Criteria for continued funding of new products

At Indeed we’ve been working on continually improving our processes for funding, staffing, executing and assessing new experimental products.

One of our challenges is assessing early products and figuring out whether to kill or continue them.  One approach used in the past has been ‘make-or-break’ goals.  This has typically been represented as a top line goal to reach at a point in time, such as: X hires, Y sales, etc.

Over time we have learned that these make-or-break goals do not provide enough flexibility for the product team and also do not provide enough flexibility for Indeed.  In certain circumstances the team might make the goal – but Indeed leadership is simply convinced that Indeed’s limited resources to test out new products should be spent elsewhere.  Conversely the team might not make the goal – but leadership is convinced that this was the wrong goal, and that further investment is warranted.  So we are no longer doing make-or-break goals.

What we are trying instead, is to use a metered-funding approach, where an investment committee provides funding in stages – and the project teams have autonomy to use their funding and pursue their vision, but when the money is running out they need to return to the investment committee for more funding.

So how does the investment committee decide if projects get further funding?  Here’s what I’ve been coaching Incubator teams with:

“For projects to continue they need to provide compelling evidence that is surprisingly positive that shows their product can produce sustainable value in a meaningful market.”

Let’s pick this apart:

  • Compelling Evidence – Bring verifiable data and evidence.  No evidence-based-learning means no more funding.
  • Surprisingly Positive – Sets the bar high, if there aren’t aspects of the experimental product that are working surprisingly well we should probably put our investments elsewhere.  Most projects will not find something surprisingly positive.
  • Sustainable Value – There is confidence that the product can achieve sustainability.  We don’t want to launch new products that are simply re-packaging our sponsored job advertising business into a different model and selling it for a loss.  Teams need to understand the cost of acquiring users, the cost of servicing them, and how these are trending.
  • Meaningful Market – We believe this market could be sizeable enough or strategic enough to be important to Indeed.

There is room for interpretation with these and over time we will provide more clarity and guidance, with examples.

By continually experimenting with a portfolio of new products, Indeed should be able to compare projects side-by-side, and invest more in the ones that better meet this criteria (and kill projects that fail to meet this criteria).

 

About brendansterne

Sr Director, Indeed.com Product Incubator
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