Why are founders skeptical of building formal product discipline?

In a previous post, I outlined the difference b/w ‘having product managers’ and having a ‘product discipline’ - the former having PMs, the latter running everything formal product structure.? This spawned some interesting conversations, especially around many founder’s resistance to product discipline.? While product professionals tend to regard this skepticism as a cost-of-doing-business, this is an opportunity to improve our product management practice.

Founders love product managers individually, leveraging them to flesh out ideas, marshal features through development and launch, dissemble complex problems, etc.? PMs with their cross-functional skills and experience are ideal for this.? However, many founders are skeptical of implementing a formal ‘product discipline’. Most experienced product execs can attest to interviews with founders who obviously didn’t want a head of product (HoP), nor top-down product discipline.? These founders are ‘forced’ into the search by investors and/or executive team. ?

While biased as a former product exec, I do think founders’ fears are reasonable…and in some cases justified.? Their primary concerns:

• ROI & Speed:? Founders place a premium on being nimble and opportunistic - many attributing early success to moving fast. They like being ‘close to the metal’ of the product development process.? A formal ‘product discipline’ can seem like addition process overhead with unclear ROI, reducing speed and optionality.? ?

• Quality of Decisions: Founders have greater market and company expertise than an HoP (at least initially).? Resolving this fact with letting PMs prioritize all of product development appears to be trading expertise for process, risking the quality of decisions being made.

• Appropriateness: Founders achieving PMF reason (often correctly) they do something different from most startups. Following ‘prescribed’ process like product discipline may not be appropriate for their unique situation. AKA spoiling the special sauce.

• Existential Risk: Finally, founders think of their company in existential terms - startups are very hard and total failure is a real risk.? Founders regard any major changes in operating mode as a high risk manuever.? Implementing a full product discipline, as opposed to just having PMs, can seem an unnecessary risk.

How can we improve product discipline with this information?

These are reasonable concerns, and frankly, we product professionals often do a poor job addressing them.? Top-down product discipline is often presented as an ‘apply the framework’ discipline.? Especially for start-ups, prescriptively implementing a product discipline is a recipe for disaster.? Founders rejecting this approach is appropriate. ?

Everything in product management is contextually dependent.? As product professionals, we must adjust our practice to be appropriate for startups.? This begins with presenting product discipline to founders in a way which aligns with their thinking.? Using the founder concerns above, product discipline can be positioned in the following ways:?

ROI

Founders often question the ROI of a formal product discipline.? The textbook answer is product discipline will create alignment and leverage throughout the organization, reducing fragility and increasing competitive advantage.? While this is correct (I’ve said this myself), there is 0% chance ‘lack of org alignment mechanisms’ is keeping founders, constantly facing existential risks, awake at night. ?

To put product discipline is relevant terms, use framing which founders are continually contemplating:

• How confident are you that the company is choosing the best opportunities generated by employees/customers?
• How confident are you that these opportunities are being pursued with the highest possible execution?
• What level of concern do yo have that a competitor will out-execute you on the best opportunity?
• If you make a strategy mistake, how quickly can the company recover? How do you know?

A successful product discipline result in highest possible confidence for each item.? The ROI of product discipline is the difference between the confident level and the high confidence level? For start-ups facing increased complexity & competition in post-PMF markets, improvements should be high value.? From a valuation perspective, product discipline improves return on invested capital (ROIC) through better/faster resource allocations & and aggregating product (not financial) leverage.? With current accounting methods, doing analysis on this is not practical, nor particularly relevant for startups, but the channel for value accreditation is clear.

If a founder currently has high confidence for these questions, they do not need an additional product discipline since it will add little value; though unusual, it is possible to have mechanisms to do this w/o a formal product org.?

In more simple terms, a product discipline ensures a company is taking its best shot on the best opportunities.? When we think of top-down product management, it should be specially positioned to do this. ?

SPEED

Does product discipline slow us down?? The honest answer to this question is ‘initially, probably'. However, this price is required to create a sustainable acceleration of the product lifecycle.? In markets where speed to market matters, this creates significant leverage. ?

Exactly where does the product acceleration come from?? A typical answer is PMs enable engineering/design to move fast through clear specs, etc.? This is bottoms-up product management and can exist without a ‘product discipline’.? (That being said, bottoms-up PM actions should improve within a top-down product framework).

The formal product discipline increases speed through: 1) better origination of development teams/process 2) tightly coupling development to commercialization 3) eliminating drag.? Importantly, these are not a benefit of bottoms-ups product management.

