The field of product management is continuously developing and changing without a stop, and the instability of the past years has played a vital role in this metamorphosis.
Remaining competitive in the field of product management requires constantly keeping up with the industry’s changes, considering that the practice has evolved significantly over the past decade.
1. Focus on monetization
In 2022, the market underwent a drastic change as venture capitalists became increasingly cautious regarding new investments due to escalating interest rates, leading to higher debt costs and ultimately resulting in reduced funding opportunities for product companies.
Previously, a polished presentation and an expanding customer pool were sufficient to secure outside investment, or if necessary, a bank loan at a reasonable rate. Nowadays, businesses are required to prioritize attaining financial stability and generating profits independently, or demonstrate substantial revenue growth potential in order to entice funders.
Consequently, product managers will need to improve their expertise in monetization. Pricing, bundling, tiering, and lifetime value calculations, which were previously unappealing topics, will now be the main areas of concentration for numerous product managers.
Product managers used to be required to demonstrate their ability to create desirable products in the past. However, in 2023, they will need to demonstrate their capability to generate profits from their products. This is a more consequential change than one may realize.
2. AI on the rise
The advent of tools such as ChatGPT 3 has caused significant disruption lately by taking publicly available artificial intelligence to a whole new level, highlighting the infinite possibilities of this technology. Moreover, it has significantly leveled the playing field for access to AI, making it available to all. Companies can now collaborate with AI vendors and apply their unique solutions in their offerings.
This implies that creating an AI from the start is unnecessary; instead, one can link up with an AI provider, tweak the connection to fit their requirements, and presto! An AI-infused item is produced.
3. Data, data, and more data
Previously, having data-informed product management indicated that the organization was advanced and experienced. Presently, it appears to be a fundamental necessity for the position. Aside from the discipline’s evolution over time, there are two factors contributing to data’s increasing significance for product managers.
As previously mentioned, the emphasis on AI is growing. To obtain the advantages of AI, it is necessary to supply it with top-notch data. Therefore, if you are already gathering and analyzing the data for AI purposes, why not utilize it to influence product development decisions as well?
The second basis is the convenience of accessing data. Previously, acquiring, refining, and handling data required a data analyst with SQL expertise. Nonetheless, product analytics software can now perform numerous tasks behind the scenes.
The difficulty wasn’t that product managers were unwilling to utilize data, but instead, the challenge was that the requirements for entry were too demanding. Presently, accessing data-driven product management is becoming progressively more feasible, leaving no justification for avoiding it.
4. Remote team management
Even though a couple of years have gone by since the surge of remote work in 2020, this mode of work is still in the initial phase of maturity.
Adapting to a fully remote setup involves more than a year or two of adjusting processes, culture, and mindset. Numerous unresolved issues continue to persist in remote work. Hence, various remote-enhancing products and solutions are continuously emerging in the market.
In addition, there are still some companies that are not open to embracing the concept of remote work, and there may be those who will remain resistant. Consequently, there will be individuals who will be unfamiliar with prolonged remote work and will necessitate unique adjustments and orientation, even in the future.
To develop valuable products, product managers need to stay up-to-date with the latest remote work trends, products, and strategies and keep experimenting until they discover the best way to work remotely. If you manage a remote team, it is unlikely that you have already identified the most effective approach to working remotely.
Collaborating face to face develops essential “trust capital” that is crucial for individuals to feel at ease to ask queries, interject, or provide helpful feedback. The downside of remote work is that people tend to delay asking questions or expressing their opinions, which can ultimately harm a company’s capacity to innovate or outperform rivals.
Instead of solely depending on remote work, Hubert envisions a future in which product teams convene only when it’s of utmost importance. Although remote work will have its merits, it won’t be the preferred method of working for everyone and all circumstances, particularly for product teams.
Eventually, you may encounter a situation where a team member who lacks remote work experience joins your team, which can present an additional obstacle. In summary, the transition to remote work is far from complete, and there are a plethora of fresh opportunities and challenges to be found.
5. Specialized PMs in demand
In the past, a shortage of product managers was a challenge. However, presently, we are confronted with a new difficulty. The growing recognition of the significance of product management by various businesses has led to increased hiring and training of product managers. This has highlighted the reality that a sole product manager is incapable of handling everything independently.
Although having an interdisciplinary product manager is typically much more beneficial than having none whatsoever, it is unwise to anticipate that one individual can effectively manage all aspects of increasingly complex and diverse products.
The specializations within the industry will become increasingly defined as it develops, and by 2023 and beyond, there will be four distinct layers of specialization.
- Segment – Are you a B2B or B2C product manager?
- Industry – In which sector do you have the most expertise? FinTech, HealthTech, EdTech, RetailTech?
- Stage – Do you feel the best working on pre-PMF companies, scaleups, or established products?
- Skill set — What topics could you take for weeks without taking a break? Is this growth? Monetization? UX design? Technical details? Product expansion?
While these specializations are not as rigid as those in medicine, it is still easy to shift between them. Identifying your key areas of interest will aid in your development and enhance your marketability.
6. Getting product management systems and processes in place is more crucial than ever
According to the 2022 Product Excellence Report, there is currently a lack of confidence in product management systems and processes.
