Product Momentum welcomes Rich Mironov back to the pod to help us drill down to the bottom line – literally. Rich is a Silicon Valley veteran and longtime product management advisor. He’s spent decades helping C-suite executives and product leaders connect their work to business outcomes. In this episode, Rich reinforces a single, powerful theme: product managers must translate their ideas into clear financial impact. It’s not enough to build great features – success comes from telling compelling “money stories” that resonate with executives and drive decisions.

Here’s what we learned:

Why Product Leaders Must Speak the Language of Money

Rich makes no bones about the yawning communication gap between product teams and executives. Product managers focus on features, processes, and operating models – while executives focus on revenue and outcomes. As he explains, “Any sentence that comes out of the mouth of a product leader that doesn’t have a currency symbol in it is one that the rest of the executive team can’t hear and doesn’t care about.”

As he reframes the role of product leadership, Rich explains that it’s not just about building the right thing – it’s about articulating how that thing makes money.

The Power of Simple, Structured “Money Stories”

At the core of Rich’s approach lies simplicity. He advocates for building “money stories” using just three numbers – two we know, one we estimate – to quantify potential impact. “A money story has no more than three numbers in it…two of the numbers you know, and one of them you’re going to reach into the air and make up or estimate.”

This framework isn’t about precision, Rich explains. It’s about enabling better conversations. By introducing even rough estimates, product leaders can engage sales, marketing, and executives in meaningful dialogue. The goal is to create alignment around opportunity size and business value, and shift the focus from abstract ideas to tangible outcomes.

From Features to Impact: Driving Better Product Decisions

On the pod, we’ve been talking a lot lately about “impact.” Rich’s approach, covered concisely in his recent book Money Stories, also highlights a critical shift in mindset: product managers must own the financial performance of their products. Without that, they risk being sidelined from strategic decisions. “If you can’t vaguely explain how the thing you do makes money, you’re just a cog in the process.”

This means knowing basics about your product – core metrics like units sold, pricing, and revenue – and using them to guide decisions. It also means prioritizing revenue-generating opportunities over less impactful work and being cautious with cost-saving narratives that may have real human consequences.

Bottom line: product leaders who connect their work to measurable outcomes are the ones who influence strategy, secure investment, and drive meaningful results.

Rich Mironov, in his own words:

• [06:07] “Any sentence that comes out of the mouth of a CPO that doesn’t have a currency symbol in it is one that the rest of the executive team doesn’t care about.”
• [06:48] “A money story has no more than three numbers in it… two of the numbers you know, and one of them you’re going to reach into the air and make up.”
• [11:01] “It’s not important whether we get it accurate. It’s important that we build some consensus.”
• [11:40] “If you can’t vaguely explain how the thing you do makes money, you’re just a cog in the process.”
• [12:09] “PMs should socialize their plans with peers; say something like, ‘I know this is wrong, but let me walk you through my logic…’ and then sit back and listen.”
• [24:18] “One thing I always recommend when socializing ideas: Bring a bucket of humility with you.”
• [29:29] “AI is real. It’s gotten investments like we’ve never seen. But it’s all going to come crashing down soon. There’s no way to avoid it. There’s nowhere to hide.”

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Rich Mironov [00:00:00] The essential message is that any sentence that comes out of the mouth of a chief product officer that doesn’t have a currency symbol in it is one that the rest of the executive team can’t hear and doesn’t care about, right? And so the book is structured so that we can talk about the money. That comes with the things we’re doing. We’re building really cool features, we’re building new products, we are building new subscription tiers, we fixing bugs, we building architecture, and notice none of that have currency symbols in it, so a good part of my executive team doesn’t care, right?

Sean Murray [00:00:30] Mentioned something about three numbers, right? So two, you know, and one, one, you’re gonna pull out of thin air, right. Talk to me about like, somebody who comes and says, like, I don’t like that number. What do you do?

Rich Mironov [00:00:41] So I think of it not as an assertion. It’s not a demand. I don’t stand on the top of the hill and bang my drum and say, I’m right, but let’s imagine the conversation that that generates. So I’m going to sit down with my sales and marketing partners and I’m gonna say, I think based on these numbers that we could get two to 5% of our folks to trade up, but you’re in sales. What do you think? Me saying that sales and marketing are going to get a target from product is not how the world works, but it’s an opportunity to have the discussion about the numbers in a way that everybody understands.

