Product Manager Diversity: Key to Realizing Product Strategy

As SaaS proliferates, the role of the product manager is becoming increasingly important in B2B, where services are used for business purposes and product evolution is highly diverse. Especially in the growth phase and beyond, the diversity increases dramatically.

In this article, we will focus on the growth phase and beyond, and explore the importance and benefits of product manager diversity after reviewing the product strategy and how it affects the realization of the product strategy. In addition, we will touch on best practices and challenges in integrating product managers with different backgrounds and skills into your team. We will identify how important the use of diversity is to your success as a product manager.

Product Strategy for Growth Phase and Beyond

After achieving Product-Market Fit (PMF) and initial growth, adopting a robust strategy for non-linear business growth becomes crucial. As a reference, please refer to the article I co-authored in a previous issue of "8 typical patterns you can use to develop a strategy for your SaaS product to realize your vision", which I co-authored in the past, I would like to introduce three strategies that often come up during the growth phase and beyond.

1. all-in-one strategy.

• This strategy combines all the software functionality used by the target users. It is not easy to master the use of multiple different SaaS, for example, by linking them together. Therefore, it refers to taking user needs in the peripheral areas and expanding products to support a series of processes, with the exception of functions that are differentiating factors, while other functions are only simplified.
• It is one of the major strategies with a simple appealing message, so much so that some new businesses and start-ups, such as Seed and Series A, clearly state that they will adopt this strategy even before achieving PMF, commit to the industry or business category, and expand the functions.

2. API Platform Strategy.

• Contrary to the "all-in-one" strategy, the "API platform strategy" is a strategy that clarifies their focus area and allows wide flexibility to link with peripheral services, rather than promoting them.
• It is often chosen when there are strong differentiators and user retention, and is used when users take advantage of APIs to develop additional services in-house, such as customization, that SaaS providers cannot reach. In addition, as API platforms become more powerful, 3rd party developers may enter the space and sell SaaS developed on the API platform.

3. Synergy strategy with other services.

• There is also a strategy to create more value by collaborating with different services, such as Fintech and marketplaces, without closing the SaaS business model.
• For example, a SaaS service can be used as a starting point to lock in users and realize a series of processes from payment to settlement, or a marketplace can be used to not only improve business efficiency but also to realize transactions such as order placement and order receiving.

When multiple of these strategies are employed and required to be realized simultaneously, it may be difficult to achieve this goal even if only product managers with the same background and experience are gathered together. When trying to realize an all-in-one strategy, the core functionality that is the differentiating factor will require more depth and will only be addressed by product managers who have very advanced domain knowledge and industry understanding.

In addition, as multiple products and modules are deployed, common functions need to be carved out and established as the foundation. The design and construction of the infrastructure requires a broad business understanding and a deep engineering background.

In addition, the deployment of API platforms will strongly require a busness development element to be deployed in an evangelist-like manner for users and 3rd party developers, as the linkage with Fintech will increase the payment mechanism and security requirements, Specific high expertise is required.

To summarize, after the growth phase, product strategies will diversify, and in order to promote and realize a combination of these strategies, it will be necessary to establish a team that can realize the following four elements.

Core products

New products








<br - Transform the business model itself and create non-linear growth

Various positions to realize the product strategy

Let's examine the types of positions available to realize the product strategy, categorized by area of responsibility and organizational layer.

The first is the area of responsibility, which classifies positions based on the characteristics and features of the product or project you are in charge of.

1. Core function.

• As we enter the growth phase, the functions and modules that drive differentiation become deeper and more difficult to plan based on the product manager's experience alone.
• Therefore, it is necessary to appoint someone who has direct experience in the industry and business, or someone who has had in-depth contact with users through Customer Success Management (CSM) or other means and knows the product inside out, and who has the background to be a product manager.

Growth.

• Once PMF is realized in a certain area, growth is literally required. Specifically, this is the area of optimizing the sign-up and billing leads. Armed with access analysis, usability frictions are to be removed as much as possible.
• This is a familiar theme in B2C, and those with advanced analytical skills and many UI drawers will be an easy fit.

New product3.

• The need for new products will increase at this time, as the PMF will reduce the uncertainty of core products and allow for business development with a higher probability of success.
• Product managers in charge of new products do not need to have expertise, but rather a commitment and broad experience (or a high ability to learn) to shape any topic or business is strongly required.

4. Infrastructure.

• In order to develop not only the core product, but also multiple products, it is necessary to establish a common foundation for the third or fourth product.
• Specifically, common functions that will be used by users of the various products, such as login, billing, function sharing, and authorization. The team will not be planning products, but will be planning common functions so that the products can focus on creating user value, so a deeper engineering background is required.

Collaboration.

• Lastly, negotiations and product design, including alliances with API platforms and peripheral products, require more than just internal planning and coordination. What is required here are business development skills to negotiate with external parties and manage progress.
• There are very few product managers who can do both, and it is common for them to divide the work between the two.

In the SaaS industry, product management is becoming increasingly specialized and important, and it is now recognized as a position that is becoming more and more popular.

1. CPO/VPoP.

• The CPO/VPoP is responsible for bringing together the various areas and formulating the overall product vision and strategic direction.
• In addition to the strategic aspects, we will also design what kind of organization is needed to realize them. Furthermore, we will promote the concrete ways to realize them, including hiring, transfers, and training.

Product director/Head of Product*.

• Product director/Head of Product (Manager of Product Manager) is responsible for product vision and strategy formulation for the product for which he/she is in charge (in some cases, he/she will be responsible for themes such as AI/ML and growth of all products on a cross-functional basis).
• As the most knowledgeable person about the product for which he/she is responsible, he/she will be asked to provide input on the overall vision and strategy. Conversely, it is also an important role to align with the product vision communicated by the management team.
• The role is to formulate the product vision, strategy, and roadmap in collaboration with the business side and development team, and to promote the realization of the product vision, strategy, and roadmap.
• You will design the organization, hiring, transfers, etc. to achieve the roadmap.

