The Andy Breen Hypothesis: Testing for Value Risk is the Most Critical Yet Overlooked Piece of Product Success

Speaker A: Foreign.

Speaker B: In today's episode, I talk with Andy Breen about testing for value, risk, making evidence based product strategy decisions and entrepreneurship. We answer some of your biggest questions about his journey, like, how did Andy learn that building successful products is about more than the technology?

Speaker A: Hey, so who's using our product and who's using that tech I built? And why aren't they using the tech I built and what's going on there? And so it was very much a journey into, um, trying to go deeper and realizing at some point that it wasn't all about the engineering and the technology.

Speaker B: What do people most often get wrong about testing for value?

Speaker A: And people too often just focus on that functional because that's usually the easiest one to observe. But you really have to go deep in understanding the value people will place. And oftentimes some of these things are subconscious. You can't just ask them and they'll say it. You have to basically go out and test for value. You have to get them to react to words or to experiences or other types of things. You have to observe them in their environment.

Speaker B: And how did Andy use evidence to drive strategic decisions?

Speaker A: And they had done the spreadsheet analysis out the yin yang, like, look, if you just move 20% of calls, look how much money we save and everything. And I said, oh, okay, that's great, I appreciate that analysis. But I said, but what do customers want? And they had no idea.

Speaker B: Hi and welcome to the Product Science Podcast where we're helping startup founders and product leaders build high growth products, teams and companies through real conversations with people who have been there and aren't afraid to share their lessons learned from their failures along the way. I'm, um, your host, Holly Hester Riley, founder of the Product Science Group. This week's episode is the Andy Breen Hypothesis. Testing for Value Risk is the most critical yet overlooked piece of product success. Andy Breen is a partner at the Buy Build Fund where he acquires and grows small cash flow positive businesses. One of his acquisitions, Prince of Love, happened in 2023 where he's now CEO. He's also an adjunct professor at NYU Stern where he started the tech product management program and also teaches on entrepreneurship. With that, let's get to the conversation with Andy. Welcome Andy, to the Product Science Podcast.

Speaker A: Thanks for having me, Holly.

Speaker B: I'm super excited to talk with you today. So I thought we could actually start

Speaker C: with a little bit of a journey through your background and uh, hear some more how you develop the skills that you're using today in your work.

Speaker B: So tell me a little bit about how you started in product management.

Speaker A: Well to tell the story of product management I probably need to tell a story about early days back into my youth. I was one of the rare people, I guess that at the age of 8 or 9 years old I knew what I wanted to do with my life which was I was, it was the 70s remember and uh, someone put a computer in front of me and I said oh this is interesting and there are no UI, GUIs, other fancy stuff. It was a command prompt that would blink. So basically started on a path to just monkeying around with computers, um, old Apple iis, you know, pre Mac type of things and other types of uh, machines into the 80s. And so I knew from that date that it was something that just clicked and drove a real passion in me and so I knew I wanted to go and do that. So eventually went on to study computer science and business at ah, Carnegie Mellon and wanted to just stay with it. And so my early career was as a software engineer running engineering teams. First started in kind of Wall street finance world. Realized pretty quickly that that structure was not great and it was the time when kind of Internet 1.0 was launching in the early 90s and so jumped into the startup game, worked for a bunch of startups. And my early career very much looks like a VC portfolio, a, ah, couple nice exits, a couple plateaus, a bunch of flame outs and uh, it very much built that passion for what we could do with people that we had everyone connected to this network and a lot of people having powerful computing devices in their hands. But the reason that I made the product management journey was I was always the engineer saying, hey, so who's using our product and who's using that tech I built and why aren't they using the tech I built and what's going on there? And so it was very much a journey into trying to go deeper and realizing at some point that it wasn't all about the engineering and the technology. It was very much about what value people got out of it and how they got out of it. And so that was kind of the start and basically transition. And that was back in the days when there wasn't really much of a definition or discipline of product management. It was kind of being defined in that timeframe. Agile was just starting to kind of peak on people's interest and stuff. And so the idea of that there's this person that's a representative of the user called a product owner kind of being kicked around and we were trying to Figure out what exactly that meant. And usually it was just the engineer on the team that had the most interest in the customer. And so kind of played that role in a few different places, but really kind of came out of that whole genesis.

