Better Product Managers, and Product Management

• “Isn’t customer development just product management?”
• “You don’t really need product management if you do customer development right.”
• “Customer development is fine for startups with no process, but it doesn’t fit into a mature product management organization.”

I’ve heard all 3 of these, and I think they’re all completely wrong.

Customer development and product management are two complementary tools.  Used together, they provide a competitive advantage to any products company.

Customer development is not the secret to creating a great product.  Let me repeat that, because I’ve heard many people claim this: Customer development does not create great products.

Customer development is primarily a risk mitigation tool.

It replaces that uneasy guesswork of assuming there is a market for your idea based on:

• analyst reports
• what your competitor is doing
• the opinions of the highest-paid executive in the room

You start customer development with a hypothesis, which you are trying your damnedest to disprove. If you go in trying to prove that you were right, guess what? That’s exactly what you’ll find.

Instead, if you go in with a high degree of skepticism and a commitment to pushing beyond “yes/no” answers and vague “sounds like a good idea” statements, and still find that people are yelling/anguishing/laughing/cheering over your problem statement, then you’re safe to continue.

At this point, we move into what most of us have traditionally known as product management - envisioning requirements, prioritizing, identifying constraints, pricing, working with engineers to get the thing built.

Of course, the product manager who is also a practitioner of customer development doesn’t stop getting feedback after that initial phase — they continue talking with prospects and customers to refine and to collect more detailed feedback as the product emerges.

Customer development is also an opportunity identification tool.  If you’re a product manager in a more mature organization, you are less likely to be looking for a whole new problem to solve or a whole new product to create — your company already has customers and product lines.

It’s easy to think, “these people are already our customers; we don’t have anything else to sell them: what’s the point?”

The point is, even customers who are happily paying you may not be using the product the way you expected them to.  They may love your product — but also wish they could do X and Y.  They may not even realize that they’re doing something that is time-consuming or expensive or resource-intensive — where you could save them time, money, or people by introducing a new feature or way of using your product.

In traditional product organizations these opportunities usually come through VOC (voice of the customer) feedback.  But customers are often unable to articulate what they need, especially if it’s something they don’t even realize is a problem.  The active “pull” of customer development interviews, as opposed to the passive “push” of VOC, gets richer feedback (and guarantees that you aren’t being unduly influenced by your “squeaky wheel” customers.

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So you want to start a company?

Great.  From day 1, you’ll need to:

• understand your market and what problem you’re solving
• differentiate yourself
• validate that customers are willing to use / pay for your solution
• ruthlessly prioritize features
• balance long-term vision with short-term development

These are all product management skills.  This does not, of course, mean you need to hire a full-time product manager from day 1.  This role can be played by the founder, or a part-time consultant (one who works with startups – “big-company PM” skills are VERY different and largely useless to an early-stage company).

“But I can do this on my own…” Probably.  But if you’re trying to raise money or put together partnerships, realistically, you’re going to neglect the product stuff.

“But it’s my vision…” Yes.  And hiring a product manager greatly increases the chances of turning that “vision” into “shipped product.”  (Also, any startup product manager worth their salt will tell you when your vision is off-kilter and bring you the data to back that up.)

“I’ve never worked with a product manager who did anything useful...” If you really think this, there are 3 possibilities: a) you’ve been unlucky, b) you’ve worked with big-company PMs in a small company = bad skillset mismatch, or c) you’re a jerk.

OK, fine, so how do I hire a product manager?

Start with a good job description. Don’t copy from some other site or throw together a list of bullet points.  A sloppy job description is pretty much guaranteed to scare away the best people and attract the desperate and unemployed in droves.

As with any product or feature, you will not get this right the first time.  Draft a description, then show it to some friends and ask for feedback.

Read more at http://www.cindyalvarez.com/best-practices/attracting-talent-the-job-description

Ask good questions. And no, I don’t mean logic puzzles – I mean questions that actually address the candidate’s ability to do the job.  At a startup, negotiation, communication skills, and the amount of “process” that a person requires to do their job are all critical factors.

“Your company uses a customer feedback tool where users can submit product enhancement ideas and vote on them.  There is a specific feature that is by far the most popular idea among your users – but it doesn’t align with your long-term product strategy.  How do you respond to the users?”

Read about this and 7 more questions at http://www.cindyalvarez.com/psychology/8-non-useless-interview-questions-for-product-managers

Ask them to sell themselves. You wouldn’t hire a startup PM who needed to be told what to do, right?  So you probably ought to test out their ability to figure out what needs to be done and do it.

My current role at KISSmetrics started out exactly that way.  “We should work together – why don’t you suggest a project that you can do for us?”

This allowed me to:

• ask questions about the current product functionality and target market
• prioritize an appropriate project that would have the highest ‘bang for the buck’
• figure out what and when I was going to deliver
• explain how those deliverables would/should be used to most benefit the product

By the time I was done, I was really excited to join the company, because I’d seen that “you’ll own product” was not just lip-service.

I also really like these articles about startup hiring:

• “T-shaped employees” for early startups
• How to Hire a Product Manager (although I think his claim that PMs are ‘less necessary’ is outdated.  See: http://www.businessweek.com/innovate/content/jan2010/id20100120_303529.htm)

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Six years ago, my then-fiance and I were shopping for my engagement ring.  A lot of jewelry stores lost our business, all for the same reason: they told me what I wanted wasn’t good enough.

I knew what I wanted: simple setting, small diamond, excellent color/clarity.

I had thought this through – I have small hands, which means a big diamond looks disproportionate (and fake) on me.   I dress pretty casually, which means a fancy setting would look odd.  I’m a designer, so I actually notice those subtle differences in “color” and “clarity”.

And yet store after store basically told me, “You don’t want that, you want this ring.  You’re going to wear this for the rest of your life! Don’t you want better quality? A bigger stone?”  When I repeated what I wanted, they argued with me.  “This is what you want,” they would insist, and then we would walk out.

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The best laid schemes of product managers and sales
Go often askew,
And leaves us nothing but grief and pain,
For promised impressive product forecasts!

With apologies to Robert Burns, I’ve seen a lot of product forecasts go askew, even for fairly mature product/market matches.

The forecasts seemed to have a strong foundation – take data-backed estimates of the addressable and attainable market size, then chop off a good chunk to be conservative.  Working with sales to get their estimate of what they can sell, then chop off a good chunk of that to be conservative.  Make sure that there’s nothing blocking engineering from meeting demand.

And yet, six months later, the actual numbers fall far short of even the conservative plan.

Why?  Because forecasting isn’t all about you and your company.

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