The Department of Product


Thursday, 16 November, 2023

Notion Q&A, Amazon Maps and Hallucination rates Plus: WhatsApp expands, SaaS product benchmarks, Gmail transforms email, how to assess a job offer with equity


Hi product people 👋,

Notion has unveiled what it describes as the next chapter in AI. Q&A is a new feature from the company which allows users to get answers about any document in a workspace through a conversational UI. In practice, this could mean coworkers being able to ask questions about product initiatives or upcoming roadmaps which would be incredibly helpful.

Another product unveiling a similar use case this week, albeit in a distinctly different category is Celonis. If you’ve not heard of Celonis before, it’s a SaaS company that focuses on one thing product teams tend to either love or hate: process map diagramming. This week, the company’s VP of product unveiled new capabilities that he’s hoping will transform Celonis into the ‘Wikipedia of Process Intelligence’. It works by analysing process flows and creating an intelligence graph that can be queried through a chat interface by different departments to understand how processes work.

All of these new AI-powered features, though, make the same assumption: that users want to use standalone conversational interfaces embedded directly into products. As companies continue to experiment, we should soon start to get some real data to emerge to understand whether this is true.

Meanwhile, earnings season continued and amongst the major companies to report their latest earnings this week was Instacart. It is the company’s first earnings since going public and overall Instacart reported a loss of almost $2 billion. Transaction revenue grew 7.2% to $542 million but its ad business fuelled most of the growth with revenues of $222 million, up 19% year on year. 

Finally, if you’re looking for new ways to visualise PRDs and user stories this new visualisation product might help. 

Enjoy the rest of your week!


Essential reads for product teams

New from the Department of Product this week:

  • 🧠Knowledge Series: Unit economics explained – what are unit economics? Examples of unit economics metrics worth knowing, a closer look at the unit economics of WeWork, Klarna, Uber and how to improve your product’s own unit economics

  • 📈Chartpack: SaaS industry benchmarks – CAC, growth, net dollar retention and other metrics to help you contextualise your product’s performance

UX – How to design conversational products using the 6 types of conversations

When interacting with generative-AI bots, users engage in six types of conversations, depending on their skill levels and their information needs. Interfaces for UI bots should support and accommodate this diversity of conversation styles. (NN Group)

Strategy case study – The rise and fall of Jawbone

Product malfunctions, weak gross margins, inflated valuations and financing troubles would reverse Jawbone’s meteoric rise. In one of the most dramatic turns in Silicon Valley history, the company went from a nearly $4 billion valuation to liquidation.

Technical explainers – What’s the difference between AI and machine learning?

ML is a subset of AI. That’s the first big difference to note. While AI is a term that encompasses a wide range of technologies and techniques, ML is a specific approach to building AI systems. (Hackernoon)

Career development – How to assess a job offer with equity

Mark Cecchini from Financial advisory startup Compound talks to Jason Leonard about everything you need to know as a tech worker about job offers with equity. Including: how to assess stock options, why you should negotiate offers with equity and red flags to look out for. (Concepts of Finance)

Tools you can use

  • Jony Eye – a Figma plugin modelled on the aesthetic taste of former Apple design VP Jony Ive to help you make better design decisions

  • Pitch 2.0 – the new version of Pitch is designed as an alternative to Google Slides to help teams build beautiful presentations

  • GPT Directory – browse hundreds of custom built GPTs for things like user feedback, product insights and more

New product features, launches and announcements this week

Amazon has launched a new map view for the connected home. Map view allows users to see a map of all their connected devices in one place.

A group of former senior Apple designers apt Humane have unveiled their first product: a wearable AI pin. After 5 years in development and $250 million in funding later, the device looks polished and beautifully designed but it feels like a solution in search of a problem. There is a finite number of devices people will willingly want to charge every day – and the AI pin might struggle to become one of them.

