Product Management Implementation: Is it Time for Your Company to Transition its Product Strategy?

When you go to buy a new car, there are two extreme scenarios you might face as a prospective customer:

The first might find you at a Ford dealership. You’ve got a limited budget and don’t care which bells and whistles the car has — as long as it starts up, works reliably, and gets you from point A to point B. So, if your only choice on the lot is a black Ford Focus with cloth seating and a manual transmission, so be it. Your needs are fairly generic and it’s a car — both pretty simple needs to address.

On the other end of the spectrum, maybe you’ve got some disposable income and you’re ready to buy a luxury car. Let’s say you’re a BMW person. So, you head to the dealership and completely customize the 5-series you want: leather seats, V8, ruby red metallic paint, moon roof, remote start, and virtually every other option imaginable. If it’s not on the lot, the dealer will have it built for you and delivered later.

Those two analogies perfectly describe the opposite extremes of some startup software companies’ product strategies.

On the total customization extreme, product development and management become a one-off deployment that is very difficult to scale. And with the off-the-shelf extreme, you may be providing a stock solution that’s suitable for some customers, but not flexible or customized enough for a broader market. This strategy typically comes out of a professional services-centric startup that is focused on addressing very specific and specialize customer needs.

On the zero customization extreme, product development and management focus on identifying and building a set of features and product workflow that satisfies a large customer constituency. And to that constituency, there is little choice in customization of the solution. The early manifestations of SaaS offerings were very much in this camp (remember the early days of

At some point in most company’s growth process, a balance needs to be struck between the two. That often requires the development of a true product management function.

I’ll use one of OpenView’s portfolio companies as an example. In the startup phase, the business’s primary focus was on being very innovative and designing the optimal solution to match their customer’s specific needs. It built its product for maximum flexibility, which required the business to rely heavily on professional services during the actual deployment of their product.

The problem with that, of course, was that the professional services step involved an implementation process that could take anywhere from three weeks to six months to execute.

That’s fine when you’re happy with a very steady, relatively paced rate of growth. But to create truly accelerated global growth and scalability, the company needed to decrease its reliance on professional services and establish a product management function that promoted a more streamlined product development and delivery process.

So, what this company did was formally create a product management group and separate it from its product development department.

Quite simply, product management would focus on making sure there was market and customer focus, and a continued understanding of customer needs. That function ensured that the company’s product strategy centered on those things and that the product development team followed through on them.

The ultimate goal was relatively simple: remove any impediment to accelerated growth. For our portfolio company, that impediment was it having to deliver professional services for specific customer requirements, while attempting to sell to more and more customers.

There were two ways to relieve the resulting bottleneck:

  1. Hire more expensive professional services consultants
  2. Or further “productize” their solution by developing components that allowed for more standalone, ready-to-deploy products that relied far less on professional services implementation.

Obviously, the company chose the latter route. Over the next couple of weeks, I’ll share the steps that growth stage software companies need to take if they’re experiencing a similar conundrum and want to install a true product management function.

Some of the topics I’ll discuss include:


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