August 16, 2017

Archives for January 2013

Rise of the SaaS Product Manager – Part 2

In my last post, The Rise of the SaaS Product Manager,  I challenged Rick Chapman’s assertion on the Death of Traditional Software Product Management.   After posting this to LinkedIn, Rick took the time to respond on the SaaS Marketing University LinkedIn Group.    In this post, I respond to several of Rick’s responses.  You can see Rick’s full response on the LinkedIn Discussion.

Rick Chapman:  Their [PM] fundamental role at software companies is administrative, coordination, and cheer leading.

The role that Rick has described is what my colleagues at 280 Group call being a Product Janitor and I think that this misunderstanding of the PM role has also resulted in poor implementation of the PM role at many companies, which is quite unfortunate.  A Product Janitor spends their time working daily tactical and administrative tasks that have little impact on the success of their product.   In our Optimal Product Management course, we teach Product Managers to invest more time on thinking strategically on how to achieve a bigger impact on the success of their product during all 7 Phases of the product life-cycle.   Product Management is more than soliciting feature requests from customers, prioritizing them and delivering them to development via some form of a requirements document.   The PM role includes market research, competitive analysis, discovering new and unfulfilled market needs from current and future customers and other internal and external stakeholders, developing business cases for major product investments and setting the vision and strategy for the product.  If they also contribute to Product Marketing, the role can also include, developing the market strategy, ensuring the market messages are clear and consistent and supporting marketing, sales and channel partners with useful sales tools.

Rick Chapman:   I believe that PM training companies are mainly irrelevant to SaaS companies (note I said SaaS companies, not on-premise).

If your PM’s are primarily doing administrative and coordination work, no PM training is going to be relevant.  But if your PMs are expected to contribute in the ways that I describe above, then the Optimal Product Management & Product Marketing course is very relevant, even to SaaS companies.   We have SaaS companies, including Plex, participating in our OPM course and the feedback is overwhelmingly fantastic.

But let me address Rick’s specific issues:

  • MRDs & PRDs – these are just documents to present Market Needs and Product Requirements.   In the OPM course, we present that you have to adjust your presentation of Market Needs and Product Requirements to match your development methodology.  For Agile companies, this is via a prioritized (or ordered) backlog of User Stories.   We teach this in both OPM and in Agile Product Management Excellence.
  • PMs acting as customer stand ins during Agile development cycles – Real customer involvement is critical to contribute to User Stories and reviewing development efforts, but as much as we’d like to have customers continuously available during Agile development cycles, customers have their own jobs to do and have limited bandwidth to provide full guidance to the development teams.   Someone internally needs to represent these interests and good Product Managers do this.   At this time, the majority of software companies (both SaaS and on-premise) are implementing agile methodologies and PM’s are effectively contributing in this structure.
  • RoadMaps – if you have no product strategy, and your focus is on the next feature du jour from your customers, then RoadMaps are pointless.   But if you have a clear product strategy (that includes customer involvement), then a RoadMap is still an essential means to communicate that vision and plan resource requirements to accomplish that vision.

Rich Chapman:  I don’t say it is (on TE statement of “But Community Management, while important, cannot be the only driver of your product strategy”). But it will be the most critical driver of your product strategy.

That is correct, Rick didn’t say that your community is the only driver of your product strategy.  But then owns your product strategy if you don’t have product managers?   As I noted in my presentation, in addition to your current customers, there are a number of stakeholders (internal and external) that have needs that must be satisfied and someone has to turn that into a coherent and profitable strategy.   Product Management is the role to do that.

Another issue in the community is resolving conflicting or competing points of view.   The community can clearly weigh-in on those, but at some point, someone in the company needs to make a decision and Product Managers do that.

I also want to add that, from my experience, those most actively engaged in the user community are going to be the day-to-day users of your system and most of their requests will be feature-level driven requests.   These are important, but you also want to make sure you get insight into the perspective of their more senior level managers that actually own the business problems that you solve so that you can be looking beyond the feature du jour, but also solving new market needs.    My experience is that you need to reach out to them to solicit their insight and involve them in more strategic level discussions via something like a Product Advisory Council.

Rick Chapman:  More importantly, as I point out in the book, the integration of analytics and community into your service will make your entire organization accountable for your development and product decisions in ways that are not possible with on-premise software. IOW, you get to measure who’s ultimately smarter, your community or your management team.

