Product Management in Economic Downturns
One consequence of having been around this industry for a while is that I have seen several cycles. Sometimes the downsides are fairly minor and barely touch tech companies, and at other times nearly everyone has lay-offs, cost-cutting, consolidations, or worse. While it is never fun to see the industry enter a downturn, I have learned that this can actually be a very productive period for the smart companies that know how to weather the storm.
There is already been the normal round of warnings from VC is and others about the importance of holding your costs down so that your runway gets as long as possible, and that is all good but it is all defensive. I am like to talk about some of the offensive opportunities that arise during these times.
First, in flush times companies tend to hire lots of engineers and the life of a product manager can turn into a constant rush to create the next PRD so that engineering has something to build. In a downturn, every headcount is considered essential, and the company understands that they will be producing less, and there is more appreciation for the need for something good something that actually works and provides real value. Instead of just having the engineering team build out lots of ideas with the hope that something will stick, in a tight environment, you need to take product discovery very seriously, and make sure that everything you ask your engineers to build is worth building.
Second, one of the biggest enemies of creating great products is simply too many people. I have written elsewhere about the problems of design by committee that come with too many people all hanging over your shoulder waiting for your product. Downturns tend to significantly trim this list of people. Not that they are all be laid-off, but rather that they are stretched very thin and they only have time to worry about their own areas and hopefully let you do your job. A small team of strong people can do amazing things.
Third, your competitors will be feeling the effects of the downturn as well, but if they are like most companies, they won’t really be taking advantage of this opportunity. This may in fact be a good time to recruit the best people from your competitors.
Finally, as the saying goes, necessity really is the motherhood of invention, and there is nothing like a small, strong team with a fire lit under them. This is when a lot of great products get created, and I will also say that if you are on such a team, you can really enjoy this time.
During the last major downturn, in the late nineties, many tech companies died off and just about all were impacted to one degree or another, but some companies laid low, developed their product ideas, and prepared themselves to take advantage of the eventual recovery. I bet you use the product of one of these companies several times every day whenever you needed to find something on the Web.