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106 / Using Atomic Networks to Find Product-Market Fit, with Neha Bansal

Hosted by Paul Gebel




Neha Bansal


Neha Bansal is a product leader with 11+ years of experience in Ads, Analytics and Commerce. Currently she heads Merchant Growth and Monetization for Google’s B2B Commerce business. Neha is also an angel investor and mentors 20+ consumer tech start-ups.

She holds a Master’s in Business Administration (MBA) from Columbia University  and a Bachelor’s in Economics and Statistics from Lady Shri Ram College, India.

Neha has lived and worked in the US, Canada, the UK, South Africa, and Israel. She will soon be launching a limited-access course on Product Management.


Product and UX professionals want their product to be ‘the next big thing.’ Right? But Google’s Neha Bansal reminds us that designing a product with everyone in mind ignores the adage, “aim small, miss small.” Instead, Neha recommends narrowing your target market to what Andrew Chen calls atomic networks.

“The broader your market, the harder it is to find product-market fit,” Neha says. “Starting small allows you to analyze the root cause when something isn’t working; when you have a small base of users – an atomic network – you can pick up the phone and ask about what you can do better.”

Neha Bansal is a product leader, angel investor, and mentor to dozens of startups. She currently heads Merchant Growth and Monetization for Google’s B2B commerce business. In this episode, Neha and Paul discuss Chen’s The Cold Start Problem and how product leaders can apply the atomic network mindset to find product-market fit.

Atomic networks help you gain traction and work through problems, Neha explains. When you know your audience intimately, it is easier to connect with them and work through the barriers and frustrations they are experiencing. Neha describes this as turning ‘zero’ moments into ‘magic’ moments.

Catch the entire episode to hear Neha describe how Facebook, Uber, and Bank of America identified and expanded their atomic networks first to find product-market fit on their way to becoming household names. Neha also shares key metrics that will let you know when you’ve discovered your own.

Jesse James Garrett and Rich Mironov to keynote at ITX Product + Design Conference 2023. June 22-23, in Rochester, NY. Early-bird tickets available until April 21. Learn more!

Paul [00:00:19] Hello and welcome to Product Momentum, where we hope to entertain, educate, and celebrate the amazing product people who are helping to shape our community’s way ahead. My name is Paul Gebel and I’m the Director of Product Innovation at ITX. Along with my co-host, Sean Flaherty, and our amazing production team and occasional guest host, we record and release a conversation with a product thought leader, writer, speaker, or maker who has something to share with the community every two weeks.

Paul [00:00:43] Hey everybody, welcome to Product Momentum. We’re excited to share a conversation with Neha today. She goes through a lot of the challenges and opportunities that she found in Andrew Chen’s book, The Cold Start Problem. She unpacks a lot of the playbook and ways that product managers can achieve that elusive product-market fit. I’m not going to spoil too much more about the conversation. So we’re just going to get right into it.

Paul [00:01:05] Hey folks and welcome to the pod. This is Product Momentum and I’m your host, Paul Gebel. Today I’m delighted to be joined by Neha Bansal. Neha is a product leader with 11-plus years of experience in ads, analytics, and commerce. Currently, she heads Merchant Growth and Monetization for Google’s B2B commerce business. Neha is also an angel investor and mentors 20-plus consumer tech startups. She pursued an MBA from Columbia University and a Bachelor’s degree in economics and statistics from Lady Shri Ram College in India. Neha has lived and worked in the U.S., Canada, the U.K., South Africa, and Israel, and she’ll soon be launching a limited-access course on product management. Neha, so delighted to have you today. Welcome to the show.

Neha [00:01:43] Thank you so much, Paul. Very, very happy to be here.

Paul [00:01:46] Awesome. Well, I’ve been really intrigued following your work and your talks lately. You’ve brought a lot of visibility to a concept that’s very timely for me and some of the clients that I work with, and I’m really excited to dig into this concept of atomic networks and the Cold Start Theory. And if we could just start at a really high level, why is this such a passion project for you? What is it that excites you about the topic that we’re about to dig into today?

