One of the most typical difficulties that a Product Manager faces is deciding whether to work for a startup or a larger organisation in order to advance their career. While both ways offer their own set of benefits and drawbacks, one can choose the journey that best suits your needs.
Let’s go over the characteristics of a Product Management function in both startups and larger businesses. For the sake of clarity, consider a ‘start-up’ to be any company with a revenue of 0 to $20 million ARR, and a ‘bigger business’ to be any company with a revenue of more than $20 million ARR (that includes mid-market companies also).
Working as a product manager in a start-up world, you may not have the luxury to work with an expert designer to fix problems with your new feature that may have had an impact on monthly users. Consequently, you will have to wear the designer hat, do some A/B testing and get the issue resolved for your customers and closely monitor the MAU trend. Let’s delve deeper into what the characteristics of a product manager working at a start-up looks like.
Team Structure. You’ll either report directly to the CXO / Senior Management or work closely with the founders. From market research to working with engineers to launch and product messaging to the audience, you’ll be responsible for both inbound and outbound aspects of the product.
Scope of ownership. You will own the entire product cycle from ideation to launch. You’ll cover all product components such as core features, portal experience, data security and customer engagements. You will find negligible intervention from peer/hierarchical functions as you will exhibit independent ownership. ROI / Customer value of the product is solely owned by the product manager.
Decision Making. The decision making is relatively easier compared to larger organisations, as you will have to consult fewer stakeholders for any prioritisation and problem-solving situations. You tend to have greater autonomy. Consequently, it’s critical to do a thorough analysis before taking any key product decisions.
Business Impact. Any wrong decision/prioritisation can cost you business. The strategic mistakes may potentially lead to customer churn which will directly impact the start-up’s growth, funding and future.
Financial Boundaries. Due to a limited budget in most of the assignments, you will have to encounter team bandwidth bottlenecks, procuring third-party tools with limited features and minimal investment in customer engagements. The constraints listed above may have an impact on your long-term product strategies. You can also discover how to make the most of your resources while making an effect.
Customer Relationship. Access to the customer base is very small and product managers must try out many things on an experimental basis. You may have a handful of key customers to learn and experiment with new product features and feedback.
Career Growth. The opportunity to learn is always higher in start-ups due to the larger scope of ownership and opportunities. Your career growth will be generally faster due to the pace of the organisation’s growth and ease of measuring performance impacts.
With large organisations, let’s assume you want to propose a strategic product decision in changing the differentiator in the market. There will be multiple stakeholders with diverse perspectives in voting against your decision regardless of telemetry backing your pitch. You will have a tough time aligning every stakeholder towards a common perspective for any such key executions. Here are some of the key characteristics of working in a large corporation as a Product Manager.
Team Structure. You will report to Director, Product Management (or) Senior Director/Lead Product Management. Depending on the size of the product/market, you may have various tiers of leadership in the organizational structure. Exclusive teams of product managers will be in charge of the product’s inbound and outbound aspects. You might be a member of one of those teams with a specific focus on some features/components.
Scope of ownership. You will own an individual component/feature of a product instead of the complete product. Your sense of ownership will always be limited and specific to your module related features or scenarios. ROI/customer value ownership is largely distributed across different stakeholders/partners (Peer product managers/engineering leaders).
Decision Making. Critical decisions are made after consultation with your leadership – Director Product Management/Product leader or any similar leadership. You will experience less autonomy while taking key product decisions. There will be multiple peer stakeholders/business partners who will participate/influence the strategic product decisions.
Business Impact. The likelihood of making a mistake is low because there are numerous processes and guidelines in place, all of which are reviewed with important stakeholders and peer leaders.
Financial Boundaries. There may be no/fewer financial constraints in hiring new team members, procuring new software tools, marketing, sales budgets and in-person customer engagements due to process-driven culture. Premium data resources, such as research papers, journals, and advisory services, may be readily available to conduct research and development on new use cases and market needs. This will aid in the search for new products and markets. In the case of deep tech products, the funding for the research team is also significant in comparison with start-ups. This helps product managers run data studies before proposing any MVPs or feature enhancements.
Customer Relationship. Access to the customer base is very high. This in turn helps to understand the new requirements of the product and acquire more new customers. Great opportunity to partner with strategic customers while building and testing beta features.
Career Growth. Due to the limited scope of ownership and learning, career growth in terms of promotion and compensation will be relatively lower. Stability is the major advantage for your longer stints and predictable career plans.
The above comparison is based on our personal experience and talks with hundreds of product management specialists from both B2B and B2C companies working in both startups and major enterprises. We hope the comparison will provide clarity to those product managers who are unsure how to plan their product management career path based on their interests.
Depending on the size and scope of the game played in the market, the details of a Product Manager’s work differ in terms of culture, nature of collaboration, strategy and vision, sales dynamics, and marketing muscle power. Although the core of Product Management in terms of creating value for customers tends to stay the same, the fueling environment (whether small or large) has its own set of constraints and opportunities in terms of delivering the same.
In our recently released book, ‘Product Management Simplified,’ we discuss many of these challenges with practical examples and tried-and-true techniques. Get your copy today to learn more about this toolkit. It will assist you in either becoming a product manager or honing your present skillset to improve the impact your products have on people’s lives.