Feedback loop velocity: a new way to measure the value of a product team

“If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster”—Stephen R. Covey

This is one of my favorite quotes. And it perfectly applies to product development. Let me explain.

If the product isn't addressing the right market need or if the solution doesn't solve the problem effectively, then no amount of development or features will make the product successful. Every new feature in the wrong direction will only lead to wasted resources and time.

The issue is that traditional product velocity metrics don't take this fundamental idea into account. They measure units of work completed in a given time frame (units of work can be engineer hours, user stories, or story points) but they say nothing about the impact of what was shipped. Did it move the needle? Are customers using it? Are users even aware that it was released?

At Cycle, we believe in a new kind of velocity metric. We call it the feedback loop velocity and it measures the speed and effectiveness of a feedback system. It is calculated as the product of the quantity, quality, and actionability of feedback.

Feedback loop velocity shows how effectively a team captures feedback, processes it, executes actions based on it, and closes the loop by communicating back to the customers. We've found that high feedback loop velocity is usually associated with better product quality, trust, and customer engagement.

The formula for feedback loop velocity is Quantity x Quality x Action, all divided by Effort. The Effort is important because if it's too high, the system collapses. Indeed, any system that forces product folks to spend hours of manual feedback grunt work every week... is doomed to fail.

If acting upon feedback is too time-consuming, it just doesn't get done and feedback velocity goes to zero. Hint: the use of AI is critical here (have a read at this blog post explaining how Cycle automated this whole process with the first self-organizing feedback hub).

In conclusion, it’s very hard for product folks to figure out how to measure the value of the product team. For the lack of a better metric, I'd optimize for feedback loop velocity (which is a leading indicator for Net Revenue Retention).

To increase it, you need to:-talk to customers-connect feedback to delivery workflows-ship at high velocity-close the feedback loop at each release

All good things, right?

If you want to learn more about how to build effective product feedback loops, check out this blog post.