#3: Erin Chan - Mental Models While Building Product In A Startup
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Erin: [00:00:00] As product people, one of the most impactful activities that we can do is getting the team to build the right thing. And you can't build the right thing if you don't know exactly what the real problem is.

Isabel: My name's Isabel, and this is your product thinking Toolbox.

Erin Chan is a co-founder at Rhenti, where she leads product and marketing.

Rhenti is a suite of industry leading software tools that streamlines the lead to lease process for rental real estate industry across Canada. Erin is a product leader with strengths in the areas of product strategy, product positioning, business design, and human insights. And I've had the privilege of working with her previously at Shopify, and she she is one of the smartest, most brilliant people that I've met, so I can't wait to have all of you listen to what she has to share.

Thanks for coming on this podcast, [00:01:00] Erin.

Erin: Hey Isabel.

Isabel: So let's start with just in general real talk. How about that? We are living in a turbulent time. As you can tell, especially in tech, right? Despite that though, Rhenti is still seeing growth, from what I'm observing and it seems like things are going well.

What, maybe you can share insight with our, audience here, what has been working well for your team?

Erin: Mm-hmm. . yeah, it definitely has been a turbulent time. and going into 2023, it's gonna be very interesting in, in the tech. . But the two things that have helped us, , recently is, is just being very intentional and laser focused, , with our product strategy, , during the pandemic and up to now.

And so, , during the pandemic, we spent years. , building relationships and our reputation in the industry. , on the product side of things, we focused on building software [00:02:00] that really solve problems for our clients. , and in that involves a lot of conversations, really understanding, , where they're having a hard time leasing.

, but it also involved having many conversations with our clients and with prospects and building. , so that when they're there, , when they're ready to jump to a new platform, , or to, or to jump to a platform in general, , we were there. , and so it feels very much like our momentum, , recently has increased and you can kind of see that in our numbers.

, we actually had the best. Quarter ever, , in Q4 of last year. , but apart from the numbers, , the conversations that we have with prospective clients, they've become a lot easier. And that wasn't overnight. It took like many years of effort and conversations to get that momentum. I would say the second thing is having just an incredible team.

So[00:03:00] And they've been really good over the pandemic. The pandemic, like that was a really tough time for a lot of people especially in the tech industry when everybody was working from home. And that was the same for our team. And sure there were like a couple of rough patches last year in 2022.

But overall it's been really impressive. What this. Very small team has been able to achieve. So I would say it's those two things that have helped us get to where we are today.

Isabel: , I think in general with this specific market, there's almost like two things that you can almost keep consistent in.

Mm-hmm. when you, in terms of relying on, which is your knowledge of what is going to work fundamentally in your product that's going to be driving strategy. And then there's the other part of investing in the right people to be on your team to be able to evolve that strategy further.

Erin: Yeah, exactly.

Yeah.

Isabel: I guess then with that being said, what are [00:04:00] your biggest challenges leading a small business in this time of change?

Erin: Gosh, this year is gonna be tricky for a lot of startups. I think there's this looming recession and we're all trying to figure out how to just survive. And, and some of us are not only trying to figure out how to survive but thrive but there are definitely some obstacles that I see us facing. And one of them is just like keeping our burn low. So it's the typical do more with less strategy which is crazy, but, but it, I think it's a really smart strategy. So what's funny. Is actually initially to figure out how to do more with less. It takes more capacity up front to figure, figure that out which is which we went through.

So I thought that was very interesting. But basically cutting things out and. Reducing work that we choose to take on and sharpening our [00:05:00] focus on, on the things that matter. So that's the first one. I would say. The second challenge is just remote work in general. You know, and this has been challenging ever since the pandemic, when we are all kind of pushed to work from home.

And the challenges I have with that is like, how do we keep our team fast? Engaged and doing their best work while having fewer resources. It's a little easier for big companies cuz they have a lot of resources to keep their teams engaged. But when you're a small, scrappy startup, you don't have a lot of resources.

So, so what do you do? And I find that the, the things that have helped. And by no means have, do we have it perfect? Like I always see that there's room to improve, but things that have helped us are making sure that the team is mostly doing work that they enjoy. Obviously there's gonna be some nitty gritty and some tedious work that we each need to do that we don't like doing, but it just helps things run, [00:06:00] but mostly doing the work that they enjoy.

And also, To go along with that. And to make that work is just continuously building trust and giving each member of the team as much autonomy as possible. So yes, remote work is our, my second obstacle that I think of often. And, and the third one is, Product innovation. So going into this year, so we're coming from a pandemic and we're entering a recession.

