Anyone familiar with the Western corporate world has a sense of the key functions at a firm. There’s the C-suite with the leadership team, finance, marketing, sales, operations, and engineering.
But one additional function that’s vital to the success of any startup is product management.
What’s a product manager?
Product management spans three key questions: what, how and why?
What: Strategy generates options and selects among them for the good or service to offer the customer.
How: Execution develops and follows through with the plan to bring this good or service to market.
Why: User engagement measures and reflects upon why the product is valuable to customers in the context of the way they operate, generally.
It is a cycle to be repeated iteratively, central to the startup’s growth and continued existence.
And it may be the most difficult and important job in the company. A good product manager can make a startup; a bad one can kill it.
Why is it so important?
As the firm’s glue, the product manager straddles multiple groups, sitting at the intersection of all the key functions.
Product managers have a tricky role. While they’re accountable, they don’t have authority.
They can’t order the engineering group to build a product in a certain way, or to emphasize one feature over another. Often, a product manager does not have the heft to allocate more resources to a particular project by instructing the finance department to make it so. They cannot direct marketing or sales to align with their vision.
The product manager must influence without control. They must lead.
Leading without authority
Everything they do involves trade-offs between competing interests for limited resources. The product manager’s role is to work with the group to make these hard decisions for maximum benefit to the broader organization.
Naturally, there are conflicts, and product managers must position any conflict so that it’s about plans and ideas, not personalities or groups.
Not only must they be able to stand in the shoes of all the different constituents with genuine empathy, but they must also do so with sufficient substantive knowledge to understand and appropriately weigh the technical choices that need to be made. Which products should have the greatest priority? What kind of development resources will this require? What do they need to sacrifice, in terms of other projects, to make this one happen? What is the timeline for execution?
They need enough expertise to talk to finance and to engineering with equal judgment and parallel impact.
Product managers have to be generalists, as many leaders need to be. They must be knowledgeable enough to be credible with specialists from a wide variety of areas.
Developing a shared vision
A product manager leads by getting the team to coalesce around a shared vision for a product with evidence of consumer demand and negotiating a development plan with all the associated trade-offs so that everyone agrees on the priorities.
The team has the same expectations because they have concurred on them under the guidance of the product manager.
Everyone must understand the plan to the point that decision-making can be decentralized for many of the selections that will need to be made along the way.
A successful outcome in this extraordinarily difficult role means that the product manager identifies the right good or service to develop, and then creates and leads a team to make it happen given all of the various constraints on resources and time.
This is why understanding the product manager role is vital to assessing the startup.
This is the ninth of a series of articles about startups and venture capital, where we’ll explain some of the concepts people might see discussed in the press. We’ll talk about how VCs decide on whether to invest and at what price in an upcoming article. We’d love to hear your feedback.