The transition from PM to CEO of a start-up. ㅤㅤ 5 lessons learned.

A product manager is sometimes called a mini-CEO because she is also responsible for her product, leads the team and is responsible for the business outcome. That often looks and feels like training wheels for entrepreneurship. At least, that's what I thought until I tried to set up my own startup. The reality turned out, as always, to be much quite a bit more interesting.

Below you can find the lessons I learned in two years as an entrepreneur after 6 years as a product manager in a California company with Russian roots.

Scale-up vs Start-up

Usually, companies first think about hiring a product manager at the moment of growth 1 → n, that is, when product/market fit has already been found, the financial performance is promising and now the ball is on the side of scaling. Prior to that, the founders play the PM role themselves (just as they frequently perform many other roles, lol). As a result, most product managers do not get 0 → 1 product creation experience during their work.

Even when a company launches a brand new product, it leverages its cash resources, marketing, existing customer base, and other benefits that early-stage startups rarely have. A product manager knows how product teams work, how sales and marketing function, how to frame a strategy, set up processes, and how to prioritize a roadmap. But most of this knowledge has nowhere to be applied when creating a product from scratch.

Also, product managers often work in large companies and get used to the scale. I worked on a product for hundreds of thousands of users and directed the work of several teams, and when working on my startup, I was initially drawn to create global projects with a wide reach. But this is a controversial strategy for a new product launch, and it’s far more likely to make something work by starting small. The former Head of Growth AirBnB gave a really good talk on this. By the way, they started out by buying three air mattresses and renting out space in their apartment for designers coming to conferences. Doesn’t sound like a company that's going to be worth $100+ billion, does it?

Conclusion

It is important to reconsider your habits inherited from working in a scale-up company. When I find myself describing the requirements for a feature with all the details, instead of putting together a prototype over the weekend with the developer... Or when it takes a whole month for a designer and me to draw a logo and discuss a tone of voice, instead of confirming the idea by making the first sales… Well, it is time for transformation.

There is nothing wrong with starting small. On the contrary, it helps to find the first P/M fit, validate a business idea on the market and learn how to work with channels. After that, you can move to wider segments and repeat the cycle.

What to read on the topic: Zero to One, Make

It's not enough to just make a good product

It is important for a product manager to be a visionary, strive to create awesome products that will solve people's problems and bring them value. And this is all really great, without this approach, we would not have seen the cool solutions that we use every day.

But I have one (bitter) observation: the vast majority of successful entrepreneurs admit that they started not with a product vision, but by finding a business opportunity. First, they saw how they could make money, and then they thought about how to adjust the solution to a specific need. By the way, this indirectly explains why sometimes B2B products are so ugly and inconvenient, but they bring money. Sometimes a huge amount of money.

Any PM can rightly say that he also starts with a need and estimates the potential ROI! Fair. But within a certain framework. In the work of a product manager, the task is rarely to replace the business model, enter a new market and rebuild the product from scratch. Most work to optimize an existing business, standing on the shoulders of those who have unearthed a business opportunity before.

Conclusion

Relatively few startups fail because they couldn't make a product. More often, the product is not needed, there is no working channel for attracting customers, or numbers are down. Sad, but true.

Good article on this topic: https://www.reforge.com/the-road-to-100m

Strengths and weaknesses of the team

We have built a service with partners using our expertise in product, design and development. Customers often praise our product for the simplicity and usability of the interface, it covers their needs well, we have excellent uptime and extensible architecture.

The difficulty is that our product is targeted at companies with 200+ employees, which implies a long sales cycle and a special approach to attracting customers. And there was no such expert in the team. In the beginning, we were engaged in customer acquisition and sales ourselves, and it turned out badly (on top of that we did it in English as non-native speakers, sic!). It took quite a long time until we found the right person for marketing and sales in the US. And so far, this part of the process remains the bottleneck for business growth.