Speaker B: Yeah, I'm curious to hear about some

Speaker C: of the lessons you learned, you know, with that, that VC portfolio type career where you had so many different experiences. What were some of the, the things that it made you realize, you know, maybe through, maybe through failures, um, where things didn't work out.

Speaker D: Yeah.

Speaker A: Big lesson number one. It's not about the technology. That was the big lesson number one. We built a lot of technology, built a lot of really cool technology. And it was back in the days when in some ways you were handcrafting your own databases, you were handcrafting your own websites and other types of things. And so it wasn't like we could rapidly develop. We were making major investments of time and pretty deep levels of development to build stuff. And, and that was something where when it didn't work, it really kind of hit you as an engineer. Like, hey, I just spent six months building something that from an engineering standpoint is super cool and super innovative. Again, why is no one using my product? And so lesson number one was, it's really not about the technology. Just because you build it, they will not come. And you really do need to be solving problems for people and offering them something that, um, you know, changes them and their life and their abilities, you know, to do things. Some people will adopt technology because it's new and cool, but very few, that's not how you get mass adoption. So that certainly was kind of lesson number one. Lesson number two morphed into what modern product management is as outlined in Lean and stuff. But we were talking about this even in the 90s, which is that, you know, how do we rapidly iterate so that we don't spend six months building something that no one wants? How do we do something super quick? And so I remember spending a lot of time in the early days doing paper prototypes, right? And literally let's print out screen one and then print out screen two. And how do we stack the papers properly? So when the person says, oh, I click this button, we shuffle in the right paper and you have some fun, interesting ideas around that. But really to say, how do we invest in understanding the user's needs? And a lot of it started with usability. Realize now that usability is an important aspect, but you have to do stuff before that, which is testing for value. Do people actually value the thing you're trying to do, um, so that if you do make it usable, they actually still will try to adopt it. Even if, if you don't make it usable, they still will try to adopt it. And so, you know, really was around iteration. I always say I've launched hundreds and hundreds of tech products in my career and never one. There's not been one that I, uh, launched that was the way I conceived it when I first thought about it. Right. They've always gone on a very winding path. At first I think we tried to resist that. We tried to basically enforce the vision and enforce the path. And now it's become, have a vision that's important, understand what you're trying to do for people. Um, although that might unwind unto itself, but be very flexible on the path and that's going to be winding to get there. And very much value what customers or users tell you when you're putting something in front of them.

Speaker B: One of the things that you said in there that I'm curious to hear

Speaker C: a little more about is the difference between testing for usability and testing for value. I feel like that's something where especially early career PMs or people, early career startup founders, um, sometimes don't recognize the difference. And I'm curious to hear what kind of experiences around that you've had and how you help people see the difference between the two.

Speaker A: Yeah, really important point. And I think most of us come to it thinking about usability, right? Because it's like, hey, we've advanced generally past paper prototypes. We can prototype stuff really rapidly now, fairly real prototypes, if that's the proper direction. And most people focus on usability. Okay? So I ask a user in this scenario try to do this and can they figure out the path to do that? And again, that is valuable because if they can't figure out how to get value out of your product, they're not

Speaker D: going to get value out of your product.

