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This is the first post in a series about developing an expansion stage product management team. To read the intro to the series, click here.

product management

Image Credit: {link:http://www.freedigitalphotos.net/images/view_photog.php?photogid=721}renjith krishnan / FreeDigitalPhotos.net{/link}

In the startup phase of most software companies, product development tends to go something like this: ‘X’ company identifies a pain point or need, assembles a small engineering team to build a solution that addresses it, and proceeds to go through a number of quick iterations to tweak the product to better meet the market’s needs.

It’s a system that relies on innovation, flexibility, and customization to fuel growth.  That’s what makes the wondrous startup stage so full of creativity and innovation.  Such creativity tends to thrive in the unstructured early stages of a company’s birth.

But (as I wrote in a previous post) there comes a time when throwing a bunch of ideas against a wall – or on the product development team’s desk – and seeing how innovation might eventually uncover the right solution is no longer efficient or scalable.

The key is to know when to transition your product strategy.

At the expansion stage – when a premium is placed on efficiency and scalability – a software company needs to have a stable set of product requirements that can be carefully allocated to a product development team, and its product strategy needs to be more formally aligned with its overall business strategy.

As a result, there needs to be some sort of buffer between that business strategy and the product development team. So what’s that “buffer?” A true product management function that ensures market and customer focus, and drives the company’s product strategy toward those things.

So, whose job is product management at the expansion stage? Well, as I’ve written before, it’s not the CTO’s or the CEO’s. Companies need to create true product management and product development functions that each have their own leaders.

For more on how to create and structure those departments, check out these posts by Marty Cagan: Product Organizational Structure and The VP of Product Role.

Another great resource is Steve Johnson’s post for Pragmatic Marketing on where product management belongs in your organization. You can also check out my post a year ago about why it might be time for you to build a product management department.

So, what are the key steps to creating and implementing that PM function?

Recruiting an actual senior product manager – rather than having a founding CEO or CTO take on that role – that can represent the customer, own the product, and have the cache to sit at the senior leadership team’s table is a critical first step. I wrote about this kind of transition in a post titled “Mr. CTO, Time to Let Your Baby Go.

The role of the product manager includes:

  • Championing the customer and the needs of the market. Having the external awareness and empathy around the customer.
  • Proactively soliciting input from all stakeholders, within and outside the company. Translating the inputs into product requirements and product development actions.
  • Being the buffer between the stakeholders and the product development group. In turn, ensuring that whatever product development builds will result in the attainment of the business goals of the company.

Clearly the product management role is a highly strategic one within the organization. Therefore, the role and function need to be given their rightful standing within the organization:

  • The product leader (the manager of the product management group) needs to be a senior executive who sits at the senior table as a peer to the product development leader.
  • There needs to be a healthy tension between the leaders of product management and product development. The CEO must ensure that this tension exists, and is healthy.
  • The product leader needs to create and facilitate the meetings of the product leadership group. This is the venue where debates about the product evolution take place, and final decisions on the product roadmap are taken.
  • The product leader is the ultimate owner of the product, and is responsible for the product’s contribution to the strategic goals of the company.

Remember, product management isn’t a replacement for product development, product marketing, or professional services. They’re different, but complementary, functions within a growing software company.

The ultimate objective of product management is to understand business strategy, translate it into a product strategy, tie both to the company’s target market segments, and define the differentiated product solutions that product development needs to build to meet those market segments’ needs.

Over the course of my next couple of posts in this series I’ll share thoughts from the VP of Product for one of our portfolio companies that just went through the PM creation, implementation, and development process. His insight should provide some excellent real world insight into why and how an expansion stage software company needed to develop a product management function.

Stay tuned!

Firas Raouf is a founding member of OpenView Venture Partners. He is a mentor to OpenView’s Portfolio, an
engaged board member, and plays an active role in investments. Connect with him on Twitter @fraouf.

  • http://www.derrekcooper.com/ derrekcooper

    This is spot on. The key ingredients are finding a driven person who has a unique combination of high energy, vision, technical swagger, can think on their toes and gain confidence of both internal and external folks. The other key point, as you mentioned ,is to have a senior voice at the exec mgmt level that can act as a filter/advocate.

