The Importance of Product Management in Startups: Insights from a VC

Last night was the Cambridge Product Manager Network 'gala event' - a special meeting before the summer break to which a keynote speaker is invited.

This year's speaker was Alex van Someren (@alexvans), currently working for local VC company Amadeus Capital Partners and before that CEO at nCipher Technologies. And if I learnt one thing last night, it was that nCipher did much more than accelerate cryptography functions :-)

Alex's topic was essentially why should a VC care if an investment company does PM well or not? He established his credentials with a series of anecdotes about his product successes (and his 'not so' successes too). His experience comes from the startup world which is characterised by founders with a strong sense of vision. Hopefully they are in listening mode too, so they can hear the reaction from their market, and they're smart enough to test the market with a minimally marketable product as soon as possible.

In that mode, he'd expect the PM role to be played by the founders themselves.

So at what point do startups need PMs? He did the sensible thing and asked one of his PMs from those days and the answer is that there are 3 trigger events:

1. Market complexity requires some difficult decisions to be made about "Product 2.0". To borrow an analogy from a member of the audience, it's the "difficult second album" for the band;

2. When there's a need for "controlling" engineering. Not everything that can be built should be built. The 'code warrior' that worked so hard under his/her own impetus during the early days may now need more constraint and more direction, as a larger band of warriors tries to work in unison;

3. When there's a need for "controlling" sales. Not everything that can be sold should be sold. The 'gut feel' that there may be a customer there is only the start of it. Will it work with the brand? Will we make a sustainable margin? Just some of the questions.

I had a boss once who talked about "someone needing to be the grown-up" during the accelerated growth stage of successful startups. Forget about the PM being the "CEO of the Product". Oftentimes, you're the kindergarten teacher of the product. You are the one who believes it will grow up to be something wonderful. You're the one who will smooth over the divisions between product factions, and get them talking to each other again. You're the one who cares.

That definition of a product manager as the CEO of a product came back to me a few times as I listened. The problem with the definition is what about the actual CEO? It kind of assumes that she/he is an absent presence, and that's rarely the case in a startup. Alex is a classic example of the CEO with passion. To paraphrase one of his closing remarks:  Every successful product has someone who really cares.

The Q&A session touched on many things but one interested me most. Alex said that although he was as 'seat of the pants' as most he did believe in a certain amount of process. A business case, a specification and an ROI was not a lot to ask, if I heard him correctly. Finding that balance between agile working and avoiding innovation stifle is what we all seek.