Death of Product Management at SaaS Companies…
By Michael Shrivathsan on Sep 23, 2009 in General, Product Management
Last night I got an email from a company with the subject “Saas and the death of software product management“.
And… with the subtitle of “Or, While You Weren’t Looking, Your Product Manager’s Job Became a Zombie”.
The email said the following:
The growth of the SaaS business model spells the end of product management as it’s been defined in the software industry for the last thirty years… Current product management functions such as tick list herding, MRDs, PRDs, “Agile” product management and the concept of no responsibility, no accountability, and no authority will soon be as relevant to SaaS companies as DOS 3.0 and floppy disks…
Do you think what this email says is correct? Here are my thoughts on it…
Death of Product Management… Rumors Wildly Exaggerated?
It seems the newest meme in B2B marketing (kinda like the Kanye Interrupts meme in consumer space!) is to claim “__________ is Dead“. You can fill in the blanks with whatever topic you’re trying to grab attention for.
I happen to manage “Product Management” as well as “Marketing” operations at Accompa, Inc. (we make a popular SaaS tool for product management teams to manage requirements). As a part of my job, I often get calls from consultants in the sales lead generation space.
In that space, over the past 6-12 months - a popular meme has been “Cold Calling is Dead”. As many of you know, cold calls are often among the first steps in the sales process at most software companies. Despite the claims of its death, cold calling is doing just fine. I find it funny how some of these folks cold call me to tell me that cold calling is dead!
It seems like the company that sent me the aforementioned email is trying to borrow a page from that play book, and is claiming “Product Management is Dead” to try and grab our attention.
P.S. If you’d like to read the whole email, here’s a link to screenshot.
I call BS on this notion that Product Management is dead due to SaaS. It’s a totally and utterly ridiculous claim - if anything, product management is more important than ever before (especially at SaaS companies). I think I’m somewhat qualified to say this - as I’ve spent a decade doing product management in the SaaS space (at very successful companies), and now at a growing SaaS startup.
What are your thoughts, do you think SaaS has killed product management? Do we all have to get ready to live in cardboard boxes? 
Click here and chime in…
1. Steve Johnson | Sep 24, 2009 | Reply
You (and I) have worked at companies where product management matters. Product management isn’t just prioritizing the ideas of developers and customers but defining a product that people want to buy based on market data. Most companies now realize that the product manager isn’t the janitor of the product. Indeed, product janitors can easily be replaced in SaaS or any other method of delivery. But a real product manager determines whether we should even be SaaS, how we’ll make money, which features will have the most impact on our market. A product manager knows whether we SHOULD build a feature; the product janitor only knows that we COULD build it.
Sad really, to see people who should know better scorning this critical role.
I guess the next thing we’ll see is that SaaS products don’t need sales people either.
2. Greg Biggers | Sep 24, 2009 | Reply
PM is not dead in SaaS. What is suffering a mortal wound (on its way to death or a long hospice stay) is opinion-driven PM.
In its place is an upsurge in METRICS-DRIVEN PM, driven by the instrumentation and behavior-observation capabilities that SaaS affords.
SaaS does not threaten my future in Product Management. Instead, it strengthens it. I no longer have to guess and speculate about the use of my product. I have data! I no longer have to spend tens of thousands of dollars on studies to find out if feature A will succeed more than feature B. I can split test prototypes or mockups of each, and lead the team to data- and outcomes-based decisions.
Long-live the metrics-oriented SaaS Product Manager.
gb
p.s. If this concept freaks you out, contact me and we will start a support group. Once you get past the fear, leading a metrics-driven product group is exhilarating.
3. Gregg Gallagher | Sep 24, 2009 | Reply
Michael/Steve:
Yeah, totally agree with your comments & perspectives. The original post was pretty much a troll. I grew up as a PM in the “value-added network services” space, which begat ASP, which begat SaaS…. with all the mid-wifing being done by a robust PM function.
Nothing here to look at…..move along……
4. Stewart Rogers | Sep 24, 2009 | Reply
The sad thing is people keep stumbling across those articles and thinking it might make sense.
Ignore it and wait for the completely irrational noise to die? Maybe.
Stewart
5. Gregg Gallagher | Sep 24, 2009 | Reply
Greg:
Have to say “Yes, but….” Metrics can & should play a key role in many product decisions. But if it were all metrics, then the human involvement of a PM would be negligible - it could all be done by process & quantitative analysis.
