Transformed

CHAPTER 24Partnering with Finance

Partnering with finance, and often with the related investor relations, is a critical part of the job because there is simply no viable alternative to working together effectively. The company depends on the products it sells, and product people depend on finance.

As with so many other areas, the key to working together effectively lies in alignment, understanding the needs and constraints of the partner, and providing data rather than opinions.

First, it's important for the head of product to establish with the head of finance the reasons for the move to the product model.

Start by looking together at the data and acknowledging that the current model is not very predictive in making good funding decisions, and not very predictive in estimating incremental revenue from product. If there's doubt, you can see this by comparing the business case claims with the actual results from the prior quarters.

More generally, it's important to acknowledge that the old model simply wastes too much money and time, not to mention opportunity cost, and generates far too little in the way of demonstrable business results.

Usually this much is painfully clear. The only real question is whether we can do better.

Testing the Product Model

The case to be made is to test out the product model, and learn together if it can provide the improved returns that it has provided to other companies.

Depending on the level of frustration with the old model, and the level ...