    • http://bit.ly/1Gu8Ha Firas Raouf

      Yup. Really hard to find highly talented product leaders. We are constantly searching for them for our portfolio companies.
      Your point on having a voice at the exec management team is key. I always advise that there needs to be a leader of product management and a leader of product development. Those two personas need to be peers, both reporting to the CEO (I’m speaking of early/expansion stage companies). And they both need to be at the senior management team table, as peers with leaders of sales, marketing and ops.  

  • Roger Cauvin

    I think the key here is that product management needs empowerment to take on its important strategic role.  But empowerment and support does not mean the product manager owns the product.  It means that executives recognize and support the strategic responsibilities and trust team leaders to cultivate a shared sense of product ownership among the entire product team.

    • http://bit.ly/1Gu8Ha Firas Raouf

      Totally agree with the need for empowerment. It must start with the CEO, and work its way down.  A seat at the executive table is a must in my mind (I’m referring to early/expansion stage companies).  
      Not about your point on product ownership. I tend to believe that the product leader needs to own the product. I don’t believe ownership of the product rests with product development. In some cases, you will find a CTO who owns both product management and product development. I find that in early stage companies, there’s very very few CTO’s with the experience and breadth to take on both functions.  

      • Roger Cauvin

        Firas, I didn’t mean to suggest that product development or any single department or person “owns” – or should own – the product.

        On the contrary – the most effective leaders cultivate a cross-departmental, shared sense of ownership.  In a recent blog entry, I explained:

        “The most successful product teams possess a culture in which the team owns
        the product.  Each member of the team – whether a developer, sales
        person, marketer, support specialist, or tester – has strengths and
        plays roles that contribute to the team effort, and ultimately to market
        acceptance and product profits.  They all feel accountable for the
        success of the product and the team, and there is no need for a ‘single
        throat to choke’.  This form of accountability is a highly effective
        motivator and yields impressive productivity and outcomes.”

        In summary, yes, empowering product management is critical to product success.  But empowerment does not necessitate assigning unilateral “ownership” to a product manager or to any other single person.

        • http://bit.ly/1Gu8Ha Firas Raouf

          Roger, I think you and I are pretty aligned on the overall perspective around ownership. I agree with your position that ownership should be more of a team centric ownership than a single individual (being the PM.)  

          The reason I stress the PM ownership is because of where our portfolio companies tend to start off with when we invest. More often, when we invest, our companies tend to have a founding CTO who “owns”  the product and manages product development. There typically is no product management function.  So our challenge is to influence the creation of the PM group (by hiring the PM leader). And in the process, we also try to influence the transition of product ownership from the CTO/Product Dev group, to the Product Management group.  

          The PM lead/team owning the product doesn’t (in my mind) mean that there is no cross-functional involvement/debate/input by other functions (Dev, marketing, customers, partners, sales, etc.)  It just means that at the end of the day when final decisions needs to be influenced and made, the product manager is accountable for bringing it all to head, and making sure that the product is moving forward to better and better days.

  • http://twitter.com/HakanKilic Hakan Kilic

    Great post, I think one of the key points you make is about product management (the function) moving from a CTO or development manager to an actual product management group (the role), which is usually a product manager. What I’ve seen too many times is that product management’s strategic role is still owned by the executive or engineering team, and any product manager that is brought in is in the unenviable position of trying to glue things together with no real autonomy, and eventually is no more then a requirements writer. At that size of company, that’s not leveraging the skill sets the best.

    • http://bit.ly/1Gu8Ha Firas Raouf

      Hakan, I learned from bitter experience how ineffective a PM can be when recruited by a product dev centric CTO, and reporting to the CTO. True product leaders were not even considered (CTO’s fear of losing control of product, guised as “I’m the product leader”). So we ended up with junior PM’s who, despite efforts otherwise, became glorified requirements writers.

  • http://twitter.com/RichMironov Rich Mironov

    Spot on!  Sharing the product management role among several folks with other primary skills (CTO, CEO, lead gen) doesn’t provide enough focus on market value, delivery details, sticking to the product strategy…