This State of the Product Conversation article is based on insights gleaned from tens of thousands of interactions with product professionals across industries, geographies, and levels of seniority.
Tl;dr: product is at an inflection point
I’m deeply grateful for the opportunity to share this State of the Product Conversation at the dawn of 2024. As you’ll see, the product function is at an inflection point. The importance of product in business has skyrocketed, changing the game for top companies globally. The number of Chief Product Officers (CPOs) appointed at Fortune 1000 companies has skyrocketed by 10X in just 3 years, now standing at a whopping 30%. Their arsenal has expanded too, with a staggering 6,000 tools at their disposal, a 10X surge in just 5 years.
That’s precisely why, 9 years ago, I birthed Products That Count – a 501(c)(3) nonprofit on a mission to help everyone build great products. As a product visionary and tech investor, I’ve made a name for myself by creating products that people truly love. My dream? A world where everyone uses products that count, transforming business and life on a colossal scale.
The role of product in driving business success has reached an inflection point
This year is particularly special because the role of products in driving business success has reached an inflection point. Here’s what I see in store for 2024:
- Product dominates the C-suite: a remarkable 10X surge in CPOs asserting their influence in the C-suite,
- PMs face an existential threat: the distinction between product management and product operations is crucial,
- Better data, better AI: PM leaders must seize control of the data agenda, leveraging strategic partnerships and acquisitions to scale AI initiatives,
- Product is the new sales: digital transformations propel product teams at Fortune 1000 into the limelight, positioning them as the new power players with massive budgets,
- PMs help PMs to stay sharp: we’re launching a $1.5M campaign and need your help to reach our goal.
Trend #1: Product dominates the C-suite
Product now stands as the primary engine propelling business value. In just 3 years, we’ve witnessed a seismic shift – 30% of Fortune 1000 now boast a Chief Product Officer (CPO), a 10X surge!
Product is no longer confined to its traditional realm. It is infiltrating marketing, by taking over the voice of the customer; engineering, by implementing low/no-code tools and AI co-pilots; and even finance, appropriating the intricate dance of M&A.
A meaningful number of CPOs were promoted to the role of President this year – such as Shiven Ramji at Okta and CJ Desai at ServiceNow – and some even scored the CEO role. And if you think things are moving quickly now, hold onto your seat, because this trend is hurtling forward at an even more breakneck pace – especially with the formidable force that is AI.
Product is the fastest growing role in the C-suite
Our 2023 CPO Insights Report, as showcased in TechCrunch, boils down insights from over 500 deep dives and executive roundtables with CPOs on the pivotal role of product at Fortune 1000. The escalating significance of this function continues to captivate me. And it underscores the trends I’ve been flagging for the past few years. Check out the highlights – I hope you find these high-fidelity signals as valuable as I do:
- Prior Prediction Accelerates: Our previous report forecasted that 70% of Fortune 1000 would boast a CPO by 2027, leaping from 15% in 2022. Well, the trend is racing ahead, with 30% of Fortune 1000 elevating a product leader to CPO in just a few years.
- C-Suite Battleground: The rising prominence of CPOs is tilting the power dynamics in business decision-making. CPOs now wield a critical role in steering strategic growth and innovation, often taking up the voice of the customer, a responsibility traditionally owned by Chief Marketing Officers.
- Beyond Cost Cutting – Innovate & Invest: While good CPOs enhance productivity and trim expenses, the great ones invest in innovation and recruit top-notch talent, all while keeping budgets intact. Some even team up with CEOs to steer the M&A agenda.
- Business Ownership: Good CPOs focus on driving product outcomes, but the stellar ones seize control of both product innovation and business success, potentially paving a path to the CEO role. This shift is propelling more CPOs into President and CEO positions.
- This Year’s Prognosis: In 5 years, 70% of CPOs will wield P&L ownership. The capability of CPOs to effectively pull business levers will be the linchpin for success across all industries.
Trend #2: PMs face an existential threat
In this brutal economic battlefield, the relentless demand for productivity is pushing product managers to the brink. The rise of AI-driven tools intensifies the existential threat they face, urging a strategic shift pioneered by Airbnb, a hospitality leader and Mighty Capital portfolio company. PM leaders, brace yourselves! Team restructuring is a must, with a redefined playbook for PMs and a dedicated Product Operations team now indispensable.
“I’ve revamped my criteria for hiring product managers. I used to focus on effective listening, now it’s all about their knack for extracting insights from vast amounts of data.”MEDFAR Product VP Patrick Charbonneau.
PMs, steer clear of mere survival instincts! Now is the time to make a career-defining choice between product management and product operations, akin to the pivotal decisions in functions like sales versus sales operations. On the one hand, PMs focus on delivering business value, guiding revenue and growth decisions through the delicate dance of build, buy, or partner strategies – I’ll talk more about that in the next section. On the other hand, product operations drives tool selection and efficiency without stifling innovation with bureaucracy.
More than 6,000 products have already been nominated for the 2024 Product Awards
The good news for product operations is that the product ecosystem and the number of entrepreneurs building tools for PMs is exploding. Our 2023 Product Guide boils down trends and celebrates the best of thousands of tools nominated for the 7th annual Product Awards. Leading the selection process is an independent Advisory Board of 25 product leaders representing diverse industries, geographies, and backgrounds, from leading companies like Google, Bank of America, and Amazon’s Twitch. Past award winners include Zoom, Amplitude, and Canela. Highlights are below for your reading pleasure:
- Growth is INTERGALACTIC. Last year: 4,500 nominations. This year: already over 6,000! And mark my words, it’ll be close to 15,000 by 2027. This unequivocally underscores that Product is poised to be one of the paramount business drivers of the next decade.