Speaker A: But more important, and something that comes well before testing for usability is testing for value, as you mentioned. That is, does this product make the person better? Does it make their life better? Does it improve something? Does it solve a specific problem or need that they have? And does it offer a clear value proposition? Because these days especially, every product gets about 30 seconds of consideration, you know, at the top. And so you have to have a clear, and it's not just the, you know, a wizzy marketing message, but can you have a clear conveyance of value? And that value is not just functional value, right? Which is like can it do X? Can it do an accounting thing for me? Can it do my taxes? Can, you know, functional matters. And there's always a functional need that you're solving for. But as important and in many cases, more importantly, does it solve an emotional and or social need? Right? So the example I give people all the time is logically, there's no reason for people to buy luxury brands, luxury products, right? There's no reason to buy a Porsche over a Chevy. There's no reason to buy a Gucci handbag versus just something you buy in the corner store. There's no reason to buy high end wine, you know, versus the local rock vodka, you know, other than maybe a difference in hangover. They all basically functionally do the same thing as their quote unquote cheaper counterpart, right? But uh, luxury goods are still a big thing. And so again, if you just look at it through the lens of functionally, like let's use the bag, The Gucci bag versus the $10 backpack, both hold stuff, right? And they hold it just as well. But then why would people buy something that's 10 or 100 times more expensive? And the reason is, is because the emotional and social value that that thing places on them, right? The social value, I think is pretty clear. It's how you project to others. And it shows people, I've made it or I have something, I've achieved some status, right? And that social aspect is very important, but the emotional one is very important there too. How does it make me feel? Maybe I come from a humble background and I have made it. I've got a job that's paying something or I had some good financial outcome and I want to reward myself, celebrate something so that I can have a marker for what that is. And that's the reason people buy those goods functionally. They're no different from their cheaper counterparts. And so it's really, really important to understand those aspects. And people too often just focus on that functional because that's usually the easiest one to observe. But you really have to go deep in understanding the value people will place. And oftentimes some of these things are subconscious. You can't just ask them and they'll say it. You have to basically go out and test for value. You have to get them to react to words or to experiences or other types of things. You have to observe them in their environment and see why they do stuff. Why did they make other decision decisions in the past? Right? Do they buy other luxury goods in other areas? Why did they do that? Right? That's really the key in understanding value. And will people derive again when they first get introduced to your product, can they perceive value? And then obviously, if they decide to double click on that and go further, um, will they actually realize the value as they experience it and potentially transact and buy your product and receive that value over time, which is the really important thing for sustaining product?

Speaker C: And I like that you touched on a little bit about how you actually do the value testing as well. I think that people seem to struggle with that. In my experience, when I'm helping people learn how to do it, it's hard sometimes when they haven't been through a lot of user tests to help them see what kind of reaction you're looking for. So I'm curious to hear more about how you teach that.

Speaker A: Oftentimes, even when you're doing usability tests, value questions arise or opportunities to test for value arise. Let's just take a simple example. So showing someone a clickable prototype for, I don't know, a new banking app, or you're basically asking them to achieve a task. So, um, click through and check the balance of your mortgage or something like that, and you can ask them to do that and they can kind of get through. And they might pause or hesitate somewhere and you might have a logical question like, oh, does that not make sense? Or, you know, is that not where you would expect it to be? And things like that. And you might get a response which says, no, I see it, but I don't think I would do it. All right? I don't think that doesn't add up for me. And that's an area to probe, and not just probe on usability, but probe on value. Because just the nature of your example might be something that's off putting to them. For example, you're showing a loan mortgage balance, and your loan mortgage balance shows $600,000. And they say something like, well, that's really expensive. I would never take out a loan for that amount. My current house, I have it all paid off, and I don't like to carry debt. So now you're getting into the psychological element and emotional element and even the social element of why they may or may not connect or find interest in your product. There's nothing to do with usability. They see the amount they got, they, they accomplished the task, but they don't connect with the value of your product because your product doesn't reflect, you know, who or who or how they perceive themselves.

Speaker D: Right.

Speaker A: So that's just a quick example. I made, uh, up but sometimes even doing simple usability tests, you can actually test. In fact, oftentimes a good usability test will reflect on value. And those are always opportunities when you're talking to customers to probe and like, why? You know, just the old classic five whys, right. Ask why five times to peel the onion and get to the root cause. Because if at first you might get a kind of a superficial answer from someone, but you really want to probe deeply, again within reason, you don't want to make them uncomfortable, but you really want to get to that core driver in decision making, which again they might be conscious of, they might not be conscious of, and they might only start thinking about it because of the questions in the probing that you're asking. That might just be an attitude they have and a reaction they made subconsciously. But now you're probing to get to like the root of what's going on there.

Speaker C: Yeah. Excellent. So let's continue on in your journey a little bit. So after all these startups and you finding your way more into the product role, what did the later years look like?

Speaker A: I definitely emerged out of it as that engineer that was asking more. And again there was starting to be more and more this product management discipline. I did a fair amount of work out in Silicon Valley at the time where a lot of that really originated. And so I was able to just learn from people and understand that. And so I did it within the kind of startup early stage context, uh, for a number of companies. What I saw was a lot of large traditional companies and industries trying to transition into that more techy startup way.

Speaker D: Right?

