On a famous 1998 episode of South Park, a gaggle of tiny singing gnomes sneaks nightly into the homes of unsuspecting victims. Their single sinister motive: to steal underpants. The merrily felonious ritual is part of a shaky three-part business plan that is mapped out thusly:
- Phase One: Collect Underpants
- Phase Two: ?
- Phase Three: Profit
In the two decades since that episode debuted, journalists have invoked the gnomes’ laughably anemic model as a metaphor for everything from blockchain hype to quixotic hopes for a contested Republican convention in 2016. It seems particularly prescient today in some tech corners, where brands like WeWork and Uber have built huge brand awareness while hemorrhaging billions.
But when Josh Gosliner, director of product marketing for microlending startup Juvo, channels the Underpants Gnomes, it’s not as a cautionary tale for VC-propped houses of cards. Rather, it’s to illustrate a point about communication. Product managers — the people who design and build the apps and websites we use every day — sometimes fail to effectively contextualize the things they’ve created. In Gosliner’s version of the gnomes, that question mark in Phase Two represents the gap that sometimes exists between the product itself and the value it nominally achieves.
It is, to employ another pop cultural reference, a failure to communicate.
“That’s the essence of product marketing for me,” Gosliner said. “How do you extract the technical attributes of products and explain how those attributes deliver on the promised value?”
Very patiently, it turns out, especially when the product is tackling a hugely complex problem.
For Juvo, that problem is the global “unbanked” — the more than 1.5 billion adults worldwide who have no accounts with financial institutions or mobile lenders. Their situation is perpetuated by a vicious Catch-22, or what Gosliner calls “the credit conundrum.”
“You can't get a loan or credit without a credit history, and you can't build a credit history if you can't get a loan,” Gosliner said. “So you're stuck in this loop. The formal economy is off limits to close to 70 percent of the world's adult population.”
At the same time, 67 percent of the global adult population is expected to own a mobile phone by the end of 2019. Juvo partners with telecommunications companies in developing markets where the prepay phone model is popular to lend users prepaid airtime. It’s microlending for minutes.
People typically qualify for at least a day’s worth of usage. When they pay back that loan, the allowance can climb to two days of airtime and eventually up to a month or more. Little by little, these small but demonstrable loan actions start to build a credit history. Cheap access allows users to keep the device active (and, of course, the phone provider benefits by expanding its customer base), with the larger goal of eventually getting access to banking.
“The objective here is to get somebody to a point where they can get into financial services and really engage with the formal economy,” Gosliner (left) said.
That’s where the banks come in. Along with telecommunications outfits, Gosliner is working on partnerships between Juvo and financial institutions in order to help consumers take advantage of banking services.
Technology also plays a big role. Juvo uses machine learning to analyze mobile transactions and data, such as daily usage patterns and airtime balance information, which can help identify responsible borrowers — even if they don’t have a solid credit history.
Using AI to inform credit and other financial decisions is still new territory. Although it doesn’t guarantee fair loans, it holds great promise when implemented responsibly. Juvo’s platform is compliant with the General Data Protection Regulation (GDPR), the European Union protocol that limits which data can be shared, for how long and for what reason.
WHAT *IS* PRODUCT MARKETING, ANYWAY?
The tech sector often coins new phrases for old concepts so as to position new products as more cutting-edge than they really are. (Lyft Line, for instance, basically works like a bus route.) It might be tempting at first blush to lump “product marketing” in that category. After all, is there anything more capitalistic than marketing a product?
Product marketing, however, represents a very different approach in at least one major way. It’s true that product marketers market, but they also work closely with both product production and sales.
For the old paradigm, consider one aspect of marketing: advertising. More specifically, consider Don Draper’s classic pitch to Kodak in the first season of Mad Men during which he tells them how to most effectively sell their new carousel slide projector. His nostalgia-evoking yarn impresses the suits, even though his frame of reference for the product is limited. He’s coming to the carousel well after it has already been designed and built. And as for whether or not consumers actually use and enjoy (or adopt) the slide projector, he really couldn’t care less.
Product marketers, on the other hand, collaborate directly with the head of production — the product manager. How intimately the parties collaborate and at what point in the production process depends on variables like organizational size and maturity, as well as the nature of what’s being built. Still, they’re far less walled off than Draper and the Kodak team that designed and manufactured its slideshow machine.
So if you were to scrap the traditional model on display in that Mad Men plot point and recast it with the product marketing pipeline, chances are you’d end up with an even better pitchman, one more deeply familiar with his subject and its market — even if you’d lose the wonderfully gooey subtext about Draper’s sadness over the fleeting nature of time.
“There's a lot of conversation that happens between us and product managers,” Gosliner said. “Making sure that we have a really strong understanding of the product roadmap, and that we're helping to shape that roadmap based on our latest understanding of what customers need.”
“And at the same time, communicating that roadmap to our sales team — and even directly to our telco customers,” he added. “Part of the value that we're delivering to the telco is that they're getting our roadmap.”
There are three basic ways an interaction between the product marketer and the product person tends to go, according to Gosliner: 1) the manager’s product explanation is crystal clear (which is rare); 2) it makes no sense at all (thankfully, also rare); or 3) it articulates what the product does — and how it does it — on a technical level, but not what it achieves or solves. The features are made clear, but not the benefits. (That’s the most common of the three.)
“But you as the product marketer understand what the value is,” Gosliner said. “That's really where my job kicks in — to take that input from a product manager and translate it into the value.”
And not all value looks the same.
“It can take several forms, whether it's monetary value or a convenience factor like it is for consumers with Juvo.”
Gosliner also is a prolific public speaker who presented on this very topic this past September at the semi-annual Product Marketing Summit. (It’s staged by the Product Marketing Alliance, a prominent collective of product marketers that many in the industry consider must-join) And yes, the underpants gnomes popped up in his speech.