Dan Sharp [00:01:18] For folks who are just getting into the money story game, I’m curious, what sort of research that product folks should be getting into to even start coming up with numbers? You mentioned there’s the three numbers.

Rich Mironov [00:01:30] There are a lot of product folks who either don’t have any of these numbers or don’t think they’re important and I can pretty easily identify them because they don’t get promoted. In the in the language of companies that are in the business of making money, if you can’t vaguely explain how the thing you do makes money, you’re a cog in the process, you’re an executor, you are on the development side, you are not on the product side. The idea that I’m a product manager and I don’t know how many units of my product got sold last year. Mmm, not good. I don’t know the list price or the or the average net price. Not good Those are two numbers. I should have in front of me every day, right? So you may be a product manager who doesn’t have those numbers But I’d strongly suggest that those are two number you really want to have every product manager should be getting their gross level quarterly product, you know Profit and loss how much how much came in and gosh, what is my team cost and you’d really like the amount to come in to be more than what your team costs, right? We’ll get there later. Without those two basic numbers, I don’t know how we talk about product strategy.

Sean Murray [00:02:49] Dan, we just got done talking with Rich Mironoff live from Portugal. An amazing conversation. Give me your takeaways.

Dan Sharp [00:02:56] Well, first off, his new book, Money Stories, is an immediate must read for product managers and product leaders, a ton of just practical insights. For me, really focusing on how I communicate the dollar impacts of product decisions. So it’s took him for that, stay for our conversation on AI. I think one of the biggest takeaways is right at the back of Rich’s book, right? Don’t bring a backlog to a gunfight.

Sean Murray [00:03:22] Practical things that we can do today. That’s what rich is all about, right? We are here today with Rich Mironoff and I’m really excited for this because we’re going to do something different than we’ve ever done before. We’re going introduce Rich by saying go back and listen to the last two episodes with Rich because this is going to be part three in our Product Momentum Rich Mieronoff MBA program. But Rich, you are, I believe, the first guest to be on three times. So welcome back to the Product Momentums podcast. Rich, We’re really excited to have you.

Rich Mironov [00:04:04] That is exciting do I win something?

Sean Murray [00:04:06] Uh, Dan will tell you what you went at the end. So our grab to listen to the old episodes, you know, I going back to quotes, like roadmap, amnesia, and talking about companies that may not have a strategy and how you propose a strategy to the executive tier, you know, it’s just things that always resonate. Rich has a new book out coming called money stories. We’re really excited to hear about the book today, but tell us about like why you wrote this book and why now.

Rich Mironov [00:04:33] So, so this is material that’s really been rattling around in my head and on my talks and blog and, you know, in, in public spaces for, I don’t know, six or eight years now. And I got really, really tired of having to get up and give the talk again. And it’s something that comes up. So most of what I’m doing these days is I’m doing one-on-one coaching for chief product officers at B2B enterprise software companies. And the thing that comes up over and over and again, and I wish it wouldn’t, is We as product folks really, really love what we do and we’re really impressed with ourselves and our processes and our product operating models. And we want everyone else to love it too. And so a lot of my coaching is about trying to explain to the folks who are chief product officers at these companies, that the rest of the executive team just isn’t very interested in that, which comes as a shock, right? And, you know, having done this in front of big audiences and one-on-one and you know. It seemed time to come back and put it in a little book that said if you want to communicate really well with the revenue side of your executive team, you have to talk about money and not product processes.

Sean Murray [00:05:44] That’s something that you, when you were at our conference, you led a workshop, that was what we worked on for four hours one day.

Rich Mironov [00:05:51] And that was how many years ago.

Sean Murray [00:05:53] Uh, it was 2023, so not too long ago. So I have some questions there, but I wanna stick with the book. Talk to me about different types of money stories. Help qualify.

