4 reasons why titles matter in startups

So you have just been offered a product management job in a startup, but the job offer does not mention any specific title. Should you bring up the title in your offer negotiations? I say Absolutely. In startups everyone is expected to wear multiple hats, but titles still matter for the following reasons:job title

  1. Equity offered is directly proportional to your title: Startups have what is known as a capitalization or a cap table. In its most simplified form, you can think of it as a two-column table – first column lists the titles in each row and the second column lists the % of ownership each title is given. Founders get the most equity, a hired CEO gets the next big chunk, VPs get more than Directors, Directors more than Managers and then at the bottom are those who are individual contributors. So your title determines what you get. Of course, there may be exceptions especially for the first few employees, but the cap tables are a general rule of thumb when it comes to equity grants. Note that I specifically used % of ownership as opposed to number of shares (this is another pitfall you should avoid). The number of shares mean nothing other than possibly stoking your ego. Being granted 50,000 shares may make you feel good, but if the outstanding shares are 100 million, you have just 0.05% of the company. This means if the company gets sold for $100M dollars 5 years after you join, the maximum you will ever get in exchange for your 5-year sweat equity is $50,000 (and even this is not a given and it depends on the terms at which money was raised from investors). Instead if you had 1,000 shares in a company that has 100,000 shares, you own 1% of the company. If it now gets sold for the same $100M, you could get a sweet $1M.
  2. Current title typically determines where you go next: Very few startups succeed, actually only a minuscule of them. You may have a fancy title of “The Cool dude” in the company that says titles do not matter and one that touts great culture. Even if you were responsible for all of product management, it could hurt you in the future. Future employers will not know what “The Cool Dude did” or may not even believe what you did. I would any day choose a title of Director of Product Management or VP of Product because it sets you up for your next stepping stone. Note, the founders of a company will make sure that they have the title of “Co-founder” in their titles for a good reason – it demonstrates their entrepreneurship and risk taking abilities. So I don’t buy when I hear startups say “we are not big on titles here”. Don’t get me wrong, I have always done what is needed to get the job done independent of what my title states, but that does not mean that the title is not important.
  3. HR cares about titles: If your startup gets acquired and if the acquirer decides to eliminate positions, severance payouts are usually based on your position in the hierarchy. I have seen execs walk away with a much bigger pot of gold than individual contributors have. Even if you are not let go, your compensation structure (bonus, stock options etc.) in the new bigger company will be dependent on the title you held in the smaller acquired company.
  4. Titles matter when speaking to customers: “The Cool dude” on your business card is not going to help you much if you are trying to close a deal for your sales team or if you are trying to meet with an executive of prospective clients. Titles like Director of Product or VP of Product Management likely will. Customers want to spend time with whom they perceive has decision making authority and not with “The cool dude”.

Just my opinion. What’s your take?

 

Effectively managing your communication with your manager

In the past 4 years, I have had 5 different managers – CEO, CTO, CMO and 2 VPs of Product. By the time I had got adjusted to the style of my manager and established a working relationship, I had a new boss. This constant change has made me come up with a way that ensures my communications with my manager is effective especially given the different roles they have held. There are three elements I have proactively established with each one of them to ensure no surprises

  1. Depth of communication
  2. Channel of communication
  3. Frequency

Depth of communication – given their different roles, I find out upfront how much detail they want to know on the progress I was making or problems I am encountering. Do they just want to know “release is on track” or do they want to know the the status of each of the features in the release including which ones have been completed, in dev or in testing? Establishing this upfront helps alignment of expectations and prevents surprises later.

Channel of communication – now that the content depth has been established, I then establish how my manager wants this to be communicated. Do they want it by email? Skype? Some managers would like to get a status update the night before my 1:1 and others have requested an update during the 1:1.

Frequency – this is where I have made sure my manager knew about my style of communication and was aligned with me. I classify problems into three categories and communicate it accordingly:

  1. “House is on fire” issues – these are serious issues that need to be escalated as soon as possible, issues that need to be handled above my pay grade. These are rare but when they happen, I will chase down my manager to communicate the issue face to face or give them a call.
  2. Important but not urgent – If it cannot wait till my next 1:1, I send it to them via their preferred communication channel (typically email) so that they are in the know and can provide me a decision or guidance I am looking for.
  3. Normal, “run the business” issues – I keep a running list of things I want to talk to my manager about during the next 1:1. If I feel that some of these issues require some thinking from their end, then I send it to them before hand and label them as “talking points” for my 1:1.

I have had great success using the above techniques, so hopefully you will find it helpful as well. Thoughts? Other techniques you have used that work well?

Communicating when “fires” break out – “We are on it”

As software product managers, we often deal with cross-functional issues from time to time such as projects that fall behind schedule and now risk making a release, creative designs not ready for implementation, serious production issues that require immediate swats to be released etc. When such problems crop up, keeping your cross-functional team including your management team updated with the latest information is of paramount important. You can take two approaches to communication when such “fires” arise:

  1. Try to gather as much information as possible before you communicate so that you can include all the details of the problem and how you are going to fix it or
  2. Communicate immediately acknowledging there is a problem without revealing the seriousness of the problem and details of how you are going to fix it.

