I have noticed that people perceive the value engineers and product designers bring to the product very easily. However, when it comes to product managers there are certain confusions. The main reason behind this problem is that the work done by engineers and product designers is more noticeable than that of product managers. Engineers can deploy new features on a daily basis, making the functional changes in the software very perceptible. Product designers can make an entirely new design revision, creating new interactive and visual components that are quickly spotted by stakeholders.

The value a product manager provides can be noticed in months, and in some cases, in years. The amazing new solution you are discovering or delivering right now may affect the company’s revenue several months later. For instance, if you build something amazing right now, it may take six months for the company to notice the value that feature has brought to the company. However, this might be different in a startup environment since the team is small enough to detect minuscule changes happening to the product. However, the lack of immediate recognition is an ongoing issue for product managers in emerging and enterprise-level companies.

Seeing that sometimes the great work done by a product manager in a technology company is not easily seen, a common question might arise - what does the product manager bring to the table? Marty Cagan provides an answer to this question in his amazing book called “Inspired: How to Create Tech Products Customers Love.” Marty provides four essential value propositions product managers give to the product team and the company: deep knowledge of the customer, deep knowledge of the data, deep knowledge of the business, and deep knowledge of the market and industry.

Learning those valuable instructions from Marty, I decided to elaborate more on those aspects and provide handy techniques on how product managers can gain expertise in these domains. And since many industries are becoming competitive, I have decided to split the expertise of the market and the expertise of the industry into two separate domains.

I will provide a general overview of each domain and checklists of questions that will help you to test whether you have enough expertise in those areas or not. Note that mastery in those disciplines takes time and commitment. Your knowledge will develop throughout your entire time as a product manager and there is no finish line as there is always something new to learn.

Expert Of The Customer

In sales, marketing, and various other disciplines, the term customer is utilized to represent the recipient of your product - someone who obtains the technology solution from your company for money or some other form of partnership. A customer could be an individual consumer who pays for using your image editing application or a software vendor who pays for your enterprise-level communication tool.

Another common term used in product management is end-user: the person who is intended to be the actual user of your product. For example, a company can become a Slack customer, and its employees will be Slack’s end-users. I generalized the term customer to indicate both individual consumers, vendors, and end-users.

People who frequently interact with your product have developed certain expectations from it. Some may not be easily satisfied, and if their needs are not met, they can easily become frustrated. But they are the most important stakeholders of the product and the driving force of your business. No customers, no business.

It doesn’t matter how sophisticated your software is or how beautiful your visual design is if a customer who uses your product finds it pointless or inadequate.

As a product team, you are here to build for your customers. It is really important to know who your customers are and what are their needs and desires. As a product manager, you should consistently learn about their problems, behaviors, as well as their current and future expectations. You need to be able to efficiently segment your customers based on various aspects such as specific pains, demographics or firmographics, interests, and activity. To become an expert of your customer, you will need to gather both qualitative and quantitative data.

A common term that explains your customer is the customer persona, which is an imaginary archetype of a person or business who represents the key characteristics of your target audience. You will need to learn how to efficiently define and frame your customer persona, revealing who is the actual buyer and/or user of your product. Once you gain enough knowledge about your customer base, you will be able to answer the following questions for each customer segment:

• Who is your customer?
• What are your customer demographics?
• What are your customer firmographics? (in case your customer is a business)
• What is your customer psychographics?
• What are your customer’s primary pain points?
• How does your customer solve their current problems?

In case you already have a product or a prototype of that product:

• What does your customer expect from your solution?
• How does the customer interact with your solution?
• How often does the customer interact with your solution?
• How does the customer feel about using your solution?

In case there are competitor solutions in the market:

• How does the customer interact with your competitors’ solutions?
• How often does the customer interact with your competitors’ solutions?
• How does the customer feel about using your competitors’ solutions?

Oftentimes product managers are not the end-users of their products. Knowing your customer will allow you to put yourself in their shoes. Understanding their problems and current needs as well as they do will give you valuable insights into whether your solution is satisfactory enough for them or not. Empathizing with their pain points and desires will also enable you to find opportunities to deliver new and improved value propositions.

Expert Of The Market

The market is the place where the buyer (customer) meets with the producer (seller, business) of the product. Markets evolved since the early stages of human history when there was a demand for a specific good from the customer side and supply to that demand from the seller’s side. There are mature markets such as grocery goods, which have existed since the archaic era.

The market is two-directional, meaning there should be a demand and supply for it to be created and sustained. The demand occurs because of the customer’s need. There might be different solutions that satisfy that need, but the market is not tied to a specific one. The customer chooses the solution that best suits their needs. Once the demand disappears, there is no market for that product anymore. If there is a huge demand, but not enough suppliers, new players will eventually appear in the market. However, if there is still a huge demand, but it’s hard to create satisfactory solutions, the market may struggle to exist.

