User journey guides bottom-up pricing; pandemic fuels consolidation in healthcare; Amazon makes more from ads than AWS?

Hello, welcome to this week’s Double Take on product, health tech, and digital media. 

It’s in our nature to look for purpose in things and believe “it’s all about us”. This is a source to unnecessary worry and a blind spot to new ideas. Explore theories that don’t center on you. Revisiting a classic Paul Graham piece, “don’t see purpose where there isn’t, see randomness”. 

If you’re looking for bite-sized audio wisdom, NFX’s “founder’s list” audio essays are fantastic. These are famous memos, for example, Kevin Kwok’s “Why Figma wins”, Julie Zhuo’s “How to be strategic”, read by NFX. No interview small talk, just packed with great insights. Josh’s Pressclub is becoming a favorite Clubhouse program. He’s also recently started recording/sharing the sessions in podcast format; the last one was about remote work with Stuart Butterfield.

✨ Inspiration

It's better to be absolutely ridiculous than absolutely boring.

― Marilyn Monroe

Now onto the regular programming 👇


💻 Product

  • Summary of Brandon Chu’s AMA on Lenny’s PM Fundamental Course. There are some great nuggets on how to be a really good PM, including leveraging writing for clarity, acting as a communication API, building trust, collaborating effectively, and more.

  • Building Products at Airbnb. AirBnB’s product culture has a strong storytelling focus. Inspired by Disney, ideas are presented in storyboards. Brian Chesky encourages PMs to think about the perfect experience without constraint, although the risk here is being lacking in execution to match the vision. The types of PM that will succeed at Airbnb are ones who are ambitious, and can build influence. 

  • User journey guides bottom up pricing & packaging. A brilliant guide (with examples) for how B2B SaaS companies can map the user journey to the right pricing & packaging tiers. There are typically 4 tiers to the journey: 1. Organic product use (usually freemium); 2. Prosumer; 3. Collaborative use; 4. Enterprise package. Each tier serves different functions, awareness and acquisition for the earlier tiers and monetization for the later. 

  • Next generation revenue centers will be customer success and support. As product-led organizations explore newer GTM motions (like self serve) and keep lean marketing and sales, customer success and support lands greater responsibility for fueling customer renewal and expansion. Product led means an emphasis on self-served onboarding and usage tracking to inform the roadmap. As reliance on the personal enterprise sales vehicle decreases, customers will rely on customer success for the relationship and customer support for product usage questions. 


📠 Health Tech

  • The pandemic will fuel consolidation in health care. Consolidation in the health care sector has spread to vertical mergers at multiple levels of the supply chain. The concern is that consolidation reduced competition and increases prices. Small transactions including consolidation of provider organizations and insurer’s acquisition of physician practices (payvider) are currently escaping FTC scrutiny. The recommendation here is closely evaluate the side effects of these activities on quality, access, and cost of care.

  • Analysis on Medicare Advantage from MedPAC’s report to the Congress. Dan O’Neill’s Tweet storm breaks down MedPAC’s 500+ page report of recommendations for Medicare Advantage and FFS to the Congress. MA plans are more profitable than FFS. This year presents more MA plans available than any other year. MA plans expand revenue through risk adjustment coding. Multiple startups/SPACs (like Clover, Oak...) are showing this trend with longer term members. MA plans provide new opportunities for new entrants, though it’s not good news to see them costing more than Medicare without proving significant quality improvement.

  • CMS is launching the core Direct Contracting Model next month. Direct contracting model is part of the transition from fee-for-service models towards value-based care. It’s where health plans directly contract with provider groups for a specific patient population and share upside and downside risk with capitated payment. From a16z’s bio newsletter, the Direct Contracting programs is meant to bring accountability for quality and cost when care is often delivered across fragmented provider groups. This model brings new opportunities for new entrants as it presents lower barrier to entry and more flexibility on benefit design. 


📣 Media

  • Does Amazon make more from ads than AWS? Amazon is rolling in $20+ billion in “Ads and other” revenue in 2020. While it doesn’t report profit in this category, it’s an educated guess that it’s likely a significant operating margin, similar to that of AWS. When so many people spend so much time on its site, the retailer becomes a media owner “by accident”. 

  • Disney+, Netflix Hikes Bring Cost of Cord-Cutter Package to $92. Disney+ and Netflix recently raised prices. If you add up all the major streaming services including Netflix, Amazon, Disney+... it  comes to $92, which is just about the same as a typical cable TV package. Consumers are stacking these services. A recent survey showed that around 1/3 have four or more streaming subscriptions. People love the choices and are bundling bundles.

Thanks for reading! If you liked this edition, hit the 🖤 above, it helps others see it :) Let’s chat more on Twitter.
- Christine