Product Management for the Solo Entrepreneur: Advantages and Disadvantages.
Navigating the Ups and Downs of Product Management as a One-Person Show
I’ve spent nearly 20 years in Product Management in the enterprise software industry, which has been my world since my first PM job at Veritas Technologies. Only 5 years ago, when I was asked by my brother to help him in scaling his vintage furniture restoration service in Italy, is when I started to realize the advantages and disadvantages of being (or acting) as a PM in a small business context vs a large organization.
Managing products for an enterprise software organization has many benefits, however, as the product portfolio and organization grow, I personally believe that the fun starts to shade. As organizations grow, inevitably you start dealing with bureaucracy, extra processes, approvals, people that think they know better, larger engineering/manufacturing teams (and their managers, and directors), frustrated customers, etc.
Don’t get me wrong, while it sounds like I am presenting all of these factors in a negative context, there are a lot of good things also. The larger the company, the higher the stakes when it comes to product success and risk management. In a large organization, all the extra processes, resources, and bureaucracy will inevitably end up in additional scrutiny and reassessment of the Product Manager's choices, which ends up diminishing risk (and pressure from the PM’s shoulder).
💡The Product Manager’s role is a highly evolving and adaptable role, and this is true for any business size.
Working for yourself and your own product also has disadvantages. What I’ve seen while helping my brother or my friend Daniel in his Amazon lunchbox business (If you haven’t read my 3 first issues, please do!) is that they commonly compare themselves to me and the realities of working as a Product Manager for a large organization. They think of it as being at a disadvantage due to the lack of resources and support from a larger company.
They realize quickly that compared to what I do, they are not only acting as their own Product Manager, but they are also acting as their own everything, which can be overwhelming.
I honestly believe that while in part it is true that being a single entrepreneur doing your best to scale your product and business is a disadvantage when compared to working as a Product Manager for a large enterprise, there are also many advantages and benefits we don’t enjoy in a large organization. I have been reflecting on these differences, and I would like to share my thoughts with you.
In my experience, the most common challenges of managing a product in a small business setting can be consolidated into four bullet points. I am not here just to share the challenges, so I will offer my thoughts on how to overcome them. This is not an exhaustive, textbook-type list, so please add to it in the comments section below, so we can all learn.
Limited Resources: A large organization typically has more resources than a small business, including more staff, bigger budgets, and more established systems and processes. This means that a large organization can invest more in research and development, marketing, operations, etc. while product management focuses on the product. When you are on your own, you basically count on yourself to do everything, and it can be overwhelming. Time is a critical resource for a solo business owner, as it has to be split between building and/or improving your product and running the rest of the business.
Idea to overcome Limited Resources: Automate as much as possible.
Running a business requires working on dozens of different activities beyond just building and improving your product. Accountancy, marketing, sales, and customer service are some examples of time-consuming areas solo business owners have to pay attention to.
Today, there are free and paid online tools that small businesses can use to automate various aspects of their business. The most popular ones I’ve seen, used by my friends are: (I don’t have any relation with any of the tools below)
Accountancy Automation:
QuickBooks: QuickBooks is a popular accounting software that can automate tasks such as invoicing, expense tracking, and financial reporting. It also integrates with many other business tools, making it a comprehensive solution for small businesses.
Wave: Wave is a free accounting software that offers features such as invoicing, accounting, and receipt scanning, making it a cost-effective option for small businesses.
Customer Support Automation:
Help Scout: Help Scout is a customer support tool that automates tasks such as email management, ticket tracking, and knowledge base management. It also provides features for collaboration among team members, making it efficient for small businesses with limited customer support resources.
Chatbots: Chatbot tools such as Tars, Chatfuel, and MobileMonkey can be used to automate customer support through chat-based interactions on websites, social media, and messaging apps. These tools can handle common customer inquiries, provide automated responses, and route inquiries to the right team members when needed.
Sales Automation:
Customer Relationship Management (CRM) software such as HubSpot CRM and Zoho CRM, can automate sales processes, including contact management, lead tracking, and sales pipeline management. These tools can also provide insights and analytics to help small businesses optimize their sales efforts.
Email Marketing Tools: Email marketing tools like Mailchimp, ConvertKit, and Sendinblue offer automation features for sending personalized emails, creating email campaigns, and managing subscriber lists. These tools can help small businesses automate their email marketing efforts and nurture leads through the sales funnel.
