From 0% to 50%: The Challenge of Building Authority as a Product Manager in Service Companies

Product Managers in Service Companies vs. Product Companies: The Key Differences

In recent years, the rise of product managers in service companies has become a noticeable trend. Traditionally, product managers were mostly found in product companies, where they were responsible for the vision, strategy, and execution of a particular product. However, service companies have started increasing their focus on product management professionals to stay competitive, improve customer offerings, and innovate within their service delivery models.

Though the titles and basic responsibilities may seem similar, the roles of product managers in service companies differ significantly from those in product companies. These differences primarily stem from the scope of authority, ownership, and how product management is executed within each environment.

Let’s break down some of the key distinctions and challenges that product managers face when working in a service company versus a product company.

1. Ownership and Authority

One of the most striking differences lies in the ownership of the product and the degree of authority a product manager has over it.

• Product Companies: In a typical product company, the product manager (PM) usually has substantial ownership and control over the product. They are entrusted with defining the roadmap, prioritizing features, driving strategy, and leading cross-functional teams toward a shared vision. With that authority comes the accountability for the product's success or failure, and their role is deeply embedded in the core functioning of the organization.
• Service Companies: On the other hand, in service companies, product managers often start with very little authority—sometimes as low as 0%. Their role tends to be more consultative, acting as facilitators or advisors to clients rather than decision-makers. Because service companies often tailor their offerings to specific client needs, PMs must negotiate their position, build relationships, and earn influence over time. Reaching even 50% ownership of the product in such an environment is considered a significant achievement, as the authority is usually shared between multiple stakeholders such as clients, service delivery teams, and even third-party vendors.

2. Execution Focus: Product vs. Service-Centric

• Product Companies: The product manager in a product company has a direct hand in building the product from ideation to execution. They work closely with engineering, design, marketing, and sales teams to ensure that the product is developed according to plan. Their goal is often centered around scalability, user experience, and market success.
• Service Companies: In contrast, product managers in service companies focus more on managing the service delivery and aligning it with the client’s expectations. The "product" may not be a tangible software or hardware but rather a service model, platform, or tool that requires constant customization to suit client-specific use cases. The execution is often more fluid and can involve continuous iteration based on client feedback, making it more reactive than proactive.

3. Client-Centric vs. Market-Centric Approach

• Product Companies: Here, product managers are usually market-oriented. They build products with a broader audience in mind, gathering data from a wide range of users, conducting market research, and identifying trends. Their ultimate goal is to create a product that appeals to a large, often global, customer base.
• Service Companies: In service companies, PMs tend to be more client-centric. The focus is on a small set of clients or even a single client, where customization is key. The PM’s role is to manage the client's expectations, ensure the service meets their specific needs, and maintain long-term relationships. This requires a more tailored approach, as the “product” here is often more of a bespoke solution than a mass-market one.

4. Authority Growth: From 0% to 50%

One of the most challenging aspects of being a product manager in a service company is the limited authority at the beginning. Unlike product companies where PMs are often given significant ownership from the start, service company PMs have to work harder to carve out their space.

• Starting with 0% Authority: Upon joining a service company, product managers may find themselves with little to no decision-making power. They are expected to work within existing service models and are often bound by client contracts, service-level agreements (SLAs), and delivery timelines.
• Building Influence and Reaching 50% Authority: Over time, by demonstrating their value, building trust with both internal teams and clients, and showing leadership in shaping the product's direction, PMs in service companies can slowly increase their authority. Reaching 50% authority in such environments is often considered a huge win, as it reflects the PM’s ability to balance client needs, operational constraints, and innovation—often within very rigid structures.

5. Navigating Multiple Stakeholders

• Product Companies: The stakeholders that a product manager works with in a product company are often internal—engineering, marketing, sales, customer support, etc. The PM acts as the central point, coordinating efforts between these teams.
• Service Companies: In service companies, the product manager must navigate a much more complex web of stakeholders. This includes not only internal teams but also external clients, third-party vendors, and in some cases, multiple client representatives. This makes the job of aligning everyone toward a common goal more difficult, especially when each stakeholder may have different priorities and success metrics.

Conclusion

While product management roles in both service and product companies share common foundational skills, the execution and scope of authority vary significantly. In product companies, PMs have more direct ownership and control, allowing them to drive innovation and strategy. Conversely, in service companies, PMs must navigate a more complex environment, where client needs, service constraints, and limited initial authority shape their day-to-day roles.

For a product manager in a service company, the journey from 0% authority to even 50% is a feat of persistence, influence, and leadership. It requires mastering the art of negotiation, client management, and finding creative ways to drive product improvements in an environment where authority is not easily handed over. As more service companies continue to embrace product management, the nuances of this role will continue to evolve, offering exciting new challenges and opportunities for growth.