In a technology startup company there are many functions that are deemed “critical”. Unless the company is heavily funded – probably by institutional capital – even some of the most critical functions are often not individually staffed in the beginning. Much of the time a founder or early employee splits time between several functions, doing the best he or she can.
While not ideal, this is often necessary in the startup world and in many cases things turn out just fine in the end. One of the functions that I consider critical to long run success–but often isn’t individually staffed at the startup phase–is product management. In reality, most early stage companies don’t even consider product management to be a role that is critical to fill early on–and worst case–maybe ever. This is a topic near-and-dear to my heart, as I started my tech industry career in a product management role and faced the decision of when to hire full-time product management staff as a startup CEO.
My definition of product management
First I should explain how I define what a product manager is, as folks use this label for a variety of roles in a company. I use what I believe is a pretty classical definition. In my world, a product manager resides in the marketing department. It’s helpful and often very important that the product manager has enough technical savvy to credibly engage with the product developers, but a product manager doesn’t necessarily need to have an engineering or software development background to be successful.
I also tend to use the terms product management and product marketing interchangeably. Product management has two inter-related, but distinct roles: as a Product Planner for new products and as a Product Marketer of current products. His or her primary product planning focus is to ensure that products developed by the developers or engineers actually meet the needs of a specific target market. The primary product marketing focus is controlling the marketing mix to optimize the ROI of the whole product portfolio.
The product manager needs a very different skill set from developers and is primarily outwardly focused, on understanding the marketplace and customer. They do need to have enough technical capacity to be able to match markets/target customers with the core technologies and development capabilities within their company. Lastly, in most cases the developers don’t work directly for product management (or vice versa). The relationship between a product manager and the lead development manager in planning a new product should be that of a give-and-take, collaborative approach. I often call this relationship a “two-headed-monster”, although I realize this is a very inelegant term most don’t want to be part of!
Too early for product management?
So how long can you get away without having a full-time product manager as defined above? In most cases, in a startup tech company the original product idea has come from one or more of the founders. Because of this, they are very often experts on the technology being developed, or insiders in market the product is targeted at. Even if founders and senior early stage management may define themselves very differently, they often have skills that can at least partially fill the critical roles of a product manager. So early on in the life of a startup when the complexity of the company is rather low – usually a single product focused on a single customer – it’s possible to successfully utilize a menagerie of folks who together fulfill the product management role. Now this doesn’t always work out; I see plenty of startups fail where stronger product management skills may have made the difference. But companies do make it past this phase a fair percentage of the time.
Unfortunately “too late” is something that usually sneaks up on an early stage company. Sometimes chaos has ensued, or at the very least things aren’t going all that well. For example, developers are making all the feature decisions in a vacuum (or becoming amateur marketers!) because there isn’t anyone in the company with the marketing skills or bandwidth to serve as the separate “voice of the customer”. Or planning and development of new products is going fine, but current products are foundering in the market because of those same bandwidth limitations, or a lack of product marketing expertise (pricing, promotion, distribution, etc.) because it hasn’t been brought into the company. Maybe up to this point both new product planning and current product marketing were being handled capably by the patchwork of time-shared executives. But now instead of an initial single product or two, there are now 3 or 4 current product and more in the planning phase – possibly aimed at different target markets. Important things aren’t getting done because there just isn’t enough appropriately-skilled bandwidth to go around.
When Product Management MUST be implemented
If you recognize any of the situations described in the previous paragraph, it’s past time for dedicated product management. But if you’d like to avoid the chaos described above when you’re too late implementing a separate product management function, there are some operational situations that may serve as warning signs if you want to avoid waiting too long:
- Newly release products are receiving a lukewarm or cool market reception
- Sales of existing products are stagnating before their time
- There are multiple products being developed that are based on different technologies, or several products are aimed at different target customers.
- IN AGGREGATE the founding management team just can’t (or just can’t any longer) fulfill all of the critical product management roles, including current and future products.
- There are an increasing number of new products being planned in the development pipeline as well as several existing products in the market to be managed
- One particular product is a very important revenue source to the company by itself and demands highly-focused attention
It’s important to note that the first full-time product manager in a company may not be dedicated to a SINGLE product. The first product manager may in fact be in charge of several products. But until you have an employee dedicated SOLELY to being a product manager–whether of one or many products–you haven’t really implemented a product management function in the company.
In an ideal world there would be a product manager in every tech startup from the very beginning, but this is often not feasible financially. I’ve laid out above some of the key ways to make sure this initial lack of full-time product management doesn’t trip you up as you grow. What’s your view the evolution of product management in a tech startup? Post a comments below to fill us in on your thoughts.
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