The 3 Stages of Product Evolution for Startup Founders (Part 1)

As a fairly new profession — the essential benefits of quality product management are not as clear as they should be to organisations, even if they consider themselves to be product-centric.

This is specifically true and most significant for emerging product-based startups.

In this series of articles we describe what are these primary benefits, why it’s extremely important to recognize them and what are the critical stages achieve and look after in the evolution of a product when founding a product-based company, along with focused, summarised practical examples of some great thought leaders in this domain.

If you are (or plan to be) a startup founder or early employee with or without experience as a product professional — this might be a significant read for you.

Why Do Product People Even Matter?

A while ago, I met a very senior product professional with which I had an intriguing conversation about several issues — one of them being the responsibilities of the product organisation in a company. I asked him what was his perception on the matter and the answer he gave was not just oversimplified, but in my mind — dangerous: “the product organisation’s role is to promote the company’s business”.

This is obviously true (even if oversimplified) — but as mentioned before I would call it nothing less than “dangerous”; this is because it simply removes all meaning from the product role since every function in the organisation is there to promote the business — from the Sales and Marketing, to the R&D to the receptionist in the front desk. Each of course having their own defined role, inputs, outputs and a set of interactions and counter parts within the company and in other organisations with whom they work. Those are what critical to be defined when describing their real responsibilities.

Had this been the answer of a novice or someone holding little responsibility in their company and no real weight in the product community — I wouldn’t have given it a second thought, but this was not the case.

For me, this was a testament of how little thought we give to what it means to be a product manager, which is even worst when it comes to how our peers outside of the PM community grasp it.

Do We Really “Start With ‘Why’”?

It dawned on me that as a community we rarely talk about the real practical value and significance the product profession has. Many product professionals I know do have their own take on the matter which is very profound and meaningful, but it seems to me that the general conversation is usually eluded to talking about best practices such as managing development sprints (and the more recent buzzword — “design sprint”) and writing user stories rather than the motives behind doing them.

In essence — we focus very heavily on the “How?” and “What?” rather than the “Why?”.

So… could you really blame anyone outside of the community for not understanding these benefits if we don’t take the time to generate clarity around them?

Why is This Important For Startup Founders

Where this phenomena manifests itself more than anywhere is with early stage startups. Another post I’m currently working on outlines the most significant mistakes I found startups make and the most severe of them actually arise from neglecting to clearly focus on the vital benefits doing quality product work provides.

What usually happens is that startups adopt common jargon such as “MVP”, “Pivot” and “Product Market Fit” (which is by far the most abused term in the industry) that makes it sound (mostly to the speaker) that they’re actually making good headway — but is actually just there to hide that they’re giving very little attention to the things that really matter in leading their product in the right direction.

In a talk given by Paul Graham in Sam Altman’s “How to Start a Startup” Stanford course (which was also later converted to a highly recommended essay) he describes the “Playing House” syndrome, during which young founders go through the motions of building a start up but miss out on the real essence of what a startup or a business is. Or in his words:

They make up some plausible-sounding idea, raise money at a good valuation, rent a cool office, hire a bunch of people. From the outside that seems like what startups do. But the next step after rent a cool office and hire a bunch of people is: gradually realize how completely f***ed they are, because while imitating all the outward forms of a startup they have neglected the one thing that’s actually essential: making something people want.

When this was published in October of 2014 it really was way too easy to do whatever you thought startups should do instead of actually focusing on serving your target audience. However, since then it actually became easier (which in any other context would be a great thing) as the practice of starting a company, raising capital, hiring employees and other needed services such as legal consulting only became more accessible for startups with the increase in demand — as more and more people decided they want to become entrepreneurs due to its trendiness.

The way this approach should be remedied, is by going back to the basics of good product management practice — from the conception of the company up until the point it’s no longer a startup, but a well established organisation— and beyond. From here on out, we will discuss these basics and what are the recommended milestones in the evolution of your product.

First Things First — What is The Function of The Product Organisation?

One of the most inspirational speakers and thought leaders I look up to in this aspect is Sachin Rekhi; Rekhi is a serial entrepreneur and a vastly experienced product manager currently leading his own company Notejoy as CEO.

In this talk, Rekhi breaks down what the “four dimensions” a product manager is responsible for driving in an organisation — Vision, Strategy, Design and Execution.

Vision

“A compelling vision articulates how the world will be a better place if you succeed”

Vision is the north star which drives whatever it is that your company does. It should be BIG and perhaps somewhat unreachable. At its best, it’s the kind of thing that would give your employees goosebumps when thinking about.

The best way I found it to have and / or to phrase a vision, is to complete the statement: “In the future…”. That is — talking about the future by describing what would be different about it, what problems would go away or what would be done in a completely different way by people.

When inspired properly by the product leadership in an organisation, everyone are better motivated and more aligned with the company’s mission.

Strategy

The vision is only a good place to start, as it’s usually not very actionable or differentiated from your competitors. If you simply try to follow your vision you’d probably end up trying to “boil the ocean” and find it extremely hard to make any kind of movement forward.

This is where a “Strategy” comes into play.

A Strategy is a plan to address a Target Audience solving a Specific Problem for them and providing a clear Value Proposition while having a Strategic Differentiation from a well defined Competition, utilising a Client Acquisition Strategy and Monetisation Strategy attempting to achieve clear KPIs.

While a vision should be stable, and hardly change — a strategy could (and should!) be iterated on again and again, possibly changed frequently until it’s implemented successfully and produces desirable results.

Design

Next, it is up to the product organisation to select the features, define the spec and drive the creation of an effective UI with a great UX.

“A compelling design delivers a useful, usable, and delightful experience to your customers”

This is the point where you get really up close and personal with the clients, build personas, understand very specific pains and habits, their day-to-day operations and pay incredible attention to details.

Execution

Finally, the product organisation has a critical role in orchestrating the actual execution of the design and making sure the deliverables match it.

“Relentless execution ultimately determines whether you’ll make your vision a reality”

This includes proper planning, monitoring and retrospect analysis of the development process.

Breaking down the role of the product organisation to these four dimensions really helps when you need to make sure you hitting all the items on the checklist of doing things properly.

The implementation itself is of course not the sole responsibility of the PM, but making sure there’s clarity and alignment regarding all dimensions with everyone in the company is. In fact, there’s very little a PM can actually do on his own.

That’s why influence without authority is probably one of the greatest skills the PM should have.

In some product-based companies, this work could be divided to several different functions, but usually in emerging companies one person in charge of all items.

The 3 Stages of Product Maturity

Understanding the abstraction of the role, we can now dive into the 3 stages a start-up has in the evolution of its product.

The description of these stages is meant to help orient you in the position you’re currently at, what’s important for you to focus on at each step, what should be your criteria for moving forward — and most importantly how to achieve it.

One of the worst things a captain of a company or product can do is prematurely use practices which are still not relevant to its audience and are not founded on prior success.

We start off from the assumption you already have a clear vision and move forward toward establishing a long time successful company. If you don’t have a compelling vision for what your company should do, you should really stop everything else you’re doing, and work on one— why else are you in this crazy business of starting a company in the first place?

Our end goal is to get to a point where the value you provide is so obvious and significant the steep increase in the “hockey stick” should really be right around the corner — and you have laid down the foundation for robust and effective product managment for your company.

In parts 2 and 3, we describe the different product stages and why it’s significant to distinguish between them and how to graduate from one to another.