How Product Management Scales from Startup to Corporation
This article is for product professionals looking to scale their team alongside a growing business. It’s also for those wondering what’s missing in their current setup.
As a Senior Product Manager living in the fast-paced world of SaaS (Software as a Service) for nearly a decade, I’ve seen my fair share of organizational changes. From joining a startup to being acquired into a 6000+ employee organization, I’ve “been through the wringer” as they say.
Scaling is fairly straightforward for many departments. If you need additional technical support, you hire more technical support. If you need more sales professionals, you hire more sales professionals. But what about product management? Can you simply add hire product managers?
No! Scaling a product team requires the creation of several types of roles to assure high-level strategies are carried out with tactical perfection. Similar to small business owners, the product manager’s responsibility is to generate sustainable growth for the company. But when you’re a $500M machine, this individual role is incapable of being stretched to such lengths, and new roles must emerge in support. Before we jump into what roles appear at various stages of company maturity, let’s define each role in the product hierarchy…
Product Roles
CPO (Chief Product Officer): The C-level suite. These are rare.
VP: Typically the highest role in product. The organizational maestro.
Director: People leader of several product lines.
Manager/Lead: People leader of one large or multiple small product lines.
Product Manager: Individual contributor and vision leader for specific products.
Business Analyst: Individual contributor and tactical executor alongside development.
Each of these roles often carry seniority indicators that follow Associate, Mid-level, and Senior. Except for CPO of course, although “Senior Chief” would make for an interesting business card.
Fast rules to keep in mind
- You don’t want to clone your people. Seek complementary talent to curate a well rounded team.
- Clearly define accountability. Loosely defined accountability leads to angst when PMs seek praise for a successful projects and finger pointing when projects fail.
- Excessive layering creates a separation between your vision and the needs of your clients. This will fast-track the demise of your brand.
The Stages
1. Startup
It all started with an idea, and that idea is going to be cultured by the founder until they are no longer capable of doing so. Early in a company/product’s lifecycle only one thing matters: validation. At this time the CEO is seeking validation of their idea through a variety of channels; proof of concept, investor buy-in, early adopter feedback, etc.
Product roles: CEO/Founders
Telltale sign of maturity: “Founder Fatigue.” The idea has received market validation, and is now growing wings which are stretching your founder thin. The CEO is forced to bestow product vision responsibilities on co-founders and other trusted individuals who are living the mission.
2. Growth Mode
Once the startup’s idea achieves market validation, the next logical step is to productize and build a customer base. This is called the growth stage. The company is under immense pressure from it’s investors to achieve market fit before they reach the end of their runway. This requires a variety of new activities which force the team to multiply itself to divide and conquer. They need do’ers, not dreamers. Enter: the individual contributors (ICs).
Product roles: CEO, VP of Product, Principal PMs
Telltale sign of maturity: Market fit is achieved, high-level hypothesis are validated, and product maturity is required in order to monetize beyond your early-adopter clients.
3. Small Business
The zone of profitability. Ideas have been validated, market fit is achieved, and now those holding the purse strings are looking to reap the rewards of their risk. The company isn’t yet a “product-focused” company, or a company that organically attracts clients based on its superior product…it’s a “sales-focused” company, still informing the market they exist and pushing sales. This is where the product management organization really starts to find it’s flow. Entry-level PMs are brought in to address a growing backlog, and those senior are starting to form processes to make their success repeatable. This is where many companies start to transition from Waterfall to Agile, create RACI matrixes to define responsibilities, and generally find their voice of influence over the sales team and the increasingly burdened senior leadership.
Product roles: VP of Product, Director of PM, Principal PMs, Junior PMs
Telltale sign of maturity: The roadmap no longer revolves around a handful of top clients, new markets need exploring, and inefficiencies become glaring.
4. Medium Business
Goodbye sales-focused roadmap, hello product-focused roadmap. At this point the company recognizes a superior product attracts clients organically, and focuses on speed of development and increasing its market share. The “me too” features are starting to get nixed in favor of features that drive differentiation. The company is highly profitable, enabling large shifts such as compartmentalization of its development organization, and the adoption of lean ideologies such as Agile. These shifts require new roles to support, particularly the role of a Business Analyst that can assure development is executed with precision while the greater product organization identifies roadmap items that gain marketshare.
Product roles: VP of Product, Director of PM, Principal PMs, Junior PMs, Business Analysts or Product Owners.
Telltale sign of maturity: The portfolio starts to become a contrast of new and legacy products, SAFe (Scaled Agile Framework) is layered on the agile framework, technical debt needs addressing, and the company is in a position not just to force change in their industry but to define the future of the industry.
5. Large Business
The market leader. At this time the organization begins to feel its own weight, seeking ways to silo teams and reattain the speed which it once had. Profitability is good but shareholders seek refinements to optimize cashflow which can be siphoned or reinvested, depending on market pressures. Departments in the organization seek simplification in the people hierarchy, often leading to flattening and increased reports, the product organization included. This stage is the apple of every founder’s eye, only it comes with worms.
Product roles: CPO, VP of Product, Director of PM, Principal PMs, Junior PMs, Business Analysts or Product Owners, and deep variation of leveling within each role.
Telltale sign of maturity: The business becomes too large for its own good, creating “innovation labs” separate from the organization in order to drive experimentation and speed. At high levels of maturity, large organizations can even divest risky branches of its portfolio, which start the business cycle all over again.
Closing thoughts
This article is not mean to be a recipe for success, but rather food for thought as you self-demystify this challenging task. Scaling your product team requires consideration of factors that are commonplace for companies of your size but also requires attention is devoted to issues that are unique to your path to success. No one-size fits all, but now at least you know the sizes.
Good luck.
-HR
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About the author: Henry Rahr is a Senior Product Manager & owner of UX/Product consulting agency LeetLab.io. Based in Los Angeles, CA.