Neha [00:02:11] Absolutely, yeah. Great way to set the context. So about a year and a half ago, I moved into an early-stage team at Google. So at this point, my Google product, along with a few other startups I had invested in, were trying to get their brand-new product off the ground. That’s when I started reading a lot of books, meeting people to understand, how do you really get stuff off the ground? How do you find product-market fit? I found a lot of opinions and a lot of approaches, but a senior director at Google recommended Andrew Chen’s book, The Cold Start Problem. It was such a lightning moment because it disentangled many theoretical concepts and gave me a framework for taking things from 0 to 1. And I realized that, since I know it now, why not share it with the community? Especially at this time when so many people are trying to build their own startups and tap into the ecosystem and find their product-market fit.

Paul [00:03:05] Absolutely. I think that there’s been a lot of ink spilled over product-market fit over the years, and I think this for me, very much like you, catalyzed just sort of a, like you said, a lightning moment of, there’s a lot of people struggling to find that audience, that initial audience that’s going to help them gain traction. It reminded me a bit of the more sort of traditional approach of Clayton Christensen’s crossing the chasm, sort of that escape velocity.

Paul [00:03:28] I’m probably putting the cart ahead of the horse, so let’s back up just a minute and talk about, you know, in Andrew Chen’s book, he’s very clear about what the atomic network should be. So maybe we can start there and unpack the theory a little bit. In the way that you’ve been sharing it, you have been really helpful for me thinking about products that are now household names, Facebook, Uber, Slack, Airbnb. They didn’t start as the powerhouses that we know them today. They started with their atomic network. So I was wondering, can you share a bit about how these names that we all kind of know ubiquitously got sometimes a very surprisingly small start?

Neha [00:04:07] Absolutely. So maybe let me start by sharing a bit of the framework and then we can talk about each of these examples that you mentioned. So Andrew Chen introduces the theory called the Cold Start Theory as a framework to think about different stages of business. The theory lays out five stages that every business ideally should be traversing through to fully harness its power. The five stages are, first is you have a cold start. Once you’ve overcome that, you hit a tipping point and then you reach an escape velocity. And once you are able to get past that, you hit the ceiling and finally you have found your moat.

Neha [00:04:45] I do wish the framework had a different name because it’s the same name as the first stage of the theory. So it gets confusing. But never mind. Now the atomic network concept falls right in between the first two stages. So when you are starting with a blank slate, this is where you actually use the atomic network to find your product-market fit, and once you’ve done that, you hit your tipping point. Now, a question around, well how did these household names use different atomic networks? As I’ve been doing this research, it’s been fascinating to really learn about it. So I’ll share some of them. Do you want to guess what was it for Facebook? Facebook’s atomic network?

Paul [00:05:24] Well, I’m cheating because I know the answers to the test, beginning with college students. And I was there a little bit late to the game. But, you know, starting there, I think really is a great picture of how Facebook nailed that specific target audience to explode their growth through.

Neha [00:05:39] Exactly, yes. Tapping into the college communities as far as getting success at Harvard and then expanding to other Boston universities and finally to all Ivy League schools, right? That’s where they found their success, and that was their atomic network. For Uber, it was 5 p.m. commuters at the S.F. Caltrain station at 4th and Kane.

Paul [00:05:57] I love that one.

Neha [00:05:58] I love the specificity here.

Paul [00:06:00] Yeah.

Neha [00:06:00] For Airbnb, their atomic network was large conferences that would cause a shortage of hotels in that city.

Paul [00:06:08] Right.

Neha [00:06:08] Again, that’s phenomenal, right? Because they were able to predict very early on which city is going to face a shortage in what week, and then they would go ahead and create more supply of homes. And my favorite one, to be honest with you, is credit cards. Have you heard that story?

Paul [00:06:24] Yeah, The data, even in the 1950s, right, was it the 1950s or 1960s?

