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Building and leading an early-stage sales team with Zoom CRO Ryan Azus
This year at Early Stage, TechCrunch spoke with Zoom Chief Revenue Officer (CRO) Ryan Azus about building an early-stage sales team. Azus is perhaps best known for leading the video-calling giant’s income arm during COVID-19, but his experience building RingCentral’s North American sales organization from the ground up made him the perfect guest to chat with about building an early-stage sales team.
We asked him about when founders should step aside from leading their startup’s sales org, how to build a working sales culture, hiring diversely, how to pick customer segments and how to build a playbook.
Below, TechCrunch has compiled a number of key comments from Azus, and afterward we’ve included the full video from the interview as well as a transcript. Let’s go!
When should founders let others run sales?
Nearly every startup leans on its CEO as its first salesperson. After all, who else knows the product and can talk it up like the startup’s leader? But having the CEO as point-person for sales scales poorly. So, when is the right time to have someone else step in?
Fairly early on. First off, CEOs need to solve customer needs. And so it’s important to be very hands-on for a while to really understand while you’re trying to figure out product-market fit. And then bringing in some of those sales people as you start seeing something [good].
Part of it is also knowing what type of salesperson you need. [ … ] Who is your core audience? What persona are you going after? And trying to find people that know and understand selling something that’s primarily very transactional to small businesses, [or] e-commerce lead, or selling something that’s more enterprise — those are different animals, different segments that you’re going after. One mistake [startups make] is hiring the wrong type of salesperson. (Time stamp: 5:29)
How much product-market fit is enough?
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CEO Manish Chandra and investor Navin Chaddha explain why Poshmark’s Series A deck sings
Mayfield partner Navin Chaddha and Poshmark founder and CEO Manish Chandra met all the way back in 2003, well before Poshmark was even a glimmer in his eye. They stayed connected over the years, through Chandra’s sale of his startup Kaboodle to Hearst and after he left.
At a breakfast one morning, Chandra told Chaddha he was going to try to do everything from his iPhone for the next six months.
Over the course of that time, the idea for Poshmark started to percolate into something more concrete. Chandra, following Kaboodle, knew he wanted to do several things differently. The first was create an engagement and revenue model that was symbiotic, rather than starting with engagement and having to build out a business model later. He also knew he wanted to start with people first, and build a founding team that had deep DNA in the fashion world to pair with his technical background.
He met Tracy Sun, brought her on, and got to work.
This was back in 2011, and Chandra was absolutely adamant that he wanted Poshmark to be an app, not a website. So adamant, in fact, that during beta he actually provided 100 users with video iPods. (He recalled that he only got 20% of them back.)
“Lead with love, and the money comes.” It’s one of the cornerstone values at Poshmark. The company practiced that early on by holding IRL, and then virtual, parties, allowing users to show each other their wares and create an engagement cycle that offered instant gratification. The user base grew from 100 to 150 to 1,000 and so on.
“We still to this day use a similar kind of strategy in a much more compressed timeframe as we go to different countries,” said Chandra. “We focus on building the community first and then scale that community.”
Chaddha and Mayfield led the company’s Series A deal a decade ago. On the latest episode of Extra Crunch Live, Chandra and Chaddha sat down with us and walked us through that original Series A pitch deck (which you can check out below). They also participated in the Pitch Deck Teardown, giving their expert feedback on decks submitted by the audience. If you’d like your deck to be featured on a future episode of Extra Crunch Live, hit up this link.
Poshmark’s Series A Deck
Time stamp — 11:00
Poshmark was built on a couple fundamental premises. The first was that the iPhone would transform the way we do just about everything. The second was more pointed: That fashion, at the time underserved by technology, was a discovery process over a direct search process. A decade ago, Chandra envisioned a fashion marketplace that mimicked shopping in the real world — walk into a shop and let natural attraction do its thing — without holding any inventory.
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How our SaaS startup improved net revenue retention by more than 30 points in two quarters
There’s certainly no shortage of SaaS performance metrics leaders focus on. While all SaaS companies do, and must, home in on acquisition metrics, there’s also massive revenue potential within your current customer base.
I think NRR (net revenue retention) is without question the most underrated metric out there. NRR is simply total revenue minus any revenue churn plus any revenue expansion from upgrades, cross-sells or upsells. The greater the NRR, the quicker companies can scale. Simply put: the power of compound math!
One of the biggest and most impactful changes we made was to move new business, retention and account management all under our chief revenue officer.
