The Silicon Valley Fallacy

Be pragmatic when joining a non Product-thinking company

There are companies that can be successful without building a product. There are even industries where a project-based strategy in the early stages may be preferable; a good example is healthcare where the fragmented, siloed, and highly regulated market is a big overhead for funded startups to find a market fit before running out of money.

The main reason people prefer building products from running projects or offerings services is that a product can scale; selling and using a product is a repetitive process, standardized, and if there is a market fit, economies of scale will allow the organization to grow faster.

This fast growth is why Silicon Valley (and relatively thinking VCs outside SV) is thinking that way; VCs know that they bet on high-risk companies, but they expect high returns. Thus, they invest by definition in companies that build products. Thus, regardless of the strategy for validating the market, with processes that don’t scale initially, the end goal of each SV-backed company is to build a product and capture a market, if not create one.

If you are outside the Silicon Valley ecosystem and the broader VC network, the terms and rules change; you need to find a way to fund your company. If you are on trending topics with founders with a great profile, a nice prototype, and promising numbers, you may get access to early funds and get connected with overseas investments. So, how should Product Managers position outside a world that is not Silicon Valley, or doesn’t think like Silicon Valley?

There is an interesting life beyond SV

Should we expect that Product Managers outside Silicon Valley are doomed to apply only to a limited pool of companies that think Product-first? The answer is that part of the job of Product Managers (and especially Product Leaders) is to help organizations make this transition to a product mindset and strategy, which will allow a company to be more competitive and grow faster.

If everyone in the organization has an honest need to become product-first (product-driven, marketing-driven, sales-driven) and you win leadership’s trust, then you need to be a “pragmatic product manager” and find your own way to help the organization on this trip.

In the process, you may get tired of the lack of experience and any inertia, make steps back to educate and prepare the organization, before you try to fight the status quo; in the end, if you realize your efforts don’t have any effect, you may leave the organization. But before we discuss a no-happy ending, here is a list of tips to help you survive in a non-product-thinking organization that says that wants to change.

1. Be a product ambassador

The first thing to do is to educate people within the organization. This is part of your job, even if it is not in the job description. Here is your checklist for onboarding a non-product-driven company:

• You should explain that the product is the business model; It’s the whole configuration and the user experience, it is not only the working software.

• You should explain that the Product Manager is the driver and facilitator, not a CEO or other function challenger.

• You should explain that delivery is not your job, it’s the engineers’ and designers’ role, but it is critical for everyone’s existence thus you are closely monitoring and driving it. Your performance should not be evaluated based on features, but based on the value created, so you have to start measuring and defining what success looks like. Otherwise, the engineering team will be a cost center.

• You should find the proper balance among your product sense, Founders’ vision, data, and qualitative information. You should measure things and work to define a North Star, but prefer to tell stories, at least until you have a market fit for your product; then you can be data-driven in your decision-making. Don’t overpromise that numbers will define the solution. Growth comes later.

• You should talk more about Product Vision and Strategy. This is a skill you have to develop. How will your product be in 1 or 2 years? How does it make sense to automate more parts of the process? If you don’t work on these topics, no one will. How can the product help the organization meet its expectations and even take it one step closer?

2. Connect with other product people

If you are in a situation where your company doesn’t get what Product Managers are about, you have to realize that you are not alone. The most important thing is to find people that are open and realistic, to share their experiences, and help you find solutions to your problems. You should look for or create local communities and meetups, but if you feel isolated in your country, follow people on Twitter, Substack, and LinkedIn, like Shreyas Doshi's Product Almanac or Lenny Rachitsky. These people may be SV related, but many of them are open to discussions and you may find other people in the relevant communities to exchange opinions.

Personally, the way I worked through tough times was the following:

1. Try to find a name for your problem. Semantics is important. Is it a strategic problem? Is this a process? People?

2. Search online for blogs, books, and videos talking about these issues. Follow people talking about relevant topics.

3. If you can’t find things answering in much detail, shout out on social media for references. Reforge has lately had an amazing library of topics with many topics to choose from.

If you do the steps above, you will realize that you are not alone. But you should search for solutions actively, and read a lot.

3. Avoid arrogance

In the process, don’t be edgy or communicate that building products is the only way to success. You have to realize that products require investment, and have a high risk of failure as well. Yes, we all love to harvest the goods of a product with a market fit. So, even if you have worked on successful products, and you did things with impact, don’t take it for granted that people should think and act like you, or that you get a free pass to work as you want. You need to align expectations quite frequently.

I personally give two examples that help my audience understand how I can contribute to the company, by bringing products in the core of the company’s offering:

1. Look at your P&Ls. If they grow linearly, you can’t scale as fast as other product companies, and you can’t have such evaluations. You can choose not to become such a company, it’s ok. But if you want to have exponential growth while keeping your costs low, you have to productize parts of your offerings. Usually, people want to build the next unicorn and capture the whole market, so it is a rhetorical question.

2. Ideally, if there is a validated market and the required budget, a product team would automate the whole user experience. Any human interactions and interfaces would be to provide a premium service for segments that need it. The only reason not to build a product is if there is no big market or you expect the market to change behavior soon. Our response to this uncertainty is to ship things in smaller experiments so that we can validate the market response and adapt to any change.

You should avoid being arrogant, but you should also avoid the Halo effect while talking with other successful PdMs; Listen critically to advice from people who only run processes at well-established tech companies, they will get you confused. While I was looking for advice, I got an answer from Product people in big Techs like “I do run my OKRs, and sync on a weekly basis with my team, then measure everything to adjust”. This is not the actual world of Product Management, this is a part of Product Management for people working in Big Tech companies who don’t have primitive problems like finding a market fit before funding ends. Thus, if you try to pass any advice as-is in practice, it is very possible to fail.

This is not a race with one winner. Try to learn from other PdMs from their experiences and their failures, not from their CVs.

I don’t say that PdMs with experiences from big Tech are not worth it; I have met some great guys and some people have amazing organizational knowledge to share, especially people from Amazon (personal preference). What I want to underline here is that Product Management is affected also by luck and the environment they operate in sometimes, beyond the effort they make or the skills the PdMs have.

Remember: Every transformation is hard

Transformations usually fail, but in the end, you will be wiser than before; you should do your retrospective for the failures you had; Why did they happen? Could you do something differently? Did you lack skills, were you in a rush, did you communicate things in the wrong way, or it was the organization’s resistance to change? You know, sometimes people in high-level management prefer to pay external consultants to do the job of transformation that should be done organically, to secure their position and sound smart and sophisticated.

As heads-up, here is a list of the most common problems you will face in the process of transforming an organization:

• Lack of understanding about what a Strategy is, and difficulty to prioritize.

• Politics from people who fear becoming obsolete, and undermine changes that will put their job at risk.

• Product may challenge existing revenue streams from clients (kill the fat cow - innovator’s dilemma).

• The agency problem; managers prefer to get their bonuses and salaries by optimizing in a certain market rather than taking the risk to invest in new markets, new business models, or new offerings.

• Lack of market fit, that doesn’t allow the product to take off. Whatever you do or try, you have no impact and you can’t bring any change because there are not many clients (in size and number) to buy what you are offering.

Thus, embrace any frustration, do your job with transparency and goodwill, design for small wins before you change the whole organization, and try to show what value you can create early on. Be a pragmatic Product Manager.

PS: This post is part of the “pragmatic product manager” series.

PS2: Yes, there are many other hubs beyond SV and many other US areas that are very strong. But gravity and ties are strong around SV. You can replace SV with any other strong entrepreneurial ecosystem.