When substantial time is needed to gather data to understand the impact and quantify the size of the problem, I always prefer the latter. In an emergency, it is important to acknowledge that you are aware of the problem and to communicate the message “we are on top of it”. This way everyone (especially your senior management) know about the problem and can rest assured that folks are actively looking into it. Then, once you have gathered more information follow up with the details, options to fix the problem and the recommended solution. Instead, if you wait until you have all the information and good amount of time goes by, someone is going to find out, things get miscommunicated and you could spend more time trying to set things right.

Relate this to when tragedies strike – there is always a “first responder” team that appears on the scene immediately. Their job is to arrive first at the scene and take charge of the scene and start the data gathering process. As a product manager, you should be your team’s leader and part of the first responder team. On-time communication with the whole team is one way to gain respect and make you the go-to-person on your team.

Thoughts? Your experiences?

Posts you may also like:

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3 sources for competitive analysis

 

Book Review: Cracking the Product Management Interview

If you are a product manager thinking about your next career move or someone looking to move into product management, this is THE book you should read and have as your reference.  I have been doing product management for many years and I found the book so resourceful. Gayle Laakmann McDowell and Jackie Bavaro have done a great job covering everything from the definition of a product manager role (remember that different companies have different definitions of what we do), how to transition from a non-PM role to a PM role, how to write a cover letter and resume that gets looked at to potential questions (behavioral, case studies, analytical problem solving) that you could be asked in a PM interview. They have interviewed product managers in companies such as Google, Twitter, Airbnb and Microsoft asking them about their day-day to activities and also senior Product Leaders as to how they have managed their careers.cracking the pm interview

It is written so well that it is a very easy read. The chapter I loved the most in the book was the one on “Estimation questions” where different examples such as “how many tennis balls can fit into an apartment” are worked out. The only chapter I have not read in the book is the one on “Coding questions”. This is only because I believe that Product Manager’s focus should be on the “Which” and “What” and not the “How”. It is our job to discover the customer problems, figure out “which” market problems are worth solving and “what” the solutions should look like from a User experience perspective. It is engineering’s job to figure out “how” they are going to develop the identified solution. But the chapter does not take anything away from the book.

I am confident that this book can end up to one of the best investments you could make if you are thinking about switching or finding a PM job. I strongly recommend it.

Here is a link to the book on Amazon: Cracking the PM Interview: How to Land a Product Manager Job in Technology

How do I become a product manager?

This is the most frequent question I get from readers of this blog. Folks who currently are developers, QA engineers, sales professionals, customer support specialists have all asked me this question. I have written how you could start making the move to product management.

But here is a course that is now available from udemy. It is a 33-Video Lecture Course called, “Skillsets to Shift Your Career to Product Management,” is intended for beginning technology entrepreneurs, and for technology professionals with no background in marketing and product management. The course is narrated by Raj Karamchedu, a Silicon Valley technology business executive with over 19 years of experience in the markets of wireless, mobile, semiconductors, software and hardware. He is currently a co-founder of a boootstrapped Silicon Valley-based startup. Previously he was at Legend Silicon (an Intel Capital-funded fabless startup) with two hats, Vice president of Product Management and Chief Operating Officer.

To get more information on the course and to get the 77% discount (offered to readers of this blog), click on the link below.

https://www.udemy.com/productmanagement/?couponCode=gopahshenoy

Product Manager Interview – 7 Cardinal Sins

So you have landed an interview for a software product manager position. You are excited! You show up for the interview and the interview is a bust. You do not get the job. Causes? Having interviewed many product managers, who looked very promising on the resume and ended up being disappointing during the interview, I have compiled the patterns I have seen as “7 Cardinal Sins”. This can also be considered as general tips for any position that you are interviewing for.

