marketing

Masterclass Series: Complete Redesign That Actually Works

Sonos replaced its CEO last week. The company faced significant backlash after launching a redesigned app earlier last year that was plagued by bugs, missing features, and connectivity issues, frustrating customers and tarnishing its reputation. This also led to layoffs, poor sales, and a significant drop in stock price.

While I usually don’t comment on companies I’m not involved with, as a long-time Sonos user, I was very frustrated that the alarm feature I had been relying on to wake me up in the morning for well over a decade disappeared overnight. There were other issues, too.

Throughout my career, I have worked on numerous redesign projects. A fiasco like this is totally avoidable. Today, I am sharing a couple of internal blog posts I wrote for my team (when I was Wattpad’s CEO) about this topic. Of course, these are just examples of the general framework I used. In practice, there are many specific details in each redesign that I helped guide the team through, as frameworks like this are like a hammer. Even the best hammer in the world is still just a hammer. The devil is in the details of how you use it.

These internal blog posts are just some of the hammers and drills in my toolbox that I use to help our portfolio CEOs navigate trade-offs and move fast without breaking things.

Happy reading through a sample of my collection of half a million words!

Note: These two posts have been mildly edited to improve readability.

Blog Post #1 – Subject: Feature Backward Compatibility

I have gone through major technology platform redesigns many times in my career. One problem that arises every single time is backward compatibility.

The reason is easy to understand: users can interact with complex products (such as Wattpad) in a million different ways. There is no way the engineering team could anticipate all the permutations.

There are two common ways to solve this problem. First, run an extensive beta program. This is what big companies like Apple and Microsoft do when they update their operating systems. This approach is also a great way to push some of the responsibility to their app developers. Even with virtually unlimited resources, crowdsourcing from app developers is still a far better approach. However, running an extensive beta program takes a lot of time and resources. Most companies can’t afford to do that.

The other approach is to roll out the changes progressively and incrementally. It is very tempting to make all the big changes at once, roll them out in one shot, and roll the dice. However, I am almost certain that it will backfire. Not only is it a frustrating experience for both users and engineers, but it also makes the project schedule much less predictable and, in most cases, causes the project to take much longer than anticipated.

Next year, when we focus on our redesign to reduce tech debt, don’t forget to set aside some time budget for these edge conditions that are so easily overlooked. Also, think about how we can roll out the changes more incrementally to minimize the negative impact on our users.

Blog Post #2 – Subject: The Reversibility and Consequentiality Framework

The other day, I spoke to the CEO of another consumer internet company. In terms of the scale of its user base, this company is much smaller than Wattpad, but we are still talking about millions of users here.

Like us, this company has been around for over a decade. Not surprisingly, technical debt has been an ongoing concern. A few years ago, the team decided to completely redesign its platform from the ground up. The redesign was a multi-year effort, and the team finally pulled back the curtain a year ago. While it is working fine now, this CEO told me that it took a few months before they fixed all the issues and reimplemented all the “missing” features because many of their users were using the product in “interesting” ways that the new version did not support.

These problems are fairly common when redesigning a new system from the ground up. In practice, it is simply impossible to take all the permutations into account, no matter how carefully you plan. However, if we mess things up, our user base is so large that it might negatively impact (or ruin!) 100 million people’s lives in the worst-case scenario.

On the flip side, over-planning could burn through a lot of unnecessary cycles.

One way or another, we should not let these challenges deter us from moving forward or even slow us down because there are many ways to mitigate potential problems. In principle, ensuring that the rollout is reversible and inconsequential is key.

The former is easy to understand: Can we roll back when things go wrong? Do we have a kill switch when updating our mobile apps? These are best practices that we have already been using.

However, at times, these best practices might not be possible. Can we reduce the consequentiality when rolling out? If the iOS app were completely redesigned, could we do it in smaller chunks, parallel-run the new and old versions at the same time, or try the new version on 0.1% of our users first? If not, could we roll out the new app in a small country first?

Again, our objective is not to avoid any problem at all costs. Our objective is to minimize (but not eliminate) the negative impact when things go wrong—not if things go wrong. Although Wattpad going dark for 100 million people for an extended period of time is not acceptable, in the spirit of speed, it is perfectly okay if we have ways to hit reverse or reduce the impact to only a small percentage of our users. These are not rocket science, but they do require a bit more thoughtfulness because our user base is so large that we can’t simply roll the dice.

P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.

The Three Phases of Building a Great Tech Company: Technology, Product, and Commercialization

There are three distinct phases in the journey of building a great tech company: technology, product, and commercialization. These phases are sequential yet interconnected and sometimes overlap. Needless to say, mastering each is critical to the company’s eventual success. However, it’s important to recognize their differences.

• Building technology is about founders creating what they love. It’s driven by passion and expertise and often leads to groundbreaking innovations.

