ken-houseman-audio-edit-raw
===

ken: ~It's less costly , to focus on the retention of the customers you have than converting and acquiring new customers in your funnel.~

~If that customer gets detached from the value that churn out.~~ ~~Is hugely detrimental~

~because a 0.1% churn when you are 500,000 subscribers is very different than a 0.1% churn At 10 million subscribers, your rate ~~didn't ~~change, but you bled a lot more customers off the backend. ~

~Welcome to Launch Pod, the show from Log Rocket, where we sit down with top product and digital leaders. Today we're talking with Ken Hausman, VP of product at Zuora. In this episode, we'll discuss why even a 0.1% increase in churn can cause huge losses and how to turn retention into a growth engine. Hawar made payments so valuable that customers want to pay more boosting revenue margins, and customer retention, and how can used AI to slash prototyping time and unlock faster smarter product development.~

~So here's our episode with Ken Hausman.~[00:00:00] 

ken: It's less costly to focus on the retention of the customers you have than converting and acquiring new customers in your funnel. If that customer gets detached from the value that churn out is hugely detrimental because a 0.1% churn when you are 500,000 subscribers is very different than a 0.1% churn.

At 10 million subscribers, you're Rick and change like you plan a lot more customers off the back end. Welcome to Launch Pod. The show from Log Rocket, where we sit down with top product and digital leaders. Today we're talking with Ken Hausman, VP of Product at Zuora. In this episode, we'll discuss why even a 0.1% increase in churn can cause huge losses and how to turn retention into a growth engine.

Zuora made payments so valuable that customers want to pay more boosting revenue, margins, and customer retention, and how Ken used AI to slash prototyping time and unlock faster smarter product development. So here's our episode with Ken Houseman.

jeff: Alright, Ken, [00:01:00] welcome to the Showman. Thanks for uh, joining us today. How you doing?

ken: I am doing well. I'm really excited to be here today.

jeff: I'm stoked to have you on. I've, you know, I've used Zuora in a past company. , I've read the New York Times quite a bit. So I have been exposed to a lot of the work you've done. But before we, you know, before we kinda jump in, maybe we just give the five second overview of how'd you get to where you are. 

ken: yeah, I, my three and a half years at the New York Times was super interesting, getting heavily in depth of the technical evolution of one of the world's premier and longest running subscription companies in the world. And at the New York Times, we implemented Zuora. We started with the revenue module and then we started looking at their billing system.

And it really started making me miss the days of my, my Oracle tenure when I spent, you know, 10 years working at that macro level across the software industry and, and the subscription business. And I was just really impressed with the way the Zuora team was approaching the subscription market and the, the [00:02:00] order to cash space.

And I was so impressed that when they, they had an opening in a position and I was looking for something a little new. I was excited to get back into that, that macro view and, and really helping customers across the broad spectrum, you know, improve their, their order to cash approaches. So it's, it's been an interesting ride.

We're now private from previously publicly traded company, and that's bringing in new challenges, but, but I love it.

jeff: so many people complain about vendors or the software they use and, and are always kind of nitpicking the things that, you know, it's not great , but you believed so much in the solution that you were using and, and what the team was doing with it.

That you took the chance to kind of hop ship and, and go from New York Times to over this war 'cause you thought, you know, you could help them. Improve on something that you really enjoyed? Kind of leading up to this, we, you know, we always do a little call first to get to know each other and I thought it was really interesting just overall, the framework you talked about how you look at product was an interesting one because so many people are focused on like zero to one or how do we build something from scratch?

Or people think that's [00:03:00] the sexiest thing you can do. But I really appreciate you talked a lot about. Planning on ways long term you can open more doors, for the future than you're closing. Or like, how do you look at retention as a major, you know, engine for growth? And not even just maybe an engine for growth, but, but a primary engine.

And that's something I think a lot of people miss is, you know, there can be a life of growth after acquisition and, and that can be, you know, huge growth and retention if possible. Can we maybe expound on that before we jump in? Azura.

ken: Yeah, I, I think teen, our, our CEO at Zuora really drove a lot of this perspective. When he wrote book, the book, subscribe and he really helped shape the, the subscription economy. Because it's not like customer relationship is a new concept, but this idea that your revenue, your recurring revenue is now tied to.

