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Product Talk

Kill Your Darlings

22 min episode · 2 min read
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Episode

22 min

Read time

2 min

Topics

Remote Work, Investing, Startups

AI-Generated Summary

Key Takeaways

  • The Flatline Trap: A product generating revenue but showing zero growth is more dangerous than a failing product, because it consumes team resources while masking the absence of true product-market fit. Teams mistake stability for success, preventing investment in higher-potential experiments. Sustained flatline growth is the signal to begin sunsetting conversations, not reassurance.
  • McKinsey Horizon Model for Portfolio Decisions: Structure your product portfolio into three buckets: H1 covers current revenue lines, H2 covers investments maturing within one to two years to replace H1, and H3 covers three-to-five-year bets. When sunsetting an H1 product, H2 experiments should already be ready to graduate, preventing revenue gaps and reactive decision-making.
  • Sunsetting Column in Product Reviews: Add a dedicated sunsetting column to your product portfolio board. Reviewing it regularly — Teresa does this annually — forces the explicit question of what is no longer growing. This structures the conversation before a crisis forces it, giving teams time to reallocate people and plan transitions rather than react under pressure.
  • Portfolio Decisions Belong One Level Up: The team managing a product is not the right group to decide whether it should be retired. Sunsetting is a portfolio-level decision requiring a broader view of resource allocation and strategic fit. Product leaders must own this conversation, removing the emotional conflict of interest that makes individual teams resistant to discontinuing their own work.
  • Selective Customer Design via Pricing Structure: Teresa eliminated monthly subscriptions entirely, moving to annual-only memberships at producttalk.org to filter out low-commitment users who asked surface-level questions without engaging with existing content. This deliberately limits growth but improves customer quality and alignment. Pricing structure can function as a customer selection mechanism, not just a revenue lever.

What It Covers

Teresa Torres and Petra Ville examine when to discontinue stable but stagnant products, using Teresa's decision to cut 40% of her revenue by sunsetting deep-dive courses and a $19/month Slack community, and introduce the McKinsey Horizon model as a portfolio management framework for product teams.

Key Questions Answered

  • The Flatline Trap: A product generating revenue but showing zero growth is more dangerous than a failing product, because it consumes team resources while masking the absence of true product-market fit. Teams mistake stability for success, preventing investment in higher-potential experiments. Sustained flatline growth is the signal to begin sunsetting conversations, not reassurance.
  • McKinsey Horizon Model for Portfolio Decisions: Structure your product portfolio into three buckets: H1 covers current revenue lines, H2 covers investments maturing within one to two years to replace H1, and H3 covers three-to-five-year bets. When sunsetting an H1 product, H2 experiments should already be ready to graduate, preventing revenue gaps and reactive decision-making.
  • Sunsetting Column in Product Reviews: Add a dedicated sunsetting column to your product portfolio board. Reviewing it regularly — Teresa does this annually — forces the explicit question of what is no longer growing. This structures the conversation before a crisis forces it, giving teams time to reallocate people and plan transitions rather than react under pressure.
  • Portfolio Decisions Belong One Level Up: The team managing a product is not the right group to decide whether it should be retired. Sunsetting is a portfolio-level decision requiring a broader view of resource allocation and strategic fit. Product leaders must own this conversation, removing the emotional conflict of interest that makes individual teams resistant to discontinuing their own work.
  • Selective Customer Design via Pricing Structure: Teresa eliminated monthly subscriptions entirely, moving to annual-only memberships at producttalk.org to filter out low-commitment users who asked surface-level questions without engaging with existing content. This deliberately limits growth but improves customer quality and alignment. Pricing structure can function as a customer selection mechanism, not just a revenue lever.

Notable Moment

Teresa revealed she cut 40% of her total revenue by discontinuing her deep-dive course line — a product that was profitable and had instructor dependencies. Her reasoning was that years of recurring operational problems and flat growth signaled the market had shifted, making space for new experiments the only viable path forward.

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Episode Transcript

Hi, folks. This is all things product with Petra Ville And Theresa Schwartz. And we're so happy you're here. Theresa, you told me that you decided to kill some of the things in your business that you consider mediocre. I would love to hear more about that and why it is important to sometimes kill your darlings. Yeah. This is a big one. So I'm gonna start with, like, the general, and then I'll apply it to the specific. So we all hear things like you'll know you have product market fit when you have it. When people buy And I've heard this a million times in my career. I'm sorry? When people buy stuff. So you know you have product market fit when people are willing to pay for something. Yeah. But there I think there's this this is something I experienced working at start ups and even in my own business. You might get some people buying something, and it might even, like, be stable, but it's not growing or it's growing very slowly. Right? We have some of these terms like zombie companies where, like, they're stable enough. They have enough revenue to survive, but they're not really growing. Oh, cash cow. It's like you get product. Well, I would say a cash cow is probably fine because it's bringing in a lot of cash. Right? Okay. Fair enough. I think there's this idea of, we know that, like like, we can try to convince ourselves we have product market fit because people are buying our product and it is they may even really like our product. But maybe we've maybe there's just not enough people like that. So, like, the product is good. People are happy with the product, but it's just kinda limping along because our target market is too small or the people that it resonates with is too small. And I think, like, we start to get a signal that, like, oh, people are buying this. It looks positive. It may even grow for a little while, and then maybe something changes in the market and you lose that product market fit or you never quite had that product market fit. You had some early fans. And so, like, I think we all know this. Like, we all know intuitively in our head and, like, we read things like, you'll know you have product market fit when you have it. For anybody who's worked at a company that was like a rocket ship, like, you're growing so fast. Everything is breaking. You can barely keep up. Like, there's no question you have product market fit. I think a lot of us have worked in organizations where that's not what we experienced. We experienced this more like, it's a viable business. It's good news. Or not. Business. Yeah. Yeah. Like, you're surviving, but it's I think that's actually a harder situation where you have some success, but it's not necessarily meeting your goals or …

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  • by McKinsey

    introduce the McKinsey Horizon model as a portfolio management framework for product teams. Structure your product portfolio into three buckets: H1 covers current revenue lines, H2 covers investments maturing within one to two years to replace H1, and H3 covers three-to-five-year bets.

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