So usually in companies, one of the first things to go is innovation efforts and taking big risks. Because companies are just trying to stabilize during the, the, the hard times they wanna make it through. That's what they're thinking about generally. And originally In the second half of 2023 that was going to be the period where we were going to experiment and take some risks with new ideas.

So we're still thinking about how we're going to approach that. I, I don't have any answers to that [00:07:00] yet. But product innovation is, and as a startup, like you're supposed to be innovating fast. But how do you do that in tough times? It's a tricky question.

Isabel: Yeah. Speaking of balance, I think I kind of wanna go back to also that first point of finding the balance between innovation and reaction or almost, yeah.

We just gotta get it done. Yeah. And also, there's another part that you mentioned that to keep and anticipate the burn to be low, you have to increase your capacity almost to plan. Yes. And in this type of time, how have you found. Working through the balance of planning and execution within such a small team?

Erin: Planning takes up so much capacity in large companies, and I, I was part of that. It takes like weeks, sometimes months. To plan out a roadmap or, or, or what have, what have you. But in startups you do [00:08:00] not have the luxury of time and you do not have the luxury of a lot of resources.

So the planning has to be quick. You kind of have to make fairly big decisions for your company on imperfect information. While trying to mitigate any risks that, that follow. But it, it's, it, it's taking just making decisions faster and, and just being okay that you don't have all the information.

And, and I think that's how we work around it is, is just kind of pushing through.

Isabel: I know you jumped from that big organization that you mentioned to building product at a startup has. Has it been what you expected it to be building product at your startup or has that been completely different?

Erin: so I always knew that building my own startup along with my, my other co-founders and our team would be one of the hardest endeavors that I would ever do in my [00:09:00] lifetime. But I actually didn't know what to expect when it came to the product function at the company. Yeah, I simply didn't have a lot of expectations, but what I can say is that it's, it's fast.

It's so much faster. And so, for example, features that would take like a month or several months at other companies, for us, it takes like a week or so to release with our team. And, and that's very intentional. So we optimize for speed. And, and this has been actually a really interesting growth area for me in particular because I have, I, I have per like perfectionistic tendencies and I inherently want everything to be polished and perfect.

But we can't do that here because one of our biggest advantage. as a company or as a startup is speed. And so if I let those tendencies to get in the way, I would [00:10:00] be failing the company as a product leader. So I definitely push for velocity and what helps us to do all of that is just building trust and autonomy within the team.

Isabel: And you mentioned one week, is it from discovery all the way to delivery in one.

Erin: No, it would be delivery. So any discovery would happen beforehand. And so we, we do work in sprints and so when the sprint starts is when everything has been kind of researched, it's been designed and it's handed over to the dev team.

And the dev team just kind of like, Cranks it out. Which is an awful way of putting it, but they do, they kind of do, they are so fast. Obviously there's some back and forth that happens between the devs, ux, myself and, and, and some of the other leaders in the company. But it all happens very fast.

Isabel: I think you have almost the advantage though, with your product experience Yes. To be able [00:11:00] to really lead product at high velocities.

Erin: Yeah. . I think that's a good point actually. And I was, I was thinking at the beginning when I f, when I first. Left Shopify to join our startup full-time, not doing it as a side hustle anymore, full-time.

I knew exactly what to do on my first day. I knew, like I had, I had a list. I was like, I, I kind of assessed the situation and had a list of like three to five things that I needed. To accomplish in order to support the team. And if I didn't have my product experience from before, I wouldn't have known what to do in such a fast way.

So I do think that my experience absolutely helped the company when I first joined.

Isabel: Maybe to the audience here. Mm-hmm. . There are some founders that I know who have no product experience at all, and they struggle. They don't know how do I build a roadmap? Fair enough? How do I know the [00:12:00] right bets to build right bets to invest in.

What if you were at a table with these founders who have no product experience at all, what do you think would be the one thing you'd like them to start thinking about when they started their company?

Erin: What I think would be be beneficial is conversations with product leaders.

So if they don't have a product background and that is a gap that needs to be filled in order to build their product. Or lead the team to build the product faster. I would say like get out there, start like reaching out and connecting with product leaders, people who are very good at that craft and start filling that gap as quickly as you can.

And I mean, that's startup life. When you have a gap of knowledge or skill, we just quickly scramble to figure it out. We, we figure out a creative solution to kind of go around it. But I would definitely, like, you need to fill that gap. And like if you, if you have the [00:13:00] opportunity to connect with product leaders, establish product leaders, go do it.

