High Growth Handbook

by Elad Gil

  Do you have the right people?

  You can tell a good PM from a bad PM based on how much time they spend on each of the above. If a PM’s time is spent solely on checklists and project management, they either (i) have a weak engineering management counterpart they are covering for, (ii) are not empowered to do their job by company management, (iii) do not understand their job, or (iv) are not respected by their peers and cannot do more important work. Optimally, most product management time should be going towards defining the product, prioritizing trade-offs, spending time with customers, and working with various functions on launch, feature iteration, and communication.53 The hardest part may be to separate whether the right person is in the right role versus whether your company is empowering that person properly.

  Characteristics of great product managers

  When hiring product managers, you should select for the following skills:

  1. Product taste. Product taste means having the insights and intuition to understand customer needs for a product in a given area. What product features will wow a customer or meet their core needs? If the PM is joining you from another industry they may not know the specific needs of your customers. However, they should have the skill set and tool kit to quickly learn about your customers and their needs.

  2. Ability to prioritize. What is the value of a proposed product feature versus the engineering work needed to accomplish it? What is more important—a new product for the sales team or a feature for customers? Should pricing be optimized for consumers or small business owners? What is the 80% product that should be launched immediately and what singular customer problem does it solve?

  3. Ability to execute. A big part of product management is convincing and cajoling teams and different resources to get the product to launch, and then to maintain the product and support the customer base. Product managers will partner with engineering, design, legal, customer support, and other functions to execute on the product road map.

  4. Strategic sensibilities. How is the industry landscape evolving? How can the product be positioned to make an end run around the competition? Intel’s famous pricing strategy in the 1970s is a good example of a bold strategic move. At the time Intel understood there was a strong reduction in their own costs as they scaled unit sales. Dropping unit sales would lead to increased demand and volume, causing a virtuous cycle. Intel smartly decided to launch a new silicon product at cost below their COGs in order to scale market share faster. In response, their customers bought in volumes they had not projected until two years out, causing a massively lower cost structure for them and therefore profitability. In other words, their low pricing became self-fulfilling and sustainable through massive volumes years ahead of projections.

  5. Top 10% communication skills. Much of the job of a product manager boils down to understanding and then communicating trade-offs to a diverse group of coworkers and external parties.

  6. Metrics and data-driven approach. You build what you measure. Part of the role of a product manager is to work with engineering and the data science team to define the set of metrics the product team should track. Setting the right metrics can be hard, and even the right metrics can sometimes drive the wrong behavior.

  The four types of product managers

  The product manager you hire depends on the type of product your company is working on. Often companies need a mix of the below. Some people can function as more than one type of PM, while other individuals are hard wired to only do one of the below well.

  1. Business product manager

  These product managers are strongest at synthesizing external customer requests into an internal product road map. Business PMs tend to thrive at enterprise software companies, or working on the partner-facing portions of consumer applications. They can work well with sales and present well to customers, yet are still technical enough to work with engineering and design to trade off road map versus engineering effort needed. They will have keener insights into product pricing, customer segmentation, and customer needs.

  2. Technical product manager

  Technical PMs are often (but not always) deeply technical people who can work with engineering on areas like infrastructure, search quality, machine learning, or other inward-facing work. Technical PMs can often work on a wide variety of products across enterprise and consumer as long as they can pick up the necessary business skills and have good user intuition to make the right trade-offs in the product.

  3. Design product manager

  Most commonly found working on consumer applications, design-centric product managers are more user experience-centric. Some companies will convert a designer to be the product manager for a consumer product. While designers are often incredibly talented at user experience and visual design, they may not be trained in making the trade-offs needed to run a business (e.g., advertising models, pricing, etc.) or may want a product to be pixel perfect (which means it will take longer to ship the product). In general, it is good to retrain design people who become product managers to focus more on pragmatic trade-offs between beauty and marketing. Design PMs spend the most time with internal engineering and design teams and tend to spend less time on outward facing or business-centric tasks.

  4. Growth product manager

  Growth PMs tend to be quantitative, analytical, numbers-driven, and in the best cases wildly creative and aggressive. The focus of the growth PM is to (i) determine the critical levers needed to drive product adoption and use, and then (ii) to manipulate those levers. For example, the growth team at Facebook added tens of millions of incremental users via email loops, funnel optimization, and large scale multivariate testing of sign up, conversion, and other flows. Growth PMs tend to work closely with engineering, marketing, UX, and in some cases partnership or deal teams. Sometimes growth marketing will play the role of growth product management and this role will report into marketing.

