Why founders should hire a Product Manager after raising a seed round

A case study from PlayPlay, Bearer, Sqreen, cargo.one and other Point Nine portfolio companies

Our mission at Point Nine is to help B2B SaaS and B2B marketplace businesses get from a stage where they have some early signals of Product Market Fit (i.e.“the P9 stage”) to what we call “Go To Market Fit”. By then, the commercial engine of the company works well enough for a Series A investor to be willing to invest $10–15M in the company to accelerate growth.

After investing in ca. 110 companies, we’ve seen several examples of companies successfully executing this growth trajectory. Often times, a key success factor is to hire a Product Manager.

The goal of this quick post is to:

1. explain the rationale behind this hire,
2. outline the key missions of a first PM,
3. share a template of a job description, and,
4. link a few Linkedin profiles to the PMs in our portfolio companies.

Please take this recommendation with a “pinch of salt”. Any company is different. That said, now having seen this play out successfully a few times, it felt right to share it more broadly.

Why hire a first PM?

When we invest, the founders are responsible for almost everything in their company. Building the first product, hiring the first engineers, closing the first customers. Founders often have strong insights into the problem that they’re trying to solve so they are logically the first Product Manager. The challenge comes when the number of customers grows and the size of the tech team increases. In this context, there are many more feature requests to prioritize and more development resources that need to be allocated optimally. This often happens when the product starts changing shape from the initial vision of the founders to one which fits what the market actually wants. Moreover, as founders become busy with more things (e.g. hiring), they often struggle to dedicate due time and care to the product.

It is important that founders handle this situation carefully. Our recommendation at this stage is for founders to hire their first PM.

What will the first PM do?

The most immediate answer is that they will optimize the execution of the founders’ product vision by:

1. Systematizing the user research process,
2. Prioritizing the product roadmap,
3. Bringing visibility into product delivery,
4. Partnering with the head of the development team to best allocate the development resources, and,
5. Keeping an eye on what the competition is doing.

This might look like a helicopter view of a VC so we went to ask Pauline, Head of Product at PlayPlay, about her first missions. Here’s her answer:

There was no job spec at the time — I actually think it took Thibaut (the founder and CEO of PlayPlay) several months to understand what I would really do in the company ;). But short (and sweet), here’s a quick overview of my key mission:

1. Setup basic product management processes (prioritized backlog, well-written user stories and epics, bug reports)
2. Communicate about product delivery to internal stakeholders (next weeks plans, sprint demos, release notes) so that everyone is up to speed and knows what’s coming up
3. Setup the first roadmaps with the rest of the team to establish clear product priorities for the next 1–3–6 months
4. Work on an initial product marketing strategy and communicate product updates to clients
5. Build a product culture based on users’ problems as opposed to just feature ideas the founder and the team might have
6. Craft the product working with designers and developers to find the best product solutions that resonate with customers
7. Meet clients regularly to put them at the centre of product discussions (and enrich the founder’s vision with continuous customers’ insights),
8. Free up some of the founders’ time on some strategic topics (e.g. competitive analysis)
9. Allow the founders to come up with creative product ideas because they can assume that the management of the product team and of the existing backlog is well managed.
10. Bonus point: Setup the product analytics stack, Be responsible for hiring new PMs, Be responsible for hiring designers.

What’s the typical profile of this first PM?

Looking at the profiles of some of the most successful first PMs, we can find a few common traits and prior experiences:

• They often have 2–5 years of experience in Product Management at 1–3 startups before.
• They have worked in an organization scaling from a few employees to tens of employees. Most often, they don’t have experience in the industry in which the startup is operating — that’s OK, they’ll learn about it!
• They were, most often, not the lead PM in their previous companies but have worked with experienced PMs before to learn the tools and the methodology while working with a growing business and team.
• They’re often entrepreneurial in their approach and not afraid (but rather excited) to build everything from scratch.
• Some of them have experience as developers before (in the most technical companies), some of them have some UX/UI expertise (in the least technical ones).

A fictional job desc

Hoping that it could help seed-stage founders make this first hire, we’ve condensed the last two paragraphs into a fictional job desc (which you’ll find here). Feel free to use it.

Want more concrete examples?

Meet:

They are the first PMs of some of our most recent investments. Don’t poach them, they’re happy where they are.

An interesting video to conclude, courtesy of Guillaume, PM at Bearer,

Good luck hiring your first PM!