Incubation is Product Management

Jeremiah Zinn, Chief Product Officer at Bark & Co., shares the incubation process his company has built to enable continuous innovation and the methodology they use to validate new product concepts.

Here are the highlights:

• Why does Jeremiah use the term incubation and what does the process look like? (3:03)
• How does this process overcome the “innovator’s dilemma”, namely focussing too much on solving current needs and not foreseeing future needs? (6:55)
• How does incubation sit and function within the greater organization? (9:35)
• How does bark beta (their incubation system) validate new concepts? (11:55)
• How does Jeremiah’s organization’s new product development process compare to how startups use lean methodologies? (16:15)

And here's the transcript:

Mike Fishbein: Jeremiah's company, Bark and Co., are the engineers behind Bark Box, a subscription service that delivers dog toys, treats, and goodies every month. Ask anyone in Brooklyn and they'll tell you it's the hottest product for dogs with a tennis ball. But I'll let him talk more about how they invented Bark Box and other products in a bit. Before that, let's explore how Jeremiah made his way into this role.

Jeremiah Zinn: I've always developed products for people and they've usually been at the intersection of media and technology. Looking at with the internet coming along or any new technology, how's media going to be affected by that new technology. What new capabilities does it enable? What new user experiences can we create? I worked for a bunch of small start-ups creating games or creating interactive TV experiences in the 90's. And then worked for bigger companies in early 2000's one of them being a company called Ericsson that does mobile infrastructure and mobile phones. And then after that huge media company called Viacom where I ran product and engineering. And the challenge I always had as a product manager is I loved working on big scaled product and platforms, like the TV platform where it reached 80 million users. But then also being hands-on and working on products that maybe only ten users saw or a hundred users saw. So I always kind of move between working in these big companies where I could really play with scale and then small companies where I could get really hands-on.

I came to Bark last year primarily because I was really excited that it's a company that not only has a really big business which I'll talk more about the box business which has hundreds of thousands subscribers more than a 50 million dollar business. But also can work really small businesses and develop new products. And that because of their focus on incubation and innovation and building new business ideas within an existing company.

Mike Fishbein: Jeremiah uses the word incubation to describe Bark and Co.'s methodology for inventing new products. Why does he use this term and what does the process look like?

Jeremiah Zinn: So it's interesting because incubation is kind of a loaded term. Some people think of it as a lot of disparate ideas living in one environment and just kind of throwing a lot of things at the wall and seeing what sticks. For Bark, incubation is really a formulaic way of basically exploring new business areas, exploring new products very quickly deciding if it's a pursue or not pursue. Usually four out of five ideas we choose not to pursue. And then a way to kind of scale those and bring those into the business. And for us so many companies say we have this one business and we want to create lateral other businesses. For us having this real kind of formulaic process has enabled us to actually do it. And not just say it. We have four or five businesses that have come out of the core business that now are stand-alone businesses on their own, revenue-generating that impact millions of users a day.

Mike Fishbein: Incubation is a formulaic process of Bark. It's what got Jeremiah excited enough to join the company in the first place. Before we explore the ins and outs of how they do it, is this even a process that's relevant to large organizations. Is this something they can approach?

Jeremiah Zinn: So I think for many companies the challenge that they have is that so you built your first big business, what's next? And so many companies usually move laterally to develop new businesses. And that doesn't always work so well because in many cases you're not really drastically expanding what you're doing. You always have the ceiling of what you did before. So let me give you an example. Bark one of our business is we send a monthly box with toys and treats to dog parents and their dogs. So every month you get a great box with a theme selection of treats and toys so you can have a fun shared experience with your dog.

Every new employee when they come to Bark says, "I have a great idea. I have an idea to double the business." We call it the C word. And they say, "How about we do a box for cats?" And it's a hilarious thing for us because it's something as dog people, why would you ever want to do a box for cats. But it's also an interesting business idea because one of our approaches has been not to do the obvious where we take the box and we recreate it across verticals and move horizontally. But actually to go vertically. And what we say is we're a full-stack company for dogs. And so we've taken that box business and we just started creating a website of photos of people opening their box with their dogs. So videos of that. That expanded into dog content. And now that's on track to be the Buzzfeed for dogs, right?

20 million unique users coming to this site, looking at content that's important to them about dogs. That seems like a counterintuitive idea that somebody who's creating commerce would build a media company alongside of it. But for us it's been super, super valuable because we can own a demographic and that's people who love dogs. And then serve them with all the services and we went from commerce. We built a media company. And our most recent thing we've done is we've built an events company, so we do over 100 events a year for people who love dogs. Everything from a singles dating event for dogs that are smaller events. To we did bark fest a month ago on the Brooklyn water front that had 10,000 people.