The solution can also create an entirely new market. For instance, a home accessory is a market for indoor furnishings and layout. Before the creation of the first home accessory, there was no market like that. The formation of the market occurred once people started to create the first home accessories to make their interiors more attractive. Throughout time various companies started to produce home accessories due to the growing demand from the customers.

Understanding your market well enough is one of the most effective ways of winning the competition. Revealing the untapped market needs and comprehending the market trends will allow you to jump to the front of the race and provide your customers with products and services that satisfy their needs better than your competitors. To make sure you have enough knowledge about your target market, you can use the following questions like a checklist:

• What is your market?
• What are your market needs?
• How big is your market (TAM, SAM, SOM)?
• How fast is your market growing?
• What are the needs in your market that are not adequately satisfied?
• What are the needs in your market that are already satisfied?
• Where is your market going?
• What are the most common trends in your market?
• How relevant is your offering to your market?
• How demanding the market is in terms of your solution?

Note that mature markets can be disrupted by new technological discoveries. Enabling technologies such as artificial intelligence and blockchain can create new opportunities for existing markets. Being the expert of your market will allow you to not only understand what to build for your customers but also how to utilize new technological advancements to deliver better experiences to them.

Expert Of The Business

Businesses care about traction. Your company builds a product for its customers aiming to generate good enough revenue to continue its growth and prosperity. This is why companies charge their customers a high enough price to make it reasonable to run their businesses. Note that the low-price approach is not a good long-term strategy, and pricing your products insanely high might discourage customers from purchasing it.

The way your business makes money might seem pretty straightforward and simple; however, in some cases, it might not seem to be the most efficient way to generate revenue. There might be alternative business models that will suit your company better and provide more appealing offers to your customer base. Maybe a business model that works with an annual license plan might yield better results with a monthly subscription plan. Even in a well-functioning business model, some small tweaks might increase your revenue.

Your business might depend on various key partnerships as well. Maybe you are a platform company, and you are relying on data provided by third-party services. This type of partnership might be crucial for your business, and you might need to understand the details and requirements of that partnership to cooperate effectively with those third-party providers.

Understanding your business also means understanding the operating psychology of your company. This means comprehending who your major stakeholders are and how they contribute to the success of your business. Your stakeholders are your customers, C-level staff, mid-management, and even non-managerial roles from other departments. Understanding their needs, concerns, and vision of your business, product, and strategy will allow you to assess their expectations of your product. Doing this will allow you to be sure that your product strategy is aligned with their goals and desires.

Disregarding those people and their opinions might affect the future of your product negatively. Imagine delivering a new solution or developing a new product strategy and then figuring out that the sales and marketing departments had different strategies and goals regarding the sales and marketing of your product.

You should be very careful with legal issues as well. Product managers should consistently cooperate with legal professionals to make sure that their product doesn’t violate any legal requirements. Disregarding this might yield terrible outcomes. In 2019, the Federal Trade Commission and the New York Attorney General fined Youtube $170 million over the allegations that the video-sharing service illegally solicited personal information from children without their parents’ consent.

Understanding your business is not as easy as it seems. Learning the way your company makes money, knowing the needs and expectations of your key stakeholders, and finding and tackling possible business risks of your product takes time and dedication. Once you become an expert of this domain you will be able to answer the following questions:

• What is your company doing?
• What is your business model?
• Is this the most efficient way of generating revenue?
• What are the dependencies your business has in terms of other companies, industries, and markets?
• What are the key partnerships for your business?
• What are the needs and requirements of those partnerships?
• Who are the key stakeholders?
• What are the needs, desires, and expectations of those stakeholders?
• How well is your product strategy aligned to the strategy and goals of other organizations and stakeholders?
• How do your stakeholders feel about your product strategy?
• What are the possible legal risks associated with your product?
• What are the potential financial risks associated with your product?
• What are the potential operational risks associated with your product?

Becoming an expert in your business will allow you to gain the trust of your stakeholders when it comes to designing a product strategy and taking full control of your product. To obtain people’s beliefs, you have to demonstrate your competence and knowledge in this domain, and once you achieve this, you will have the freedom to innovate.

Expert Of The Industry

Some people get confused between the concepts of market and industry. While the concept of the industry is strongly associated with the idea of the market, it is worth analyzing them separately; while remembering the two concepts are woven together. The industry is one or a group of vendors that produce the same product for the same market. We say that the industry exists if at least one company produces some kind of product.

The presence of supply and demand is a prerequisite for the industry to function. The major difference between the market and the industry is that the market mostly shows the demand side, whereas the industry shows the supply side. If there is no market for the specific product, then there is no industry as well. When discussing the industry, product people usually gather and analyze the top producers of that industry.

Industries can be either competitive, somewhat competitive, or non-existing. The definition of competitiveness varies per industry as it is proportional to the size of its market. In some cases, having ten companies might already mean that the industry is competitive enough, and in other cases, it might indicate that it is somewhat competitive. There can be non-existing industries as well - market spaces that are currently unknown. There is a common term that differentiates non-existing industries from competitive ones - the blue oceans and the red oceans.

