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Product Management, Leadership Keith Cowing Product Management, Leadership Keith Cowing

It’s the end of product management as we know it.

My Cornell colleague Josh Hartmann and I recently spoke at a Cornell keynote about the rapid changes that have hit the tech world and how CEOs, CPOs, and CTOs are adapting. Let’s break down what tech leaders are doing and how you can think about evolving your product organization.

My Cornell colleague Josh Hartmann and I recently spoke at a Cornell keynote about the rapid changes that have hit the tech world and how CEOs, CPOs, and CTOs are adapting. Let’s break down what tech leaders are doing and how you can think about evolving your product organization.

We have seen market crashes, most recently in 2001 and 2008. We have also seen several platform shifts: PCs, internet, cloud, and mobile. But we are on truly rare ground right now. A pandemic obliterated prior assumptions about office space, the market crashed, with SVB as a kicker, and we are on the precipice of a new platform shift with AI. All. At. Once.

So product management as we know it is done. It’s time to adjust our thinking, quickly.

One trend in the market is the revival of the General Manager role. This position has been around for a long time. It means running a P&L, including all costs that go into making and selling a product: product, design, engineering, marketing, sales, and operations. During the past ten years, many tech companies have used functional org designs with product, engineering, and design teams that report to their own executives without arbiters at the director or VP level who control resources cross-functionally. GMs were occasionally used in international teams or new ventures but rarely in core product development teams. In the functional model, P&L “ownership” is dispersed. During times of abundance, this org design works well because it optimizes for product decisions, tech tradeoffs, and distinct product, engineering, and design cultures. The big downside is that cross-functional decisions such as pricing changes, headcount changes, reorgs, or strategic shifts take longer because they require intense cross-functional negotiations. During times of abundance, those decisions can be slow and it is merely a nuisance. During times of scarcity, slow decisions will cause failure. We have been in abundance for 10+ years due to the incredible business models at big tech companies such as Meta and Google and the nearly endless venture capital fueling startups and growth companies.

Welcome to times of scarcity. It is now increasingly important to make hard tradeoff decisions rapidly. Creating GM roles or morphing other roles into GM roles is one tactic. I’m seeing a revival of the GM at tech companies and I like it.

It’s not the only way. AirBNB is doing something totally different. There has been a lot of talk about AirBNB implementing an Apple-style product marketing manager role that blends product and marketing. But listen to Brian Chesky carefully in his interviews; you see several key points many people are missing.

AirBNB’s efficiency is mind-blowing. They have less revenue and profit than companies like Google, but their Free Cash Flow per employee is in a league of its own. AirBNB has natural tailwinds because marketplace models at scale are highly profitable. But it’s still a remarkable example.

So what should you do in your org?

First, figure out who the decision-maker is in any given context or domain and lean into it. Great companies tend to be politically dominated by a specific function, usually driven by the founders' personalities. At Meta and Google, engineering runs the show. LinkedIn is product-driven. Apple and AirBNB are design-driven. Costco is operations-driven. The problem with these cultures is that dominant functions create the feeling of second-class citizens. Google PMs know they’re not the most important people in the room. But the advantage is giving somebody access to the accelerator and removing other people’s access to the brake pedal so you can move fast.

In today’s world, you better move fast. Figure out who should have the reins for specific decisions, and let them move.

Roles and responsibilities are frequently fuzzy, especially between product and other functions. An hour spent clarifying roles and responsibilities is a very high-leverage hour. Determine what artifacts must be created (roadmap, positioning statement, pricing page, etc.), what decisions must be made, and what activities must happen. Then make sure you have a function that clearly owns each.

Decisions need to be made by people close to the problem, with overall strategic context. If people on the ground make decisions but don’t fully understand the company’s strategy and investment areas, they won’t make the best decisions, and that’s not their fault. In contrast, ivory towers with execs making decisions on problems they don’t intimately understand will lead to failure and culture rot. So ensure your communications flow effectively; it’s the WD-40 for effective decisions. In today’s market, making difficult decisions with limited information quickly will give you the velocity you need to win.

If you have comments or questions or are taking a different approach on your team - shoot me a note!

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Does a product manager need domain expertise?

If you don’t understand your industry, you can’t be successful. If you have been in the industry too long, you get steeped in tradition and are less capable of innovation. So what’s the real deal with domain expertise?

