March 2024
Alline Akintore & Julian Dunn
When is the appropriate time for a startup to hire their very first Product Manager (PM)? Should the PM be a day-1 hire? Should you hire a junior PM, or someone who can be a head of product on day one? Should you wait until the product has product-market fit? There are so many variables that can go into making this decision that it’s easy to get caught up in analysis paralysis. While there are obviously no clear answers for either scope or timing, here are some factors that you should consider, based on our experience working with and guiding startups through this critical process. We asked Oregon Venture Fund (OVF) venture partner Julian Dunn, an accomplished product management executive, to help answer these questions and more.
First, you should recognize that what you’re really hiring for is your second product hire. You, as a founder, are already wearing the chief product officer hat. Some founders/CEOs feel pressured to hire a PM because the board, investors, or peer founders have recommended it. But you need to be convinced about the need for the hire and prepared to delegate ownership of critical parts of the product strategy and execution to that person. If you aren’t, you will merely undermine that person once they are aboard. No competent PM wants to just follow a CEO’s orders.
How do you develop the conviction that you need to bring on a product expert, who in many cases will be more adept than you at doing product management? One way to look at it is in your level of expertise in your startup’s domain. If you are a founder developing a product for a domain in which you have deep expertise, market knowledge and relationships, it makes sense for you to be the primary product person until you at least achieve product-solution fit. Product-solution fit is when you are confident that the product solves the problem for the target audience, and they have a willingness to pay for it. But getting to product-market fit involves designing a repeatable go-to-market motion, pricing and packaging, and additional capabilities to ensure that your product can be acquired and used. You are on track to achieve product-market fit when your product is in the market and scaling to different users/personas that are outside the mold of what you are comfortable with, including users that you had no prior relationships with.
However, if you are a founder building a product in a domain that you are not intimately familiar with, or for a broad customer base with a variety of personas (complex go-to-market), it makes much more sense to bring in a PM early. Their job is not to supplant your vision as a founder, but to create leverage by accelerating your company’s understanding of the market and getting you to product-solution fit faster.
What to consider before you hire the PM
In our opinion, product management is a strategic role. This means that at your company they do more than just execute and follow someone else’s strategy. The PM should have great product sense and be able to drive key product decisions based on market/customer signals as well as influence the entire go-to-market process. At the same time, they need sufficient technical aptitude in the domain to know how to guide an engineering team.
It is tempting to hire very technical PMs. In most cases, though, unless you are in a very specialized domain, you run the risk of hiring the profile of an engineering manager. A product generalist with experience working with cross-functional teams and having a point of view is probably more valuable at the early stage. That said, the PM will need to earn the trust of the engineering team as the lead in steering product direction, which is where technical aptitude will come in handy.
We recommend hiring someone with a wealth of PM experience from the get-go, rather than being economical and bringing on a low-level IC (individual contributor) and hoping that they’ll grow into it. While you may save money, you’ll also spend a lot of time managing that person and then get frustrated why the PM hasn’t created leverage for your company. Your first PM could join as Director of Product/Head of Product. This gives you some options as the founder: if the first hire can grow the product and build a team, they might grow into the role of VP of Product. If they can’t, a more senior individual might be brought in later to be VP and oversee the first PM hire and their team. You should be transparent with your first product hire about their potential career path at your company and success criteria. But whatever the case, the first PM should not be too junior.
The first PM is ideally a good complement to the go-to-market team (sales, marketing, etc.). If you have those functions in place, it is worthwhile to determine how the PM could add to their expertise and what a productive relationship could look like.
Setting you and your new PM up for success
If you are an early-stage company, the founder/CEO has been managing product for a while. It can be difficult for the CEO to trust the first PM and to delegate to them. Any company’s product is so near and dear to the core of the business that many founders believe that they must stay fully involved. This is especially true when you haven’t figured out the market beachhead. Our one-liner on this is: don’t micromanage. Give your new PM latitude to apply themselves in the role. Evaluate your PM based on outcomes, not outputs, and don’t always expect them to arrive at the same conclusions you would have. Sometimes, as the founder, you will have to override the PM – but don’t make a habit out of it, otherwise they will get frustrated and leave.
Because of how critical this hire is, you don’t have to jump right in. If you aren’t sure, bring on an experienced PM on a fractional basis with the view to cultivate a long-term relationship. The short-term fractional contract affords both of you the opportunity to evaluate if you would like to move forward, and what it would be like for you to delegate PM responsibilities. Just keep that fractional relationship short and sweet. You do need to quickly move a fractional relationship that is working well to full-time, so that the PM can build a lasting relationship with the team and customers – and so that you, as the founder, can concentrate on running the company and not making every product decision.
If you are a founder and would like to chat more on this topic, reach out to us!
Julian Dunn is an OVF Venture Partner. He supports company evaluation and portfolio success, especially as it relates to product and go-to market.
Alline Akintore is a Partner at OVF.