Over the course of two quarters, Terminus grew its NRR by more than 30 points, opening up incredible new levels of growth opportunities.
To boost our NRR for the better, I focused on three core pillars within our organization.
People
We took a holistic look at the organization and our org structure. One of the biggest and most impactful changes we made was to move new business, retention and account management all under our chief revenue officer. At the end of the day, it just makes a ton of sense to have acquisition and retention living under the same roof — why bother acquiring new customers if you can’t retain them?
We also rolled out a surround-sound team (around three or four people per customer) who onboard and help customers with their account from day one. In total, we have about a quarter of our company dedicated to this 24/7 support and hands-on guidance to ensure we’re enabling customers immediately.
Process
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Dear Sophie: When can I finally come to Silicon Valley?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m a startup founder looking to expand in the U.S. I was originally looking at opening an office in Silicon Valley to be close to software engineers and investors, but then … COVID-19 🙂
A lot has changed over the last year — can I still come?
— Hopeful in Hungary
Dear Hopeful:
How and where work is getting done in Silicon Valley (as well as in much of the world) shifted during the COVID-19 pandemic. That said, yes, it can still make business sense for many to join the Silicon Valley ecosystem.
According to a recent report from PitchBook, Silicon Valley will continue to be the center for VC investment and high-tech talent, even though several large tech companies relocated out of Silicon Valley and implemented full-time work-from-home policies — and many predicted that “the Bay Area tech scene as we know it would be lost, and VC would find a new home.”
Clearly, while the pandemic’s impact on the venture industry will be felt in years to come, VC will continue to be centered in Silicon Valley. In a recent episode of my podcast, I discussed work trends and how to use immigration to support company priorities as well as attract and retain talent in the United States.
The PitchBook report points out that Silicon Valley “has kept a tight hold on fundraising in the U.S., closing on commitments exceeding $151 billion over the past five years, more than the rest of the U.S. ecosystems combined. LPs have continued to funnel capital to area VCs because of the region’s track record of success, which includes 17 of the 22 U.S. companies to ever receive a private valuation of $10 billion or more.”
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
So while VCs will likely return to the old ways of networking and funding post-pandemic, we’ll see a hybrid of online and in-person meetings because there are so many benefits to in-person networking and exchanging ideas.
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Clubhouse UX teardown: A closer look at homepage curation, follow hooks and other features
Clubhouse, the social audio app that first took Silicon Valley by storm and is now gaining much wider appeal, is an interesting user experience case study.
Hockey-stick growth — 8 million global downloads as of last month, despite still being in a pre-launch, invite-only mode, according to App Annie — is something most startups would kill for. However, it also means that UX problems can only be addressed while in “full flight” — and that changes to the user experience will be felt at scale rather under the cover of a small, loyal and (usually) forgiving user base.
In our latest UX teardown, Built for Mars founder and UX expert Peter Ramsey and TechCrunch reporter Steve O’Hear discuss some of Clubhouse’s UX challenges as it continues to onboard new users at pace while striving to create enough stickiness to keep them active.
Homepage curation
Peter Ramsey: Content feeds are notoriously difficult to get right. Which posts should you see? How should you order them? How do you filter out the noise?
On Clubhouse, once you’ve scrolled past all the available rooms in your feed, you’re prompted to follow more people to see more rooms. In other words, Clubhouse is inadvertently describing how it decides what content you see, i.e., your homepage is a curated list of rooms based on people you follow.
Except there’s a problem: I don’t follow half the people who already appear in my feed.
Image Credits: Clubhouse
Steve O’Hear: I get it. This could be confusing, but why does it actually matter? Won’t people just continue to use the homepage regardless?
Peter: In the short term, yes. People will use the homepage in the same way they’d use Instagram’s search page (which is to just browse occasionally). But in the long term, this content needs to be consistently relevant or people will lose interest.
Steve: But Twitter has a search page that shows random content that I don’t control.
Peter: Yeah, but they also have a home feed that you do control. It’s fine to also have the more random “slot machine style” content feed — but you need the base layer.
The truth about aha moments
Peter: In the early days of Twitter, the team noticed something in their data: When people follow at least 30 others, they’re far more likely to stick around. This is often described as an “aha moment” — the moment that the utility of a product really clicks for the user.
This story has become startup folklore, and I’ve worked with many companies who take this message too literally, forgetting the nuance of what they really found: It’s not enough to just follow 30 random people — you need to follow 30 people who you genuinely care about.
