All is fair in startups and war
I don’t believe in fair fights. I like competitive environments where there are tangible rewards for winners and life really sucks for losing. Building a successful technology startup is hard. Sometimes it can be downright brutal. In spite of our attempt at a feel-good society today where your kids get trophies for just showing up and everyone makes the team, there are still a few remaining high-stakes arenas. War is one, entrepreneurship is the other. I’ve done both. I prefer building startups. Forget sports. How bad do the losers of the Super Bowl, Stanley Cup or NBA finals really have it?
Granted, no one gets killed because their startup crashes and burns, but it’s a deep and life-long scar. The cost for losing? About 4 to 5 years of your life working 14 hour days, being on the road 21 days a month, losing multi-millions of dollars for people who believed in you and sometimes your life savings. Yeah, that will leave a scar. If you’re afraid to fail, please do not become an entrepreneur.
The idea here is to stack the deck. Give your startup the greatest chance to succeed and make it an unfair fight. One of the greatest weapons in the startup war that few people pay attention to or even understand very well is The Mythical Beast of Product Management. In fact, experienced product managers are so prized in Silicon Valley, that they are made co-founders. The big technology firms will often pay an experienced product manager 3X what they pay a good engineer. It’s that valuable. It’s like bringing a grenade launcher to a knife fight. At DataTribe, we embed our product managers into each of our startups at day 1. It makes a massive difference.
Great product management injected into a startup from the day 1 gives such an advantage that often times VC’s give higher valuations simply because it reduces the risk. Yeah, it moves the needle that much.
A product manager acts as the “owner” of the product and is responsible for the go-to-market strategy, product roadmap and feature definition of the product. He or she is also the mediator and final word as they balance the push between the sales team and the engineering team. A good product manager is the product God. Good CEO’s set expectations and get out of their way.
Very few people start in product management. They typically come from marketing, design, and more often than not, had multiple jobs in a company. I have seen some good ones that started in software development, but those are rare, but the most effective. A product manager can sometimes even have P&L responsibilities (profit and loss), but that is also rare.
If I had to boil the main role of a product manager down to one sentence, it would be “A product manager aligns the company with the market and focuses the entire organization to solve the pain point that customers will pay for.” Today, most fast-growing technology companies from Post A Series round all the way to IPO understand that Product Management (including Product Marketing) is the most important job in the company.
The art of product management is not learned at a university or in an on-line course, it’s from years doing product marketing, strategy, and product development in a variety of startups and companies. It takes years to build the expertise and resources required to be an effective PM. This is why they are so hard to find and lure away to your company. It is a resource that is just as rare as it is valuable.
I have been lucky to work with two of the top product managers in the world. Ambika Gadre of DataTribe, Bracket and Cisco and Daniel Weinand from Shopify. Daniel is one of the top product managers and designers in the world, co-founder of Shopify and one of my co-founders in Blue Pacific Studios. Daniel sits in a category even more rare than just product management. He led the product vision and design at Shopify that pivoted from a small snowboarding retailer to a $10 Billion dollar market cap publicly traded company. There are unique characteristics that the top product managers and designers share, such as math, marketing, music and design backgrounds. Daniel is unique in that he is a professional poker player, music composer, computer programmer, artist and even led Shopify’s HR and culture program at the same time he was Chief Designer.
You will learn more in one day from a top product manager than all the blogs, books and conferences stacked together.
A CEO, Sales SVP, CFO and CTO cannot do the job of a product manager – they just cant. They don’t have the skill set. In early stage startups, the founders and early team do the best they can do develop the product, but without this unique skill set to help guide things they would never even know about – there is the danger of completely ripping the guts out of the product after the first year and starting from scratch. I have seen it and unfortunately, had to go through this pain myself. Not pretty or fun.
It’s OK for a founder to start out managing the product development, but the longer a startup goes without seasoned product management, the more time and market traction is lost. When a CEO or founder takes an ego-driven iron fist on the product, the startup ends up building out the product for the wrong reasons, with the wrong features and without understanding what customers actually need and want to pay for.
A good product manager oversees the landscape of everything that touches the product. This includes customer feedback, competitive threats, pricing, sales needs, marketing needs, use data, UI/UX, features and the product roadmap aligned to the market. It’s very complex and requires a high EQ (emotional intelligence).
Startups I see usually end up making several key product mistakes if they don’t have either a strong product mentor or a product manager involved day-to-day.
- A solution looking for a problem. This is where product-market fit, go to market strategy, competitive intelligence and customer interaction are lacking or non-existent. If you don’t take the time to interact with customers and learn the market, you already lost.
- Feature rich and function poor. Without experience building a MVP (minimum viable product) that focuses like a laser on the core pain point you are solving, you end up with losing the value proposition among features that YOU thought the customer would want. You lost.
- A one-off. I see this a lot. You have a relationship with one customer and you build to what they tell you, then you wake up a few months later and find out no other customers needs all the “bling” you build for the sole customer. This is a one-off. Painful.
- The Good Idea Fairy. Perfection is the enemy of progress here and time is your enemy. I see startups that spend 10 months building an MVP because they are afraid that it’s not perfect. You just burned 6-7 months of cash. UI/UX, pretty colors and lots of features are poison to an MVP. Keep it simple; keep it focused on doing one or two things well. Your job is to get the customer to buy into your product vision, not what the MVP is today.
Experienced product management is one of the few secrets that can literally make or break a startup. In cyber security and enterprise software, the best technology only wins about 60% of the time. I see better funded startups with a crappy product spend $1M a year on marketing, sales and slideware gain customer traction over better products all the time. This doesn’t last in the long-term, but gives them the time to catch up on quality and performance. The ability to align the product with the market need, articulate your vision and execute with simplicity –combined with strong go-to-market strategy is what builds $100M revenue companies.
Good product management and design can be the difference between winning and losing.
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