So that's been a really great opportunity for us to continue to lay new businesses focused on the same demographic.

Mike Fishbein: Jeremiah believes that the key for incubation is to go vertical instead of horizontal. Once you satisfy and understand your target customer, you can more quickly understand their other problems and learn to solve them. So how does this process overcome the innovator's dilemma, focusing too much on solving current needs and not foreseeing future needs?

Jeremiah Zinn: The innovator's dilemma is real. I worked at a big media company for many, many years. And it was always challenging that when we came up with new ideas those ideas either were big and in many cases they were seen as if you plotted them out a year, two years, three years to be really disruptive to the existing business. Or they were too small and there was always something that maybe an interesting side project, but can never be something that would make sense running inside of a big company like that. And the challenge that you run into and you run into that challenge when you mix the innovation that you're doing alongside the optimization of the existing businesses. And so we really kind of have a process that tries to address that by two things.

One is that we have a really different process for coming up with ideas, validating those ideas, and growing those ideas. Which I'll talk about later. Then we do an optimizing our existing businesses. The second is that we use a totally different staff of people to actually develop those ideas because in many cases, the people who are working on these short projects to validate and understand a new business area, work a different way where they're focused on just getting something out the door, getting an MVP in place, and then getting validation for that MVP. They're also a little more comfortable with failure because in many cases the businesses that we're building in Bark beta, four out of five of them will fail. And it takes a very unique person to be okay with something that they've worked on day and night for three months at the end of three months to understand, look this doesn't look like something we want to invest, $100,000, $200,000, $300,000 in. It's something we're going to shut off and move on to the next thing.

So really by keeping the process different from the rest of the company and keeping many of the people different from the rest of the company, we've been able to avoid innovator's dilemma and have a more vibrant kind of innovation program that exists alongside of the other stuff that we're doing.

Mike Fishbein: Jeremiah touches on a point coming out in previous episodes. That the decision-making process is separated from the data generation process to avoid bias. He also mentioned Bark beta which I take is the name of their incubation system. How does this system sit and function within the greater organization?

Jeremiah Zinn: The risks when you set up a program that exists outside of your existing business is that it becomes what people call innovation island. Where ideas go, they live over there and then they never make it back into the existing business. And a lot of people think they've solved innovator's dilemma by separating the innovation from the core of the company. But actually the hardest part of being innovative within a bigger company is bringing those ideas back. And so, one, many of the initial themes that we focus on, so if we're going to do a bunch of projects around dog wellness, those themes we create those with the idea that at some point they could come back and be a business line with the broader business.

The ideas or the themes come from the employees themselves. Then two, when they're built up, they're built up outside of the existing infrastructure with a set of employees that are separate. Usually people who come from the entrepreneurial space, people who are kind of two-man sort of founders of existing internet startups. And they can run with those outside. But the ideas that at any point, somebody from the main business is following these new innovative ideas with the hope that at some point we can bring them back to the broader company. And the media business was exactly that.

The media business was hiring one blogger, having them do a lot of different types of content posts, understanding what types of posts would resonate with our audience. And then once we found that point, once we found that stickiness that resonated with our audience, we brought it back to the core business and we scaled it up. So you'll see while we partition the employees into separate buckets away from each other there's a lot of interaction from the island to the mainland.

Mike Fishbein: The key then to building an innovation management process in a large organization is to insure that there continues to be collaboration and communication between the island of innovation and the mainland of the existing business. Now, let's learn more about the actual methodology from with Bark beta to understand how they validate new concepts.

Jeremiah Zinn: So, it's interesting because so many people think innovation is about a great idea. Great ideas happen every day to all of us and really it's about do the ideas fit within a theme that makes sense for the business. And that's why the themes that you explore are so important. And that's why understanding your consumers and those themes being derived from consumer insights is so important. I have a dog named Moxy. I think about that she's healthy, that she's happy, that she has a day where she's in a safe comfortable environment. And all of those thoughts that I have about Moxy are basically problem sets or needs that I have as a dog parent with my dog Moxy. And so what we do is we actually develop personas and each of those personas then have core needs as a dog parent attached to those.