That retention, that long-term value, that constant reiteration of the value that you're bringing to a partnership and how you're approaching that. It, it's really opened up a [00:04:00] whole new perspective on, on how you approach your business and how you approach your product. And in that world, you're not just like focused on closing the deal and then it's two, three years before your next deal.

Or the next deal cycle, but you're constantly having to groom that value and that relationship and make sure that you're meeting your customer's needs because in that recurring revenue space, that's a planned revenue stream that you're depending on, and if that customer gets detached from the value or you're not aligned on your strategic positioning and approach that churn out.

Is hugely detrimental and it's less costly to, to focus on the retention of the customers you have than converting and acquiring new customers in your funnel. And depending on your growth lifecycle, you know, it waxes and wanes which approach you take on each end, but you always, always, always in a subscription business have to focus on that retention aspect, or it will just obliterate your margins [00:05:00] and

you will never be able to catch up to your losses by just acquiring more customers if you are losing them on the tail end. And so I think that it's really important to, to balance that approach depending on where you're at in your life cycle.

jeff: yeah, I mean, the math is pretty straightforward, right? It's, it's, you know, growth is what you add, take away what you lose and add that net to what you had, and that's. That's your new, your new a RR number. So, you know that works for a while. When you're small too, you have a small denominator of base. Maybe churn isn't gonna get you, 'cause you can add a lot kinda relative to that. But once. Once you start getting up there and you get a very high denominator of kind of your, your base subscription churn can kill you like even a medium percentage on churn and can really, really be a tough thing to tame if you're not adding just gigantic numbers at the top of funnel.

ken: The Chief Growth Officer Hana Yang at the New York Times, she was so laser focused on this, this issue. Of the retention piece. And [00:06:00] she multiple times throughout my tenure there would give org speeches where she would talk about how important the focus is on the churn retention.

Because a 0.1% churn when you are 500,000 subscribers is very different than a 0.1% churn At 10 million subscribers, your rate didn't change, but you bled a lot more customers off the backend. 

jeff: So that brings us into kind of exactly when you entered, right? You came into Zuora. I know we're not saying they had a churn problem, but more use on an opportunity to kind of further serve the customer and, and probably improve that churn. And that is, you know, Zuora for, for everyone who doesn't know, is, is a platform fundamentally, I think known for like subscription billing. But they have several other things they do as well. And one of those was, payments and it was not something maybe they were known super well for, but you had seen, you know, lots of capability but also beyond that, like a, a chance to more holistically and better serve the customer and to [00:07:00] bring more of that value stream together to zuru.

Maybe set the stage for kinda where it was at when you came in, and what kind of led to this first hypothesis here.

ken: Yeah. Zoa for years has been highly focused, like you said, on the subscription billing side. We're getting into usage metering and rating and trying to own that side of it. But we have a fantastic flexible extensible billing and invoicing product. Several years back we bought a revenue product. So if you do billing kind of naturally makes sense that you then transition your invoices over and you recognize the revenue and with a SC 6 0 6 and all the complex D around accounting for recurring revenue.

That made sense. But sitting in the middle of that is this world of payment. If I send out my invoice and I'm recognizing the revenue, I still gotta get cash in. 'cause at the end of the day, the old aum, you know, cash is king still. Very, very true. And so what I had observed and got deeper into when I came into Zuora is we had a fantastic billing product and we had a [00:08:00] fantastic revenue product.

The payments product was embedded inside the billing product. And it was pretty much led from a history of customers who bought the billing product and they would say, Hey, you know, I kind of need this other payments thing to really optimize this billing thing. And so over time we had built up these like, almost like, decentralized features around payments that then started to sort of, coalesce together around bigger and bigger feature packages until it kind of became its own product.