There’s also a qualitative dimension to the PM’s role & product decision-making - the insight, pattern-recognition and yes, intuition, that a product leader needs to bring to the table.
I use the terms “voice of the customer” and “heart of the customer” to distinguish between the two. The former (VoC) are the expressed needs of the customer, which are most readily identified and measured via quantitative means.
“Heart of the customer” are the unexpressed, latent and unmet needs of the customer. If you can understand, identify and meet those needs, quite often it can result in a truly disruptive product innovation. This is mostly a qualitative function, but can sometimes (not all the time) be validated quantitative.
Don’t think “OR” (mutually exclusive)…think “AND” - both approached are valid, and can be complementary….
6. Jim Holland | Sep 24, 2009 | Reply
Thanks for “calling BS.” Let’s just call the “________ is Dead” a passing fad. When the dust settles, REAL companies have product managment in place, enabled and hopefully, a methodology established to ensure it executes.
7. Patrick Fetterman | Sep 24, 2009 | Reply
While I think the promoter of this webinar (in which I am presenting) is overstating the case, I think many people from the traditional product management realm might find this webinar interesting. After working for several years in product management, including 8 years at ASP/Hosting/SaaS companies, I joined a company called Plex Systems a few years ago as VP Marketing. After a few months at this company, I was stopped dead in my tracks when I realized that the SaaS delivery model PLUS an agile software development methodology (we use RAD, Rapid Application Development) completely eliminated the traditional role of product managers inside of Plex. Part of this webinar is going to be about how we do things at Plex, and how the product definition and development is driven completely and directly (100%, day in and day out) by our customers.
8. Jeff Cronin | Sep 24, 2009 | Reply
The main failure is not the inability to serve the market you already have (Customers) it’s the assumption that they are the same as the markets you don’t have (evaluators and prospects). You have two sales functions for these types of markets and you should have different market requirement collection methods.
Direct sampling of clients to provide direction is easy with web tools, but in my experience you are leaving over 60% of the opportunity on the table building your product via technologically enhanced navel gazing.
If you are OK with this assumption then go ahead, but I for one want to grow faster than that!
9. Michael Shrivathsan | Sep 24, 2009 | Reply
Steve - You may not be far off! I’m expecting an email to hit my inbox any day now saying SaaS has eliminated the need for sales people and even engineers!
Gregg G, Stewart - I agree with you guys totally about the “troll” nature of that email, that’s why I didn’t link to their site or even mention their name in the post.
Jim, Jeff - Good points. These guys don’t even seem to understand Product Management (they seem to think PMs manage some kinda checklists), yet claim it’s dead. How silly.
Jeff - Excellent point on “markets you have” vs “markets you don’t have”, very well said.
10. Michael Shrivathsan | Sep 24, 2009 | Reply
Patrick - Thanks for the comment and details.
Interesting approach, you folks are trying to attract PMs to the seminar by telling them they’re not needed any more & are useless.
If you’re trying to copy “Cold Calling is Dead” approach - notice how they didn’t say “Sales is Dead” or insult salespeople. They just exaggerated that one of their activity is dead, and pitched how they can help them do it better.
You folks are promoting a seminar by insulting PMs, calling them zombies, irresponsible, etc.
BTW, I actually agree with parts of your message - i.e. PM training, books, etc can be better - just like they can be better for any discipline. But there’s 0% chance I’ll attend the seminar, because of “troll” like approach (as Gregg pointed out above).
11. David Locke | Sep 24, 2009 | Reply
Michael, your post confuses your experience as a PM at companies that sell SaaS enabling technologies, and SaaS companies. The former needs product managers, but there is a logic to SaaS companies not needing them.
SaaS jumps immediately into Moore’s late market where everything is a commodity. Agile exacerbates this with its inherent fast followers, and thin code to follow. Cost management is one key to the late market. Likewise, promo spend is another key. A SaaS company could just hire a brand manager to the same end as a product manager.
With utility computing, it doesn’t make much sense to continue to code features. Code it launch it, forget it, collect your check. Yes, it can be thought of that way. But, there is another way to think about it.
The aftermarket follows the late market in firms that are not willing to spend money to develop the hardware capabilities they need to put an information appliance on the market. If you are going to make a lot of money when you sell your company in the aftermarket, you will need to do more than fire and forget. You need a product manager.
12. David Locke | Sep 24, 2009 | Reply
The day-to-day following of your customer ignores much and doesn’t provide the maximum value to the vendor.
