The Art of Product Management

1. Product Management is Like Parenting: Nurture, Guide, and Plan for the Future

"We're not really parents [or product managers] until we've gotten some poop on our hands and laughed about it."

Long-term commitment. Product managers, like parents, must commit to their products for the long haul. This involves making multi-year plans, balancing immediate needs with future potential, and sometimes making unpopular decisions for the greater good. Product managers must:

• Set appropriate expectations for early versions
• Have a developmental roadmap for future features
• Protect and nurture the product through criticism and setbacks
• Make tough choices about resource allocation

Balancing act. Just as parents must juggle the needs of different children, product managers must balance competing interests within the organization. This includes:

• Engineering demands
• Sales team requests
• Customer feedback
• Executive expectations

2. Early-Stage Sales Require Explorers, Not Thoroughbreds

"Explorers sort prospects early to keep focused on the few with real potential."

Different skills for different stages. Early-stage companies need sales "explorers" who can navigate uncertain terrain, not "thoroughbreds" optimized for running established races. Explorers are:

• Comfortable with uncertainty and changing product messages
• Able to help find the right customer segments and applications
• Skilled at sorting potential customers to focus on those with real potential

Characteristics of explorers:

• Broad industry experience
• Adaptability to changing circumstances
• Willingness to help shape the product and market strategy
• Comfort with muddy boots and uncertain sales cycles

As the company matures and the market becomes more defined, it can transition to hiring thoroughbred salespeople who excel at closing deals in established markets.

3. Agile Development Demands More Intensive Product Management Involvement

"Agile PMs meet with their development teams much more frequently than traditional PMs."

Increased collaboration. Agile development requires product managers to be much more involved in the day-to-day process, including:

• Attending daily stand-ups and sprint planning meetings
• Rapidly reviewing user interfaces and customer-facing elements
• Quickly removing development roadblocks
• Supporting the team throughout the sprint

New deliverables and processes. Agile PMs must adapt to new ways of working:

• Backlogs: Dynamic, near-real-time sets of deliverables constantly reviewed and adjusted
• User stories: Replacing lengthy MRDs/PRDs with more flexible, iterative documentation
• Frequent customer input: Soliciting feedback throughout the development cycle, not just at the beginning and end

This increased involvement can lead to burnout if not managed properly. Product management executives should consider creating product duos or trios (PM, program manager, business analyst) to handle the increased workload effectively.

4. Software-as-a-Service (SaaS) Transforms Companies from Grocers to Chefs

"By hosting an application centrally, you've put on a chef's apron."

Fundamental shift in responsibility. Moving from traditional software licensing to SaaS changes a company's relationship with customers:

• From selling ingredients (software) to serving complete meals (end-to-end service)
• Direct responsibility for customer success, not just software delivery
• Ongoing engagement rather than one-time transactions

New challenges and opportunities:

1. Shared infrastructure (multi-tenancy)
2. Incremental sales cycles
3. Itemized billing capabilities
4. Access to real usage information

Companies must adapt their entire organization to succeed in this new model, including:

• Sales and marketing strategies
• Customer support processes
• Product development methodologies
• Financial models and metrics

5. Understand Your Place in the Product Food Chain: Shark, Pilot Fish, or Fish Food

"Big fish need a lot of food and room to swim."

Strategic positioning. When entering a market, companies must decide their role in the ecosystem:

1. Shark (dominant player):

   • Requires huge resources and direct competition with incumbents
   • High risk, high reward
   • Needs enterprise-class sales team and marketing

2. Pilot fish (complementary product):

   • Extends existing solutions without threatening incumbents
   • Lower risk, smaller rewards
   • Focuses on partnering and ecosystem integration

3. Fish food (OEM component):

   • Sells directly to larger players as a component
   • Requires unique expertise and key customer demand
   • Focuses on staying ahead technologically

Organizational implications. The chosen strategy shapes the entire company structure:

• Staffing decisions
• Sales and marketing approaches
• Product development priorities
• Funding requirements

Companies should carefully consider their capabilities and market conditions before choosing a strategy, as it's difficult to change course later.

6. Combat "Insider Thinking" by Regularly Engaging with Customers

"Stuck at headquarters, it's easy to forget customer realities and needs."

