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Posts tagged “startups”

26 October 2023

When To Hire Your First PM

Good advice here on when (and when not!) to hire the first product manager in a startup. This is also a good reminder to “let PMs be PMs”…

PMs are the strategy arm of this process, and should be empowered to own the roadmaps for how they’ll better the business, not just the execution of getting things built. In an ideal world, PMs will have better decision-making and execution than you within their domains due to focus and proximity to customer needs. This is how you scale. If you continue to hold all of the strategic decisions close to the vest and use PMs as glorified interns, you’re wasting all of the focus that they could be bringing to bear.

19 October 2023

Everything Looks Like A Nail

Ed Zitron’s newsletter is kind of a hate-read for me because his vitriol knows no end and it can be a lot… but I think he did pretty well in his response to Marc Andreessen’s latest essay:

This is Andreessen’s dream—a continual race to the bottom where the tech industry is incentivized not to solve problems, but to find ways to make already-solved problems cheaper to solve so that venture capitalists can make money.

That’s a good quote, but please don’t stop there. The whole essay is the best rebuttal I’ve seen so far.

6 September 2023

How to Scale Yourself Down

How to Scale Yourself Down has some really interesting advice on how to go from leading a team at a bigger company to rolling up your sleeves at a startup. A couple of my favorite quotes:

Avoid process out of practice. Leaders who are successful in a startup are the ones who naturally reinvent their own toolboxes, and question what the process is trying to accomplish before establishing something that might be too heavyweight.

However, process is a double-sided coin. “There’s often an overcorrection when leaders move from big companies to small startups. Folks want to shake off that big company feeling and run hard in the other direction. And while the idea of no process sounds fantastic, issues emerge if you don’t start adding at least a little bit of it early on,” he says.

And:

To me, a well-made decision is one that you can explain how and why it was made. Ingraining this in the culture early on will support transparency as the company grows, promote consistency, and reduce politics. In essence, ‘don’t blame me, blame the framework’.

6 September 2023

Advice for new hires

I came across a couple of really helpful articles recently about how to start a new job well. 30 Tips for New Startup Employees is a long and super useful read—and not just relevant for startups:

Align yourself with the risks of the company. If you’re an engineer but the company is not acquiring customers fast enough, spend your time in marketing. Have range, and don’t try to be too narrow in your focus in the early days. Gain knowledge in a few different areas of the business so you can reduce the overall risks of the company.

Learn How The System Breaks is more relevant to technical roles, but I think “failure streams” can be expanded to other areas of the business as well:

Failure streams are a short circuit to understanding the system, because failures are where the system is interesting and nuanced. Failures are where the heart of complexity, entropy, and flux in the system are. Everything that doesn’t fail behaves like the architecture diagram. Failures show where the architecture isn’t working as intended. By focusing on failures, engineers can onboard quickly into the most important part of the system - the part with problems.

These are all great tips. The one I would add as most important for me personally is related to the concept of Chesterton’s fence:

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, ‘I don’t see the use of this; let us clear it away.’ To which the more intelligent type of reformer will do well to answer: ‘If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.’

Or to put it in terms of systems thinking:

Before you disturb the system in any way, watch how it behaves. If it’s a piece of music or a whitewater rapid or a fluctuation in a commodity price, study its beat. If it’s a social system, watch it work. Learn its history. Ask people who’ve been around a long time to tell you what has happened. If possible, find or make a time graph of actual data from the system. Peoples’ memories are not always reliable when it comes to timing.

When you join a new organization you’re probably going to see a lot of random “fences across roads.” Instead of saying “let’s tear this thing down,” first ask “why is this fence here?” There is always a reason, and it’s very likely that there is value in the reasoning. First understand, then make change.

19 July 2023

The Product-Led Growth Trap

Oliver Jay wrote a 3-part essay about what he calls “The PLG Trap”, where product-led growth companies grow to a certain point and then suddenly sees that growth slow with no obvious ways through the slowdown. From the introduction to the essays, Oliver says this usually happens after an initial (and initially successful!) expansion into the enterprise market:

Quite simply, despite the complex security and administrative features you’ve launched, your product has not evolved to becoming broadly “enterprise-ready” for the majority of your enterprise prospects.

At this point, you may feel trapped–the PLG Trap. You’ve set growth expectations externally and internally based on how revenue (in particular, from the upmarket segments) has grown in the past few years.

However, what drove revenue in the past, in terms of your product offering as well as your sales and marketing motions, is unsustainable. There is no more bottoms-up, low-hanging fruit to feed the larger sales and marketing engine you’ve built. To pursue sustained revenue growth, you must tolerate a lower efficiency…only to now be punished by the public markets in what appears to be the beginning of a recession.

The essays go through several reasons why companies fall into this trap, and also how to avoid it by making smarter decision about sales, marketing, and product roadmaps early on.

11 July 2023

B2B Product-Led Sales Guide

Elena Verna presents a great guide to product-led sales for B2B products here here:

In a traditional top-down sales approach, the sales team is motivated to close the largest and newest deals to account for the high acquisition cost and ensure profitability.