A mere 12% of the 1400+ survey participants expressed contentment with their ability to collect information about their products. This presents a challenge in comprehending customers’ needs. In regard to road mapping, merely 32% of teams are confident that their roadmaps will lead to favorable business outcomes, while only 31% can effortlessly share these roadmaps with cross-functional partners.
In 2023, priority should be given to implementing these systems and processes to ensure efficiency and optimal use of limited budgets. It is crucial to have teams and stakeholders on the same page with a shared plan and to prioritize getting new products and features correct from the outset to avoid wasting valuable time and money.
It is crucial, regardless of your role as either a sole contributor or a product leader, to establish a consistent approach towards obtaining and utilizing product feedback and insights, determining product strategy and prioritization, and developing routines that will facilitate effective communication of plans throughout the entire organization.
7. The PM role remains critical despite economic uncertainty
The tech industry job market has been unpredictable in recent years. The 2022 State of Tech Salaries report by Hired states that “After the pandemic, companies were vigorously hiring to achieve their goals, but things changed as inflation increased and a recession loomed, leading to reduced or halted hiring in certain regions.”
Despite being impacted by recent layoffs, there is still a high demand for product managers. This is because creating the right products and features for customers has become increasingly vital, and product managers play a crucial role in understanding customer needs and determining priorities.
As per the Future of Product Management report by the Product School, almost half of the companies (43%) are seeking to add PMs to their workforce, while over a quarter (26%) of the current PMs are contemplating leaving their job within the next year. Despite the uncertainty in the economy, the salaries for tech roles in product management remain amongst the highest-paying positions in the US.
Tech workers have a promising chance of recovering from layoffs, with a high probability of securing a new job within three months, according to economists’ estimates. In October of 2022, approximately 75% of tech workers affected by layoffs were projected to find employment following their dismissal.
8. Overcoming lack of clarity around product vision and strategy will be a key focus
Establishing a distinct product vision and strategy was identified as the primary obstacle in product management for 2022, causing discomfort for both personnel who contribute individually and those in charge of product development. With limited resources and prolonged periods of unpredictability, it is crucial to foster cohesion among teams.
As a product leader, your primary responsibility is to establish and articulate a well-defined product strategy. It is crucial that you regularly touch base with your product teams to confirm that you share the same objectives and that they are using the strategy to inform their prioritization choices.
Hubert Palan, the CEO of Productboard, notes that it is a frequent mistake for people to mistake plans for strategy.
A plan outlines the components to develop, whereas a strategy encompasses the customer segments and challenges you aim to address, the manner in which you distinguish yourself from rival businesses, the significant investments you intend to make, and your approach to allocating resources in a portfolio.
Hubert states that during periods of financial instability, leaders are compelled to think further ahead: “If you don’t come up with a solution, there is a considerably reduced chance that you will receive financial backing within the next six months.” This can be seen as both a challenge and a chance to improve: According to Hubert, “It serves as a driving force for companies to become more strategic in their actions.”
9. Product managers focus on working smarter and more efficiently
High-profile technology layoffs began to emerge in the latter half of 2022, and even in 2023, economists remain uncertain about whether or not we are moving towards a recession. This has prompted many business leaders to pivot their focus away from pure growth and towards efficiency and profitability. There is now a greater emphasis on revenue and ROI rather than experimentation and risk-taking, with tighter budgets being put into place.
Product professionals are tasked with doing more with fewer resources, whether due to layoffs or budget constraints. Despite having fewer resources, the expectations placed on them remain the same.
In such situations, the creation of excellent products holds greater significance, emphasizing the need for enhanced, cohesive teamwork and communication. It is crucial to avoid working in isolated groups during these times.
Nowadays, prioritization holds greater significance, and it is crucial to be honest with stakeholders regarding the timing and rationale for addressing certain projects. Additionally, it is imperative to remain concentrated and evade being sidetracked by demands that do not correspond with your primary objectives.
10. A fresh take on customer-centricity is needed
The 2022 Product Excellence Report reveals that just 36% of those surveyed have faith in the overall acceptance by consumers of the products and functionalities they launch, prompting product teams to prioritize enhancing that figure in 2023.
Mike Belsito, the co-founder of Product Collective, recommends using certain tactics to achieve this goal. One approach is to strive for excellence in serving a specific customer group. How can you guarantee that your product is essential to at least one crucial customer segment?
Sophie Lalonde, the Group Product Manager at Productboard, suggests revisiting your ideal customer profiles (ICPs) and evaluating how well-defined they are. She compares the ICPs to a bullseye, where the individuals who receive the maximum benefit are placed in the center ring, and the groups that are closely linked but different are positioned in the adjacent rings.
If you’re uncertain about your customers or their needs, it’s a sign that you need to conduct further product exploration.
Return to the feedback you have obtained from diverse sources, detect significant patterns and tendencies, and correlate them with particular feature concepts or customer concerns you intend to address (by the way, the Productboard Insights board is an ideal platform for this purpose).
Side notes
While these are mere projections that may require over a year to materialize, what is indisputable is that product management and the way we create products and startups experienced significant changes in 2022, and the occurrences of the previous and subsequent years will have a profound effect on our forthcoming endeavors.