Clubhouse has clearly adopted a similar methodology, by pre-selecting 50 people for you to follow while signing up.
Have you noticed that some people have accumulated millions of followers really quickly? It’s because the same people are almost always recommended — I tried creating accounts with polar opposite interests, and the same people were pre-selected almost every time.
At no point does it explain that following those 50 people will directly impact the content that is available to you, or that if your homepage gets uninteresting, you’ll need to unfollow these people individually.
But they should, and it could look more like this:
Steve: Why do you think Clubhouse does this? Laziness?
Peter: I think in the early days of Clubhouse they just wanted to maximize connections, and by always recommending the same people (Clubhouse’s founders and investors), they could somewhat control the content that is shown to new users.
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How to recruit data scientists without paying top dollar
When it comes to building a data science team, many companies fail at the first step — creating a job posting. These mistakes have been amplified in the age of COVID-19.
The increasing demand for AI and data science experts, driven in part by the pandemic’s economic impact, is showing no sign of abating. Many employers are failing to identify viable job candidates, much less interviewing or hiring them.
What’s the biggest obstacle holding them back? In our experience, it is often a poorly drafted job posting. And with the pandemic completely stopping all in-person recruiting events, hiring success hinges on an effective job rec. Previously tolerable mistakes are now fatal.
At The Data Incubator, a data science training and placement firm, we’ve helped hundreds of companies successfully hire data science teams. Honestly, it pains me to see amazing companies undersell themselves in this area.
When it comes to building a data science team, many companies fail at the first step — creating a job posting.
Companies inevitably gravitate toward the same generic buzzwords, promoting themselves as “cutting edge,” “creative,” “collaborative,” “data driven,” “passionate” or “insightful” (just peruse Indeed for examples of these lackluster postings). Or they delve into industry jargon, which may be lost on candidates who are not familiar with the industry.
To streamline the writing process, we recommend that clients break down their competitive advantage into three buckets: compensation, mission and tech. Only by understanding where their strength lies can they successfully market their job openings.
Compensation
Compensation is an important component of making a position competitive. Managers certainly need to fight to ensure their remuneration range is appropriate for their data science roles. However, budget constraints are difficult to overcome, especially given the ability of tech and finance to pay top dollar for these sought-after skills. How to combat this when you don’t have the same budget? Consider listing compensation in job ads.
If you’re one of (the majority of) employers who cannot afford to compete on salary, this will help job seekers understand what to expect. Neither you, nor a potential candidate, wants to spend hours interviewing just to discover that it would have never worked out because of compensation. Save yourself the time and frustration by listing remuneration upfront.
What if you are one of the few employers able to pay major-league salaries? Congratulations, but don’t throw away your hard-won budget! Companies develop reputations for compensation. Unless you are one of the select firms with a reputation for paying top dollar, you will need to signal that to top talent. Otherwise, strong candidates may assume the remuneration is low and not apply, defeating the purpose of paying a high salary in the first place.
Obviously, listing salaries is controversial and there are plenty of reasons why employers are weary of listing salary ranges. However, a recent survey by SHRM found that 70% of professionals want to hear about salary upfront and Glassdoor.com reports that salary is the No. 1 consideration for 67% of job seekers. With all these benefits, employers should seriously consider being more upfront and transparent about what they are able to pay, if only to save themselves time and frustration.
Mission
In the COVID-19 workplace, employees are finding themselves increasingly isolated. With work from home poised to stay even after the virus has dissipated, the risk of isolation will continue. Companies need to double down on articulating their mission and galvanizing employees around that. This doesn’t just start with employment but the very first step of the hiring process: the job posting. Emphasizing mission in the job posting will attract employees.
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Why ‘blaming the intern’ won’t save startups from cybersecurity liability
SolarWinds is back in hot water after a shareholder lawsuit accused the company of poor security practices, which they say allowed hackers to break into at least nine U.S. government agencies and hundreds of companies.
The lawsuit said SolarWinds used an easily guessable password “solarwinds123” on an update server, which was subsequently breached by hackers “likely Russian in origin.” SolarWinds chief executive Sudhakar Ramakrishna, speaking at a congressional hearing in March, blamed the weak password on an intern.
There are countless cases of companies bearing the brunt from breaches caused by vendors and contractors across the supply chain.
Experts are still trying to understand just how the hackers broke into SolarWinds servers. But the weak password does reveal wider issues about the company’s security practices — including how the easily guessable password was allowed to be set to begin with.
Even if the intern is held culpable, SolarWinds still faces what’s known as vicarious liability — and that can lead to hefty penalties.
