall. So it's the cars that you see in the middle of the common area, the little kiosk things, parking lot usage, any creative way we could squeeze a buck out of the shopping mall.
And then I went to HP which was my first tech job and I was in sales dialing for dollars; I was sitting in a call center making cold calls into places like gas stations and trying to ask them to buy servers, which is a ridiculous exercise. So when I’m thinking about understanding business needs, that very early sales career was really important in learning how to ask questions and how to build a rapport with people that do not understand why you're calling them and probably don't want to talk to you.
I got my start in product before it was called product; we were just project managers, and our job was to solve problems for business constituents, whoever those folks were. I built data centers at HP, and this is back in the day where all of your data storage was done on site. It was going in and setting up physical hardware and data centers to do data storage and recovery. At this time, a terabyte could cost a million dollars so we've come a long way since then. My true product journey started when I left HP back in 2008 when the economy crashed.
I did some NGO work in Africa and then came back to the US and started a company with a friend. I didn’t realize I was doing product work at the time; it was a bootstrapped company, where we were trying to build a business from the ground up. It was very classic product management, where you're going out, you're talking to your users and your customers, and you're trying to understand what problem you can solve for them that you can make money off of, which effectively is how you build a business. We had a bootstrapped startup where we were buying textbooks from college students at the end of the semester and reselling them on Amazon. I sold that company in 2013 and ran another startup by myself as a bootstrapped company, where I was a service provider for Amazon merchants, solving data problems for them.
I then went to Mapbox and became a product lead, leading a product group for about two and a half years. That was a very different end of the spectrum compared to what I was doing previously, going from back to back bootstrapped startups with no funding to a very well funded, much larger company at a very steep part of their growth.
I left Mapbox about a year ago to join Till as VP of product because I really enjoy early stage product development. I love working with the really smart team at Till.
SVP: Why don’t you spend a moment telling us about Till in your own words.
KE: Till acts as a financial platform for renters and landlords. The goal of Till is to help renters prioritize and pay their rent on time. The way Till does that is by offering a suite of financial solutions for renters to help them budget, save for rent, and build their credit history. Paying rent is one of their biggest expenses and a really powerful tool for people to build up their credit score.
We also offer a flexible payment schedule for renters who may struggle to pay rent only once per month. We spread rental payments out to line up with their pay schedule and this benefits renters because they are able to build their credit history and have a better financial foundation. It also benefits landlords because it helps them get paid in full on the first of the month a higher percentage of the time.
SVP: You’re an advocate for product teams to work with speed and agility. What is the right cadence to know when you're going fast enough?
KE: Velocity is different at each different org and we often see frameworks that people talk about like agile methodology. I think hitting velocity is very specific to the organization that you're in and the team that you have. When we talk about questions around defining your velocity, how do you measure velocity, etc., I think it means your work output is happening at a pace that seems efficient to you. Are you able to bring new products to market quickly, and are you able to be responsive to issues that your customers have? That ability to solve problems for your customers and your internal teams is really important. Do you get feedback efficiently back to the engineering teams? Do you have a way to triage incoming bug fix requests? All of these things go together to make velocity.
The clarity of your team’s goals is really important. You want to have long term goals that everybody can march towards and make independent decisions to reach. What are your large projects that you're trying to get out the door and when do you need those projects to ship? Is it a date where you need to have something to market by a specific date for a specific customer? Or is it more like a big hard problem that you're working on that may not necessarily have a date but you definitely need to fix the problem? Then break those goals up into milestones. Make sure that your milestones are small enough that if you ask someone what's the very next thing you need to do to work towards this milestone, they know the answer to the question. Sometimes the answer is ‘I don't know, but these are the three things that I need to answer in order to find out.
As a product leader, if you can give the people that are doing the work enough context about what the problem is that they're trying to solve, then you need to be able to step back and allow people to work independently. Engineers especially have to make hundreds of decisions a day about what they're building and you need to give them enough context to be able to answer questions independently without having to ask you every single question.
