Founders and Product Management: A startup story

Photo by Daria Nepriakhina on Unsplash

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At TheVentureCity’s acceleration program, we work with dozens of early stage startups every year. During a period of 6 months, we work together with startups on an intense but exciting challenge, in which we seek to guide, accompany and provide the necessary tools to reach and grow beyond Product-Market fit. We emphasize data to support decision-making, vision and product strategy, as well as its growth and internationalization. These are the pillars managed mainly by the startup founders, because in most cases, there is not a dedicated role to the area of “Product Management.”

As startups grow, the role of the Product Manager (PM) begins to be a recurring theme in strategic meetings. In many cases, it automatically becomes a necessary and urgent milestone for founders to delegate, and don’t spend enough time understanding in detail why and for what. The problem lies in the fact that in many cases we lose sight of what it really represents: the importance of understanding their responsibility and autonomy, and even more important, to know the rules of the game necessary so that the product management carried out by one individual generates a greater impact in the long term.

I want to share a guide with all the entrepreneurs so that they can detect when and why it is important to incorporate Product Management in the company and how to ensure that it generates the greatest possible impact.

The right time

Each startup is different, so it would be unwise to generically determine a specific time or an approximate size of the team or the PM/developers ratio to hire Product Managers. In our experience, the answer doesn’t come based on a number or ratio, but rather to the founders’ certainty of the strategic value of positioning product management as a growth engine (Product Led Growth). If this happens from the beginning, great!

The founders of startups in our acceleration program find it easy to identify the right moment to approach the start of product management as a discipline due to the emphasis we place on practices considered “product”. However, for those who are not sure whether or not it is the best time, there are a number of indicators that generally mark the need to do so.

Indicators that you need a person to manage product

  • You have a hard time keeping track of what should be prioritized. Your product backlog — list of initiatives, user stories, among others — is messy, without prioritization, illegible or you just don’t have one.
  • Your team — the closest to product development– often reminds you why things are being done. You seem to forget or find it hard to understand the context of what is being developed.
  • You spend a lot of time managing product issues, which although are important to do in the initial phase, becomes the opposite when you stop acting on the many other responsibilities you have as a C-Level. These responsibilities can be funding, team building, business development, and most importantly: “The vision of the company”.
  • Your engineering and design team doesn’t trust your decision-making process. The team is frustrated because you tend to appear “suddenly” with arbitrary and spontaneous decisions.
  • The question How many times a week do you interact with your users to collect insights? makes you uncomfortable. You know it’s important, but you don’t have time to give it the attention it deserves.
  • You often present a product roadmap that transforms as you receive ideas or suggestions from different sources.
  • You recognize that you are no longer in the best position to propose product decisions based on solid data or strong statements.

On the basis that there are sufficient indications of the need to incorporate a product role, it is important to ensure that the founders — especially the CEO — understand what responsibilities and what knowledge will become the pillars of the new team member.

Before the Product Manager

The CEO and other roles of the founding team are expected to have in-depth knowledge of 4 product fundamentals:

  • The users/customers and their problems
  • The data they generate through their interaction with the product/service
  • The industry, trends and competitive framework in which they are immersed
  • The business in all its dimensions (financial, commercial, privacy, security, legal, etc.)

It is natural to find it difficult to incorporate an external profile that must work continuously to respond to these 4 points. In many cases it can even feel intrusive, because after all, it is their baby. So accepting the complementarity and specialization of a third party seems, at the very least, complex.

In any case, the effect of having and relying on someone working in this direction is priceless.

OK, I need product management; can you share a sample job offer for a PM?

Many founders make a serious mistake when it comes to establishing product in the organization: “Let’s hire a Product Manager as soon as possible to prioritize the backlog and manage the designers”, but beware!

So we find the certainty of the need and the scope, but what does it really represent for the founders? Is it simply an incorporation to delegate tasks or is it the beginning of a discipline and vision for the company?

It is at this point that many founders make a serious mistake when it comes to establishing product in the organization: “Let’s hire a Product Manager as soon as possible to prioritize the backlog and manage the designers”.

Beware! Before thinking about the role, the first thing you need to understand is what type of company you want to be moving forward, how we expect the process of discovering what to do, the why and the dynamics of prioritization. In order to do this, it is important to understand why we should talk about product teams before talking about Product Managers.

Product teams

Although many technology companies believe they do Product Management in the organization, even assuming that PMs are executing their role well, this is not always the case. You will assume that I am referring to companies far from Silicon Valley, where the product area is mature and consolidated for many years, but this is not the case. This problem is evident in all technological hubs. I have had the fortune to interact with dozens of startups around the world through “product groups” of different venture capital funds in which this difficulty is still present and few detect it or take action to find a solution in time.

A product team is by definition multifunctional. It is not a department of product managers that as the company grows, so does its structure. Nor is it a department that should include everything that is not evident under the organizational umbrella of the CTO or the CCO (design, customer care, among others). And especially, it is not the team where by chance PMs and designers are included. They are often referred to internally as “the product guys”.

A product team is a way of working, it is a company vision; it is the best tool to build the best product within a framework defined by the limitations and scope of the business, the technology and of course, the needs that our customers have or do not know they have.