Rich Mironov [00:06:07] Literally right oh and the the essential message is that any sentence that comes out of the mouth of a chief product officer that doesn’t have a currency symbol in it is one that the rest of the executive team can’t hear and doesn’t care about right and so the book is structured so that we can talk about the money that comes with the things we’re doing we’re building really cool features we’re build new products we’re building new subscription tiers we’re fixing bugs we’re building architecture and notice none of that currency symbols in it, so a good part of my executive team doesn’t care, right? I would like them to, I would love them to. So the book lays out a really, really simple model. It says a money story has no more than three numbers in it and we only multiply, and two of the numbers you know, and one of them you’re gonna reach into the air and make up or estimate. So for instance, there’s a whole section on upsell stories. And we as product folks tell these stories all the time. We say, if we could just add this really cool feature, actually this year we’d say, if we can add this cool AI feature to the silver tier of our product, because we have a bronze, silver, gold subscription model, we get a lot of our bronze subscribers to trade up to the Silver subscription and pay us more money, right? That’s why we do it. We’re gonna put this really feature, through this. You know, insight generating feature in the silver version of the product and our bronze customers are going to pay us more money. But what we don’t do is we don’t finish the sentence. We don’t say to the executive team, well we have twenty five thousand bronze subscribers and the upcharge from bronze to silver is a hundred bucks a year and we guess, we think, we hope that we might get five or eight or ten percent of those folks to Get so excited about this feature that they’re going to pay us more money. And if we multiply 25,000 subscribers times $100, so that’s two and a half million times 10%, that’s 250,000. Right now it’s a wild estimate, we always do a range. But as soon as I say there’s a quarter million dollars or a half a million dollars if we can build this feature, I have everyone’s attention. So the middle part of the book is me laying out five or six of these very generic template stories. There are upsell stories. If we do this, people will trade up on the subscriptions, right? There’s the boosting volume story. So if we’re in the per transaction, we sell airline seats or clothing online or books online or units of things. We want a story that says, well, if we made these things more attractive, The folks who are going to buy 10 next month would buy 15, or 12, or 100. And if we multiply the numbers, say we have a lot of customers and they’re going to buy six more and on each one we make an extra 472 euros or whatever currency we’re in, then we’re telling an upsell story. Now, mathematically, it’s exactly the same as the volume story, right? They’re all the same, but the way I laid out the book was to have these sections of upsell story and boosting volume story and retention story and new customer acquisition story. So folks could find a story that feels like the one they need.

Sean Murray [00:09:36] You mentioned something about three numbers, right? So two, you know, and one, one you’re going to pull out of thin air. Right. We had a guest on recently, uh, Phil Hornby who said that we’re paid to have an opinion and product. Yeah. We’re not paid necessarily be right all the time. That’s correct. Talk to me about like somebody who comes and says like, I don’t like that number, what do you do?

Rich Mironov [00:09:56] I think of it not as an assertion, it’s not a demand. I don’t stand on the top of the hill and bang my drum and say I’m right, but let’s imagine the conversation that that generates. So I’m gonna sit down with my sales and marketing partners and I’m going to say look, we have 25,000 bronze customers and if we get them to go up to silver it’s an extra 100 bucks a year. I think based on these numbers that we could get two to five percent of our folks to trade up. But you’re in sales. What do you think? Me saying that sales and marketing are gonna get a target from product is not how the world works Right, but it’s an opportunity to have the discussion about the numbers in a way that everybody understands So sales can say well, here’s a really really long list of folks who’ve been demanding this Maybe five percent’s too low And marketing comes back and says well We’ve run a lot of campaigns and we’ve never had anything that got more than a half a percent uptick Right, and we’re going to argue about the one number That’s the swag, right? And it’s really not important whether we get it accurate. It’s important that we build some consensus around the table that says, yeah, marketing and sales and product think we’re vaguely in the right space. It’s something between two and 5%, right? It drives the discussion. Instead of me saying, I’m smarter, I am right, take my number, right, and that just doesn’t go over so well.

Dan Sharp [00:11:26] For folks who are just getting into the money story game. I’m curious at what sort of research that we have product folks should be getting into to even start coming up with numbers. Yeah. You mentioned there’s the three numbers.

Rich Mironov [00:11:40] There are a lot of product folks who either don’t have any of these numbers or don’t think they’re important and I can pretty easily identify them because they don’t get promoted right in the in the language of companies that are in the business of making money if you can’t vaguely explain how the thing you do makes money you’re a cog in the process you’re an executor you’re you’re on the development side you’re not on the product side right and a lot people are put there maybe their organization doesn’t want them to do that or they don’t have access, but. The idea that I’m a product manager and I don’t know how many units of my product got sold last year, not good. I don’t know the list price or the average net price, not good, those are two numbers I should have in front of me every day, right? How many did we sell and what are they gross worth at the top line for the company? And if I multiply those by the way, I get the revenue for my product. And if I don’t understand how revenue is created by my product, then somebody else who doesn’t understand anything else about it is making decisions for me that aren’t so good. Right. And, and I’m being put in the closet where I get to sit with engineering and design, but not with the people who make decisions and allocate money and set strategy. So you may be a product manager who doesn’ have those numbers, but I’d strongly suggest that those are two numbers you really want to have. Every product manager should be getting their gross level quarterly product, you know, profit and loss, how much came in and gosh, what does my team cost? And you’d really like the amount to come in to be more than what your team costs, right? We’ll get there later. Without those two basic numbers, I don’t know how we talk about product strategy. Yes, customers love us. Yes, we have an NPS score. That’s not what drives companies every day. That’s now how decisions get made. That’s how money gets allocated. That’s know how head count happens. So you could decide that you don’t know those or you don’t care, but I think you’re playing a different game than the product managers who are gonna advance their products, advance themselves, and make a mark in the world.