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If you don't understand your industry, you can't be successful. If you are an industry veteran that's too steeped in tradition, you become less capable of innovation. So what's the real deal with domain expertise? First, let's be specific. You can break domain expertise down into your understanding of:

  1. The industry: key players, competitive dynamics, regulatory issues, supply chain, talent

  2. The customer: characteristics, behaviors, motivations, goals, key challenges

  3. The product: technical design, value prop, key features, customer experience

  4. The problem: entertaining, saving time, making money, improving performance

Within these areas, it is easy to conflate knowledge and skill. Knowledge is knowing what a neural network is. Skill is the capability to build a deep learning model that produces results for your business. Knowledge is required but not sufficient. Skill is where you truly differentiate yourself.

In my experience, skills at solving a specific type of problem are the most critical. Steven Spielberg is an expert at entertaining.  I would bet on him being successful in any medium as long as the fundamental premise is developing rich characters and stories to entertain an audience. Tim Ferriss, on the other hand, is an expert at improving performance. He does it across domains like entrepreneurship, investing, sports, cooking, and politics. But it's always about identifying behaviors that improve results. Great product managers hover around similar problem types, whether it's saving companies time and money or connecting and entertaining consumers.

Understanding the customer is also wildly important. World-class product experiences are anchored on empathy for the user. It takes time to build this empathy and knowledge. However, if you have the skill to perform effective user research - then you can accelerate the learning curve and learn new customers more rapidly.

Product is a mix. You need deep knowledge and specialized skills to build a self-driving car or develop a new cancer drug. But I have found most software products to be readily learnable once you understand the basics.

Industry is a tricky dichotomy. You can't succeed in a complex regulated industry, like financial services or healthcare, without knowing the market's dynamics. On the flip side, radical innovation tends to come from industry outsiders who aren't steeped in the old ways, i.e. Stripe, AirBNB, Uber, etc. So there is a risk/reward tradeoff. Being an insider increases your chances of success, but reduces the chances of outlier success. Being an outsider increases your chances of hitting a home run, but increases the likelihood of complete failure.

As a product manager, I recommend you think carefully about where you want to build your expertise over time, especially in regards to problem type. Early in your career, focus on breadth so you can build a baseline and experiment. Once you find the area(s) where you have the highest combination of passion and ability, go deep! That's how you go from good to great.

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A product manager's list of things to read, watch, and listen to

I have spent the past 15 years building products, teams, and companies. Along the way, I have read, watched, and listened to a LOT of content. Here are some of my favorites.

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I have spent 19 years building products, teams, and companies. Along the way, I have read, watched, and listened to a LOT of content.  Here are some of my favorites.

Books on Business Leaders and Creators

 Books on Leadership and Management

 Books on Productivity

 Books on Product Management

 Books on Sales and Marketing

 Books on Startups

 Books on How to Think

 Websites and Blogs

 Email lists

 Videos

 Podcasts

 

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What skills do you need to become a product manager?

To start with, you need a basic level of skill across a wide range of topics. Then, you need to build superstar skills in one or two areas.

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People frequently ask what it takes to become a successful product manager. I tell them all the same thing. To start with, you need a basic level of skill across a wide range of topics.

  • Engineering

  • Design

  • Marketing

  • Sales

  • Data and analytics

  • Strategy and prioritization

  • Communications and leadership

Then, to become world-class you need to build superstar skills in one or two areas. These one or two areas will be highly dependent on your personal interests, your natural-born skills, and your experience.

As you invest in your superstar skills, it becomes increasingly important to find a product, a market, and a company where flexing those specific muscles pays outsized dividends. Each company is politically driven by a different function and it’s important to keep that in mind. At Apple, for example, design and marketing run the show. At Facebook and Google, engineering drives everything. At Salesforce, it’s all about talking to customers. As you grow in seniority, it becomes more and more critical to be the right PM for the job. The top PM at Instagram might completely fail at Amazon Web Services and vice versa.

So build the base skills then carefully select areas where you want to develop your personal edge. For more on this topic check out A product manager's list of things to read, watch, and listen to.

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3 keys to simplifying your product design

Building a product customers love is about making it simple and compelling. Here are 3 keys to getting it right.

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Building a product customers love is about making it simple and compelling.  Here are 3 keys to getting it right.

1. Clarify your value prop

Your value prop should be crisp. Who are you serving and how do you make their lives better? I suggest summarizing your product in the following form: We provide solution X to user Y by doing Z. For example, Patagonia provides high quality active gear to people who love the outdoors using sustainable and ethical practices. They have a big organization with a lot of products. But you can summarize their value prop and purpose in one sentence. The cleaner your value prop, the more loyal your fans.

