Product Sense: the not-so-secret sauce for successful product management

Created by DALL·E

Introduction

As a product manager, you are repeatedly faced with the challenge of making good decisions. New, unfinished product ideas or even very specific feature requirements must be understood, sorted and assessed for their expected impact. Good Product Sense helps to quickly evaluate the desired impact of an idea or requirement. Product Sense is therefore a crucial factor for better decisions in product development and helps to save costs and time. At the same time, a strongly developed Product Sense does not replace testing product ideas. Testing ideas and hypotheses remain necessary.

According to a survey of 1,000 product managers in 2022, Product Sense was named one of the three most important skills in product management, after “communication” and “execution”. However, it is also one of the least clearly defined skills in product management. That is why we want to clarify the term Product Sense and describe in more detail how to develop this skill.

What is Product Sense?

Great product sense = generally being right about which product changes will have the intended impact.
— Lenny Rachitsky

Good Product Sense is based essentially on four factors: empathy to discover meaningful user needs, product and domain knowledge of how successful solutions in the market work, creative problem-solving to effectively meet user and business needs alike, and finally, experience gained over time in product development. The first two factors will be considered in more detail in the following, as they form the basis for subsequent creative processes and the accumulation of experience.

The importance of Product Sense

This is, admittedly, a purely fictional story. But it is similar to what we have experienced in many companies. It is a good example of why good Product Sense is so important for product management decisions. In organizations with little Product Sense, product managers are often responsible for the simple implementation of external requirements. There is no ability to think ahead or to question or validate the effectiveness of requirements. There is simply a lack of understanding of how products are built and how they work in general. Product management has little ability to develop an imagination of what impact individual requirements can have on users, customers, the product, and the business model as a whole. For product managers in such environments, it is difficult to make good, forward-looking decisions that are in line with the company’s strategy and that also have a positive impact on users and customers. In short, Product Sense is a crucial factor for successful product development.

A good product intuition helps product managers to …

  1. better understand the cause-and-effect relationships
  2. assess the potential effects in complex systems
  3. recognize risks early on
  4. achieve more impact on customers and their own company
  5. ask good, goal-oriented questions
  6. make the right decisions

Even though the ability of Product Sense primarily benefits decision-makers in digital product development, such as product managers, this ability can also be useful for other roles involved in product development, from engineering to design to marketing, sales, and customer support. A well-developed Product Sense can help these individuals better understand and actively participate in product development. Therefore, developing Product Sense is beneficial for anyone who needs to make product decisions or wants to help shape them.

How to develop Product Sense

[…] my mantra for this process is “strong opinions, weakly held.” Allow your intuition to guide you to a conclusion, no matter how imperfect — this is the “strong opinion” part. Then –and this is the “weakly held” part– prove yourself wrong.
— Paul Saffo

The more experiences product managers accumulate in their careers, the more likely they are to have developed a deep understanding of products and good Product Sense. The presence of Product Sense is therefore one of the key factors that distinguishes senior from junior product managers. However, this ability does not come naturally but must be actively developed and continuously improved. As mentioned before, this requires empathy and a deep, holistic understanding of the product, business, and domain. We will discuss this in more detail in the next section.

Building empathy

Empathy must be trained and actively developed. Product managers are not real users or customers of the product they are developing—even if they use the product themselves. Therefore, product managers must directly and regularly talk to users or customers to understand them and recognize patterns. It is not enough to be informed only by customer support or the research team. On the one hand, the opportunity to ask for a better understanding and additional context is lost, on the other hand, repeated and regular interaction is important, as customer needs and usage behaviour can change over time. A user statement that seemed interesting yesterday may already be obsolete today. In addition, observing user behaviour and measuring interactions with the product provide useful clues about the needs of the end users. Marrying qualitative observations with quantitative data further enhances empathy. Therefore, product managers must be integrated into research or conduct it themselves in order to develop Product Sense.

It is time to take control of your product research! Let business development and market research teams do what they do best, but make sure to define and conduct your own early-stage research based on your specific product management questions.
—Christian Becker

In order to consistently engage with users and customers, test subjects must be found for interviews and tests. Finding subjects for a B2C product with a large user base is much easier than for a B2B product for specialists. To get feedback on the interface of a B2C product, it is often enough to go to the nearest coffee shop and ask a handful of people if they know and use the product. This way, test subjects can easily be found without having to put in much additional effort. Finding users for B2B products is much more difficult. In this case, it is a good idea to start by talking to users within your own company. Your colleagues often know potential partners in other companies who can be recruited as test subjects.

