What do Facebook, Whatsapp, Salesforce.com, and the iPhone have in common? They all benefitted from great product management. All avoided UX clutter, confused pricing schemes, and non-existent product roadmaps. It is hard to imagine a world without these products.
In short, these companies nailed it.
Now, what do Evernote, Google Glass, iCloud, Nike’s FuelBand, and Amazon’s Fire Phone have in common? They underachieved substantively versus what they could have been and are widely regarded as either failures or presently failing to realize anything close to their potential.
They got nailed.
As the first investors in promising startups, my firm sees many teams lacking experienced product management. Sometimes the CEO is simply trying to save money and run lean. But more often than not, entrepreneurs tell us that the day they hire a product manager, they feel they will lose control over the product vision. (See here for my recent blog on why control is a dangerous illusion for an entrepreneur to hold.)
We think that logic is a big mistake — and potentially a fatal one for the company. But rather than simply postulate, we thought it would be useful to call out some surefire signs your startup needs dedicated product management now:
- Your team does not agree on what feature should be next on your product roadmap.
- Your team is confused about how to price your service.
- You have met with industry analysts and they are indifferent to your innovation.
- You do not have a detailed understanding of the competition and where you fit in from a customer POV.
- You do not know how big your market is from a bottom’s up perspective (number of target customers and what they will pay).
- You cannot explain in 10 seconds the value proposition of your product and have someone understand within another 10 seconds.
- You can only guess at the incremental sales volume that comes from adding a new feature.
- Your sales team does not have the tools needed to sell the product.
- You do not have a list of the top 20 prospective customers whose input has shaped your product, and you do not have names of your key contacts at those prospects.
This is not an exhaustive list by any means, but it does show the potentially disastrous consequences of being ill prepared to make important decisions about where to take your product or service. Making a wrong turn on any one of these issues will cost you dearly. And in the case of an early stage company, it could be fatal.
In many cases, it takes more time to find, recruit, and onboard a product management person than the market is going to give you to solve or answer the above challenges. However, if you wait until one of these alarm bells goes off to start recruiting product management, you will have put yourself and your colleagues at a substantial competitive disadvantage.
Great product management is a huge asset for any startup, and as investors we get more excited about an investment when we see this well represented in the founding team. Be smart and cover this base early in your company formation. You will not be sorry.
Jeff Thermond is a Venture Partner at XSeed Capital and has been involved in information technology and computer networking for over 30 years. Prior to XSeed, he was CEO of Woven Systems, CEO of Epigram (which he sold to Broadcom for $498 million in 1999), and vice president and general manager at 3Com. He currently sits on the board of directors at Lex Machina.