The Evolving Role of Product Leaders in Business Growth

In recent years, the concept of the product manager has begun to spread rapidly and is now one of the central roles in product development. Furthermore, the role has been subdivided according to where one's strengths lie as a product manager, such as artificial intelligence (AI), machine learning (ML), BizDev, domain, and people management, and is used in building organizations and considering a product manager's career.

Roles such as Chief Product Officer (CPO) and VP of Product (VPoP), often referred to as product leaders, have also begun to be defined in similar ways. However, have you ever noticed instances where, despite delivering output in line with these definitions and expectations, there's a gap between the pre-employment image and reality, or where the desired results aren't being achieved as intended?

This article will explain the changing role, skills, and mindset of the product leader, focusing on the parent organization, company, and business phase in which the product leader is active.

Company or Business Growth

The process of company or business growth can be broken down into four major phases: the start-up or new business launch phase, the PMF (Product-Market Fit) phase, the growth phase, and the monetization phase.

In the start-up phase, ideas are generated, market research is conducted, and prototypes are created to develop a viable business model that leads to product development.

Next, in the PMF phase, we improve the product or service based on feedback from users and adjust it to gain market acceptance. In the growth phase, we add to and improve our products and services to spread them in existing markets and expand into new markets.

Finally, in the monetization phase, we work to monetize the business and establish a sustainable business model. Thus, for each phase, the product leader will approach both the strategic and organizational aspects of the business to work toward growth.

Role of the Product Leader

Founding or new business start-up phase

In many cases, the company is founded by a CEO and CTO with a deep understanding of the industry’s challenges, with one of them taking on the role of product leader based on their expertise. It is rare to have a full-time product manager from this period, and even in new businesses, it is common for the business manager to concurrently serve as the product manager.

At this stage, the product leader’s primary role is to identify user pain points, develop the MVP, and oversee product development.

I should mention that there is a difference in approach between B2C and B2B. In B2C, sustained user engagement is seen as the best validation. Therefore, the best way to get the PMF is to create a prototype anyway, run the PDCA cycle incessantly, and refine the UX.

On the other hand, B2B tools are often used for business purposes, so it is possible to accurately grasp the issues and needs of users in advance through interviews. Therefore, it is important to create user value with minimal development and achieve PMF by conducting a thorough preliminary survey.

PMF Period

In the process of completing product releases and chasing PMFs to target segments, we often bring on the first full-time product manager. We will wind up some of the work from the CEO, who has an overwhelming presence.

Specifically, in B2C, we will run web ads to secure MAUs in the tens of thousands and continue to diligently refine the UX through AB testing. On the other hand, for B2B, we go to users and get feedback, abstract their needs, and incorporate them into our products.

In B2B, CEOs with strong business backgrounds often hire senior product managers, but these managers may struggle to handle everything from product vision to roadmap development without domain expertise. This is the reason why there is often a gap between performance and expectations at the time of hiring, so we recommend that those who are hiring in the future confirm their hiring requirements and expectations again.

Since there is no product organization yet, even if you call yourself a CPO, what you need to do is the same as the first product manager, and you should focus on bringing PMF to hand.

Growth Phase

Once you have PMFs for the target segment and surrounding segments, the next step is to proceed with growth.

At this point, the product will be organized and a CPO/VPoP will stand clearly as the head of the organization, responsible for developing the overall product vision, strategy, and roadmap, while designing and building the product management organization that will make this happen.

In terms of organization, To drive growth, we will diversify our product management team. In B2B, this means hiring product managers with strong analytical skills to optimize the sign-up and billing processes, as well as those with business development expertise to enhance collaboration with complementary products. In B2B, there is a strong tendency to hire product managers with strong analytical skills to optimize the sign-up and billing paths. In addition, as the development of core functions becomes more specialized, the participation of domain specialists with more directly related experience will be essential.

On the other hand, B2C will focus on UX and analytics and the use of AI/ML. This is because the product is expected to be used by a fairly broad range of users, so keeping the product simple is a source of competitiveness. In addition to analyzing user trends, we will proactively conduct advanced user analysis and enhancements using AI/ML, since the use of AI/ML, such as personalization, is often directly related to KPI improvement.

