Bill Campbell says, hire Product Management First!


Back in early July, I had the pleasure of being interviewed by Forrester’s Tom Grant for his weekly podcast on the Heretech site.

About half way through the podcast, Tom asked me:

You recently wrote about Product Management in technology startups. Where do you see is the point when a very distinct Product Management role pops out in the natural growth of a startup?

A summary of my response (and Tom did let me speak for quite a while uninterrupted!):

I think any venture-funded startup should have someone with a core focus of Product Management. If someone is giving you $5,000,000 to build something, to me it makes no sense to say, “OK, we’re giving you this money and you don’t need to have a person who can find the right fit of the technology in the market and bring that together in an efficient way.

Because I’ve seen too many cases where a CTO and a CEO are leading a company, and the CTO really is technical, and the CEO is very business focused, and yet they fail because they don’t understand how to bring those two worlds together and how to bring products to market in a scalable, efficient way.

After the podcast was published, I got a couple of emails wondering if what I was saying was simply self-serving, given that I work in technology Product Management myself.

I didn’t feel there was anything self serving, because I wasn’t telling people they should hire me :-), but rather they should hire experienced Product Management right from the start. Given what I know today I would agree with that whether I was in Product Management or not.

In fact, I wonder why VCs don’t actually stipulate that part of the funding they provide be used to pay for experienced Product Management services (whether full-time/part-time/contract) to help ensure the what is being built aligns with market needs, delivers real value and continues that way?

A lot of young companies make the mistake of building something fast and seeing what sticks, instead of understanding what is of value and then heading in that direction.

Well, later that month, July 28th to be exact, at the AlwaysOn Summit at Stanford University, Bill Campbell, former CEO of Intuit gave his view on this topic during an interview with Michael Moe.

billcampbell

Click the image above to open a window and view the full interview.
Play close attention starting around 2:45 into the interview.

Michael Moe:

So, I think many people in the audience know that before you got into business in Silicon Valley, you were in the coaching business. So let’s just say you have a first round draft pick; after the founder and CEO, who would be the first draft pick? Would it be head of sales, a CTO, human resources, finance? And why?

Bill responds:

The more I think about it, and it depends on who the founders are by the way, and when I say who, it depends on what functions they represent. Generally in Silicon Valley they would represent technology.  A guiding thing for me would be somebody like Mike Homer, probably the best Product Marketing guy, somebody that understands how to apply technology in the market.

You know, as strange as that sounds, you need someone who can work with brilliant engineers and try to take this creation, this technology creation and turn it into a product, and make sure it is for somebody, that somebody can use it; some kind of service or some kind of product.

And so, I know that sounds like a strange answer, Product Marketing, some people call it Product Management, but somebody who can really understand the dynamics of what goes on in a marketplace, apply technology to that marketplace, see how the technology can work, and continue to advise brilliant scientists so they can adapt their products to make sure customers are happy.

Alrighty now. Glad to hear my views on the subject match those of someone like Bill Campbell. Or vice versa. 🙂

So I wonder, are the VC’s listening to people like Bill when he says the first hire for startups should be someone who understands the dynamics of the marketplace and how to apply technology to it?

This person is not likely to be a technologist or strictly a business minded person.   Find experienced Product Management who can bring the two worlds together to create products (and not just “technical creations”)  and give your startup a greater chance of success!

Saeed

Also see: Bill Campbell says, It all starts with great products!

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22 responses to “Bill Campbell says, hire Product Management First!

  1. I am totally with you on this one Saeed! In fact, during my last unemployment bout, I was targeting consulting for small start-ups with a need for product management. It was very clear to me that they needed product guidance that I could offer, but they have a really hard time justifying the expense, especially if they’re young entrepreneurs with very little experience bringing a product to market. They can’t make a direct link between the expense and the return, and they think they’re capable of doing it themselves with the CEOs original vision and a good engineering function.

    So, as you mention, that may leave the responsibility of forcing the issue to the investors.

    Certain investors excluded, early stage VCs don’t necessarily have real world experience (except through observation) bringing a product to market. Thus even some of those folks don’t understand the true value of product management.

    The “oh shit” moment for a startup – the inflection point when they realize they need a product function – arrives when they’ve already spent all of their series A, they’ve tried to do a proof of concept with some validation (but no real scale), and they have to promise revenue as they raise series B.

    And that’s when you and I get a phone call. 😉

  2. Spot on! The alternative model of “have the engineers build something on the hopes that they deeply understand market needs / customers / competition / pricing / product strategy” is pretty common, but not very effective. Another $5M in VC flushed.

    See my very old piece on the “post-course correction” , http://www.enthiosys.com/insights-tools/avoiding-the-post-course-correction/ – Rich

  3. Add me to the “ditto club.”

    The point I make when talking with smaller companies is to get them to acknowledge that they are already doing product management (through action or inaction). The only question is, do they have someone who (1) is good at it, and (2) has the time to dedicate to doing it.

    @sehlhorst (on Twitter)

  4. I’ll have to add a Double DITTO on my support. I am currently engaged with a “scratch” startup. The CEO is a brilliant technologist and business person and gets product management and its value. When I first met with him, he said, “I need someone who can discover markets, understand problems and use REAL market evidence before I spend any money.” I said, “Let’s get busy.”