Or the next Best thing podcast, quick reading. Those are all very helpful, but I do think the firsthand conversations would be the most beneficial.

Isabel: Speaking of that too, I know you have a toolbox within your product way of thinking . Yeah. And and you highlighted previously that it was first order, second order, and third order thinking. So maybe just for us to start, what is the difference between first order, second order, and third order

of think?

Erin: Yeah, absolutely. So first order thinking is basically performing an action or making a decision with the intention of getting a certain immediate or short-term outcome.

And it's a very surface way of thinking and it's very easy to do. So, for example, it's like I'm gonna stay up late to watch a two hour movie on a weekday when I know I have work [00:14:00] tomorrow morning. It satisfies what I want in the moment. But it, it's a very bad decision because obviously there will be cascading consequences the next day.

And because I'm older now, possibly the day after , whereas second order thinking and third order thinking is simply acting and making decisions based on your projections of the future. So basically considering the consequences and the chain of. That may occur. And this mental model is a way of thinking.

It's so important not only for product leaders, but I would say it's a little bit more important for founders because we're constantly making strategic decisions that will very much impact the trajectory of the company. And as a startup, we have to balance making decisions that create immediate value.

and decisions that actually don't benefit us at all in the short term, but we know that it'll set us up well in the long term. Yeah, and I won't go into detail, but like, I can think of examples [00:15:00] off the top of my head where we've made like price partnership decisions, pricing decisions, and even like target segment decisions.

That very mu like sometimes we use second and third order thinking. Sometimes we didn't. We we could have done it more. But basically second and third order thinking is asking, it's very simple. It's asking yourself, and then what if I make this action, or if I do this action and make this decision, then what is gonna happen?

And then what is gonna happen after that? So it's quite simple.

Isabel: Are there any frameworks that you use to map it out in general? Because you mentioned that there's almost a balance between execution quickly and making quick decisions quickly versus that almost like perfectionism and decision, because sometimes we can go into a spin of, well, but is this really true?

Do we need to validate this assumption? So how have you found a way to put it into a [00:16:00] framework

Erin: So we actually don't use a framework. And because we are just trying to move things along so quickly, and I find that framework thinking is actually, it can kind of slow you down, but second order and third order thinking.

Is, is kind of like a natural way of thinking for a lot of people. For example, I, and this is not one of my strong points, is I constantly think in second and third order thinking. I'm always thinking of the consequences and Sometimes to a detriment. You know, sometimes you can get mi, I can get mired down in, in like consequences, and it's important to know that these are not guaranteed consequences.

You are making an assumption of what's gonna happen. So you have to keep that in mind that it's a probability, you know, it's not an absolute that this thing is gonna happen. But anyways back to like my earlier point is we just have to push through so [00:17:00] there's no framework. It's just constantly asking.

And then what and then kind of making a bet on the probability, probability of the, and then what and that's kind of how we approach it.

Isabel: And maybe going back to more of maybe a more concrete example here, how has leveraging these mental models helped you build a better product or better products?

And can you maybe give us an example of what you have seen at Rhenti?

Erin: Yeah, I would say that it actually hasn't been, when I think of building product at Rhenti, I would actually say that I use. First principles, the, the, the mental model first principles more so than I use second and third order thinking. And so basically, I'm sure any, any listeners will know what first principles in is if they're a product person.

But basically it's getting to the real root of the problem, which [00:18:00] is essential if you wanna operate as. A top tier product person. As product people, one of the most impactful activities that we can do is getting the team to build the right thing. And you can't build the right thing if you don't know exactly what the real problem is.

And so basically one way of doing this is asking the five layers of why, which is what first principles is. And The reason that you ask the five layers of why is so that you can understand people's true feelings or motivations behind a behavior or an action that they take, for example, on your site on your platform, in our case.

And so if I was to go back and think of an example as it related to our business, . There was a point where we were finding that renters who were looking for their next apartment they weren't reading the entire listing of a, of a rental that was listed online and we were like, that. That's [00:19:00] so odd.

But also it kind of led to a couple of assumptions which were like, okay, maybe they're just not seriously looking for a place. Maybe they're just browsing. Or an even worse assumption that we had was maybe they're lazy. , which is an awful assumption. But what we did is , we asked dozens of renters, we interviewed them to understand various things, but one was like, why do you not read listings?