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Extra Crunch roundup: Coupang and Roblox debut, driving GPT-3 adoption, startup how-tos, more
Extra Crunch publishes a variety of article types, but how-tos are my favorite category.
For many entrepreneurs, the startup they are trying to get off the ground might be only the second entry on their resume. As a result, they don’t have much experience to draw from when it comes to basics like hiring, fundraising and growth marketing.
Last week, Natasha Mascarenhas interviewed experts who had some strategic advice for finding the right time to bring a product manager on board. This afternoon, we published a guest post by growth marketer Jessica Li with tips for “how nontechnical talent can build relationships with deep tech companies.”
We’ve also received great feedback on a recent guest post about bootstrapping options for SaaS founders written by a founder who’s actually done it.
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
If you have some startup-related “how” and “why” questions, please browse our Extra Crunch How To stories. They’re aimed squarely at early-stage founders and workers trying to solve long-term problems.
Thanks very much for reading Extra Crunch this week! I hope you have a relaxing weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Welcome to Bloxburg, public investors
Image Credits: Steve Jennings / Getty Images
As Roblox began to trade Wednesday, the company’s shares shot above its reference price of $45 per share. Roblox, a gaming company aimed at children, has had a tumultuous if exciting path to the public markets.
Seeing Roblox trade so very far above its direct listing reference price and final private valuation appears to undercut the argument that this sort of debut can sort out pricing issues inherent in more traditional IPOs.
4 ways startups will drive GPT-3 adoption in 2021
Image Credits: Zastrozhnov (opens in a new window) / Getty Images
Trained on trillions of words, GPT-3 is a 175-billion parameter transformer model — the third of such models released by OpenAI.
GPT-3 is remarkable in its ability to generate human-like text and responses, able to return coherent and topical emails, tweets, trivia and much more. In 2021, this technology will power the launch of a thousand new startups and applications.
There have never been more $100M+ fintech rounds than right now
Image Credits: Nigel Sussman (opens in a new window)
We are in a period of all-time record investment for so-called mega-rounds, or investments of $100 million or more inside the fintech realm.
To date, Q1 2021 is ahead and is thus guaranteed to set a new record, having already bested the preceding all-time high. What’s going on?
Global-e files to go public as e-commerce startups enjoy a renaissance
Image Credits: Nigel Sussman (opens in a new window)
Global-e, an e-commerce platform that helps online sellers reach global consumers, filed to go public on Tuesday. Global-e’s business exploded amid the pandemic in 2020, and the company expects that the COVID-fueled shift to e-commerce will only lead to future growth.
Passive collaboration is essential to remote work’s long-term success
Image Credits: Alistair Berg (opens in a new window) / Getty Images
Have you ever popped into a meeting because you overheard a snippet of a conversation and wanted to share your perspective?
That’s passive collaboration — low-friction ways to invite new ideas. But it’s only when we’re able to fully realize passive collaboration virtually that we’ll have unlocked the full potential of remote and hybrid work situations.
Dear Sophie: What are the pros and cons of the H-1B, O-1A and EB-1A?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie:
I’m an entrepreneur who wants to expand my startup to the U.S. What are the benefits and drawbacks of various types of visas and green cards?
The ones I’ve heard the most about are the H-1B, O-1 and EB-1A.
— Intelligent in India
Proactive CEOs should prioritize European expansion
Image Credits: Sean Gladwell (opens in a new window) / Getty Images
Many investors will encourage CEOs to remain U.S.-centric this year and perhaps expand their product offering or move into new market segments. But 95% of the world’s population lives outside the U.S., making an expansion into Europe your best growth lever.
Coupang follows Roblox to a strong first day of trading
Image Credits: Bloomberg (opens in a new window)/ Getty Images
After Roblox debuted on Wednesday, Coupang followed, with shares shooting above the South Korean e-commerce giant’s IPO price range. Quick math shows Coupang is worth around $92 billion at the moment, a huge number that nearly zero companies will ever reach.
How and when to hire your first product manager
Image Credits: Francesco Carta Fotografo (opens in a new window) / Getty Images
Because product managers and founders often have overlapping skill sets, it can be tricky to find the right candidate.
While it’s different for every company, hiring a PM ensures companies aren’t “chasing the shiny object” but rather building the things that create enduring value for customers.