1. Product discipline differentiates product areas which require investment & quality from those which can be rapidly built or even outsourced.? This provides a framework for optimally assigning resources, resolving blockers/bottlenecks, and fast-following actions. ? By differentiating product work types, throughput can drastically improve.?
2. Speed of development is ~not~ the primary measure of ‘product development speed’ but the rate at which customer value/experience improves; this is driven by the whole product offering improvements, not just feature releases.? When markets enter the ‘early majority’ phase this is especially significant; technical innovators are often overtaken by adept GTM players.? A product discipline ensures ‘whole product’ speed increases by tightly coupling commercialization with development.
3. Product disciple’s elimination of drag is always underestimated value.? Products which ‘everyone thinks we should shut down but no one is willing to pull the plug’ plague nearly every? Series B, C startup.? Given these require organized wind-downs, and no groups are charged with sunsetting, this is a particularly tough issue to address.? A product discipline relentlessly pares non-strategic offerings, eliminating organization drag.

At the end of the day, top-down product disciplines creates much greater velocity.? IME, high performance product organizations are continually assessing ways to increase product velocity.? Outside of regulated industries, higher velocity is a universal strategic value, enabling fast following and strategic recoveries.?

When discussing speed concerns with founders, this is an opportunity to discuss the proper strategic positioning of the product development capability. Often this has never been contemplated with any diligence; having this discussion can surface important strategy considerations. If founders are serious about speed within a strategic context, they will gladly have this conversation.

Quality of Decisions

Product management is often mischaracterized as the source of ‘product ideas’.? Consequently, founders are skeptical of top-down product discipline led by PMs who are less familiar with the problem space than themselves.? Any tenured product exec understands most product ideas come from outside of the PM team.? Engineers, designers, founders, and customers generate opportunities than the PM team.? In fact, most HoPs would expect founders to continue leading idea generation.? ? (That being said, individual PMs with high empathy and market knowledge are a great source of solutions/opportunities). ?

A product discipline does not seek to supplant other sources of ideas, rather to the improve quality of decisions.? This is accomplished via a consistent, appropriate and traceable evaluation framework.? Aside from improving decisions, it increases recoverability for inevitable mistakes.? When decision criteria fluctuate, decisions may be good atomically, but their outcomes do not aggregate or enforce each other.? In many cases, they actually offset.? This creates an all too familiar situation at startups where there is ‘a lot of activity but little progress’. ?

Secondarily, having a decision making framework in place allows for founders to remove themselves from many tactical decision-making cycles which can improve high-level decision making.

When implementing top-down product discipline, getting the organization aligned on decision criteria is paramount - even more important than strategy formation. ?

Appropriateness

Founders naturally feel their organizations are unique on some axis which accounts for their success.? This gets extrapolated to ‘we don’t follow conventional models since they don’t apply here’.? If product discipline is presented as suite of pre-packaged processes which ‘work other places’, this will not be particularly compelling. ?

Any product discipline worth its salt will incorporate what is distinct and unique about the company.? In fact, that will be central to the whole implementation strategy.? This needs to be a clear strategy for any startup product discipline.

Every company moving from pre-PMF to post-PMF necessarily shift their operating model if simply for the fact there are more constituents - more customer segments, employees, competitors, partners, functional teams, products, etc.? All of these have specific incentives, biases, and operating languages.? To keep the same operating mode while facing these changes is not appropriate - operations will be overwhelmed at some point with the great complexity.? This is why investors and senior execs often advocate for the hiring of an HoP when a company reaches a certain success level.

While the product discipline may not be the particular solution for any given company (as discussed above), product orgs are specifically equipped to absorb and manage increasing complexity and ambiguity.? Having a clear POV on how the product org will do this for a startup is a must. ?

Existential Risk

At its core, founder skepticism is a trust issue.? They cannot hand over control of major decision-making without trusting the company will be in a better position afterwards.? If forced to hire an HoP they don’t trust, founders will create work-arounds to any product discipline, effectively undermining it. ?

Product execs must prioritize founder trust to be successful.? While no 1-size-fits-all approach exists, 3 points HoPs should explicitly position a product discipline around:

1. The #1 goal of any product discipline is marketplace success; everything is secondary to this including PM processes, best practices, frameworks, etc.?
2. The product discipline is centered on better serving customers than competitors.? Customer obsession is a primary virtue which most founders hold dear; they should be confident a product discipline reenforces this.
3. Implementing a product discipline starts with learning from the company and customers.? Product execs need to make clear a product discipline will take what is working and build on it.

While founders never trust anyone more than themselves with the fate of their company, HoPs must attain a high level of founder trust, else a product discipline will not be successful.? Only by demonstrating that company’s (and customer) success is their top priority will this occur. ?

HoPs should treat initial planning and strategy activities as trust building exercises, with common understanding and language of the marketplace challenges as the top goal, rather than a clever strategy plan.? Any plan will certainly have flaws, but a foundation of trust is essential.

Final thoughts….

Having worked with (or within) product orgs at F500 to seed-stage companies, building a product discipline at a startup is the hardest but most satisfying challenge in product management.? While founder resistance can be frustrating, using it to sharpen your understanding of product management is invaluable.? It forces us to strip a complex mechanism to its essential parts, which is the best way to understand it.?