by   on January 30, 2021

5-Signs You are Focused on Valuation and Not Value

value vs valuationIt doesn’t matter if your company is a unicorn or in a popcorn business. If you are not focusing on value, you are not doing your job, Mr. Product Manager!

Did I get your attention? If so, good. This is an important topic..

In any business, focus must always be on the value. Period. Your users and customers frankly don’t care about your company valuation. They will however get mad at you, if you stop delivering value to them. This is applicable to product managers and entrepreneurs alike. Well, let me take a step back and first give you some background.

The beginning is good…

Businesses are started, entrepreneurs are born, companies grow, product managers come into the picture. Entrepreneurs start just right – focus on value. Assuming the entrepreneur focuses on value as the business grows, there comes a point when the entrepreneur starts to focus more on other parts of the business. This is the point when Product Managers come into the picture.

But something happens…

It all starts right, but something seems to go wrong somewhere down the road. Investor pressure is one. Lack of experience is another one. And of course there are many other reasons to this. It’s OK for a CEO to think about valuation, but not the product manager. You as a product manager are expected to focus on the product, more importantly your users’ and customers’ needs, desires, fears and concerns. In a world that’s increasingly getting human-centric, driven by both technology and changing businesses, the value has just gotten dearer than ever.

Products in a Human-centric world

The nature of products is changing. Driven by newer technologies, blurring of the line between hardware and software, newer business models, products is more about experience than just the form and function.

Humans interact with so many products at any given point in time. It is so much that we hardly realize the hops and skips we make between products in any given day. Value in today’s world lies in the user experience. If we stop observing and listening to our users, we stop adding value.

Valuation is Business-centric

Valuation is a financial process that is used to determine the current worth of an asset or company. Valuation is understood by your board and investors or probably someone who is interested in finance. Your users care about value that your product delivers to them to make them feel they are better-off with your product than without. Your paying customers will only evaluate your product to see if it gives them the desired benefits and for a price they think is reasonable. They care about your company’s vision but don’t care about your company’s valuation.

5 Signs You are Focused on Valuation and Not Value
  1. You do more analyst and press interviews than user interviews.
  2. You are doing more top-down market sizing than bottom-up when designing your business case
  3. You are more focused on competitive analysis and competitors than talking to existing users and customers.
  4. Your product roadmap is a bunch of features than showing how your initiatives are aligned to goals that are consistent with your product vision and the overall company vision.
  5. Your product has features that are shallow that are focused on getting a seat-in-the-table, than vertical features focused on enduser experience
In summary…

End of the day, what matters most is if your customers and users do see value in your product that’s worth paying for. Focus on identifying that value and relentlessly delivering it to your customers – that’s where success lies. Valuation is just a natural byproduct of value. A big hug from a customer as a testimony of your product’s value is a million times better than being a billion dollar company with unhappy customers.

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