Neha [00:06:29] This was around the 1950s, yeah.

Paul [00:06:32] So, yeah, Bank of America, if I recall correctly, the ecosystem of credit cards at the time was every store had their own individual…

Neha [00:06:40] Charge cards.

Paul [00:06:41] And what Bank of America did was target a very specific, either zip code or, can you remind me what it was that they targeted?

Neha [00:06:49] So what they did was they focused on one city, which was Fresno in California.

Paul [00:06:53] Yeah.

Neha [00:06:54] I’ve been through it so many times, but I never knew it was such a big part of our history in terms of atomic networks. So what they did was they did some analysis and they figured that on the demand side, 35% of Fresno residents already had some relationship with Bank of America. And on the supply side, most small businesses in Fresno downtown did not have a proprietary charge card of its own. So because they had the right supply and demand in terms of volumes, on one specific day, they just shipped credit cards to 60,000 Fresno residents, no application process, all pre-approved, right? It was just in the mail and ready to use. These residents took the cards to 300 restaurants in Fresno’s downtown that following weekend and, boom! They got the traction they needed to prove their PMF.

Paul [00:07:40] Yeah. You know, these stories behind narrowing it down to the smallest possible network, it’s fascinating because in hindsight we look at how something so small can turn into something so big, and it’s encouraging because everyone starts somewhere. But on the other hand, I have to dig a level deeper and ask the question, why is small so important of an attribute? Why, in forming this atomic network, is it so important to focus and keep it so lean? Because, you know, it can be tempting for developers and designers to think, “okay, that’s our only audience; this train station is our only audience, but we fully intend to grow bigger.” Why is this smallness so important, and how can we prevent that distraction from keeping us from that bigger vision?

Neha [00:08:24] Yeah, before I answer your question, I’m going to tell you a quick story because I love telling stories. In 2010, Chris Dixon, partner at Andreessen Horowitz, he wrote an essay titled “The Next Big Thing Will Start Out Looking Like a Toy.” He talks about Clay Christensen’s disruptive technology theory, where he says that disruptive technologies are dismissed as toys because when they are first launched, they undershoot the user needs. For example, the first telephone could only carry voices a mile or two. The leading telco of the time, Western Union, passed on acquiring the phone because they didn’t see, how could it possibly be useful to businesses and railroads, who were their primary customers at that time? What they failed to anticipate was how rapidly the technology would grow and evolve. The same was true of how mainframe computers treated PC and then how modern telecom companies viewed Skype. Now, having said that, what Andrew Chen does is he extends this into target audiences. The next big thing would start looking out like it’s for a niche network.

Paul [00:09:28] Interesting.

Neha [00:09:29] So now I answer your question, but why should it be niche? Well, the answer is very simple. The more users you need, the harder it is to create something. That’s why starting off small allows you to analyze the root cause when something is not working. If you have a small base of users, you can pick up the phone and call them and ask that, “Hey, why aren’t you signing up? What can I do better for you?” But imagine doing that if you launch something to everybody. How would you ever pinpoint that, where things going wrong?

Paul [00:09:58] Right. I love that. If Facebook launched today and they tried to market to baby boomers and millennials and Gen Xers and Gen Zs all at the same time with dating verticals and marketplace and neighborhoods, they’d be a mile wide and an inch deep. But because they’re able at their start to focus on just a very small pocket but very deep into the network, they were able to learn really fast and they were able to get to know their audience in a very human way as opposed to a more data-centric, aggregate way. Is that fair?

Neha [00:10:31] Absolutely, yeah. You hit the nail on its head.

Paul [00:10:35] Hey folks. Please excuse the quick break in our conversation, but I have some exciting news to share. June 22nd and 23rd, 2023, ITX is hosting our second annual Product and Design Conference. I can confirm two of our guests. Keynote speaking is Jesse James Garrett, one of the founding fathers of UX Design and currently a UX design leadership coach. He also helped us recently celebrate the 100th episode of this very podcast. Rich Mirinov is also going to be there, an alum of this podcast as well. He’s a legend in the software and product space, author of The Art of Product Management. And we also have Mike Belsito, CEO of Product Collective, returning to help us emcee the conference.