In other words, while B2B requires a wide range of product managers with various specialties, B2C will specialize in analysis and UX, and will be organized around highly specialized product managers.

Monetization Phase

After increasing the profitability of core products, we will enter a phase in which we will launch new products in peripheral areas, take on the challenge of reforming the business model itself through Fintech, platformization, etc., and further build a solid revenue base.

In terms of strategy, the challenge goes beyond simply improving the product, and the level of difficulty rises dramatically as we design a product that will attract qualitative changes in the business model.

In spite of this, as the product management organization becomes more diversified and deeper, the weight of organizational management will increase, and more than half of the mindshare will be taken up by hiring, transfers, and training. In other words, the main focus will be on actively hiring, transferring, and developing the potential of the diverse product management team.

Even in this phase, it is easy to maintain ownership of the product vision and strategy because in B2C you can continue to be the user. As the product becomes more prevalent, the likelihood that a potential hire will use the product increases and awareness naturally spreads, and the hiring cycle evolves.

On the other hand, in the case of B2B, since the product becomes something used in the business, it is difficult to keep an overview of the whole picture in this phase, and the need for transfer of authority comes relatively quickly. Unlike B2C, even if the product is widely used, it is difficult to expand awareness of the product among potential recruits, so in order to increase recruitment efficiency, it is necessary to focus on recruitment PR separately.

Evolution of product leadership required in response to change

Change by Phase

The discussion thus far can be summarized as above. In the first half, skills related to domain and new business launches create impact, while in the second half, experience as a diverse product manager and people management become more important. In other words, what is required of a product leader will undergo a major transformation.

Considering that a normal company will run from the start-up phase to the monetization phase in 5-7 years, if you enter as a product manager from the start-up phase, the product leader must face the product and the organization in a short period of time and keep changing himself/herself.

From the founder's point of view, when bringing in the first product manager as a CPO in the early stages of the company, one of the most important factors in the hiring criteria is whether the person is able to endure this transformation. Conversely, if you are bringing in someone who has been in charge of CPO at a company in the monetization phase as a product manager in the founding phase, the most important factor when hiring is whether or not he or she can move his or her own hand to bring PMF to hand and proceed once again in a muddled manner.

Changes between B2C/B2B

In terms of a comparison between B2C and B2B, the first half of the process is very different in terms of whether the emphasis of the planning is on AB testing or preliminary research. In other words, in B2C, users are encouraged to try more and more through prototypes and products, and the PDCA cycle is used to achieve PMF based on AB testing. On the other hand, in B2B, the best way to show your skills as a product manager is to conduct interviews as much as possible in advance, improve the accuracy of planning as much as possible in the pre-development stage, and minimize the number of things to be developed.

The latter part of the process makes a big difference in the diversity of the product management organization and the perception of the candidates to be hired.

In B2C, the product is simple and relatively easy to maintain a holistic view of, and it is easier to maintain ownership of the product vision and strategy. In addition, the product awareness expands, which in turn expands the perception of the product to potential recruits.

On the other hand, in B2B, since the product is used for business purposes, it is necessary to build a diverse product management organization to grow and monetize the product, which requires a high degree of specialization in the types of actions that can be taken. Moreover, if you don't do a separate recruiting PR campaign steadily, you will have to keep sending out scouts endlessly.

For example, if a CPO in the monetization phase in B2C turns into a CPO in B2B, he or she will have to face the expertise of a product manager who has never faced it before and draw out performance while the UX and analytical skills he or she has honed so far become relatively less important.

In addition, as the importance of recruitment PR increases, you will be required to speak at events and conferences you have never done before and distribute articles. Conversely, if you have been a CPO in B2B and go to B2C, you will suddenly be expected to review against advanced UX and analysis. Without prior B2C product management experience, this transition can be particularly challenging.

Summary

With the proliferation of PM, the roles of CPO and VPoP are also gaining citizenship. However, the roles of product leaders such as CPOs and VPoPs vary greatly depending on the company, the phase of the business, and the B2C/B2B domain.

I would be happy if you could use this as a reference when designing your PM career plan, such as whether you can grow with the changes and what kind of PM or product leader you would like to become in the end. If you are in a position to hire, I hope it will help you when you consider hiring or assigning a product leader.