Is Your Product Team Entrepreneurial?

I n Silicon Valley, entrepreneurship is elevated as the highest aspiration, and yet there are few definitions of what it means to do entrepreneurship well, especially as it relates to product management. Nearly every product manager describes themselves as “entrepreneurial” because he or she is the CEO of the product. And there is plenty of other jargon like fail fast and do everything to ship the product. The newest buzz is around a mystical concept of product market fit. But what does it really mean to be an entrepreneurial product manager?

Most product managers at large companies are not entrepreneurial. Agile methodologies, rapid prototyping and fail fast are tactics that facilitate an entrepreneurial product mindset, but alone these are not sufficient. Lacking an entrepreneurial view, the product roadmap produced by many PMs often suck.

Poor roadmaps exhaustively detailed in 8-point font give a false sense that there is a lot to keep engineers busy, but also obscure the most important question: When has the product created enough new customer value that you should double down? Or when has the product reached a no-go or kill point?

Absent an entrepreneurial mindset, product roadmaps are a recipe for incremental, which may be perfectly ok for a large company harvesting revenue, blessed with ample salespeople and value-insensitive customers. This is why products often linger well past any meaningful value creation as poor roadmaps offer few clear kill points. Revenue becomes a lagging indicator of diminishing success; executives put off the brave decision because they underestimate the massive opportunity cost.

Startups are not immune but if the product proves too incremental, the startup runs out of cash and the kill decision is easy. Natural selection, survival of the fittest.

So what does it take to become an entrepreneurially-minded product manager?

• You must believe in something disruptive when no one else believes.
• As your vision is risky, you must introduce risk reducing milestones in your roadmap that calls out where a step function increase in customer value creation or capture might occur.

The first is straightforward but with an important caveat. Unlike the rest of us, the entrepreneur believes that incremental is failure. In facing big incumbents, an entrepreneur has a 100% chance of failure if the vision is only incremental. Big companies can do incremental cheaper and better and at scale.

In an entrepreneurial mindset, the #1 priority and 95% of the job for the product manager is to clearly define the problem that needs to be solved. That means:

• Define the problem end-to-end: Stretch to explain what happens during the 90%+ of time customers are not using your solution.
• Clarify the customer Wow: What would make a customer say “Wow” aloud as they explore your product and how it solves the problem? This is where you make an emotional connection with the customer.
• Get paid: Equally important, if that problem was solved, will customers pay enough that the solution becomes profitable and keeps big profit margins at scale?

All I ask from my product managers is that they keep the organization focused on the big problem we are trying to solve. Simple, not easy.

For a product manager to focus on the problem means in practice that they must have a crisp point of view on all 3 of the above bullets. That clarity becomes magical as engineers wake up sweating at 2 am, thrilled they discovered an elegant solution to a well characterized problem. Clearly defining a big problem end-to-end enables disruption.

The second point is where the rubber meets the road. Have you wondered why most entrepreneurs believe in something but still fail? And why other entrepreneurs believe with equal zeal but succeed? Aside from some luck, the difference is that successful entrepreneurs are obsessed and intellectually honest about managing to risk-reducing milestones. The good entrepreneurs do this instinctively and many may not even agree that they manage risk. They do.

R isk reducing milestones sounds like a lot of jargon. What does it mean and how can you do it? For starters, this is an abstract concept which is why it feels easier and safer to cram all the detail on the roadmap. To manage against risk, you need to define completely a perspective on what the world could look like at some end point in 24–36 months. This is usually your well-defined customer problem.

Now work backwards, thinking only about the customer, how they use the solution and how completely the solution satisfies their need at each step along the way. If you think hard enough, there will be natural inflection points that tell you when the customer value radically increases. For example, I had a nice Nissan Leaf but found the utility seriously lacking due to the 95-mile range. I imagine that a 200-mile range is a major “break point” where most consumers can safely take long commutes or only charge once per week. Not surprisingly, Telsa’s offering is 3 times more expensive but nails this break point which is why Tesla has successfully disrupted the automobile market.

If your roadmap tells you that in only 6 months or 12 months you are completely solving the customer problem, you are doing something very wrong. You have either defined a very incremental problem, or you are not being intellectually honest.

While abstract, managing to risk-reducing milestones is straightforward because there are only 3 kinds of risk: (1) Market, (2) Technical and (3) Execution. Your roadmaps and your entrepreneurial product mindset should be oriented to reducing each risk in turn — as the risk is reduced, the value becomes more apparent to customers and the value of the enterprise increases by an order of magnitude. To implement this practice, ask the following questions in your next product review:

• At what point and under what assumptions will the new product capabilities greatly reduce market risk?
• Overcoming which technical hurdle allow a radical increase in how completely the problem is solved?
• How does it(the product) get big?

If the answer to any of these questions is “I don’t know”, then the roadmap may keep engineers busy but fail as an entrepreneurial management tool.

A s I am cheating on my promise of short, I will wrap here. My experience is that product managers are most effective when they approach uncertainty with an entrepreneurial mindset, which is more than just moving agile or acting like a CEO (or founder). An entrepreneurial mindset is about managing risk in a way that clearly defines a meaningful problem end-to-end and breaks up the solution into meaningful customer milestones which can be explained on a roadmap of increasing value. Simple, not easy, but worth doing.

About the Great Product Inspire Series

Here is the first piece in a regular series about my two professional passions, (1) bold management and (2) inspired product experiences. Purposefully short and contrarian, the posts won’t tell you what you think you already know. Feedback is a gift, so comments and disagreement are invited.

Upcoming topics include:

• Turbocharge Your Recruiting By Making it Personal
• Who is Your Customer?
• Your Best Opportunities Come From People Who Know You
• Revenue is a Lagging Indicator of Success