In contrast, in a product-led sales approach, the sales team gets involved with the account much earlier in the problem lifecycle, and the initial contract value is smaller. It’s important to note that in top-down sales, the buyer is typically captured during the high maturity stage of the problem. In contrast, in product-led sales, the account is acquired earlier in the lifecycle. Therefore, the landed annual recurring revenue (land ARR) is not comparable between the two channels. Product-led sales’ primary goal is to expand by continuously growing with the account, which is where most of the revenue is generated. Overselling the account during the initial contract can be detrimental as it may disrupt the expansion journey.

There are a couple of other recent posts on product-led sales that I found useful:

9 July 2023

Airbnb and the future of product management

I am finally catching up on the big “Airbnb canceled PMs” debate of 2023, and like most online arguments the whole thing seems pretty silly to me. First, here’s a good overview from Aatir Abdul Rauf, in which he publishes the full quote from CEO Brian Chesky:

“…The designers are equal to product managers. Actually, we got rid of the classic product management function. Apple didn’t have it either.

5-second applause

(smiling) Let’s be careful. Hold on.

We have product marketers. We combined product management with product marketing and we said you can’t develop products unless you know how to talk about the products. We made the team much smaller and we elevated design.”

Aatir does a great job of putting the quote in context of the entire talk, so it’s well worth reading. The TL;DR is this: “Airbnb didn’t kill PM. They relabeled it and consolidated their team roles.” That seems like a completely reasonable organizational change to make within the context Airbnb is in, and considering the thought they clearly put into that decision. It definitely won’t work for every organization, but it’s also clearly not some kind of thought leadership mandate that they want to force on the entire industry.

I say good for Airbnb for making a decision that aligns their organizational design with the way they believe they can design and develop products most effectively. One last plug for Aatir’s post: he does a great job explaining the Product Marketing function, and what product managers can learn from it.

Now, the real topic I want to get to with this post is this idea of merging PM into other roles. That concept has been around as long as the profession itself. As with so much in product, it’s not inherently good or bad, it’s about the context of the change. Here’s another example (that I happen to agree with). In Melissa Perri’s response to the controversy she made a slightly different case that the PM role will start to merge with the GM role:

Product Management has always firmly sat between business, tech, and the user/customer. In SAAS companies, the Product Management role has always been about figuring out how to grow the business by solving customer problems with the right software. In other companies that are not software-native, you saw this same act being done by GMs of the business, but just with the tools available to drive the business at the time - sales, marketing, and human operations. What does a GM look like in a product-led business? Someone overseeing the teams that build the things you sell.

As more and more companies become predominately software companies, I believe the Product Management role and GM roles are going to merge. You won’t be a great GM unless you deeply understand software, along with understanding your domain. Product Management was never purely about “tech” and if companies were treating it so, of course, they didn’t see the value of the role.

The point is that organizations will always need someone who understands the product, customers, technology, and the broader market—and guides conversations towards what that all means for priorities and what to work on to help the business grow. In the current SaaS environment we’ve settled on that role being filled by product managers. That’s great, but it might not always be so, and that’s ok too. It doesn’t mean we’ll lose our jobs. It just means we’ll keep evolving.

8 July 2023

Why Do Developers (Actually) Hate Marketing?

Why Do Developers (Actually) Hate Marketing? The Heavybit team has some good advice in this post:

  • Don’t: Create product-led content that shoves the product into your reader’s face.
  • Do: create a transparent guide to what your product can and can’t do. But make sure you don’t over-promise (or even sound like you’re overpromising).
  • Don’t: Write thought leadership content that relies on cheesy trend predictions.
  • Do: Create thoughtful, technical essays based on experiences from engineers and founders. But make sure your claims are authentic as well as relevant and well-supported as well as novel.
  • Don’t: Produce hollow, manicured case studies.
  • Do: Create technical case studies that describe, in detail, what a customer’s experience was really like – including the gains, the stresses, and the adoption and integration processes. But make sure the focus remains on the customer’s problem and not on your solution.
8 July 2023

How to optimize your pricing page

Good advice here from Kyle Poyar on how to optimize your pricing page, including a reminder to emphasize benefits, not features:

Did your feature matrix get dumped on your pricing page as-is, leading to confusion and eye-rolls across your target buyers? Don’t do that. Tell a story about what the customer can do with the feature.

14 June 2023

Metrics to check when evaluating a company as a job seeker

There’s some really good advice for job seekers in Carilu Dietrich’s post 10 Most Important Metrics For Evaluating a Company:

Net Dollar Retention (NDR) is one of the best ways to see if a tech company is healthy and growing. It measures the expansion or contraction of a company’s existing customer revenue over a given period. NDR takes into account the revenue lost from churn and increased revenue from upselling, cross-selling, and renewals from existing cusomers.

I would also add Gross Revenue Retention to that list. It describes how much revenue a company keeps from its existing customers over a specific period, not including any new revenue from new customers. So, if a company started the year with $100 from its existing customers and ended the year with $90, even if they lost some customers but upsold others, the gross revenue retention would be 90%. It helps guage how good a company is at keeping its current customers happy and continuing to spend money, without taking into account any new business they’ve gained.