Another example: registration and legal and accounting support of a company. At some point, I realised that contractors would not be able to responsibly perform this role for a reasonable price, and I would have to deal with the specifics of registering a company in the States, taxes and all these little issues myself. Just to sleep well at night. It takes a long time in the initial stages, and it would be better to have someone with relevant experience who can explain the process in detail so as not to spend weeks on googling.

Conclusion

Consider your team's strengths and weaknesses when choosing your strategy. If your team does not have experience in sales, focus on direct sales from the website. If there are not enough developers — consider starting with a no-code solution.

Or find partners to fill in the missing competencies.

Services that we used to register and support the company:

• https://clerky.com incorporation for startups by YC;
• https://virtualpostmail.com physical address for letters;
• https://quickbooks.intuit.com/ accounting;
• https://mercury.com bank;
• https://upwork.com lawyers by the hour.

Other entrepreneurs

At the beginning of my project, I had the feeling that I was a pioneer, trying to understand how everything works in the business world by touch. A product manager often works in uncertainty, but here its level has increased 10 times, and I really needed to have people with relevant experience around me, and there were not enough of them. I knew a lot of useful product management chats, conferences, training, where product managers communicate with each other, share experiences, and learn from cases. But I had no access to entrepreneurial communities.

Once I met by chance a former colleague who went into entrepreneurship and is now developing his company. We talked for literally half an hour, but during this time he managed to answer most of my questions, and most importantly, he made it clear that my tasks and problems were not unique, that other entrepreneurs are following a similar path.

After that, I visited the week-long camp Uskillz: a group of start-up entrepreneurs gathers there, and one of the prominent businessmen/managers comes every day, tells their story and answers questions. It just so happened that I got to know the inside stories about the launch and development of several companies straight from the horse's mouth. In addition to the cases reviewed and the knowledge gained, again, it was very important to get real about my business fantasies, to ask myself the question “What? Was it really possible to do it that way?” ten times in a row.

And to understand that yes. It is, indeed, possible and should be done be that way.

Conclusion

Businesses go through similar processes and make similar mistakes. There are very specific laws governing startups. And the best way to learn them is from those who derived these laws from practice.

Talk to other entrepreneurs :) Find an entrepreneur or mentor you know, share your case, ask for advice. They usually are unexpectedly open and share their experiences with pleasure.

Entrepreneurial communities: USkillz, Indie Hackers

Learning by doing 

Skin in the game. Learning by shipping. All successful entrepreneurs repeat the mantra of “just start doing it,” but this is often the biggest obstacle. I remember explaining to myself over the years that in order to start doing something seriously, I first need to quit my job. I say hello to everyone "first I will move and it will be possible ..." and "first I will gain experience and then ...".

At some point, I realised that the formula "first X to make Y" simply shows the place where I feel uncomfortable psychologically. And often behind the reason “not enough time” you can find something like “I am scared of screwing this up, so I should not even start”.

But here's the thing. The very best is often found behind the uncomfortable. And if you give up everything cool that comes with the unpleasant and difficult, there will be a very limited set of activities left open for you. No joy from connection if you avoid opening up to people. No way to showcase yourself if you are not ready for criticism. No game if you exclude defeat. Conversely, willingness to face the consequences of your actions brings freedom. But this is already a topic for another article :)

There is one famous reference point that has become a meme: 9 out of 10 startups fail. Of course, like any generalised numbers, they do not account for your unique situation. But try to honestly ask yourself the question - why should your startup be among the 10% successful? Have you already started a business? Did your parents teach you this? No? Well, then you better start gaining experience as quickly as possible. Let it be small: you can write down your ideas, show them to friends, study competitors, and discuss the idea with the community. At the very least, this will give you the first feedback and will motivate you to keep working on it.

Conclusion

The transition from PM to CEO cannot be theoretical. A few months of working on your project can provide more insight into the business than years of working in companies, reading articles, and watching TED videos.

Probably the main piece of advice I would give to my 16-year-old self: if you want to do something, start now. You are ready.

Everyone is ready :)