Taking the Leap: Why Product Managers Make Better Entrepreneurs

Taking the Leap Why Product Managers Make Better Entrepreneurs | Entrepreneur

I’ve spoken with so many product managers who have a dream of becoming an entrepreneur or launching their own product one day. Every one of those conversations is exciting because that was my dream too.

After a decade of working with others to launch successful SaaS products, I took the plunge to launch a startup in 2013. As I continued to help launch products, I realized that I was prepared to dive into entrepreneurial life myself.

Our surveys at ProductPlan support this trend of product managers (PM) desiring the entrepreneurial life. In ProductPlan’s 2021 State of Product Management Report, we learned that 27% of product managers said they wanted to start their own company in the next 10 years.

Career Goals Product Managers | State of Product Management Report | ProductPlan | Entrepreneur

Download the 2021 PM Report ➜

I also spend time with students at different technology programs—it’s becoming more common for many of them to want to embark on a product management career. Many of them also one day want to start their own company.

It makes sense. Product managers are usually high-performing people who have a variety of skills in different areas. Many of them are natural risk-takers. I believe that product management is a great training ground for entrepreneurship.

I’m not claiming it was easy leaping into entrepreneurship. Being an entrepreneur and running a new company is hard work. Startups fail more often than not. But the experience I gained through my product management career lowered my risk and made it “easier” to find success.

While there are plenty of examples of product managers becoming founders, it’s not the only path. Many CEOs of well-known companies have had product management experience during their careers. For example, Susan Wojcicki, the CEO of YouTube, was the first product manager for Google’s AdSense.

Here are the reasons I think a career in product management makes you especially prepared to start your own company or perhaps lead as a CEO.

4 Ways Product Managers Make Better Entrepreneurs

1. We have a holistic view of a business and markets.

Few jobs have as much exposure to other roles and departments within a company as product management. Because we need to work with so many stakeholders and understand markets, we have a more holistic view of a business.

Think of everyone you need to interact with to go to market with a new product or feature. You might need to engage with product development, sales, customer service, finance, department heads, key customers, strategic partners, and more in many organizations.

As a product manager at early-stage startups, my prior experience taught me that a business is more than a product or a set of features. It’s the entire business model that requires collaboration and effort from many different departments. For example, your outstanding product won’t get far without understanding the customer acquisition and sales model.

In my case, there were many areas of our business model I understood well. Through my previous careers, I understood finance, marketing, and of course, how to launch a product. However, because of my limited sales experience, I had to educate myself to become our first salesperson and sales leader. My prior experience (and belief) taught me that I could learn it.

2. We can talk with customers and find pain.

The best product managers and entrepreneurs think of themselves as finders of pain. It’s this skill that I believe leads both to the most successful products.

Before starting ProductPlan, I used the customer discovery techniques I learned validating several prior products, including GoToMeeting. Greg, my Co-founder, and I talked with potential customers to identify their pain and validate that the problem we’d detected was significant enough for them to want to solve.

My experience as a product manager gave me the awareness to ask the right questions and dig in and understand customer pain well enough to design a solution that customers would want to buy. This experience allowed me to spot repeatable problems to solve – not simply for a few customers but for a market. We also discovered underlying needs and desires that helped us craft a value proposition that really resonated with our market.

Ultimately, I believe our product management experience helped us get an innovative product to market quickly, on a budget, without significant pivots, and with paying customers immediately. Without that experience, we may have made a few more missteps.

Read the Customer Interview Tool Box ➜

3. We understand how to prioritize.

In any startup, the opportunities appear unlimited. So many potential product directions. So many potential customer segments. Which to choose?

Successful entrepreneurs know how to go after the opportunities that really matter and reject 90% of the other distractions. They can focus on a specific product for a specific market.

I’ve spoken with first-time startup founders who don’t possess these skills. They talk about their products being for “everyone.” They believe that they can get a robust product out the door in a couple of months with a small outsourced engineering team. When asked about revenue models, they say, “we’ll worry about that later.”

Product managers already know not to make these mistakes. We understand how to think about a minimum viable product, understand agile development, and prioritize using a mental model of value versus cost.

We’ve also been burned in the past with optimistic delivery dates. We’ve taken risks on features that received yawns from customers. We have lots of battle scars. This experience can accelerate a product manager’s success when they take the leap into entrepreneurship.

Download My Product Manager's Guide to Prioritization ➜

4. We can communicate.

Writing and verbal communication skills are essential as an entrepreneur. The ability to persuade – whether during a sale to a prospect or a potential investor – is one of the skills that sets the best entrepreneurs apart.

All those hours you’ve spent toiling over business cases and one-pagers as a product manager –  it pays off as an entrepreneur.

We also can communicate in outcomes. Product managers are data-driven and use outcome-driven thinking to grow the business. As a result, as startup founders, we stand a better chance of focusing on features and initiatives that move the business forward and motivate a team.

And we say “No” a lot. This is a skill that takes a lot of subtlety and practice to get right.

But…Product Management and Entrepreneurship are Different

As I mentioned previously, there were many skills I wish I had before I started a company, including selling experience. There were many other ways that the two paths are different.

Entrepreneurs have final authority. As a product manager, you make the product decisions, but you’re the master of none. First, you need to influence through persuasion because you likely won’t have a team working directly for you. Next, you need to collaborate with stakeholders and work with cross-functional teams. You can’t act autonomously. As an entrepreneur, you make the decisions and enforce them because, well, you’re the founder. It can be stressful sometimes. You, of course, still need to influence and convey your vision, but the final decision is yours to make.

Entrepreneurs take the risk — and reap the reward. As a product manager working for others, I was playing with someone else’s money. I took strategic risks, but if the product failed at the end of the day, I would still (likely) have an income. Fortunately, the products I launched and managed were successful. Yet as an entrepreneur, I’m now taking all the risk (well, me and my co-founder).

Leaping into entrepreneurship can be scary. But my product management experience gave me the confidence and skills to become a startup founder and launch my own product with the help of so many others. It helped me prepare for the eventual decisions and stresses as an entrepreneur. If starting your own company is an ambition for you one day, I believe that your product management experience lowers the risk enough for you to leap too.

You can read more about the founding story of ProductPlan in my book ‘How to Find Product-Market Fit Faster.’

Download the Product-Market Fit Book ➜

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