Unlocking the Potential of Product Management in Resource-Constrained Startups

In an era of economic uncertainty, startups face the challenge of delivering more value with fewer resources.

PMs are ideally positioned to drive this approach.

But founders might question the need for a PM, arguing that the founders themselves should manage the product, being the visionaries behind the startup.

If a founder comes from a product background, that can be true. Still, everyone has only 24 hours in the day. You can do some things well, but you won't have time for other things.

And if the founder doesn't have a product background, they can make many costly mistakes that can kill the startup.

The Product Manager can bring in significant efficiency and effectiveness.

What Will The Product Manager Do?

They can help the startup define its Ideal Customer Profiles (ICPs), engage in product discovery work, and ensure the product strategy aligns with its vision.

Here are some critical tasks a PM typically carries out:

• Deep Market Research: This includes understanding the customer, their problems, and how the product can solve those problems. The PM must also understand the product's user-friendliness, reliability, market fit, and suitable pricing model.
• Managing Product Development: PMs keep development consistent and hustle-free. They help ensure that the product meets customers' needs and that it's not only about excellent UX but understanding broader user needs.
• Customer Mapping Journey: PMs work to reach more people, focus on product-market fit, and build a customer mapping journey.
• Avoiding Feature Creep: PMs need to manage the risk of feature creep—a common problem for new products where unnecessary features are continually added, which increases the cost and time of development.
• Maintenance Planning: PMs account for intermediate maintenance in the planning stages of a product, which helps keep the product running smoothly and prevents unexpected issues or downtime.

What Will The Founder Do Instead?

Meanwhile, a founder can focus on tasks that are more strategic or big-picture in nature:

• Setting the Company Vision and Strategy: The founder can work on establishing the overall direction and goals of the company.
• Building the Team: The founder can focus on hiring the right people and creating a solid company culture.
• Securing Funding: The founder can meet with potential investors and stakeholders to secure the funding necessary to grow the company.
• Networking and Partnerships: The founder can build relationships with other businesses and potential partners.
• Public Relations and Branding: The founder can work on building the company's brand and managing its public image.

By having a PM handle the product-specific tasks, the founder is free to focus on these broader issues, which can lead to a more efficient and effective company overall.

The Case of iCharts

I recently read about the experience of a product leader Deepak Deolalikar at iCharts, a data visualisation startup.

It illustrates several critical aspects of product management in startups, particularly the importance of defining an ideal customer for the product.

In this case, the startup initially targeted a broad business intelligence sector, including established clients from Deepak's previous consulting work.

However, they found it challenging to compete with established giants like Tableau in such a broad sector.

Recognizing this difficulty, Deepak shifted the strategy and focused on specific sectors that were generating large amounts of data, such as industry research and surveys.

This process involved extensive market research, including cold-calling around 80 companies from these sectors and mapping out their needs for data visualisation and willingness to pay on a 2x2 matrix.

Based on this research, the team decided to focus on the primary market research segment, where companies strongly needed data visualisation and the budget to pay for it.

The product was then tailored to meet this segment's specific needs, resulting in faster customer acquisition, better product positioning, and more predictable sales cycles.

Deepak suggests a framework for selecting a niche, which includes evaluating the validity and importance of the pain point, its prevalence, and the ability to target the potential customer base.

Despite investor pressure to aim for a large Total Addressable Market (TAM), the PM can help founders separate their vision from execution and successfully start small to niche down.

This story underscores the importance of starting with a small niche when building a new product, especially for platform or horizontal solutions.

But most importantly, it highlights how a product manager can break down the founder’s big vision and help execute on the right path.

Will The PM Help You Win?

At the end of the day, the startup has two most important tasks:

1. It has to survive
2. It has to find product-market fit and growth

Founders should think of every resource as a bet that can create the most significant delta between the time it takes to find PM/F (with or without that resource), adjusted by the cost and effort of employing that bet.

So if a PM that costs 150K per year means an increased likelihood that your startup will hit PM/F in month 12, not 18, that saves you six months of run costs less the 150K (+ load costs) you spent on the PM. That's what you're working with.

Think through these questions before you hire:

• Do you believe that the likelihood of the PM making an impact is high?
• Do you believe that the delta in time will be longer or shorter?
• Would any PM cut it, or only a particular type?
• Do you understand what conditions would have to be true for them to succeed at your company?

If you’re pre-revenue and you’re bootstrapped, this is a clear No.

If you’re pre-revenue and have some seed funding, it’s probably still a No.

If you have revenue, have funding, but you’re struggling to get to product/market-fit, this is the time to think about it. Why aren’t you there yet? Could you be there sooner?