In the age of product companies, having capable and extraordinary product managers is crucial to success. Product managers with commercial mindset are top of the hierarchy, tough to find and essential to success of the organizations. This article shares with you
- What’s my definition of commercial mindset.
- How a commercial mindset product manager can single handedly make a company successful.
Product managers who can identify customer gaps, invent solutions, and execute them are considered to be of very highly capbale and are necessary for the success of product organizations. The product managers who can perform all three roles and also have a commercial mindset are called level 4 product managers. They are very rare to come by and are the best ones to have around in your company or startup.
This article covers the role number 4 of product managers which is making the business work. In another article titled “Product Management Defined by a 9-Figure Company CEO”, I defined Product Management based on my experiences building a successful company around a product. This article explains Role 4 of product managers, as briefly mentioned in that article. It’s written so it can be read on its own, but you can read the main article after. Read it however works for you.
Let’s get started:
This is last role of product manager are often not studied or thought because of its complex definition. The irony is that this indeed what makes product managers the CEO of product and yet many product managers are don’t reach this level or it’s not even on their radar. I wrote another article called, Product Managers Make Great CEOs”. I believe in it but you have to be a successful level 4 product manager to even go on that path.
Before we talk about why product managers should have a commercial mindset, I’d like to discuss the definition of such for product managers.
Definition of Commercial Mindset:
- Ability to make money:
The ability to make money is the foundation of a commercial mindset and entrepreneurship. It is something that can be taught; it takes mentorship and exposure to the right environment and people to gain such skill. Role 1 of product managers is to work with customers and identify the gaps. A level 4 product manager finds gaps that have so much value to the customer that they are willing to pay. This is very simple but it doesn’t come natural in organizations. They promote engineers or hire product managers with engineering background. No commercial or the money-making skill is tested during the interview process. The ability to make money in entrepreneurship is directly associated if you can see what has value and what the customer is willing to pay for it. In the context of product management, a level 4 product manager see what feature gets developed first that makes the most money for the company.
-> Understand Good Product = Sales
The most important metric in product success is sales nothing else. This is something the many product managers
This is very simple and yet tough to grasp for many of the product managers. T
-> What keeps us relevant: Level 4 product managers have a sixth sense-like intuition toward what keeps the product line more relevant, so we can continue winning market share and identify what’s lacking and needs to be developed. It’s very easy to lose sight of what’s working and what’s not working. Many times this is in contradiction with what customers wish, and that’s how a level 4 product manager’s prioritization can make or break the company. Neglect what’s not working or why people are buying from competitors. Neglect why your customers are leaving you and don’t do anything about it. It takes a very short time to lose your market position.
- Ability to Work with Commercial Teams:
The commercial teams (Sales and Marketing) in the organization should be the main partners of product managers. They are the ones putting product managers in front of customers, the ones who know the commercial value of the product and its features, and they are the ones helping product managers with what to prioritize. I find that not every one of our product managers is comfortable with this or knows how to leverage it. Level 4 product CEOs not only are comfortable working with the commercial teams, they are partners with them and work closely with them to get in front of customers, create marketing campaigns, and make presentations to potential customers. This is perhaps the only sign of whether you are a level 4 product CEO or not. Are you working with the sales and marketing, or are you isolated?
We talked about the ability to make money as the first definition of a commercial mindset. The second thing is creativity in making money: It is important to point out not everything is a direct money maker for companies or not every decision of a product manager should be with the lens of direct money making. There are many ways that indirectly help create value and charge for that value but sometimes go unnoticed.
Why We need a Level 4 Product Manager
1. The Work Doesn’t Stop at Product Launch:
This is the most important reason but doesn’t come obvious to many product managers. The work is not done at the launch. The work actually begins. When product managers have product mindset, they think like a CEO. When a CEO of a startup launches a product, she doesn’t go home and rest. She knows it’s time to start working with customer 10 times more than before. The biggest measure of a product success is sales. When a product launches, sales see a graph like this:
Initial Traction: When a product launches, there is a lot of hype and energy with the sales team, as well as built-up demand with early adopters and fans. Companies see a big spike in sales. This lasts 2-3 months. This is usually a trap, as the product manager thinks the product works and sells, and they don’t stay on top of the business.
Reality Plateau: Then reality hits when sales go down and stay flat for another couple of months. This is where product managers should be super active, working with customers to utilize versus revenue. Only a commercially minded product manager has the fortitude to push through this phase, work with customers, and track sales. If the utilization is low, the product manager should stay on top of the product, work with customers to figure out why, and pivot fast. I have gone through this phase many times in my career as a startup CEO and product manager. You need to have the stomach to work with customers directly, hear feedback, and have the charisma to convince the R&D team to work harder and faster to iterate and give the customer a better version if the product is not there. No company gets it right the first time, companies win when the y iterate, resolve issues and add functionalities that the customer need.
Make or Break: After the reality plateau, the products that see utilization by customers take off and those who don’t see customer utilization will lose. It’s the level 4 product manager that is able to bend this curve and make sure the product make it. It happen by sheer perseverance, commercial mindset and grit.
2. Commercial Teams are Clueless without Product Managers
Marketing and sales team need a huge partnership with product managers to succeed. Sales team needs constant training reminder of why the products we are selling are the bests and and marketing teams need the product teams to market the products. Additionally, the sales team are the best source of info about what doesn’t work and what competition is up to. So this partnership is very much needed. However, not every product manager are of a different mindset and don’t naturally gel with the commercial teams. However, product managers with commercial mindset build this relationship naturally and help each other in their success.
Conclusion:
- If you are product manager, learn the business and understand your work doesn’t stop at the launch. Start working with commercial teams and get involved at the frontline.
- If you are leading a product management department, evaluate which one of your product managers are level 4, create a program to elevate them.
- Without level 4 product managers your organization won’t succeed.
Good Luck
Amir
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