2. Define goals for specific user actions

These goals should be unique to your product. When Chamath Palihapitiya was put in charge of the growth team at Facebook, Mark Zuckerberg gave him a mandate to grow the user base. But “Growth” was an impossibly broad topic. So they did research and identified a milestone of “7 friends in 10 days.” If a user joined Facebook and connected with 7 friends in the first 10 days, she was likely to become a daily user and invite her friends. If she joined Facebook but fell short of that milestone, she was more apt to churn. This gave the team something tangible to rally around: let’s build products and onboarding experiences that help people find their social network in the first week. Chamath joined Facebook when they had less than 10M users and left when they had close to a billion.

Focus on what you want your users to accomplish. Get this right and everything else falls into place.

3. Reduce cognitive load

Cognitive load is the energy required for a user to absorb information and make a decision. It takes customers more time to understand your product than you think. That’s why it is so important to get out and test your product in the real world. You are not a valid test. You think about your product every day and focus on every detail. If you run a social network, your customer might see your app while waiting in line at a coffee shop, talking to 2 friends, and pulling out her wallet. If you build software for doctors, the physician might see your screen while talking to a patient, ordering a prescription, and flagging down the nurse to check on lab results. People are busy and distracted, so design with the expectation that you will never have your customer’s full attention. Cognitive load is about more than just your product, it is about everything your customer faces.

Here are some places to look for cognitive load:

Navigation bars. People love to copy navigation bars from other companies. “They have X, Y, and Z so we need X, Y, and Z.” Don't fall for it!  Did Google copy the Yahoo! homepage? Design simple flows that lead to the outcomes you want. Then delete everything else.

Calls to action (CTA). If you want users to add an item to their shopping cart, make the button bright and obvious. Then remove buttons that aren't important. Don't ask users to do three things. Ask them to do one.

Word count. Count the words on every page and tighten your copy. Tell the same story, but with fewer words.

Onboarding flows. Don’t ask your user for a ton of information up front. Get started easy and onboard them over time.

Simple product design in the wild

Facebook vs. MySpace: There was a time when MySpace was bigger than Facebook. But MySpace had a fatal flaw. Designing your MySpace page was a complex task involving add-ons and custom html. Setting up a MySpace profile came with huge cognitive load. Facebook, on the other hand, made every profile page the same. When you join, you only have to do 2 things: upload a photo and find your friends.

In ‘N Out menu: In ‘N Out Burger is famous for having exactly 4 food items on its menu: fries, hamburger, cheeseburger, double double. That’s all! Four items, plus milkshakes and sodas. Compare that to McDonald’s and see what you get.

Apple product line: According to Apple lore, there used to be a table in the Apple design studio and every product the company sold had to fit on that table. If the product line got too big, it was time to trim down and simplify.

Diapers.com vs. Amazon: Amazon bought Diapers.com (aka Quidsi) for $550M because Diapers.com was giving Amazon a run for its money in baby supplies. One key reason was simplicity. Diapers.com gave parents a simple way to have diapers, wipes, and baby supplies delivered to their house every month. That’s it. Keep it easy. Keep it simple. Trust me, if anybody is under cognitive load it’s new parents! So this simplicity paid off. Even the URL was easy to remember.

Biggest loser competition: When I was on the product team at LinkedIn, our head of product ran a biggest loser competition. He challenged us to see which team could remove the most unnecessary stuff from their products. Everybody wants to add features and add products and add complexity. Yet the best products are great because they’re simple. It is extremely difficult to remove live functionality from a product. There is always somebody who will yell at you for taking away that feature. But having the discipline to prune your products helps create long-lasting franchises.

It is easy to create complexity. It is hard to create products that are simple and compelling. But it’s worth the effort.

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Why your product should evoke emotions

There was a famous food test where critics were given three meals: chicken, grilled chicken, and Tuscan-seasoned balsamic chicken. The Tuscan chicken got the best ratings. But there was a twist. The three meals were identical except for the name. The critics’ brains literally told them that the Tuscan-seasoned balsamic chicken was tastier than the identical “grilled chicken.” The name evoked positive emotions that changed their physical experience.

