This is the first of a two-part series on Product Management at startups. Atomico partner Siraj Khaliq (in part 1) and XIR Steve Crossan (in part 2) try to spotlight a major problem facing European startups. Siraj was an early Googler (2001–06) and Co-founder/CTO of San Francisco based The Climate Corporation.
Coming back to Europe after a decade plus in Silicon Valley, one thing I continue to find striking is the disproportionately small population of Product Managers in the tech ecosystem here, and — worse — a persistent under-appreciation of why this all-important role is needed.
Just last month, the first-time founder of a 15-person company told me that she was puzzled when she visited the valley that she encountered so many PMs. What were they all up to?
This is, unfortunately, not atypical. When speaking with startups at Series A (the stage that Atomico invests in), a frequent attitude we encounter is that dedicated PM roles are a luxury and not needed until later. Often product management is informal, split between engineers and founding CEOs/CTOs.
We sent out a survey to a dozen European series A and B startups in our network, and the results were sobering. The median headcount at which they installed a full-time PM turns out to be 34. The average Engineer to full-time PM ratio was 24:1 (not even counting a couple of outliers with zero full-time PMs despite engineering teams over 10 in size). The same questions put to several Valley based companies, by contrast, revealed typical full-time PM hires in the first 10 employees, and an average Eng:PM ratio of 8:1.
The problem is self-compounding. Given the dearth of available PMs, people don’t often see good PMs in action and build the necessary appreciation for what they bring… at least until relatively late in the game when they start to see the consequences.
The Product Manager serves in a critical role — independent of the quarterly pressures of Sales and (hopefully) independent of the perfectionist tendencies of Engineering. She understands customer requirements (often poorly stated or not clearly known by customers themselves), CEO vision/direction, sales team feedback, engineering team capabilities — and uses this to forge a viable roadmap that everyone can rally behind. And she does this continuously, adjusting as appropriate to fluid circumstances. Good PMs are also key to deciding what not to build, bringing focus and steadiness to often over-stressed teams.
Take out good Product Management from a promising startup, and often all you’ll end up with is promise. And the disappointment of a high potential company that never made it (maybe because someone else with better execution did).
Europe has a Product Manager problem. A major skill shortage of PMs that is crippling our chances of executing towards huge outcomes. A problem that is hugely underappreciated given its subtle, pernicious nature.
When discussions in Europe turn to what is holding back our startups, the common culprits are often capital, risk taking attitude, entrepreneurial ambition, mentorship, inspiration. Talent isn’t usually mentioned, and not without reason: our State of European Tech report every year highlights we have a wealth of developers, at last count 5.5m vs 4.4m in the US. However, these high level figures mask that there’s a quality and experience gap for certain key roles fundamental to execution. And execution makes all the difference when you’re a startup.
Those companies that have accepted they need PMs will likely tell you that they find that it’s the hardest role they have had to fill — above data scientists, VPs of Engineering or Sales.
The good news is that this is a very trainable skill set. It is something that can be taught within a company rather than requiring training courses or academic degrees. Indeed, this is the only way to build good PMs.
Google is a great example of this. They were early to realize that PMs would be a critical choke point in their growth ambitions. So they decided to train from within, and on an industrial scale. Google’s APM program, launched in 2002, is widely considered to be a huge and lasting success. The idea was to hire people with engineering degrees straight out of university and train them over a structured two year program. When I left Google in 2006, my 20 engineer project already had three product managers, of which two were capable young APMs being trained by the lead PM.
Fifteen years later, Silicon Valley continues to reap the benefits. Many of the graduates of Google’s APM programme form the lifeblood of product teams across the valley, serve in senior executive roles, and in many cases have founded and built startups, underpinned by the skill set they developed. A few well known alumni are Facebook ex-CTO & Quip founder Bret Taylor, Polyvore ex-CEO Jess Lee, Asana co-founder Justin Rosenstein and Aardvark co-founder Nathan Stoll.
At The Climate Corporation we decided to hire and empower someone early in his career. Jim Ethington, now CEO of Arable, rose rapidly from junior PM to eventually SVP of Product running a team of over a dozen. A majority of our PMs were self-trained, via a curriculum Jim put in place. Jim tells me his success came down to (a) having prior experience as a software engineer having to figure out specs in the absence of a PM, and (b) crucially, having the firm backing of leadership on the importance of Product Management.
It’s simply prudent planning. Not having enough qualified PMs is really not a bottleneck you want to encounter, and yet I’d wager this problem will be experienced by the majority of European tech companies around today.
So, let’s get on top of this. It’s time to declare code red on the severe dearth of experienced Product Managers in the European tech ecosystem.
If you’re lucky enough to have a seasoned PM who can mentor others, set up a structured programme internally to train junior PMs. These junior PMs will often come from engineering, but could come from sales ops, consulting, project management or any other kind of analytical background.
What makes for good PM raw material? Yes, they need the ability to analyze, plan, and arbitrate between multiple stakeholders, but there’s an attribute even more fundamental.
Great PMs are clarifiers, not confusers. They need to be able to take complexity and distil out what really matters. More so than almost any other role, PMs need to be clear-headed and comfortable making decisions on how to do less, not more.
If you don’t have a senior PM, of course try to hire one, but don’t block on this process. Identify people already at your company that might be product managing by default, and see whether they should be put into that role full-time and reporting directly to the CEO or CCO.
There are a lot of resources available for motivated future PMs to get started, including books like Inspired (thanks, Jim), but — critically — connect them with great mentors. At Atomico we like to do this across our portfolio and network of friends, but many of the other good VCs here in Europe would step up here and deliver if you ask.
And, last but not least: if you’re a great PM somewhere else in the world reading this, know that you can have a profound impact coming to Europe. We aren’t lacking in great technology skills, ambitious companies or appropriate pools of funding. If you want to make your mark in this field there‘s no better place to do it.
With luck, looking back five to 10 years from now this article will seem hopelessly dated, and the next wave of European entrepreneurs might say “what PM problem?” If so, then job well done. Here’s to the serious effort ahead needed to get us there!