I’m deeply grateful for the opportunity to share this State of the Product Conversation at the dawn of 2023. The following is based on insights gleaned from thousands of interactions with product professionals across industries, geographies, and levels of seniority. Are you curious to learn what the new year has in store for product? Read on for five product trends on our radar here at Products That Count. Taken together, they make up the state of the product conversation in 2023.
For context: Products That Count engages 20% of all product managers globally (300,000+ strong) in what we call the “Product Conversation,” through:
- Daily programming such as our award-winning podcast show, Product Talk
- Trusted advising to Global 2000 with strategic partnerships like the CPO Track, in a multi-year collaboration with leading global technology consultancy Capgemini
- Creating a flywheel across geography and industry with corporate memberships like our mentorship program at scale, with Cisco, SoFi, Cognizant, and more
Our Mission: Accelerate the careers of product managers
Trend #1: Product expands into the C-suite
Post pandemic, the role of Product in Fortune 1000 companies has become more strategic: product leads digital transformation and going digital is no longer optional; it’s a matter of survival. Our inaugural CPO Study shows that 15% of the Fortune 1000 currently have a CPO (Chief Product Officer) as part of their C-suite. In other words, CPOs are effecting change but are not quite ubiquitous. Our prediction is that 70% of Fortune 1000 companies will have a CPO by 2027. My hope is that this research empowers more PMs to become product leaders and claim a seat at the C-suite table.
Most surprising to me is this simple equation: more control = greater success. Naturally, CPOs oversee all product functions. But many of the 300+ CPOs we talked to for our study had a broad range of reportees, from engineering to marketing. For CPOs with this broad reach, their company was 70% more likely to be high growth and to achieve its objectives.
Greater control = greater success
This isn’t the first time a digital transformation is making waves in the C-suite.
Consider the CMO (Chief Marketing Officer). In 1993, the first CMO was named at Coca-Cola. At a time when most advertising consisted of TV ads and billboards, the 90s saw a massive shift to digital marketing. What was once hard to measure then became codified and worthy of an elevated role, a larger budget, and a massive company culture change. Fast forward to 2020: 70% of Fortune 1000 have a CMO, and most CMOs have more budget than Chief Information Officers (according to the Gartner Group, a technology research firm).
For context: we interviewed and surveyed more than 300 CPOs for this inaugural study. The purpose was to gain insights into the role’s transformation and its potential trajectory, as well as to see what the most successful CPOs are doing. The CPO Study is produced in partnership with Capgemini, a leading global technology consultancy.
Our inaugural CPO Study reveals that 15% of Fortune 1000 have a CPO
Trend #2: ROI trumps growth
With a looming recession, our focus as product builders is shifting towards doing more with less, especially less engineers: boost productivity, prove ROI, and reduce cost. So it’s no surprise that we’re increasingly looking for effective low-/no-code solutions, which augment our teams and allow us to get more done with less engineering resources. Over 25% of the 4,000+ nominations we received this year for the 2023 Product Awards are for low-/no-code tools.
In contrast, we’re seeing lower appetite for product-led growth (PLG) services this year. The economic environment is partly to blame because we’re no longer in a growth-at-all-cost mindset, but more importantly, it’s becoming clear that PLG cannot scale unless 2 critical conditions are met: built-in network effect and stickiness. Take Dropbox as an example, the network effect is built-in because it’s a file sharing system, and the stickiness comes from the fact that people want to have ongoing access to their files.
Based on the nominations submitted for the annual Product Awards, other trends we’re seeing this year include:
- An ever-increasing bar for product excellence, exemplified by >30% more nominations than last year
- Products are more than just products: they are channels helping companies engage customers
- Product management is specializing by industry – we see the strongest momentum in these verticals: B2B Tech, FinTech, Life Sciences, PropTech, AdTech, IoT, and Telecom,
For context: this year will mark the 6th annual Product Awards. Past award winners include Zoom, Amplitude, and Canela. Over 4,000 nominations have already been received. Leading the selection process is an independent Advisory Board of 12 product leaders representing diverse industries, geographies, and backgrounds, from leading companies like Intuit, Macy’s, Oscar Health, and Fidelity. The Product Awards are produced in partnership with Mighty Capital, the go-to venture capital firm for product-first companies.
