A key part of your startup team.
A key difference between thriving ecosystems and lagging ecosystems is the ease with which a startup can hire product managers.
In a location such as the Bay Area, everyone knows what a product manager is, as well as many people doing it as a career. Thus there’s a clear view of what credentials you should look for and how much you have to pay (in cash and in equity) for a good product manager. Some superstars in the field, such as Chris Cox and Sriram Krishnan, have gone on to high-level responsibilities: the former is one of the most senior executives at Facebook while the latter is now a general partner at Andreessen Horowitz.
In lagging ecosystems, (and that includes most of Europe), however, the idea of product management is still blurry. Few people aspire to it as a career. Startup founders struggle to write job descriptions or decide how much a product manager should be paid. Many others, from engineers to designers to marketers and salespeople, don’t understand why they should make room for working with a product manager in their daily routine.
But why has product management emerged as a discipline? In the past, a company’s product was a mere input in its supply chain. Most of the value was added in distributing, marketing, and selling said product at as large a scale as possible. The winners in this game were the companies that could afford the most well-run assembly lines, the largest logistics networks, and grabbing the most eyeballs via television ads.
Today, however, the nature of doing business has been dramatically impacted by technology, and product has taken center stage as a result. Here’s everything that has changed in that regard:
You can market a product before it even exists—an approach known to everyone in the startup world as “Fake it ’til you make it”.
You can sell the product before you build it. This has gradually become the norm in manufacturing as well, but it’s much easier to do in the world of tech startups.
You can delay R&D until after you’ve reached a large scale. Before that, startups can rely on cheap, robust technology provided by third parties such as AWS.
You can market and distribute the product yourself through the Internet without having to rely on intermediaries. Hence the rise of direct-to-consumer models!
Finally, the product’s design is no longer a given. It can evolve as quickly as you collect user feedback, provided you have the engineering talent to iterate fast and someone to manage the whole process—that is, a product manager.
It’s no surprise then that product managers have become so prominent in the org charts of tech companies these days—and that there is now such a concept as “product-led growth”, a “go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers” according to author Wes Bush, who popularized the notion in the SaaS space.
It all leaves early-stage founders with two critical tasks, especially if they’re part of a lagging entrepreneurial ecosystem: pay close attention to product management in your early team, and make sure you hire someone good to take it over!
Ready to make the leap into entrepreneurship yourself? Join us for our upcoming events, the First-Time Founder Summit on May 18, and Be My Cofounder on May 27!