Experimenting Your Way to Greatness With SoundCloud’s VP Product, Andreas Jacob

In 2016, Jeff Bezos wrote a letter to Amazon shareholders saying: “I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.”

Andreas Jacob has spent most of his career building products, experimenting and learning about user behaviour.  Earlier this year, he became the VP Product at SoundCloud, where he leads the Growth and Commerce group. We caught up with Andreas to chat about how product management has changed in recent years, his current challenges at SoundCloud, and how to build truly experimentative teams.

Andreas Jacob | Interview

Andreas has an entrepreneurial background with a strong focus on user experience, software development and product management. He started his professional career founding his own business (a web-design agency) while still at university. For his second venture, he designed and developed a web-based content management system (CMS) for small and medium-sized businesses.

After working a few years as Account Manager for custom IT solutions, Andreas finally found his passion in Product Management. In 2009 he joined update4u Software AG (later Matrix42 AG), where he was leading the company’s IT Service Management (ITSM) product suite. In 2014, he moved to Copenhagen to join Citrix as Product Line Director. During the following 5 years at Citrix (and later LogMeIn) Andreas led several product lines such as OpenVoice, join.me, GoToAssist, GoToMeeting, GoToMyPC and GoToMeeting. As CIO and Co-Founder of Amber Bloom Foods, he helped launching Germany’s first sustainable Food Lifestyle Service in 2019. This year, Andreas joined SoundCloud as the new VP Product – Growth & Commerce.

Hi Andreas, thanks for joining us. First, can you tell us a little bit more about your career to date?

Sure, no problem. So I consider myself a product generalist, which basically means that I have a pretty entrepreneurial nature—I’m always thinking about how to add value to my customers’ lives. My fascination for digital products began back when my dad taught me how to code Basic as a young kid. That’s when I became intrigued by the possibilities for technology to change the way we work, think and live.

My first professional foray into this area came when I was working at the German Red Cross in the Civilian Service. This was around the time when the internet first came about, and someone said that the German Red Cross should have its own homepage—so knowing about IT, I decided to volunteer. That’s where I really got hooked. 

After leaving the Civilian Service, I started my own small web development agency. It was a really useful experience and we created a really cool product. More than anything, running a business taught me all about engaging with prospects, presenting our value proposition, and starting a conversion process. However, I simply didn’t attract enough sales—this was a big learning moment for me. I began to understand that no matter how great the product, you get nowhere if you don’t have your go-to-market sorted out. 

Because of this experience, I decided to go master sales at a custom software company. I ended up learning a lot but it just wasn’t fulfilling. I ultimately wanted to help customers. With sales, however, you just convince customers that your product is great and then move on to the next deal—you’re not actively involved with helping them on an ongoing basis. 

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That’s when I heard about product management for the first time. I was really attracted by the prospect of talking to customers, understanding what they’re trying to do, shaping the solution, and checking back in on a regular basis to make any necessary changes. 

Is being customer-centric the key to becoming a great product manager?

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Personally, I think the key is to have a multidisciplinary approach—I’ve yet to meet a single product manager who started out working directly in product itself. I think it’s useful to have a variety of experiences before you dive straight into product management—whether this is sales, marketing, business intelligence, design or whatever else it may be. Product managers can’t simply stay in their lane; they need to soak up as many insights as they can from all areas. 

Product management has also changed significantly in recent years (for the better). It used to mainly be focused on the long term—you had strategic PowerPoint roadmaps with a three-year waterfall and everybody was truly convinced things would happen as planned. Nowadays, however, that’s been flipped on its head.

It basically boils down to a significant shift in our mindset. With the rise in data analytics and user research, you have a constant stream of information regarding your consumers and very often this data will surprise you. So you have come to terms with the fact that you don’t really know what customers want. This realisation required product managers to change their approach fundamentally. Instead of creating detailed long-term plans that bear significant risk, a more opportunistic approach to growth became the new norm. Through ongoing analysis of the available data you look for opportunities, e.g. a potential to increase the conversion of free users to a paid plan. Next you articulate a set of hypothesis about how to solve the problem. Instead of assuming you already know the best answer, you create a few variants of the solution and simply test which one performs best. 

This experimental approach has completely changed the game. Product management now relies upon having a comprehensive set of data, being extremely agile and – most importantly – having a deep understanding of the go-to-market and customer life-cycle. Nowadays, you don’t see three-year plans anymore, but rather KPI-driven mid-term roadmaps.

So what are your current challenges at SoundCloud?

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To give you a bit of context, my title is VP of Product and Growth and Commerce. I’m not actually in the product team in a traditional sense (in other words, making features), but I’m more focused on engaging and activating users, conversion, and retention optimisation. 