Dan Sharp [00:13:51] Yeah, I think so for product managers out there. Like if you don’t have that information, there should be a rallying cry to be curious and start finding it out.

Rich Mironov [00:13:59] It should. And, and I, in most places, if you just asked, it would be very easy to find. And there are some companies that hide their financials, but again, I don’t know how you’d be a product manager and grow your product. If you’re not allowed to know how much money it’s bringing in.

Dan Sharp [00:14:14] So one of the money stories you mentioned in the book is around kind of the cost saving story. And you have a bullet in there that I felt was especially applicable right to kind of today’s market climate of like, Hey, these money stories, we should be extra careful about because like now we’re talking about things that potentially impact people’s lives and you know, how organizations are structured. So I’m curious to how, how in your experience, you kind of handle those conversations with clients? Let me take a step back to.

Rich Mironov [00:14:45] What I find is that the cost-saving stories are much less powerful than the revenue stories. If there’s a revenue story you can tell about why the thing you’re doing is gonna bring money into the company, it’s almost always way bigger, way more interesting, and leads to the right place. Typically when we’re telling cost saving stories and let’s exclude R&D for just a minute, right? Let’s say we’re a big logistics company and we have a lot of trucks and a lot people who drive trucks and who put boxes on trucks. And we have some bit of tech that’s going to route the trucks better so we need fewer trucks or somehow makes it easier to load the trucks and drive the trucks, right. If we tell a story like that, we’re gonna come back and say. We need fewer trucks, we need fewer drivers, we need a fewer truck loading people, right? And so we’re gonna multiply the average salary of those folks by the number of them that we don’t need anymore, and we’re going to get savings to the company. But obviously in the front of that is, we’re are going to have less people. We’re either going to fire folks we have, or we’re not going to hire more folks as we grow. And my observation over and over again is that it’s easy to overestimate how much savings we’re really gonna get, and that it’s really easy to fire a lot more people than the savings we are gonna get especially if we haven’t gotten it yet, right? So here’s a six month project to build some piece of tech that’s gonna save us a lot of money later in the year. But everybody’s believing it enough and the software is gonna arrive on time and be perfect of course. And so we start firing folks before the evidence is in, before the stuff is ready. Yes, it blows up people’s lives and livelihoods, and it’s a terrible product approach. So I’m always much more cautious with these cost saving stories because I understand that it’s easy to overestimate and it is easy to fire people, at least in, well not so much in Europe, but certainly in North America, right? It’s easy fire people and it really blows up folks’ lives. And so I’m much more willing to go out on a limb and talk about revenue in a way that’s a little, aggressive than to talk about cost savings in a way that’s aggressive, because the human cost is really high. And I guess just because, you know, if anybody read the headlines last week about some particular CEO of a tech company who fired 40% of all the employees of his company, because he’s pretty sure that AI is going to replace them all. I really, really hope that he’s already seeing that savings, because once you let 40% go,

Sean Murray [00:17:26] I wanna ask about another kind of money story because this has been coming up in conversations with me, with clients recently. It’s about retention stories. Yeah, like if we don’t do X, we might lose. Yes. Why?

