Russell’s insights were all true 30 years ago for on-premise products, but today should be as relevant to a SaaS PM as a Neanderthal’s advice on how to hunt down and properly roast a wooly mammoth. Shaun’s lecture should have discussed a very different set of PM to-dos and potential accomplishments. (It is the fault of the industry, and Shaun’s company, that it did not.)

Product Management Fake News

Before going further, let’s first dispel some of the usual myths surrounding product management in the software industry. These include:

As a PM, you’re the “CEO” of their product. This is wrong.  You’re not the CEO of anything. Product management as a functional group or task set, is typically added to a company after it’s been in the market for a period of time, usually between 12 to 18 months, and when headcount exceeds 20+.

A PM is a middle manager hired in to relieve upper management of the burdens and busywork of product management because upper management is tired of listing new features in spreadsheets, arguing with web designers about the color of page headings, and lying to prospective customers about the new features that will not be appearing in the timeframes indicated on the official roadmap. That last bit in particular is now your job, Pinocchio.

To hammer this point home, please remember that product managers cannot fire nor fire, and rarely have actual control of “their” product’s budgets. CEOs can and do.

I once got into a lively discussion with a PM who had risen through the ranks of a large software company to become head of one its business units. He had budget, and could hire and fire. Yet, he insisted he was a product manager. He didn’t stop until I asked him to give me a copy of his business card and pointed out his title said “President.” Who did he hire to help manage his division’s product lines?

Product managers. None of whom had budget and could hire/fire. That was his and the VPs of his group’s perogative.

Another popular shibboleth is that PMs lead a team. This is also almost never the case. Yes, in some companies, the various functional groups may meet periodically either virtually or in person to exchange information and build camaraderie. The PM in some cases may chair the group. But in no real sense does this team report to the PM. Developers continue to code according to project schedules or scrums set by development, sales targets are set by sales managers, and marketing programs are launched and administered by marcom. The PM is always encouraged to provide “input” into these projects and programs and if her advice is in accordance with what the leader of the functional group believes, will be accepted. If not, it will be ignored and there’s nothing the PM can do about it.

Rather the PM acts a team cheerleader, whose principal function is to begin each meeting with a chant that goes something like this:

One! Two! Three! Four!

Get that product out the door!

Five! Six! Seven! Eight!

Hope the market thinks it’s great!

Referring back to PM superpowers, perhaps the most useful one a product manager could have had in the 80s, 90s, and noughts was the ability to wave super pom-poms while leaping over tall buildings in a single bound.

The “Agile Product Management“ movement has also been quite the thing for the last  few years, though I detect enthusiasm is waning. This is because Agile is a development methodology and PMs aren’t programmers. It’s true that Agile usage has become almost mandatory for SaaS and mobile companies (particularly if they’re venture funded. In the Softletter SaaS Report, 80% of VC-funded SaaS firms reported they used Agile).

But product managers do not give coders orders. They’re rarely competent to do so, and if they make the attempt, the development process  quickly breaks down as the programmers inevitably revolt against an unnatural regime.  I’ve read through several “agile product management” course offerings that attempt to meld product management into Agile and they all have different ideas on the topic and often directly contradict each other. (I provide a precise example of this in my book, SaaS Entrepreneur: The Definitive Guide to Succeeding in Your Cloud Application Business, the first chapter of which deals directly with how the job of PM in SaaS and mobile is transformed.)

Another recent wrinkle in product management is the concept of “leadership.” PMs, we are told, need to spark “movements” and “create” experiences. (These types of metaphysical  ponderings are not new to product management and recur in the industry regularly.) One interesting take on the idea can be seen in an online presentation by Josh McWilliams, VP of College Factual.  Click on this link to watch; it runs about 10 minutes. At one point, Josh discusses the idea of a PM  not leading a team but being a member of the team.  Well, yes. I warn you now in the interests of your career that while this all sounds wonderful, if you’re not perceived as an employee who is making a tangible contribution to a product’s success, you will find yourself dropping into that most dreaded class of hire, an “expendable.”

The above all leads naturally to the question— “If Shaun’s take on product management is obsolete, what should the contemporary SaaS PM be doing with his or her time?”

SaaS Entrepreneur’s first chapter takes this topic head on. I’m not going to dive into every detail, but the excerpt below focuses on the core issue:

As we’ve noted, from a business standpoint the most distinguishing facets of SaaS products include their ability to operate 24/7/52, capture all subscriber interaction with your system, and concentrate your subscribers into a natural community (and this will extend to your reseller channel, assuming you’ve built one).

These facts have a profound impact on product management.  As a SaaS or mobile PM, the things you can measure and analyze via your SaaS or mobile system include:

• Interaction with your system and services to micro detail. What functions do subscribers use? Which ones don’t they use or have abandoned? What new function do they most want?
• Massive amounts of geo location and demographic data.
• Quick feedback from your “community of customers” about service needs and requirements.
• Amalgams of network effect data that you can monetize, use as marketing collateral, and sometimes even leverage to create new business lines.

We’re only scratching the surface. In today’s online software industry, the value of the information being gathered by SaaS and mobile applications is beginning in many cases to exceed that of application or subscription sales.

And you, as the PM, are naturally positioned in the nexus of it all. You are the best person to dashboard and analyze the data flowing through your system. Cross-indexing system usage against community feature requests. Tying the two together to create a data- and reputation-driven view of your company that can scale up to encompass every subscriber, then  zoom in on a single customer interaction.

Of course, to accomplish any of this, your SaaS system needs to integrate analytics and community. In the latest edition of Softletter’s SaaS Report, 58% of SaaS companies reported they’d baked in analytics. That number should be 99%. But only 31% have integrated community. We think that’s a serious mistake for most companies.

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