(2024-02-27) Gilad The Hype Economy

Itamar Gilad: The Hype Economy. Observing tech companies you may notice a broad, disturbing phenomenon: everyone’s hard at work “selling” their product ideas — stakeholders and engineers are selling to product managers, product managers are selling to management, and management is selling to everyone (soft skills). It seems that when it comes to promoting ideas, critical thinking, humility, and evidence are not widely in use, while salesmanship, politics, and hype are the norm.

The underlying reason is clear — product ideas are competing for limited resources. Managers or committees choose the “winning ideas” that will get a spot on the roadmap, and kill everything else

A Fundamentally Bad System

it’s actually a very bad way to build products that, as will see shortly, creates major negative effects on business results, product value, and company culture.

let’s look at the downsides of the hype economy.

Roadmap decisions are often made through a combination of sparse data, opinions, consensus, and biases.

self-conviction, a compelling pitch-deck, thematic support, and consensus are all very weak forms of evidence — essentially opinions by a different name, as reflected in my Confidence Meter

Getting your project approved and funded can lead to big personal rewards

Thus, the hype economy creates perverse incentives to push for your idea (whether it’s the best or not) at the expense of everyone else’s (a zero-sum game).

The problem is even stronger in top-down companies where the leaders choose their own ideas, essentially hogging all the innovation. (HiPPO)

Even when your project is underway, the selling cannot stop... you must keep projecting a facade of success irrespective of true results. (reality distortion field)

Funders/investors sometimes share the motivation to cover up for their bad investments, and may throw good money after bad in an attempt to rescue the project.

In extreme cases people may cross the fuzzy line between over-hyping their ideas and flat-out lying about them

The Alternative – Evidence-Guided Development

Strategic Context... High-impact product companies have a clear sense of vision and mission; they identify the most important strategic opportunities or challenges ahead, and they put in place simple guiding principles (for example “focus on the buy-side first”). This strategic context creates a clear and broadly understood direction for the company

Having clear and concise company goals that reflect the most important achievements the company is aiming for this year, further helps boost alignment and eliminates non-productive ideas. This is really where we want to hold the hard discussions and negotiation: what are those 3-5 top priorities that we must pursue and achieve?

Basing Ideas off research — user, market, data, competitive, technology — rather than opinions and one-of customer requests, can both enhance the quality of the ideas, and ensure that they come with at least some amount of supporting evidence

Product discovery is the art and science of evaluating and validating multiple ideas, before picking the ones we wish to build in full and launch. The name was coined by Martin Cagan, but you can argue that Lean Startup, Design Thinking, and most other forms of modern product development are about product discovery

Hype and salesmanship, pressure tactics, and politics, are not the core problem, but rather symptoms of it. When companies lack a clear sense of direction, and where decisions are made on the basis of opinions, it’s only natural for people to take initiative and fill the void with their own agendas and ideas.