Rich Mironov [00:17:40] Right, right. I like to tell it the other way. Okay. Let’s take a churn number, right? Churn and retention are mirror images of each other, right, so generally when we measure churn, we say we’re in some consumer software thing, we’re doing music streaming, whatever it is, and 35% of our signed up subscribers drop out every month or every quarter, every year, right? If we ask the question that way, we say, well, what could we do that would reduce the churn rate by two or three or four percent, right? Now, that’s also equivalent saying, what could we do that increases the retention rate by two, or three, or four, percent? And the language that the different companies use tend to fall into one or the other, and they’re the same, but if you’re at a company that talks about churn, you wanna talk about chern reduction. If you’re a company that measures retention, you wanna have to talk about increasing retention. The math is the same. But either way, We want to assert something. We want say, if we made the onboarding process easier and folks got to their aha and their joy moment sooner, we think that would increase retention by, right? Or if we fixed the renewal page such that it actually processed credit cards correctly and let people renew their subscriptions, we think would reduce the churn a lot because folks abandoned it because they can’t figure out how to do the job, right? Either way, you’re talking about some piece of tech or some piece of UI or some peace of training or whatever. But we want to tie it to a guess as to how much churn it reduces or retention increases, because then we can talk about it in money because for every 1% churn we reduce, that’s figure out what your company is, right? 15 million bucks on the top line. And suddenly everyone in the room wants to know how we’re going to reduce churn by 1%. Because 15 million bucks on the top line really got their attention instead of talking about dark patterns and workflows.

Sean Murray [00:19:47] When we talk about retention, are we talking about bottom?

Rich Mironov [00:19:50] No, I think, so generally you measure your total subscription revenue, right? More retention means you have more people who renew. Now, some people divide new accounts from renewing accounts. I think that’s silly. Maybe it doesn’t matter, right? But if we lump all of our subscribers together, we say, look, we’re keeping 72% of them at the annual renewal. If we could keep 78% of the them, 6% more, that would be worth, it’s top line money, right. It’s more dollars in for the subscriptions for what we do.

Sean Murray [00:20:27] So say I’m listening to this podcast and I’m like, this is excellent. I want to start flexing my money story muscle. How do I get started, right? What’s the first thing that I should do?

Rich Mironov [00:20:37] Well, the first thing you should do is buy a copy of the book, I think, right? It’s very short, it’s 88 pages, including all the footnotes and the acknowledgements. It’s an hours read if you go through it, but there are probably 40 or 50 examples in there. And to me, they’re all the same because it’s the same three numbers we’re multiplying. But again, market entry story, new customer acquisition story, I’ve grouped them in a way that you might only go to one of those sections, say, okay, I’m in the. Subscription software business, so the upsell and the retention are the two I care about. I can skip the other four. So let me read through these, and then I’m gonna take a, does anybody still use paper and pencil? Whatever, right? Whatever it is that we use, and I’m going to try to think of the three numbers, because it’s no more than three, two of which I already know, and I am going to see if I can multiply three numbers together and see what I get, right. Nobody gets it right on the first time or the second time. I’ve got a whole bunch of blog posts, there’s a whole lot of other folks out there who can help with this, but like anything else, in the privacy of your own office or whatever it is, you try it out yourself and you see what happens. And you get it wrong the first time and you’re terrified because as a private person you believe in accuracy, right? And this is wildly inaccurate. If we can get within a factor of six, I think you’re doing pretty well.

Sean Murray [00:21:58] If you so say you’re using your money stories for the first time and you have that executive audience that we’re hoping to get because that’s wants to hear these stories. If you’re doing it for the first time, is that something that you prep that audience for? Well, I would just

Rich Mironov [00:22:12] I would do neither of those things. Okay. Okay, so so let’s say I’m the product manager on this particular product I would first try to socialize that with my peers I would bring it to my marketing counterpart or my product marketing counterpart and I’d Walk him or her through it and say look. I know this is wrong Well, I know two numbers are right and the third number I made up Let me walk you through the logic and give me a hint higher lower and give you a reason, right? I’d go to sales. I’d got to support I’d find the good folks in there who want to get the right answer and will help me. Right. Because the first time I’m going to do it, it’s wrong. You know, I don’t know if it’s way higher, it was way long, but it’s raw. Right? And that also gives me some ammunition. Now, by the way, I would also run it up my organizational chain. If there’s a director or a VP, I’d want to run it past them and ask them the questions of who in that executive meeting is going to be interested in care and what reactions I’m going to get. Right, I wouldn’t walk into an executive meeting cold with any of this, right? But if I’ve socialized it with some of my peers who work for those executives, by the way, when I get slammed and somebody says, oh, come on, we’ve never had a campaign that got us four and a half or five or six or 7% conversion, I can say, well, I actually sat with this really, really smart person in your marketing department, Mr. Ms. Marketing VP. Who told me about these three campaigns that I was really impressed that you guys ran that had 8% returns, right? And I don’t think we can get eight, I’d put five down here, because whatever, but you have really, really smart folks who’ve done better than this, right. Now, first of all, I’ve praised the people who work for them and who help me and who I need. And second of all I brought some internal evidence of what we’ve been able to accomplish, right, whenever I’m doing this I use the we word. Not the I word, nobody cares about me. And so if I’ve socialized at the doer level, at the IC level, now I’m ready to trot it up the line a little bit, right? And the other thing that I always recommend is bring a bucket of humility with you, okay? First couple of times you do this with the executive audience, you say, I say, I know this number, I know that number. The third one is a wild guess. It’s my best estimate. If anybody in the room has a better idea, I’m going with yours. But stick with me long enough to let me talk you through it, and then let’s see what the temperature in the room is. Because I know that I’m not accurate here, and the smart folks in that room know I’m accurate, but we have to get past that to talk about what’s real in the future. And by the way, I don’t know if you guys know this, it’s really hard to predict the future,