But what we hadn't done was sit down and ask ourselves who are we within the payment space and what's the right play for us to add value to our customers? Given the context of that recurring revenue stream, we're sitting on 17 years of subscription recurring transaction. We know from the billing history, the risk profiles, the recurring that the involuntary churn, payment failures, cross gateways, cross industries, cross price points.

And so we've been [00:09:00] really focused on taking a beat, having a, a hard look internally to say like, how do we start to structure what our customers want and go beyond what they're telling us they want and help shape a market here? Provide them with simple one stop shop orchestration. That gives them access to this really complex payments processing world and then simplifies it for them commercially with feature sets so that they don't have to go out and figure this out on their own.

Every company has to process payments, so why not work with a vendor like Zuora that helps solve some of those biggest problems for you so that you can focus on your retention and your growth. Let us worry about just making sure that recurring payment happens with a low risk profile and that you have all these options.

If I get a failure here, how do I retry it? Where do I send it? What's the data around it? The data and analytics to help me figure out what's the next payment method I should enter into? That's what we try to provide. And so we're [00:10:00] building a much more structured approach so that payments isn't part of your billing.

Payments is a product that brings a whole extra value to your order to cash subledger. 

jeff: not to distract us real quickly, but just one thing I do want to add in for folks listening. If you're liking the show, if you're on YouTube, give it a like. Subscribe to it. Write us a comment. If you're on, apple or Spotify, subscribe, please write a review. It also helps us get it out to more people so that everyone can see it, 

I Do wanna get into though, like it's clearly a problem, right? This is something as log rocket. We've gone through ourselves of, you know, the involuntary churn and there's a lot of complexity here and you could have a whole team on that.

How did you approach kind of tackling this problem? Like, I assume it wasn't to just come in and start building, you know, I guess step one. You must have done, done some research, like what did that look like and, and what were the findings come out of that? 

ken: Yeah, so 

we process thousands of customers, different price points, different industries. And so we really sat down to understand the, the cross section of those [00:11:00] industries, , who's using which gateways, which payment methods are the most important. And we started doing a fundamental product approach where we started segmenting our market and our customers and our pipeline into what do they want in these, these different areas.

And in the payments world, it's breaking that down into core processing and orchestration. Access to the banks and the processors that actually process your money. The retry strategy, because it's, it's a complex technical world out there with all the different banks and regulatory industries, and so sometimes failures happen by accident, sometimes intentional.

There's risk management, fraud protection, and so we sat down with all of these complexities, started with our market segmentation, and then just looked at, based on that segmentation, based on the size of each customer. What is the complexity that we're trying to solve and what's the problem we're trying to solve for each one of them?

So from that, what we were able to discern is that customers fundamentally had four problems. [00:12:00] One was the, the poor, the pure complexity that it takes to deal with. I have a, a vendor relationship with a billing and invoicing company, but I still have to go get a commercial relationship with a processor like Chase.

Worldpay, Ian Stripe, and then I gotta bring those two things together and make sure that they work together . And so we said, look, that's super complex, especially for companies on the low end, less than $50 million of total processing volume. Let's go solve that. Why? Why are they having to sign a contract with zoa?

Sign a contract with Ian and come back to Zuora. Give us your audio and key, then sign something with Zuora. Let's have the right construct and structure so that we have a direct processing option for you. We have access to these best in class global payment method gateway processors fully built out so that you can plug and play with a, a connector, but also there's maybe 350 processors around the world doing various things.

No way we can build that [00:13:00] at scale for our customers. But what we can build is a platform. And so thinking about a platform perspective, how do we create solution that our customers can say, you know what? I, I hear you on your most strategic things, but I have this really niche market in in India or Turkey or South Africa, and I need a process of that really understands the payment rails in that space.

And you don't have a certified connector 'cause they're not big enough. Great. Here's our standard platform. Here's all the technical documentation. Go have that vendor who knows their rails the best. Build a connector on our platform, we'll certify it. And then, you know, we'll work out the commercials amongst ourselves, but that unlocks and and facilitates the speed.

So it's that flexibility that we want to create. So we wanna be the facilitator that gives you all the options and extensibility that you want in a payments ecosystem, but that we also [00:14:00] simplify how you get access to that extensibility. Simplify the commercials for you and make it really easy for you to launch, expand, experiment, because payments is not only a back office function any longer.

