Why Product Management Has Become So Important

European Straits #116

Nicolas Colin

Dear all,

I’m in California for 12 days—part meetings and talks, part vacationing with my daughter Béatrice. Here are three things I wanted to highlight.

1/ If you’re in San Francisco, you should attend the discussion on technology and the Safety Net I’ll be having with Rey Faustino of One Degree tomorrow (Thursday) at 12pm. The talk is being held in partnership with New America CA and is hosted by the James Irvine Foundation. Here are the details: LINK.

2/ Everyone I’ve been meeting so far—and I mean everyone—has discussed the fact that San Francisco has become unaffordable and unbearable. More and more tech companies are trying to figure out how to redistribute their operations in nicer and cheaper cities. At some point, one of them will crack that code and change Silicon Valley forever! In the meantime, you should read these two articles:

3/ My colleague and fellow Londoner Pietro Invernizzi is here with me to discuss our new program The Family (AAA), designed to help ambitious London-based founders raise their Series A. If you have interesting insights or want to know more, you should meet Pietro while he’s here. Please reach out!

Product management is a thing

Our friend Barbara Vogel recently approached me to discuss product management. At first I was confused: I know that product management is a thing and that startups make key hires in that field; on the other hand, I was unable to define it, let alone elaborate on that definition.

But I have my secret treasure trove: almost 20,000 carefully curated articles stored in my Evernote from the past seven years. And so I performed a search on “product management” and it only took me a few minutes to realize that 1/ I actually do know what product management is, 2/ I understand why it’s become so important, 3/ I have already written about it many times, even though I never used the term.

There’s no better illustration of what the world was like before the invention of product management than the great AMC series Halt & Catch Fire, which is about the birth of the personal computer industry in Texas and California. It perfectly describes what business was all about before companies could connect directly with individual users over the Internet:

  • Joe MacMillan is the tragic anti-hero of the series. The first season focuses on his hacking Cardiff Electric, an old industrial company, to get hold of its cash flow, its engineering talent, and its manufacturing capacity, and create a portable computer.

  • When the new computer is complete, after much pain and many unexpected twists, Joe needs to sell it. This is why he has to attend the legendary COMDEX computer exhibition in Las Vegas (whose founder, by the way, is now the 15th-richest person in the world).

  • His goal at COMDEX is to strike a deal with a retail store chain so that the product is distributed and thus visible to potential customers. Again, there wasn’t an Internet back then, and so this used to be the only way to market a personal computer and make revenue!

This all describes what is known as the “Waterfall model”, which implies a rigid sequence of events: first, there’s R&D, then manufacturing, then distribution, then marketing, then sales, then customer support. But as you know, the Internet has completely invalidated this approach to doing business:

  • You can market a product before it even exists so as to assess the market’s interest and iterate on the product’s design. This is the well-known startup approach known as “Fake it until you make it”, about which I wrote in a .

  • You can sell the product before you manufacture it. The most extreme version of that is Kickstarter, but on-demand manufacturing is very much a thing in many industries, including the car industry and, more and more, in the book industry.

  • You can delay R&D until after you’ve reached a large scale, because at the early stage and even during the growth phase you can rely on cheap, robust technology provided by cloud computing platforms and open source communities.

  • You can market and distribute the product yourself through the Internet without having to rely on intermediaries. This, by the way, is why tech conferences are way less critical to doing business than they were in the times of COMDEX.

  • Finally, the product’s design is no longer a given. It can evolve as fast as you collect feedback from your customers—provided you have the engineering talent to iterate fast and someone to manage the whole process—that is, a product manager.

And so at the heart of it all lies that new discipline, product management. Indeed, you could define it as the discipline of handling all those heterogeneous practices (R&D, engineering, manufacturing, marketing) around a core (the product) and with an infrastructure (customer-generated data) that radically changes the rules of the game. This is what good product managers do really well: connecting all the dots, making the right calls, and making it happen—or, to quote Sakunthala Panditharatne, “collect relevant information, devise strategy, encourage collaboration between different specialists”.

By the way, this all echoes what a tech company is all about: providing an exceptional experience so as to collect data in a regular and systematic way and use that data to generate increasing returns that, in turn, make it possible to improve the experience. You can read this short article from our Scaling Strategy series: What’s a Tech Company?

Because it was born with the Internet, product management is a discipline that isn’t mature yet: there is no textbook to learn it; there is no consensus as to what the new context demands; good product management only exists in companies that have made the whole journey from zero to triumphing at a large scale. And because those are mostly located in the US, Europe is especially ignorant about the specifics of product management. European startups don’t know how to hire product managers. And there are very few seasoned product managers available to teach what they’ve learned along the way.

And by the way, you should expect to read more from me about product management in the near future, as we’re working with Barbara on launching a new business focused on exactly that 🤗

🌍 As discussed in a , Diaspora is bringing ambitious entrepreneurs from around the world to Berlin, supporting them as they grow their startups. My colleague Gagan Bhatia, ex-early employee at Uber, talks about why he decided to take up the challenge here: Introducing Diaspora.

🤸‍♀️ Goldup is all about helping women to take their first steps into entrepreneurship. It’s being led by my colleague Marine Sorato, who talks about some of the reasons women have given her for why they’re hesitant to take the plunge here: Ladies: 6 Reasons Why You Haven’t Started Your Business Yet.

👜 Marine has her own entrepreneurial experience as well, and like so many experiences, it didn’t end in success. She wrote this article about why she’d have loved to have this new program back when she was running her (now dead) online business: How I Created My Fashion Brand and Failed at It.

🌌 The Family’s BFFs (subsidiary companies providing services) are all led by very, very different people who have a few shared characteristics. My colleagues and I could feel there was *something* that tied them together, and my colleague Maïté Hourcade dit Bellocq surveyed them to try and put some words onto those feelings: Our Galaxy of BFFs.

🔪 My cofounder Oussama has a new favorite startup, which he discovered at Copenhagen’s incredible Noma. Here he explains why he sees food as art, with chefs being the new stars: Food is the new music, chefs are the new stars.

🏥 Mental health in startups has been ignored for too long. My colleague Mathias Pastor took the stage with Hampus Jakobsson of BlueYard and Charles Thomas of Comet to get past the taboos: Startups & mental health: No more taboos (video).

Here’s a reading list on product management:

Warm regards (from San Francisco, California),

Nicolas