• Building a product is about creating something others love to use. This is where usability and solving real problems come into focus.

• Commercialization is about building something people will pay for and driving revenue. This phase transforms users into paying customers or finds someone else to pay for it, such as advertisers.

These phases are related but distinct. Great technology doesn’t guarantee anyone will use it, and a widely-used product doesn’t always lead to revenue. I’ve seen many technologists create incredible technologies no one adopts, as well as popular products that fail to commercialize effectively (though it’s rare for a product with tens of millions of users to fail entirely).

For deep tech companies, these phases often have minimal overlap and unfold sequentially. The technology might take years to develop before a usable product emerges, and commercialization may come even later.

In contrast, shallow tech B2B SaaS products often see complete overlap between the phases. For example, a subscription model is typically apparent from the outset, and the tech, product, and commercialization phases blend seamlessly.

Wattpad is also a good example of how these phases can play out differently. Initially, we built our technology and product hand in hand, creating a platform loved by millions of users. However, its commercialization—whether through ads, subscriptions, or movies, the three revenue models we had—was deliberately delayed. Many people assumed we didn’t know how to make money without understanding this counterintuitive approach (but of course, we purposely kept some of our strategies under wraps). This approach allowed us to use “free” as a potent weapon to dominate—and eliminate—our competitors in a winner-takes-all strategy. Operating for years with minimal revenue was clearly the right decision for the market dynamics and our long-term goals. More on this in a separate blog post.

Given this variability, asking, “What is your revenue?” must be thoughtful and context-specific. For some companies, the absence of revenue may be an intentional and brilliant strategy. For others, insufficient revenue could signal serious trouble. It all depends on the company’s stage, strategy, and goals. Understanding the sequence, timing, and specific needs of a business model is crucial for both investors and entrepreneurs. Zero revenue could be a blessing in the right context. On the other hand, pushing for revenue growth—let alone the wrong type of revenue growth—can be fatal, a scenario we’ve seen many times.

At Two Small Fish Ventures, we are very thoughtful and experienced investors. We understand that starting to generate revenue—or choosing not to generate revenue—at the right time is one of the secrets to success that very few people have mastered. We practise what we preach. Over the past two years, all but one of TSF’s investments have been pre-revenue.

No revenue? No problem. In fact, that’s great. Bring them on!

P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.

Portfolio Highlight: #paid

#paid was one of the first investments we made at Two Small Fish Ventures. It’s been over a decade since we backed Bryan and Adam, who were still working out of Toronto Metropolitan University’s DMZ at the time. They had a vision to build a platform that connected creators and brands before “creator” was even a term! Back then, influencer and creator marketing campaigns were just tiny experiments.

A decade later, the creator economy has taken off. It’s now a $24 billion market—an order of magnitude larger than just a few years ago, with no signs of slowing down. The next wave of growth is still ahead as ad spending continues to shift away from traditional media. With the global ad market approaching $800 billion, one thing remains true: ad dollars follow the eyeballs—always. And where are those eyeballs today? On creators and influencers.

Today, #paid has become the world’s dominant platform, with over 100,000 creators onboard. It addresses a significant challenge: most creators don’t know how to connect with brands, especially iconic brands like Disney, Sephora, or IKEA. On the other hand, brands struggle to find the right creators amidst a sea of talent. #paid bridges this gap, acting as the marketplace that makes collaboration easy. They use data-driven insights to determine what makes a successful match, ensuring that both creators and brands can find each other effortlessly.

At #paid, brands and creators work with a dedicated team of experts to build creative strategies backed by research, first-party data, and industry benchmarks. This means campaigns run smoothly, allowing creators to focus on doing what they love—creating—without getting bogged down by administrative tasks.

I’m not just speaking as an investor—I’ve actually run a campaign with #paid as an influencer myself, and I can personally vouch for how seamless the experience was.

If you think #paid is all about TikTok, Snap, or Instagram, think again. Brands leverage #paid content across every platform. Want proof? Just check out the Infiniti TV commercial, which came from a #paid campaign.

How about billboards in major cities like NYC, Toronto, and more? #paid has that covered too.

#paid also brings creators and marketers together in real life. I had the privilege of speaking at their Creator Marketing Summit in NYC a few weeks ago, and I was amazed at how far #paid has come. The summit brought together hundreds of creators and top brand marketers—an impressive showcase of the platform’s evolution.

Looking back on this journey, here are my key takeaways:

• Great companies take a decade to build.

• To create a category leader, especially in winner-take-all markets, the idea has to be bold and often misunderstood at first. Bryan and Adam saw something that few others did, and their first-mover advantage has solidified #paid’s leading position today.

• There’s no such thing as “done.” #paid constantly reinvents itself. Generative AI is another exciting opportunity for step-function growth, and I can’t wait to see what’s next.

Bryan and Adam should be incredibly proud of what they’ve accomplished.

P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.