We should not confuse product teams with agile development teams. The latter only solves the problem of developing software in an environment of constant change and requires an administration role (usually called Product Owner).

A product team is much more ambitious and to achieve its goal has 3 super powers.

  • Design Thinking — The way to explore and identify problems. Usually its ambassadors are the PMs, designers, and those responsible for usability and research.
  • LEAN — The frame of reference used by the entire team to evaluate hypotheses and beliefs by iteratively learning the way to the expected results. Build, Measure, and Iterate.
  • AGILE — How we adapt software development in a framework of constant change and adjustment.

These powers allow us to welcome uncertainty, to make decisions through experimentation and learning. In short, it is about being adaptive, not predictive.

With these 3 powers as work methodology, designers, developers, customer success agents, sales, among others — under the guidance (not to be confused with reporting to) of the Product Manager — constitute the product team. These groups, sometimes called squads, are created regardless of whether their members belong to other teams — development under the CTO, Business Analyst under the CCO, Product Manager under the CEO or CPO/Head of Product if the structure of the company requires it.

I frequently meet “developers” assigned to projects by the CTO who are limited to developing what “the product guys” (a PM and a designer) usually prioritise. This, unfortunately, is not a product team.

All team members must make use of and share part of the three powers mentioned above. To really integrate them into their operations implies that they participate in all their phases. I place special emphasis on developers. It’s very easy for developers to feel more protected under the umbrella of the CTO and in the event of bad results; they answer “ask the product guys why we did that, I didn’t agree”.

This is an organizational red flag, and is something that is only avoided if it is made clear from the outset that everyone in the team analyzes, identifies and iteratively builds solutions to validate (or not) the hypotheses about a specific problem. If your development team only wants to “code”, you may be limiting its potential in the medium and long term.

Advice on Product Teams

  • In the world of remote working, it is understandable that work does not take place in an office, but when this happens, you should always force the whole team to work side by side. In more than 10 years of experience working with startups, I have never seen anything positive about product teams distributed in organizational islands (developers on one side, sales on the other, Product Managers and designers on the other).
  • Focus on problems vs solutions — One characteristic that differentiates good and not so good product teams is whether they have been built from the beginning to find the best solution to a user experience, not to a “part” of the service (the APP team). I understand that we are at a very early stage of the organization, but it is important to have this reference as the company grows.
  • Every product team must have a dedicated designer. If the size of the company does not allow it, we should avoid this person delivering designs only to the PM and not being part of the team. He/she has to participate in all strategic tasks (Design thinking and user discovery) and tactics (expected activities in a scrum, Kanban, mix environment, among others).
  • Hours of customer/user exposure throughout the team: Jared Spool conducted research where he explains that teams where all members spend at least 2 hours every 6 weeks “exposed” to customers — i.e., receiving support calls, talking to users, observing people in a store — developed more successful products. The effect is very clear. Under this premise the whole team builds a stronger connection with why they are doing what they are doing, they have greater empathy for real customer problems and the focus on relevant solutions increases.

This way of approaching problems is what differentiates a features development team (what we try to prevent) from a product team. But there’s one fundamental element missing — empowerment. Company management must trust and empower the entire interdisciplinary team to find the best solutions to the problems that need to be addressed. This is what really makes product management the most effective tool for success of companies.

Marty Cagan, known worldwide for his excellent book Inspired, explains in one of his articles in a very simple way the concept of empowered teams. I recommend reading it. Link.

Are you willing to do that? Do you trust that the team has the necessary capabilities to find the best solution to the problems that arise from the company’s strategic objectives?

If you are honestly willing to implement this company vision, then we can talk about the role of Product Manager.

CPO, VP of, Head of, Senior, Junior PM. What do I need?

The setup that we find most in early stage startups is that of a CEO, a CTO, some developers, sales and marketing managers. There are very few cases in which from the beginning we find a product manager (omit for a moment if it is CPO, Head of, etc.).

Many startups, regardless of whether or not they have the economic capability to attract the best talent, mistakenly believe that part of the incentive package is the title itself. In other words, many founders believe that by having a CEO and a CTO, and having the certainty of better structuring the product vision, it is time to incorporate a CPO. It is in this type of companies where we must make some clarifications:

  • A CPO is a strategic role. It is usually the one who manages several product teams and a fundamental part of its role is the alignment of the company’s vision and setting up its team. An early stage startup does not require this position.
  • The company will grow, transform, adapt, and in its growth process will have the resources to attract the most appropriate talent for each stage of the company. Companies are people, and there is nothing more unmotivating than lowering its professional category.
  • VP of Product, Head of Product…in the end what the startup needs is for a role to assume the responsibility of leading and building this vision together with the team. If the project is interesting for the candidate and is well paid, calling it Product Manager or Head of Product is irrelevant. As your results are satisfactory you can organically make professional growth by improving your title when the company really grows and requires a greater structure.
  • I am often reached out to recommend product profiles. Several times I have come across the following situation: We are looking for a CPO or Head of product for our growing company, well financed and with a lot of potential, can you help me? When I go deeper into what they expect from the role, they usually answer in a very protective way: “Keep in mind that the CEO and I (C “any letter “O) are very product oriented. Translation: feeling that only they understand the product, they will remain immersed in this work and will not trust the candidate. What usually happens is that a) the candidates pick up on it in time, and prefer not to join, or b) after a few months of work, the Senior profile leaves or is fired for not being a good “fit” in the company.
  • In product the most important thing is that the growth is accompanied by training and monitoring. A Head of Product without a Senior PM, or a Senior PM without a PM, does not make sense.