  In general, the more technical and back-end heavy your product, the fewer product managers you will have. A database company is likely to have a much lower product manager to engineer ratio than a consumer internet company. When I was at Google, the search infrastructure team had a few-to-none product managers while the mobile team, which was more UI-centric and business-centric, had many (despite a much smaller engineering organization).

  Not a product manager: Project managers

  Do not hire project managers as product managers. While project managers may be great at organizing and driving a schedule, they often lack the ability to prioritize features or ask the larger strategic questions. In general, project managers are not needed in high functioning software organizations, where a mix of the engineering manager and product manager will take on project management. Project managers may become useful for hardware products, external partner implementations, or vendor-specific hardware integrations.

  Associate product managers (APM’s)/rotational product managers (RPM’s)

  Google and Facebook have developed extensive programs for more junior product managers joining these companies straight out of undergraduate programs. The Google program consists of two 12-month rotations, while the Facebook program is three six-month rotations. For each rotation, an APM/RPM works with a different product organization (e.g., ads, a consumer product, timeline, or search). APM/RPM programs are meant to grow an internal crop of future product leaders for each company. As your company scales to 1,000 or more people, it might be worth considering an APM-like program. Don’t do this until you have a solid internal senior product management organization in place.

  Interviewing PMs

  When interviewing product managers, it is important to keep in mind the role you are hiring her for (see the previous section “The four types of product managers”), as well as the generic capabilities sought out in all product managers (see “Characteristics of Great Product Managers”) and all hires (culture fit, etc.).

  Key areas to push product managers during interviews are:

  1. Prod
uct insights. What products do you use daily? How would you change X product? How would you design X product for a specific set of users? What features would you add? What would you drop/discontinue? If you were starting a company from scratch, what product would you start with, and why? For example, how would you design a mobile phone for children?

  2. Contributions to past successful products. When I worked at Google, I overlapped with some of the strongest product people I ever met. I also overlapped with a number of terrible product managers who happened to be at the right place at the right time. When interviewing a product manager from a successful product, it is important to dig into their specific contributions. For example: What role did you play in the product definition and launch? Who came up with which product features? Who drove the idea to price the product X way? Etc.

  3. Prioritization. Focus your questions around prioritization on the frameworks the candidate uses for making trade-offs, rather than the trade-offs themselves. You can initiate these questions by providing a scenario or case study to work from. For example: What is a real world example where your company had multiple potential product paths to invest in but could not do all of them? How would the PM approach this decision-making choice? What factors would fold into it? What data could be used? What is an example of a product feature that the executive team requested that you pushed back on or had removed?

  4. Communication and team conflicts. Was the PM able to sell a vision or product to their last company’s leadership team? What disagreements or conflicts did the PM have with engineering or design? How were these disagreements resolved? How does the PM actively build relationships with other parts of the organization? What communication approaches does the PM use? What is important to communicate, and when? What is an example where a miscommunication caused an issue for a product? How was this resolved and what changed from a process perspective after? In general there is a natural tension between product, design, and engineering. Conflicts may arise naturally in a fast-paced environment. The key is how to build relationships to surmount disagreements and how to resolve conflicts if they do occur.

  5. Metrics and data. What metrics did the PM track for their last product? How did they choose these metrics? What bad behavior could these metrics have driven and how would you avoid this behavior? What metrics would the PM track for your company’s product? Why are those the right metrics? How often and in what context should metrics be reviewed? How do you evaluate if a product launch has been successful?

  Reference-check all your product hires

  For all hires, reference-checking is incredibly important. For product managers, it’s even more important. With an engineering candidate, an interview can reveal if she is technically competent. For a product manager there is no easily testable metric of competence. Instead, past work is the strongest single indicator of whether someone may be successful again in the future. Informal backchannel, pursued appropriately, can be especially enlightening.

  The best product managers have a history of launching products or features that would otherwise have gotten stuck, successfully negotiating with engineering and design to make trade-offs that contributed to the success of the product, and creating a big strategic viewpoint that drives business success.

  “Crisp product requirement documents can make a world of difference in driving concise agreement on, and execution of, the product. PRDs should clearly articulate primary features and product needs.”

  —Elad Gil

  Product, design, and engineering: How they fit together

  Product, design, and engineering may have the perception of overlapping roles. In reality, each function has highly distinct responsibilities.

  Design: Design the optimal visual and user experience for the product.

  Engineering: Build the product. Suggest how the technical road map can drive product and vice versa.