- Verticalization is the name of the game. With the product stack brimming with tools, there’s a discernible trend toward designing products tailored for specific industry verticals – be it platforms for FinTech compliance or IoT security tools.
- AI is like a universal currency, a commodity offering competitive advantages in efficiency, accuracy, and innovation. Notably, nearly 20% of our 2023 winners flaunt an explicit AI function in their product.
- Silicon Valley’s reign is waning, with burgeoning regional technology hubs globally – take Quebec, for instance.
- Sustainability is not just a buzzword; it’s a business imperative. Our research has unveiled that sustainability tools are now woven throughout the product stack. The times, they are a-changin’.
Trend #3: better data, better AI
In the realm of AI, 2023 was the year of experimentation and while I’d love to say that 2024 is all about scale, I don’t believe we’re there yet. PM leaders need to take charge of the data agenda, thinking holistically about the product and seeking opportunities for partnerships and acquisitions.
“Crafting exceptional products, particularly in the realm of AI, doesn’t happen in isolation. It’s imperative to consider whole products and integrate an ecosystem and strategic partnerships into your roadmap.”Bank of America VP, AI/ML and Automation Platform Hira Dangol
Examples of strategic partnerships driving AI at scale in the Mighty Capital portfolio.
Product Managers, chart your data and governance strategies, and sharpen your ecosystem and partnership-building approaches. Owning the data agenda is crucial; it shouldn’t be left to tech teams. And the data landscape unfolds uniquely by region. In the US, expect a hyper-personalization race – especially in healthcare – coupled with AI-driven content moderation across media, gaming, e-commerce, customer support, and marketing. Privacy and security will also take the forefront due to the election year.
In Europe and the Middle East, regulatory hurdles like GDPR may impede personalization, while sustainability challenges could hinder scalability. Meanwhile, China, with its long-term vision and data wealth, gains a competitive edge, but demographic shifts pose a threat with an aging population.
Trend #4: Product is the new sales
Product teams didn’t really have a budget until recently. That’s changing at warp speed. Digital transformations are now mainstream, and the real business value comes from crafting exceptional products. Fortune 1000 companies are pumping massive budgets into product, making product teams the king/queen-makers in tech decisions and investments.
Visionary entrepreneurs are onto something by embracing a product-first strategy, aiming squarely at the expanding wallets of these product teams. Airtable, Slack, and Mighty Capital’s portfolio company Amplitude show how it’s done.
These disruptors are not alone. Entrepreneurs are fed up with battling for budgets from the same over-allocated pockets in marketing, engineering, and finance. And with the venture capital (VC) landscape in upheaval, getting money from investors is even tougher than convincing customers. The VC tensions continue into 2024, with big players facing scandals, senior partners making swift exits, and small firms fighting for survival.
For CEOs crafting tools for PMs, the product ecosystem is expanding, and now’s the time for bold moves. Seed-stage recovery has started, driven by innovation in business models and realistic valuations. SaaS is grappling with challenges, and AI and edge computing are flipping the game, demanding more security and privacy.
Series A recovery depends on shaking up distribution and sales. Forget the old tactics; products are the new power players for landing accounts. Be ecosystem enablers in this AI revolution. Partner up with the likes of Microsoft and Capgemini, leverage developers, and keep your North Star on ROI. Brace for the relentless sales pressure—it’s the name of the game.
“Technology is an enabler of transformation, but it’s not always sufficient. Today’s Fortune 1000 companies need to adopt a customer-first, product-first mindset that prioritizes new experiences in order to stay competitive.”Capgemini Americas Product Lead Lisa Mitnick
The landscape, ripe for consolidation, also hints at increased M&A activities, though premium valuations may not be the norm. Navigate wisely in this era of transformative choices.
Trend #5: Help us help PMs stay sharp
Staying sharp requires a serious commitment to immersing ourselves in the product conversation in 2024. I mentioned that I started Products That Count to help everyone build great products. Products That Count, a 501(c)(3) nonprofit, is on a mission to help everyone build great products. Our coveted Awards – inspiring over 500,000 product managers – honor product excellence and elevate the professionals responsible for their success. (Free nominations here.) We catapult >30% of all Product Managers to the C-suite through exceptional programming. That ranges from award-winning podcasts to popular newsletters (free subscription here) – all completely free. As a trusted advisor to Fortune 1000 CPOs, we share insights from innovative companies like Cisco, SoFi, and Amplitude, transforming product success into business success.
Guided by a stellar Board of top-level product executives, our values of respect, grit, and adaptability shape everything we do, nurturing future Chief Product Officers. In the past 2 years, the organization has surged ahead. Now, at an inflection point, we’re launching an unprecedented $1.5M campaign. This initiative will amplify our reach, depth, and influence. We see it as turning Products That Count into the Oscars, Gartner, and TED of Product, all in one.
To achieve this, we need your help. Like other non-profits, we rely entirely on the generous support of corporate sponsors who invest in the development of product professionals for the benefit of all. And there are many direct benefits for the sponsors.
By introducing us to 2-3 colleagues or peers who could be interested in corporate sponsorship, you play a crucial role on 3 fronts. Helping us reach our $1.5 million goal. Helping companies get involved in the product community. And helping everyone get the access they need to build great products.
Your passion for shaping product management is invaluable, so here’s to a mighty 2024! I look forward to hearing from you!
~SC Moatti, Products That Count Founder and Board Chair
The passionate team and powerful board of Products That Count