3 Things Every Product Manager Should Know

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Someone asked me recently how they could determine if their product manager was doing a good job or not.

I think this is always a tricky question.  There are lots of statistics that you can use — number of new customers, percentage of retained customers, revenue, revenue versus development cost, etc. — but some of these require information that may not exist.  For example, if your company hasn’t shipped your first product yet, you can’t really determine the number of new customers or the amount of revenue.

And sometimes, you simply want a quick and dirty way to reassure yourself that your product manager is doing a good job — that they are the “winner” you hope that they are.

So I suggest that a product manager needs to know the following three things.  If they do, then they are likely doing a good job.  If not, then something needs to change…

1.  What key business problems do your target customers have?

The product manager must know who your target customers are, some of the problems that they have, and which of those business problems the customers consider to be “key” or important.

Customers (and potential customers) will always have numerous problems — but only some of them are worth solving.  Some are simply irritants that your customers have decided to live with.   Others are so overwhelming that your customers don’t have the will (or money) to attempt to solve them.

Thus, “key business problems” have 2 characteristics:

  • Your customers want to solve them, and
  • Your customers believe your product can provide at least a partial solution.

These are the problems that a good product manager will understand thoroughly and can describe clearly whenever asked.

Say you’re talking to an e-commerce prospective customer whose web site is getting too many complaints from consumers trying to purchase products.  As a result, their revenue is declining and their support call center is overwhelmed.

If you were to talk to them, they might describe their situation like this:

  1. Consumer complaints are increasing,
  2. Sales revenue is decreasing
  3. Support call times are increasing (because they have to deal with irate consumers)
  4. Ad revenue is decreasing (due to reduced click-through rates)

But all of these complaints could be symptoms of a single “key business problem” — that the time required to purchase a product through their e-commerce website is taking far too long.

A good product manager will know what the “key business problems” are and will be able to tell the difference between “symptoms” and “problems”.

2.  How is your product approaching these key business problems?

OK, you have your list of key business problems from your target customers.  And you have your product which you hope to sell (or are selling) to these customers.  Before any customer gives you some of their hard-earned money, they will want to understand how your product makes their life better by solving one or more of their key problems.

They don’t want (or need) the gory details right away — they just want to understand the approach that your product is taking and be comfortable with the limitations (or risks) associated with using your product.

Consider our example e-commerce prospective customer…  Their problems could be due to traffic delays with their ad provider, network bandwidth limitations from their ISP, performance issues in their application, the number (and quality) of the images that they display for each product, the performance of their credit card processing partner, etc, etc, etc.

Perhaps your product collects statistics by monitoring each component’s performance.  Or perhaps you add a hardware device to a customer’s network to monitor communication between servers.  Or perhaps you monitor the application’s performance using simulated web browser client sessions.

Any of these approaches could diagnose the problem(s) with this prospective customer’s e-commerce system — but each approach also has potential limitations and/or risks.

A good product manager will understand how your product is intended to solve one or more key problems, be comfortable articulating your solution approach to a wide variety of audiences, and be well-versed in handling objections about the limitations and/or risks of your product’s approach.

3.  How well (or poorly) does your product solve these key business problems?

Once you present your product concept to a potential customer, you will have some feedback on how well (or poorly) they think your product will solve their key business problems.  You will get more information each time you interact with a potential customer and even more information when a customer starts using your product.   Once you have collected information from a dozen or so customers and potential customers — some patterns will begin to emerge.

Did you identify your target customers and their key problems correctly?  Do you actually understand their key problems and why they are important to your target customers?  Does the approach of your product appeal to them?  Do they think that your product can actually help them?  How well does your product actually help them?

If your product manager knows the answers to these questions — and a bunch more just like them — then your product manager can easily tell you how well (or poorly) your product solves the key business problems of your target customers.

Or put differently, a good product manager can tell you whether your product is likely to be successful or not in the marketplace and where your product needs to be improved to attract a larger share of the market.

Conclusion

Evaluating a product manager is not easy because there are a myriad of company cultures, product types, personalities, and business situations in this world and no two situations (or product managers) are identical.

However, a good product manager will always know:

  • What customer problems their product is attempting to solve,
  • How the product intends to solve these problems, and
  • How well (or poorly) the product solves these problems.

In addition, a good product manager knows that customer situations continue to evolve — so they will maintain contact with current and prospective customers, anticipate future needs, and provide timely product solutions — instead of reacting after the fact with something that doesn’t match what their customers need, want, or will buy.

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One Response to 3 Things Every Product Manager Should Know

  1. emodeen says:

    Great post, David. One point that resonated with me is that customers have many challenges, but they are only willing to invest in solving some of them. This distinction is important for a product manager to know so that development resources can be allocated to focus on solving the most critical issues.

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