Speaker A: Because they saw either A, um, tech startups now are getting really big and really big businesses. Right. Google at that point and several others have really taken off to be major players, uh, there. So one, they saw potential opportunity or B, probably in more cases they saw a big threat from tech like oh my God, tech is disrupting, you know, that industry and that industry. Oh, they're coming after us. And in particular I, uh, liked quasi or heavily regulated type of businesses because their insulation was regulation and they knew that whether they liked it or not, they knew that, but they also knew that, that some of those tech companies were starting to chip away at that, come at that. And particularly in financial services. So being based in New York, obviously I'd had a background in, as I mentioned, early career in financial services. It's always around, it's here, it's the, the center of it. And did a stint to running product, uh, for American Express's services division and it was a really interesting opportunity because Amex, you know, a huge brand, very loyal customers, kind of unique proposition in the credit card space. But they basically said on, ah, my first day, really said, hey, we get 150 million phone calls a year. You know, our connection to our customers is really unique and really important. We do really special things for them. Right? If like someone calls up and says, you know, I'm in Jakarta and I just had my, you know, lost my credit card, um, please help me and oh, by the way, I need dinner reservations in Singapore tomorrow night. Like they would do that. Like that's the kind of stuff Amex did. It wasn't just like, you know, hearsay and rumors. They really did that kind of stuff. And so they said, okay. But we realized that not only is there this trend of obviously digital servicing versus you know, phone calls in the younger generation, but they also said, um, obviously it cost us a lot of money to take all those phone calls. And they were pretty strong about not offshoring a lot of it. Right. A lot of companies, their whole thing was put call centers overseas and save money. We all know that. That, you know, generally didn't have a lot of good outcomes, especially for a company though, that's differentiating itself, you know, on customer service. So they actually kept it on shore. And so it was obviously a fairly expensive cost center for them. And they had done the spreadsheet analysis out the yin yang, like, look, if you just move 20% of calls, look how much m money we save and everything. And I said, okay, that's great, I appreciate that analysis. But I said, but what do customers want? And they had no idea, right? And their only analysis was young people want to do digital and old people want to do phone calls. That was the depth of the analysis. And they said, so great, we probably won't get many of the older people, but yeah, we'll get all the younger people. And I said, okay, that seems like a pretty stereotypical non deep analysis. And so I said, can I just go talk to some customers? Let me just talk about them and their journeys and everything. And so it was nothing to do with anything new and any new ideas. It was purely out there to seek. How do you work with Amex today and how do you perceive, you know, that type of thing? And a really interesting thing came out of literally like 20 customer interviews around the different journeys you do with your credit card company. And we come to find there was virtually no correlation with age. Like we interviewed people across the spectrum. So that was completely thrown out pretty darn quickly. And in fact it had a lot more to do with the journey and in fact their emotional state on the journey. So I'll give you a couple examples that, that really lay this out. One was, okay, if I just had my card stolen or I just lost it, that's a very intense emotional kind of thing. And no matter your age or any other demographic, I want to have a phone call because I want to have the assurance that A, um, I'm not going to be responsible for any of those charges and B, someone is like overnighting me a new card so that I have that and all my other things are taken care of and stuff like that. So people basically wanted to do a phone call because they wanted a comforting voice on the other side of the phone. Again, back to emotional needs there versus functional ones. The other one at the other end of the spectrum was why do I have to make a phone call when I need to change my address? Right? Like that's the simplest thing. I should spend about 15 seconds on your website, type in my address, change it, we're done, we're good. In fact, I don't want to get into a phone call because that's a waste of my time. And so, interesting enough, the side note, the reason that they had, um, kept change address in a phone call at that time was because it was a big, ah, source of fraud. And so they wanted to do extra double verifications to make sure someone wasn't like changing it because they're stealing the credit card and everything like that. So it took us a while to get credit card moved online. But back again, from the customer's perspective, it was emotional. I need comfort, I want to talk to a human being. The other one was simple giant waste of time, like, let me do it quick, you know, because it's a transactional type of, you know, experience. And again, we found no correlation on any demographics. Right. And that's the big mistake I think a lot of people make coming out of kind of from a marketing perspective, which is like we create these Personas and things about demographics around age and income and gender and all that kind of stuff. And it's like those are almost never the reason people make a product decision, right? And as far as the action to adopt a product, uh, it could be an element, like there are clearly products that are for women or there are products that are for older people. Like I use the example all the time of aarp, right? As someone who's getting up there and might look at services at some Point. Just because I'm of a certain age does not make me interested or not interested in aarp. It has to do with where I am in my life cycle and what I'm trying to do. Am I actually, do I need. Am I transitioning out of job into retirement? So I need health care and understand about Medicare and like, you know, that kind of stuff. Right. And again, there's a correlation with age, but age is not the reason I decide that, you know, kind of thing. And the same thing for, you know, a lot of other products. And so again, someone who said, oh, it's all because of demographics. That's why people would make phone calls. And I basically proved to them it had nothing to do with that. And that was a big revolution because they were, you know, trying to swim upstream and basically just say, oh, the number one call driver is lost card. Let's do that first. And I ended up basically proving to them that, no, not only should that not be first, we may not ever do that, you know, because people don't want to do that online. People don't want to do that in a chat experience or whatever, you know, kind of thing. And we made a difference and we actually saw real adoption because we did it based on user insights.

