Probably one of the most critical roles in a technology startup or project is that of the product manager. In a startup, this is typically the first hire that wrestles some responsibility away from the startup founders who, until then, are typically responsible for driving product development. In a larger company this is often the informal CEO of a new product, tasked with taking an idea or powerpoint strategy and turning it into a viable product.
As someone who has built from scratch and managed large teams of product managers, I am often asked for advice one how go about finding and hiring a great product manager or building out a great team. And if you have worked in technology for a long enough period of time you are going to have run into CEOs/founders/executives who have really strong and diverging opinions about product managers.
Lets start with some facts.
First obvious fact: there are wide range of product managers out there. If you look at a broad cross-section of product managers you’ll find people with engineering degrees, others with design degrees, others are mathematicians, and many with no degree at all. Some will have been doing the job for many years, others seem to have walked into the job yesterday. Why?
Second obvious fact: there are a wide range of opinions about the impact product managers have on the success of a technology enterprise. I am talking about beyond the general mistrust of product managers by engineers. Even more curious, I frequently run into product managers that previous managers rave about that I wouldn’t think to put into one of my ventures. Why?
Third obvious fact: most folks consider product managers as one of the most difficult roles to hire for. Like success rate well under 50%. They can comfortably spot a great engineer or financial controller or marketer, but not a great product manager. Why?
There is only one way to reconcile these views — that the challenge posed by each company is not the same, that the skillset and competencies that each product manager brings is not the same and that, most importantly, this is likely to change over the live of a product/business.
This leads to three core questions:
- What challenge is driving the need for a product manager?
- What type of product manager best meets that need?
- How and where can I find that person?
The product management challenge driving the business
Most every entrepreneur has heard of the term product/market fit, though most of us would struggle to define it or recognize it when we see it. Partially this is because it follows a somewhat circular logic (each define and influence the other) and because markets and products are constantly changing and evolving — they never stand still. Typically the growth of a product or startup is an exercise in figuring out this fit —and the challenges posed of the company, and therefore the product manager, change as the fit gets tighter.
Exploration stage. In the early stages of a company, the product that you are planning on developing defines the addressable market, while at the same time the market and its particular characteristics similarly define the product. This bouncing around the product/market dance-floor is characterized by rapid iteration, a need to confirm or validate hypothesis as quickly as possible through all available means — research, interviews, technical proofs of concept, customer validation tests, etc. This is the stage where epiphany probably plays the most important role in the company’s success, often coming from the interplay between what engineering is capable of delivering, what customers/market is saying and what various business models might enable.
Growth stage. There comes a point where a sufficient number of early users of the product enjoy it, however that is defined — retention, engagement, surveys showing customers would be disappointed if the product ceased to exist. The product may not be very well fleshed out, there could be manual hacks behind the scenes, and the product will probably provide only a small subset of its desired feature set. But it has a good idea of what it need to be and there is a relatively plausible set activities spanning months that helps deliver that. Here agile becomes more important and a well functioning product team relies on epics, stories, and scrum meetings to ensure that the product progresses in a methodical fashion. Once the product has launched, the company begins to focus more attention on high level metrics of lifetime value versus acquisition costs as a way to arrive at the point where the product can scale.
Optimization stage. With the formal product launch in the background and core metrics of the business at or close to breakeven acquisition, the attention often turns to optimization. To thrive at this stage the company needs to have a deep understanding of business drivers, registration and purchase funnels, segmentation and the performance of different customer cohorts by time, market channel or geography relative to the average. There is a lot of number crunching. Identified problems are often attacked through a process of hypothesis generation and rigorous A/B testing. Gut feel is not worth anything unless it passes a live experiment.
The best product manager given the challenge
Experience has shown me that, while there is a core set of capabilities that all product managers may have (more on this later), typically product managers have environments in which they excel and those in which they do not. This is not that different to engineers – some are very good at “hacking” while others are very good at refactoring and building for scale. There is no right answer — just what is right for your business or product at a given time.
Most product managers fall into several of the following profiles.
Innovators. This type of product manager is naturally curious, full of energy and extroverted. They get excited talking to others about their ideas for a product, and thrive in researching a market and taking to as many people as possible in order to find promising “angles” with which to shape a product or define a market. Their job is to solve unknowns, and prioritize their efforts and those of their team on formulating and then proving/disproving hypothesis as to the problem the product is trying to solve. Fast failure and pivoting is typically embraced by innovators — a necessary learning step on the path to success. Innovators tend to make decisions based more on intuition and customer research than rigorous process. Innovators, more often than not are former (or future) entrepreneurs. This profile is a natural fit for the hectic early days of a product where the most important exercise is rapidly seeking out the product market fit. At that stage, too much process and project management can often lead to overlooking the most critical question — is what we are going to build something that will sell?
Architects. This type of product manager is more traditional, the type of person that probably would have attended an agile course or two and is able to “agile” speak with the wider team. They are adept at meeting with and taking in requirements from various parties, turning those into epics, stories and sprints for the team. A project will not run completely off the rails with this product manager at the helm, and you can expect dashboards and burn-down charts that will keep the team and the company informed on the current state of development. This product manager is most likely to insist on QA testing, staging/release servers and other procedures that make sense once moving beyond beta. This profile is a natural fit for companies that are in a growth stage. Enough is known about the product/market that the emphasis shifts to solid execution. And solid execution requires someone who can make the different contributors to a product’s success — engineers, designers, marketers, finance, etc — all work together behind a plan that delivers a launch in a predictable, though not necessarily precise, timeframe. For start-ups this is particularly important, because that predictability is probably what is most needed in order to hit the next milestone for funding.
