“When is a startup at the right stage to bring on Product expertise?“

This post was inspired by a conversation I had with a founder who was responsible for Product at a seed stage startup. He asked me this question because he had no background in Product Management but he was advised by the Y-Combinator program to “keep Product close as long as you can”.

Here’s my perspective on how to evaluate the timing for hiring your first senior Product Management employee, leader, or advisor.

Staying close to Product without a PM expertise

I agree with the guidance that early stage founders should keep Product close, but this advice can (as it did in this case) be misapplied. In the case of the founder who I spoke to, neither he nor his fellow cofounders had prior experience with Product Management. So his company was putting itself at a disadvantage by waiting to bring on Product expertise. As this founder was from an Engineering background, I asked him “if the guidance had instead been to keep Engineering close, would it be sufficient for a non-technical founding team to avoid hiring Engineering expertise because they want to keep Engineering close?” Of course, it is clear to see that this would not be enough.

Hiring Product expertise is perfectly compatible with having founders stay close to the product. Founders can be complimented by an experienced Product person, remaining deeply connected to key decisions and insights while also taking advantage of the person’s functional expertise.

The question of whether a startup should bring on Product expertise is a matter instead of how much Product experience the team already has and how important the Product function is at this stage of the company.

The importance of deep Product Management experience

For this post, I be referring to an experienced Product Manager who brings Product leadership skills to an early-stage startup. This person may join as the Product leader (e.g. CPO, VP of Product) or instead join as a senior individual contributor. The managerial aspects of Product leadership are less critical when you have a small Product team. The key is the type of experience they bring, not the title.

Without tradeoffs, one could easily argue that it’s better to have more experience in any function. However, the dilemma comes from the reality that relevant Product expertise comes at a high financial cost for a full-time hire, and cash is usually tightest in the earliest stages.

As an aside: this is why more early-stage startups are considering fractional and advising support to bring on Product leadership expertise without breaking the bank.

So if the team doesn’t already possess deep Product expertise, they should determine what is the most important part of their business to get right at this stage. In some cases, the biggest challenge is in solving a difficult Engineering problem, closing key Sales deals, or developing a Marketing campaign that will spread like wildfire. There is no universal answer; it depends entirely on what is the most important thing for the business to accomplish at this particular moment.

However, I think that more often than not, the biggest challenge of an early-stage software startup is to build the right product. This is because a product may need to evolve dramatically from its original concept before it can be successful, and the act of efficiently evolving the product into the right product requires strong Product management skills.

“Making an insanely great product has a lot to do with the process of making the product, how you learn things and adopt new ideas and throw out old ideas.” — Steve Jobs, Playboy magazine (yes, you read that right)

Evidence that you need more Product experience

The effects of a Product leadership experience gap are easiest to spot when things aren’t working well. Even teammates who are more removed from the Product organization may feel the pain.

Below is an incomplete list of symptoms indicating that a startup lacks strong Product leadership:

Sales driven prioritization: There are situations where Sales should have a dominant voice in shaping the product’s roadmap (more commonly with B2B Enterprise customers). But what is more common is when a Product function doesn’t have a clear and articulated opinion on what the product should be, it creates a vacuum that the loudest voices fill. So a Product team might find itself jumping from one feature that Sales promised a customer to the next.