Many new business ventures are based on good ideas and started by smart and capable people. Yet the generally acknowledged success rate of start-ups is less than 15%.
Why is that?
There are many reasons why companies may ultimately fail: the products don't live up to the brand/company story; the founders/team get tired and fade away to other opportunities; the company runs out of money before becoming profitable. An honest post-mortem on failed companies or failed products can often be traced back to one common element: weak product management.
A search on Wikipedia provides the following definition of Product Management: Product management is the role and function within an organization that is responsible for a product's overall success. Product Managers work with groups inside and outside of the company to build and execute a plan to make sure the product best meets its financial and strategic goals. Based on my experience this is a decent explanation of the product management function.
Often the work done on a product starts and ends with figuring out the physical thing or the software platform/solution that a company plans to design, produce and sell. That is an important part of it. The founders or leadership are excited about their product idea(s) and have a high degree of confidence that everyone will see the value of their product and want to buy it. They also assume it will be obvious why someone would want to buy their product as opposed to that of a competitor, or it’s obviously why someone would switch over to their product from whatever they were previously doing. A successful company or product introduction cannot rely solely on these initial thoughts.
Setting up for success means having a good understanding and clearly articulating how the product or solution will address the problem or pain point of a user or paying client…*before* investing in developing a product and making it broadly available If your product doesn’t help anyone in a meaningful way, why would someone pay for it?
Product management must connect with end users and paying clients to confirm the understanding of the user/client needs and the price points they are willing to pay for these products or solutions. A way to test this is to strive for product-market-fit, a concept we discuss in another post,
Products can seem important to have to the founders/leadership but end up being a nice-to-have instead of a must-have. Products that are nice-to-have are harder to get orders for, harder to have implemented by the users/clients, and harder to get repeat buyers or users.
I was involved with a SaaS (Software-as-a-Service) a few years ago that developed and offered a mobile application to be used by clients of major brands in several industries. The client of the SaaS company was the brand and it would help them engage with their customers, the users of the brands products. The application was useful for engagement and gaining some insight into the customers. We were unable to directly correlate the use of the application by the brands to increases in revenue for the brands or meaningful reductions in operating costs. In the end, this product was nice-to-have but not critical to the success of the client; it wasn’t a must-have.
Working with the product development team, product management will define the product itself and the experience the user and paying client will have using the product. This will include visual experience and packaging.
The marketing team will work hard to generate interest in the product; the sales team will work hard to get paying clients to place orders for products. The last thing that should happen is that the user or paying client has a bad or frustrating experience with your product, solution or application. They will not come back. And, worse yet...they will tell other people about their poor experience. All that hard work, and money invested, is wasted. Coordinating all of this, being the hub of the various functional areas of a company *is* good product management.
Another trap that product management can help avoid are operational issues, such mass manufacturing of the product, easy on-boarding of new users, simple customer support or ideally self-support, failure and return issues. Product management needs to work with the development team to design and come up with the product(s), but equally important is working with the production and/or operations team to ensure the product or solution can be easily provided and supported in high volume and on a large scale. This includes packaging and shipping for physical products; it includes sign-up forms, login screens, data access modules for software products, as well as storage and memory requirements for the application itself as well as the valuable user data it will generate. For e-commerce applications it will include seamless transaction processing.
Product management will work with marketing to develop the product story; explain to users and paying clients why they try and keep buying your product, and at what price point. Product management and marketing will work with sales to develop the sales strategy and story, to make it as easy as possible for the sales organization to secure customer orders.
After all, isn’t that why a business exists in the first place...to generate orders and sales of its product?
Product management has successfully connected with the marketplace to define a product; has worked with marketing and sales to set up the teams to get lots of people to buy the product over and over again. The production and operations teams are happily adding and supporting a huge and growing customer base. Well done! But...the job is not finished.
Once a product is successfully adopted by the market, product management needs to monitor sales, growth and usage of the product. So many useful insights are gained from products already into the market. Listening to clients about their experiences with your product will help formulate new feature ideas, areas for improvement, cost reduction possibilities and generate ideas for major product releases in the future.
Product Management is a hub in a successful company, that all functional areas work with.
Thank you for investing time in reading this post. Questions and comments are always welcome.
Shail Paliwal
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