And so what we did was we're gonna take you, I'm gonna take you through like the layers of why we're like, why don't you read. All the listing details and what we found was that what they said was, it's overwhelming. A lot of these listings, there's too much information and I can vouch for it. There is a lot of information on a lot of listings and it's overwhelming for them.

And so then we asked, well, why do you think that there's too much information? And at the top of [00:20:00] their mind, they have like a handful of requirements that they're looking, they're laser looking for when they're searching or scouring the internet. And those requirements meet their, they're kind of needs.

And when it comes to listing those requirements are like number of bedroom. Number of bathrooms, the location, the price, and certain amenities. And so they're scanning like hundreds of listings for these details. And if they can't find those details easily, they won't read the rest of the listing.

They'll just quickly move on. . And so then we asked, well, why? And then what they said is, if the rental listing doesn't align with what they call their non-negotiables they're just, like I said before, they're just gonna quickly move on. And so if you take the assumption that we originally had earlier, which is, oh, we think renters are just lazy, you're gonna build that list.

You're gonna des we, we would design that listing. Very [00:21:00] differently than. Then the actual reason, which is they're scanning for key requirements. They're scanning for their non-negotiables. That kind of listing page would be, D would be built different. So I think that as product people, Like first, pri first principles is so important because it helps you to build product properly and it helps you connect with the people that are using your, your feature product or your platform and it helps you to optimize it for them. .

Isabel: How do you balance between the relationship and dynamic of that discovery work, of that investigation and bringing your team along that versus the execution, especially when there are so many things that you need to build when it comes to the startup versus Yeah. Spending time asking those questions.

Erin: Yeah. And so what we had it was a great period. We were wor actually working with An [00:22:00] intern from Waterloo who did all of this, she was phenomenal. She did all of this work for us where she, her the, the majority of her role was interviewing property owners and renters. So partnered with me and we would kind of like design what those interviews would look like, but she would be the one dedicated to kind of gathering all of those.

And then we would have, I think it was weekly or biweekly on Fridays, we would have sessions where the entire team would sit in for about half an hour and she would present her insights and findings, which were so incredibly valuable for the company. So because we moved fast, we would never want the devs.

Or even our UX to be in on those interviews cuz they just simply don't have the time. But we had someone dedicated for that work.

Isabel: And now, given that you probably have a plethora of knowledge and information that you had from those research, [00:23:00] but the market does evolve, how do you absolutely balance between that old information versus finding and seeking out new information?

Erin: Yeah. And, and you bring up a really good point. So that was information gathered at a point in time. You can't leverage that information into infinity because you're absolutely right. The market changes people's behaviors and, and the way that they think change all the time. And so your question is how do we balance that old information with.

What we build in the future. Yeah. Well, so there's, there's two parts to that. So there's the understand, taking the time to understand like the deeper feelings behind behaviors and thoughts of our, the people that use our products. But also we have property owners who literally say, This is a problem for us.

And, and so we're very lucky in that way because we have like a very [00:24:00] large portfolio of clients who it, it's a SaaS product, so they are invested in using our product. They pay us on a monthly basis to use our product, and so they literally tell us, This is a problem area for us. This is a problem area for us.

Sometimes they, they suggest a solution, but as product people, we should never, we should never kind of absorb that and take it to heart. You kind of have to dig in more into that. But we're very lucky in the way that they literally tell us their problems. A and they, and, and it's our. To figure out which are the, their highest priority problems and which are their lowest priority problems, which ones should we solve first for them and which ones can just like, wait.

Isabel: And going back to your example of first principles thinking, right? It's like if someone does give you a solution, that's where you ask the five why's of Yes, but

why?

Erin: Exactly. Exactly. It's so, [00:25:00] it's such a great mental model to have in your toolbox.

Isabel: . Given that also you mentioned that balance between that old information and new information.

Sometimes from what I've observed in previous organizations is that the fundamental problems that you're trying to solve some most of the time doesn't change unless the market radically changes and the behaviors radically changes. Yeah. Most of the time I think they're, especially in a bigger organization, there tend to be an overinvestment in that research part of things that interviewing. part of things. Mm-hmm. . Yeah, so I think from a startup perspective, do you feel a little bit more free from that process, that now you have the autonomy to actually drive? Let's say if you were to scale your product team and let's say Rhenti were to double in size mm-hmm. , what are the lessons that you think you take from your startup into scale up?

Erin: when you say double in size, I try to imagine our team twice as big. And I have to say, [00:26:00] being small and lean is incredible. So I feel like we would wanna stay this lean for as long as possible. But to answer your question, if there were to come a day where we would double in size, I think it would be to.