It's highly connected to your growth strategy. One of the highest reasons why a consumer abandons their cart is because when they go to pay, they don't see a payment option that they are familiar and comfortable with, and so they're not willing to give their financial details to you.

And so it's really, really important for our customers and their growth strategy, their retention strategy, that we give them the tools that allow them to flexibly expand into these global markets and try out new payment methods really quickly and then learn and adapt and pivot at a very low cost infrastructure way.

jeff: I get it. I, if I see some sketchy looking, you know, payment option, I'm probably not gonna put any information in. How did you go about kind of understanding.

You know that a, this was a problem, right? [00:15:00] Because I mean, I think for most people you probably look at it and go, there's like, you know, visa, MasterCard, there's a couple of payment options that exist in the credit card world. There is apple Pay go so on and so forth, worldwide, there's tons of these.

How'd you kinda go through and pick which ones to kinda outta the box build, you know, the first sets with, how did you prioritize that? 

ken: Yeah, so when I, when I first joined Zuora, this was, this was one of the big questions we had because we have such a large install base and customer base, very global presence. And our customers are, are very demanding as they should be. And one customer wants this payment method on this gateway or that gateway with this payment method or this regional provider.

And we, we had to take a very conscious pause and say, which providers are gonna provide us the, most scale globally? Where do we already have an existing footprint? Because that gives us a relationship with those providers. So for example, one of our biggest volume processors is chase payment Tech.

Or Worldpay. These are, these are two of the most common ones. [00:16:00] We already have huge volumes with them. So we started there to say like, what have we already built out with them? Let's open up a commercial relationship with those gateways. Let's figure out what more we can build. How much deeper can we build the integrations?

What additional payment methods do they offer that we can ignite for our customers? Then we started to tear down, and so then we started to look at feedback from, well, what are some payment methods or gateways that are very regionally specific, Alipay in China and Southeast Asia, or Ebanks in Latin America?

Like, where do we start to bring in some of these regional players who can give us scale across different types of payment methods and currencies, but still allow us to focus and aggregate our volume? So that we can have an influential conversation with those players to build what our customers need.

And then let's deal with the long tail. There's always gonna be a long tail of one-offs and, and things like that. And so how do we create something that is scalable and approachable and that [00:17:00] we don't get distracted by you know, spending 200 hours of engineering time, building one connector for one customer that's highly valuable for them.

But quite honestly may never get used by any other customer, right? And so by segmenting the, these areas, it, it provided us with a different product approach and a different product solution for, for each area that we could then blend together and start to drive like real value, short term, and then a more strategic approach long term.

Which then also led to, well, we have a list of strategic partners that we work with, and so when we get into a sales pipeline discussion or an expansion discussion with our customers, it's no longer, well, what gateway do you want? What payment method do you want? It's more about what is the business objective that you are trying to achieve?

Why are you trying to do that payment method in this market at this time with that gateway? Because then that allows us to say, oh, if that's the outcome you're trying to reach. Did you know we already have this thing and you could literally [00:18:00] launch it tomorrow versus what you're specifically asking us for.

We can still do, but it might take us three months to build and so we can get you the same outcome faster. And that's where we've actually started to see some high value reciprocal conversations where customers are. Wow, I didn't even know that was an option because I'm locked into this commercial agreement with this gateway.

So I just wanted to expand that gateway and we're saying, no, we'll bring you the right person to talk to, and if you sign a commercial deal with that gateway, we can have you off and running in in weeks instead of month. It's. no matter how big you think your business is, you're, you're still a fraction of the total volume that any one bank or any one processor actually processes. But if you add your voice to Zuora's collective voice. Now we have a stronger bargaining perspective that we can bring your needs and your demands to those gateways.