  Product: Set the product vision and road map and ensure the company builds a product that the user needs. Make trade-offs and prioritize between design, engineering, and business concerns.

  While design is often focused on the optimal design for a product, and engineering on the technical side, product’s role is to make trade-offs and prioritize based on inputs from design, engineering, legal, customer support, and sales/marketing/customers versus the broader business needs, competitive environment, and company strategy.

  Ambiguity arises largely due to designers thinking, “I own the design, why is product telling me what to tweak?”, engineers thinking, “I own the technical aspects of the product, why is product asking me to stop working on feature X?”, and product sometimes stepping on either function’s toes.

  In reality, product management should be viewed as the function in the middle that needs to make holistic trade-offs on all aspects of the product and represents the voice of the user (while making the proper business trade-offs). This role obviously requires a lot of trust from design and engineering, which is why a bad product manager can ruin perception of the role in an organization.

  Hiring a strong VP Product

  In many startups the CEO may initially play the role VP product. At some point the organization and processes need to be professionalized and a VP product will need to be hired in. Many CEOs at this point are tempted to hire a “process person” to drive product management as the CEO feels she understands product and just needs someone to execute her vision. This is often a mistake as the company scales and more is delegated to the VP layer over time. Instead, CEOs should look for a VP product who both understands product management processes as well as has a complementary or similar vision for the product and its road map.

  The role of a VP product is to:

  1. Drive product strategy, road-mapping, and execution across the organization. Obviously, this is done with the guidance of the CEO who is the final authority.

  Set product vision and road map. Work with the CEO and other key executives to ensure a robust product vision and road map is set and adhered to.

  Think strategically and articulate that strategy. The VP product should be able to lay out a compelling product strategy that includes a strong understanding of (i) who your customers really are, (ii) what it means to win in your market, (iii) how to differentiate as a product and company, and (iv) how to build compelling and remarkable products for your customers.

  Make cross-functional, strategic trade-offs. Product management is about product strategy and prioritization. A great product leader should be able to work with the founders on company strategy and own the product road map. This does not mean the founder/CEO should not ultimately make decisions in this area. Rather, the founder/CEO should be able to delegate strategic product planning and prioritization to the VP product and then bless/modify the outcome of that process.

  2. Create and empower a professional product management discipline.

  Recruit experienced product managers who have overseen multiple stages of the lifecycle of high use products. If your company is in high-growth mode, you want to hire experienced product managers who have shipped products at scale and then managed them through their lifecycle.

  Represent product management at the executive level. Work well with peers. Product is the central spoke in communicating with, integrating feedback from, and pushing back on design, engineering, sales, marketing, operations, customer support, and other functions. This means product managers need to build deep relationships in each organization and be able to work with many different functions and personality types effectively.

  Empower PMs in their organization to work effectively and get things done. Help PMs on her team navigate internal politics and stakeholders. The VP product should also clearly define, and get cross-company buy-in on, the roles and responsibilities of PMs and the adoption of simple product processes.

  Build programs to train and support new PMs. Ensure that your company has proper mentoring and training to support new PMs as you make university hire and internal conversions.
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br />   3. Set cross-company product management processes.

  Develop processes needed to run product development efficiently, prioritize product decisions, and launch products. This includes experience with a multi-functional launch calendar, writing simple product requirement documents (PRDs), and navigating cross-functional input and trade-offs for products. Ensure adoption of these processes by the broader company.

  Empowering the VP Product

  As with all executive hires, as CEO you need to spend time onboarding and empowering the VP product. This may include:

  Delegate aspects of product strategy and planning to the VP product. Delegation does not mean abdication. Rather, the VP product should work with cross-functional teams to generate a product road map and prioritization that is then blessed/modified by the CEO.

  Empower and support the VP product. The VP product may implement a set of basic new processes that did not exist before at your company. They may turn over or re-organize a subset of their team just as any new executive would. They may also carve out a stronger role for product management than has existed traditionally at your company. This may cause tension with other influential teams at the company. The VP product will need the CEO’s support to make these changes.

  Be patient. You have been thinking and working on this company for years. It takes some time to transfer all the knowledge. It will take three months for your VP product to come up to speed on the company, product, key people, processes, etc. It will take another three months for them to start to be valuable. This is true of any senior hire, especially as your organization gets larger. That said, any senior hire should start to get some quick, low-hanging-fruit wins in the first few weeks or months and take some pressure off of the CEO. Strong onboarding is critical to any executive hire’s success.