Launching a Product Function – Hiring the Right Head of Product ManagementBy: Shannon Bauman | September 27, 2023
Bootstrapping your software company to achieve product-market fit is hard. It gets even more difficult as you scale and need to start focusing on all the other aspects of the business such as building a great team, supporting your growing customer base and creating a long-term vision for the company.
When Mainsail first starts working with a bootstrapped software company, we often come across CEOs/founders who are running the product function as well as the business. These leaders are wearing too many hats and at some point, the CEO gets spread too thinly and the product execution suffers.
This is a critical juncture in the journey of any growing company, and we believe launching the product function correctly is essential to a strong future for the business.
At Mainsail, we’ve helped many CEOs and founders at bootstrapped SaaS companies grow their businesses. An important initial step in that journey is building out the product function by hiring a product team and — at the head — a product leader.
Here are our observations to help CEOs build a product team during the critical phase of growth.
What to look for when hiring an experienced Head of Product
The head of your product team should first and foremost be an experienced Product Manager (PM). Too often, we see first-time PMs (often coming from support or engineering) as the sole PM in a new product team. While bringing in strong employees from other functions is a great strategy for growing a team, companies at a growth stage need someone with experience at the helm so others can learn the skills of the trade.
Keep in mind that this core product expert doesn’t need to be a Subject Matter Expert (SME), but they should be familiar with your business model (e.g., B2B enterprise, B2B SMB or B2C) and willing and able to learn the nuances of the market quickly. In addition, you need someone who is willing to be a player-coach, not someone who is looking to hire a team below them.
Look for these key attributes in your first product leader:
- Entrepreneurial spirit: They can make anything happen without needing other people to do it for them.
- Bridge-builder: While “making it happen” they can inspire others rather than bulldoze them.
- Customer and user focused: A passion for talking to customers and users, and being empathetic to their needs.
- Technical: A passion for making great products and great product experiences.
- Business-minded: A thorough understanding of how to run a product team AND a business. They should understand core SaaS metrics like ARR, NRR, churn, cohort analyses and be able to perform market analyses, understand GTM strategies, and speak the GTM language.
- Connector: An expert at communicating with any group. This is often an overlooked trait. Beware: if you are a CEO interviewing a PM and they are speaking jargon that you don’t understand, this is a bad sign. A good PM can put themselves in the shoes of users, engineers, executives, board members and others — and speak their language.
- Brains: No getting around it — they need to be smart.
- Culture: A good cultural add for your company.
Finding good candidates to lead the product function
Start with your network and the network of your team members. Tap your employees to see if there are great product folks they have worked with; reach out to people at industry events; post on PM boards; and engage with recruiters who specialize in product and engineering hires.
An ideal product leader will already understand your business by the time you interview them. They will have researched your website and maybe even played around with your product, so it is fair game to ask what they think about your product and what ideas they have.
In addition, ask them about their ability to execute (get product pushed out the door), their people management experience, their experience creating vision and roadmaps, how often they talk to customers, their standard KPIs, and even the software products that they love.
Two of our favorite resources for good product leadership interview questions are:
It has become standard to assign candidates homework assignments after the first few steps in the interview process. The assignment should include tasks like ideating solutions, roadmapping, prioritizing and communicating. Ideally, the candidate will present solutions, speak about their processes, and use real-world examples in their assignment.
Finally, have the candidates interview across the org, specifically with Engineering, GTM, Design and the CEO.
Assessing the hire after you hire them
Product leaders can be harder for a CEO to assess than some of the other common GTM roles, as the KPIs can be less obvious.
Consider these important metrics when evaluating performance:
- NPS, especially the trend line: is it going up, staying neutral or going down?
- GTM metrics such as ARR, funnel metrics, etc.: is the product helping to close deals?
- Churn, which correlates to NPS: are people leaving your solution?
- ACV/NRR: is the product team able to build more solutions that result in more revenue per customer over time?
- Qualitative feedback from other departments: the product team should be building bridges. How are other teams feeling about the communication from the product team and the product quality itself?
When to expand on your product team
It’s wise for product teams to hire in lockstep with engineering, with roughly 1 PM for every 4-8 engineers. Your first hire, even if their title is “VP of Product,” should “own a team” – meaning, they should be the PM actively working with a specific team of engineers.
After a few PM hires, this leader can hand off all ownership to other PMs and shift into being a people manager.
Creating a successful team starts from the top
We believe building a product team with strong leadership is key to the long-term health of a company. PMs are the tip of the spear for building out a great product that differentiates you from competitors which creates satisfied customers who return every year and refer you to more business.
The product function will also allocate the engineering team’s time and project priorities, which can be one of the largest cost centers of the company, so ensuring the product team is building the right functionality can save millions of dollars over the long term. We suggest building out a skilled team with a strong leader from the start and save yourself and the organization costs down the road.
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