SVP: You’ve expressed a need for product people to have opinions but be willing to give them up. Could you talk about an example of an opinion that you had at Till which you have given up due to contact with the customer?
KE: Yeah. Before I started, Till had a product that was effectively like short-term low interest loans for renters. As we were coming into Covid, there was a great deal of uncertainty and risk to be putting loans out into the market when we don't really know what's going to happen with Covid. There was a decision to pivot to what has become Till’s primary product which is a flexible rent schedule which basically just breaks up your rent payments over a series of payments that line up with your paycheck. We’re not issuing credit into the market in the same way that we were before, but we’re still delivering a similar value to renters and to landlords.
By just tweaking a little bit of how people think about how we pay rent, we’re reducing the risk associated with credit. We used to think that the identity of the company was in giving loans and we were willing to walk back from that and say that the problem statement hasn't changed, but how we approach the problem should change. We started talking to renters about what's most important to them and what's the hardest thing for them. What we heard was renters saying that paying my rent all at once, on the first of the month is really, really hard for me because I only get paid every two weeks, and so my paycheck doesn't cover my full rent.
And so, being able to hear that and change the fundamental identity of the company in the middle of a pandemic when everybody's leaving the office and working remote, is sort of an extraordinary example of agility and getting rid of your assumptions about what you think you're going to be doing and instead listening to your customers telling you about what they need. The lesson is don’t always assume that the identity of your company is the only way you can go forward; rather, think about what the problems are that your customers are having and how can you solve them in a novel or new way.
SVP: You hear the product-led growth (PLG) term thrown around all the time; it’s hard to read a product-focused blog post that doesn't talk about it. Are you able to explain what product-led growth is and what your take is on it. Is it just just a buzzword?
KE: Product-led growth is actually something that I’ve been practicing for a long, long time and then saw it named for the first time and was like ‘oh, somebody named this.’ You always start with the people that are going to use your product as the group that will define what your product should do, and you ask them questions about what they need. Product research exercises that follow a thought pattern of ‘this thing is really cool and I'm going to find people to use it and sort of force feed this solution to a problem that doesn't exist’ will not lead to a great product.
So you always want to start with understanding the problems that your users have or what's hard for them or what they're struggling with, and then you work backwards from that. You don’t want to come in with a solution already; you can have an idea about what your solution might be, but you always want to be prepared to be wrong. There’s something very valuable in being proven wrong: you will learn something that will help you build a much stronger product in the future.
There are two ways that you can understand whether your product is going to work well. The first is that you always want to look for the painkiller instead of the vitamin. The issue with vitamins is that they are something that someone can take or not, and it might make them feel better or not, but they’re easy to forget, they’re kind of expensive, and nobody really cares. If you're busy in the morning, you're not going to take your vitamin. This vitamin-style product is the kind of product that will struggle in the market. What you want to look for is a painkiller; a painkiller is not optional— you have to take your painkiller or you can't function. That’s the kind of product that you want. To get traction in the market, you need to find a very deep problem; not a surface level vitamin problem, but rather a deep, painkiller problem.
The other way that you prove this out is when we're talking about things like pricing strategy— it’s very important to understand how you're going to monetize the business. It doesn't always mean charging your customer, but you do need to have some vision for how you monetize. Don’t go to market with a freemium product assuming people will pay for it, because there's a big leap between signing up for something that's free and opening your wallet and paying money for something. A good litmus test for whether you've got a painkiller or a vitamin is if people will open their wallet and pay even $1 for it. There’s a big psychological hurdle that people need to get over to be willing to pay even a small amount. Even if you're doing early product development, you need to test people's willingness to pay very early and getting people to pay $1 shows you you’re beginning to find product-market fit.
SVP: Till has two types of customers: you have landlords and you have renters. How do product leadership questions become easier or harder when you have a two-pronged go-to-market like you have?
KE: This is something which is particularly interesting to me about Till: we aren't solving problems for just one set of customers; rather, we're solving problems for two sets of customers and these are two sets of customers that are traditionally adversarial. Making sure that we're aligning the needs of both of these customer sets is very, very important.
