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When and Why Your Startup Needs a Product Manager

Alex Williams

Front-end Developer @ Forward Partners

One of the most important hires you can make as the founder of a startup looking to achieve rapid success is a Product Manager. As you move through your first 12 months you will start with an idea, you’ll validate that idea, turn that idea into a valued product and then scale that idea into a valuable business. A dedicated and user-focused Product Manager will be able to help shepherd your product from initial conception, through first contact with customers, to becoming a rapid success.

In this article I want to outline: what is a Product Manager, why your company needs one, and when you should consider hiring one.

Key Takeaways

  • A Product Manager is responsible for clearly understanding all aspects of your product;
  • From initial discovery of the problem, through to framing a possible solution the Product Manager will shape your product so that it achieves product market fit 
  • Consider hiring a Product Manager within your first 12 months to maximise the benefit that this would bring to your product and increase your chance of long-term success.

What is a Product Manager?

To understand what a Product Manager is you first need to define what we mean by a “product”. A product is a solution to a problem, whether it be a bicycle or a super computer, and in the case of your startup your product is the solution to the problem that your customers are currently facing.

A Product Manager is therefore responsible for understanding all aspects of this product. She will accomplish this by exploring the problem you have your sights set on fixing, testing your proposed solution against a carefully crafted hypothesis, and iterating on the product through small measured changes. In fully understanding the problem landscape the Product Manager will be able to shepherd the product from initial idea to a fully-fleshed out solution to your customers problem.

But wait. Isn’t the founder the Product Manager?

A common point of contention is that the founder is the de facto Product Manager. This happens early on because of constraints on the budget, and later on due to the mistaken idea that the Product Manager needs to be the “CEO of the product”, a sentiment originally espoused by Ben Horowitz of Andreessen Horowitz and often taken out of context. The result of this is that the role and responsibility for managing the product falls to the founder and actual CEO of the company.

Most founders that we meet fall into one of two camps: the technically-minded CTO, or the business-focused CEO. However, in the gap between the business and its technology sits the product. Without experience in building and iterating on a product it is easy to end up with a solution that is technically sound but does not address the customers problem, or makes sense for the business’s bottom line but prices out your key demographic. Product brings these two worlds together to solve the customers problem in an efficient and scalable way.

There are some founders who have a natural inclination towards product, and during the first 12 months perform a key role in shaping the product. However, as their company grows they will find themselves with competing interests on their time and should shift their focus to the strategic side of product, leaving on the ground product management to a dedicated Product Manager.

Moreover, the founder should shape the vision of the company and the strategy for how to fulfil it, while a Product Manager should support the founder by validating her vision and strategy against the market (i.e. proving that the product is the solution to the perceived customer problem). As actual CEO the founder should be driving the company forward while the Product Manager builds on the business goals to create a valuable product for customers.

If a founder’s strengths lie outside of product then separating these two roles as early as possible will distinctly improve the company’s chance of rapid success as it leaves the founder free to focus on strategy (and in the short term, fundraising for a future round of investment) while the Product Manager focuses on continuing to address the changing needs of your customers.
 

Yet what does this look like in practice?

As we mentioned earlier a Product Manager’s primary responsibility is to have a full understanding of the problem landscape so as to provide the best solution for your customers. In practice this means that your Product Manager will be responsible for three main areas of your product: discovery, managing the build of the product, and iterating on the product based on customer feedback. Let’s look at these three areas in a little more detail.
 

The Discovery Phase

As a founder you will undoubtedly have a set of business goals in mind when you consider building a product to address a customer need. Your Product Manager will be responsible for digesting these business goals (and product goals if the company is at a later stage) and undertaking a process of discovery. In straightforward terms discovery is about speaking to your current and potential customers so that you can answer the following four questions:

  1. Why should you build this product?
  2. Who are you building it for?
  3. What exactly are you going to build?
  4. How will you build it?

In practice this involves speaking to your customers to understand their experiences (both positive and negative) and key challenges, and distilling these insights down into accurate customer personas (who are you building for) that are centred on the results of good user research (why are you building it), an understanding of what we need to build in comparison to what would be “nice to have” (what we going to build) and a prioritised list of product goals (how we are going to build it).

In an early stage startup this phase could take 2-4 weeks and involve business goal alignment, customer interviews, stakeholder interviews, creating personas  and the synthesis of all your user research ready for a Design Sprint. A Design Sprint is a five day workshop pioneered by [Jake Knapp at Google Ventures] with the aim of ingesting your user research, quickly iterating through a few ideas, creating a prototype product and testing it with your key market to see if there’s interest. Your Product Manager will contribute to and facilitate the workshop attended by the founder, a designer, and a developer (this will vary depending on the size of the startup team).

Managing the Build

Once discovery has come to a close and you have decided on what to build it will be your Product Managers responsibility to manage the process. With an outline of the solution to your customers’ problem your Product Manager will breakdown the large (a.k.a. Epic) tasks into more manageable tasks or User Stories that capture a piece of value for the user and form the basis of a discussion between your designer and developer on how to build that feature of the product.

Organised in a prioritised backlog the Product Manager will work with the development team (usually in a cadence of one to [two week sprints], see Scrum for more details) to build the product and release it to your customers.

Measure and Iterate

As you will be releasing your product to your customers in small releases your Product Manager will have the chance to gather quantitative data (product analytics) and qualitative feedback (user interviews) after each release. This will tell you whether the product is addressing your business goals and will help to identify areas where your product is struggling to solve your customers problems.  

This is the third pillar of the Product Manager, measure and iterate. With each new release comes a chance to gather new data and make small changes to the product in order to improve conversion rates or increase engagement with your product. This process of measuring your customers interactions with the product leads directly back into suggesting solutions, breaking those solutions down into user stories and assigning them a priority in your development team’s backlog.

