Founders of companies are often, by necessity, their own Product Managers. They’re often the ones who have most knowledge about their company’s first product suite, after all, since they’ve probably designed, built or coded it all from scratch themselves anyway.
They are the ones who have taken all the risks (financial or otherwise) to turn an early vision into reality. And as is the way with small, ambitious, cash poor start ups, they may have done so in a more or less ad hoc way, without a huge focus on process and documentation. Along the way they may have eschewed standard product management techniques; allowing themselves to be driven by hunches, gut instinct and personal conviction as they rushed to get to market.
And even after an initial period of success as a company grows and is planning further product launches, these old habits may die hard. A CEO/founder may still be so wedded to their familiar style of product management, with them at the helm defining new features and marketing ideas, that they can’t see the benefits of introducing more formal controls into their decision making processes.
But, as the demands of managing a growing company increase and investors are courted, the need to adopt a more structured approach to product management, and even appoint a Product Manager, can become increasingly urgent and apparent.
What investors really want
There’s plenty of advice out there about what Venture Capitalists (VCs) are looking for in an investment opportunity and how best to prepare yourself for their scrutiny. But there are many compelling reasons to focus on the way your company manages your core products as a priority, if you want to convince investors that you can continue to grow from those foundations:
VCs need to know:
- That there’s a sustainable market for what you’re selling and that you have a plan to continue and grow a profitable operation.
- They want to know the product has a unique selling point and that you have the systems in place to keep up with changing market demand.
- They want to know you have a great team in place with the right knowledge and approach to deliver and replicate success in the future, while all the time seeking out new opportunities for growth.
Is it time to appoint a Product Manager?
In the first place, there is a strong argument to say that for the future of the company, a CEO should focus their energy on the bigger picture, driving forward the strategic vision for the company as a whole, assembling the right management team, setting sales and production targets, and bringing in the big, transformative deals. They shouldn’t be getting bogged down in the day to day function of Product Management - and it might give the impression of CEO micromanagement if they are.
Also, as Forbes rightly points out, just the process of securing extra funding can be hugely time consuming. We might ask whether a CEO could devote their full attention to that process and ensure that their core products are being managed and serviced effectively, even as new ones are being planned.
It’s also worth considering if the founder/CEO is really best placed to take forward a product line that is fast reaching maturity.
A CEO has ultimate authority in an organisation, the power to allocate resource, set strategy and hire or fire at will. A founder CEO has all that authority and may also have an emotional investment in the business they have built up and the product they have nurtured for years. This may not be the right combination to ensure a clear-headed approach when it comes to defining the future of a product that is so close to them.
Why good Product Management is key to investor confidence
We would argue that investors want to see there is a clear method by which a product is managed, that is fact-based and process driven rather than hunch driven, unstrategic or arbitrary.
This means having a systematic and documented approach to product upgrades and changes in functionality that is always adhered to. If it seems like the decisions about a product are made outside of a defined process, or on the whim or gut instincts of one person ‘at the top’ then your company may well look like a bad investment opportunity.
Sometimes a company will need to make ruthless decisions to pull back on a new set of product features or cancel development streams or product lines altogether.
A founder/CEO may be too close to a proposed piece of development to see its flaws. By the same token, their status and personality may make it hard for the rest of a team to resist or contradict them even if they have a bad idea. That’s when there is a great risk of wasted or misdirected effort in a product management cycle with a passionate CEO/founder at the helm.
A dedicated Product Manager with access to the right business and document management tools, will surely be able to more efficiently martial and control all aspects of this product development cycle than a busy CEO who is also a PM.
When evaluating the potential of a new feature set or iteration of a product, a dedicated PM will typically collate and assess documentation from a range of stakeholders within an organisation to make an impartial decision based on available data.
This process will include gathering user requirements, writing specification documentation and collecting feedback from all parties, all of which takes time, attention to detail and dedication.
With the right digital tools available this can become a highly organised, efficient and trackable process that will ultimately assist investors with their due diligence, helping to convince them you have a firm grip on future planning and the metrics of success.
When a business is in an accelerated period of growth and in the process of talking to investors, having a dedicated Product Management function could be an impressive part of your offering.
The ‘difficult second album’ syndrome
If a company has had huge success with an initial product, being able to properly focus on the next one is even more important. We’ve talked about the ‘Difficult Second Album’ scenario before in relation to this topic. It can be very hard but very necessary for businesses to replicate their first successes, particularly when the eyes of investors are upon them.
However, with a properly documented and understood product management system in place, a business can have the confidence that their existing offerings are subject to appropriate, continual commercial review, even while a brand new Product Development and Management cycle is kicking off.
The right Product Management tools really matter
Even if you don’t have the resource for a dedicated PM, then, having the right digital tools in place, that can help your organisation achieve controls over your commercial planning and product management processes will surely give a more favourable impression to investors.
The framework of a light weight Business Management System, with phase gating tools and proper provision for document management, review and feedback, will make managing and auditing the status of multiple products much quicker and more seamless.
In the same way, being able to demonstrate you have the right controls in place for oversight, approval gathering and innovation at all stages of a product’s lifecycle will demonstrate to potential investors a deep seated commitment to continuous improvement and commercial optimisation.
It’s great to have the charismatic energy of a CEO/founder to inform your Product Management strategy, but any healthy, functioning company needs the ability to organise and integrate that influence into the operation of a truly process driven business. This is especially true if you’re going to persuade others you can achieve real, sustainable success.