Why Product Management is Everything
This is not a question any entrepreneur likes to get. When I heard it, it hit me like cold water: “Are you a product or a company?” Coming from a bunch of potential investors, it was an unexpectedly profound query. We had some happy customers, zealot employees, and a hit product, but at that point we were mostly chutzpah and Gates-ian ambitions. We were “just a product,” and we had to change to become a big-boy company. In the process of making the jump I realized that, of all things, lowly product management was the key.
As a VC now, I see many companies hit the same speed bumps we did: A product takes off, competition comes in, customers become pickier, and sales slow down. A typical entrepreneur reaction is to spend more on sales and marketing, with the justification being that “more people just need to see what we have, and then of course they will buy.”
So we get more salespeople, jargon-y press releases, shiny brochures, new websites, trade pub ads, SEO, forced social media efforts, and convention tchotchkes. These activities--what I call “easy” marketing—just end up stroking the egos of non-customers: partners, the board, the entrepreneur, or industry pundits.
“Hard” marketing, on the other hand, are activities that authentically engage customers: finding them, grokking their needs, crafting a solution with shoe cobbler-like attention, patiently educating them about your approach, making it easy to buy from you, and being a likable vendor. This “hard” marketing is the essence of what I refer to as product management.
“Well,” you’d be wise to ask, “we’re just an early stage startup and ‘product management’ sounds very GE-ish and bureaucratic. How will I know when I need to get serious about it?”
Product management becomes critical when your prospective customers need you to sell them more than one thing in order to become paying customers.
The moment that happens, a) pat yourself on the back (“Yay, people think we’re big enough for them to buy more than one thing!”) and then b) roll up your sleeves (“Uh oh, what’s our story and messaging and product roadmap and sales training and resource allocation and ... uh oh”).
That’s why I call it “hard” marketing--it’s hard to do product management well. Not because it’s rocket science, but because its execution crosses so many organizational boundaries that good intentions almost never make it out the other side intact.
For example, technology companies often have a mid-level project manager on the development team. CEOs usually point to that person as the product manager, but that person is an operations or development person whose job is to keep engineers on track and make sure they meet their milestones. In return for allowing themselves to be “managed,” engineers use the project manager as a human shield so they don’t have to deal with non-engineers. This is not product management.
Successful product management happens when one team reports to one leader. That leader is responsible for the information loop from customers back to product development and back out to customers. This team must work with:
● Sales people (“What are you hearing from prospective customers or competitors?”)
● Implementation/support staff (“What stumbling blocks are preventing the customer from having an ecstatic experience?”)
● Developers (“If you can’t include X and Y by the release date, can you push X to the next release? Customers don’t need it as much.”)
● Business development (“The customers really need product A to supplement our next upgrade. Can we find a solution for them?”)
● Accounting and legal (“Customers hate our contract because it doesn’t fit their budget processes. Can we change the contract?”)
● Marketing, communications and PR (“Here are the key product points to emphasize as we go to market. Can you do a case study?”)
In early stage companies, all these functions are usually performed by the founder, because he or she usually has the strongest product vision. As the company grows, customer needs expand, and so must the product vision. In most cases customer needs will exceed the founder’s vision, and the organization--not the founder--must have a mechanism in place to accommodate the expansion of customer needs. When a startup masters the art of product management, they can grow beyond the founder and their first product vision and become a real company.
ALAN YING | Managing Director, Polus Capital
Alan is the non-executive chairman of KLAS Enterprises, a leading provider of healthcare information services. He is also the President of Polus Capital, a provider of entrepreneur-friendly capital to growing and profitable businesses based out of Houston. He was formerly the founder and CEO of MercuryMD.