In general your Product Manager will be responsible for discovery, managing the build of your product, and iterating on that product to improve it in line with your business goals. Now that you have a overview of the role of a Product Manager let us dive into the very concrete benefits that a Product Manager at this early stage will impart to your startup.

What benefit will they bring to my product?

Having outlined the role and responsibilities of a Product Manager in the first part of this article I’d like to think you can see many areas that a Product Manager would add significant - if not essential value. However let’s be clear and ask ourselves the question: why do you need a Product Manager?

The simple answer to this is as follows: Fully understanding the problem leads to innovative solutions that you (the founder) and your startup can take advantage of when building your business. Breaking this down further a Product Manager:

  1. Helps to reduce wasted investment (human and financial);
  2. Helps avoid spending time on rework;
  3. Creates alignment internally;
  4. Fosters a culture of experimentation;
  5. Validates customer needs and challenges;
  6. Verifies assumptions; and
  7. Prioritises a lean product build.

A Product Manager’s keystone benefit is that she will help you reduce wasted investment, both human investment and financial. Wasted investment lies squarely at the foot of building the wrong product. Building the wrong product can result in wasted development time and its associated costs. Rolling out a product that doesn’t have market fit, and doesn’t resonate with your customers, is a step backward, and an expensive one at that. A Product Manager focusing on the discovery phase will dramatically reduce the risk of your product being rejected by customers.

This works hand in hand with the Product Manager’s responsibility to collect customer feedback on the product post-release and use that data to iterate on the product. A reliance on analytics and metrics-driven development will reduce the time spent on reworking a product to fit the market. Starting with a tested MVP (minimum viable product) and then releasing in small increments reduces the risk that a product does not solve the customers’ problems and in turn reduces the amount of rework to fix that.

One of the key responsibilities of the Product Manager is to create internal alignment. This starts before the product discovery phase kicks off in a Goals Alignment Workshop attended by the founder, any major stakeholders, and the Product Manager, with the purpose of extracting the key business goals (and any product goals) that will influence the development of the product. With a Product Manager as the facilitator and with the clear aim of coming to a mutual understanding of the business goals the workshop brings everyone into alignment before work on the discover phase begins.

The Product Manager’s focus on gathering feedback from customers and making small changes to see the effect on conversion rate (or customer engagement) has the side-effect of fostering a culture of experimentation. As your customer base grows it will become more and more difficult to make sweeping changes and so a culture of experimentation becomes essential. Learning to rely on making small changes and seeing the reaction (see articles on A/B testing) provides you with a powerful tool to move the product forward without losing existing customers by making a unneeded change.

This culture of experimentation, once embedded by your Product Manager, directly leads to better customer intelligence. Part of a Product Manager’s role is to make assumptions on how to provide more value to your customers. In making small changes and measuring the response both the customers needs and challenges can be validated, as well as the Product Manager’s (and the wider business’s) assumptions on how to address these needs and challenges.

Finally, the Product Manager will emphasise a lean product build. In focusing on building only what is necessary and relegating “nice to haves” to a future date the product build process remains on budget while simultaneously only providing customers with the features they need and value. This process starts in discovery but really becomes apparent when working with the development team to build a backlog of properly formed User Stories to work on.
 

When is the best time to hire a Product Manager?

We’ve now spoken about the role of the Product Manager, and the benefits that having a Product Manager will bring to your business. However when is the right time to hire a Product Manager?

Typically a startup’s founder will fill the role of the Product Manager for the first 12 months. This is essential as every good founder should have an intimate knowledge of both their business goals and their customers. However as the founder takes on a more focused role as CEO of the company, she will have less time to manage the product and will instead start prioritising the strategic direction of the business. Constrained by budget and often encouraged to focus on hiring support around technology or growth, she will make do until the startup is at a large enough size that she is able to afford dedicated help with her product. Yet this can often be too late.

By the time that your business has secured seed-stage or later funding the foundations of good product thinking (also referred to as having a good “Product Muscle”) should be well and truly in place. This should coincide with the first 12 to 18 months of your product’s lifecycle. Being able to present a deep and meaningful understanding of your customer to investors, along with a story of increased revenue due in large part to adapting the product to better serve your customer base, will go a long way in securing future investment.

With this in mind, we believe that a Head of Product should be amongst the first key hires that your make during your first 12 months. However, this will differ depending on the type of company you are building. At Forward Partners it is common for us to see a company hire a Head of Growth who has considerable product experience as their first major hire; conversely many companies look to a Head of Product who has experience in marketing and growth. At this stage of your journey you’ll rarely be able to afford both so finding a product-minded hire that’s right for your company is of important.

Bill Campbell, former CEO of Intuit, spoke of the importance of hiring a product-minded individual when he suggested that his first big hire would be “somebody who can really understand the dynamics of what goes on in a marketplace, apply technology to that marketplace, see how the technology can work, and continue to advise brilliant scientists so they can adapt their products to make sure customers are happy.” If you hire a Product Manager within the first 12 months, you will guarantee long term focus on your product and the continued iteration needed to, as Bill Campbell says “make sure customers are happy”.

Conclusion

In conclusion, one of the most important yet often overlooked hires that an startup can make within the first 12 months of its life is a Product Manager. Responsible for clearly understanding the problem that the product is looking to solve, and intimately knowing the customers that the product is being marketed too, the Product Manager brings a very tangible benefit to the first 12 months of a product’s life, and a business’s success.

Alex Williams

Front-end Developer @ Forward Partners

Front-end developer for Forward Partners. Helping our companies build a scaleable and maintainable codebase.

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