Dan Sharp [00:24:59] So I could also testify that the book is a really great read. I mean, I read it and I could hear you talking, Rich. So that was fun. Audio version coming later. Yeah, well, one of the things that I thought was interesting with how you structure the stories is like for each story type, you have a things to watch for, right? Which kind of get into the complexities of those scenarios. If you just kind of talk through us, what that looks like and how that’s sure. Full morning.

Rich Mironov [00:25:26] Yeah, and I and I tried to do different what to watch for is for different things, right? So for instance, if I’m looking at the upsell stories, right, one of the things to watch for is, it’s easy to think of all your users in one big lump or segment, right. But it might be that we’re thinking about your bronze users, the 25,000 of them, that some of them are in a different geography, or some of the more earlier in their usage patterns, or Some of them have different problems. There’s some sub-segments. And we might say, well, about a quarter of our bronze users have this other qualification. They have multiple employees in multiple cities, right? And so they’re gonna be the ones who really trade up on this feature, which has to do with coordinating across time zones, right. Whereas the ones that were in one location and don’t have a lot of employees won’t care about this feature. So that’s what to watch for, because just grabbing some segment, if you haven’t thought about who in that segment cares about this, who are the users, what are the jobs to be done, what matters, right? So for upsell, that’s one that I put in the things to watch, trying to think, oh, one other one, especially in the upsell in the tiered product strategy. New features don’t sell themselves, mostly. We have to promote them and remind our users and set up demos and do newsletters and there’s a lot of marketing and maybe a lot selling to get anybody to notice that we added a new feature. Me saying I shipped a new feature and therefore it should make money, not so much here. We need to have coordinated with the folks who are going to turn it from some bit of tech that nobody heard about to some bit tech that people are excited about and send us checks. So for each of the sections I tried to think about what was different about upsell versus transactional versus certainly we touched on the people saving stories. They’re all very different. And so the lessons learned, the hard lessons learned from section to section varied because I was trying to highlight what was different about each of those kinds of stories.

Dan Sharp [00:27:35] Yeah. I didn’t think, you know, one of the takeaways I had there and it goes to something Sean and I have been talking about for a while on the pod is I kind of this back to basics approach that like, before you get the money to it, right, you still need to do the product diligence and the thinking about what you’re solving. Absolutely consider that before you start going up the exact team. Be like, yeah, I think I got a $10 million idea here.

Rich Mironov [00:27:53] And you want to be careful because when you say I have a 10 million dollar idea, you know what the executive team does They say congratulations. When can I have it right? Yeah, that’s nice week and next week by the way I’m told that development with under AI development is instant right and customers will instantly adopt it So if you think there’s 10 million dollars, you’ve got until five o’clock today, right? So we want to Be thoughtful about the kinds of stories we tell because we’re gonna be taken at our word and And again. Something that takes six months or 18 months to build, there’s a lot of things that happen in the world between now and then. And, you know, odds are the delivery date’s late anyway, right, because almost always it is. So I always talk about ranges. Look, I think this might be worth between 200,000 and 800,000. Okay, that’s good enough to get a budget. That’s good to figure out where in the ranking it goes. That’s enough to decide if we’re gonna fund it.

Sean Murray [00:28:48] I have a question around your philosophy over the last few years as specifically in software development, how the market, we know that the market’s changing with AI and Dan, there it is right there. Our contractual obligation to say AI, right? So you mentioned early on that one of your motivations for writing the book was because you got sick of traveling and doing the, doing the road show, but what’s changed has anything fundamentally changed or even even maybe not fundamentally maybe is too much of a lead like what’s really changed over the last three or four years of your philosophy around the way that we should be talking about money.

