Product Management: A Smart Investment For Your Business

Product management is a crucial function in any organisation, and investing in it can be the difference between success and failure. A good product manager will be able to balance the needs of the business, technology and user experience, making tough decisions and trade-offs to deliver successful products that meet customer needs. They will also be able to assess the viability of innovative ideas and create a strategy for products with a clear vision, outcomes and timeline.

In addition, product managers can provide valuable insights to venture capitalists, having worked with various departments and gained a unique perspective on how businesses create and launch products. They can help VCs cut through the confusion when dealing with startup teams and make more informed decisions about which companies to invest in.

Early investment in product management can result in a strong, motivated and engaged team that drives product success. It can also help to streamline processes, improve efficiency and ensure a company's strategy is guided by market realities.

Product managers are akin to conductors of orchestras

A product manager is an expert in their specific market or domain. They lead and coordinate across departments, bringing each one together to play their part in harmony, creating a beautiful experience for the customer. They are responsible for the product's vision and direction, and they rely on executive sponsorship for support.

Product managers need to be generalists, with a broad knowledge of many areas, but they also need to be able to focus on several strategic factors at the same time. They must balance the needs of customers, prospects, other departments, the c-suite, and investors, building a product that suits all their needs.

Like a conductor, a good product manager can make a mediocre team shine, and a poor product manager can ruin a great team. They lead with integrity and influence, establishing a vision for the company and serving the needs of their team.

They are jacks-of-all-trades, needing to know enough about everything

Product managers are jacks-of-all-trades, needing a broad knowledge base to succeed. They must be multilingual, speaking the unique dialects of developers, marketing professionals, executives, and other departments. This skill is invaluable when dealing with startup teams approaching venture capitalists for funding.

Product managers are also involved in the entire product creation process, from idea to market. They identify customer needs and business objectives, articulate what success looks like, and bring a team together to realise their vision. This includes defining a product vision, gathering input from researchers, analysts and marketers, and managing the day-to-day execution with developers and designers.

In smaller organisations, product managers spend more time on the hands-on work of defining a vision and seeing it through. In larger organisations, they spend more time aligning stakeholders behind a specific vision. Product managers also need to be independent enough to determine the product roadmap, direction, and strategy.

Product managers must know enough about engineering to understand technical specifications and requirements, and enough about marketing to focus on the marketing aspects of a product. They must also be able to deal with the push and pull of various constituencies within and outside the organisation, keeping their focus on what's best for the product.

A product manager needs to be a great communicator, able to win over the hearts and minds of product teams and stakeholders. They need to be able to say no and deal with disapproval. They must be able to empathise with customers, hearing what they are unable to articulate clearly, and asking the right questions to get to the heart of what customers need.

Product managers must also be able to analyse data, metrics, and analytics to determine how a product is doing. They need to distinguish between real and vanity metrics and understand what the data means in practice. For example, if the number of users/subscribers goes up after a sales discount, does that mean anything? Is it better to have more prospects with a higher churn rate?

In short, product managers need a broad knowledge base and a wide range of skills to succeed. They must be able to communicate, analyse, and make tough decisions, all while keeping their finger on the pulse of the market and their customers.

They must be able to create a product strategy

Product managers are akin to the conductors of orchestras. They are responsible for creating and implementing a product strategy, and they must wear several hats to do so effectively.

Firstly, they must be able to create a product strategy and define a clear vision. This involves understanding customer needs, the competitive landscape, and the overall business objectives that the product will fulfil. A good product strategy is accompanied by a detailed roadmap with clear outcomes, goals, timelines, and checkpoints. Effective product managers are excellent communicators, able to evangelise the product strategy inside the organisation and win over the hearts and minds of product teams and stakeholders.

Secondly, product managers must be market experts. They need a deep understanding of the customers' psyche, including their perceptions, motivations, and unarticulated needs. This involves asking the right questions, understanding nuances in vocal tone and body language, and having deep empathy. By getting inside the customers' heads, product managers can ensure that products meet their needs and address pain points.

Thirdly, product managers must be able to deal with the tug-of-war between various internal and external constituencies. They need to keep their focus on what's best for the product and be comfortable saying no to requests that don't align with the product strategy. This requires a thick skin and the ability to explain and stand by their decisions.

Finally, product managers must be able to influence and lead without authority. They need to empower their teams to make decisions by creating a shared brain – a way of making decisions and escalating issues. This involves building context so that team members can make informed choices independently. Great product managers are respected and influential leaders who can guide their teams without direct authority.

They must be able to assess a market that doesn't yet exist

Product managers are responsible for identifying customer needs and business objectives that a product will fulfil. They also need to be able to articulate what success looks like for a product and bring a team together to realise that vision.

Product managers need to be able to assess a market that doesn't yet exist. Traditional venture investors with financial industry backgrounds may understand the financial markets and know how to research the size and growth potential of existing industries. However, they may not know how to assess the viability of an innovative idea pitched by an entrepreneur for a market that doesn't yet exist. This is where the product manager can bring valuable insights.

For example, Ring, the company behind home security doorbells and cameras, created a new industry. There was no pre-existing market for home security doorbells, and many venture capitalists turned them down. However, VTF Capital, whose founders include the former Head of Product for Zappos.com, saw the potential and gave Ring a large part of its $4.3 million Series A funding.

Product managers can provide unique insights into how businesses come up with product ideas, vet those ideas, and decide which ones are worth pursuing. When reviewing a business plan or speaking with an entrepreneur, a product manager will have a valuable real-world perspective that many VC partners won't.

Product managers need to be able to assess the viability of an innovative idea and determine whether it could create a new industry. They need to understand customers' needs and the market landscape, including the strengths and weaknesses of competing products. They must also be able to make tough decisions and trade-offs, balancing the needs of the business, technology, and user experience.

Product managers play a crucial role in product development, especially in the world of finance. They decide which securities and investment vehicles to offer and set the pricing structure. Product managers must also ensure that their firm's products comply with regulatory and legal requirements and work closely with marketing and sales teams to craft promotional materials.

In summary, product managers are vital in bringing new products to market, especially in industries that don't yet exist. They possess unique skills and insights that can fill blind spots in venture capital firms, helping to identify industry-changing opportunities.

They must be able to delegate product strategy

Transitioning from product manager to venture capitalist can be challenging for several reasons. One of the most difficult aspects of this transition for many product managers is having to delegate product strategy.

In their role as a product manager, overseeing and directing their products' strategies is often the most rewarding part of the job. However, when they become a venture capitalist, their focus shifts from a single product or portfolio to a wide range of products and services across many companies.

As a VC, the former product manager's job is to support the teams they believe have the greatest potential for success. They can offer guidance and resources along the way, but they must leave the responsibility for directing the product strategy to the company's product team.

This shift in focus and level of involvement can be a significant adjustment for former product managers, requiring them to let go of the hands-on work and strategic decision-making they were used to in their previous role. It demands a different set of skills, such as the ability to identify promising teams and ideas, provide support and guidance, and manage a diverse portfolio of investments.

While delegating product strategy may be challenging, it also presents an opportunity for growth and development. Former product managers can leverage their experience to identify innovative ideas and teams with high potential. They can use their knowledge and insights to make informed investment decisions and provide valuable guidance to the companies they invest in.

Ultimately, the ability to delegate product strategy is a critical skill for product managers transitioning into venture capitalism. It requires a shift in mindset and a willingness to embrace a broader, more supportive role, while trusting in the potential of the teams and ideas they invest in.

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