Product Leadership Through a Sea of Constraints

Government regulation, user experience, a superstar product manager, COVID-19. What do all of these things have in common? These are examples of constraints, but what counts as a constraint? How do you juggle them? How can you keep your company afloat, let alone thriving, with all of these barriers? Let’s dive in.
 
At N26, our goal is a new approach to banking. We want to build a fully mobile digital bank that people love to use. We believe in providing the best digital experience, easy setup, full transparency, and innovative features. We intend to be the first truly global digital bank. This puts us in a highly constrained space as we try to balance competing worlds as a regulated, hypergrowth technology company.
 
While our regulatory environment is more unique, constraints are a part of life for every product manager. Constraints are anything that imposes a limit or restriction which prevents something else from occurring. They can range from regulations and compliance to resources and deadlines. 

Business Constraints Are Like a Game of Tetris

Product management is like playing a game of Tetris: there are constraints in everything you do. Some pieces are harder to work with than others, but the ultimate goal is to earn points while you avoid letting things pile up. The more you play, the more you develop and understand successful strategies to make both immediate decisions and long-term plans. 

Each Tetris piece is a constraint. When it comes at you, the most valuable thing you can do is adjust your perspective, see its potential given your current circumstances, and creatively leverage it to add strength to your structure.

Any given combination of constraints may lead to a position of power or impeding downfall depending on your mindset and approach. Some constraints can strengthen your products by filling gaps in your Tetris board. Failing to address your constraints will create instability. 

The most successful product managers I’ve hired are those who are excited by the problem of innovating under constraints. In order to operate on a daily basis as a product manager, you must know your limitations and play your pieces as you get them. This requires excellent communication, prioritization, creativity, quick thinking, and informed decision-making. The best PMs use those skills to turn challenges into opportunities.

Constraints at N26

At N26, the constraints can be grouped into challenges of Hypergrowth, Technology, or Regulation. Each category comes with its own boundaries and challenges that can be leveraged as opportunities. For example, your compliance with a regulation can involve creative solutions and produce competitively advantageous new techniques. N26 uses geolocation, delivery address, and 15 other data points to perform address verification. While it may be difficult to explain to financial regulators expecting certified original documents in person, this creative solution achieves parity with traditional bank security all while enhancing the experience for users.

Regardless of whether you face a tightly regulated environment, all companies must answer to their users. What is the customer’s appetite for innovation and experimentation? People may say they want innovative banking, but in practice they aren’t okay with experimentation. If your Spotify playlist doesn’t load, it gives you an opportunity to go out and find music you have never heard before. If your savings account displays a zero balance, that’s not an error you can easily stomach. Understanding the needs, desires, and emotions of your users as a constraint will help you design and build what people actually want.

So how do you succeed?
Learn to play your constraints. 

Let’s talk about Login screens, something practically every app has. N26 users said they valued speed and efficiency during the login process. When we tested that experience, it reeked of insecurity, and users didn’t like it. Therefore, logging in is constrained by security, speed, and user experience. Which one is most important to address first?

Through our research, we know that those who don't currently use digital banking are under the false impression that it is less secure. Despite assurances otherwise, people have a sentiment that it cannot be as safe as traditional banking. This told us that security is a more dominating constraint, and we should do everything we can to show users our product is secure. We purposely added .5 seconds to the login flow to feature a lock icon unlocking upon user verification. This animation improved sentiments of security and in turn more users transferring additional funds into their N26 accounts. By balancing the constraints with the things that were important to our users, we succeeded.

Other Tetris Pieces That Can Come Your Way

• The beta launch that has to happen without the additional 8 weeks to iron out user flows because you wanted to be first to market
• The mounting tech debt as you release new features to improve your valuation for the current funding round.
• The need to comply with a regulation limiting your ability to automate a flow which will save your users time.
• The rockstar PM you met which you don’t really need for 6 months who will eat up headcount for an iOS developer you desperately need now.
• The superstar Product Lead who pushes their team to produce impressive results, but no one wants to work with.
• The time you scaled from 300 to 1500 people while magically trying to hire people with experience in the industry you were simultaneously redefining.

You need to really understand what is more important for each particular product at that point in time. By working out which constraint is most important at this time, you can better make your decision. When it comes to personnel, find out if the people are open to developing new skills and if they aren’t it may be time to move on.

Sometimes, you cannot move your constraint and you need to let it fall. As with Tetris, the only way to continue playing after a badly timed piece falls is to change your plan or strategy and play around it.

The Piece You Never Saw Coming

At the time of writing this, COVID-19 presents the most forceful and dominant constraint. It has drastically impacted the global economy and user behavior. In response, we needed to shift our plans so that we could address changing needs and still continue our hypergrowth trajectory.

For example, our middle tier product, N26 You, has a strong association with travelers and the perks are all travel-related. The bulk of our revenue for this product came from international and exchange fees. When everyone was grounded for an undefined amount of time, we had to pivot as quickly as possible. 

Like any software company, we were also constrained by how fast we could build features, so we instead changed our partnership strategy. We temporarily moved capacity onto our partnerships team and within days started offering 8fit and Headspace instead of Bookings.com and Skyscanner as perks. In a 10-day period, we were able to completely change our positioning of the product, even though it functioned the same way on the backend.

With something like COVID-19, changes which serve the short-term may limit your options in the future. This is balanced with knowledge that focusing on the short-term may be the only way that you actually have a long-term to worry about. As a product leader, you must know the ins and outs your individual business and the potential impacts of COVID-19 to choose the best way forward. How can you come out of this dark time roaring and steps ahead of the competition? What can you do right now to increase your competitive advantage for when users return?

What Can I Take Away?

Knowing your constraints and learning how to play them are the keys to success. This will allow you to see where your gaps are. Much like your Tetris tower, there will be holes in your build, and that’s okay. Understanding these areas lets you make informed decisions and have a better idea of what tradeoffs to make in the short-term in order to secure long-term success. 

Constraints aren’t a limitation, they are a growth opportunity. Even in the most regulated and constrained environments, you can successfully innovate and build incredible things.

Georgie Smallwood is N26’s Chief Product Officer, in charge of defining, leading and implementing the company’s global product strategy. Georgie joined N26 in 2018 and brings with her over 15 years of experience in global digital and software companies such as Xero, News Ltd and Scout24. Having led teams at fast-growing companies across the globe, Georgie prides herself for her leadership skills, strategic thinking and operational effectiveness, as well as her ability to lean into the challenges of scaling a global business with a focus on communication and respect.