Special attention must be paid to personal preferences when developing intuition. All people are biased, that is inevitable. Product managers are influenced, among other things, by confirmation bias (acting to confirm one’s own point of view and ignore contradictory evidence), the law of small numbers (the belief that small samples represent a population), or recency bias (the preference for events and results that have just occurred). In order to counteract the influence of these effects, one’s own views must be constantly checked. But product managers are not alone in this. They can draw on the different perspectives of their team and on existing data and facts.

In addition to empathy for customers and users, empathy for the internal and external stakeholders of the product is also needed. A product is value creation for customers and companies alike. Without customer value, there is no business value and without business value, there is no investment in customer value. One of the main tasks of product managers is therefore often to balance the needs of these two sides.

Strengthen product and domain knowledge

Product knowledge

The most important question in product management is probably what a product actually is and how it works. A product is often described as a collection of functionalities that solve a problem. At best, this only satisfies one side, the customer side. In order to satisfy the company as well, the product must also cover its costs and generate profit. At the core of every product is the exchange of value between the consumer and provider. Providers create value for their customers, who in turn return this value to the provider, for example in the form of monetary value. A product is therefore much more.

Building a product is NOT “the product” of your startup. Your business model is ‘the product’.
—Ash Maurya

The business model is the blueprint of the product. It describes, on the customer side, the target group(s), the corresponding value promise, which is described by problem-solving, and the channels through which customers and users become aware of the product. On the business side, in addition to the financial model, consisting of cost structure and revenue streams, the competitive advantage of the company is described. Viewed holistically, a product is more than just the sum of its functionalities. A successful product combines a solution for the customer, for the business, and for the technology. A general understanding of the business model, the customers, the solution, the technology, and the resources that can be used is the basis for all product-related decisions. These decisions also correspond to the four major risks in product development: the risk of usability, feasibility, business success, and added value for users and customers.

So don’t let anyone try to tell you it’s all about the business, or it’s all about the customer, or it’s all about the technology. Product is harder than that. It’s all about all three.
Marty Cagan

To better understand the business models of products, it is recommended to learn more about their structure. A nice exercise is to deconstruct or decipher everyday products. It is always worth being curious, trying out new products, breaking them down and analyzing them based on product knowledge. The findings can then be shared and discussed with other product enthusiasts or colleagues.

Domain knowledge

In addition to product knowledge, domain knowledge is also essential for good Product Sense. This means, on the one hand, to know and understand the company, product, business model, and customers in depth — on the other hand, to know the market, industry, trends and technology developments, as well as competition and competitors.

I argue that strong product sense is better described as deep product knowledge, and is the result of truly immersing yourself into a specific product space.
Marty Cagan

To understand the vision and strategy of the main competitors, it can be helpful to use their products regularly and talk to their customers. This can help to better identify weaknesses and strengths. In addition to competitive analysis, there are other ways to build up domain knowledge: collaborating with subject matter experts, who are real experts in a domain, is very valuable according to experiences to gain own expert knowledge. These can be existing customers or external consultants. Often, experienced experts can also be found among your own colleagues. To learn more about the product, customers, and business, it is always worthwhile to ask other departments of the company. Whether it is sales, customer success, marketing, or business development, they all have valuable insights that can give product managers a better understanding of the domain.

Quick Start to Product Sense

Product Sense Checklist

First

  • Regularly block off time in your calendar to talk to users and customers
  • Read product and team documentation
  • Understand the business model and value proposition
  • Review general analytics data and performance data of individual functions
  • Understand the technical landscape and possibilities or limitations.

Next

  • Conduct stakeholder interviews to understand needs and find pain points
  • Learn about the perspectives and needs of adjacent areas such as sales, marketing, business development, and customer support
  • Set up product KPIs and check them against other areas
  • Learn more about customer needs from other product managers, UX design, customer support, sales, marketing, etc.
  • Research the company’s vision, mission, goals, strategy, positioning, and differentiation.
  • Subscribe to relevant newsletters and podcasts, or visit conferences, webinars, communities of practice, and meetups on product topics.

Later

  • Evaluate first prototypes with users or customers
  • Talk to experts to build domain knowledge
  • Exchange with competitors and/or industry experts
  • Deconstruct and analyze foreign products
  • Investigate data collection and usage data in the industry
  • Keep an eye on the market, competition, trends, and venture capital investments
  • Read industry reports and attend industry fairs.

Acknowledgements

About the authors

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Product Designer

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