More than 4,000 products have been nominated for the 2023 Product Awards
Trend #3: Innovation trumps ROI
The power of great products remains the idea that people feel something when they use it. The insight here is that despite the expected focus on ROI and productivity in 2023, market leading companies will still find ways to invest in innovation in order to position themselves ahead of their competitors once the economy recovers.
There’s a misconception that a good product is something that can be manufactured or analyzed into existence. We first want to see products drive ROI and the bottom line. To describe that, we use a framework called the Product Equation, which is simple to explain but hard to execute. It helps us articulate how our product roadmap affects the bottom line by:
- Increasing the number of customers for our product, i.e. developing an acquisition strategy
- Getting customers to come back more often and increase transactions, i.e. creating an engagement strategy
- Improving revenue per transaction for our product, i.e. having a monetization strategy
The Product Equation connects our product roadmap to the bottom line
Products that rise above the rest
But that’s forgetting the most important aspect of our job. After all, using products is not simply a logical decision where people say, this product is cheaper than that one. Products that rise above the rest provoke a deeper, almost emotional response. These products make users feel in control, or more productive, or less anxious.
To connect to our customers’ pain and needs, we use a more philosophical framework called the Product Formula, which is the mind-body-spirit of great products:
- Body = Beauty. We all want to look good and expect our products to be beautiful, too. It goes way beyond pretty pictures. It’s about efficiency and “wow” effect.
- Spirit = Meaning. We all want meaningful lives and expect our products to be meaningful as well. It’s about personalization and at the same time protecting privacy.
- Mind = Learning. We all want to learn and grow and expect our products to evolve, too. It’s both tactical (e.g. growth hacking and blitz scaling) and strategic.
The Product Formula connects our product roadmap to our customers’ pain & needs
For context: we partner with dozens of leading brands, including SoFi, Cisco, and Teladoc to transform product teams into a competitive advantage with our certification and mentorship program. In addition to the frameworks above, we go over key aspects including product/market fit (when it applies and why it’s a myth); how to optimize conversion funnels, and when to think outside the funnel; how to prioritize effectively and get internal alignment; and much more.
Hundreds of high-performing product teams rely on our mentorship program to stay sharp
Trend #4: Defining a product-first company
One of the emerging questions I’ve been hearing lately is: what is a product-first company? It is top of mind for folks who are new to product and trying to make the best possible career choice, for CPOs looking to build high-performing teams, and for CEOs who want to become market leaders.
While the definition of a product-first company remains a bit in flux, one thing is clear: the answer isn’t in any textbook or classroom. No, the answer is in all of our collective experience as product professionals. Tapping into that collective experience requires a serious commitment to immersing ourselves in the product conversation in 2023. Here are some ways to take part in this new chapter of the product conversation:
- To join the product conversation, show up! For instance, listen to our award-winning podcast show once or twice a week, read one of our popular newsletters, or sign up for a free membership to our CPO track.
- To shape the product conversation, share insights. For example, nominate a product for one of our coveted Product Awards, apply to be featured on our global webinar program, or learn about our exclusive mastermind circles.
- To drive the product conversation, commit to become a face of product management. Submit an application to lead a local chapter or a podcast series, inquire about our global Advisory Boards, or take a shot at our 2023 CPO 20 Awards.
Trend #5: Play, purpose, and potential
We’re all snowflakes, unique in our own ways yet committed to innovation. When we talk about why we do what we do, we start peeling back the layers of the onion:
- Play: What makes our work fun. We love building something cool and working with engineers.
- Potential: What propels our career forward. We hone our growth mindset and our AI skills.
- Purpose: What changes the world. We bridge the gap by helping one another build a career in technology. We play our part in reducing inequalities and leaving the planet a little bit better than we found it.
Thank you for your passion in making product management the world-shaping field that it is at the dawn of this new year. Keep your finger on the pulse on these five trends by getting more deeply involved in the product conversation this year. And last but not least, cheers to a mighty 2023!
~SC and the Products That Count team
The passionate Products That Count team