What It Takes to Become a Great Product Manager and What Happened to Yahoo

What It Takes to Become a Great Product Manager and What Happened to Yahoo

In the world of product management, there are certain qualities and skills that separate the great PMs from the average ones. While the role of a PM can vary depending on various factors, there are three primary factors that aspiring PMs should consider when evaluating a role: core competencies, emotional intelligence (EQ), and company fit.

Great PMs are not just the CEOs of the product, but they also have the ability to create products with strong user adoption and exponential revenue growth. They may even disrupt an entire industry with their innovative ideas and solutions. To achieve this level of success, PMs need to have a deep understanding of their customers.

Empathy plays a crucial role in the success of a PM. The best PMs are able to empathize with customers during interviews, tuning into their body language and emotions. By doing so, they can identify the pain points that their product or feature can address effectively. By forming authentic and trustworthy connections with both internal and external stakeholders, the best PMs inspire people and help them reach their full potential.

Self-awareness is another key quality that great PMs possess. They remain objective and avoid projecting their own preferences onto users of their products. This allows them to make data-driven decisions that are in the best interest of the users and the company. The best PMs also know how to prioritize effectively, pushing hard on the right priorities with urgency, but without conveying a sense of panic or stress.

In addition to these personal qualities, great PMs also need to have a deep understanding of how the organization operates. They must build social capital to influence the success of their product, from obtaining budget and staffing to securing top engineers to work on their product. PMs may also take on responsibilities beyond discovery, definition, and shipping. They may be responsible for pricing, marketing, support, and even sales of the product.

Looking at the downfall of Yahoo, we can see how important it is for a company to have a sharply defined identity. Yahoo had two major problems that Google did not have: easy money and ambivalence about being a technology company. Yahoo did not care about extracting the full value of traffic because advertisers were already overpaying for it. They were the beneficiaries of a de facto Ponzi scheme, where investors were excited about the Internet and invested in new Internet startups. These startups then used the money to buy ads on Yahoo, causing further revenue growth for the company.

One of the reasons Yahoo did not focus on search was because both Internet startups and established companies like Procter & Gamble were more interested in brand advertising than targeted advertising. As long as customers were writing big checks for banner ads, Yahoo did not see the need to prioritize search. This allowed Google to surpass Yahoo and become the dominant search engine.

One of the key mistakes Yahoo made was not embracing its identity as a technology company. Instead, they tried to be something else, which led to a lack of a sharply defined identity. Yahoo treated programming as a commodity, with user-facing software controlled by product managers and designers. This led to the hiring of bad programmers, and once the quality of programmers starts to drop, a company enters a death spiral from which there is no recovery.

In contrast, Google had a hacker-centric culture from the beginning. They understood the importance of having great programmers and creating a culture that attracts and retains top talent. Great programmers want to work with other great programmers, and companies that do not have a hacker-centric culture struggle to attract top talent. This was one of the reasons why Google was able to surpass Yahoo and become a technology giant.

In conclusion, becoming a great product manager requires a combination of core competencies, emotional intelligence, and company fit. Great PMs have the ability to create products with strong user adoption and exponential revenue growth. They empathize with customers, form authentic connections with stakeholders, and remain self-aware. They also have a deep understanding of how their organization operates and can influence the success of their product. Avoiding the mistakes made by companies like Yahoo, PMs should embrace their identity and create a hacker-centric culture that attracts and retains top talent.

Actionable Advice:

1. Develop your emotional intelligence by actively listening and empathizing with customers. This will help you identify their pain points and create products that truly address their needs.
2. Prioritize effectively by pushing hard on the right priorities without conveying panic or stress. This will help you make data-driven decisions and achieve success without compromising your well-being.
3. Embrace your identity as a product manager and create a hacker-centric culture that attracts and retains top talent. Surrounding yourself with great programmers will elevate the quality of your product and contribute to its success.

By following these actionable advice and embodying the qualities of a great product manager, you can pave the way for your own success in the ever-evolving world of product management.