The product owner is not the product manager. If you only have a product owner, you have left much on the CEOs plate. And, in doing so, you have diminished your business outcomes.
Many companies have died listening to the voice of the company. You have to know when to stop listening to the customer.
The features are not the business. The product manager is responsible for the business.
13. Michael Shrivathsan | Sep 24, 2009 | Reply
Hi David - Interesting thoughts, thanks for sharing.
Just to clarify, 100% of my experience I refer to is at “SaaS companies” - and *NOT* working at companies that sell “SaaS enabling technologies”.
14. Adam Bullied | Sep 24, 2009 | Reply
Jim - totally agreed. That methodology and working with senior management to ensure successful execution is critical.
15. Patrick Fetterman | Sep 25, 2009 | Reply
Michael,
I’m not trying to sell anything to product managers - I’m just being used as an example in this webinar. Personally, I think that agile software development methodologies + SaaS are going to have a HUGE impact on traditional product management (and on marketing in general), and that’s why I’m participating. (I have a personal blog about this also, at http://www.patrickfetterman.com). But my company sells software to manufacturers, not tools to PMs.
Again, during my 20+ years in the software industry, I’ve been with companies that have run traditional waterfall development and its accompanying product management process with great success. It was only after I stumbled across the opportunity at this company (Plex) and saw how wildly successful it has made them that I started down this path of alternative product management - mainly because I was scared for my job.
Also, I think the target audience for promoters of this webinar is not necessarily PMs, but executives and entrepreneurs who are running or founding new SaaS companies.
I hope some of you will attend. I think you’ll probably get a standard sales pitch from some of the participants, but I think you’ll find the Plex example an interesting one.
Patrick
16. Michael Shrivathsan | Sep 25, 2009 | Reply
Patrick,
Thanks for the follow-up comments.
When I used “you folks” in my comment above, I was lumping you in with the seminar organizer. Perhaps that wasn’t fair.
Thanks for the clarification on target audience - I can see how this pitch may fly to execs/founders (many of whom themselves may not know a lot about product management). Although I find claims by you & promoter that “product management is unnecessary for SaaS companies” to be deeply flawed - at least I can see how the pitch can fly to execs/founders from a purely marketing perspective.
By the way, best wishes for success at Plex - I love to see startups succeed!
17. Robin Zaragoza | Sep 28, 2009 | Reply
I wonder if this is all a question of semantics. Patrick mentions several times that “traditional product management” is defunct, but I’m not sure everyone has the same definition of “traditional product management” in the first place. Perhaps I’ll attend the webinar to find out what he means by that.
Gregg - I like your term “heart of the customer”. You should do something more with it!
18. Patrick Fetterman | Oct 1, 2009 | Reply
Thanks again for the constructive discussion on this. Did anybody end up attending this? Any comments on the content?
Patrick
19. Rick Chapman | Oct 2, 2009 | Reply
Michael, let me get this straight. As I remarked to you when you sent me that E-mail tellig me I was “wrong,” you didn’t know what I was going to say! And since you didn’t attend the session, you STILL don’t know what was said. How can you call “BS on this notion that Product Management is dead due to SaaS” when you are utterly ignorant of the points made in the presentation?
BTW, your product was mentioned during the presentation.
Now, for those of you who didn’t attend the session, it’s now up at this link:
http://www.saasuniversity.com/RESOURCES/Podcasts/tabid/1341/Default.aspx
Now, a couple of points. First, this statement reflects thinking that is increasingly out of date in the software industry:
+++ A product manager knows whether we SHOULD build a feature +++
This is fine for client/server companies; it’s obsolete in SaaS. With on-demand products, your community will tell you what features it wants (and in the case of Plex, they vote in the main with their dollars. And it those with the bucks whose opinion really matters in the end).
The methodology preached by companies such as Pragmatic of PMs acting as stand-ins for the customer is becoming as relevant in SaaS as WordStar and Ctrl-KB. In SaaS, you will not be a stand-in; instead, you will enable a community and in most cases get the hell out of their way. You need to watch the presentation to understand what I mean.
+++In its place is an upsurge in METRICS-DRIVEN PM, driven by the instrumentation and behavior-observation capabilities that SaaS affords.+++
Ah. Someone who’s getting it. You will enjoy the presentation.
+++ The main failure is not the inability to serve the market you already have (Customers) it’s the assumption that they are the same as the markets you don’t have (evaluators and prospects). +++
Yes, I’ve heard this chestnut before. SaaS products inherently create customer communities that also function as marketplaces of ideas. And these communities are not static; people come, they go, and they are constantly refreshing the marketplace with new ideas and insights. It will be the job of community managers to “run close” to that community and enable it to transmit these ideas to development.