And so you can join the chorus instead of being the lone voice, trying to demand your your thing. And I think that, that that's where we're trying [00:19:00] to add more and more value for our customers to be a louder voice on in the the network.

jeff: Another piece this I do wanna touch on is, you were able to intelligently start to look at adding providers and how do you provide access to them

but the other piece is all the stuff around payments that could have been made better and, and were now, and you kind of put through right, this idea of like AI driven retries, how do you route payments correctly? And all those kinds of things you need to understand what your customers wanted there because like the retry engine for instance, you often don't want to go back and flag to someone like, Hey, this failed. Because that can, that can cause all sorts of things to come out. it's like what drove, I guess, a lot of those other things and more so than that.

How did you go about kinda going back to the business where I would, I would wage up into this point kind of priorities were set, on how much time like engineering was spending on each of the kind of pieces of Azua platform. And now you're saying, no, no, no, we wanna do a lot more here.

How did you [00:20:00] kind of go about negotiating that internally where you know, you were able to get the resources needed to build all this extra capability?

ken: The leadership team here is, is really focused on customer value and, and data. If you can prove your, your case point and you can show that it's not only feasible but marketable and that there's a a real monetization and we're always focused on a win-win where it's not just Zuora making money, but it's also Zu, we're helping our customers grow.

'cause when they they win, we win. And so for me, like in the payment space in particular, that was a really easy story to tell because the reality is on average a recurring business usually loses about 4% of their recurring business due to involuntary churn. Pure payments, failures. And so anything we save customers, if we move them from 4% to 3.9%.

It's revenue upside, pure upside for them. [00:21:00] And so that's really where we, we started the focus on the retry journey. It's also very much a business where we can say like, look, we know exactly what your average subscriber revenue is, and so if I save you that 0.1%, I can directly associate it to how much money I'm saving you.

And I can size the cost of the, the product that I'm selling you associated to that. And so whether it's a performance based or it's a rev share based kind of performance, that was, it was an easy sell to sell to me. The other part of it is, we sell subscription industry and so, we talk a lot about how that churn backend save is so important to your business.

And so it's just a natural story fit for us to then have a product that is, that is focused there. So it was, it was really not that hard to get, get the focus from a, retry perspective. The way we brought AI in, we've always been sort of obsessed with advanced algorithm based automation.

And so, [00:22:00] the whole industry around B2C has moved from AB testing to more of like propensity scoring. And so what does that mean? The traditional AB testing is, I have a hypothesis. I set up an experiment with a control and option A and an option B. I run a bunch of data. A month later, I come back and I analyze the results of that data and I say, which one is better?

And I, I put that one into the market. That is a, a long cycle for you to find out whether either option really worked or not, much less which option to go with. And in particularly in a digital subscription environment, that market is changing every millisecond. You know, if you think about the news media, something could be hitting the wire right now today.

And if I don't have an automated system that takes advantage of that moment to catalyze my, my acquisition , you're losing out on the market. So we've always thought that way and we started to bring that same thinking to our retry strategy, the number of times how you retry changes your risk scoring in a payment [00:23:00] profile, it also increases your cost.

Every attempt that you have to retry it costs you more money to brute force it. And so getting smart about balancing how many retries does it take before I can maximize my success? When do I start to lose my value? And then getting smart about not just blunt. I will retry every two hours or retry once a every Monday once a week, but starting to build algorithms around patterns that we're starting to see.

We know that this size transaction. With this metadata on this network is highly likely to be successful in this time of day or that time of day, or is more successful on this gateway than that gateway. And that's where we're able to bring much more intelligent driven things because we are sitting again on 17 years of that transactional information that is so invaluable of making sure that you.

You limit how many [00:24:00] times it takes you to get that successful transaction and you get it right the first time. And if you don't, it takes you as few attempts as possible to get it in the door, or quite frankly, give up on it. If it's never gonna be successful, don't waste your money. So we're, we're then now advancing that it's like, it's not just algorithms, but it's now ai.

How do you build outcome deterministic AI engines that decides all of this on the fly for you? So much faster than any humans, 

jeff: and

one thing you mentioned when we were talking earlier that kind of blew my mind was it wasn't about. Negotiating to get engineering time. It was, you know, proving out that it's, it's, gonna return value to the customers. And once you did that it was, you know, how do you quantify it? How do you maybe even change how you guys bill for it?

