If you have been wondering what’s going on with all these startups with 20-something founders and product leaders, you’re not alone. There are some great companies that have been started by some very young people, several of whom dropped out of college to pursue their ideas. I’ve talked earlier about the value of experience, but in this note I’d like to talk about the problem I see of people discounting product leaders because of their youth.
I’ve been working with quite a few startups over the past few years, usually in an advisory capacity, but sometimes more directly involved. Startups are essentially all about new product creation, so they’re a terrific place for product managers to do their thing, and it’s why I love working with startups so much. Yet I believe that the prevalent model for how startups go about coming up with their first product is terribly inefficient, and why so many otherwise good ideas never get funded or make it to market.
How many times have you seen the situation where a sales rep brings to the CEO a proposal from a prospect that says, “if you will just add these seven features to your product then we’ll buy your software and even pay you an extra $X.” Or, lest anyone thinks that this situation is unique to enterprise software companies, for consumer service companies, your ad sales person comes over saying that “a big prospective partner will sign a seven-figure advertising and sponsorship deal with you if you’ll just agree to these site integration and placement requirements.”
One of the most difficult - but highest leverage - types of product management is to define successful platforms. By platforms, I am referring to foundation software that is used by application developers to create end-user solutions. Examples include operating systems (e.g. Windows, MacOS, Palm OS), operating environments (e.g. Java, Flash), Web services (e.g. Amazon’s or eBay’s integration API’s), and game developer platforms (e.g. XNA).
Some people believe that business is all about marketing and building brand - establishing a great brand in the mind of consumers. Many of these same people also believe that one of the biggest weaknesses of Silicon Valley-style companies is that we just don’t get marketing in general and brand development in particular.
I’m frustrated by the state of the Enterprise Software industry, and I have been for quite some time. While there are some notable exceptions, I find fewer examples of good products in this space than any other. Many people view the enterprise software market as “mature” or worse, but I think customers are just frustrated and aren’t anxious to spend yet more money on more disappointing products. And they’re just not willing to dish out hundreds of thousands of dollars – or even millions – on “professional services” just to get them working.
In the last issue I wrote about the role that domain expertise plays in product management, and I alluded to deeper differences in types of products. For more traditional types of products, such as Enterprise Software, these differences are fairly well-known. But for consumer internet services, this is new enough that I thought I’d share some of the most important lessons that I’ve learned from doing large-scale internet services at Netscape, AOL and eBay, and working with clients at several other major internet service companies.
This week a friend called to ask my opinion of a product management leader - I'll call him David - whom I've worked with in the past. The hiring manager is an exec at a large consumer internet services company. He really liked David, but his question to me was: "He's clearly an expert at Enterprise Software, but could he succeed at our type of business?"
The past few newsletters have had references to what I call "Product Validation." This refers to verifying that the product spec (PRD) is describing a product that you know will be successful, but doing so without actually building out and deploying the product.