Docusign has unveiled a new way to sign documents via WhatsApp. Docusign’s VP of product said that the integration was part of the company’s commitment to building a “frictionless, end-to-end agreement experience”. Duolingo also launched its own WhatsApp integration.

YouTube is testing a new feature that will automatically answer a user’s questions in the comments section about a video. An ‘Ask about this video’ button will appear be allowing users to get answers to questions or find similar videos. For product teams, this type of feature is already widespread thanks to contextual help bots but there may be further use cases to consider.

Gmail is testing a new reply functionality that transforms email into instant messaging. If successful, this could mark the end of the formalities of email.

Strategies for reaching product profitability: some key trends 

As tech companies double down their efforts to achieve profitability, here’s some of the ways companies are doing it:

  • API monetization – as LLMs increasingly feed off more data sources, companies have fought back by either blocking access to their APIs entirely or hiking up their prices. Reddit is of course the most well-known example of a company who did this this year. Others are following suit.

  • Launching new revenue generating products – for example, Twilio has invested heavily in building an AI powered data platform – an alternative product to its traditional communication product. Growth in this product category, along with cuts, has led to the company reported quarterly profits in 2023.

  • Staff cuts – many tech companies have taken the difficult step to cut costs wherever possible; one of the most blunt ways a company can drive profitability. Stack Overflow recently cut 28% of its staff to try to achieve profitability and doubled down on its investment in product development.

  • Changes to pricing and packages – 75% of SaaS companies have used the last 12 months as an opportunity to tweak their pricing and packages in an effort to drive profitability. Price hikes have been introduced across products including Netflix, Spotify and others. Lower-priced ad-funded products have also been introduced to capture both ends of the market.

For more premium analysis check out the Department of Product paid substack.

📈 Product data and trends to stay informed

“Hallucinate” is the Cambridge Dictionary’s word of the year. The term relates to AI accuracy and GPT4 is the most accurate LLM with a hallucination rate of 3.0%. Llama is second at 5.1% and Anthropic Claude at 8.5%. Stats worth bearing in mind if you’re planning to integrate AI features into your product that are powered by LLMs. Full study on AI accuracy.

53% of designers say they are now using group meetings to design collaboratively with other product team members. Figma’s State of Designer report 2023 in full.

GitHub’s AI coding assistant, Copilot has officially reached profitability. Enterprise accounts are priced at $39 per month, per user – which it seems, is more than enough to cover the costs of the OpenAI integration that powers it. Despite that, rumours are still rife that Microsoft is hard at work on developing its own LLM to complement, or eventually displace OpenAI.

HBO Max has lost 700,000 subscribers. The company reported 95.8 million global subscribers across all of its services – down from 97.6 million.

Only 6% of Americans want to spend much less time on their phones, according to a study by Consumer Trends. 

Other product news in brief

Denise Dresser is the new CEO of Slack.

Grab has lost its second top exec in 6 months as its president quits.

Roblox now has over 70 million daily active users with revenues of $713.3 million.

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Product Briefing – November 9, 2023

GPTs for everything, Google Maps gets Immersive, Netflix’s QR codes
Plus: Slack’s CEO exits, How to use conjoint analysis, a new tool for reading API documentation

Product Briefing – November 2, 2023

Google Slides’ superpowers, a Sublime second brain, Pinterest’s PMF
Plus: Tech salary report, how to manage API integrations, Spotify, Instagram and LinkedIn MAUs in context

Product Briefing – October 26, 2023

Discord monetization strategies, Slack ditches X, Spotify growth
Plus: 50+ product analytics tools, Microsoft impresses, Google Meet gets appearance enhancers

Product Briefing – October 19, 2023

Netflix’s $8 billion quarter, Figma in limbo, Synthetic UX research. Plus: YouTube’s major release, a new way to manage your calendar, the Web Technologies Report 2023

Product Briefing – October 5, 2023

Google Docs’ new competitor, AI wars, App industry benchmarks
Plus: Airbnb’s ML patent, DoorDash’s swipe for restaurants and Uber expands to returns

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