"No PM, no problem"
A root-and-branch reassessment of product ownership, hiring for agility, and pre-PMF gut checks.
Welcome to the 67th edition of The SaaS Baton. A fortnightly newsletter that brings you three, hand-curated pieces of advice drawn from the thoughtful founder-to-founder exchanges and interviews taking place on Relay (curated with 💛 at Chargebee) and the interwebz. So, stay tuned!
In this edition, you’ll find the following instructive and inspiring pickings:
#1: Podia’s founder and CEO, Spencer Fry, describes how their 30-member team ships exceedingly fast by placing developers uncommonly close to customer problems and despite — “precisely because of this” — having no PMs.
#2: Slab’s co-founder and CEO, Jason Chen, having become profitable in 2022, recenters hiring practices that can furnish the flexibility that companies need to scale better in the current environment.
#3: Mutiny’s co-founder and CEO, Jaleh Rezaei, on the importance of knowingly getting underneath the most flustering, embarrassing thing in their pre-PMF journey.
🗞 Recently on Relay:
Heuristics and Hunches — When to Switch on the Customer-Led Mode, Pivoting (4 Times) towards PMF, and Other Discerning Realizations with Summit’s Founder, Matt Wensing:
— Inventions vs. services
— Summit’s many pivots (and why PMF demands getting everything right)
— The downside of rushing to the market
— Making the shift from self-serve to top-down selling
— Why it’s worth postponing integrations
— Documenting the founding journey
#1: “No PM, no problem”
(From: Podia’s Spencer Fry) (Source: Spencer’s blog)
Many things surprise people about how differently we work at Podia, but one that comes up often is that we have absolutely zero product/project managers at our company of more than 30 people.
Despite this — though I’ll argue below that it’s precisely because of this — we’re shipping features faster than companies many times our size and resources.
First of all, this isn’t personal; I know many PMs who are great people. When considering our product development process and track record, however, I simply don’t see the value in the work that they would bring to our team that a developer, designer, or head of product can’t drive themselves.
That’s not to say that the work of gathering data, researching customers, developing features, working on specs, and organizing a project isn’t valuable. Rather, I believe that work should be done by someone closer to the implementation of it.
Why shouldn’t the developers — or designers — be tasked to work through the problems, instead of being handed a set of solutions?
Every single project, a developer is assigned what we call a Champion* role and it’s that person’s responsibility to act as the PM in addition to their work as an individual contributor.
This approach, as opposed to handing off a spec to stitch together with code, makes for much more engaged developers who feel more ownership of the work.
That means that in addition to coding, they’re tasked with…
1. Creating the project in Basecamp, and organizing it as they see fit (e.g. setting up the to-do lists)
2. Running the weekly project meetings that we hold, including setting an agenda, presenting questions, moderating discussion, and demoing anything that they need feedback on
3. Writing an end-of-week update on the project’s status outlining what their team got done and what they’re working on the following week
4. Presenting the project update to the team during our Monday weekly all-hands
5. Setting an up-to-date estimate of when the project will ship to production
6. Communicating with marketing and support to coordinate the launch
Some developers we hire have never done any PM work before, and it can be intimidating the first time they step into the Champion role. But after they’ve gotten their feet wet and gone through their first project, developers on our team are itching for another project to Champion.
Don’t be so quick to hire a PM for every 2-3 developers that join your team. Instead, think about adopting the Champion system, or trying something similar. I think you’ll be pleasantly surprised by the results.
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#2: Hiring for a path to profitability
(From: Slab’s Jason Chen) (Source: Knock Down Silos)
Hire contractors before employees
Salaries are almost always the biggest cost for a company. Outside core competencies, first hire contractors or small agencies. This allows flexibility in commitment and needs for all parties, but also easier access to specialists and top-tier talent.
You will often not be able to afford top talent as full-time employees, nor will you have 40 hours a week of work for them. Contracting solves both problems.
In many domains, learnings scale more from exposure to different businesses than personalizing for one. For example, you want your immigration lawyer to have obtained visas for many other clients.
In contrast, you want your account executive to be exclusively focused on your company and product because personalizing is crucial for closing sales.
Slab saved substantially in salaries by hiring contractors or agencies in numerous domains including brand design, illustrations, animations, video production, SEO, SEM, content marketing, accounting, and more.
If needs do grow, the contractor to full-time employee path is a well-trodden win-win as you’ll know each other far better than from any interview.
Also look for contracting opportunities in areas of high skill or knowledge curves. For example, even with Slab’s very capable engineering team, we contracted experts for specific technologies, including Kubernetes, Electron, and dbt, in some cases the core maintainers themselves.
We not only got to quickly adopt these technologies but could also be confident they were set up the “right way” according to their best practices.
Hire senior and remote
Slab embraced remote work in our earliest days simply because we wanted to work with the best and did not believe that every talented person lived in my home city of San Francisco.
Top talent in tech has never been more dispersed amongst the rest of the United States and the world.
Hiring in lower cost-of-living geographies creates a win-win for employers, who can offer more competitive salaries at lower costs, while employees can command greater purchasing power with those salaries.
Remote work is too large and nuanced to fully cover, so I’ll simply offer that the salary savings alone can be game-changing and should be strongly considered for profit-seeking companies.
Because of management, more people and salaries lead to even more people and salaries. One way to slow this is by hiring senior individual contributors, who can get more done, even relative to their higher salaries.
This further saves from operational overhead and complexities inherent to employing more people, including regulatory requirements but also simply the need to get more people on the same page.
One caution is some senior people most prefer to influence or mentor junior people, so not having them can create issues. Some of this preference can be directed outwards through blogging or open source but ultimately you want senior individual contributors who mostly want to build, not mostly want to influence.
#3: A PMF signal as vital as revenue and NPS
(From: Mutiny’s Jaleh Rezaei) (Source: Acquired LP Show)
The way that we thought about product-market fit was a combination of (and I don’t know if this is the best way to do it, but this is how we did it) — we looked at companies that clearly had product-market fit at the Series A [stage].
And we looked at some metrics…so we looked at revenue, we looked at conversation rate from lead to close, and we looked at NPS.
We were looking at minimum $1m in ARR, ideally $2m, so that you could trust the rest of the data. We wanted at least 25% conversion rate. For our industry the conversion rate was much, much lower, so that’s what we triangulated would make sense for us.
From someone talking to sales and saying, ‘I’m interested’ to does it actually close. And then NPS above 70 is basically what we were looking for.
And then there’s also your own gut, right?
When I was at YC, I think it was Gary Tan, who, came to speak and he shared an anecdote which always stuck with me, which was:
‘The graph that you feel the most embarrassed of showing to your board is literally the thing that you should be showing and where you should be spending all of your time on.’
And I think that is probably very tied to product-market fit. What is the thing that you know is bad about your business and then fixing that.
For us, that was getting somebody to become active within the first 30 days, so when we were pre-PMF, some people would use Mutiny and they’d be very successful because they were motivated.
And then some people would run into issues. They had other priorities that would come up… So we had this issue around activation.
We would look at how many experiences has the customer launched within the first 30 days. We made that the most important metric for the company. And we started really focusing on that.
We started revamping our onboarding, the way that we handled CX. It was probably with the 5th or 6th iteration of our AI engine where we made it easy enough for someone to just come in and then launch experiences where they could do it within an hour.
That’s when the switch started to flip.
And we started to see a lot of success there. But it’s painful to look at that because your instinct is to be like, ‘oh, everything else is great, let’s just not look at this one thing.’
But Gary had it spot on.
That is exactly where we needed to focus on.
🤝 Founder social:
Until next time,