Founders' Guide: Should We Hire a VP of Product?

In an era where software is eating the world and the bread and butter of most companies is their product, the roles of product managers and product leaders have increasingly become critical. 

As a result, bringing in the right VP of Product who understands your business, can identify product opportunities, and can build and lead a team to execute and deliver the best products could significantly change the odds of your company's success. However, in order to do this right, you need to be ready for this transition. Even if you bring in the best VP of Product, if you or your company are not emotionally and mentally ready to let the person do their job, you won’t be able to get the most out of this hire.   

I’ve spent many years partnering with founders of startups, both as a product leader within the organization and as an advisor/consultant that helped founders and their teams formulate product and business strategy. From these experiences, I have come to conclude that a "product" is truly the baby of any founder, and that hiring a VP of Product is one of the most difficult––yet critical––steps for many founders. For these reasons, I put together this guide to help founders and executives at startups (from seed to Series D) decide if they should hire a VP of Product.

The initial urge for hiring a VP of Product might come from different places. You, as a co-founder, may feel your plate is full and it’s time to hand off product management to an expert. Alternatively, you may feel the pressure from your board or internal teams (e.g. product managers, engineers, or other executives) that it’s time to hire a product leader to drive product strategy and lead the product team. No matter the trigger, the “founder’s emotional readiness” for giving away the product function is one of the most important stress tests to conduct in order to decide whether you should hire a VP of Product now or postpone that decision for 3-6 months.

The flowchart above, as well as the 5 key stress-test questions below should help you and your teams understand which situation you are experiencing and decide if you are ready to hire a VP of Product or should consider some of the alternative routes proposed below.

Five key stress-test questions to ask before hiring a VP of Product:  

#1: Are things going well on the product side at your company? If the way you’re driving the product is working, customers love it, and your business KPIs reflect this, you should aim to not change things for as long as possible. 

#2: Are you, as a co-founder, overwhelmed by driving so many different functions? If, as a co-founder, you are overwhelmed by the number of things you need to do, and you believe having more support on product function is the right choice, then you might be ready to hire a VP of Product (see the flowchart above for the actual stress-test). 

When a founder does a good job driving product but he/she feels overwhelmed, I encourage them to consider if they can first hire any other functional leader, such as a Head of Finance to perhaps help them with fundraising or a Head of People to help them with internal management. If you’ve already hired these other key leaders, maybe it’s time to think about hiring a VP of Product (see the flowchart above for more information). 

#3: Do you have product/market fit or not yet? As a founder, you typically are the Head of Product in the early days of the company since you have the most affinity with your customer group and the problems they face. Bringing in a VP of Product in the early days might work, but you need to make sure that the person deeply relates to your category. You also need to make sure you are emotionally ready to truly partner up with this person to figure things out together. I typically encourage founders to delay hiring a VP of Product in the early days, if possible. If your company has less than 30 people and/or you haven’t hit product/market fit, but you still need support with product function, you could consider hiring a “rising” VP of Product (a product manager with category expertise or a Director of Product).    

#4: Do you know the root causes of under-performance of your product and business – if that’s a scenario you’re experiencing? If you believe you have product/market fit as a company, but your business growth and KPIs are not at the level expected, many things could contribute to the underperformance of your KPIs, including having a sub-optimal product. The poor performance of KPIs and business metrics are typically due to a combination of issues. For instance, your business operations may not be sound; your underlying technology might be poor; you may have too much technical or design debt; your product features might not be competitive; you’ve built features that users don’t care about; or your pricing might be too high. Only after you do a proper root cause analysis and understand the contributors to the poor performance of KPIs, you can decide what to fix, how to fix it, and in what order. Some of these changes might be in the product, while others may be related to the business operations. 

These types of situations are the most common points for a company to hire a VP of Product; however, you need to be aware that the diagnoses of these issues (especially in a complicated business) take time and effort. So if you decide to hire a VP of Product to partner with the rest of your executives to help fix business and product issues, you need to be patient and give them the time and resources to do their jobs. You also have to be open to new ways of doing things because the old way of doing things didn't lead to the desired business outcomes.

#5: Are you emotionally ready to give away product decisions to someone else? After reading the questions above, you may feel the urge to hire a VP of Product. But it’s important to check in with yourself and evaluate if you’re emotionally ready to have someone else come in and make a lot of decisions about your baby (product).

VP of Product could probably contribute a lot to growth of your business if it's the right time for your company to hire this type of leader, but it's not always the right answer for your needs. As you can see in the flowchart above, under certain situations, it’s much more effective to hire a few talented PMs, hire a Director of Product, or temporarily bring on board a product consultant/advisor to help with your needs. 

I hope this helps founders and executives/leaders in startups with their decision-making process of when to bring in a VP of Product. Please make comments on the article and share your points of view for the benefit of others. Also, please reach out to me if I can be helpful in the journey of building your product or product team.