Optimizers. Optimizers prioritize everything they do with reference to the data. Highly adept at slicing and dicing Google Analytics, they strive to understand why customers are doing what they are doing and how this can be tweaked to improve overall performance. They get excited by their ability to make small changes to highly trafficked websites that drive big changes to the bottom line. They often do not feel the need or comfortable in relying on gut instincts, instead insisting that A/B testing is the only way to ensure that the overall product moves in the right direction. Optimizers, as you can probably guess, are ideal for better established products where product economics might have slowed after all the early obvious wins have been realized.
Just as companies often find themselves moving between more than one stage (eg. the market or technology changes that leads to the need to re-invent) or occupying more than one stage (eg. one product feature might be quite mature while another is experimental), so to are product managers not necessarily falling strictly in one of those definitions. In fact, I have found that the top 10% of product managers actually can be very effective across all situations — they adapt to the demands of the situation. Having said that, it’s often not difficult in an interview to figure out where their sweet spot is based on whether they get most excited talking about exploration, process or analytics.
How and where can I find that person that I need?
The search
The million dollar question is how to find a great product manager for your company. The above discussion highlights probably the most important aspect which is finding the right type of product manager for the problem you product or business is facing. The where is somewhat derivative of the what.
Innovators. To find and assess innovators, I look almost exclusively to people that have founded or worked in very early startups. They will know and understand the energy and time pressure required to test, assess, iterate, repeat until product/market fit is clearer. I’m not particularly concerned about the success or failure of their venture (lets face it, it probably failed if they are looking to be a product manager) but what they learned from that experience and what they want to learn from this one. The right answer is usually that they eventually want to go an built their own company and if they will give me 2-3 years of fully committed time, I’ll typically even support them when they eventually head off.
Architects. To find architects, I tend to look for folks who are already working in the role in another startup. They will have already done product management for 2-3 years and will be able to hit the ground running. Sometimes, a transitioning consultant (especially after business school) is good for this type of role especially if they will be working with a more senior product manager. If anything, I tend to be slightly wary of folks that have been product managing for a long period of time, especially in the same industry. That for me is typically a red flag — and unfortunately a profile that you see in 80% of recruiter referrals — because ambitious product managers often graduate to other roles. I find that product management is almost exclusively a functional skill (problem solving) — good product managers can excel in any domain and typically want to switch between different fields during their career. I would much rather take a smart product manager from a totally different industry and bring them across that someone who seems to be hopping every 2 years between companies in the same industry.
Optimizers. To find optimizers, I tend to look for people who have a strong quant or finance background, even if they haven’t previously been product managers. It really is incredible how many product managers are driving paid acquisition and revenue without really understanding anything about segments, conversions, virality, etc! I’m also really excited if a candidate can do some basic front-end coding or is eager to learn because there is nothing more powerful than a product manager who can optimize on their own.
The interview
Before the interview, I will typically have done a pretty brutal weeding of candidates to find (i) those that match the type of product manager I am looking for, and (ii) those that just look driven and ambitious (good school, fast progression in roles, self-taught programmers, etc). I often also do a very quick 15 minute interview with the candidate to tell them about the role and to prompt them with 2-3 questions to check that they are switched on.
For those that come to an interview, I tend to spend 80% of the interview doing case studies with the candidate. Because product management is a functional skill and because it depends so heavily on the candidate’s problem solving skills I like to stay away from spending too long a candidate’s past history or my job opportunity. This gives me a better read on the candidate’s core skills, rather than their level of preparation.
I’ll often try and brainstorm wth the candidate a hypothetical product/market issue. For example:
- Imagine we started today to build a business-only airline between London and New York. What would the product be and how would we make money?
- Given the rise of app-based food delivery, I want to start a chain of high-quality kitchen that make food for delivery-only. How can we figure out if this is a good idea?
- Imagine you could reprogram the lift in my apartment building. What would you do so that the average occupant waits less time for the lift?
- I have a website that is a marketplace for tutors but my acquisition costs are too high. What can I do?
- I took an Uber the other day and the driver was an accountant from Ghana. What business can we do to help immigrants work in fields for which they are qualified?
I tend to make this question up on the spot, based on whatever musing I have had that day. There is never a right answer to the problem (and frankly the variability keeps me engaged across multiple interviews on the same day).
The key to the interview is to get a better sense of how the candidate thinks. If I’m looking for an innovator, I hoping that they get excited, have ideas, check-themselves when they imagine roadblocks, and intuitively figure out points of leverage that the business would depend on. If I’m looking for an architect, I’ll dive deeper into the how of building the business to try and see if they are structured in their thinking and can apply agile principles to case at hand. If I am looking for an optimizer, I’ll steer the conversation into PIRATE metrics and make sure they are comfortable solving basic maths on the fly, identifying breakeven points, etc.
My experience is that after that interview I have a pretty good idea of whether I can work with the person and they probably have a good idea of my energy levels and whether they want to be a part of what I am doing. I’ll then follow up with a sell-interview where the candidate can ask as may questions as possible and I can understand better how the role can be best shaped to leverage the skills of the candidate and best further their career ambitions.
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Hope you found this helpful. Drop a note if you have any suggestions or thoughts on what works or doesn’t work for you.
Andrew Lacy 