Product Manager*.

• Product Manager is in charge of roadmap and specification development for each area of responsibility. In the course of actual development, you may also be responsible for managing scrums as a product owner.

In order to realize the product vision and strategy, I start by identifying what areas need to be positioned. If the size of the organization can be reduced to 5-6 people, then we need to build a 2-tier organization, and if it is larger than that, we need to build a 3-tier or larger organization with a CPO/VPoP. The reason for this is that the product manager is not a purely one-person operation, but rather a hub for product development, with a diverse background and often a high degree of specialization in his/her area of responsibility. Therefore, the number of members one person can take on is 3-5, which is fewer than in other functions.

In addition, in addition to the consideration of business plans, organizational design from scratch is actually done only once a year, and during the term, gradual evolution is required to see how the current structure can be improved. In addition, there are many factors over which we have no control, such as hiring and transfers, and we must regularly collaborate with engineers and the business side to fine-tune the organization, moving back and forth between the ideal and the feasible.

Product manager's own diversity

What kind of product manager should be assigned to each area and layer to bring the product vision and strategy to fruition? In this section, we will capture the characteristics of the product managers by dividing them by the types of jobs they have worked in and the phases and providers of the companies they work for.

In fact, it is rare to find a person who has been a product manager all the way through his or her career from graduation. Many people have experienced some kind of peripheral job title, such as the following, before moving to a product manager position and becoming active in the field.

Designer
Business Side (Marketing, CS)

Please refer to our recent article "Career Paths to Becoming a Product Manager" for a detailed description of the characteristics of each background. For product managers with a wide range of backgrounds, experience in peripheral positions is directly related to their strengths and their reason for being. Their strengths will remain with them even after they become product managers, and because they are not homogenized as general product managers, diversity is born and becomes a source of innovation for the product.

In addition to their backgrounds, the experiences they will have will also differ depending on the phase of the company they work for, which will lead to the strengths of the product manager.

1. Seed and PMF phases.

• In this phase, a limited number of people, regardless of their job titles, are required to create a single product and create value for users. Therefore, they inevitably go beyond the framework of being a product manager and develop a wide range of knowledge and the self-motivation to move forward anyway, which is where their strengths are formed.

Growth.

• In the growth phase, the diversity of product managers emerges, and many who have experienced this phase or later ask themselves where their strengths lie and clarify their position as a product manager.

3. Monetization.

• You will experience a phase in which the business and organization evolve through qualitative changes in the product, such as the development of API platforms and collaboration with Fintech and marketplaces.
• Furthermore, events such as IPOs and M&As may also require indirect, if not direct, involvement, making this a fulfilling phase for improving your knowledge.

4. Mega Venture.

• Beyond monetization, experience in mega-ventures and major companies is important for project management skills to conduct careful research and preparation in advance, and to fully plan and realize the project in a highly decentralized organization.

In addition, the experience available is very different between B2B and B2C, the two product offerings that I often use as a comparison axis. As described in "The Evolving Role of Product Leaders in Business Growth", at the product leader layer, B2B has more diverse options for evolving the product and the product vision, In B2B, the product vision, strategy, delegation of authority, and organizational design are differentiating factors. On the other hand, in B2C, being able to remain your own user makes it easier to maintain ownership of the strategic aspects and build an organization with increased specialization around UX and analytics.

Also, as detailed in "6 Differences Between 'B2B and B2C Product Managers' You Need to Know If You're Building a SaaS Product Organization", fundamentally, B2B is used for business As detailed in 6 Differences between B2B and B2C Product Managers, fundamentally, B2B is a product used for business purposes, so by conducting user research in advance, plans can be created with high precision. B2C, on the other hand, is a market-in approach that focuses on preliminary research, while B2C is a product-out approach that focuses on post-product iterations to improve the product. B2C is product-out, focusing on post-product iterations to improve the product.

Assignments

We will consider who to assign as product manager and how to design the organization based on the company's phases and clients, as well as the type of work experience.

Everyone has a bias to hire people who are similar to themselves, and product managers are no exception. Also, since organizations are not static but dynamically changing, there are actually few opportunities to think from an ideal perspective, and we tend to focus on clearing the issues on our feet. In a very employee-protected work environment such as Japan, losing the mid- to long-term perspective is directly related to risk.

Furthermore, while diversity in any organization can lead to innovation, looking at the footprint, the communication costs are high and the organization is never a comfortable place to be. For example, a product manager with domain strengths and a product manager with more than 10 years of product management experience and a certain career path will perform in completely different ways, and it is easy to see volatility in results depending on the situation. If you communicate without assumptions in such an environment, it will be clear from the fire that you will not get very good results.

Thus, one can raise any number of concerns about diversity. Short-circuiting and conservative decision making will lead to homogeneity. Especially after the growth phase, the diversity of product managers will increase the options to realize the product strategy and, in turn, become a source of competitiveness.

However, it is important to deepen the understanding of the impact of product manager diversity on the product vision and strategy, and to keep in mind what kind of impact you want to achieve in the medium to long term, rather than the current performance, when hiring, transferring, and making organizational changes. The organization should be designed to promote the evolution of the product.

Conclusion

To support SaaS growth in the expansion phase and beyond, a diverse team of product managers is essential, as this diversity becomes a source of competitive advantage. When diverse product managers are geared together, when they perform as an organization, it leads to incredible impact. However, this is supported by organizational transparency and significant communication costs. It is important to design an organization with a mid- to long-term perspective, and not be distracted by these immediate costs.