And you said that you probably talk more to your corporate development partner than to your, than to your engineering counterpart. Which I, I, I think is a rare thing on the peroxide, but like, what does that look like?

ken: Yeah, a lot of that came from just like the dynamics and the complexity of the payments [00:25:00] networks and industry and trying to figure out who we wanna be and not trying to recreate the wheel. The, the knee jerk reaction when it comes to the payment space, especially with new entrants into the market, the knee-jerk reaction is, let me own the entire process.

Let me own the transaction. I'll take a a, a percentage point, but I can play on volume. If I can just process everyone's volume, I can take a very small fraction, pennies on the dollar and I'll just manage it and then I can manage the risk and you know, I'll build algorithms that know what's a, a safe transaction or a risky transaction.

Everybody does that. And so it's a highly competitive, very saturated market for us. We didn't wanna reinvent that wheel, so I worked really closely with my corporate development guys to say like, look. We already have all of these networks, all of these processors that our customers are already using. How do we identify who's doing it the best, where we have the most depth, where we need to go deeper, and how do we work with [00:26:00] them as again, just like we work with customers in a win-win, how do we work with these, these partnerships in a win-win?

So if I can build out better integrations with war features with one of the gateways. That's more value for my customer, but it's also more value for them because more customers are gonna gravitate to them because they offer more payment methods and more features. And again, now Zuora is acting as this aggregator and as we're able to aggregate and drive more business their way, they're more willing to work with us and give us better margins on the processing fees that that are associated, which is better for us.

And so we really built this two-sided platform model where we're building win-win with the customer and win-win with the partnerships. Which then allowed us to take the space and say like, okay, that's, that's a, a margin improvement, which is giving us more money to invest internally to figure out more of that middle space.

And where can we add more features? Where can we add more values and create more of that reciprocal two-sided platform.

jeff: so to kind of bring it all together [00:27:00] here, what was the overall kind of outcome of, of all this work, did it, did it add to the bottom line over zoa? Like you guys seeing a lot of value out of, out of all this?

ken: Yeah, it, it definitely has. We're still very early in the journey, so a lot of what I'm talking about is still being built out and expanded on. But we know that customers who use our billing product. And process at least half of their invoice payments on our payments product. They are willing to pay more in average revenue per transaction.

They stick with us for a lot longer because they see more value out of our platform and they have grown their business. Significantly because they have the right platform that allows 'em to focus on the right things to grow the business instead of managing the business. And so we see these connection points already and we are trying to find ways to make these connection points across [00:28:00] our suite of products even more valuable for our, for our customers.

But we are seeing that that is where the focus is. And so whether it's getting billing customers to start processing payments on us. Or revenue customers just start using billing so they can process payments on us. We really think about that full connection and helping customers understand that when you, you operate in our full order to cash suite, the aggregate value is so much higher than just the sum of the individual parts.

jeff: that makes total sense. , This kind of retention life cycle is a really virtuous cycle. And we don't even get into the fact that like, the way people buy software, especially on the B2B side, I think it has the, the idea of. Word of mouth and going off of recommendation of trusted people, you know, has been long undervalued in this.

And if you 

were, if you have a bunch of happy customers Yeah. Like you're 

gonna have such an easier time acquiring. I'm sorry you were trying to talk [00:29:00] too, 

but like 

ken: no, I, I 

it's almost like my, my chief marketing officer, like paid you to, to set us up because Kyle Christensen, who just recently moved into our chief marketing spot after leading our product marketing teams for, for several years. He, he talks about this word of mouth and this need 

to get back to basics

of like,

he uses this analogy on, you're out playing golf. You're in the golf cart and, and you're talking to your peer at another company and they're complaining about how complex it is or the turnover in their headcount or whatever their, their, their headwinds and growth strategy. And you want that other person sitting there and going.

Well, well, I work with Zuora and that's not a problem for me because of blah, blah. The next thing you know, it makes the sales cycle so much. All of a sudden you've opened up a pipeline, right? And like this is just like marketing 1 0 1. Word of mouth is always so much more powerful than any billboard or any use case or industry report or.

