Looking to transition from internal to commercial product management and leverage the experience you already have? Mark Bailes has some valuable pointers  

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The Product universe is vast. Exploring job titles alone, you come across a long list – including but not limited to product strategists, technical product managers, product managers, product marketing managers and product owners. When you consider the number of industries that have adopted the product mindset and disciplines, and the wide range of products that exist in each, the variety of skills and mass of knowledge required to be successful rapidly multiplies to a large number. While there is no typical career path for a product manager, and it can be daunting to navigate a career across these roles, industries and products. In this piece, I’ll discuss how you can develop your skills by working on internal products that will bring increased business benefit.  It makes a transition to commercial products more feasible.

Internal product management and commercial product management roles are different, but not worlds apart.

Many of the fundamental tasks of a product manager are consistent across internal and commercial products. Examples include: building a product roadmap, communicating requirements to engineering, tracking product / feature adoption, strong communication, deep domain knowledge of the product and the domain in which the product functions, being obsessed with the end user and a focus on outcomes rather than outputs.

But there are many other activities, interactions and artefacts that are unique to a commercial product manager, such as pricing, business models, go-to-market strategy and market analysis.

Figures 1 and 2 show how differently these worlds can be perceived. While the simplified view of an internal product manager role may help an individual to operate in the short term, this can present business and personal professional challenges in the longer term. Internal product managers are missing opportunities to amplify their impact, increase their presence and visibility across the organisation. This limits their skills development, so that they don’t maximise their impact while working on their product and reduces their opportunities for career growth. This is particularly problematic for product managers looking to transition to commercial product management having only previously worked on internal products. One way to address both of these challenges is to consider an internal product as a commercial product.

Figure 1: The world of an Internal Product Manager

Figure 2: The world of a Commercial Product Manager (Assuming a B-2-B Product. For B-2-C, combine the Buyer and End User Persona).

But how? Below are some of those activities – with details on how they’re different, and perspectives on how they are quite similar.

Persona definitions

Treat your business / functional stakeholder as a buyer

Both commercial and internal product managers need a strong understanding of the end user persona as this determines a product’s usage and adoption criteria. Successful products meet the unmet needs of these users that help them with their jobs-to-be-done – and there is a consistent need for both internal and commercial product managers to define requirements based on this detailed knowledge and understanding of the end user persona.

A commercial product manager must also understand the buyer persona. The buyer persona determines the buying criteria for the commercial product and is later used to train sales and marketing teams on the positioning and messaging of the product.

The business / functional stakeholder is the closest equivalent to a buyer persona for internal products. Like a buyer, this stakeholder is responsible for the outcomes driven or enabled by the product and will expect to see KPIs or metrics that prove the effective impact of the product against those measures. They also provide the funding or sponsorship for the product, paying cost price rather than a portion of the total value created by the product. Business / functional stakeholders can often fall into the trap of requesting features to be developed simply because the price for those features is relatively low (they only pay the cost price). A strong internal product manager will remind these stakeholders of the outcomes the product should drive – focusing on the return or the value that they would get from these features – asking if that is something that they would be willing to pay for.  Internal product managers should take time to fully understand the outcomes that their “buyer” is trying to drive through the use of the product they are working on.

Interaction with customers and end users

Have others supporting your cause while you’re out of the room

Interaction with customers (including internal, non-paying customers) and end users is critical for all types of product manager. This interaction is hugely valuable throughout the lifecycle of the product: accelerating requirements gathering, improving feedback loops on prototypes in the design stage, training pre-launch and support post-launch. Given internal product managers work for the same business, they should be able to identify and gain access to the end user more efficiently and effectively. Once a commercial product manager gains the equivalent access to their end user, they will need to demonstrate skills common with the internal product manager – clear, purpose-driven communication and in particular strong listening ability.

A commercial product manager will uniquely find themselves educating, influencing and aligning cross-functional customer-facing teams on their product so that they can increase their reach and access to their target customers. The alignment is critical so that customers are hearing a single truth about the product from multiple different sources, which is not a concern when you’re the sole source communicating directly to end users. As such, buyers and end users will learn a lot about the product indirectly. This is a unique skill – focusing more on training and educating those individuals on the pain points and/or unmet needs and product value proposition, leading to  sales training, marketing collateral and positioning and messaging artefacts being created to support commercial product management in these activities. The goal here is to align the entire product organisation and to increase effectiveness of the interaction with customers and end users.

Internal product managers can look to utilise internal super-users or early adopters of the product to educate others on its value. This is an opportunity to practise influencing and alignment skills and ensure you communicate product details accurately to other users.

Competitors / alternatives

Make sure your product is the chosen one

Both internal and commercial products have competing alternatives that customers and end users could choose to adopt. Both internal and external products can provide a variety of features that compete against the ever-present self serve option – where the end user chooses a solution that is available to them without any external dependencies (for example, their own spreadsheets, macros, tables or home-grown databases are options that compete with a globally available analytics dashboard). Further differentiators here could include product quality (reliability, availability, relevance) and experience.

Commercial products have alternatives beyond enterprise tools and self-serve options that align with the larger external environment in which they compete. Other companies and organisations that provide a similar offering to the same set of target customers must be analysed in detail (market and competitor analysis). Commercial product managers can look to compete by offering differentiated features to different customer segments and adjusting price. Commercial products are also threatened by new entrants into the market, so must also anticipate disruptive innovations into their market or react quickly to respond to competitors looking to gain their own competitive advantage.

Just like for commercial product managers, it is important to understand the competing alternatives available to your end users and the differentiating features that will lead to them adopting your product.