In terms of landlords, they’re not paying with money for Till, but rather with a willingness to be flexible with renters and to entertain a different way of doing things that allows access to a different market. We found that renters are willing to pay. We are charging a fraction— somewhere between 5 and 10%— of what they would be charged if paying a late fee. So there's high value to the renter and it's still financially better for them to pay for our service instead of paying a late fee.
As for landlords, even though we don’t charge them, we need to provide value for them in order for them to be willing to give us access to the market. Internally, we’ve talked a lot about what our go-to-market strategy will be, and we actually recently launched a new product which is called credit builder and it is marketed directly to the landlords as a way for landlords to offer an amenity for their residents to build credit by paying their rent. Landlords send us the list of residents that have paid their rent successfully and on time, and we will then send that to the credit bureaus so that renters can build their credit. This is a way for landlords to incentivize renters to pay on time because they can build their credit.
SVP: It’s amazing to see the mission-driven elements of Till. How do you think about embodying this sort of mission-driven aspect from a product lens?
KE: At the core of our questions, we ask: “is this good for the renter?” We ask ourselves in every product decision if there are going to be negative unforeseen consequences as a result of this product decision that we're about to make, and is it good for our renters?
It’s a very important part of Till’s mission to make sure that we're improving the financial lives of renters. We also need to keep in mind whether what we’re building is helpful to the landlord and can help them make their business and daily operations easier while helping their bottom line. If we can pass both of those tests, then we know we’re making a good decision. If we can't pass both of those tests, we need to go back and understand the trade-offs that we're making and to see if there is a different way we can approach the situation.
At the heart of all of the conversations that we're having is making sure that there's a voice in the room that's advocating for the renter and a voice advocating for the landlord. We ask ourselves: is this a decision that is going to negatively impact either of these parties, and how can we understand more deeply what a better solution might be.
SVP: As you think about planning, roadmap development, and market research, how much consideration do you put on competitive offerings and how much do you put on what you're hearing from customers?
KE: I think one of the traps that companies can fall into is over-indexing what your competitors are doing and trying to follow in the path that your competitors are following. If my competitor just released a feature to do xyz, it’s a trap to feel like you need to release a feature that does xyz. Instead, you should focus on being aware of what your competitors are doing and try to learn from what the market is doing. Sometimes you’ll see what your competitors are failing at, and those can be really helpful learnings as well. Don’t focus so much on your competitor that you lose sight of your customer.
If you don't have competitors, you should look very carefully at what you're doing and make sure that you are solving a real problem. Sometimes competitors are validating the market; when Till started, we did not have competitors. We are now starting to see competitors entering the market which is incredible market validation for us because people are seeing what we're doing and the success we’re having.
SVP: How do you gather feedback from customers?
KE: As a product person, you have two ways that you can get information in: one is building up a strong feedback loop between the people that talk to customers every day, all day. They have more ability to collect information and to pick out signal from the noise than I ever can. To this end, you want to create clear ways that are in people’s workflow for both your sales team and whatever customer-facing support team you have to easily funnel feedback to the product team.
At Till, we have a Slack Bot that we use where our customer support team can very quickly fill out a little questionnaire and get us information back about the problems that customers are having. This can be anything from like ‘oh this screen wouldn't load for me on the web page’ to ‘I really hate having to do this process that you make me do every time I want to pay my rent.’
The other way to gather information starts with providing a deep level of support for both our growth team and our support team. When a customer is having a problem, I want any of our product folks or myself to be pulled into a meeting to help have a difficult conversation with a customer to answer questions about something. These conversations are golden opportunities for product people to get in and start asking questions about what people need. It also gives us an ability to see around the corner to anticipate what our customers’ needs that we are not meeting and with which we can help.
SVP: Karen, thank you for sharing these very helpful insights. We look forward to the second part of the interview where we focus on leading product teams at an emerging startup.