Thoughts and News from Basis State
Thoughts and News from Basis State
There’s a right way to do software product management. There are schools to teach it, certifications prove it, and plenty of articles on it. This is not one of them.
This is an article on how to manage an early-stage product when resources are too constrained to do it perfectly. When money is too tight to hire a full-time, certified product manager. When there’s not enough time to manage formal processes. When perfect is the enemy of good.
In short, this is an article on where 99% of product management starts — no money, no time, and infinite ambiguity.
While not a complete guide, here are 4 tips that have helped me manage less-than-perfect initial products:
There’s a difference between being incompetent and making measured trade-offs. Whatever product you develop initially will take its beating from the market, and morph wildly before achieving market fit. That’s also to say, effort to optimize a product before it hits the market is probably not well-spent.
As an investor, advisor, stakeholder, I get concerned when a company releases a gorgeous product before it has any users. It concerns me far less when a company releases something slightly janky, or barebones simple. That’s a signal that the company is saving dry powder for when the product vision becomes clearer.
So rather than apologize for your initial product, wear it as a badge of good sense.
Unguided, your technical team will likely create the best technical solution for your technical needs. That’s pretty much their job, done well. But the best technical solution is not always the best business solution. For example, sub-scale, contracting human review can make a lot more sense than building automation.
Developers tend to be naturally analytical. If you take the time to share the economic rationale of one approach vs. another, your technical team is going to get it. And with time they’ll incorporate that thinking into their own decision-making.
Plus, without a lens into how they are made, business decisions can look like they’re based on gut and not fact. Showing that there’s rationale behind the decisions can foster trust.
When you first create a product, the thing you need most is market feedback. Any friction to getting that feedback is probably not worth whatever benefit it brings. If you spend months negotiating a big contract, those are months that could have been spent iterating towards a product that has some chance at long-term viability.
I have found that the fastest way to get the feedback I need is to suspend whatever is giving customers pause. In order of importance, these items tend to be (1) setup fees, (2) contract term, and (3) price. If one of these items is impeding your ability to get your first customers, knock it down.
It took me many years before I became comfortable with foregoing good terms to get feedback. Here are the objections that I had rattling around in my head, and what I’ve learned about them since:
Objection: You will erode your perceived value
Learned: You’re a startup. No one has heard of you. You have no perceived value to erode…yet.
Objection: You need to prove willingness to pay
Learned: Once your product is stable, and appreciated, you can charge a fair price for it. If existing customers won’t absorb the new price, then you didn’t get the value right, and it’s back to the drawing board.
Objection: Investors need to see commercial traction
Learned: Investors need to see commercial traction on a product with market fit. Traction on a product that hasn’t found its fit is the single biggest sinkhole of early stage capital and should be terrifying to investors.
Objection: You will deplete your runway
Learned: Nothing depletes your runway faster than spending time on the wrong product.
The guidance often goes, startups should make themselves look bigger than they are to gain the trust of prospects. There’s some solid logic to this. Prospects can be wary of tiny companies, because tiny companies often go out of business.
On the flip-side, any large customer is going to test your capacity at some point. At that point, it’s better to be known as a strained 3-person company than an incompetent X-person company.
Also, fakery is exhausting, and if you’re caught, it will erode goodwill. You should be focusing on building good relationships with early customers rather than perpetuating a lie.
Once the market has validated your product, you’ll have plenty of time to do product management the right way. Until then, time is a scarce resource, and letting go of perfection is one way to use it to its fullest.
Basis State helps software companies find exits.