    As product management leaders, we have to step in, step up and move forward and ensure EVERY COMPANY has a product champion that owns and drives the strategy with real market artifacts and evidence.

  5. I feel lonely here! 🙂

    Robin said it best: “It was very clear to me that they needed product guidance that I could offer, but they have a really hard time justifying the expense…”

    Having been fortunate to be a part of some successful startups myself – my observations are this:
    * “Full-time PM” is usually a very hard to justify expense until the startup gets to be at least 15-20 employees.
    * At most startups, founders play the PM role until it gets to that size.

    I’m not sure hiring a full-time PM right away is a good option, unless founders have NO product/market sense. In which case, the startup has much bigger issues than can be solved by hiring a PM, IMHO. 😉

    • Michael,

      I generally find the “justifying the expense” argument pretty hard to defend, with the exception of small, self-financed companies. In the early stages, we’re talking about adding one skilled individual – full-time or part-time.

      People will add developers or salespeople without batting an eyelash. And trust me, they’ll spend a lot of money (several times the salary of a good PM) chasing ghosts with products that don’t meet market needs.

      How many failed POCs and unnecessary support cases and sales trips, how much extra engineering time is needed to add up to the cost of a full time PM? What is the lost opportunity cost of not truly understanding market needs, delaying both customer adoption and revenue? But for some reason, people think they can’t seem to justify hiring Product Management.

      I’ve seen many examples of well funded startups who’ve built product and sales forces only to find out they didn’t really have the product the market needed.

      Then the VCs started pushing them to find someone with PM skills. But they still have to pay for all that headcount while they retool their offering. And what’s the deal with those VCs? Asleep at the wheel? Why did they wait until trouble appeared before doing what was in the best interest of their investment?

      Someone tweeted a good line recently — “There is never time to do it right, but there is always time to do it over.”

      Keep in mind what Campbell is saying. He’s talking about the need for Product Management very early on where the founder(s) are technologists. i.e. they don’t understand how to properly productize “technical creations” and take them to market effectively.

      In other situations, perhaps where the founder has a PM background or has market and domain knowledge, the answer would likely be different.

      But, the point remains, Product Management expertise is key to accelerating success.

      • Hey Saeed,

        I don’t believe it’s a matter of funding source of the startup.

        Without providing a detailed rebuttal, let me ask you this. Do you know of many successful startups who hired PM as their first hire?

        Almost every single successful startup I know of (including many which raised a lot of VC funds) either hired an engineer or a salesperson as their first hire. That’s the right approach, IMHO.

        As you know, I’m with a startup – which makes a popular SaaS tool for PMs! Yet, the first few employees we hired were engineers.

  6. Jim, Scott, Rich, Robin

    Thanks for the comments. Given the readership of the blog, I didn’t expect a lot of dissenters — though I do credit Michael for speaking up for his perspective.

    I like Scott’s comment– being experienced and being focused/dedicated to it are key.

    There’s a lot of other good stuff in the Bill Campbell interview. I’ll blog about that in the near future.

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  8. Michael,

    The question to ask is actually the opposite of the one you suggest.

    It’s not a question of successful companies without ProdMgmt, but how many unsuccessful ones have failed or underperformed because they didn’t have ProdMgmt early on.

    Keep in mind what Campbell says. After a technologist founder, you need someone who understand how to map market needs to technology. If the founder can bridge the technology/market needs gap, its a different story.

    BTW, the PMgmt process starts BEFORE any real code should be written. Figuring out what to build and for whom, the value prop etc. is core business basics.

    It’s easy to write code, so that’s what a lot of people do. But understanding what to build and why is really the most important first step. Then hire engineers etc to build whatever is required.

  9. Great post! I’ve blogged a couple of times about this. It is the sad stories, like I talk about here ( http://softwaremaven.innerbrane.com/2009/10/influence-of-tribes-on-product-success.html ) that really illustrate the importance of product management.

    I’ve come to believe that it is a side-effect of founders being so passionate about their products. Given the passion that drives them, it is hard for many of them to believe that a market won’t just open up for them.

    Then reality hits, and it isn’t pretty.

  10. As a product management professional I have seen a worrying amount of start ups some of which are quite well funded that have made no effort to produce product strategy and plans.

  11. Very nice article and great to read different perspectives from Saeed and Michael. I agree with Saeed that if the founder (brilliant technologist) can bridge the gap between the technology and market, it is the best thing. But rare to find such people. I also agree with Saeed that the right metric to look at it is the number of unsuccessful companies that have failed because they did not build the right thing.

    Now why does it happen? It is very easy to start writing code and also the erroneous belief that if we build something, they will come and then help us iterate and make it perfect. Then they throw examples like Facebook, Twitter and Google at you without realizing that these are essentially needles in a haystack of failed startups.

    Michael – one of the successful startups that I can name which had a Product Manager as one of the founders was SolidWorks – took the CAD industry by storm.

    I had written a guest blog post on “Product Management in a Startup” along similar lines at http://subrataalpha.wordpress.com/2009/03/11/product-management-in-a-startup/

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  14. It seems dangerous for a startup to grow without product management as a CEO’s attention becomes more scattered. I’ve added my ditto to those of you advocating early product management at startups on my blog. (http://bit.ly/qeOUF)

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