And not heavily invest, but invest a little bit in onboarding and processes. I found in the past when we introduced new team members, that is added complexity for every person that comes in the team or the organization becomes a little bit more complex. And so if you're doubling in. It actually.

And so right now we are roughly nine, 10 people. If you were, if we were to double in size in a short period of time, add 10 people. That's 10 degrees of complexity that we need to figure out. And so I think just having, I don't like process but I do think at a certain. You should have very light [00:27:00] processes in place to help people operate at their best abilities.

And also I think that on onboarding is so incredibly important in order people to operate at their best of their abilities. They need to have context and they have need to have a lot of context. So I think that designing kind of a, an onboarding process where they just get like a nice organized injection of context from all all team members or most team members I think would be Inc- would be key.

Isabel: It is a difficult problem to solve though. So I think yes, it's just in general, especially no matter if you're a 100 to 300 company or 500 to a thousand company, information architecture is always just a big pain point, right?

Erin: Absolutely. Absolutely. And that's where you see people floundering as when there isn't, when there aren't the processes or the on the proper onboarding [00:28:00] in place and people just literally get.

In an organization, they wander around for weeks. I've seen it. And even months, like I don't know what to do, where do I go? Like what project do I go on? And I think that, especially at a startup, when we have such limited resources, would be that would not be a good thing for us.

Isabel: if you were to go back to, let's say Shopify or a big organization, or you're talking to someone who is in one of those big organizations, but want to move at the speed of a startup and want to be almost like a startup product manager within a big organization.

Mm-hmm. , but there's process bogging them down, let's say. Yeah. How what, what do you think is that shift that you might make? Let's say if you were coming back to Shopify or you were to talk to that person?

Erin: I think there's two things I would do and the first thing would actually start in the interview process or when I'm like trying to figure out if this company is the right one for me.

I would [00:29:00] actually let the interviewers know that I am someone that likes to work fast. And so if, if you're not willing to kind of like support me in that speed we both mutually would understand that this isn't the right organization. So I would make that very apparent in the interview process before I get in there.

Cause the worst thing would be. That you, you are misaligned in expectations and you get into a company and you can't do what you need to do or what you wanna do. So it would start in the interview process for me. The second thing I would do is once I'm in the role, I would, cuz you and I've seen it, people who are fast, which is amazing get into a very large, heavy organization and they, they act.

But no one is, act around them is acting fast. So they start to become very frustrated. And so what I would do is I would start to work with the people that are, that are around me and also maybe. [00:30:00] Your leader, whoever that is, and just try to understand how we can mold the processes that exist to be a little bit leaner, a little so that people can work a little bit faster.

But I do think you need to get the buy-in of people. Bulldozing and large organizations rarely. And so this is where PMs can like kind of lean into their stakeholder management skills and have those conversations ahead of time so that you can set yourself up properly and your team up properly to just increase velocity.

Isabel: . I think the biggest differences from what I'm hearing then is PMs and startup are more focused on cross team alignment and cross team collaboration, internal storytelling. Scale-ups are more of making the right bets and also that in between of stakeholder collaboration and internal storytelling. And startups are more of that strategic thinking slash making the right bets.

Erin: Yeah, absolutely. There I gotta say, when I [00:31:00] moved over, there was very, little stakeholder management that happens. At our company, we're just so small and so everybody already knows everything. So I don't need to create, like, set up meetings to like, everyone just knows.

And so when that happens, we're op, we're able to just operate very quickly, whereas at, yes, at larger companies, stakeholder management, whether you like it or not, is a large part of the job at PM's job.

And so just understanding the differences is important.

Isabel: So if you, you're listening and you're looking at which role it should I go to in PMs.

I'm hearing startups fast, agile kind of dirty. Yeah. And then more bigger. Absolutely. Organizations, a more polished internal storytelling cross collaboration. Absolutely. Yeah.

So, well thank you, Erin, for just this rich information and so much insight into [00:32:00] how your brain works, and I really, really appreciate the time and I'm sure many, many people appreciate the time.

Is there a way for people to reach out to you if they wanted to chat or get to know more information about Rhenti?

Erin: Yeah, absolutely. And not just about Rhenti, if there are any. People who have been recently laid off and would love to chat about product, I absolutely love chatting about all things product.

Connect with me on LinkedIn.

Isabel: That's very generous of you. Thank you, Erin, and again, thank you for your time and I will see you in the next episode.

Thanks, Isabel.