  1. You hardly know anything about the company – I have had at least two instances where the candidate told me that s/he was hoping that I would explain what we do, our business model etc during the phone screen. Surprised? Think it is not possible? I was too until I heard this. Good thing this happened on a phone screen.
  2. You do not know the job description/responsibilities in and out – If you don’t know the job description, why did you even apply? How did you figure out that your skills match what the company is looking for? The way a hiring manager can figure this out is by asking the question – “Why do you want to work for us?” or “Why should we hire you?” – These questions should be slam dunk for you if you are prepared, you can show case how much you know about the company, what you bring to the table that relates to the job description and your past successes and accomplishments that are relevant to the job. I have heard lame answers such as “Recruiter called me about this job and hence submitted my resume” or “You guys called me and wanted to talk to me.” Come on, while that may be true, you need to still do a sales job – you need to sell the product you have – “YOU”!Cardinal-Sin
  3. You do not have an elevator pitch – Same as the above, but if the interviewer asks the question – tell me about yourself, try to hit the ball out of the park. Relate your experiences that are relevant to the job. Sell, sell, sell! Your elevator pitch should be 2-3 min max. Give an overview that piques the interest of the interviewer that they want to know more.
  4. You don’t know anything about the people you are going to interview you – You need to ask for the interview schedule before you get there. Then do the research – where have these folks worked at? Use LinkedIn. Do you and them have common connections? What questions can you anticipate given their background?
  5. You do not have questions for the interviewers – when asked if you have any questions, you say No. It is quite possible that towards the tail end of an interview schedule that your questions may have been answered. But instead of a terse No, mention that you had many questions about X, Y and Z that you have asked the previous interviewers. Give everyone a window into your preparation. Ask questions that gives you a deeper understanding of the problems that they are looking to solve by making this hire, the organizational structure, decision making process etc. Ask the same question to multiple people and see if you get a consistent answer.
  6. You have not anticipated questions or prepped for the interview – Research sites such as glassdoor.com to see what questions get asked in interviews at the company. Ask your contact what a typical interview looks like? Do they have a problem solving round where you are asked to solve a given problem? Practice doing a problem solving round before hand to get your thoughts together. It is hard to think on your feet when you are under pressure at the interview. So play through such a session before hand so that you can come up with a strategy of tackling it in the real session.
  7. You lie on the resume – Believe it or not, this happens. If you get caught, not only will you not get the job but your reputation and integrity will be tarnished. In the world we live in, word travels fast. The tech world is highly networked, so don’t take a risk. I had one instance where a product manager claimed that he came up with a pricing strategy – when I asked him to explain it, I was told that he put it on the resume just to make it look well rounded. He admitted that he does not have experience with pricing. End of the interview, right there and then! I am not going to hire you as a PM and put you in front of customers if I cannot trust you. Never, ever lie on your resume.

Image: Courtesy of smallbusiness.yahoo.com

Competitive Analysis: 5 reasons why Apple in-store iphone trade-in program should not impact Gazelle.com

Apple recently announced its iphone trade-in program whereby consumers can walk into an Apple store and trade-in their old phones and walk out with a new phone. While minimal details are still available on the program, as a product manager, I was left to wonder if this program constitutes a threat for established trade-in programs such as Gazelle? Full disclosure: I was the Director of Product Management at Gazelle 2 years back and am an employee  investor in Gazelle. But I have not been asked by anyone at Gazelle to write this post and it represents a product manager’s opinion on a competitive threat from a company with deep pockets.

Here are the five reasons why I think Apple in-store trade-in program should not impact Gazelle.com

  1. Inconvenience: Apple’s new program is only available via its retail stores.There are only ~250 stores in the US. Only 20% of iPhone sales happen in their stores. 80% happens via carriers, online sales and retailers such as Best Buy, Walmart etc. (Source: TUAW). 250 stores does not represent great coverage for US customers of iphones. For example, the nearest Apple store to me is 22 miles away. I have always bought my iphones via the Apple website because I am not driving that far and standing in line. Every time I have visited the store during the early days of a new iPhone, the store has been sold out of the new phone.
  2. Price paid: All news articles point to a trade-in price of upto $250-280 for an iphone 5 16GB (AT&T) in excellent condition. Gazelle at the time of writing this post pays $330 for the same phone. That is an extra $50-100 in your pocket if you lock in the price today with Gazelle.
  3. Can only trade-in an iPhone for an iPhone: Among the people switching brands, Apple took in three times more customers from Samsung (33%) than Samsung took away from Apple (11%). (Source: cnnmoney.com). Apple’s trade-in program does not help these Samsung customers, while Gazelle is a viable choice because they accept Samsung trade-ins.
  4. Have to buy a new iphone: Apple’s trade-in program works only if you want to purchase a new iphone. You cannot get a store credit or walk away with the cash. No such restrictions at Gazelle. So if you have already switched to other popular phones such as Samsung Galaxy 4, you are out of luck. While this may seem to be a weak argument because of the strong loyalty of iphone customers, it is a factor you cannot discount.11% of users who switched to Samsung Galaxy were prior iPhone users.
  5. Not sure if Apple is serious about the trade-in program: I am not convinced that Apple is serious about this program. This is the second avatar of a trade-in program being launched by Apple. There has always been an online program that they have had, but not something they have promoted. While I am a huge Apple fan for the products it creates, I have never been a fan of its customer service in its retail stores. My previous post of How Apple sucks at customer service is the post with highest comments and 6 years later still gets comments from pissed off customers. How much marketing muscle Apple will put against this program remains to be seen. In the mean time, iPhone trade-in programs are the lifeblood of sites such as Gazelle. It is what they do day-in and day-out. Having worked at Gazelle, I know how much effort it puts into the customer experience. Reviews from real customers are testimonials for the great experience provided by Gazelle.

Now will Apple’s trade-in program help Gazelle – absolutely. Electronic trade-in programs are still in its infancy. My best guess is that the number of iPhones traded in are probably about 5-10 million per year. Compare this to 86 million iPhones sold in the US as of 2012 Q2 (2012 is not a typo – could not find the figures for 2013). That means just 10% of the phones are being traded-in. Apple’s foray into the trade-in program is only going to increase the awareness and Gazelle stands to gain by increasing its market share.

What do you think? Do you agree or am I missing the boat? Or is it too early to tell?

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