Startups: When to Hire a Product Manager

The Birth of Software Product Managers

I started out my software career as a subject matter expert (technically a “Business Analyst”) at the turn of the century – 1999 to be specific, with Y2K looming over our heads. But I didn’t need to care about Y2K, right? I was an SME. Issues regarding 2-digit years and the new millennium were not our concern – that was engineering’s problem.

I was working at a startup that was about 8 years old when I got there. It wasn’t technically a dot-com. It was a fat client/server application. I don’t remember if it was PowerBuilder or Java Swing, but it was something of that ilk. When I was hired there was a push to re-platform all our products as web applications.

We built global trade compliance software (essentially software that helps you file the right paperwork with a country’s customs agency to properly import or export your goods into/out of a country - though there are a lot of complex rules depending on what you are importing or exporting, in addition to rules from other agencies like Food & Drug and Agriculture and Defense, but I’ll stop boring you here).

I was hired because the current SME was having a really hard time translating government regulatory requirements into something an engineer (with no domain expertise) could code off of. When I interviewed for the position, I happened to be an expert on US Customs import rules and regulations with no experience in software, BUT I had a technical degree.

The hiring manager was excited that I had taken programming languages in school. I told her that it was Pascal and Fortran, so I’m not sure how valuable that was. (Side note: this was before I learned to <ahem> embellish my qualifications to appear as qualified as possible, though this was also when tech companies were throwing money at people with marginal experience... You have a degree in underwater basket weaving? YOU'RE HIRED! ⬅ This isn't really much of an exaggeration. I had a friend with an art history degree and she got hired at a tech company and had absolutely no idea what she was doing and they didn't seem to care.)

Anyway, the hiring manager said, “I don’t care. If you know how to program, you know how to be logical and if you can be logical, you have the skills to translate business into tech.”

And lo and behold, she was right…

When I started there was no such thing as a product manager. I mean there was at other companies like Microsoft, but at startups, the concept of such a role hadn’t really caught on. However, not long after I started when people figured out that I actually could translate business requirements into something engineers could code off of (I could even spoon-feed them pseudocode), the Product Manager role was born and I was the first one (I mean... not like the first one ever, but the first one at that company).

Bridging the Gap Between Business & Technology

It took 8 years for that company to realize they needed someone to bridge the gap between business and technology. The product I was hired to work on was brand new with no customers and in terrible shape. It was virtually unusable. During my first week there I attended product training for the product I was taking over, and I had no idea what was going on within the application and I UNDERSTOOD the regulations and the processes - or at least I understood what the processes should have been. Even the instructor got confused and lost. Several times.

The company already had an established product to help with export regulations, but export regulations are infinitely less complex and easier for laypeople to understand than import regulations (my inherited product's wheelhouse). There is no doubt in my mind that, had I not been hired, that product would have failed. I know this sounds super braggy and I don’t mean that it had to be me specifically, but they needed someone different than the non-technical SME that I replaced. (Stay tuned for a follow-up post on my unpopular opinion that the most effective product managers need to have a technical background.)

Incidentally, that product still exists today, 25 years later. It was bought and sold several times over and (hopefully) re-platformed a few times, but it is still a viable product (this bit is intentionally super braggy).

Most Seed Stage Startups Don’t Have Product Managers

Fast forward 20+ years and most startups still don’t hire their first product manager until several years in. 2-3 years seems to be around average - either that, or around the time the company has hired  between 1 and 2 dozen engineers.

In cases where the founders are engineers, generally one of the founders can effectively act as the product manager (though not all engineers are good at this, which seems to contradict my statement above that product managers should have a technical background, but it does not and you're just going to have to hold your horses until I have time to write that post before you flame me). Also, in cases where the product is something familiar or tangible (most B2C products), it’s easy to get by without product management for a good long while if the engineering team is small enough.

Regardless, even 30ish years after the inception of the software product manager role, product managers are almost never an early hire, UNLESS one of the founders is a product person – in those cases they realize that the skill is necessary, and that they don’t have the bandwidth to do that and their executive role.

You Don’t Know What You Don’t Know

Most (not all) startups are created by engineers with a great idea, but they often know nothing of ideal customer personas, market or market fit, product vision, etc. This is fine and perhaps even good. Too much structure and planning can squelch innovation and if they can manage to get an MVP out the door without outside investment, they won't have VCs breathing down their neck telling them what and what not to do (which can also squelch innovation, but in time having some guidance is a good thing).

Because product management tends to be an afterthought, startups often don’t start thinking about the skill until they start floundering. Maybe they can’t figure out who their ideal customer is. Maybe they know their ideal customer, but they aren’t gaining traction because they aren’t prioritizing the right features. Maybe they aren’t getting anything done because startups with no product oversight often like to run to the next bright shiny object only to be distracted by another bright shiny object (otherwise known as, “SQUIRREL!”).

I’ve been hired as the first product person in most organizations I’ve worked and the one thing that everyone has told me is, “I wish I would have hired you sooner.”

There is this sweet spot within a startup, usually sometime after MVP and sometime before the company starts floundering (at some point, without product oversight, the company will start floundering, even if otherwise successful), is where they should start looking for a product manager.

The first product person should be a combination of strategic and tactical. They should have several years of experience. Often companies will try to train an intern to fill that gap, but you need an experienced product manager. The product person needs to be someone who’s willing to roll up their sleeves and work alongside the engineers day-to-day, as well as talk with stakeholders and customers, while putting in place a process for their role. They cannot be someone who just builds roadmaps and defines OKRs and throws them over the wall to engineering.

what can a Fractional CPO do for you?

Hiring a fractional CPO in early stages can benefit startups by providing some structure without disrupting the engineering process. Fractional CPOs can help build out product vision and strategy and ensure that these align with the company’s overall strategy. They can also help with product-market fit and provide go-to-market and launch plans and ensure that the product aligns with customer and stakeholder needs. All of this will help guide the roadmap and prioritize feature development. In essence, a fractional CPO will help build the foundation for the first product manager.

The term “CPO” is kind of a misnomer. Fractional CPOs should also be willing to help execute on the product strategies they’ve defined and ideally, they should be there to onboard and coach the first product manager.

A fractional CPO can help smooth the rough patches in a startup’s early stages without spending the money up front for a full-time product manager (product managers are expensive). Once the foundation has been set, the first product manager should be able to hit the ground running and execute.