The Top 5 Myths of Product Management

Larry Roshfeld

Will Rogers, America’s cowboy humorist, was once quoted as saying “It’s not what you know, it’s what you know that just ain’t so.”  When it comes to Product Management, one could make the same claim. The greatest problems faced by product managers are often self-inflicted, and are a result of their unflinching willingness to accept as facts some things that “just ain’t so.”

It might be helpful to come to a common understanding of what is meant by the term Product Management.  Unfortunately, we find ourselves in a situation reminiscent of Supreme Court Justice Potter Stewart.  Stewart, when faced with a case involving obscenity, but finding himself unable to define it, said "I'll know it when I see it." 

Similarly, while each of us might have a different canonical definition of the role of a product manager, we would likely agree that “we’d know one when we see one.”  And in that spirit, we’ll blithely skip past the debate over whether a product manager is defined by title, or by role, or by responsibility.  We’ll avoid the argument as to whether a service can be a “product”, or whether one does or does not need to be technical to be a product manager.  We’ll make the dangerous but pragmatic assumption that the reader will know whether the following applies to the job they perform, and segue right into a discussion of the Top 5 Myths of Product Management.

Myth #1: Customers will buy our product because it is technically superior

While it is somewhat comforting to believe that the old adage “build a better mousetrap, and the world will beat a path to your door” still holds true, the reality is far different.  The dust bin of product history is littered with technically superior products that failed, and failed spectacularly.  Some failed due to a missing set of capabilities, others failed because they were ahead of their time.  Some failed due to poor sales or marketing execution, and many failed because, while technically superior, they simply did not solve a problem that the customer was willing to pay to have solved.  To put it bluntly, most customers do not wake up in the morning and say to themselves “Today I need to buy me some more technology.”  Customers buy products that solve their real problems.  They buy products because they have made an implicit or explicit analysis that they need your product (and technology) more than they need their money.  While your product may impress reviewers, wow your competitors, and be worthy of a dozen different patent awards, if it doesn’t solve a big problem, it won’t sell.

Myth #2: Distributors are desperate to stock and service our product

There are literally hundreds of thousands of software and hardware products in the marketplace today.  Some are sold directly to customers, while others are sold indirectly, through what is know as distribution.  While in theory it makes sense for you to offload the hassles of sales onto someone else (i.e. a distributor), it usually makes no sense for them to stock, sell or service it.  As a reminder, revenue is a function of price and volume.  And profit is simply revenue minus cost.  For someone else to want to stock/sell your product, they have to be able to sell enough of it, at a reasonable price, and at a low enough cost, to make enough of a profit to make it worth their while.  Of course, the easiest way to reduce their cost is to pay you very little.  Not a good thing.  And few, very few, products will sell enough volume to generate enough profit to make it worthwhile for anyone involved.  If you find this hard to believe, walk into your local computer superstore.  Ask them how many products they carry.  The answer is likely to be “I don’t know, hundreds I’d guess.”  That is “hundreds”, out of the hundreds of thousands of products out there.  Then ask them if they carry a specific product in the same general category as your product (e.g. a desktop utility, a database, an educational game).  The odds are that they will point to a large wire mesh bin, in the corner, and tell you to look in there.  In other words, you have one chance in a thousand of actually being able to sell into distribution, and even if you are that lucky a good chance of ending up in the bin, where customers will paw through boxes on the off chance that your product is there.  Yes, I know, your product is different.  Trust me, it isn’t.  And by the way, this holds true for productized services as well.  AOL, the phone company or your local cable provider do not wake up in the morning with a burning desire to take on your sales problems.

Myth #3: We will develop the product on time and on budget

Most experienced product managers will tell you that there are 3 variables that effect the delivery of a product.  Some will even draw a lovely diagram, showing them as the vertices of a triangle:  Time, Features and Budget.  Some will substitute People for “Budget”, but it is all pretty much the same thing.  One could actually add 2 other variables to the list, though it makes for a messier diagram: Quality and Effort.  Basically, the idea is to hold some of the variables constant, and adjust the others.  So, for example, you could say “Our product must ship at the end of Q2, and on Budget.”  In that case, you would have to vary Quality (ship on time, but with some bugs), or vary Features (drop some things off the must-have list), or vary Effort (work harder).  Unfortunately, while this works well in theory, the world we  live in is rarely so accommodating.  Shipping a lower quality product is a recipe for disaster, especially for a startup.  Yes, Microsoft can get away with quality problems.  However, you are not Microsoft.  Dropping features is an attractive option, but don’t lose sight of the fact that the features are the reason the customer will want to buy the product.  And if the features you are removing aren’t really necessary, then why where they in there in the first place? Adding people will not only blow your budget out of the water, but is also likely to add time to your schedule. Finally, having your existing resources work harder sounds like a great idea, but the fact is that real productivity tends to drop after 50+ hours per week.  All that said, remember one simple rule:  the earlier you know you have a problem, the easier it is to fix it.  Product Development, like Product Management, is not an exact science.  So when planning a product release, don’t assume that you know enough to be able to predict “on time and on budget” with any reasonable degree of accuracy.  You don’t.  So don’t wait until too late to recognize, and admit, that you are running late and over budget.

Myth #4: We will build a great team by only hiring great people

There is an old aphorism that “A players hire other A players, and B players hire C players.”  It is a laudable goal to want to only hire great people.  Unfortunately, you are not the only one out there with that goal.  It is probably safe to assume that there are very few companies out there with the goal of hiring the most mediocre people they can find.  That said, clearly some companies are better at hiring great people than are others.  What is their secret?  People want to work for a company that has a reasonable chance of succeeding in their market, want to work with other good people, and want to learn from the people for whom they work.  It is difficult to attract good people if they don’t believe in what your company is doing. If you are losing good people to other companies, it is often because you aren’t effectively selling your product and market vision, or because your vision isn’t compelling.  Clearly, either or both can be fixed, if sufficient attention is paid to it.  However, it is not a good idea to ignore the problem, and just hire whoever you can get to accept your offer.  If the idea can’t be sold to a potential employee, what makes you think it will be sellable to a customer?   As for whether you are perceived as an A player yourself, that is also a critical question,  but would require a longer and more difficult discussion that is outside our scope.

Myth #5: Competitors will respond predictably

Just as individuals will often do things that are unpredictable (as evidenced by any number of drivers on the Beltway each day), competitors will often behave in a manner contrary to your expectations.  In some cases, the competitor may be behaving in a way other than you might have predicted, but which is still quite rational.  For example, a large competitor may gladly sell their product at a loss, under  the quite reasonable assumption that their deeper pockets will allow them to survive a price war longer than you can.  Or a competitor may give away the competitive product, or bundle it with another of their offerings, all in an attempt to deny you revenue.  In other cases, a competitor will actually increase the price, but bundle it with value-add services that your company is too small to offer (e.g. management consulting).  While companies are constrained by the law, there is no law that says a company can’t willingly lose money on  a product, or alternately, raise their prices and change the value equation.

Summary

The most dangerous risk that a product manager will ever face is unchallenged assumptions.  Perhaps the best use of your time, on an ongoing basis, is to ask yourself “What assumptions am I making about my product, or my business?”  Write them down.  Read them over. And don’t be afraid that admit that some of your assumptions may no longer be valid, and act accordingly.  Remember, a spectacular failure is still a failure.