In short, the role you are looking for is that of a Product Manager.

It is important to point out that in cases where from the beginning you have a CPO or Head of Product role, the important thing to bear in mind is that a CPO is as good as its worst PM. You must delegate and manage, but firstly, provide training.

Again I want to emphasize the importance of not starting this process by hiring a Product Owner. A Product Owner fulfils a small percentage of the responsibilities carried out by a Product Manager. This focuses exclusively on the operation of a development backlog in an Agile environment. I recommend the following article from Mind The Product to understand the differences. Link

Who should this first role report to?

Our recommendation is that regardless of the size and title of the position, the most senior product role should report to the CEO.

It is natural for startups to start with a CTO rather than a PM. The CTO often finds itself in an uncomfortable situation when it feels that its position is no longer so important, when in fact it is quite the opposite. The word is complementarity, not hierarchy. The CTO must mainly analyze and decide on how to develop the initiatives prioritized by the product teams in the most optimal and efficient way.

A CTO, by definition, is going to be biased by the how before the what. Allow me to clarify: I know many CTOs, with great capabilities, even with the hard and soft skills necessary to be great product managers. However, for the company to work, they can’t develop both at the same time. If what generates illusion to the CTO Is Product, do Product Management, but not both. It is not scalable. I recommend the following post about it. Link

What to look for in an interview?

More than questions, I want to share important features of a good PM, so that you try to identify signs of these skills.

Product Managers are often leaders in their organizations, but generally lack direct authority over others, as they are part of other teams in the organization. This implies that Product Managers “earn” their authority and lead mostly by influence. Try to find clues of these capabilities in the candidates.

Being a Product Manager requires wearing several hats. In the world of Product we usually comment among ourselves that much of the time of our work is focused on advocating for those who are not currently in the discussion or meeting: the client, technology, sales, marketing, among others.

Being a Product Manager without having a sense of design doesn’t usually work. Before building a multidisciplinary product team with a dedicated designer, it is the Product Manager’s responsibility to make decisions that even though should not be focused on interface design, they should at least cover usability, information hierarchy, as well as on-boarding optimization which should be his or her responsibility. This is why it is important to find these skills in a potential candidate.

In the world of tech companies — with an important component in software development — Product Managers are able to consolidate the relationship with the development team easier when their context is understood. Although the goal of a PM will never be to “code”, it is incredibly useful to have programming experience. Nowadays programming is within everyone’s reach and although I don’t intend to reduce the importance of a university degree in computer science, I do consider that there are multiple tools that can introduce profiles of other backgrounds (business, design, etc.) to programming. When a PM has programmed and deployed to production something of its own, it offers a great deal of knowledge that will allow it to establish a better communication and relationship with the development team. If the candidate does not have this, it should be included in his training plan to learn how to program. Onemonth.com, for example, is an excellent alternative to offer to these candidates.

The best talent might already be part of your team

In my experience, the most relevant cases of Product Managers that have had an impact on their organizations and subsequently establish themselves as benchmarks in the discipline have the same origin. They are based on the founders’ desire to allow employees with the following characteristics to carry out product management:

  1. Great knowledge of the real needs of customers. Business profiles, customer success, among others.
  2. A performance that always goes beyond your responsibilities. Candidates with curiosity and ambition that try to generate impact wherever they are.
  3. A versatile, curious, collaborative profile. They generally like design, have ease and sensitivity when it comes to analyzing the usability or design of a product or service.
  4. Candidates with an empathic virtue. Fundamental in the Product profile, because rather than generating consensus, the PM generates bridges of communication between stakeholders, keeping the focus on what is really important. To do this, it is necessary to be empathetic.

Although they may not have 100% of the skills and knowledge at the famous intersection between usability/design and business and technology, this can be developed over time.

I remember with great joy at least 3 cases of Product Managers who previously worked in customer success departments and who were given the opportunity to enter the product world with the help of a mentor like a senior product profile or reporting directly to a C-level, which resulted in a complete success.

I understand that in early stage startups, the CEO may not have the time to play this role, but I think it’s important for founders to understand the importance of making product management a growth program within the company from the beginning.

The journey towards growth

Product management is not the only tool of entrepreneurial success, but it is one of the most effective to be relevant, useful and efficient in solving the problems of our users.

More and more established companies, and traditional corporations, begin to incorporate Product in their organizations.

It is up to you to ensure that the ecosystem where your company is encourages this way of doing things. Make product management a fundamental pillar of your company. ?

Some links of interest:

Empowered Product teams by Marty Cagan

Maintaining the empowerment of product teams by Thor Mitchell

Empowering development teams by Roman Pichler