Marketing Automation:
Social Media Scheduling Tools: Tools like Hootsuite, Buffer, and Later allow small businesses to schedule and automate social media posts across various platforms, saving time and effort in managing social media presence.
Marketing Automation Platforms: Platforms like Mailchimp, ActiveCampaign, and Marketo provide marketing automation features such as email marketing, lead nurturing, and campaign tracking. These tools can help small businesses automate their marketing efforts and streamline their marketing workflows.Lack of objectivity. While we all get somehow enamored of the products we manage, in a large organizational context it is easier to be objective and make the tough calls when the tough calls are needed. Great Product Managers have some level of intuition they develop with years of expertise (and many scars), however, the data-driven, well-justified decision is usually the best. I learned by having multiple emotionally driven discussions with friends that it is not the same in the small business context. Small entrepreneurs are so in love with what they have created that it is very difficult for them to be objective, and accepting contrarian suggestions even when backed by data triggers emotional reactions. This is, in my opinion, a huge risk.
Here is an example. In 2019, my good friend Jules opened his first modern churros restaurant in Florida. The concept was to offer a very traditional Spanish dish, aka. churro, with an American twist (filled with chocolate, caramel, and other variations).
Now before my good friends from Mexico massacre me for saying that churros are from Mexico, I did some research and all experts agree that the churro is a type of fried dough from Spanish and Portuguese cuisine, made with choux pastry dough piped into hot oil with a piping bag and large closed star tip or similar shape. OK, let’s move back to my story.
After the first store's success, two additional stores followed in Florida. Things were looking great for Jules, and the growth prospects were incredible. Now here is the reason why I am using this example for lack of objectivity. Jules's family moved to Spain for retirement, and they convinced Jules that opening a location in Spain would be a huge success, as the Spanish people were apparently ready for some disruption.
Jules is very smart, he didn’t stop at his parents as the only source of feedback and consulted multiple people, plus a business consultant in Spain. They all said the same thing, which was, that churros (with hot cocoa) are such a traditional dish in Spain that people really only crave the original version. It wasn’t really just about the dish, but Jules also learned that eating a churro with cocoa is something you do in very traditional places, usually at your family bar* and at certain times of the day also, which was problematic for a place that only sells churros.
*Bar in Spain is similar to a coffee place in the US. Imagine a family-owned, small Starbucks.
Jules was so blind by his success and passion for his own product that he thought he could enter the Spanish market and succeed, especially with the local support from his parents. Needless to say, after an investment of over $600k and multiple changes to the Spanish churro menu (different fillings, less sugar, only organic ingredients, better coffee, etc), he decided to shut down the restaurant, swallow the loss, and refocus back in the US market.
We could say that Jules wasn’t smart enough, or maybe arrogant. But again, after dealing with and learning from many small business owners, lacking objectivity in their products or services is one of the top risks. Maybe I would be the same way if I started my own business. Who knows.
Idea to overcome Lack of Objectivity: User Groups.
By running a user group, you can gather valuable insights, feedback, and suggestions from real users of your product. This can help you make informed decisions, prioritize product improvements, and ultimately create a better product that meets the needs of your target audience.
What is a User Group? A user group is a gathering of individuals who are enthusiast users of your product or service. The purpose of this meeting is to provide feedback, share experiences, discuss relevant topics related to the product or service, and influence product development decisions. They can be in-person or virtual and are a cost-efficient opportunity to engage with users, collect feedback, and even foster a sense of community around their product or service.
Tips to start a User Group:
- Identify and invite users. You might need to bribe some people initially with a free version of the product or some gift, but it is worth it. Don’t offer expensive gifts to attract users though, as it can be counterproductive and attract people more interested in the gift than providing real feedback. If you have received feedback from some of your customers already, they are great targets for User Groups.
Keep the meetings short. Let’s be honest, you are not selling the new iPhone 14, so even your most avid customers won’t be happy to see they are tricked into a 2-hour meeting. I would say 30 minutes is an ideal time.
Define the Purpose: Start by defining the purpose and goals of your user group. What feedback or insights are you seeking from your users? What are the objectives you want to achieve through the user group? Clearly defining the purpose of the user group will help you structure and plan your activities effectively.
