Creating Product Management at a Startup

By Jacques Murphy

The pitfalls involved in creating a Product Management function at a company, along with guidance that will help you be successful in such a vital component.

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from PRODUCT MANAGEMENT CHALLENGES A Newsletter of Tips For Companies that Develop Software

A startup faces many daunting challenges as it moves along the path from an idea on paper to a full-fledged company that can stand on its own. It has to be built out piece by piece, function by function, and there is probably no function where I've seen companies, both brand new and established, struggle more than Product Management.

Some of the biggest barriers to successfully establishing a Product Management function at a company result from misconceptions about what the function is and what Product Managers are supposed to do for their product and company. These misunderstandings lead companies, especially startups, to waste and therefore lose lots of time on false starts and a poor fit between Product Managers and the company's expectations.

Yet building a solid Product Management function is an important step in a startup's development into an ongoing company. Therefore, by understanding what Product Management needs and challenges exist at startups, all individuals with a stake in the company's success – CEOs, management team members, board members, and venture capitalists--can help move the company towards a new level of product competitiveness.

Read on below for a discussion of the pitfalls involved in creating a Product Management function at a company, along with guidance that will help you be successful in such a vital component.

First, Some Questions

Before we talk about common pitfalls and how to work around them, it's helpful to get starting by answering a number of questions:

Q: Has your company ever had a Product Manager to date?

Q: How many Product Managers has your company hired, and how consistent were they in terms of what they worked on and where they were successful?

Q: How does your company define Product Management? Is it consistent across the management team?

Q: How would you rate the effectiveness of the Product Managers you have worked with in your career?

Q: Would the Product Management you have seen at previous companies work at your company? What hurdles would someone find?

Q: What's the most important difference you want a Product Manager to make for your product?

Q: Does your company have a founder who is the product visionary?

Q: Is your company's CEO or President the product visionary?

Q: How would you rate the success of your product in each of the following areas: Development and/or Engineering, Marketing, Sales, Consulting and Implementation, Customer Support and Service, Partners and Business Development, QA, Documentation?

Take a moment to work out your answers to these questions.

Clueless in Seattle (and Silicon Valley)

I'm continually surprised by the widely varying and incomplete grasp of Product Management that you find in software technology companies. Perhaps it's due to how young the industry is, at least relative to such industries as, say, household products. Household products seem to lead the way in terms of sophistication of Product Management organizations and techniques. But then, companies have been offering household products a whole lot longer.

These same startup companies generally have a decent idea of what is involved in marketing, sales, customer service, and certainly software development. Yet they fall down when it comes to a basic understanding of what a Product Manager is expected to do.

CEO of the Product

A Product Manager is like a CEO of the product. CEOs have to be responsible for all aspects of a company. However, they don't get involved hands-on with every piece, because they can't. CEOs choose which areas urgently require their personal focus and efforts, versus which parts of the company use their guidance but are run by a vice president or manager hired to build and run that piece.

In much the same way, a Product Manager focuses only on the product. Unlike the company CEO, this does not involve Finance or Investor Relations, but does involve everything connected to the product: Development, Implementation, Customer Service, Marketing, and Sales. And the amount of time that a Product Manager spends on any given function depends upon whether it requires focus and hands-on involvement or whether it only needs guidance and support.

The Product Manager fills in the gaps in the product effort, whatever they happen to be.

A Customer Solution Every Time

Because Product Managers act like CEOs to cover everything but go deeper where they need to fill gaps, Product Management is a custom solution at every single company. In companies with multiple products whose situations vary widely, there might be a custom Product Management approach for each individual product.

That's what makes it so challenging for the management team when they consider what starting a Product Management function entails. The team struggles with models from other companies, companies where the strengths and weaknesses and business strategy were different and unique. The team usually senses that following those models won't necessarily bring positive results.

There's just no getting around the fact that a Product Manager is going to conduct a uniquely tailored effort, in fact must do so, in order to be successful.

Support Roll to All the Management Team

A CEO cannot completely neglect any single function of his or her company. 'I'll just focus on public relations, I'm not going to worry about financing at all' simply won't work. So too must a Product Manager focus on ALL aspects of the product.

In order to provide coverage for the entire scope of the product, Product Management serves in a supporting role to each member of the management team. Specifically, Product Managers help each area maintain a sharper focus. For example, to support Marketing, the Product Manager makes sure that the collateral, product positioning, and conversations with the press sharpen their focus on product successes, benefits, and capabilities.

