Episode 115: Answering Questions About Navigating the B2C to SaaS Transition, the Cultural Change Challenge, and Comforting People With Product and Legacy Business
In this Dear Melissa segment, Melissa Perri answers subscribers’ questions about moving from B2C to SaaS companies and how we can do it effectively, getting people comfortable with product and legacy businesses, and understanding the right time to move on to another company and stop fighting the cultural change.
Have a product question for Melissa? Submit one here and Melissa may answer it in a future episode.
Q&A:
Q: I've been in the product space for about eight years in Cape Town, South Africa. The opportunities for SaaS companies here are super limited, and I've only ever worked on B2C products. We are now moving to Europe, where there is a plethora of SaaS companies, and I'd really love to get into that space. My question is, how can I get into that space without experience? Do you have any advice for SaaS product management-specific courses I could highlight on my LinkedIn or CV to convince potential employers I can adapt?
A: The thing about SaaS and B2C product management is that our fundamentals are pretty much the same, but we use different techniques. For example, if you are in B2C, you will be doing lots of AB testing. In B2B, we're gonna do things that mitigate risk by doing beta testing or getting small groups of customer advisory boards together. So I want you to concentrate on the fundamentals of product management. Let that shine through in your resume and in your LinkedIn.
Q: I'm a product manager at a financial institution that is introducing products to the organization. My question has to do with incorporating the product into a legacy business that is used to making decisions based on a need to put out fires rather than being strategic in decisions. How do I bring the executive level along to start crafting product strategies and still show that the department heads are ultimately making the decisions on what to move forward with? I'm starting to see some folks worry about losing their control over the area, which could lead them to miss targets, but that isn't what the product aims to do. Seems to be a lot of sentiment toward not wanting to do the work, to think through a problem, and instead move forward with what they think is most important on an individual level.
A: Here's a situation for legacy businesses that we have to take into account. A lot of people who've been working there have been doing so for a very long time, and they may actually have things that they know to be true that could be proven by fact. Sometimes when we jump straight into product processes and start talking to people about, "Hey, we need to put the strategy together" or "We need to experiment. Hey, can we get together to figure this out?" They respond with, "But I already know. So why do you need me to figure it out? Just do what I'm telling you to do." So, one technique that I found works well is to get everybody together and start listing out your assumptions. You do want to start from the perspective of how we make sure that these GMs or the people in charge of these businesses understand that by working with product, they're actually going to get more results, more money.
Q: I recently left a mid-size company where I had great product leaders because, after the company was acquired, I was no longer passionate about the mission. I didn't think I'd be able to move from a PM role to a Director of Product position without a stop at another company on my resume.
I joined an internal product team at a company where I'm very passionate about the mission. The team is only two years old and took over the technology solutions from an IT leader. I took a PM role because of the mission and the opportunity to help shape an organization, which I thought would help me hone my skills for a future Director role.
Now, what I'm finding is that the leaders of the product team say that they want to move towards being a product-led company but rarely take the steps to get there, and we're always too busy to. I knew that it wouldn't be easy, and I'm trying to do things like bring in product analytics tools to help drive more data-informed cultures, set up monthly forums for discussions around products, and best practices for the team to discuss how we can get better, and create interview guides that help ensure we're hiring the right type of product people.
Well, you've talked about how hard this type of work is, and I understand that this type of cultural shift takes time. At what point should I start thinking about whether I've done enough to gain the skills I need to move into product leadership at another company where I can start fresh without having to convince my own team, let alone others?
A: Cultural shifts take a long time, but they can set you up nicely to gain some of the skills you need as a Director of Product. But for you to think about whether it is the right time to leave, you have to consider the Director of Product skills. So, ask yourself, can I steer a team toward a larger product vision and have them execute towards that? Can I handle crafting more complicated product strategies and oversee a much larger scope? Can I effectively coach them to be great product managers? Can I set up the infrastructure that they need to succeed? Can I manage up to executives and other people in the organization and communicate my points clearly and confidently so that they have faith in me? That's the last skill that you're really working on here during that cultural change. So, if you do want to stay, here's what I would advise to try and open up the conversation a little bit more and see what could happen.