Dangers of isolation. Product managers who spend too much time internally can lose touch with customer needs and market realities, leading to:

• Packaging decisions based on internal organizational structure rather than customer needs
• Pricing justifications based on costs rather than customer value
• Overly complex positioning statements filled with insider jargon

Strategies to stay connected:

• Regular customer visits and conversations
• Attending trade shows and industry events
• Riding along with sales teams
• Conducting user research and usability studies
• Analyzing customer support data and feedback

By maintaining a strong external focus, product managers can ensure their decisions are grounded in real customer needs and market dynamics, rather than internal assumptions and politics.

7. Strategic Secret Shopping Provides Crucial Competitive Intelligence

"Even at 30,000 feet, though, you know the difference between flying and driving."

Benefits of external perspective. Hiring a "secret shopper" to approach competitors as a potential customer can provide valuable insights that are difficult to obtain internally:

• Unbiased assessment of competitor messaging and positioning
• Up-to-date information on features, pricing, and sales tactics
• Fresh perspective unencumbered by existing assumptions

Best practices for secret shopping:

1. Create a detailed, realistic prospect profile
2. Conduct multiple interactions over time
3. Listen for strategic selling themes
4. Capture sales materials and presentations
5. Ask about your own company in passing
6. Focus on specific questions that need answers

While secret shopping involves deception, it should be conducted ethically:

• Respect the sales rep's time
• Don't sign NDAs
• Combine insights with other competitive intelligence methods

8. Create a Whole Product Bill of Materials to Avoid Last-Minute Surprises

"Don't let your customers teach you what's missing from your product."

Comprehensive planning. A Whole Product Bill of Materials (BOM) helps ensure all necessary components are accounted for, not just software modules:

• Legal documents (e.g., license agreements)
• Support resources (e.g., toll-free numbers, knowledge bases)
• Upgrade paths and processes
• Installation and configuration tools
• Documentation and user guides

Cross-functional collaboration. Create the BOM through brainstorming sessions with diverse team members:

• Engineering
• Marketing
• Support
• Operations
• "Naive" users

Walk through the entire customer experience, from discovery to installation to ongoing use, identifying potential issues and necessary components at each stage.

9. Technical Advantage is Fleeting: Plan for Competitive Responses

"Even those players with technically inferior products are working to distract customers and re-arrange perceptions."

Anticipate competition. Even with a true technical advantage, companies must prepare for how competitors will try to unseat them:

1. Finding unserved segments
2. Bundling and packaging
3. Partnering with industry leaders
4. Using "marketecture" to reframe the discussion
5. Introducing new pricing metrics
6. Selling to non-technical decision-makers

Proactive strategies:

• Develop deep market understanding
• Plan several competitive moves ahead
• Arm sales force with both rational and emotional selling tools
• Create clear ROI justifications
• Avoid technology-driven optimism
• Listen for "footsteps" of emerging competitors

Remember that technical superiority alone doesn't guarantee market success. Effective marketing, sales strategies, and competitive positioning are crucial.

10. Tailor Beta Testing Programs to Different Customer Types

"If you want useful results, plan a long beta phase for friendly customers followed by a short, post-QA cycle for urgent situations."

Recognize different beta audiences:

1. Loyal Opposition:

   • Enthusiastic existing customers
   • Provide thorough testing and feedback
   • Don't generate new revenue
   • Pamper them with early access and recognition

2. Overcommitted:

   • Prospects with urgent needs
   • High-risk, but often mandatory to include
   • Require extra support and quick fixes
   • Assign dedicated support resources

3. Reluctant Volunteers:

   • Typically result from sales team promises
   • Unlikely to provide useful feedback
   • Require significant follow-up
   • Ask for test plans to identify serious participants

Tailored approach. Design beta programs that cater to each group's needs and expectations, balancing the competing goals of thorough testing, useful feedback, and sales acceleration.

11. Use "Goldilocks" Packaging to Offer Clear Choices and Upsell Opportunities

"Packaging and pricing help our customers buy what we make."

Three-tier strategy. Create packages that customers will perceive as "too small, too big, and just right":

• Offers clear choices without overwhelming customers
• Provides functional reasons to trade up, not just capacity differences
• Allows sales team to upsell based on features rather than arbitrary metrics

Effective packaging principles:

• Target different buyer personas with each package
• Use broadly different price points to aid quick decision-making
• Include "must-have" features at each level to drive upsells
• Balance capacity metrics with functional differentiation

Example tiers for an Instant Messaging audit tool:

1. Basic: Department-level logging and simple reports
2. Professional: Cross-department analysis and IM slang translation
3. Enterprise: Email integration and advanced compliance features

This approach gives sales teams a clear framework for presenting options and guiding customers to the most appropriate (and often higher-priced) package.

Last updated: October 15, 2024