Product Manager vs. Product Management (part 1)

I recently finished a series of articles on being a Great Product Manager. I want to switch gears a bit and spend some time talking about the function of Product Management in software companies. As we know, product managers and product management are not isolated to software companies, but the role of product management in software companies is different from the role of product (or brand) management in other domains, such as the financial sector or Consumer Packaged Goods (CPG) firms.

For example:

• How many new “features” does a “release” of a new shampoo have?
• How much time does the brand manager spend with the chemists working on that new shampoo formulation during the “release cycle”?
• How much discussion is needed on how the consumer will actually use the shampoo?
• Are whitepapers and product demos that important for shampoo?

This is not to belittle brand management in CPG, but simply to give a few examples of how issues in CPG product management may be different than those in software product management.

One nice thing about CPG Product Management is that it is fairly well defined. For CPG, Product Management is, without question, a marketing function. CPG Product Managers need to be business focussed and have a keen understanding of media and web marketing, demographics, finance and analytics. They need to be able to grasp the differences in various global markets, and be able to market global brands locally, as well as create local brands and products as needed in specific markets.

The 4 P’s (product, place, price, promotion) are fundamental to them. And, with the web growing ever omnipresent in our lives, and the emergence of new technologies allowing customers and companies to communicate more intimately with each other, terms like interaction, interruption and mass-customization are heard quite frequently.

Now compare this to Product Management in most software companies. Honestly, how many software product managers could list the 4 P’s, let alone talk confidently about the dynamics of international markets and how they impact their software products?

Full disclosure: I always list “Position” as one of the P’s (product, position, price, promotion), even though it is not. I really think it should be! Also, while I have been the PM of products that have had world-wide distribution including full localization into languages such as Japanese, French and Korean, I really had little insight into the dynamics of those markets. For the most part, beyond the specific localization, those markets received exactly the same functionality as every other geography, and it was up to local partners and distributors to market the product in the ways they saw fit.

The reality is that software product management is still an immature function. Most software companies define and staff product management in a reactionary manner. Typically a product manager is hired once the founder or CTO or chief architect or other corporate thought leader reaches the limit of their abilities in defining the product, or things become so messed up in the company with a product or technology strategy, a member of the Board of Directors tells the CEO to get a Product Manager.

It really shocks me that VC’s don’t make it a funding requirement, at minimum in the series B and above rounds, that a startup must have an experienced Product Management executive on board. Think about it? These folks are in the business of investing in technology companies. Their objective is to maximize the likelihood of success for their investments. As such, why would they not view Product Management as a critical role, on the same level as Sales, Marketing and Engineering?

I recently asked a couple of VCs this question. The answers really surprised me.

One said, quite candidly, that he really didn’t understand the role of product management very well, but that he had recently learned a lot more about it via interaction with one of his portfolio companies. OK, thanks for the honest answer, but not very reassuring from my perspective.

Another said his expectation was that the founders would fill in for the PM function until such a time as it made sense to bring dedicated product management into the company. I asked the latter VC why he didn’t view product management as a critical role to fill right at the start? He said that when he makes investments, it’s fundamentally the management team, and particularly the founders that he’s investing in. Pulling in a PM who isn’t a close associate of the founders in the early stages can be disruptive to the management team.

OK, certainly a better answer, but it says a lot about software product management when those who make their living investing in software companies cannot see enough benefit in the function to have it outweigh any concerns they have about personalities and fit in the management team.