As a product manager, your goal is to have a singular focus – creating products that your customers love. Without a great product you have no business, no growth, and no audience. But in growing startups, another need takes greater attention – capitalization, and the obligations that come with it. When raising a seed round, expectations between the founders and the investors are set – they have this vision for solving a problem for a certain audience, and they need a certain amount of money to achieve a set of proof points that their business is viable.
But most businesses need more time than they thought to achieve half of what they initially planned, and many don’t achieve those proof points within a set period of time. Finding product-market fit is an unpredictable journey, and the results will vary by founder, by team, by product, by industry, and by audience.
Product Manager Leadership In Growing Startups: Know The Product Story and Communicate
Whether it’s a seed round, or a seed extension, or a Series A or beyond, the pressure to show some version of those proof points to investors is high. For founders, these are the results that matter, and the judgement on the viability of their work will come from the investors that decide to invest in the next round. If current investors don’t want to follow on and invest in the next round, it’s a red flag for any potential incoming investor. CEOs and founders can be in tough positions if the last round took them far, but not nearly far enough.
And this is where you the product manager need to step in and save the business. Perhaps the founders made promises that couldn’t be met during the previous round. Perhaps there is a growing need to show the progress in user growth or engagement that the product is just not ready for yet. There will always be competing needs that a product team has to balance month over month.
The conflict between that which will look best to investors to raise the next round, and that which will serve your customers the best is a critical balance for any product manager. Without the capitalization, the business will fail in the short term; without product market fit, the business will fail over the long term. It’s critical for the product manager to not look at a situation like this with frustration, but approach it with the same creative problem solving you approach your work in the product.
Building a trusted relationship with your founders/CEO
Whatever your level of seniority at a startup, a product manager should have context on the runway and expectations of those who have provided the cash to fund the business. Do your best to be on the inside of these conversations. Try to understand the fundraising stage, runway, and your CEO’s responsibilities over the next 6-12 months. You want to be the problem solver down the line when the product needs to tell a good story in the next fundraising round. So, find out what that story might be. Understand the expectations.
Make sure everyone is clear on the goals
It’s also important to understand your product team’s goals, and how those goals roll up into the company’s objectives. The nature of product development requires consistent, clear cross-team communication. Therefore, this communication needs to happen regardless of what your quarterly plan “says” everyone is going to do. When architecting a plan for the next few weeks, you cannot afford to not take into consideration the company runway and proof points for the next round. In a perfect world, the goals would be the same, but your company’s runway is an absolute, relatively unwavering timeline. Whereas on the other hand, product development by nature is an exploratory journey and is never entirely predictable.
As a product manager, a scenario you want to avoid is to let any fundraising noise distract your product team. Thus, you need to understand the story around the business. That way you can keep that constraint in mind when making product decisions.
Challenge the narrative
When you can’t find a balance between all the expectations surrounding the product, then challenge the narrative. Point to what you can deliver over the next 90 days, and be clear about what you cannot. These are such critical conversations to have as a team. In addition, everyone needs to keep an open mind about what the solution might be. Thereby, allowing an optimal outlook for the business in the short and long term.
Even after all this work, at the end of the day you have to solve the short-term problem. The key is to not be frustrated about it. This is the nature of growing startups, but the learning you’ll take away from these internal dynamics will be priceless.
About the speaker
An experienced and creative entrepreneur and product leader, Britt Myers has developed an impressive resume of business successes in media and technology production. In 2014, Myers partnered with Stephanie Dua as co-founder and Chief Product Officer of ed-tech startup Homer. Homer is the #1 Learn-To-Read program powered by your child’s interests; an educational app for iOS and web that teaches a child to read and develops crucial early childhood cognitive skills.