Speaker D: Right?

Speaker C: Yeah, I love that story. And I think that one of the

Speaker B: things about it that I'm curious about

Speaker C: too, is the psychology of the people inside the company that you are changing their mind because you understood the psychology of the customers so well, uh, from those conversations you're having and going out and taking a look at it from more than just the demographic point of view, how did you shift mindset inside the company to understand and get on board with the direction that you found that should go?

Speaker A: Yeah, um, there are a couple of things. One is, especially I find in larger companies where people have worked at them for a long time, and Amex was certainly that. People like, hey, we're successful business. We know our customers, right? You know, look, if we weren't, we didn't know our customers, why would we have all these customers? Right? You know, kind of thing. And the truth is, at some point you did know your customer. But guess what? Things drift over time, right? Your products change, customers change, sentiments change. You know, all kinds of things happen. Competitive landscape, other offers that, you know, these people have, you know, change. And that was certainly something Amex was seeing. And so part of it was that you couldn't say this to someone, but you basically had to know, like, I appreciate all your historical knowledge and some of it was quite useful, right? You know, being able to see the ranking of all the reasons people call us, all that kind of stuff. Very, very useful. Having that, that data analysis and Amex was very data driven. But you have to break old habits and especially people that have been educated. A lot of people that marketing or MBAs kind of thing we're all trained on, uh, the only way you segment customers is by demographics, because that's the way we did it. Right. And we know the history, because marketing was always bought and sold that way. Because before we had big data and lots of data collection, all that kind of stuff, the only data we had on people was the U.S. census. Right. You know, and people just got conditioned into. The way I look at customers is through demographics. And at some point, people, you know, spiced it up a little bit with psychographics and attitudes and things like that. And, you know, eventually it led to Personas and stuff. And while that may or may not work for marketing, but we know marketing has changed dramatically with, you know, digital, where I'm targeting intent and, you know, other types of things, it's hard to break those old habits. And people still look at their customers through the lens of demographics. And again, I can cite very, very few times that because of my demographic is why I made the choice to buy or adopt a product. Right. It's almost never the case. And again, it comes back to that, what are the needs of the person? Functional, social, emotional. And the only way you get to understand that is by talking to people, observing them, seeing their past behaviors. Right. Those types of things. So the only thing I asked for, I said, let me just, just give me like a few weeks to go talk to customers. And I came back and instead of being my opinion, because if I'd stood up on my bully pulpit and got on my milk cart, milk crate and, you know, kind of preach this, I would have gotten a lot of rolled eyes. But because I came back and said, hey, guys, this is not me telling you this. This is our customers telling us this.

Speaker D: Right.

Speaker A: It was a lot more legitimacy, you know, in doing that type of thing. I fought for years before. It was always like, my opinion, my opinion, my opinion, and it didn't matter. Your opinion versus anyone else's. That's not a great way to convince someone. But coming with evidence, even just qualitative evidence, right. You know, that's basically said we talked to 20 customers, and I talked to a bunch of people that were, you know, 50 and over, and they all told me, no, I don't need to make phone calls for everything. Right. That was a big insight for people and kind of an aha moment.

Speaker C: So uh, I just love everything you had to say there. It aligns so well with a lot of the things that, that I think and teach as well. And in particular it's not enough to be right. You also have to be persuasive and you need to bring the actual evidence from the customers or the insights or you know, their faces. Actually saying the thing is so much more convincing than, you know, coming forth with your opinion.

