My earlier post on Customer-obsessed companies, and the posts by Ed Sim and Fred Wilson referenced in my post, talk about the importance of a strong customer focus in building successful start-ups. We all mention the central role of the product manager in ensuring a focus on customer needs, not technology. (I think we're all talking explicity about software and related types of technology companies although I think the advice is true in a general sense.)
But one issue I've seen start-ups wrestle with, particularly software start-ups, is where to find a good product manager. The skills mix and knowledge mix for a good product manager is pretty broad. You need someone who absolutely understands the needs of the customers that you are targeting. You need someone who understands enough about the technology so that they can build credibility with the engineering team, so that they can translate user needs into something engineering can understand, and so that they can filter and evaluate the technology team's designs and schedule estimates. You need someone who is a good communicator and negotiator. You also need someone who can negotiate with the sales force and distinguish between the one-offs that every sales rep needs tomorrow to help close whatever big deal is in their pipeline from the true broad requirements that are going to improve the marketability of the product on a broader basis.
So where do you find candidates with this "walks-on-water" skill set? And where do you place them in the organization so that they can be successful?
I've had good luck with repeatedly sourcing product managers from two types of jobs. This most consistently successful source of good product managers that I've found is from the ranks of successful pre-sales product specialists. These folks have lots of different titles in different companies, but they are the technical sales resources who work directly with sales reps on understanding customer requirements, they often take the lead in presenting solutions to customer problems, and on planning the implementation of the product/solution in the customer environment. In start-ups they often are directly involved in implementation tasks as well, but not always.
Why is pre-sales a good source for product managers? I think for several reasons. First, they have been eyeball to eyeball with customers - they understand their needs and where customer needs and product capabilities don't match. They have an appropriate level of technical knowledge. They have good communication skills as well as sales and business savvy or they wouldn't be successful in pre-sales. They have the customer knowledge and technical skills to be credible with the engineers and the sales experience to be able to deal with and be credible to the sales force. I've used pre-sales for product manager candidates for both application software products and systems software products (e.g. middleware and development tools).
The second source that I've used, although less frequently, is recruiting directly from the user or prospective user community. In very early stage products, I've had success in a couple of cases hiring strong advocates for the product from accounts that turned out not to be a visionary stage buyer but where the internal technical coach or technical recommender had become a strong advocate/evangelist for the product. In somewhat more mature products I've had success, particularly with application software packages, finding strong product manager candidates out of the user base and in particular from among users who self-selected themselves by voluntering to work in creating a local, regional, or national user group. User recruiting can be a little trickier than recruiting from among your own staff in the pre-sales organization, but when done well it can give you your best product managers. At least that's been my experience.
I'm much less taken with the idea of recruiting someone who has been a product manager elsewhere based on the assumption that they understand the function and processes so all they have to learn is the new technology and/or market. Personally, I believe that learning the processes of product management is much easier than learning the technology or the customer needs - particularly when we're talking about an early stage market. Frankly, my belief is that the best product managers rarely stay in that role for long - rarely long enough to go repeat the role elsewhere. The skills that make a great product manager also make them a great candidate for promotion to a higher level role, so I don't believe that you are likely to be able to recruit a top-notch product manager with lots of experience. You're more likely to get a mediocre performer and that's not what you want in an early stage company. Better to grow your own (yeah, I know that you can probably point to lots of exceptions - I'm just speaking from my experience and observations as to the most consistently successful approaches).
Where you won't consistently find great product managers is from engineering or from sales. I've only had the experience of a sales rep converting to product management a couple of times and I've never been happy with the result. But you are not likely to have to face this choice often as good sales reps rarely want to take the income hit required to move to product management. In a software business you'll much more frequently find engineers or engineering managers who want to try product management.
This can be very tempting. They clearly have the technical skills and the understanding of how to work the engineering organization. But, aside from a development tools business - where the engineers were also users - I've not seen this work on a consistent basis. Too often you get a bias in the direction of technology issues rather than customer priorities from converted engineers. Or there are other key skill or knowledge gaps or just the wrong temperment. I've come to the conclusion that unless I can apprentice someone coming from engineering to an experienced product manager long enough to figure out if they are going to be able to be re-programmed or can put them into a pre-sales job for a while for the same purpose that I'm going to avoid moving engineers into product management.
So - you've chosen your product manager, now where do you place them in the organization? Well, Ed Sim's answer is:
Your product person should be in marketing with significant experience balancing the short-term and long-term needs of the various stakeholders.I think that's the correct long-term answer, but I've seen lots of software start-ups where that's not a good solution, at least in the early days. Why - because all too often the head of marketing in start-ups isn't the right person to be managing the product function. In many, many technology start-ups the VP or Director of Marketing is more of an out-bound marketing person, not someone with the broader skill set and perspective to be leading the product function.
In my opinion, the default solution for placing product management in a start-up is to have it report to the CEO. That places this key function - the one that really is responsible for ensuring on a day-to-day basis that the product is being focused on customer, customer, customer - high enough in the organization to give it the support it needs to keep the focus where it ought to be. And if your CEO can't keep the focus on the customer, well, you've got an even larger problem.