Financial modelling

Find a currency alternative to revenue

The cost portion of the financial model will be mostly consistent for internal and commercial product managers. In both cases, fixed and variable costs should be well understood, as well as the cost associated with ongoing support and maintenance.

Commercial product managers are then able to leverage input from pricing and business models to complete the financial model, calculating contribution margins and total revenue projections for (typically) three to five years.

Internal products should still deliver a return on the investment (cost). Some products enable financial outcomes that are easier to quantify – for example, productivity. If your product eliminates the need for one hour of manual tasks for 100 users, you can calculate the $ value for that productivity saving (1 hour x 100 users x hourly rate) and can consider this recurring revenue. Beyond savings, you can look to understand the financial value of the outcome that the product is driving.

Sizing and increasing market

Size matters when estimating the market opportunity

All product managers need to determine if the product opportunity is an attractive one. Sizing the market opportunity is a critical component of this process.

Commercial product managers will look to measure the total addressable market (TAM) and serviceable obtainable market (SOM) within a target market. This will enable the product manager to understand the market size in terms of revenue to determine whether the product is an economically appealing opportunity. Depending on the product, some commercial product managers may have a product that can drive outcomes across a number of different industry verticals and look to increase their SOM by penetrating other industries and markets.

Using the previously discussed principle of replacing revenue with an outcome as a different type of currency, internal product managers should look to calculate the size of the opportunity rather than the market. This could be achieved by understanding the current benchmark of the outcome and the target, and sizing the opportunity as the difference (SOM equivalent). TAM could be defined as 100% perfection and SOM would be the target percentage in terms of the outcome being used for currency. Furthermore, internal products can have repeatable and re-usable elements beyond the initial scope or domain in which the product was designed. For example, an improved search bar added to a company’s internal intranet can be re-used on the company’s external customer facing website to improve the customer experience. At its core, the search bar improves the experience of website users – even though the different websites have very different end users.

Product launch

Ensure new features are adopted successfully, not just released

Many elements of the commercial product launch checklist are applicable to internal products. Both types of product need a clear and validated value proposition. Development must be complete, including documentation such as support and user guides, and ready for use. From a promotion perspective, both internal and commercial product managers should be working on demonstrations of their products to end users (internal) and customers (commercial).

Both roles will be working on communication: internal product managers delivering communication internally to end users and stakeholders; commercial product managers providing internal communication to their organisation so that they’re fully aware of the launch and ready to support it. Both products could have a launch event – this may look like a formal launch through an “all-hands’ or “town hall” style event internally, whereas commercial products may be launched and announced at major industry conferences. Launch plans are consistent artefacts across both products, and ensure operational readiness. All product managers should have post-launch targets for the products although these may look different for both – internal will focus on adoption of features or number of transactions complete within the product while commercial product managers will likely look for revenue and customer acquisition soon after launch.

External promotion and marketing through digital and printed collateral is unique to commercial product managers, as well as ensuring that the product is available to purchase. The purchasing process also requires customer contracts to be in place as well as any commercial and legal risks to be signed off.

Internal product managers are not able to replace the purchasing process within their internal product environment, so should instead focus on understanding and acknowledging the different techniques used when executing the common items on the product launch checklist.

Figure 3 shows how an internal product can be a lot more like a commercial product.

Figure 3: The world according to an Internal Product Manager who treats their Product as a Commercial Product.

Internal products should be considered as commercial products

From a business impact perspective, internal product managers can amplify their impact by including some of the practices and artefacts commonly used for commercial products.

• Considering business / functional stakeholders as the buyer combined with a financial model allows you to facilitate prioritisation discussions with a data point to help drive the decision – if the cost (effort) is greater than the impact (revenue), should this feature / product be prioritised? Similar questions may be posed once the size of the opportunity is understood and quantified.
• Utilising super users and/or early adopters to communicate the value of the product means your work is ongoing even when you’re not in the room.
• Understanding the alternative products available to your end users will help to increase adoption – critical to enabling the realisation of the outcomes.
• Consider product launches beyond simply releasing new features to increase feature adoption and accelerate time to value for the end user and the business.

From a personal and professional development perspective within your current role, treating your internal product as a commercial product will create opportunities to practise cross-functional influencing skills – educating and teaching others to promote the product on your behalf – and in doing so increase your visibility across the company. Identifying other areas with a similar unmet need that could be solved through re-use of the product shows an increased awareness and knowledge beyond your immediate scope of responsibility. Many of the activities discussed show a superior level of thought leadership – so you can create a personal brand as a product strategist and not just a do-er.

Furthermore, if you’re looking to take your first step into a commercial product management role, it will be critical to demonstrate your ability to think about the activities expected of a commercial product manager.

• It speaks to a deep understanding of the outcomes that concern a buyer (functional / business stakeholder) and the difference between a buyer and end user persona related to the criteria they offer for the product.
• It shows you understand the skills required to work with cross-functional and customer-facing teams effectively and have a detailed understanding of how the differentiated product competes against the available alternatives.
• It demonstrates that an understanding of the cost of your product will be the best transferable knowledge possible regarding financial models, as will understanding the size of the opportunity with regards to market sizing. Aside from experience with commercial products, this will be the most effective way to demonstrate these competencies and experiences.

At the same time, it is important to acknowledge that there are areas where you lack experience but are excited to learn, such as go-to-market strategy, pricing and business models. There is a lot of training available – and would be a worthwhile investment if this is a step you’re looking to take in your own product management journey.

Mind the Product has a full range of training courses designed to support product people across the world on their learning journeys. See Mind the Product’s product management training