Speaker A: Yeah. And the good news was Amex generally was a very customer oriented company with customer service and everything. So they were good when a customer called them, said I need this. Right. But now we're saying, okay, we need to also do this when we're planning our products. Right. It's not just for solving a customer service problem. We're seeing this drumbeat like this should feed back into our product. So they had a history of it internally and so it wasn't a super hard thing to convince them. When you, like you said, you put their face up and say here's the quote kind of thing. That was something that they took seriously. Right. So they were data driven but not so much that they basically ignored their customer needs because they were in a business that was highly competitive and they knew they had to be sensitive to that.

Speaker C: So I want to jump ahead a little bit because I want to hear a little bit more about um, what you're doing these days because I understand that you have sort of a different role in companies and you've recently been working with one that you acquired or invested in. And I um, want to know more about that and how does product play a role in that.

Speaker A: So uh, did that at amex, had some really good success, got recruited away to a public uh, company in the commercial insurance space to run digital. The short of the long story, there was again another situation where old stodgy industry was going to get affected by digital and tech. But we had some really good success there, just doing some basic stuff, again, understanding customers needs there and basically went from zero digital revenue when I joined to uh, over 300 million in a few years. But during that time I started to notice how there are a lot of digital businesses, whether it's e commerce or SaaS or content, whatever it is, we're growing from people's kind of side projects or little bootstrappy kind of things that they did into pretty major businesses. Right. These were not sexy, VC backed, you know, types of things. There are Things that people just kind of crafted in their, you know, bedroom. There are a lot of stay at home moms or like people like engineers doing little SAS side projects and stuff, stuff that were turning into real businesses, real revenue, real profits, you know, something that's not often talked about in the venture world. And they were selling for low multiples of their profitability. Right. Really, really interesting. So the kind of thing where it's like, okay, if I go in and do nothing and pay all cash for this, in four years I make all my money back and then it's all profit. And the truth is that because they were also solid profitable businesses, you could actually get loans to help acquire the businesses. So you could even, you know, not even have that level of exposure paying all cash for them. So I acquired my first one um, back, I think it was 2017, which was an E commerce business and it was a small one. Um, but it was something I want to dip my toe in the water. I still have that business today and it's up 8 to 10x now. It just throws off cash and it's great because I automated most of it. It takes two to three hours a week to run, you know, kind of thing. And that was really great in kind of figuring out the whole landscape and how things worked. Acquired another one, again, a small one, kind uh, of in a related content space. And I started saying to myself, like there's a real opportunity here, like this is off people's radar, you know. And again these, these acquisition multiples are so low it doesn't take a lot of cash to get into them and they just throw off cash so you don't have the whole burning. Do I need to raise more money, capital, you know, that kind of thing. And ended up finding that it's a space called ETA or Entrepreneurship through acquisition. And I said okay, I don't want to just do this me onesie twosie. I want to do this in a bigger way. And so through my network and talking to people, I found a couple of like minded folks that were looking at the space as well from different angles. Angles. So we formed uh, now a partnership called the Buy Build Fund where we basically go out and acquire small cash flow positive businesses. Doesn't have to be all digital, but tends to be because all our backgrounds are kind of in digital. And the one you mentioned has kind of been our biggest one to date and the one we're most excited about, which is back in May we bought a company called Prince of Love. Prince, as in not the uh, music Superstar, but P R I N T S princeoflove.com and it's basically a genius business that this guy started six years ago. Again, just an idea and he bootstrapped it himself. Aggregating printing demand on top of printing supply, you know, being kind of in the middle of that. And what does that mean? So with digital printing, retail printing kind of went away, right? If you all remember Kinkos and all that kind of stuff where you'd walk in and you'd print stuff for school or for business or whatever kind of thing, and you could print pretty sophisticated stuff, like you can still walk into a Staples day and get some copy, but you could bound books and all this other kind of stuff. But with digital and less printing happening, those businesses all kind of went away. But there's still printing demand out there, in particular for high end events, weddings, babies, showers, like all these other kind of things. People still need printed material and there's not a lot of retail printing to go do that anymore. And commercial printers don't deal with end consumers, right? They deal with large runs of big types of things. So the genius of what he did was he aggregated a whole bunch of printing demand, consumer printing demand that's online, especially like highly custom stuff. And he basically cut deals with printers with spare capacity so that they could basically aggregate all that demand, send it through as kind of bulk orders in large volume so that the printers could deal with it properly, um, but then dealt with all the customer service stuff, which printers were not set up to do. And so built into a really nice business, highly, highly profitable, lots of growth. And we were able to luckily acquire it back in May. And since I've slotted in as CEO of that business, learned a whole bunch of stuff about, you know, printing and. But the truth is, is that we're finding, you know, as is in digital, it's a shifting landscape. Um, but the genius of that business is that they spend zero, we spend zero dollars on marketing.

