Product Pulse #3: What you can learn from Palworld

Plus: PMs in non-tech companies, Whether Product Is Overrated, Product Growth Benchmarks, the Vision Pro, Google's 2 New 100M subscriptions, and Google's Corporate OKRs

👋 Hi, there. This is Aakash. Product Pulse is a new series covering the latest product and tech news relevant to builders. Have a source? Send me a message.

In Today’s Issue

Words: 2,677 | Est. Reading Time: 13 minutes

1. What you can learn from Palworld: The viral gaming hit dubbed “Pokemon with guns” has dethroned PUBG to become the top concurrent users game on Steam. I examine what lessons product & growth practitioners can take away.

2. Most PMs are in non-tech companies: Examining the data of open PM jobs, only about 27% of open PM jobs are at tech companies. The rest are in other industries. I cover the implications.

3. More talk of Product being overrated: We reflect on the latest in the parade of comments on product. This time, nuanced thoughts from Venture Capitalist Rex Salisbury on whether, as a business focus, it matters in B2B enterprise.

4. Product growth benchmarks: We cover interesting data on the MRR growth, R&D spend, CAC payback, and churn across a variety of B2B and B2C subscription companies.

5. Should you be building for Vision Pro? An exploration of the 600 apps for Vision Pro available on launch, with predictions and analysis of who should be taking a look at what *could* be the next computing platform.

6. Google’s two new 100M subscriptions: Google recently crossed 100M subscribers for both YouTube Premium and Google One. I explore what we can learn from these two giant products.

7. Google’s OKRs: Google has been one of the main drivers of the adoption of OKRs across business. We take a look at its hilariously vague leaked 2024 Corporate Objectives and read between the lines.

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1. What you can learn from Palworld

These are just a few of the insane stats that Palworld - “Pokemon with guns” - has racked up in 2 weeks after launch:

1. 19M players, compared to the last Pokemon game which sold 23M copies

2. Biggest 3rd party game launch in Xbox Game Pass History

3. 2.1M concurrent players on Steam, passing PUBG to #1

And it did all of this on a budget of $6.75M.

By comparison, Bethesda’s Starfield had a budget of $400M and peaked at 30,000 concurrent players on Steam.

The story is inspiring:

• Created by people who were not experts in developing a video game

• Shifted from Unity to Unreal Engine half way through development

• Their balance guy is a 20 year-old who was a cashier at a gas station before

What lessons can product & growth leaders take from the game’s rise?

1. The Japanese ‘DNA Model’

2. It’s worth having fresh eyes even in established markets

3. Platform for going viral + perfect execution = viral formula

Let’s go through each.

Lesson 1 - The Japanese ‘DNA Model’

It’s tempting to think Palworld has no creativity or originality. But it’s actually a really cool example of the Japanese game development concept, the DNA Model.

The DNA model is a cross: you take the gameplay from one genre, and you take the systems from another, and you just cross them. That’s what Palworld does. It takes the gameplay from Fortnite and the systems from Pokemon, and it puts them together.

The mash-up is alive and well.

Lesson 2 - It can be worth having fresh eyes to a market you don’t understand

Here’s what CEO Takuro Mizobe said in his epic blog post (worth reading in full):

Because we were a group of amateurs… I started out not knowing everything…

It was because we were a group of amateurs that we were able to create a method that was not bound by industry conventions.

This is counter-intuitive for most.

It’s tempting to hire people who are perfect fits background-wise for a role. But passion, dedication, and love for what you’re doing mean a lot.

Lesson 3 - Platform for going viral + perfect execution = viral formula

Steam is a viral hit platform. Before Palworld, there was Among Us, Goose Goose Duck, Stardew Valley, and many more.

Palworld took all the lessons from those before them and executed on the template: a niche, with a couple developers, and less than $30.

You need to study your platform and learn from the best.

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2. Most PMs are in non-tech companies

With all the layoff news in the tech industry - much of which we have covered in the Product Pulse - it can seem like there are no open PM jobs.

There are, they just aren’t in tech.

Subscriber Salil Sethi shared interesting data from Prosper Circle on what industries the open PM jobs are actually in:

It’s crazy to see that long tail. Fully 73% of the open PM jobs are outside the tech industry.

And the good news is: these industries are experiencing far less layoffs and job freezes. Instead, their PM orgs just continue to grow.

Of course, the Prosper data set isn’t a full sample of jobs. So it would be interesting to get a sampling of Product Growth readers:

I’ll report back on the results next week.

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You can find templates to expense Product Growth here:

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3. More Talk of Product Being Overrated

Rex Salisbury, former A16Z partner who is now a VC on his own at Cambrian, had a spicy take on why product is overrated:

MBAs, as he points out, tend to think that product is the sexiest role to work in.

But in enterprise fintech, solutions, sales, and customer success actually tend to be closest to the customer.

The same can be said for enterprise software generally. Because the customer is the most important person, the org closest to it tends to be important.

These are interesting points. The takeaways make sense for MBAs.

But for your average PM, this is just a reminder to stay close to your customers. As it relates to the future of PM, it doesn’t really mean much.

Even at enterprise fintechs - like Affirm, where I worked - you still need PMs to do the hard work of translating the voice of the customer into the product, alongside design and engineering.

As a result, this seems like a less frontal attack than the one we discussed last week, when we talked about the ratio of Engineers:PMs potentially decreasing over time.

I mainly include this topic in today’s newsletter to reflect back on that piece. In that piece, I asked you all what ratio of Engineers:PMs you think PM will settle on.

You all tended to agree with me, with a 10:1 ratio of Engineers:PMs the dominant guess:

With everyone from Elon to Rex taking digs at PM, that prediction seems increasingly more likely.