Banner that you get on your, your website or whatever, like [00:30:00] that word of mouth is so, so important, especially when the cost of making a bad it decision is so like overwhelmingly bad so CFOs and CIOs, , they wanna know that other people are winning and that they base their decision not just off of like.

Engineering technical specifications and, and dollar signs, but also like, oh, I can see my use case succeeding somewhere else. And that's, that's huge for us is, is winning that, that word of mouth space.

jeff: It's so powerful also because you can't buy it, right? Like, it doesn't matter how, how much money you raised or not, if you're not providing great experience, no one's gonna recommend it. You are putting your. Reputation is somewhat online there, if you can serve these people better, if you can bring them more value, that's gonna have a, a virtuous cycle unlike almost anything else you can do to completely change topic here,

you've talked a lot publicly and, and you and I have talked a [00:31:00] bit about. AI and, how it's going to fundamentally affect product teams specifically. And we're not necessarily talking about how do you build it into the product somewhat, but also how is it going to affect teams and, and how can they be using it to do a lot of these things that we see bring value about how you do it better, faster, quicker, smarter, , that people are looking for.

ken: Yeah, I, you know, I am now long in the tooth enough that I've seen a few cycles of technology waves happen and it, it, it is often the same cycle. People get worried, jobs are gonna go away, jobs are gonna change, my skillset's outdated. And that's somewhat true. But we've always evolved past it and, and things change.

But you know, fundamentally, there, there are still just as many jobs, if not more than there were before the telecommunications and smartphone revolution. And I think the same is true here. This does feel different in many ways of what's happening akin to the internet revolution, however.

What's gonna become really important is, is the human aspect. I think [00:32:00] this is where, this is a technological evolution where the human aspect is actually gonna get amplified. How do I trust things more? How do I apply the humanistic things that AI can never do? The creative things. And I think of it from a term that I use called applied intelligence.

The algorithmic AI agents, they can automate all kinds of things for you, but they can't bring the creative element to it. And just like we were just talking with the marketing word of mouth trust is gonna become so important. And being able to rely on a brand where I can point to them and say like, look, you know, I'm not an AI expert and I can't dig into all these things, but I'm gonna index towards what Zuora's ais are telling me I should do

what Nike's AI is telling me I should buy. What the New York Times News AI is telling me is the truth in the world. Because those are the brands that I resonate with, and those are the brands that I trust, and therefore the AI and the algorithms that they're building, i, I trust. And, and [00:33:00] so I think that this whole concept of like an AI auditor.

An AI trust designer, like these are gonna be new roles and new concepts that, that come to, to market in the AI world. And from a product manager's perspective, it's a, it's a fundamentally different way of thinking about how we run organizations, how we structure things the right way and how we, we build products.

It's not about how AI gets me, you know, better days of sales outstanding on my invoice that will come naturally. But it's more about like, how is AI gonna reshape the billing analyst role that my customers are building their organizations around? And if that role changes, that changes my ICP and my, my design profile.

And so how do I change my product to meet that changing persona? And I think that that's really interesting to me. And I think five, 10 years from now, we're gonna see a completely different way. Product being developed and product managers are gonna be somewhat [00:34:00] more autonomous. They're gonna have more tools at their fingertips.

You're gonna be able to get 80% of your design and engineering work out the door without having to actually talk to an engineer or a designer. But when you do talk to the engineer and the designer, their work is gonna be so much more valuable and more complex and harder because that last mile, 20% is where the real differentiation is gonna come.

And I think that that's as a technologist for me, that's very exciting. We're changing the whole dynamic of the career field.

jeff: Like, what does that look like though, when you say. You know, the the first 80% is really, really going to change in the last 20% is gonna be, you know, way more important. Like, 'cause right now, I mean I think most, most of the time probably you have a world where, where PMs will gather requirements, do some research, aggregate a lot.

There's a lot of kind of going through notes and research and putting it together.

