Product Management at the $0–$1M stage: what’s it like?

From product discovery, vision & priorities, to scrappy MVP, and lots of adjustments in between 😎

Pre-Seed or Seed startups ($0–$1M ARR) have unique characteristics that influence what product work looks like at this stage.

Company’s goal: to get traction, to show that you have a solution / product that users are willing to pay for. The trend line on key metrics, such as CAC, LTV, user growth & user engagement indicate traction (or lack of).

Very limited resources to get to the goal: the Seed round funding you’ve raised, typically ~$1-$3M (more capital intensive startups raise more), must sustain you for ~12–18 months to develop the product, and to prove traction.

Prepare your mindset: embrace scrappiness and rapid learning

Companies often go through many iterations before they find product/market fit, if they ever do.” — Andy Rachleff

Image credit: Hackermoon

Being scrappy lowers the burn rate, which gives the team time to learn, adjust, and get traction.

“Going through many iterations” requires curiosity to learn, and a low ego to admit you are wrong based on user data / feedback and adjust quickly.

Product discovery

PMs must become experts in our users, and are responsible for spreading the customer obsession virus to rest of the team. Seed stage is no different.

The PM’s product discovery chops (e.g. iterating on the target user groups, spotting pain points, finding solutions) could make or break the company at this baby stage.

How do you cold start product discovery when you have no users / customers, and are running against time? Here’s how we tackled this at Limelight:

• Provide manual service, be in market to learn: we provided recruiting services to manufacturing and construction companies, to put ourselves at the frictions points between employers & candidate. This tactic got us pilot revenue $, enabled us to experience what’s broken first hand, and a pool of employers and candidates for deeper user interviews.

An example of planning targeted user interviews

• Targeted User Interviews: observing candidates’ job hunt behaviors alone didn’t give us the full story about their inner motivations, unmet needs, and career goals beyond the job hunt transaction.

So we strategized key questions we want to learn, our knowledge gaps about skilled trades folks. Then, we recruited workers in targeted trades through Limelight’s marketplace, social media, and referrals.

Using these 2 tactics, we learned about candidates’ day-to-day behaviors (e.g. more responsive to texts in the morning, use laptops maybe on the weekends), fears (e.g. job scams), and motivations.

We used our learnings for:

• Product development - wrote out How Might We’s, and began crafting product solutions that would beat out incumbents
• Product marketing - wrote our v1 of value proposition for candidates and employers based on the language and pain points that we believe would resonate
• Candidate engagement - informed the verbiage we use in texts and emails to aim to increase response rate
• Sales enablement materials - for the B2B employer side

Aside: If you want to sharpen 🔪 your research and discovery chops, these 2 books are excellent (this is not an ad)

• Validating Product Ideas: Through Lean User Research by Tomer Sharon
• Disciplined Entrepreneurship Workbook by Bill Aulet

Create, iterate, and articulate vision and priorities

“Innovation is saying ‘no’ to 1,000 things. You have to pick carefully.” — Steve Jobs

When creating vision and priorities, I ask 3 questions to stay honest:

1. What is the moat / unique advantage we seek to create?
2. What have we learned from product discovery about the most painful friction points? (painkiller vs. vitamin)
3. How does #2 evolve our initial view on our moat and priorities?

Articulating product priorities, and if the priorities have changed, are still crucial at a startup! Similar to growth-stage companies, clarity keeps the cross-functional team focused, motivated to move fast, and accountable.

I’m a fan of a 1 pager formal document that outlines product priorities and a rolling roadmap. It’s a communication tool to the board, and a source of truth internally. Unlike at a larger company, I spent less time doing roadshows on the priorities and roadmap.

Building the MVP

Taking $2M and 12 months to build a 2-sided marketplace was not an option, nor a good practice. The first critical question is “what must we build in-house now?”

At Limelight, we used product priorities +user experience as guiding principles. With 2.5 developers, we decided to do this:

• Build the candidate and employer facing web app pages in-house. This ensures the ability to deliver and improve on user experience fast
• Everything else = not MVP. We cobbled together using 3rd party tools like Google Sheets for matching engine, a CMS for data input, an ATS for candidate CRM, and marketing campaign tools to engage with candidates.

Example of cobbling together systems to support value we want to deliver to users

The other critical question is how we might best staff to deliver the MVP. Full time talent takes time and money to attract, both of which a startup does not have. This means having difficult conversations about:

• Staffing: What staffing models (FTEs, contractors, development shop in South America) can enable us to ship quality product with the little funding we have? What are the financial and operational risks are associated with each staffing model?
• Scalability: What is the light and ‘right’ infrastructure and architecture (monolithic vs. micro-services) for pre product-market fit stage? When should we invest in architecture?

Thanks for reading. 🙏 If you’ve built / are building companies and products from the ground up, I’d love to compare notes.