Should Klarna prioritize expanding our merchant network or improving the user experience for existing customers?

Introduction

The trade-off we're examining today is whether Klarna should prioritize expanding our merchant network or improving the user experience for existing customers. This decision is crucial for Klarna's growth strategy and customer satisfaction. I'll analyze this trade-off by considering various factors including business impact, user needs, technical feasibility, and resource allocation.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking our current revenue model might influence this decision. Could you share how our revenue is split between merchant fees and consumer-facing products?

Why it matters: Helps understand financial implications of focusing on merchants vs. users Expected answer: Revenue split is 60% merchant fees, 40% consumer products Impact on approach: Higher merchant revenue would lean towards network expansion

• User Impact: Based on recent user feedback, I'm assuming there are specific pain points in the current user experience. Can you highlight the top 2-3 user complaints we're receiving?

Why it matters: Identifies critical areas for UX improvement Expected answer: Checkout process complexity, payment plan clarity, customer support responsiveness Impact on approach: Severe issues might prioritize UX improvements over network expansion

• Technical Feasibility: Considering our current tech stack, I'm curious about the complexity of integrating new merchants versus implementing UX improvements. How would you compare the technical effort required for these two initiatives?

Why it matters: Assesses resource requirements and potential timeline for each option Expected answer: Merchant integration is more standardized, UX improvements require more custom development Impact on approach: Easier technical implementation might favor that option in the short term

• Resource Allocation: Given our current team structure, I'm wondering about our capacity to handle both initiatives simultaneously. What's our current split of resources between merchant acquisition and product development teams?

Why it matters: Determines if we have the right team composition for either focus Expected answer: 40% merchant acquisition, 60% product development Impact on approach: Significant imbalance might necessitate team restructuring for chosen priority

• Timeline and Urgency: Considering our competitive landscape, I'm thinking about the urgency of each initiative. Are there any upcoming market events or competitor moves that might influence our timeline for either option?

Why it matters: Helps prioritize based on external pressures and opportunities Expected answer: Major competitor launching improved UX in Q3, new market opening for merchant expansion in Q4 Impact on approach: Imminent competitive threats might necessitate faster action on one front