The New Paradigm in Product Management

The background 

Product Management is my third career: I started in tech coming from a content background and an education in liberal arts. Just on those two counts alone, the odds of someone like me thriving in tech were, and are, statistically very low. As incredible as this might sound, tech is still a more “forgiving” industry than others, or at least it used to be. 

For the past decade, I have worked in tech, moving from content to marketing and, later, to product. Since 2015, I have worked in companies of all sizes: startups, scale-ups, mid-sized businesses and enterprises. Despite amassing experience across seemingly unrelated industries (Travel, Field Service, Localisation, Media, Maritime, Sustainability and Risk Management), the bulk of my work has been in B2B and B2B2C, and, for the past five years, in highly regulated industries.

"Tech companies are often quite transparent about their vision, mission and values and notoriously opaque about their financial goals. Yet one’s employment situation and career prospects are much more dependent on the latter."

Joana Belo Pereira, Chief Product Officer @ Factlines

Working in highly regulated environments means facing some daily challenges that fall somewhat outside of the product mainstream (the golden standard still being consumer facing products). If working in these industries, product people at any level need to contend with buying committees instead of simply focusing on users, the prospects in the TAM are a known quantity, and both Regulators and Auditors are stakeholders one contends with. It can often feel a world away from funnel optimization.

Nonetheless, PMs in these industries today  face the same industry-wide challenge as all others: how to thrive in one’s job and build a career when the paradigm has seemingly shifted from growth to profitability.

The end of ZIRP and the rise of financially savvy PMs 

It should come as no surprise at this point that the end of ZIRP (Zero Interest Rate Period) has taken a toll on the tech industry; different roles have been impacted differently, and a reasonable number of product people have for the past four years been faced with the need to justify their paycheck, if employed, or to argue for the right to one, if trying for a new job. 

This has trickled down into LinkedIn posts and carousels outlining the importance of showcasing tangible and quantifiable achievements on one’s CV, and preferably ones featuring a currency: “led product function at W over two years, generating a CAGR of x%” is in. (Hint: the CAGR should be at least 20% for SaaS businesses; better to omit it altogether if it’s less than that) “led product function at W over two years, increasing the MAUs by x%” is out: it has almost become a vanity metric, unless it can be backed by revenue. 

It wasn’t supposed to be like this. The generation of PMs who rose through the ranks until 2021-2022 were educated on the ethos of user centricity, not “greed is good”. In an era where capital has become both costly and scarce, product professionals aiming to get not only hired, but also promoted, might find it easier to thrive with the help of financial concepts that until recently, remained confined to the Boardroom.

Master the art of following the money

Do you know what your company’s current AAR per employee is? Do you know in which situation(s) that figure is of particular interest? Again, while such concepts may appear completely unrelated to the realities of the product(s) you’re building, understanding the dynamics of P&L, cashflows and PE is, to a large extent, also determining what gets built, who gets hired, and which company goals leadership will be using as a guiding principle. You won’t become a worse PM for taking an interest in these matters. 

Tech companies are often quite transparent about their vision, mission and values and notoriously opaque about their financial goals. Yet one’s employment situation and career prospects are much more dependent on the latter. 

Think about it: if you knew what the most favorable outcome for the company within the next 24 months is, how would that affect the decisions you’re taking towards your product? How would your product strategy change if you knew you’re building for a series B capital raise? An IPO? Or for a M&A? Hint: due diligence and audits always precede both processes, and that’s precisely when you don’t want dark patterns in the UX to be discovered.

Asides from the specifics of your current, or prospective employer, it’s helpful to keep abreast of money flows and market developments, both at industry and market specific level. It is very seldom the case that downturns affect all industries and markets equally: money seldom disappears entirely, but it’s very often reallocated. 

Pause to consider the recent boom and bust of food delivery services during the pandemic: that industry subsector went through explosive growth, then contraction, then consolidation through successive M&As within the space of 36 months. This is not a glitch, but a repetitive pattern that hits different industries at different times: as a product person, spotting patterns is probably something you’re both familiar and comfortable with. Use it to your advantage.

AI will not bring back ZIRP

While on the topic of using finance to decode your company’s strategy and make more informed decisions about your career: AI might be making headlines, but it’s not a key to bring back the glorious past of plenty. While most PMs currently upskilling in AI are focused mastering AI tool for building and optimization, one of the most wicked problems (but not the only one) in AI is growing before our eyes: the financials of building, deploying, running and maintaining AI in a profitable way. 

Without wanting to sound like a Cassandra, AI providers (think ChatGPT, Claude, Gemini, Grok, etc) are in a similar state today to that of SoMe platforms circa 2010. They’re competing for users and user adoption while burning through cash and hoping to acquire enough market share to outrun competitors. At some point, there will be winners and losers, and winners will then proceed to extract as much revenue as possible from their customer base. Look at the funding rounds of AI providers and try and extrapolate the average subscription price of ChatGPT in 24 months’ time (assuming OpenAI will be one of the winners). 

Have you already embedded AI features in your product? Or maybe you’ve built an entire product using Lovable, or a similar vibe coding tool. So take the exercise a step further and check what your operational costs will be if your provider or tool increases its subscription by 50%. When does your product stop being viable? Where does your customers’ willingness to pay stop? And do you have a plan B in place if that happens?

Conclusion

It was with great hesitation that I wrote this article about embedding a financial dimension in product management; not because it’s such a difficult topic to write about, but because there appears to be innate resistance to acknowledging that tech ventures have been, to a large extent, subsidised. 

Capital will still be available, but potentially not on the same terms. And choosing to focus exclusively on the more tactical aspects of building with AI will do little, in the long run, to provide better career choices for PMs. AI building without strategic oversight, and without financial acumen, will possibly not be enough in the new profitability paradigm.