We have some interesting challenges surrounding wiring and sticking all the data together. We spend a lot of time and energy on getting a comprehensive and insightful view of our users’ behaviour—so we’re very focused on piecing together our marketing stack, analytics and experimentation tools so that we can then rapidly experiment and iterate. The goal is to have hundreds of experiments running at any one time, so we’re constantly on the lookout for anything that will ultimately improve what we do.

This probably sounds easier in theory than in practice—so how can you build such an experimentative team?

There are 3 main components: people, processes, and technology: 

1. Technology: From a tech point of view, we’re focused on connecting third-party vendors with our own infrastructure to get deeper insights about our users. There’s no perfect mix when it comes to balancing internal and external capabilities—you just do what you need to do to solve both your short-term and long-term goals.
   
2. Process: Once you truly understand how your business operates and what you’re trying to achieve, you can then begin to optimise the processes you use to get there. Working in an experimental mindset requires a fundamentally different setup than delivering on a pre-defined feature roadmap. To set our teams up for success, we focus on adding the right stakeholders to the mix. Where previously a cross-functional team was considered to consist of Product Management, Design and Engineering, we now add User Researchers, Data Analysts and (Product) Marketing experts to complete the picture.
   
3. People: More than anything, you need employees with the right mindset. Some people might get tired of this constant experimenting, iterating, and experimenting again, but others love it—and I’m one of them. Nowadays, I think people in general are more used to the idea of data-driven decision-making and experimentation. Our team doesn’t actually talk in terms of features. Instead, we’re all just focused on tests and KPI increases. 

It’s important to note that you also need to keep on iterating and testing these three elements. Take the entire endeavour—in other words, building the right team—as just another experiment. This is the key to long-term success. 

How to experiment your way to greatness

Experimentation is the key to innovation. You can’t simply copy what everybody else does and hope to become the best—if you do, you’ll always be one step behind. But that’s not to say that the process of running experiment after experiment is easy. After all, most will likely fail. Only a tiny portion of experiments will lead to tangibly useful insights so being willing to experiment means embracing failure.

Let’s dive into three crucial steps to making experimentation your competitive advantage going forward.

1. Get management buy-in (and make the business case for experimentation)

Perhaps you’d love to spend more time experimenting but you don’t feel like you have the time. After all, management is so focused on the here and now that they lose sight of what the future could look like. They just want you to hit your KPIs and add value to the business today.

This is understandable—but it could severely hamper long-term growth and innovation. Of course, that’s not to say that you should drop all your current responsibilities. However, you should try to make the business case for ongoing experimentation. Why? Well, for starters, companies that fail to innovate die out. A massive 88% of the Fortune 500 firms back in 1955 have now disappeared. Think about Blockbuster, for example. 

Management won’t necessarily appreciate scaremongering, so you shouldn’t walk into a meeting and tell them that the company will crumble unless you’re given free rein to experiment. That being said, you should make it clear that experimentation is the only way you can innovate, and innovation is the only way that you can survive. 

2. Start small

According to Harvard Business Review, “As with many endeavors, the best experimentation programs start with the low-hanging fruit—experiments that are easy to implement and yield quick, clear insights.”

Don’t try and bite off more than you can chew. Start off small and experiment with potential quick-wins. If you’ve just gained management buy-in, it makes sense to sweeten the pill by showing positive results out of the gate—this will buy you more goodwill going forward. 

Plus, this also gives you time to get ready for bigger experiments down the line. Your team needs training, you have to identify what tools will be needed, and you need to develop an experimentative culture. These things take time. 

The Wright Brothers didn’t try to fly across the Atlantic the first time that they created their aeroplane. Instead, they just tried to make sure that it could fly. Likewise, don’t try to tackle your organisation’s biggest problems first.

3. Remember the ‘why’ before looking for the ‘what’

There’s one golden rule when it comes to experiments: always remember the ‘why’. Or rather, the ‘whys’.

• Why are you running the experiment in the first place? 
• Why do you believe that doing X can result in Y? 
• Why did it succeed/fail?
• Why should you celebrate this win/analyse this failure? 

By remembering the ‘whys’, you can make sure that you properly set up the ‘whats’.

• What does this experiment tell us?
• What could we have done differently?
• What are we going to do with the results/what can this impact?

The three steps listed above are by no means the be-all and end-all of making experimentation your greatest weapon. You still need to have the right team in place, make the most out of technology, champion data analytics, and successfully implement your learnings. However, if you make sure that you get management buy-in, smart small, and remember the ‘why’ when looking for the ‘what’, you’ll be in a good position to experiment your way to success.