Speaker C: Wow.

Speaker A: 100% of our acquisition is through referrals. And so we've partnered with 4,000 or over 4,000 now, um, independent designers, principally who sell through places, platforms like Etsy. They sell digital designs for people. You know, I want, uh, I'm getting married, I want to get wedding invitations and a whole wedding package. Etsy has tens of thousands of different offerings for this type of thing, all kinds of different styles and whatever you want, and they basically buy it. That designer then says, my preferred printing partner is Prince of Love, refers it over to us, the customer gets A discount for that referral. But we also then pay, um, a piece of the sale back to the designer. So we kind of lock in that type of thing economically. And it's been super successful. Just keep growing that designer pool every day. But if you've seen the recent things, Etsy's had some softness, you know, in what's going on in the macro market, somewhat blaming disposable income, economy, all that kind of stuff. And so we're starting to tap into other pools of customer bases because even though we don't have direct exposure to Etsy, the way Etsy kind of goes as far as running their business, uh, you know, does affect us. And so we're really focused on growing that and keeping that going. But again, a great business. And it's so nice to, you know, having done so many tech stories, startups in the past, where it's like, we got to raise capital, we're burned. You know, how many months left do we have in the bank? Uh, it's really nice to have a profitable business where you're like, hey, you know what? I'm not going to make a decision this week. And that feels good because the business is going, okay, let's observe, let's talk to customers, let's look at some data, and let's not try to hit home runs, let's try to hit a bunch of singles, because every point or two we improve our conversion rate just goes right to the bottom line. So, yeah, so we're out there basically, um, acquiring these types of businesses, but are pretty selective in getting involved in running them.

Speaker C: Such an interesting story how you ended up acquiring businesses with your knowledge and product. And in tech, how can people find you if they want to learn more or follow what you're up to?

Speaker A: So you can go to the buybuildfund.com you, uh, can get. I think my contact information's on there. If not LinkedIn. You can find me Andrew Breen on LinkedIn. Um, also, uh, along with you, Holly, professor at NYU, teaching product management. So you can find me also at NYU Stern. I have a page there, but yep, you can find me there on Twitter. Um, I think you have my Twitter handle. You can publish out with this as well. And, uh, happy to hear about folks. We're always looking for people to come along in the ride with us with these acquisitions. Whether you want to be a CEO, uh, you want to, you know, get and slot in to be a CEO, you're an experienced operator, and it's time to get out of that Big corporate job and run your own thing. We're always looking for people to do acquisitions with and happy, uh, to talk to folks, folks like that.

Speaker C: Wonderful.

Speaker B: Awesome. Well, we'll make sure to put all those links in the show notes and thank you so much for your time today, Andy.

Speaker C: It's been such a pleasure to talk to you.

Speaker A: Great. Thanks, Holly.

Speaker B: That was a fantastic conversation with Andy Breen. Next up, our new Lab Note segment where I and my team at the Product Science Group discuss our key thoughts and takeaways from the conversation. In our first lab Note, Principal Product consultant Dina Levitan and I talk about what we see in the industry when it comes to assessing value risk.

Speaker E: One of the first things that he said that I really related to was the emphasis on value risk. And when it comes to, you know, Silicon Valley Product Group discussion of the types of product risk, I always come back to value risk. That's, you know, that's the one that people forget, ignore, or just under undervalue, if you will. I completely agreed with what he was saying about the importance of that.

Speaker C: Yeah. And going back to the Silicon Valley product groups teachings, they actually say that product managers are responsible for value and viability. And I think that that is something that a lot of actual product managers out, uh, in the world honestly struggle with or don't do well enough.

Speaker B: So Lab Note 606.1 is too many product managers underestimate the importance of assessing value risk. In our next lab note, Mark Ynakia, product and design consultant at Product Science Group, talks about the ambiguity and tension involved in conducting value research.