This is an important concept to remember when designing product experiences. Let’s use Starbucks as an example. Starbucks customers love getting to work in the morning feeling like they are powerful and ready to take on the day.  Nothing evokes that emotion like striding down the street holding a caffeinated beverage in a signature Starbucks cup. On the flip side, Starbucks customers hate when days get long and stressful. Therefore they love having a sanctuary where they can take a 15-minute break in the afternoon. Think about the music, the smells, the baristas, and the entire environment inside a Starbucks. It is designed to evoke emotions so when you sip your coffee, it feels like the best part of your day.

Think carefully about your customers. Figure out what they hate and what they love. Then take advantage of that to evoke emotions and win their loyalty. If people buy your product because it’s rational, you can win for now. If people buy your product because they love it, you can win for a lifetime.

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Keep score because you will play harder

In The 4 Disciplines of Execution, the authors discuss watching kids play basketball in a park. You can immediately tell when they start keeping score. They run faster, double the intensity, and start playing defense. Everybody knows that you play harder when you're keeping score. There is an old management axiom that you get what you measure. I deeply believe this and I think it applies not only to companies but to your personal career as well. By finding the key drivers in your career, measuring them, and putting them on a simple scoreboard - you will play harder and reach a higher level of success.

The 4 Disciplines of Execution (yes, I think this book is worth reading) also describes a manufacturing company where a facility in Canada was seriously underperforming. The proposed solution was to erect a scoreboard for everybody to see, showing each team's key metrics and clearly identifying the lowest and highest performers (all with a playful hockey theme). The facility VERY QUICKLY went from being a laggard to being one of the top performers in the whole company.

It's simple to say that you get what you measure and it's simple to say that you should apply this to your career. What's difficult is finding the right things to measure and finding a sustainable set of habits to actually measure them. So here are three keys to consider.

1. Differentiate results from inputs

It is important to measure the results of an initiative. If you're exercising you want to track fat loss or muscle gain. If you're looking for a job you want to track how many interviews you get at your target companies, etc. But there is a lot of luck, timing, and external factors that affect those results as well. So your day-to-day scoreboard should focus on inputs, which are things you control. For example, inputs for your fitness regime might be the number of times you go to the gym or make a healthy dinner each week. For a job search, you might track the number of hiring managers you reach out to or the hours you put into an impressive side project.

2. Choose inputs that are highly correlated with the end results

You want to choose inputs that are heavy factors in determining the end results. Measuring the times you hit the gym per week is highly correlated with your fitness results. Measuring the number of hiring managers you reach out to is highly correlated with the number of interviews you get. Those are good inputs to measure.

3. Identify metrics that are easy to quantify

The only way this will be effective is if your inputs are easy to quantify and measure. Otherwise the habit of measuring them every week is simply not sustainable. When I was making a change in my career I decided that writing a blog would be a key way to differentiate myself and spark interesting conversations (that turned out to be extremely true). So I measured the number of posts I wrote per month. It was a metric that was under my control, it was a key driver of the results I wanted, and it was easy to measure. I set up a report once and it emailed me each week to show me how I was doing. Simplicity rules here.

I highly encourage anyone looking to make a change in their career to think deeply about the key drivers that will result in success and find a way to measure them. If you keep score, you will be more focused and play harder, and I guarantee you will see better results.

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Forget About the Competition and Delight Your Customers

People are trained to think about competition all the time. You need to understand your competitors and your differentiating factors. Strategically, it's important to look at the market and stake your particular ground. But strategy is only 5% of the game, the rest is execution. When it comes to executing on your strategy day in and day out, sometimes you need to forget about competition and focus on your customers. Adding features because your competitors have them, obsessing about new market entrants, and constantly refreshing industry news can lead to a very muddied approach to your business.

When you look at the cultures and personalities of companies, the ones who are obsessed with competition tend to be neurotic and uncomfortable in their own skin. Steady, yet humble confidence leads to true industry leaders. Apple has fierce competition, but thinking about competitors would have led them to a bigger MP3 player or a laptop with more features, not the iPhone or the iPad. Apple has a very simple strategy: build beautiful and simple products. That's it. It is Apple's relentless execution that has built one of the most valuable companies in the world. Anybody could replicate Apple's strategy. Nobody has been able to replicate its execution.

There are some markets that are commoditized and hyper-competitive. As an entrepreneur, I would prefer to avoid these all together. But some people thrive in that environment. At the end of the day, everybody has their own approach, both companies and individuals. I believe that entrepreneurs should think deeply and carefully about their market, their competition, and changes that are happening in the world. But when you're in the thick of a battle, forget about competition and focus on delighting your customers. That will lead to long-term success much more often than a neurotic focus on your competitors.

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