Those then are translated into themes. And we do traditional brainstorming sessions to try and generate as many ideas as possible. Those ideas are valuable only in so far as we're basically transferring ideas and they give us focus to then build a product. And that's where the real important work is done. We use those ideas as a North Star. But it's okay to move off of those ideas in pursuit of a great product. And so what we do in that next phase is we develop something called a lean product plan. And the lean product plan is literally an area that you want to investigate around an idea and a set of metrics that you want to understand. And that's our goal. Our goal isn't really ever to hit a success metric. It's to understand a business. So we go from theme to idea to understanding our business. And then when we've gotten to that state and we understand a small area of the business, then we can decide what we want to build and where we want to invest and where we don't want to invest.

Mike Fishbein: So I'm wondering how this works at a granular use case. How would a concept in this scenario be validated so that it's clear more resources should be invested in it?

Jeremiah Zinn: That's where it is really understanding the core metrics for that business. So an example being we worked on a project that was about an on demand vet. So if you were a dog parent you had a question about your dogs health, you could on demand through via an app, talk to a veterinarian immediately. And if you wanted that veterinarian could make a house call and come to your house to look at your dog. We initially had thought that that was a product that had a lot of legs primarily because people spend a lot of time thinking about the health of their dog. When we rolled that out into the marketplace, we recognize that the challenge there is that people have a question about their dog or need a vet to come to their dog, maybe once every couple months. And it wasn't an ask or a need that happened so regularly that you develop the behavior of picking up your phone and bringing in Bark Care.

What we recognized then based on that metric because we didn't have the frequency there for it to work was it wasn't an area that we wanted to continue to pursue. And it was based on that core metric of frequency. It's a unique situation because when we looked at our NPS from our customers, customers loved the service and raved about the service. So if we had just used that one metric we would've continued to put effort into the service. And there probably would have been throwing good money after bad. But what we recognized was look for this to be a business it needed to be something people used regularly and that we didn't have to continue bringing new customers in the funnel. That we'd have to develop some repeat usage. So that's an example of the types of hard decisions that we have to make all the time. But it's all based on the metrics for the business which is customer happiness, acquisition, conversion, and retention.

Mike Fishbein: Earlier Jeremiah mentioned the lean product playbook that his organization uses for new product concept testing. I wonder how this is similar or different from house startups using lean methodologies.

Jeremiah Zinn: It's funny as we've really taken the template for lean and that's worked well for us in the beginning of the process because what we're trying to do is really understand the mechanics of the business and lean is a great model for doing that successfully. I think the part that's a little different is that at some point we have to one, take these products back and integrate into a broader business. And sometimes what you're trying to get out of it is different. So I'll give you one example. Many traditional incubation programs just focus on building new businesses that can drive revenue. And that's what Bark beta primarily does. But we have a separate program called Bark alpha and it's unique because the idea behind it is all that we want to do is create engagement with our customers.

So these products have no business goals. They can be a stunt, a funny app that we could create. And the idea is only to be more part of Bark customers lives. I'll give you an example there. We created a product called Bark Buddy and Bark Buddy is basically the Tinder for dogs. You can see a long list of dogs. You can swipe left or swipe right. And literally you can find a dog that you could adopt to bring into you home via this app. This app gets us a lot of promotion. It gets thousands of downloads a day. And it's something that was on the Today Show, was in Tech Press, was in advertising press. Really helps bring Bark into the conversation.

The challenge is that it doesn't make us any money. We would never want to make money on getting dogs into happy homes. And most companies probably wouldn't actually focus on developing something like that because you couldn't tie it in their business. We recognize that through this Bark alpha program there is value just in that and that's been kind of a unique approach that we have and maybe at some point we'll use that to cross-promote to other products. Maybe at some point we'll use it to launch other products on. But for us just bringing better products to our customers and being more a bigger part of their lives it's important.

Mike Fishbein: The Bark alpha and Bark beta I'm sure Jeremiah has his hands full with the present. But I asked him what about the future gets him most excited?

Jeremiah Zinn: One thing that's really interesting to us is we're focused on a very specific demo which is people who love dogs. And you could assume that that is empty-nesters in their 40's and 50's, everything down to kids with their dogs. The interesting thing for us is that we actually are really, really focused. One, our audience is primarily women, about 70% women. And two, women in their 20's. And it's kind of a new emerging demo around dogs. And it's interesting because when you think about what is a woman in her 20's? What is her life like day in, day out? She's probably using a lot of services like Uber or on-demand services, a lot of the friction in her life has been removed. She may not watch traditional cable but may use Netflix. And then two, design is a really important part of people's lives. And a lot of that is amplified by social media.