Create an Agenda: Create a structured agenda for each user group meeting. This could include introductions, updates on your product, presentations or demos, discussions, and feedback sessions. Having a clear agenda will help keep the meetings focused and productive.
Encourage Participation: Encourage active participation from the members of your user group. Ask open-ended questions, facilitate discussions, and create opportunities for members to share their experiences, feedback, and suggestions. Encourage constructive criticism and be open to feedback, both positive and negative. Remember, you don’t get to do the talking in User Groups.
Show Appreciation: Show appreciation and gratitude to the members of your user group for their participation and feedback. Acknowledge their contributions, provide updates on how their feedback has been used, and show that their opinions are valued.
Finally, Collect and Analyze the Feedback: Analyze the feedback to identify patterns, trends, and areas for improvement in your product. Use this feedback to drive product enhancements or updates.Specialization. A gift and a threat. In a large organization, product management is typically a specialized role with a dedicated team of professionals focusing solely on the product. Even if we assume there is one Product Manager in a large organization, help comes from adjacent specialized roles (sales, marketing, finance, legal, etc) which allow the PM to focus on the product. In contrast, in a small business, the owner may wear many hats and manage both the product and the business as a whole.
It is very common to see that in a small business context, especially for solo entrepreneurs, the specialization or skill the owner has is reflected in the product they sell. If I am a specialist in restoring wooden furniture, then I provide services in restoring wooden furniture, etc. This is good because you ensure that what you do, you do it well. The problem for specialists relies on all adjacent activities that come with running the business. It is not uncommon to see:
- A specialist is usually an OK (at best) business person. My brother is amazing at bringing back to life a piece of antique wooden furniture but is a horrible sales and marketing person. He regularly accepts unsustainable discount requests from his customers and is incapable to charge for what his work deserves. Of course, there are exceptions to this rule.
- Owners with good business/finance skills lack specific specialization. Jules the churro guy is not a chef. He is a businessman with a degree in business administration capable of running P&L numbers and negotiating. However, he is not good at cooking and mixing ingredients. He also learned that he is not great at analyzing market data and assessing it objectively, either.
How to overcome Specialization issues:
As a solo entrepreneur, specializing in a single area (the product or the business) can be challenging, and t is common to face challenges in other aspects of running a business. Here are some tips on how to overcome these challenges:
Educate Yourself: Take the time to educate yourself on the different aspects of running a business that you may not be familiar with. Utilize online resources, books, courses, and workshops to learn about marketing, finance, legal, and operations or a specific skill or knowledge you need to master a specific product niche. Stay updated with industry trends and best practices to make informed decisions.
Seek Expert Advice: Recognize that you can't be an expert in everything and seek advice from professionals in relevant fields. Consult with professionals and business coaches to get expert guidance on areas outside your expertise. Among all of these bullet points, this is in my opinion one of the most important ones together with “Automate as much as possible”, mentioned above.
Collaborate and Network: Build a network of fellow entrepreneurs, industry peers, and mentors who can provide guidance and support. Collaborate with others to leverage their expertise and learn from their experiences. Join industry associations or business groups to access resources and knowledge-sharing opportunities. You would be surprised how many people are willing to help you succeed.
Outsource or Delegate: Identify tasks that are outside your core expertise and consider outsourcing or delegating them to trusted partners or freelancers. Outsourcing or delegating can free up your time to focus on your core product and strengths.Market reach: A large organization may have a broader market reach than a small business, with established sales channels and distribution networks. This can make it easier for them to reach a wider audience and sell more products. This is one of the hardest aspects of being on your own. Sure, depending on what you sell you can rely on large eCommerce platforms like Amazon, Walmart, Ebay, Etsy, etc. However, I’ve witnessed how difficult it can be to be successful on these platforms, especially for specialists like my brother, who runs a service business in Italy and is completely unaware of how these platforms work.
How to Overcome Market Reach:
It is no secret that the internet changed forever the way the world transacts, and this is no exception for small business owners. As a matter of fact, small businesses today are capable to target almost the entire world by leveraging the most common eCommerce platforms with a relatively small effort and cost. Having said that, remember that selling to everybody is like selling to nobody.