Rich Mironov [00:29:29] I don’t think the philosophy’s changed much at all in the last eight years. But if we look at the last 18 months, back to your AI. So just for historical interest, I worked on some AI stuff in 1979. And by the way, it didn’t really work then either. And those of us who are old enough have been through four or five or six AI winters and AI hype cycles. This one’s real. This one is big. This one has gotten investments like no one’s ever seen on the planet. It’s all going to come crashing down soon, I think. But so there’s no way to avoid it. There’s no where to hide. But if we think about the things that are automatable and the things that we’re going to get assistance on, they’re the same ones that don’t really earn us a place in the game. Okay. So taking notes and doing transcripts is something I used to do by hand and listening to recordings, right? Not value add. Knowing which questions to ask somebody in an interview because they said something interesting and they took us off the standard interview question path is something I’m not willing to automate or outsource or delegate, right? Because the administrative is not important, the setting up calendar is not an important, the searching for keywords may not be important, but over and over again, what I’ve found as a product person is most of what I hear is junk and garbage and obvious and completely not interesting. And a lot of these summaries and analysis packages here will give me the average. They’ll tell me what’s most often said. You know what? I already know what’s often said because I’ve been in hundreds of those conversations, right? And it’s not what’s interesting. What’s really interesting is when the three or four percent of the leading edge folks tell me something I haven’t heard before, and I have to decide if they’re crazy or they’re way ahead of the game or maybe both. And so when somebody says something interesting, I have to be there in real time, when someone says, oh, we never run those reports on Tuesdays, wow, stop, tell me more, right? What’s going on here? So that I can figure out whether there’s a real opportunity here that the generic average interview questions won’t uncover, right. And so, when we think about how we add value as product folks, and I would say designers too, right, it’s really, really understanding the context and seeing the trees from the forest. And spotting the interesting thing, which I think is still something that we have to do ourselves. I think writing specs is getting uninteresting. We may even find that writing code is getting interesting, but I think software architecture is not. I don’t think we outsource software architecture or security architecture or really understand the economics of what we’re doing. If we peel back the things that are low-value add but take a lot of time, I think we we can use the current set of tools to give ourselves 10 or 15 hours back in our week that we better use to be smarter than the other folks who are using the same tools. One other thought, and I’ll give it back to you, which is I’m seeing a tremendous push toward shipping hundreds or thousands of more products, right? I had an idea in the shower, I can code it up, I can push it into my assembly line, I can build a product in four and a half days and name that tune, right. What we’re gonna see, I think, in the next year is. Thousands or tens of thousands of products that are available but not well thought out or aren’t positioned or don’t have a target audience or a reason for being or differentiation. And the buyers and users are going to be so clogged with slop, product slop, it’s going to really, really hard to get the message out on the good stuff. And we’re going to see the failure rate of new products go from 60% to 92%.

Dan Sharp [00:33:23] Yeah, it seems like there is a lot of risk for, like, reputational harm for firing out, y’all kind of quaintly if you would. Only your f-

Rich Mironov [00:33:32] that has a reputation.

Dan Sharp [00:33:34] Touche. You mentioned you mentioned with the AI summers and winters that maybe this AI peak might we might be almost over the summit. What are you hearing or seeing that makes you think that.

