Product management in a crisis

I was writing a series of articles about the relationship between product management and the other areas of the company. I already wrote about:

• UX and product management
• Engineering and product management
• Product marketing and product management
• Project management and product management

I still have a couple of articles to write in this series, but I want to pause and write about the impact of a crisis on product management and digital product development. It not only seems to be good timing, but I also wanted to share some real-life examples I’m experiencing at Gympass.

COVID-19 crisis

Now we are facing COVID-19 crisis. Another crisis as many others, but this one with a huge impact on people’s daily lives. To help remember, here’s Wikipedia’s list of economic crisis and a list of health crisis, including the Spanish Flu that happened more than 100 years ago with 500 million people infected — about a quarter of the world’s population at the time.

Crises have a big impact on business. In a crisis, people and companies spend less, demand for certain types of products and services plummet and, depending on the crisis, some companies may even have to cease operations altogether.

That’s what’s happening now, people have to stay at their homes due to social distancing and many businesses need to stop or to change the way they operate. Some can’t remain open like barbershops, gyms, dance houses and others that require close contact, while other can operate only by delivery, like markets and restaurants.

Product management in a crisis

In a 2016 article, I explained that product management “is the function responsible for making the connection between the company strategy and the problems and needs of clients using the digital product. It must be, at the same time, helping the company to accomplish its strategic goals, and solving the problems and needs of clients.”

In a crisis, what is the company strategy? What are its strategic goals? First thing is to preserve cash. As people say, “cash is king”. Good times or bad times, a company needs cash to pay wages to workers for the labor, pay suppliers for the supply and pay its tax debts.

In order to continue to receive more cash, the company needs to be solving a problem or addressing a need of its clients. In a crisis, the client’s problems and needs will probably change considerably. The company needs to identify and adapt to these changes as fast as possible.

When COVID-19 crisis hit the market, companies started to look into these two perspectives:

• preserve cash;
• identify and adapt to changes in customer problems and needs.

For the first measure, to preserve cash, all the usual suspects apply to many companies. Preserve or even advance revenue streams while looking into all costs with a magnifying glass.

On the revenue side, some companies, like travel agencies, offered to exchange existing travel booking for future bookings with an increased value. For instance, if you have a trip scheduled for March or April, some companies are offering that you can rebook it late for the same amount, or even for a bigger amount, say 120% of the amount you paid. Some companies are offering special discounts if you pay in advance, like a barbershop that are offering discounted prices if you book a dye hair session for July.

On the cost side, some companies are avoiding some costs while keeping the offices closed. Unfortunately, that may not be enough and other ways of cost-cutting may be necessary like postponing accounts payable, reducing salaries or even laying off part of their employees, as described in this Business Insider article.

The role of the product manager

The interesting side comes when the company focuses on identifying and adapting to changes in customer problems and needs. That’s the main role of the product manager.

With COVID-19, customer problems and needs changed really fast, and the product manager and the entire product development team (product managers, UX, and engineers) have to be even faster in order to adapt the product to these new needs.

I just heard about an interesting offline example. A pizza house added to its product portfolio a new type of pizza, the do-it-yourself pizza. They send the pizza disk pre-baked plus the sauce and all ingredients separately to your home, so you enjoy the pleasure of building and baking the pizza yourself.

Street stores are having to adapt themselves to e-commerce way faster than they were planning since now all buyers are at home and don’t visit stores.

Schools and art event coordinators now are adapting to e-learning and event live streaming.

Real-life example

Here at Gympass we have 3 different customers and all of them deeply impacted by COVID-19:

• gyms in many cities were closed to help in physical distancing measures applied in many cities to avoid the spread of COVID-19 and consequently are losing recurring revenues from users who are not visiting the gym;
• users, the employees of our clients, cannot go to gyms anymore and have to stay at home, but also have to somehow stay active, but their first reaction is to cancel or pause their Gympass membership since they won’t have access to gyms for a while;
• corporate clients, whose employees are at home and don’t go anymore to gyms, while HRs are concerned about how to keep these employees engaged and productive.

So all 3 of our customers, gyms, user and corporate clients, had huge changes in their problems and needs and we had to be very fast to adapt to those changes.

At the end of 2019, after some product discovery work, we decided to explore the idea of offering to our users wellness services beyond access to gyms and studios.

Our first challenge was to find partners who were willing to test this new concept with us. We were able to partner with NEOU, 8fit, tech.fit and Zen App. Thank you, partners! \o/

We built a pilot to be launched early March to a very limited audience to test real user interest in this offer. The pilot was a very simple order form, where we presented the value proposition of Gympass Wellness, the name we gave to this new service, and a place for the user to register and to put their credit card info.

We had just launched the pilot internally (eat your dog food!) when the COVID-19 crisis arrived. We were able to adapt in record time our pilot to be offered to our entire user base so they can not only remain active but also take care of their nutrition and their minds during these very challenging times.

With Gympass Wellness we were able to address both users and our corporate clients’ changing problems and needs during the crisis.

What about the gyms? By being closed, they are losing revenue. Their customers are not visiting them anymore so the regular gym users are prone to cancel their subscription while those who used to visit gyms using Gympass won’t visit the gym during the crisis what will cause a loss of revenue for the gyms as well. To help our partner gyms we decided and implemented in record time 2 solutions:

• Provide gyms a white label app they could offer to all their members so they can deliver value to their clients helping them stay active while at home;
• Provide a platform for gyms to schedule and stream live classes to all Gympass users so they can keep their instructors employed while providing Gympass users with exclusive content.

As I mentioned, all these solutions were implemented in record time, which was needed to provide solutions as fast as possible.

Perfect is the enemy of good

As mentioned earlier, when a crisis hit the market, companies need to look into these two perspectives:

• preserve cash;
• identify and adapt to changes in customer problems and needs.

Even though product managers and product development teams have an important role in the former, their main role is in the latter.

In order to identify and adapt to these changes in customer problems and needs, the product development team needs to change its behavior with the rule in mind that “perfect is the enemy of good”. In all moments of product development, this rule is valid. The most important thing is to have your product in front of real users in their own context so the product development team can deliver value to their users as fast as possible and can learn from real users using their product.

However, in a crisis, this rule is even more critical and key. We need to deliver solutions to our users’ changing problems super fast. It doesn’t matter if we didn’t do the best discovery process, or that the solution is a very simple web form that we will have tons of manual work afterward, or that the solution will generate many technical debts. The main thing is that we are able to deliver a solution to the new problems and needs that our users are facing in a crisis.

That’s the role of the product manager and the product development team in a crisis.

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