Last year was akin to a ride through hell. Global macroeconomic instability, Russia’s invasion of Ukraine, funding shortfalls, supply chain disruptions and many other factors made running a company an extremely challenging experience.
It sounds like a cliche, but in the midst of difficulty lies opportunity. Sometimes, you just need a boost to see it.
As companies cut costs to extend their runways, here’s how product managers can make the most of a tough situation:
Focus on monetization
The market has changed dramatically in the past year. VC funds adopted a cautious and conservative approach that resulted in a 35% drop in funding in 2022, and if the first weeks of 2023 are any indication, that trend is likely to continue. “Growth at all costs” isn’t a good idea anymore.
This year is expected to be a time when companies identify their unit economics, and product managers should focus on monetization to weather the shortfall of cash. It’ll be helpful to balance CAC and LTV, optimize conversion rates and understand pricing, bundles and subscription tiers.
Retention is king. There’s no reason to think about growth if your retention is unstable.
To really see what you can accomplish, experiment with paywalls, try out Darius Contractor’s Psych’d framework and implement prediction models to manage the LTV:CAC ratio and drive positive cash flow.
Take advantage of the commoditization of AI
At the end of 2022, OpenAI saw such success with ChatGPT that Google got nervous, and today, companies are pouring millions into building AI technologies similar to ChatGPT. The rapid rise of these AI platforms also birthed concerns that AI would eventually replace vast numbers of engineers and product managers, and those worries aren’t being soothed by ongoing layoffs at tech companies.
But you can consider this commoditization of AI as an opportunity. Indeed, there are endless ways to utilize and benefit from the fast-developing technology.