Brad Hoover "Differences between building a consumer vs. enterprise product"
Software Product Development
Enterprise vs. Consumer
Brad Hoover bio
CEO Grammarly, Inc.
Formerly 6+ years as investor
with VC firm General Catalyst
consultant with McKinsey &
Company, and just enough
time dabbling as a coder to
appreciate the difficulty!
Board member MocoSpace;
leading venture-backed mobile
social gaming destination site.
Proud Sponsor of AgileBaseCamp
Offices in SF and Kyiv.
Currently hiring for a variety of
positions in Kyiv.
Consumer Saas business providing leading writing
with highly engaged users.
Exceptional team with track
record of success.
Large scale with nearly 10M
annual uniques and many
The essence of Product Development
Identify need: why doesn’t it exist already?
Initial product development: reduce risk (cost
Iterate product to go mainstream: improve
product feature set to increase quality (sales,
LTV) and scale (total available market).
Comparison: Enterprise vs. Consumer
Serves enterprise customers, not
Generally paid; enterprise
procurement with seat license
model; security and uptime
E.g., Office365 (MS), Salesforce,
Serves individual users.
Usually free or free offering; paid
by individual credit cards, cell
phones, e-money, etc. (if paid);
security/uptime may be less
E.g., Google search, Facebook,
Comparison: Identify Need
Someone from the industry or
function served, who understands
all details of the market
Need of the founder based on life
experience, generally outside of
Comparison: Initial Product Dev
Extensive upfront design and
In-person conversations and
demos fine tune the product,
often with customer input.
Develop hypothesis to infer broad
customer needs from in-person
conversations, surveys, etc.
Test the hypothesis on real users
to find the local maximum (A/B
testing; multivariate testing).
Less upfront design and
prototyping work for new features,
infer customer input via tests.
Comparison: Iterating Product to Go Mainstream
Gain credibility with reference
Expand the feature set to provide
enough appeal to broader market.
Business development deals to
reach large market.
Sales force can overcome
objections in person.
Develop the best product in the
Expand feature set to solve a
Good product with great marketing/sales may
beat the reverse, as sales force can overcome
the objections through conversations.
Higher need for security & stability.
Lends itself well to outsourcing model.
Requires truly exceptional product with very fluid
funnel and interface to sell without speaking.
High need for speedy iterations to test hypothesis
(infer collective needs/preferences of user base).
Benefits from entire product development team
(product + engineering) in same location to
facilitate rapid communication/iteration.
Shared guiding principals
Focus on a clear, achievable goal; launch as little
as possible to provide initial value.
Create a flow environment so the team is “in the
— Clear feedback on progress towards goals;
— New skills/challenges;
— Autonomy, especially around “how”.
If total addressable market (TAM) is not large
enough, go back to the drawing board to find
a larger hill.
Consumerfication of enterprise apps
Saas enables introduction of ”prosumer”
enterprise products with similarities to consumer
products and development process.
These prosumer apps may have a superior
user experience/workflow vs. strict enterprise
alternatives, and are well positioned to take
market share as a result.
A trend to follow (e.g., Google Docs, Evernote,
If you have interest in working for Grammarly, go to
www.grammarly.com/jobs and review…