+++SaaS has eliminated the need for sales people and even engineers!+++
Not completely, but you will be hearing more about the power of a SaaS community to help drive sales. And at Softletter, we’ve discussed the increasing appearances of what we call a “Big Head” company; one that almost completely outsources its main development and relies on a domain expert(s) to create a specification and build a product to the spec.
+++ SaaS jumps immediately into Moore’s late market where everything is a commodity. +++
No, it does not. When the SaaS rebirth took place in the 2004-2006 timeframe, it took place in markets that could not be reached by the existing models. These were not commodity markets; they were new markets. Softletter’s been tracking this since 2006 and we’ve got the numbers to prove this.
+++ The day-to-day following of your customer ignores much and doesn’t provide the maximum value to the vendor. +++
All can say is that if you follow this road in SaaS, your future employment plans include a long stint working in a food court in your local mall, perhaps as a fry preparation specialist at Wendys!
Now, I want everyone to read what Patrick said here:
+++After a few months at this company, I was stopped dead in my tracks when I realized that the SaaS delivery model PLUS an agile software development methodology (we use RAD, Rapid Application Development) completely eliminated the traditional role of product managers inside of Plex. +++
Let’s focus in:
+++ completely eliminated the traditional role of product managers inside of Plex. +++
More focus:
+++ completely eliminated the traditional role of product managers +++
Plex is not the only company where the above is taking place. Everyone here needs to watch that presentation in its entirety. You can also download the slides but you have to register with http://www.saasuniversity.com (it’s free).
Those who watch and begin to reorient their thinking will survive in software. Those who don’t will not be working in this business in the future. The existing product management model used in software has been around for 30 years and it is dying. You need to get ready for what’s replacing it!
rick chapman
http://www.saasuniversity.com
http://www.softletter.com
20. Michael Shrivathsan | Oct 4, 2009 | Reply
Hey Rick,
You said:
** … you didn’t know what I was going to say! And since you didn’t attend the session, you STILL don’t know what was said. How can you call “BS on this notion that Product Management is dead due to SaaS” when you are utterly ignorant of the points made in the presentation? **
Good question. In most cases, I agree with you that I should listen to the logic before disagreeing with the conclusion.
However, that’s not true in all cases.
For example - lets say you were to conduct a seminar to argue that the “Theory of Gravity”, or may be the “Theory of Evolution” is wrong. I don’t need to attend the seminar to know that I disagree with your conclusion. (No matter what the logic is).
Of course, this is only true in the very small number of cases where I’m 100% confident of something.
For me - “Product Management” for SaaS companies just happens to be one of those cases.
That said, thanks for raising some excellent questions and challenging the status quo. As I said before in my email, I agree with a few of your points — such as: a lot of theory, books, etc on product management is outdated or impractical, and needs to be improved for today’s practical reality (SaaS or otherwise).
I’ll be sure to check out your links, thanks for sharing with our readers.
21. Rick Chapman | Oct 5, 2009 | Reply
+++ Good question. In most cases, I agree with you that I should listen to the logic before disagreeing with the conclusion.
However, that’s not true in all cases.
For example - lets say you were to conduct a seminar to argue that the “Theory of Gravity”, or may be the “Theory of Evolution” is wrong. I don’t need to attend the seminar to know that I disagree with your conclusion. (No matter what the logic is). +++
This is an amazingly silly statement, but it doesn’t really matter. Several hundred people attended the session and they now know what you do not. Many listened quite carefully, and are carefully thinking about what they learned, something, you, of course, can’t do.
Best of luck.
rick chapman
http://www.saasuniversity.com
http://www.softletter.com
22. Mark Kromer | Nov 5, 2009 | Reply
If you want to be sucessful, regardless of your product delivery mechanism or marketing channels, you will still need customer requirements, market analysis, market requirements and business requirements.
And those are still best served by someone who focuses on analyzing those attributes instead of dumping them into a spreadsheet with equal weighting and consideration.
If agile teams or SaaS mindsets call this product analysis, business analysis, or whatever the term du jour may be for the role, that person is still practicing best practices of a product manager.
What I am finding is that the bigger, more apparent difference is in regards to outbound marketing approach, sales support, campaigns, etc. as opposed to R&D and engineering-facing activities.