I agree with Rick on this point.  The ability to measure every interaction a customer has with your SaaS product will make Product Managers more accountable for their decisions.

The Rise of the SaaS Product Manager – Why Product Management is More Important Than Ever!

In a previous post, I did a short review of the book by Rick Chapman, SaaS Entrepreneur and mentioned that he was completely off target on his discussion around product management (Chapter 1 – The Power of Communities (and the Death of Traditional Software Product Management).   So here is my counter to Rick’s Death of Traditional Software Product Management and why the product management role is critical for the SaaS Company.

  1. To start with, the description of Traditional Software Product Management that Rick describes is erroneous based upon what traditional software companies are actually doing today.  (Rick’s description of software product managers makes it sound like they are all Tom Smykowski (Office Space).)  Sure, there may have been a time when much of traditional software product management was done in the way the Rick describes, but with the maturation of the product management practice, I have seen very few traditional software companies do product management in the way he describes.
  2. Rick states that instead of product management, what SaaS companies need is Community Management.   I agree completely with Rick that Community Management is important and I, as a Product Manager, have been doing community management for a long time in the form User Groups, Product Advisory Councils, etc.   What SaaS allows you to do is to change the community interaction from a small number of times a year to a continuous interaction with the community (note – you don’t have to be a SaaS company to achieve this, but SaaS clearly enables this in a powerful way).  But Community Management, while important, cannot be the only driver of your product strategy.
  3. If you consider all of the potential sources of market needs & requirements that contribute to your product strategy, your current user community is one cog in the product strategy machine.  Your company will receive input from external constituencies, such as:  non-customers, business partners, competitors and industry analysts and from internal constituencies that help sell, deliver and support your product (such as sales, professional services and operations).   These are important inputs that cannot be ignored and someone has to receive these needs, validate and prioritize them, resolve conflicts and then turn these diverse set of inputs into a coherent product strategy.   This goes way beyond community management and is one of the key reasons that product management is critical to the SaaS company.  The question is, who owns your product strategy, and if you don’t have product management to do that, then no one will own it, and you’ll end up with a 9 inch wide Swiss Army knife with 87 tools that is practical for doing nothing.
  4. There is one critique of traditional product management that I have to agree with.   That is in the metrics for evaluating the success of a product (and thus the success of a product manager).  E.g., when a product manager specifies a new capability or feature for a product, in traditional software, you rarely know whether the addition of that capability has any positive impact on your business.   With SaaS products, you can immediately observe the usage of new capabilities and see whether they make a positive contribution to your key business metrics and product managers should be held accountable for these.
  5. Finally, Rick touts a specific example of a company that got rid of all of their product managers and was using only community managers to drive their product direction.   Though Rick doesn’t mention this in the book, what the company now realizes is that they are unable to effectively pursue important strategic initiatives as all of their community requirements are mostly tactical and they have no one to drive their strategic initiatives.  Thus they are building a team of product managers to address this significant gap.

There is a whole lot more I have to say about this and I encourage you to join me on Friday, January 11th, 2013 at 12 noon/9am PT as I present an encore presentation of The Rise of the Saas Product Manager, Why Product Management is More Important than Ever.

Also, I encourage you to peruse my presentation that I did at the SaaS University in October 2012.

Review of “Saas Entrepreneur” (by Rick Chapman)

Rick Chapman has been covering the SaaS market since 2006, well before it became one of the industry’s buzzwords.   He has consolidated his extensive knowledge gained from his work with The Softletter SaaS Report, the SaaS University and other work with SaaS companies to address the unique challenges a SaaS company faces.   This book is chocked full of data and examples from the SaaS Market to provide real world guidance on starting and growing a SaaS company.  Not only does he address important concerns for a new start-up, but he also addresses how a traditional (licensed/on-premise) software company can change its business model to SaaS.  Bottom-line, I high recommend this book for anyone considering developing a product for the SaaS model.  If you’re interested in purchasing the book, you can buy is at http://www.saasentrepreneur.com/.

Having said that, Rick does make some points that I believe are off target and need to be corrected.

The major issue is around his thrashing of the Product Management role.   I’ll address this in more detail in another post, but he completely misconstrues current best practices in product management and ignores some of the most important aspects of the product management role.

I’ll be sharing additional thoughts on the SaaS Entrepeneur book in future posts.