“So the biggest aspect of product marketing in my view is developing customer empathy and really understanding what is it that the person on the other side cares about,” he said.
SO WHAT DO CUSTOMERS CARE ABOUT?
In effect, Gosliner has to market both B2B and B2C. But at this point, his primary focus is getting telecommunications carriers on board.
“Everything we want to do in financial services is only possible if we have access to the population through the mobile operators,” he said.
Gosliner offered no mock pitches to Built In, but he did lay out the two-fold value proposition: the core business is stabilized by retaining customers and increasing the amount consumers are able to spend on their network; and it also generates valuable data. “That becomes useful in terms of offering them other products and services — like cable TV — under the telco umbrella,” he said.
Juvo’s pitch also arrives at a time when many telecommunications companies are scrambling to identify new revenue streams. Mobile operators’ core revenue (from voice and data) is projected to plummet $50 billion worldwide by 2022.
San Francisco-based, Juvo’s markets are scattered throughout the far-flung corners of the world for that reason, Gosliner spends a lot of time on the move. The week before he spoke to Built In, he was meeting with major wireless carriers and financial institutions in Mexico and Colombia.
“We had a workshop with the top three mobile operators and seven of the biggest banks in Colombia in the room,” he said, “and [we were] really engaging with both — understanding the challenges they're trying to solve, but also explaining to them the value that Juva creates.”
It’s an ongoing process of building out messaging and pitching — and the cycle reinforces itself.
“We’re selling, but we're also learning and evolving what we do every single time,” Gosliner said. “Every time I meet with a customer, our pitch gets smarter and better. And really are everything we're doing from a product marketing perspective improves.”
It’s not all globetrotting and high-powered pitches, though. Everything requires prep. Gosliner spends plenty of time building PowerPoint pitch decks and collaborating with design teams to make sales materials. New announcements are seemingly forever on the horizon, which means working with public relations teams to fine-tune the message — and making sure Juvo’s potential clients know who they are.
“The biggest challenges we have working with really big companies is that we just have to continuously establish our credibility as a company,” he said. “So both PR and analyst relations are really important.”
He invokes an old adage that remains relevant: Nobody gets fired for buying IBM.
“We want clients to feel like they're buying IBM, that we're an established company that isn't going to let them down. And so it's really working with third parties to help establish our credibility and trust within the market.”
As for Juvo’s consumer marketing, the primary method by which that’s done couldn’t be more direct. Because the company has real-time access to users minutes and data balances, it can text users when they hit a low or zero balance to offer microloans that will keep their phones operational.
“That's by far the most effective way of bringing people into the service because we're getting them at the time of need,” Gosliner said. “And we found that even though conversion rates for text messages are usually fairly low, we've been able to greatly exceed those standards.”
Along with more direct collaboration with product management and sales, product marketing as we now think of it also often includes adoption measuring. The process of doing so not only gauges whether users have taken to a product, but makes sure they do through education and careful illustration about why a certain widget is so valuable.
To that end, a member of Gosliner’s team will head to Malaysia in mid-November to conduct a wide-ranging study with end users.
“These consumers on the ground are trying to understand how they're utilizing the service, what are the benefits they're getting, what are their ambitions around financial services,” he said.
All that information goes back into the product development and marketing funnel.
“Then we can start thinking about how we tailor our partnerships and the types of services that our partners provide to consumers.”
Product marketing managers also need at least a working grasp of data analysis — and not just PMMs like Gosliner who must explain to prospects how their respective solutions apply complex machine learning to massive datasets. Product marketers increasingly use data science to gauge things like customer adoption and more clearly define their markets. Gosliner is no exception, having earned an MBA in marketing and a data science certificate from the University of California, Berkeley’s Haas School of Business.
“THIS COULD BE THEIR FIRST TIME ACCESSING CREDIT”
Microfinance has a complicated history. It was popularized by author-economist Muhammad Yunus, who was awarded the Nobel Peace Prize in 2007, the year before he published his seminal microfinancing text Creating a World Without Poverty. But the bloom eventually faded amid criticism that some would-be business entrepreneurs who took microloans were cast into cycles of overindebtedness. But even non-predatory loans weren’t necessarily effective. Studies showed that business borrowers fared only marginally better than the control group.
But Gosliner noted a few important facts about Juvo’s loans (which are for airtime, not business) to stave off fears. The loans are interest-free, initially cover only a day’s worth of usage give users 90 days to repay. And if they fail to do so?
“There’s no recourse,” Gosliner said. “We’re not reporting [people] to the credit bureau or anything. If somebody doesn't pay back and they get rid of their SIM card, there's really not much we can do.”
The chance to further the process is more attractive, he said.
“What we've found is, people see value in moving up the ladder and getting access to other products and therefore are wanting to pay back these loans,” he said.
According to Gosliner, loan repayment is at about 97 percent. At the same time, Juvo’s willingness to burden defaults, however rarely they occur, is also attractive to the risk-averse telcos the company courts.
Consumer education is part of the process, too.
“In many instances this could be their first time accessing credit,” Gosliner said. “You can have instances where people don't even understand what a loan is. They think they're being given a gift.”
Failing to correct such a misconception wouldn’t bode well for the user or in terms of getting loan repayments, he said.
“And some people won't move up the ladder. They’ll continue to take one day’s worth of air time and that's fine. We've seen that a lot of people will continue to just use the amount of service that is kind of right size for them. And that's totally fine.”
As Gosliner runs Built In through the finer points of Juvo’s business model, he’s essentially doing something that’s central to his role as a product marketer: crafting a narrative to facilitate a fuller understanding of benefits as opposed to a basic grasp of features.
The underpants gnomes would surely be proud.
