How to eliminate the #1 killer of startups
I recently wrote about the Product Management Gap: the period of time between having a successful demonstration of a technical innovation (the proof-of-concept) and when a full-time team member is assigned to focus on managing the product(s) that feature it.
The Product Management Gap is a pervasive and deadly problem in the VC-backed startup space that I feel accounts for over half of the ventures that succumb to the dreaded Series A Crunch. Although it’s easy to identify, and affects nearly every startup, the Gap is also stubbornly difficult to fix without access to the talent, and budget growth-stage companies have at their disposal to hire qualified Product Managers.
How large is a startup’s Gap?
One way to conceptualize the impact the Gap is having on an organization is to think about what a product manager would actually be doing, if one were hired, from a time and function perspective: measure and analyze product engagement; track middle-to-bottom of funnel sales and marketing conversions; gather feedback from team members in different roles; talk to customers; and then use these inputs to objectively inform their product development roadmap — which they tend-to like a parent cares for an infant.
A PM’s product development roadmap is the blueprint that defines how the team’s limited creative resources should be contributing to the CEO’s mission and vision. In my experience, doing this well requires just as much focus, time, and energy as any other common tech startup role, yet it’s commonly a secondary or tertiary responsibility of a founding CEO or CTO.
An effective Product Manager must test new ideas, and then champion, deprioritize, or reject them backed with enough quality data and clear reasoning so that their founders and peers respect their priorities without losing their own drive to execute at full-speed as individual contributors.
The value (and challenge to finding) a great product manager stems from the rare mix of character traits, experience, and vertical-relevancy one needs to be the right fit for a particular venture:
- The experience and personality required to effectively lead a cross-functional team in an environment of extreme stress;
- enough subject matter expertise to both deeply understand the problem space and how to address it with the company’s core technology;
- the wisdom to be able to form strategies that garner buy-in from the experts in the other disciplines encountered throughout the team and base of early adopters;
- the objectivity required to inform strategy with user engagement data (and understanding and respect for the limits of the story that data tells);
- and, most importantly, the humility to understand when to course-correct prior well-thought decisions.
These are very difficult traits to find in one individual, but magical things happen when someone who embodies them is added to a team of smart and capable doers.
Methods of Closing The Gap
As I’ve written previously, “the primary reasons teams don’t have Product Managers comes down to lack of awareness, a lack of understanding, and, ultimately, a lack of budget.” My intent is that readers now have a heightened awareness and understanding about the vital importance of the Product Management function… but that doesn’t translate into the budget to be able to simply hire a full-time Product Manager. From a cost perspective, I’ve found the following to be the most effective Gap-closing solutions (from most-to-least):
- Hire a Product Manager
Whenever feasible, adding a skilled and experienced Product Manager to a team is the most straightforward way to mitigate the risks associated with the Gap. Ideally, these responsibilities belong to a dedicated co-founder (in addition to the traditional CEO & CTO founder pairing).
There is a school-of-thought that hiring a PM in the early stages is anti-lean since bringing on someone who is adequately qualified can be time-consuming, expensive, and dilutive (in the additional co-founder scenario). Ken Norton, Partner at GV, perhaps summarizes this viewpoint best: “I discourage founders from hiring [a product manager] until they’ve found product-market fit.”
2. Complement a team with a Product Management Coach
Often, a pragmatic option for an early-stage team is to hire a Product Management Coach. A coach works with a team in a hands-on capacity to identify specific challenges, resolve conflicts, encourage course corrections, and enable individual contributors through knowledge transfer so that they successfully close the Gap together. (disclosure: this is a service my company provides.)
As a venture matures and can allocate the resources to build out its growth-stage management team, it should prioritize hiring a full-time product manager. A good coach will also be an active participant in helping the company through their transition.
3. Add a product-focused Advisory Board member
Strategic advisors are helpful contributors of subject matter expertise and catalysts for networking opportunities, but they are typically motivated to be low-touch due to their small equity-based compensation structure. The right advisor can completely close the Gap in the scenario where an individual with a pre-existing product management skill-set in a different vertical could benefit from some additional mentorship.
4. Adopt simple product management frameworks
At a bare-minimum, every startup team should instill in its culture some of the basic strategic hygiene common to popular product management frameworks.
Harlan Milkove is a repeat VC-backed startup founder, and Managing Partner at Foundational where he works with early-stage startups to expedite their pursuit of venture capital. His prior venture Reonomy, a commercial real estate data analytics platform, has gone on to raise $125M+.
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