Good to Great: Chargebee’s Product Operating Model

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The following transcript has been altered for readability.

Introduction

Sridhar Nagarajan: Good morning, everyone. Welcome to the CPO Series hosted by Dragonboat. As you’re probably aware, Dragonboat hosts the CPO Series and has been doing so for the last couple of years, where we have Chief Product Officers from all over the industry joining us to share their knowledge.

Just a little bit of intro before we dive in and I introduce our guest for today. Dragonboat enables product leaders to run their product operating platform model on a single platform. It’s been adopted by over 4,000 teams in multiple countries, managing over $48 billion in annual product investments.

Thank you again, and welcome to this session. I’m Sridhar, Chief Customer Officer at Dragonboat, and with me today, I have Kishore Konakanchi, Chief Product Officer at Chargebee. Kishore is also the former head of checkout product at PayPal, where he worked for 18 years. He’s a seasoned product leader who thrives on the challenge of developing products at scale. Today, we’re hosting him to learn from his ability to create dynamic teams, align them around a shared vision, and energize them to execute effectively.

Sridhar Nagarajan: Welcome, Kishore, to today’s session.

Kishore Konakanchi: Thanks for having me.

Setting the Stage

Sridhar Nagarajan: Today, we’re talking about “Good to Great” and Chargebee’s product operating model. Without further ado, let me hand off to Kishore. This will be an interactive session, so feel free to ask questions as they come along. We’ll try to answer them interactively, and if not, we’ll address them at the end of the session. Kishore, let’s start by talking about Chargebee and why you do what you do.

Kishore Konakanchi: Thank you, Sridhar, and thanks, everyone, for joining us. At Chargebee, we’re crafting the future of subscription revenue. Businesses are increasingly looking for predictable revenue streams, understanding customer behavior and usage patterns, and retaining their customers. Subscriptions provide a powerful way to achieve these goals, and that’s what we do at Chargebee—we focus on creating revenue growth for our customers.

Product Principles at Chargebee

Sridhar Nagarajan: That’s excellent. So, as we think about the evolution of your approach, let’s discuss your product principles and how they’ve shaped both your model and customer outcomes.

Kishore Konakanchi: At Chargebee, we’ve established four core product principles that guide everything we build:

1. Engineer for Customer Outcomes: We focus on helping customers achieve their ARR goals, retain consumers, and expand the lifetime value of existing customers.
2. Simplicity and Intuitiveness: Our products prioritize usability, encompassing not only the customer experience but also APIs, documentation, and support processes.
3. Agility and Flexibility: We move fast to enable enterprises like Pratt—a company with 600 global locations—to launch subscription programs in just seven weeks.
4. Open and Integrated Platforms: We partner with CRM, ERP, and payment systems to create a cohesive ecosystem for our customers.

Aligning Teams Around the Customer Lifecycle

Sridhar Nagarajan: That’s fascinating. It sounds like these principles require robust structure and alignment. Could you elaborate on how Chargebee organizes its teams to deliver on these principles?

Kishore Konakanchi: Absolutely. We align our teams around the customer lifecycle, which we’ve divided into four key pillars:

1. Customer Acquisition: A cross-functional team of product engineers, designers, and analysts focuses on helping our clients acquire customers.
2. Retention and Growth: This team develops tools like Chargebee’s predictive engagement product to help clients retain existing customers and expand revenue.
3. Scaling Financial Operations: Focused on automating financial workflows and enhancing productivity.
4. Ecosystem Operations: Ensures seamless integration with third-party systems like Salesforce, HubSpot, and multiple tax and payment gateways.

Each team operates cross-functionally, with clear objectives tied to their pillar to maintain alignment and focus.

Strategic Planning and Operating Cadences

Sridhar Nagarajan: Kishore, how do you ensure that these teams stay aligned in terms of both strategic planning and day-to-day execution?

Kishore Konakanchi: Great question. We start the year by defining both customer objectives and business objectives. These include:

• Customer retention rates and customer satisfaction (CSAT) scores.
• Business outcomes like revenue growth and customer acquisition targets.

Once these objectives are set, we develop value creation plans under each objective. Each plan details the programs we will run, along with the input metrics and output metrics to track progress. For instance:

• Scrum teams focus on actionable input metrics like onboarding rates, which directly map to revenue growth or customer satisfaction.

We also establish operating cadences, including bi-weekly and monthly check-ins with cross-functional teams. These cadences ensure we’re tracking progress, identifying roadblocks, and course-correcting as needed.

