The Evolution of the Product ManagerHow product-led growth is reshaping the skillset of PMs and should we ask even more from our product people?
Product management is a demanding undertaking. In addition to understanding the fundamentals of shipping software or hardware products you’ve got to be across any number of data points, customer feedback, stakeholder vision and so much more. In recent times as organisations start to become more product-led or product-centric, product managers are now required to add yet more skills to their already challenging remit – P&L, marketing and more. Or are they?
Are we asking too much of our product managers? I outline how the landscape has changed and why it might be essential that product managers include some of these skills and understandings into their repertoire.
The Rise of Product-Led Growth
The Rise of Product-Led Growth
Product-led growth, a strategy where the product itself drives user acquisition, conversion, and retention, has gained immense traction in recent years. Companies like Slack, Dropbox, and Zoom have demonstrated the power of this approach, leveraging their products as the primary vehicle for customer acquisition and retention.
Traditionally, product managers have been responsible for product development, feature prioritisation, and user experience. However, in a product-led growth model, they play a pivotal role in driving user adoption and engagement. Understanding the business’s financial health and how the product influences revenue becomes crucial in this new paradigm.
P&L Awareness for Product Managers
Product managers are now required to have a comprehensive understanding of P&L statements and how product decisions influence the company’s financials. They need to comprehend the cost structures, revenue streams, and profit margins associated with their products. This has become more nuanced with tighter VC purse strings, improved board due diligence and a better understanding of the LTV (lifetime value) of the user in any given product org.
Let’s take the example of Netflix. Product managers at Netflix don’t only focus on enhancing the user interface but also understand how each content recommendation impacts user engagement, ultimately influencing subscriber retention and acquisition. They are attuned to the financial implications of their product decisions, acknowledging how content investments affect the company’s financial performance.
Marketing as a Core Skill for Product Managers
In a product-led growth environment, marketing is no longer confined to the marketing department or even solely attributable to the product marketing team. Product managers need to be well-versed in marketing strategies, understanding user behaviors, segmentation, and positioning. They must craft product experiences aligned with the overall marketing strategy to drive user acquisition and retention.
Product managers at HubSpot are deeply involved in understanding user personas and developing features that resonate with their target audience. Their collaboration with marketing teams ensures that product development aligns with the company’s marketing efforts, contributing to the overall growth strategy.
Equipping Product Managers for Success
Furthermore, fostering a culture that encourages collaboration between product, finance, and marketing teams is vital. This collaboration enhances the holistic view of the product’s impact on the business and ensures that product decisions align with broader organisational objectives.
If you’re a product manager and wonder if this really should be something you take onboard then frame it in a positive way. By understanding the market, the cost implications of your role and decision making you’ll be able to have a better real-world handle on attributing growth to your strategies.
In conclusion, the shift towards product-led growth necessitates a transformation in the skill set of product managers. Empowering them with an understanding of P&L management and marketing strategies will be instrumental in their ability to drive successful products in this new era. As companies continue to embrace this approach, product managers equipped with these additional competencies will undoubtedly be at the forefront of this transformative journey.
There’s also a big upside for aspiring PMs here – dipping your toe into marketing is FUN. Whilst you’ve often knee deep in data, surveys, feedback loops and so on, being able to jump on creative projects that celebrate the very features you’ve been toiling over can be inspiring. It also really does help to bring teams together. So make it worth your while to join those marketing meetings, get involved and take your product management skills to the next level!