The Department of Product


Thursday, 12 October, 2023

Freemium fallacies, Shopify AR, Space OS. Plus: Instagram Threads says no to news, Spotify on managing 500+ squads, Dropbox's CEO defends remote work

Hi product people 👋, 


Is freemium the most effective monetization model for SaaS businesses? The founder of spreadsheet startup Equals says the answer for his product is a firm no. In a new post entitled ‘the fallacy of freemium’ he outlines the reasons why adopting a freemium approach actually stunted the company’s growth. It’s worth a read if you’re looking for some inspiration for your own product’s growth trajectory.

Meanwhile, a new product we came across this week imagines a future where your desktop isn’t a cluttered mess full of screenshots, downloads, folders and other random, disorganised files. Space OS, from Berlin-based startup Deta, thinks there’s a better way to run your desktop’s operating system. It imagines operating systems as an infinite canvas on which you can take notes, watch movies or run full apps just by drawing on the screen. At first glance, it looks a little like what might happen if your OS were powered by a Miro board and Deta say it is developing a suite of native apps to work on the OS. It’s still early days and the product is in an Alpha release but you can find out more here.

In other product news this week, GitHub has extended its scanning feature to include AWS, Microsoft and Google. The feature is designed to reduce the risk of leaked credentials like API keys by scanning a product’s code repositories for vulnerabilities. GitHub also announced a new accessibility assistant in Copilot designed to improve the accessibility of your product’s codebase.

Finally, if you’re currently going through a vendor onboarding process which involves security and compliance issues, this new tool might help.

Enjoy the rest of your week!


Essential reads for product teams

The latest posts from the DOP Substack

DOP Deep: Blue Apron, HelloFresh, the economics of the meal kits. Why did HelloFresh succeed where BlueApron failed – and what lessons can you learn from their success?

🧠Knowledge Series #9: How to segment customers – practical tools and frameworks explored.

(Department of Product)

Interview – Dropbox’s CEO on why remote work works

In October 2020, as it became clear COVID-19 wasn’t going anywhere anytime soon, Dropbox made a big bet. Rather than continuing with a temporary remote-work policy and postponing longer-term decisions, the company declared it was going virtual-first. (Fast Company)

Process – How Spotify manages 500+ squads at scale

How does Spotify manage a sprawling tech ecosystem made up of 500+ squads managing over 10,000 software components in production? Last November, Google Cloud distinguished engineer Kelsey Hightower met with Spotify chief architect Niklas Gustavsson at Spotify’s office in Gothenburg, Sweden, to talk about just that. (Spotify Engineering)

Tools you can use 

  • Relay – automate your work flows for meetings, interviews and more

  • BrainStory – a tool to help you think through your ideas properly

  • Twos – notes, tasks, reminders in one place – for free

Design case study – Behind the scenes of Patreon’s new redesign

Many of the principles that guide brand-building today are still rooted in ideas from 20th century retail: have a static logo with an exact shape, one or two key brand colors, and make sure it all stands out on a store shelf or in a print ad. But Patreon wasn’t born on store shelves and print ads. (Patreon design blog)

Podcast – How to communicate complex ideas simply and effectively

 (Stanford Business School)

New product features, launches and announcements this week

Adobe has created a symbol to encourage creators to tag AI generated content. The symbol will be adopted by companies including Microsoft to make it easier for consumers to understand human generated content vs. AI generated content. 

Fresh from Spotify’s recent unveiling of translation tools, AI startup ElevenLabs has launched a new feature called Dubbing which allows users to translate recordings into up to 29 languages. 

Shopify has filed a patent for an augment reality (AR) interface designed for post-purchase actions. Whilst most ecommerce businesses have focused on pre-purchase use cases, the patent would allow users to scan the object after it’s been purchased to find out useful information about the product. This could include installation instructions, information on how to return the item or eligibility for extended warranties.

Jira’s parent company Atlassian is to acquire video sharing and recording product Loom in a deal worth $975 million. Loom’s CEO has said the acquisition means Loom will be integrated ‘deeply’ across Atlassian’s suite of products.

Instagram’s head says there are no plans to amplify news on Threads.

Google is experimenting with a new feature for folks with tab management problems. The new feature will allow users to organise their tabs into groups which can be named. 

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📈 Product data and trends to stay informed


The disparity in revenues between HelloFresh and Blue Apron has widened significantly since 2017. HelloFresh’s revenue is now roughly five times higher than that of Blue Apron.

Some users of Microsoft’s AI copilot are costing the company as much as $80 per month, according to a report by WSJ. GitHub’s former CEO denied the claims.

A new app is number one in the US app store. Epik allows users to create a 90s style yearbook and is generating ~$250,000 a day through one-off payments.

ChatGPT hit revenues of $4.58 million last month across its iOS and Android apps and September saw a new record of 15.6 million app downloads. But, it’s not the biggest ChatGPT app; that title instead goes to a competitor called Ask AI which generated monthly revenues of $5.51 million.

Spotify has to tackle a new trend: the streaming service is allegedly being used by Sweden’s criminal gangs to launder money through fake streams.

Search habits are evolving and users are becoming more specific with the search terms they use. Fascinating report from Google on search trends.

Other product news in brief

Snapchat is under fire from UK regulators who say the company’s new AI chatbot may pose a privacy risk to children.

US tech unemployment rates have hit 4.3%, up from 1% in April, despite an increase in overall added jobs.

Netflix’s ad chief Jeremi Gorman is leaving the company, to be replaced by Amy Reinhard, as rumours that price increases are on their way.

All yours, all free. Enter your email to receive your briefing.

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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