Paul [00:11:13] It’s going to be a great time of networking, learning, and bringing some great ideas back to your product teams to help level up your game. It’s also going to be the opening weekend of Rochester International Jazz Fest, and we’ve recently extended our early bird pricing for tickets. If you have questions or want to know more, you can go to 2023, 2023. All right. Let’s get back to our conversation with Neha.

Paul [00:11:40] So let’s unpack the story to the next level. We have this data now, we’ve built our network, and now we need to get a playbook to go to market. So how do so many people either miss this opportunity or fail to capitalize on their networks? What are some of the tactics that you’ve observed that help people to make better decisions once they’ve achieved this network? You know, it’s difficult for us to identify the goal, the problem that we’re trying to solve. And I wonder if there’s a next step of, “Okay, I’ve got this small group of dedicated people who I think are going to be my initial users; how do I take this and turn it into what I’ve heard you call ‘magic moments’ and ‘zero moments?'” What are these things and how can we capitalize on them?

Neha [00:12:26] Yeah. So let me share a little bit about, what does it take to build a network that will help the listeners understand that it does take a lot of work? In each of the three steps I’m going to describe, if you fail, that is where it becomes harder to build the magic moments for your users, and therefore it’s hard to find an atomic network to find your fit.

Neha [00:12:48] So there are three steps that you would have to do to build your first atomic network. First is you have to identify the heart site of the network. As you can imagine, let’s take Uber or DoorDash. The minority of the users, they are the ones that create disproportionate values, and as a result, have disproportionate power. So in case of Uber, it would be the drivers, for social networks, it’s the content creators, and then for the App Store, it’s the developers. Now, once you’ve identify that heart site, you have to solve the problem for that site of the users.

Neha [00:13:20] It’s important to understand, what’s a unique value proposition to the site? How will they use the product? How will they first hear about your product and in what context? What makes them stick to your network such that when a new network emerges, they will retain on your product? These are difficult questions and require a deep understanding of the motivations of your users. So understanding these diverse points of view is what makes it easier to serve them. In my experience, I’ve often seen that a lot of founders and PMs who are consumer PMs, they tend to default to addressing for the masses. Like, “Hey, let me build this for the users,” versus thinking, “how can I soft this for the.. Uber, like the driver side, the harder side of the network first?”.

Paul [00:14:04] Hmm.

Neha [00:14:04] So yeah. And the final step is, you know, once you have an understanding of, what do these users need, you need to build a simple-to-use product. And once that product starts delivering magic moments, you know, you have found your success. Now, you did ask, “what is this magic moment?”

Paul [00:14:21] Right, right.

Neha [00:14:21] Now it’s very hard, right, to say, what is a magic moment? So I like to reverse it and say, what are not magic moments? So as a builder, I always think about, what is it in my current product that would upset my users? And those are defined as the zero moments. So you would then actually write down that doing A, B, C, D, E, F, etc. if that happens, the product has generated a zero movement. And then you start tracking those zero movements. And your goal as a team is to bring those zero movements down to zero.

Paul [00:15:00] Right.

Neha [00:15:00] So, for example, an Uber started at the Caltrain station, they gave their drivers and coordinators an app, I believe it was called Starcraft, that recorded ride completion. Anytime a rider didn’t get matched with a driver, it was recorded as a zero. They continuously ideated to completely eliminate these zero moments and therefore find their product-market fit in that smaller atomic network.

Paul [00:15:23] Yeah, this reminds me a lot of the Kano model, if you’re familiar with that, where there’s a curve that maps the delighters and the curve that maps the detractors, and trying to get those detractors up to at least a business-as-usual, if not a delightful experience to create those magic moments. I think that the way that Chen’s magic in zero moments simplifies that, I think is a really helpful mnemonic to remember what it is that we’re trying to do in these apps. It’s not just a functional technical list of features. It’s a human experience, and there’s a person on the other end that’s feeling things as a result of what we’re building.