Deep Science: AI adventures in arts and letters
Image Credits: Alashi / Getty Images (Image has been modified)
AI isn’t confined to the tech sphere; machine learning is applicable across disciplines, from music and the “computational unfolding” of ancient letters to figuring out where EV charging stations need to be built.
A first look at Coursera’s S-1 filing
Image Credits: Bryce Durbin / TechCrunch
The SEC filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year.
It paints a picture of growth, albeit one that came at steep expense.
Olo’s IPO could value the company north of $3B as Toast waits in the wings
Image Credits: Nigel Sussman (opens in a new window)
Olo has a history of growth and profitability, making its impending pricing all the more interesting.
But are investors willing to pay more for profits? And, if so, how much?
From electric charging to supply chain management, InMotion Ventures preps Jaguar for a sustainable future
Image Credits: Andrew Ferraro — Handout/Jaguar Racing / Getty Images
InMotion’s investment in Circulor, a company that monitors supply chains from raw material inputs to finished outputs with an eye toward sustainable sourcing, shows the firm’s dedication to backing companies across the mobility space broadly.
White-label voice assistants will win the battle for podcast discovery
Image Credits: maxkabakov (opens in a new window) / Getty Images
Americans are bored, housebound and screened out, driving roughly 128 million Americans to use a voice assistant at least once a month.
This has created a golden opportunity for audio as consumers turn to podcasts, voice assistants and smart speakers.
Why I’m hitting pause on ARR-focused coverage
Image Credits: Nigel Sussman (opens in a new window)
One of the first recurring features Alex Wilhelm established at Extra Crunch was the “$100M ARR Club,” ongoing coverage of startups that have reached scale.
“Forget a $1 billion valuation — $100 million in annual recurring revenue is the cool kids’ club,” he wrote in December 2019. Since then, he expanded it to cover companies that attained $50M ARR.
The concept is a useful lens for studying the market. I can say this with confidence because it’s been widely copied by other tech news outlets. But this morning, Alex surprised me — he’s shelving the ARR Club, at least for now.
“In the end it became a pre-IPO list that was fun but not entirely educational, by my reckoning,” he told me. “The $50M ARR club evolution was supposed to help shake loose more interesting operational details, but just didn’t.”
Before putting the format on hiatus, Alex’s last ARR Club roundup looks at in-office display and kiosk startup AppSpace, data backup unicorn Druva, and Synack, which makes security software.
TC Early Stage: The premier how-to event for startup entrepreneurs and investors
From April 1-2, some of the most successful founders and VCs will explain how they build their businesses, raise money and manage their portfolios.
At TC Early Stage, we’ll cover topics like recruiting, sales, legal, PR, marketing and brand building. Each session includes ample time for audience questions and discussion.
Use discount code ECNEWSLETTER to take 20% off the cost of your TC Early Stage ticket!
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Does your VC have an investment thesis or a hypothesis?
Venture capitalists love to talk investment theses: on Twitter, Medium, Clubhouse, at conferences. And yet, when you take a closer look, theses are often meaningless and/or misleading.
OpenVC is a new, open-source initiative to collect and analyze all publicly available VC theses to help founders more efficiently find the right investors — and vice-versa. For the first time, we are sharing here our initial conclusions. We hope you’ll upload your own thesis to benchmark yourself. We’ve identified six common patterns of how VCs articulate their theses and some best practices in doing so.
Our analysis is based on two complementary datasets:
- 125 theses so far submitted by investors into the OpenVC database.
- 36 theses pulled directly from U.S. VC websites by David Teten and Sam Sabin, co-founder of Hireblue.
Our four primary conclusions:
- Public theses are often inconsistent with how firms actually deploy capital.
- VC theses are often so vague that they’re meaningless.
- We found seven categories of VC theses, plus an eighth: the non-thesis.
- Investment theses are just hypotheses; the portfolio shows how accurate the hypothesis was.
For the sake of simplicity, we will consider “investment thesis” and “investment criteria” as equivalent terms moving forward, although we argue that the thesis leads to the investment criteria. We summarize how they interrelate in the table below.
1. Public theses are often inconsistent with how firms actually deploy capital
A typical VC thesis: “We invest in tech startups in Europe at an early stage.” However, our experience shows that in many cases “Europe” means a handful of countries, for instance, France, U.K. and Germany; and “tech” means B2B SaaS/fintech or consumer apps.
Thirty-four VC firms in OpenVC call themselves “early stage.” Yet 30% of those don’t actually invest in pre-revenue startups. The phrase is quite ambiguous; we suggest quantifying check size so that your investment preference is clearer.
