Why a Startup Doesn't Need a Product Manager

A startup is like a street fight – it's not enough to have power alone. To win, you need a proven technique, cold calculation, speed and adaptability. But methodology alone is not enough. There must be an authentic experience. So who is he – a person who brings success to a product in a startup?

Love at first sight

The first time I heard the word "startup" was in 2012. At that time, I invested in a software project at Edtech. Together with the team, we created a product for learning professional English called Qwizio. It was difficult to dive into NLP right away, but we managed. We decided not to scale up the project. Instead, we exited selling the solution to the strategic investor.

I had love at first sight with software products, and I made a pivot from a classic venture to the startup industry. At that time, I was managing a small VC in the family office format. So I learned from what was – as they say, "difficult childhood, wooden toys." But I learned from personal money and mistakes. It is painful, but it hasn't worked out faster yet – the conclusions reach immediately.

Who is he, the product manager

Until 2017, I could not fully explain who I am: a marketer, product manager, strategist or innovator, plus an entrepreneur and investor. Now I know for sure – a developer of innovative startup products. The difference compared to a new product developer and a product manager is significant.

Now in order. The marketing profession has evolved towards new product development (NPD). Previously, the marketer worked at the level of product promotion. Then added the need for a precise understanding of the customer at the user experience level to generate ideas for improving and creating new products.

As the culture of innovation developed, the role of product manager emerged in the 1980s. The area of responsibility is the operational management of the existing product, and the root competence is analytics and project management. An experienced product manager, who already has the makings of a strategic vision for the development of the company and the product, is already working closely with the marketer and creating new products (NPD).

The NPD concept includes the creation of innovative solutions. We are talking here about supporting innovations – minor improvements or additions to an existing product.

The boom of "garage cooperatives"

In the 90s, a mainstream of disruptive innovations has appeared in the United States. Due to the rapid development of the startup industry – the creation of many disruptive products by newly minted entrepreneurs in isolation from large corporations.

The formation of a startup industry leads to another change in core competencies of a marketer, product manager, and strategist (responsible for the long-term vector, investments, and risks in business). The search for breakthrough ideas, the creation and development of disruptive solutions are added to the promotion, improvement of existing and new products. The role of innovator penetrates business. This leads to several additional competencies: customer development (CustDev), attractiveness assessment and feasibility study of an idea, exploit of non-existing markets.

Why is he not needed

It's about risk: the marketer and the product manager do not deal with the amount of risk that a startup has inherent. I am talking about the uncertainty that is characteristic of the five hypotheses (see figure below). That is, a product manager in a startup must be able to assess hypotheses and associated risks at five levels, test them and draw appropriate conclusions. A product on a finished product, including a startup at the scaling stage, does not have the first four risk zones.

At the same time, each hypothesis carries some other competencies, such as risk assessment and management, investment management, methods of developing disruptive innovations, and the search for a business model. Thus, the competencies of an entrepreneur and an investor are added to the competencies of a marketer, product manager, strategist and innovator.

And if you do not know where to look for such people or partners in one person, look for the right mentors.

Read my Book – When Businesses Test Hypotheses: A Four-Step Approach to Risk Management for Innovative Startups