Neha [00:15:56] Exactly, yes. And as an investor, obviously, all of these translate into some standard metrics that I look at. So if I’m looking at consumer products, I would want to see a download ratio of at least 25%, and 50% above would be world-class. I am looking for at least hundreds, if not thousands, of signups per day. Day one retention should be at least 30% to say that yes, you have found a fit. For SaaS products, you would look at conversion rate from free to paid of about 5% or more. Then you would also look at CPA to LTV ratio of 3x, blah blah, blah. Right. All of these, I’m happy to share my slides for these, but that’s what it translates into from an investor perspective.

Paul [00:16:38] No, I’m glad you went there. You’ve built a career on your expertise in analytics, and these metrics are exactly the kind of things that I think a product manager would be looking for. Otherwise we’re shooting in the dark. So we do stand on the shoulders of giants. We have the pattern, the case study of Facebook and Airbnb to go back and look at and see, how do you calculate escape velocity, how do you calculate what it takes to cross the chasm, so to speak?

Paul [00:17:01] So, you know, if we could dig into, you know, one or more of these metrics that you just rattled off, the daily active users, monthly active users of 25%, that kind of stickiness is, you know, I think in the investor community, it is sort of table stakes at this point, right? Is there anything else in this list of metrics that stands out to you as an investor that you would want to talk to a product manager building things about to help identify, “this behavior is something we’re looking for,” or, “this outcome is something that we’re treating for in products that we’re building.” Anything else you care to unpack on those metrics? I’d love to hear it.

Neha [00:17:35] Yeah, absolutely. So retention is the thing, the holy grail when it comes to saying that, yes, I have a PMF. I’ll give a recent example of a founder I was working with. He started in the Canada market, was already expanding into the US market, and also thinking of doing Mexico. And I helped him understand through a lot of just questions to understand, why is he expanding so fast, even though his MRR, his monthly recurring revenue, was less than a few thousand dollars at this point?

Neha [00:18:04] So the answer always is that, “oh, because I’m getting some traction in a new market.” And as a founder, you’re always also trying to survive and prove retention at the same time. So it’s very attractive to just say, “oh, we can easily expand our market.” And in today’s day, technology, it’s so easy to go across geographies. Most of the countries are English-speaking countries. You can totally do that. But it took some convincing to really drive the point home that until and unless you’re able to understand your one market in a fair amount of detail, and not just market, it was important to break it down that within Canada, what vertical are you focused on? Because his was a B2B product. So really thinking about whether it’s construction, or is it cybersecurity, or is it something else? And then focusing on that because your users in each of these segments have such vast needs. And then once we were able to pick that one industrious focus for a variety of reasons after looking at all of the data, we started discussing, what’s been your retention? What’s your monthly recurring revenue for each of these segments? And I typically look for at least a hundred thousand dollars of monthly reoccurring revenue for SaaS products to say, yes, you have a PMF. And that helped him find his North Star metric that said, “okay, until I achieve this, I’m not going to expand to other countries,” right?

Paul [00:19:21] That’s great. I really appreciate you unpacking that a little bit more because I think the way that we come to metrics is usually, it evolves or emerges over time. We look at behaviors and then we say, “Oh, that’s the target,” as opposed to saying, “here’s a pattern that we know works; here’s a playbook that we know is established and has produced successful a result, so here’s something that we can shoot for.” So I think that that sort of metric-first mindset is really helpful to begin with.

Neha [00:19:44] Absolutely.

Paul [00:19:46] We just have a couple of minutes left. I wanted to make sure that I close out with at least one more question about the follow-through. And you talked about the hardest part of this process, and I was wondering if you could share, you know, why is it that this seemingly simple idea is so hard to follow through on? What is it about this that can be so game-changing for products that are in this early stage and getting to startup?