, What does that look like in the future?

ken: Yeah, I don't know if, I don't know how it's gonna look next year, two, five years from now, but I can tell you how different it is. Right now , I think a lot about our order to cash [00:35:00] financial operations space. And so I've been working with several folks to figure out like how is that gonna change and evolve?

And the traditional product approach is to do a lot of market research, talk to customers, like you said, just, just the pure like wire framing with a designer to say like, this is the requirement I heard. How does it look visually? Well, I gotta find time on your calendar. I gotta make sure what I'm saying, your hearing and then the design, and that can take weeks, months to, to turn around.

Just a first concept and then just to look at it and poke at it and say, I don't like this. I don't like that. Move this, move this, move that. Then it's another week, okay, you got this right. You didn't get that right. Versus today, like I, I go to the Zero or rept and I, I write down my requirements. In a traditional PRDI do some vibe coding in an AI chat bot.

And I can get a clickable front end prototype up and running in an hour, and I can take it to my designer and I can say, look, I know this isn't visually very nice. I know it doesn't meet our company standards with colors and branding and logo, [00:36:00] but let me take you through the clicks. I need this functionality.

It's less opaque what's in my head versus my words, and I can literally now show you. And so now the designer is able to turn around that. Full holistic design that meets my concept a lot faster. And then when I bring in my, my engineer, a lot of the front end work has already been done.

Maybe even some of the database structure has already been done. And so it, it puts them at a starting point where the clarity is much more visible and solid, much faster. And they're able to then go do the hard thing, which is the nuances, the one-offs, the, the integrations, like that's the really hard stuff, and they get there so much faster because the product manager is more autonomous to actually get the concept out there. Also, customer feedback, right? Like, I don't have to waste my designer and engineer's time. If I can put a working, you know, front end prototype in front of a customer and be like, this is what I was thinking. And they're like, oh, no, no, no, you got it [00:37:00] wrong. Click here, click this. You need this other thing. So it's just, it just the speed at which we're able to turn things around is,

lightning tasks. I, I think the last vibe coding demo that I did from a blank PRD to actually having a clickable demo between chat GBT, Claude and, and Rept took me less than a week.

That is unheard of in, you know, in the past 10 years.

jeff: I think the first order effect that we're gonna have from ai, if you summed up into one word, is gonna be speed, right? It's just, It's 

gonna be faster. And companies that don't find ways to go faster, like maybe you don't have to use ai. I guess maybe you can find another way to be incredibly faster, but if you're not finding a way to be ridiculously faster, you may end up not needing to be.

'cause you know, if you don't exist, you don't need to be fast. 

ken: the creative process too, right? You know, when you, when you sit with something for a while and you have to wait two weeks for someone to turn it around to show it to You 

like yeah. And it's like, okay, that's good enough. But then like, if you're able to like, turn it around and be like, oh, you know, [00:38:00] that made sense in my head, but it doesn't make sense here.

It changes your creative process,

jeff: i, I think there's so much more we could go into here. And I'd love to talk more about it, but right now. I have to give you your day back Ken, it's been a joy to have you on, man. Thank you so much for coming on. If people have questions about kind of like how you made the choice you did, why you did, or, or you know, thought processes or just even wanna pick your brain on something, is LinkedIn the best place to find you?

Or is there somewhere 

better?

ken: Yeah, absolutely. I'm on LinkedIn. I'm, I'm pretty on top of responding. To people. I love to hear different perspectives and just chat with, with new voices all across the world, different industries. So feel free to reach out. I hope your, your audience found some valuable nuggets. I could talk for days on this stuff because I get genuinely excited and curious about it.

jeff: Okay, well, we'll have to stay in touch 'cause I, I think there's a lot more here. But thank you so much for jumping on. For everyone else listening, like I said, give it a, like, if you're on YouTube, you know, subscribe, do the thing there. If you are on, apple Podcast or Spotify, please subscribe. Write us a comment.

It goes a long [00:39:00] way to getting the word out and helping others find the show. Ken, it was a real pleasure and look forward to talking in soon. Thank you so much.

ken: Yeah. Thank you.