So one of the things that's been really interesting and exciting for us is to say understanding this consumer, how can we do things differently. The average pet product has probably pretty poor packaging, poor design, and maybe never is thought of as something that you'd want to ever take a picture of and put on Instagram. And that's where we've really tried when we look at all of our products, try and think about the lives of our consumers and integrate them much better into their lives. So an example is one of our best selling products was in a box was it's a felt bouquet of flowers. And dogs love it because it's kind of crinkly and they could chew on it and pull on it. But a lot of our customers love it because they can put the flowers in their dogs mouth. They can take a picture on Instagram and they can say look at the flowers that Moxy brought me today.

So one of the things that we're really excited about is saying let's take a different look and let's understand who our consumers are and how they live. And then really take a drastically different take on the products that we create with that understanding. Our CEO, Matt Meeker, has a dream that when we've made it, and I don't know what the definition of made it is, that we will have an airline for dogs. No longer will dogs have to like travel down below but will travel up above and that's big dogs and small dogs. He has a pretty big dog, a great dane. And so today the great dane would have to travel down below which is not only not so exciting for him, but not so safe. So riding up top and so I think transportation is a really interesting area.

Another area that's been very interesting to us and it's kind of when we've started to run events we've really recognized the people really love to bring their dogs wherever they go. Dogs are now part of family like kids. So it's not so crazy to think that we may have some plans in the back room around a theme park for dogs. So the idea being that you can come to a fun place, bring your dog and have an experience. We have to figure out what the roller coaster is for dogs. There's still a little ways to go. And figuring out exactly what that experience, how that would take part. But we're innovating in that direction.

Mike Fishbein: Jeremiah has outlined the process Bark and Co. uses for testing and executing on new ideas, employees, and partners. We heard his innovators to keep the island in touch with the mainland and to focus on learning more about the problem sets of the target customer before imagining up new customers. Next up is the benchmark. Let's see how Jeremiah reflects on the next series of questions we ask all interviewees to ask themselves.

Jeremiah Zinn: How do I eat my own dog food? And because Bark beta is an internal program that's the dog food we have. We use it day in, day out to manage all of our innovation projects and incubation projects. We're actually doing the inverse. One of our founders, this guy Henrik Werdelin, runs a company called Prehype and Prehype is a company that works with large either media companies or consumer goods, any big company that's struggling with innovator's dilemma. And they actually help them develop new products and pipelines for products. And so some of the work that we've done in Bark beta and some of the format of Bark beta we've actually through Prehype brought to other folks. And so other folks eat our dog food every day by building lean product plans and by rolling out new products using some of the formats that we developed within Bark.

How do I get out of the office? And it's interesting because we bring out of the office in pretty regularly as I said earlier we do maybe 15 to 20 consumer interviews really trying to get in the mind of our customers. Understand not just how they live but how they feel. But we also have this great opportunity to talk with our consumers because we do so many events. And events are a great opportunity to either exist with and connect with our existing customers or connect with future customers. And so as an example we did a 10,000 person event on the Brooklyn waterfront and that place was full of people to talk to and really understand the diversity of our community and so much about our community.

In many cases, the challenge is getting out to people who maybe don't know about your brand or haven't encountered any of your products. So that's where we spend a lot of time thinking about where consumers live and for me I live in Brooklyn. People take their dogs to the dog park in Brooklyn so the dog park is a great place for me to go talk with people who are passionate about their dogs, have a conversation with them about their unique wants and needs, and think about how we can develop products to serve those wants and needs. So for us the dog park is kind of that perfect place.

What am I reading right now? So I guess not work-related I'm reading a book called Nexus. It's a series of books. Sci-fi, about what would happen if everybody's brains were networked. And it's really interesting sort of what if series about what if the internet wasn't just connecting computers, it was connecting people's brains. Work-related, my team is working our way through the book Lean Analytics. I think it's written by Allister Kroll and it's a great sort of primer on how to think about analytics and how to take a lean approach towards analytics which has been super helpful in everything I do day-to-day. But also been helpful in my team getting up to speed on data and analytics.

The actual nightmare people have is showing up to class and not knowing the test was today. The product management nightmare that I have is that our data is not instrumented correctly and in my job data is my eyes and ears. And data is only good as if it's firing correctly and if events are aggregated correctly. And so my fear is that when I look at that mixed panel conversion and it says it's up six percent it's actually down five percent and we just didn't instrument. So I'm vigilant about making sure that we're testing and that things are always working correctly.

Mike Fishbein: Listeners can find out more about Jeremiah and Bark on Twitter @miahzinn that's @miahzinn or Bark.co. That's our show. Thanks for tuning in until next time. Until next time, this is Mike Fishbein from Alpha.