Neha [00:20:10] I describe this in just three words. It’s scary to commit. At Google, when I was building the B2B marketplace, after analysis, we decided to focus on plumbers for our marketplace. Now, that was scary for the merchant onboarding team because they initially felt like there will never be enough companies of plumbers who would come to the marketplace. And as a PM leader, I had to work a lot with them to help them see the bigger picture. So once getting your team to align on that, “hey, this is not a small opportunity, there is much more beyond that, but we want to first prove success and then one niche area.”.

Neha [00:20:45] Second is, as a product person, it takes a lot of commitment to say no multiple times. So every time there’ll be a feature that let’s say a user from another atomic network would want, and you have to constantly think that, “does my current atomic network that I’m trying to prove success in, does that network need this feature?” If no, say no. So it’s very hard to say no constantly.

Neha [00:21:06] And finally, it’s a lot about just keeping your team believe in the vision and not be like, “we’re limiting ourselves to that one small niche network.” I think that was always a struggle.

Paul [00:21:16] Yep.

Neha [00:21:17] But it’s just scary to come from so many different aspects. Once you get over that, it’s fine. And I think once you’re over that, it’s just about, rinse and repeat, which is the nice part. So what I’ve done is I would write a success playbook of what worked and what didn’t work as we were trying to find PMF for that niche network, and then you just go ahead and keep copying that as you’re expanding your atomic networks. You know, what worked and what didn’t work, and you also add to the playbook as a team.

Paul [00:21:43] Yeah.

Neha [00:21:43] Which becomes very exciting, very fast, and then the growth rate of expanding to the next network is much faster than the last time you did it.

Paul [00:21:50] Yeah, that’s great reassurance. It can be scary. I’ve got two last questions for you that are hopefully quick. The first is something that we ask of all our guests and it’s become a bit of a pet project trying to explore all the angles that we can find. In your own words, how would you define innovation?

Neha [00:22:07] Hmm. It’s a heavy one. I’m going to first start by sharing my favorite quote.

Paul [00:22:12] Sure.

Neha [00:22:13] This one is from Grace Hopper, who was a pioneering computer scientist. She said that “the most dangerous phrase in the language is, ‘we have always done it this way.'” I associate a lot with this quote because this emphasizes the danger of complacency and the need to constantly challenge the status quo in order to stay relevant and competitive. So for me, innovation is when you are constantly challenging the status quo.

Paul [00:22:38] Big fan of Grace Hopper. We actually have a conference room named Grace Hopper right across the hall from where I’m recording today. And I think that definition really suits the topic that we just got done talking about. I appreciate you sharing that. Last question before I let you go, I don’t think I’m putting words in your mouth by saying that you’d probably recommend Andrew Chen’s book, The Cold Start Problem.

Neha [00:22:57] Mm-hmm.

Paul [00:22:57] Are there any other books or blogs or podcasts that you’d recommend to product managers either getting started in their career or looking for an idea to take them to the next level? What comes to mind when you think of what inspires you?

Neha [00:23:11] Oh, I’m a huge fan of How I Built This.

Paul [00:23:14] Great.

Neha [00:23:14] I think that’s like my favorite podcast of all time. But I also like Product Mastery Now for product managers and innovators and leaders. And obviously, I listen to Product Momentum as well. So those would be my top picks just for today.

Paul [00:23:28] Well, we’re honored to have you as a listener and hopefully a fan. Neha, it’s been a pleasure getting to know you and getting to hear your thoughts. I really enjoyed our time together. Thanks for joining us today.

Neha [00:23:38] Same here. Thanks, Paul. Thanks for having me.

Paul [00:23:42] Well, that’s it for today. In line with our goals of transparency and listening, we really want to hear from you. Sean and I are committed to reading every piece of feedback that we get, so please leave a comment or a rating wherever you’re listening to this podcast. Not only does it help us continue to improve, but it also helps the show climb up the rankings so that we can help other listeners move, touch, and inspire the world, just like you’re doing. Thanks, everyone. We’ll see you next episode.

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