Because Product Managers can dive into a level of detail that the CEO and management team cannot, Product Management becomes the link between the top level goals set at the strategic level and obtaining results that truly reflect those goals. This extra set of hands becomes a vital catalyst for growth of the company as it grows beyond the ability of each vice president to micromanage his or her operations.

Naturally, when Product Management supports all aspects of the product, it is less hands-on with some functions than others.

Visionary Founders and CEOs

When startups are founded or led by a visionary who drives the direction and development of the product, they have a Product Management function and don't even know it. It tends to be partially unconscious or automatic, and is usually not called Product Management. The founders or CEO set the product direction.

As the company grows, it begins to feel the effects from the activities that pull the founder or CEO away from setting the product direction. There's a feeling that the direction is being neglected, that the product is not being driven as much as it should, that the product visionary doesn't have the time to follow through on the necessary details.

That's when it's time to create a Product Management function. However, if the company already has one or more product visionaries, there is a tremendous resistance to the idea of establishing a Product Management function that is independent of their guidance. The fear is that the product vision will be taken from them.

Nothing could be further from the truth, once you realize what a Product Manager does as the newly appointed product champion.

Product Champion and What that Really Means

The Product Manager is the product champion, as you no doubt have read in a multitude of job descriptions for Product Managers. When a company already has a product visionary (or two, or three), the Product Manager acts as cheerleader and facilitator for that vision. They do not try to supplant or replace it. The Product Manager makes sure there is a systematic analysis and comparison of new suggestions, and follow-through on the high priority ideas.

Sometimes there is no product visionary at a startup. Perhaps the visionary founder has moved on and the current CEO is focused on the success of the business model more than the specific product vision. In such a case, Product Management not only implements the vision of the product but formulates it as well. Even then, building the product vision is a group effort that pulls in the best input from all sources at the company.

Professional Product Management

The goal of building a separate Product Management function at a company is to achieve a level of Product Management which is professional. Since Product Management is not a college major, or a licensed degree like doctor or lawyer, what constitutes a professional is an open question. This really refers to a mindset where best practices learned from other Product Management specialists are systematically applied. It involves developing a superior level of abilities in all aspects required for Product Management, which can be done with the help of consultants and training in best practices, and may involve certification from such bodies as the PDMA or AIPMM.

The two top priorities where professional Product Managers turn their focus are product requirements and product releases.

Requirements Need to Be Driven

Product requirements are the first area where a startup benefits from professional Product Management. The Product Manager's role is to funnel requirements from all sources, and help systematically analyze and prioritize them. [more about dealing with requirements].

Many of the top requirements will come from the product visionaries. But the Product Manager can help put those ideas through a consistent process to define and polish them, and then help ensure that they get completed and out in the market as intended.

Solid Product Releases

This gets us to the second of the top two priorities: product releases. Product Management defines a company's release schedule and approach. It ensures that all the development of valuable capabilities that flows from a well driven requirements effort makes the right first impression on the market and results in real sales and implementations of the product.

Build Versus Buy and NIH

Product Management can help make another important difference--especially in a startup that is dominated by the Development or Engineering function – by bringing a more impartial and strategic perspective towards how targeted capabilities are actually added to the software. Specifically, Product Management can help drive the Build versus Buy discussions.

The usual and quite natural tendency of Engineering and Development, the folks who are responsible for figuring out how to build things, is to respond to the possibility of using outside technology with NIH, or 'Not Invented Here.' It's up to Product Management to make sure that a consistent ROI is calculated and compared for both the Build and Buy options. Learning how to take advantage of third party technology is usually a vital factor in developing a product that achieves faster momentum than its competitors.

The Usual Startup Requirements

Finally, in addition to all the job requirements specific to Product Management, the usual requirements apply for any managers or employees you intend to bring into a startup. This includes the ability to function in a dynamically changing environment, acting as a one-man-band, often without resources and support. When it comes to expenditures and investments, you're constrained by shallow pockets and the short timeline that many venture capitalists have for cashing out of their investment.

If you can understand the specific purposes and advantages of building a Product Management function, and hire accordingly, your startup stands a much better chance of keeping its product momentum competitive, instead of advancing in fits and starts.

Copyright (c) 2002-2005 Jacques Murphy. All rights reserved.

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About the Authors

  • Jacques Murphy tailors best practices in software product management to your company and products, creating competitive advantage through better product roadmaps, product requirements and product launches. Read more of his articles on this site or on productmanagementchallenges.com or via email at jacquesm@epix.net.


Categories:  Roles & Activities Leadership


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