Manufacturing Currency

It’s fascinating where product lessons come from, especially when you’re not in a mode where you’re expecting it. I was recently listening to a pitch session where various founder were walking through their early-stage start-up ideas, and I got the most interesting tutorial on creating value (where at first glance there isn’t any).

This particular founder had built a gifting app - a deal of the day type service, but with an added twist of personalization. So rather than everyone getting access to buy 1 (or a pre-set # of) discounted item(s), the hook was the item would be guaranteed to delight the person receiving the gift (assuming you had answered the detailed questionnaire correctly). The app had apparently been gaining some traction, and users were raving about the quality of gift recommendations - nothing builds word of mouth better than relieved husbands getting the right gifts for their wives.

Where the conversation got really interesting for me was the business model. Basically, the company was doing a tight dance on pre-buying enough quantity in bulk for the margins to make sense, but not so much that they had excess inventory lying around. In their business, “sold out” was not necessarily a bad thing, but if the average user’s experience always ended in “sold out”, then it would become a problem. Arbitraging on merchandise is not a scalable business model unless (a) you’ve got a monopoly on some hot item or (b) you’re Amazon and scaling hyper-efficiently.

So…how else could this gifting app make money?

Well, after building a user base that has faith that the gifts will be spot-in terms of delight-factor AND creating belief that items will quickly “sell out”, the founder realized his service had unintentionally manufactured a currency that people valued: time!

People were falling over themselves to log into the app at exactly the moment the new gifts dropped, and even a precious few seconds mattered between the have’s and have-not’s. And extra time was something users were willing to pay for. So the concept of buying early access was introduced, and a rewards program was created where regular buyers were gifted chunks of seconds for their loyalty. Coming soon: the ability to trade and transfer time to other users on the platform.

I found the whole setup to be a fascinating spin on value creation and communication…

As always, I’d also love to hear from readers about their attempts at manufacturing currency in their products - please chime in via comments👇 or join the chat via the Substack app.

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further reading / references

• if you work on B2B products and your value metric is revenue, read this (or listen to this)

• it can be really hard to get internal and external alignment on a value metric - see this annotated Twitter exchange as an example

• a common way to create value is for a prodcut to recognize a disjointed workflow and remove steps to simplify

• thinking about value creation and communication is a capability product leaders have to demonstrate to scale the PM mindset ladder

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childish drawing / interpretation