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.