What do Product Managers do?
It’s a question that many of us have had to field at a party or family event, and one that can be hard to answer even if you’ve been a PM for years!
A solid, if rather dry answer might be:
“Product managers de-risk investments in technology.”
Let me explain…
Product teams are expensive
When a company has a product team, it’s making an investment in technology. Product teams are expensive, so that’s usually a big investment. We usually stick to a ballpark figure of £1m a year to run a product team, but you can (and should) run the numbers yourself. Whilst you might be removed from budgeting decisions yourself, it never hurts to understand how the CEO will be thinking about your product team.
Typical cost of a product team This is a pretty risky investment for the company as well. We all know that the results from building products are far from certain, and the team needs to be paid regardless of what happens.
Hopefully your team builds features that customers love and result in substantial improvements to the business metrics. In this case, the company should get a handsome return on its investment.
But if you build the wrong thing, the company might not see any benefits for their investment at all, or you could even damage key metrics.
Product managers ensure a return on that investment
Product managers help ensure that the money companies spend on product teams is a good investment - that it results in lots of positive outcomes that more than cover the cost of the team. That might mean:
- Creating customer value that leads to increased margins or growth
- Reducing operating costs through simplification and automation
- Increasing the effectiveness of engineering teams to deliver more of the above
Discovery - deciding what to build - is therefore a key task for product managers. It complements the other half of product development: delivery, or actually building and shipping features.
Four types of risk to mitigate
There are four types of risk that can prevent teams from creating value for the company. These are:
- Value risk – Do customers really want what we’re building? Do they value it?
- Business risk – Can the business deliver this? Does it create operational complexity? Is this legal?
- Technical risk – Can we build this? Is it scalable, secure and reliable?
- Usability risk – Can users understand this? Do they know how it works?
Product managers are responsible for coordinating the efforts of the product team to systematically reduce these risks, focusing on the biggest risks first.
Faster is better
Of course, doing the hard work to reduce risk takes time in itself. Product teams’ time is expensive, both from the cost of employing the team, and from the opportunity cost of what else the team could be doing. So whether you are doing discovery or delivery, you want to do it as quickly and efficiently as possible.
That doesn’t mean cutting corners and doing a shoddy job, but in both cases, all other things being equal, faster is better:
- Delivery: shipping something faster is better
- Discovery: learning something faster is better
How much discovery is enough?
So how much discovery is enough? When do you have enough confidence in a feature to ship it?
There’s no easy way to answer that. You can never remove uncertainty completely. Conceptually reducing risk is a curve, where you can get some confidence very quickly, but it becomes increasingly difficult to increase your confidence further and further.
At some point the cost of doing further discovery is more costly than the risks of shipping the feature.