Speaker D: He was talking also a bit about doing research, discovery research into the value that a customer gets from your product. And I, uh, believe Andy was saying that sometimes that comes up anyway within the course of usability research, but that by and large, usability research tends to be the main focus that a lot of product managers are taking with products. I think value is one of the trickier ones because there's more of the human component that's in there. Like Andy was saying, it comes down to what are people's emotions, what are their beliefs, what do they want to get socially as well out of your product? I think about the work that Product Science Group does, and one of the things that I think we bring to the table is that we'll have an initial hypothesis and try and get one really early on using the expertise and the knowledge that we have in house. We could tap clients to see what do they already know and use that as a starting point while sort of in parallel, developing this, uh, emerging hypothesis through the discovery work that we're doing. And when you're doing that, I experienced this qualitatively as a feeling of, like, holding this tension of the unknown that is kind of extending throughout the whole project. And I mean, that's over weeks or months. Um, and, you know, people can get a little freaked out about that unknown. Uh, you know, it's not a place that we're very accustomed to operating in. But if you're trying to bring something to the table that is surprising, which is the challenge to the assumption, that is a surprise, it's going to be disruptive. It's just harder, and you have to hold more tensions.

Speaker B: So that brings us to lab note 606.2. Conducting value research often means holding uncomfortable tensions. Following that, Dina and I talk about the holy grail of finding multiple kinds of evidence, pointing to the same thing

Speaker E: that I feel is kind of like the holy grail. Like when you get to that place of confidence and conviction, what you're seeing from the customers, what you're seeing in the data, they're all saying the same thing. And you're like, I'm onto something. I don't think it always happens, but when it does, it's really cool and magical.

Speaker C: And that, honestly, is the early sign of product market fit. You know, that's the sniffing of it. It's the scent is wafting in where you're going, oh, there could be some product market fit here for this problem we're trying to solve. But it's, you know, the actual product market fit requires that you then design, build and bring to market the product. This is just the first step. It's almost got a pull of its own that you're like, wow, now everything seems really clear. And it almost seems like it was obvious the whole time, but it wasn't.

Speaker B: Thus, lab note 606 point, uh, three is when qualitative and quantitative are telling you the same thing, you're on your way to product market fit. For our next lab note, Dina discusses how paper prototyping fits into the product science principles.

Speaker E: A lot of what Andy was sharing hearkens back to the product science principles, I thought, particularly when he was diving into discussion about Lean and kind of making a really, really, um, quick and dirty paper prototype to learn rapidly from users. That really, um, spoke to me with the continuous, ah, discovery and delivery product science principle. And, you know, I think it's, it's, it says something that the practitioners in the field, you know, it comes down to that how fast can you learn?

Speaker C: Yes, and I loved that his example was in the 90s he was doing paper prototypes because that was the way you could learn really fast. And it might look different now how you learn really fast. But the core principle is still there. It is a core principle, which I think is pretty awesome.

Speaker B: So that brings us to lab note 606 point. Uh, four. Continuous product discovery has been useful since the 90s, even if it looks different today. In our final lab note, I share how well Andy's stories illustrated another principle, evidence based product strategy.

Speaker C: Another Product science principle that I think came out really strongly in the interview with Andy was evidence based product strategy. The idea that you need to uh, bring back evidence to support, support the direction you're going. His story around call centers and trying to understand what parts of the activities that go through the call center should and should not be moved to. You know, automation and digital experiences was a really, a really masterful evidence based product strategy of um, coming back and saying, hey, the evidence is showing us that we shouldn't even be trying to remove the human side of the lost card situation. That is a piece of um, product strategy. That kind of decision about which use cases should we be covering and which use cases should we not is a core thing.

Speaker B: Which leads to Lab Note 606.5. Deciding which customer use cases to replace with AI requires evidence based product strategy. Well, that concludes our lab notes section. Each of these lab notes will be in the show notes as well. It was such a pleasure to talk with Andy Breen about testing for value, risk and entrepreneurship. I hope you enjoyed this episode. The Product Science Podcast is brought to you by the Product Science Group. We teach startup founders and product leaders how to use the Product Science method to identify the biggest opportunities for growth and lay the foundations for product success. We do this through community coaching, training and consulting. Learn more@ah.productsciencegroup.com Enjoying this episode? Don't forget to subscribe so you don't miss our next episode. Or visit us at, uh, product science podcast podcast.com to find show notes or sign up for more information and resources from me and our guests. If you like the show, please leave us a rating or review. It goes a long way towards helping others find the show too. Now go out there and experiment.

Speaker D: It.