I can spend an entire article on this point, and maybe I will, however, here are some ideas on how to overcome Market Reach issues:
Define Your Target Audience: Clearly identify and understand your target audience. Conduct market research and create your personas (read my first issues here) to determine their demographics, preferences, behaviors, and pain points. This will enable you to tailor your marketing efforts and messages to resonate with your target audience. If you want just a single takeaway from Market Reach, this would be it.
Develop a Strong Brand: Create a compelling and consistent brand identity that resonates with your target audience. This includes your brand name, logo, website, social media profiles, and marketing materials. A strong brand helps you establish credibility, recognition, and differentiation in the market.
Create a Comprehensive Marketing Plan: Develop a comprehensive marketing plan that includes strategies and tactics to reach your target audience through various channels such as digital marketing, social media, content marketing, email marketing, and offline marketing. This can be time-consuming so automate, automate, automate. You might also want to invest in expert advice initially.
Offer Outstanding Customer Service: Provide exceptional customer service to your existing customers. You may be thinking, what does good customer service have to do with market reach? Well, they will be your best advocates. Happy customers are more likely to refer your business to others and leave positive reviews online, which can expand your market reach through word-of-mouth marketing.
Collaborate and Network: Collaborate with other businesses or industry influencers to expand your market reach. This can include co-marketing initiatives, joint ventures, or participating in industry events and networking opportunities. Networking can help you build valuable relationships, gain exposure, and access new markets. Depending on your product niche this will cost you money, however, nowadays it is proven to be one of the most effective marketing strategies.
Focus on Customer Retention: Retaining existing customers is often more cost-effective than acquiring new ones. Implement strategies to delight and retain your existing customers, such as offering personalized offers, providing exceptional service, and maintaining regular communication to encourage repeat business and foster customer loyalty. At the moment you launch a new product variation or a new offering, this group will be your first target.
Overall, while both large organizations and small businesses may be able to develop and sell successful products, they have different strengths and weaknesses that can affect their approach to product management.
I know this issue is getting a little longer than I expected!!!
It is an exciting topic for me. Before I leave you, I just wanted to share with you some thoughts about the advantages small business owners have and I don’t, as a Product Manager for a large SW vendor.
Flexibility and Agility: Small businesses and solo entrepreneurs have the advantage of being nimble and adaptable. They can quickly respond to changing market conditions, customer feedback, and emerging trends, and make adjustments to their products or services accordingly. This flexibility allows them to be more agile in their decision-making and product development process, enabling faster iterations and improvements.
Quick Decision-Making: Small businesses and solo entrepreneurs have the advantage of making decisions quickly, without the need for lengthy approval processes or complex hierarchies. This enables them to respond rapidly to opportunities or challenges, take calculated risks, and pivot if needed. Quick decision-making can be a significant advantage in a dynamic and competitive market.
Entrepreneurial Creativity: Small businesses and solo entrepreneurs often have a high degree of entrepreneurial creativity. They can think outside the box, take calculated risks, and innovate to solve problems and meet customer needs. This creativity can lead to unique and differentiated products or services that stand out in the market and attract customers. No wonder why disruption always comes from smaller niche players.
Cost-Efficiency: Small businesses and solo entrepreneurs often have more control over their costs and can be more cost-efficient compared to large organizations with dozens or hundreds of employees, offices, etc. This cost-efficiency allows them to allocate resources to the most critical areas of their product management process and achieve better profitability. I know some of you are thinking that this can also be a huge disadvantage if the business owner is a specialist, and not good at managing money, and I agree. However, I believe this is achievable with the right automation and expert advice in place.
In conclusion, managing and scaling a product as a solo entrepreneur or small business owner can be challenging, but it also comes with unique advantages such as flexibility, agility, and direct connection with customers.
By leveraging free online resources, embracing automation, seeking feedback from user groups, and expanding market reach through effective marketing strategies, small businesses can overcome challenges and thrive in the competitive market landscape.
Remember, success in product management requires a combination of product expertise, business acumen, and continuous learning. With the right strategies, mindset, and determination, you can navigate the complexities of managing your product and business, and achieve your entrepreneurial goals.
Here's to your success as a product-driven entrepreneur!
Now it is your turn, please add comments and experiences you might have so we can all keep learning. After all, this is why we are here, to keep learning from each other.
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