Red oceans are often referred to as mature industries with a lot of players in the market. A common characteristic of a red ocean is that there are large companies that are ready to destroy you in order to keep their market share. In other words, the red ocean is full of sharks (large companies), and hence the term. This ocean is all about competition, and customers are the ones who benefit a lot from it. The more crowded the ocean gets, the more intense the competition becomes, therefore declining the potential chances of success for new companies entering the game.

However, the competitiveness of the industry should not be a discouraging factor for a new player who wants to enter the market. If the company is confident enough that its unique value propositions solve untapped and strong customer pain exceptionally well with low chances of replication by sharks, then that player has solid possibilities of winning a good market share. This is not to discourage you, but to warn you regarding the fierce competition.

Blue oceans, on the other hand, are the unrevealed market opportunities - potentially big industries that are untouched yet with pretty much no competition. This brings a lot of promising opportunities for viral growth and huge success. Blue oceans are the industries that create demand. For instance, before the distribution of first home accessories, there was pretty much no market for that.

Becoming an expert in your industry allows you to objectively assess the strengths and weaknesses of your competitors, as well as determine how competitive your product is compared to its alternative solutions. Later, I will introduce techniques for evaluating your industry, its players, and their pros and cons over your products and services. Once you become an expert in your industry, you will be able to answer the following questions:

• What is your industry?
• How competitive is your industry?
• How monopolistic is your industry?
• Who are the big players in your industry?
• What is your current position in your industry?
• What are the main strengths of the big players in your industry?
• What are the main weaknesses of the big players in your industry?
• Where are these big players trying to go and what are they trying to achieve?
• What are the differentiating factors between big players and mediocre players?
• What are the differentiating factors between big players and your company/product?

Once you gain enough knowledge about your industry, you will be able to predict what are the upcoming industry trends, as well as the product and business strategy of your competitors. Knowing the weaknesses of your competitors will allow you to assess new product opportunities and innovate toward growth. Knowing their strengths will allow you to understand what are the must-have requirements for your product to keep its competitiveness in your domain.

Expert Of The Data

There was a time when businesses were managed through gut feelings. People who considered themselves successful entrepreneurs often praised their business intuition. The reality is that those times have passed. Having business intuition is very important; however, in the current competitive landscape, it may not be enough. In the modern era, it is nearly impossible to imagine running a technology company without having proper data regarding the performance of the business.

Data became the oil of the 21st century since it can provide so many insights about your customers that can tremendously robust your product thinking. Hence, the concept of big data has emerged throughout time. Companies are consistently collecting and analyzing tens, hundreds, and thousands of terabytes of data about their customers, their acquisition, engagement, and retention rates to learn insights that are hard to notice for the human eye. In 2010 only, Walmart was handling more than 1 million customer transactions every hour, containing more than 2.5 petabytes of data inside their databases.

As a technology product manager, one of the daily routines of your life will be working closely with your data. The more connected you are to your data, the more chances you have to gain valuable findings for your product and company. Data can provide you with powerful insights into why and how your customers are using your product. For instance, you may think your customers are using your product for social engagement purposes, but your data may reveal that they are using it for the awesome image editing tool you have inside your application.

When working with your data you should be careful regarding which metrics are actionable for your business and which metrics are not. You should always try to avoid vanity metrics - numbers that might excite you a lot but don’t matter that much for your business. For example, the number of likes your company has on its Facebook page is not indicative of your product’s success. However, the number of daily/weekly/monthly active users your product has tells a lot about how popular it is.

Note that today’s actionable metrics might become vanity metrics for tomorrow. Maybe three years later, daily active users might not matter as much as the lifetime value the average user brings to your business. Understanding what types of metrics are the most valuable for your product is crucial. As you become an expert of your data, you will be able to answer the following questions:

• What are the actionable metrics for your product?
• How often should you track your metrics?
• What are your technology metrics?
• What are your operational metrics?
• What are your customer acquisition metrics?
• What are your customer engagement metrics?
• What are your customer retention metrics?

As an expert of your data, you will be able to leverage the power of the data with other domain learnings to understand the needs, interests, and desires of your customers. You will spend part of your daily work to query your data, measure the success of the latest releases and the customer activity inside your product. Data is one of the essential indicators of your product’s success, and you don’t want to miss that during your journey.

To Sum Up

Great product managers are consistent learners of their customers, market, business, industry, and data.

However, it is also vital that you share all the knowledge with your team members and key stakeholders. Nothing convinces people better than the combination of your qualitative and quantitative learning. If you want to sound confident in front of people, your expertise in those domains will be one of the most effective persuasion techniques.

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About The Author

Rafayel Mkrtchyan is a product management advisor who helps companies improve their product discovery and delivery processes. He teaches teams how to set up a winning product strategy and sustainable growth model, run customer and product development processes, develop outcome-, experiment-, and data-driven mindset, as well as robust their lean, agile, and design thinking skills.

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