Almost every VC says that they invest in the “best” founders. However, according to PitchBook Data, since the beginning of 2016, companies with women founders have received only 4.4% of venture capital deals. Those companies have garnered only about 2% of all capital invested. This is despite the fact that the data show you’re better off investing in women.
This lack of transparency results in confused founders who chase the wrong investors. In turn, investors are overwhelmed with poorly qualified opportunities.
2. VC theses are often so vague that they’re meaningless
Christoph Janz from Point Nine Capital wrote on Twitter:
The modal VC thesis is: “We invest in great teams addressing large markets with disruptive solutions.” Who invests in lousy teams addressing tiny markets with outdated solutions? Theses also tend to use the same words across many firms, e.g., “daring” and “bold.”
In particular, in our second dataset, we found a disproportionate number of theses focused on “technical” companies (vaguely defined) and focused on companies attacking “problems of the future rather than the present,” in various permutations of that language.
| Top Visible Heuristics (in dataset of 36 U.S. VCs) | Occurrences |
| “Technical” companies (i.e., any mention of a focus on tech companies) | 26 |
| Local affinity or bias | 10 |
| Attack problems of the future rather than the present (or some variant) | 9 |
| Technical founders | 7 |
Why are the investment criteria so imprecise on the VC websites? We have three theories, in descending order of importance:
- Option value. Investors don’t want to be too restrictive and miss out on a deal. However, we’d argue that for most smaller managers who are not brand names, it’s better to be highly identified in your niche than being a generalist. Most limited partners we speak with agree.
- A desire to look “sexy” and politically correct as opposed to being honest. This is probably a major reason. For example, saying publicly, “We invest mostly in white/Asian men who went to Stanford like us” accurately describes numerous VCs, but doesn’t sound very politically correct.
- VCs are afraid to give out their secret sauce. We think this doesn’t make much sense; you can share your criteria without telling the whole logic behind them. Many top-tier VCs share detailed public theses.
3. We found seven categories of VC theses, plus an eighth: the non-thesis
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How and when to hire your first product manager
In the world of early-stage startups, job titles are often a formality. In reality, each employee may handle a dozen responsibilities outside their job description. The choose-your-own-adventure type of work style is part of the magic of startups and often why generalists thrive here.
However, as a company progresses and the team grows, there comes a time when a founder needs to carve out dedicated roles. Of these positions, product management might be one of the most elusive — and key — roles to fill.
Product management might be one of the most elusive — and key — roles to fill.
We spoke to startup founders and operators to get their thoughts about how and when they hired their first product manager. Some of the things we talked about were:
- Which traits to look for.
- Why it’s important to define the role before you look for your best fit.
- Whether your new hire needs to have a technical background.
- The best questions to ask in an interview.
- How to time your first hire and avoid overhiring.
Don’t hire for the CEO of a product
Let’s start by working backward. Product managers often graduate into a CEO role or leave a company to become a founder. Like founders, talented product managers have innate leadership skills and are able to effectively and clearly communicate. Similarly, both roles require a person who is a visionary when it comes to the product and execution.
David Blake was a product manager before he became a serial edtech founder who created Degreed, Learn In, and most recently, BookClub. He says that experience helped him launch the first prototype of Degreed and attract first clients.
“The must-have skill is the ability to put the team’s best wisdom in check and inform the product decisions with users and potential clients to inform what you are building,” he said. The person “must also be able to take the team’s mission and develop and sell that narrative to users and potential clients. That is how you blaze a new trail, balance risk, while avoiding building a ‘faster horse.”
The overlapping synergies between PMs and founders is part of the reason why the role is so confusing to define and hire for. Ken Norton, former director of product at Figma who recently left to solo advise and coach product managers, says companies can start by defining what PMs are not: The CEO of the product.
“It’s about not handing off the product responsibilities to somebody,” he said. “You want the founder and the CEO to continue to be the evangelist and visionary.” Instead, the role is more about day to day “blocking and tackling.” Norton wrote a piece more than 15 years ago about how to hire a product manager, and it’s still an essential read for anyone interested in the field.
Define the role and set your expectations
Product managers help translate all the jugglers within a startup to each other; connecting the engineer with marketing, design with business development and sales with all the above. The role at its core is hard to define, but at the same time is the necessary plumbing for any startup that wants to be high-growth and ambitious.
While a successful product manager is a strong generalist, they have to have the ability to understand and humanize technical processes. The best candidates, then, have some sort of technical experience as an engineer or otherwise.
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