Rich Mironov [00:33:48] A couple things. One is I think if you if you look at the aggregate market valuation of the largest few hundred AI pure play companies you’ll find out that in order to maintain that valuation they need to gather more than all the revenue that exists in the universe. Okay there’s not enough money in the economy on this planet to actually support the valuations of most of those companies. So sometime soon and I think we’re a couple or quarters away. A bunch of those companies are gonna miss their numbers, which are already small, and their investors are gonna take them out, and well, it’s not gonna be pretty, right? And so we’re gonna have this moment when, what was the Warren Buffett thing, right, when the tide goes out, you see who’s wearing the swimsuits, right. There will be some great AI companies that survive and thrive and are worth a tremendous amount of money, but the economics of it are really hard to map. The first moment where somebody runs for the door and there’s a bank run here, I think we’re going to see a lot of companies close their doors because they’re spending 10 X or 40 X or 90 X on of their current revenue, keeping their tokens paid for and their engines running and their AI chips going, right? The, the economics of it is upside down, right. Yeah. So, so that’s one. And the other is, I think, Every business publication I’ve seen in the last year or year and a half is describing the huge benefits of putting AI in place and all the people you can replace. I think that’s somewhat overstated and naive and a little too shiny. I think we’re going to find out that we can improve some average company by 30% or 35% but not 90% and that the pressure from investors to CEOs to fire 50% or 60% is gonna be pretty extreme. So I’m worried that those two things are gonna arrive at the same place. Let me go back for a quick historical note, again, because I’m old enough. I remember when browsers arrived in 1995 and Netscape was bigger than any other thing on the planet and every company wanted to hire internet product managers. They didn’t know what they were supposed to do, right? Because they had to know the internet and every country wanted a website. Even though they didn’t know what it was for, right? And a year and a half later, we started hiring product managers based on the product they were gonna be in charge, and they had to understand the internet, but it was a thing, right, it was part of the tech. In 2008, maybe, when the first really smart smartphones arrived, Android and iOS, right. We didn’t call it iOS then. Every company on the planet started hiring mobile product managers and nothing else, and every company on a planet wanted a few apps in the app stores, even though we didn’t even know why. And two or three years later we discovered that mobile was part of most products and that you had to understand your products in your company and your audience and your users and their problems, not just mobile. Now, AI is way bigger than either of those, but at some point soon we’re going to have to start cashing the revenue checks that have been written for the for the stuff we’re using. And we’re gonna rediscover what some of us have seen over and over again, which is that The economics really matters, the revenue really matters. Meeting user needs really matters getting people to pay for this stuff really matters and that it’s not enough to have sprinkled a bunch of AI on top of the things we already ship. Folks are not gonna send us twice as much money because of that.

Sean Murray [00:37:26] The getting the people to pay for it thing is the biggest, that’s the biggest red flag for me.

Rich Mironov [00:37:32] That’s right. And those of us who are using the AI tools intensively are going to have to keep paying for them until the prices get too high. But I’m thinking of end companies. If you use ERP systems, big enterprise systems, are you going to pay 40% more because they have AI-based reporting and AI- based predictive inventory? I think you’re going to demand that because all of your vendors will have them and all of them will be in the same price competitors than they have now. And I didn’t get more budget for my manufacturing company because you did those, right? And so what I see is that very quickly these become the competitive standard, these become must have, these become the table stakes, and I’m not sure they generate a lot more money. Now maybe those companies save a lot because they have fewer people building it, but we’re really in the same place. So blood from a stone.

Sean Murray [00:38:28] A little bit of a somber note to end on, but I think a great business story.

Rich Mironov [00:38:32] And if we come back to, again, my fundamental says, as a product manager, as a project leader, as a chief product officer, I can’t just talk about the tech, right? If I’m gonna get the next five million for really good, you know, agentic tools, right, I have to tell a story to the executive team that it’s gonna earn me 30 million bucks because R&D is not a cost center, it’s a profit center, right. And so. Typically a company needs to see five or six times return on the money that goes into R&D. So if I need another five million and a bunch of data scientists and some really cool folks and very cool tools, I have to tell a money story that says the company is going to earn that back. My replacement gets to tell that story.

Sean Murray [00:39:23] Rich, thank you so much for closing out your third episode. You are, you know, you’ve been such a vital part of what we do with product momentum, so thank you for, for being here. Pleasure. Thanks. I’ve got some takeaways. So one, be able to explain how your product makes money, right? That’s a base. That’s the base. That’s, uh, base thing, right. Speak to your audience, right, so I think when you sit, when you’re talking about, you have to use money language when you talk to the executive suite, that’s you’re knowing your audience right.

Rich Mironov [00:39:52] And when you’re talking to engineers, then that conversation about Dungeons and Dragons is right on target Or whatever it is or a Star Trek versus Star Wars You need to know your different audiences and what they care about and so this is just part of that thought

Sean Murray [00:40:07] Three numbers two, you know and when you pull love that socialize your idea to your team because it’s wrong Right, maybe not all the way wrong, but it’s a little it’s at minimum a little bit wrong Right and then you also have some references that you can use in later conversations right and the one the one thing if anything, there’s that call to action of Go and demand your P&L go figure out what your PNL was for last month last quarter And how can you use that moving forward?

Rich Mironov [00:40:36] And I almost always find that there’s somebody, some relatively junior person in the finance organization who’s waiting to be asked and will happily spend a couple hours going through the P&L with you and feeling smart and helping you. We’re not alone in this. There’s folks all through the company who want us and themselves to succeed. Who are the people who know the answers? Who can help us? Who can support us? And then we can support them in turn.

Sean Murray [00:41:03] You’re the man. Thank you so much for being with us today.

Rich Mironov [00:41:06] It’s a huge pleasure. Go get ’em.