Defining the Product Operating Model

Audience Question: “When you say product operating model, what does it mean to you? Is it about organizational structure or something more?”

Kishore Konakanchi: To me, it’s more than just structure. A product operating model includes:

1. Objectives and Priorities: Aligning organizational goals with the outcomes we want to drive.
2. Team Structure: Ensuring teams are set up to focus on one or two objectives without diluting attention.
3. Operating Cadences: Establishing regular rhythms to track progress, adjust plans, and stay aligned.

Together, these elements create a cohesive framework that balances strategy, execution, and feedback loops.

Prioritizing Customer Problems Over Features

Sridhar Nagarajan: That’s insightful. I understand that Chargebee has a unique approach to prioritization. Could you share more about that?

Kishore Konakanchi: Of course. Internally, we prioritize customer problems, not features. This has been a significant shift for us. When we plan for a quarter, we focus on:

1. Identifying the customer problems we aim to solve.
2. Determining the scope and solutions required to address those problems.

By focusing on customer problems, we’ve seen higher engagement, better product usage, and stronger customer satisfaction.

Measuring the Impact of the Product Operating Model

Audience Question: “How do you measure the effectiveness or impact of your product operating model?”

Kishore Konakanchi: Great question. The measurement depends on whether we’re addressing a zero-to-one problem (finding product-market fit) or a scaling problem (expanding an established product). Here’s how we approach each:

1. Zero-to-One Problems:
   • Focus on solving high-level problems and discovering product-market fit.
   • Teams operate independently, testing ideas through early access programs with small customer groups.
   • Success is measured by how many innovations can scale into full-fledged products.
2. Scaling Problems:
   • Tight integration between go-to-market (GTM) plans and product roadmaps.
   • Success metrics include customer adoption, retention, and lifetime value (LTV) increases.
   • For example, we track whether new features reduce churn or improve annual contract value (ACV).

By tailoring the operating model to the product’s maturity, we ensure flexibility and effectiveness.

Real-World Customer Impact

Kishore Konakanchi: Let me share some signals that show we’re on the right track with our customers:

1. Faster Pricing Model Launches:
   • Previously, launching a new pricing model took three to four weeks.
   • With AI-driven tools, it now takes just minutes.
2. Improved Productivity:
   • Automation enhancements saved 250+ businesses over 6,000 hours of manual work in financial operations.
3. Accelerated Go-To-Market (GTM) Timelines:
   • Competitors often take six to seven months to integrate a billing system or subscription platform.
   • With Chargebee, enterprises can achieve this in two to three months.

These are measurable outcomes that demonstrate the value of our product principles and operating model.

Communicating the Roadmap

Audience Question: “Do you publish a roadmap to your field teams and customers? If so, at what level of detail?”

Kishore Konakanchi: Yes, but we use an indicative roadmap rather than a locked roadmap:

• Current Quarter: Communicate firm plans and enhancements.
• Future Quarters: Provide directional insights with the caveat that priorities may change.

We focus on the customer problems we aim to solve rather than detailing specific features. This approach helps us stay flexible while maintaining transparency.

Closing Remarks and Audience Engagement

Sridhar Nagarajan: Kishore, thank you for sharing those impactful examples. Before we wrap up, we’d like to engage the audience with a quick poll. Alyssa is going to share it now. The question is: Do you have a product operating model? If so, how do you use it?

We’d love to hear your responses. If you don’t have one yet, are you planning to introduce one within the next year? Feel free to also share any additional details in the chat.

Poll Results and Final Reflections

Sridhar Nagarajan: The results are in—92% of attendees either already have a product operating model or plan to implement one within the next year. That’s fantastic and shows how critical this concept is becoming across industries. Kishore, any thoughts on these results?

Kishore Konakanchi: It’s encouraging to see so many organizations recognizing the value of a product operating model. My advice is to start small—focus on solving key customer problems and iterating from there. Flexibility is key, especially as your teams and products mature.

Upcoming Events and Closing

Sridhar Nagarajan: Before we close, I want to remind everyone about the upcoming webinar in the CPO Series. Shelly Perry will join us on May 7th to discuss optimizing product ROI and connecting various functions across the product organization. Anna has dropped the link in the chat.

Additionally, if you’d like to connect with Kishore, he’s available on LinkedIn, and we encourage you to reach out. We’re also hosting a group demo on April 25th at 8 a.m. PT. Check the QR code on your screen or follow the link in the chat to register.

Thank you, Kishore, for taking the time to share your insights, and thanks to all of you for attending. We’ll see you next time!

Kishore Konakanchi: Thank you for having me. Bye-bye!