Resources
Melissa Perri on LinkedIn | Twitter
MelissaPerri.com | CPO Accelerator
Transcript:
Melissa Perri - 00:00:07:
Hello and welcome to another Dear Melissa. Today I've got three questions for you. One about moving from B2C to SaaS companies and how we can do it effectively. Another one about getting people comfortable with product and legacy businesses. And then the last one is going to be when do we know when it's time to move on to another company and stop fighting the cultural change? So I'm excited about that. But before I dive into that, I want to remind you you can submit all your questions to me as well @dearmelissa.com. This is where I answer everybody's questions. Happy to have some deep questions, in depth questions, things about a particular situation. Just explain away, go to dearmelissa.com, drop off your questions and then I answer them every other week. So let's dive into today's questions.
First one Dear Melissa, I've been in the product space for about eight years now in Cape Town, South Africa. The opportunities for SaaS companies here are super limited and I've only ever worked on B2C products. We are now moving to Europe where there is a plethora of SaaS companies and I'd really love to get into that space. My question is how can I get into the SaaS space without experience in it? Do you have any advice for SaaS product managers and specific courses I can do? Things I could do to highlight on my LinkedIn or CV to convince potential employers I can adapt? Thanks so much. I'm going to redo that one.
So the thing about SaaS product management and B2C product management is that all of our fundamentals are pretty much the same, but we do use different techniques. So for example, if you are in B to C, you're going to be doing lots of AB testing because you have a scale, you usually have a lot more customers than B2B company does. But in B2B we're going to do things that kind of mitigate risk by doing like beta testing or getting small groups of customer advisory boards together. So the way that we conduct our testing, but we still do testing is different. The premise is the same though, that we want to test things before we launch it and before we build it. So what I want you to do is concentrate on the fundamentals of product management. Let that shine through in your resume and in your LinkedIn. So what you should really be doing is saying like, “Hey, I can do the customer interviews.” “I can do testing.” “I can do roadmaps.” “I can do this.” “I can do that.” But then try to highlight keywords that say that you've got some knowledge of what it takes in B2B as well. Right? So really dive into here's the key things that I can do and that will help.
I think people see that you could do SaaS or you could do B2C. And also if your experience isn't like, I've spent 40 years in B2C, you'll be able to pick up SaaS. I know a lot of people who've migrated between B2C and SaaS before and it's totally fine. Like, this happens all the time, so I really wouldn't freak out. Another thing that could get you an in a lot of companies are doing more product led growth schemes now. So they're trying to figure out, how do I institute this in things where I've traditionally gone up market or sold into the enterprises and need a large sales team sometimes. Now they're going down market and they're trying to do product-led growth. Those have a lot more similarities in the techniques for B2C because you've got one person purchasing that thing and then hopefully you scale it to the rest of the enterprise. But that purchase channel and the way that you get those one people up and running one people that one person up and running is very similar to some of the techniques and some of those funnels that we use in B2C. So maybe look for people who are looking for, like, a growth PM or a product led growth expert or somebody in that area, because I think a lot of your B2C techniques are actually going to shine through there. And it may help people who don't actually have any experience with those types of work or that type of funnel before. So that could be a really good way to break down a barrier and make yourself a little more interesting for those companies too. Best of luck.
All right, second question. Dear Melissa, I'm a product manager at a financial institution that is introducing product to the organization. My question has to do with incorporating product into legacy business that is used to making decisions based on a need to put out fires rather than being strategic in decisions. How do I bring the executive level along to start crafting product strategies and still show that the department heads are ultimately making decisions on what to move forward with?
I'm starting to see some folks worry about losing their control over the area, which could lead them to missing targets, but that isn't what product aims to do. Seems to be a lot of sentiment towards not wanting to do the work to think through a problem and instead move forward with what they think is most important on an individual level.
All right, so here's a situation for legacy businesses that we have to take into account. A lot of people who've been working there have been doing so for a very long time, and they may actually have things that they know to be true that could be proven by fact. And sometimes when we jump straight into product processes and we start talking to people about, hey, we need to put the strategy together or we need to experiment, hey, can we get together to figure this out? They're going, But I already know it, so why do you need me to figure it out? Just do what I'm telling you to do. That's their mindset. So I want you to not that it's the right mindset, but I just want to tell you that that's their mindset. So now I need you to know this is where they're coming from, right? So now let's take a step back. A lot of people get really uncomfortable when product comes in and starts from scratch or tries to start from scratch. So one technique that I found that works really well is get everybody together and start listing out your assumptions. What do we know to be true? Cold, hard facts. And let's put down how we know that to be true. It could be research, it could be industry knowledge. Any of that stuff. Cool? Let's assume those are true. Let's put down what we're not sure about. How you explain this is that product's opportunity here is to help you figure out what we're not sure about and see if those things are true so that we build the right thing. You might want to start from that angle.
Another thing here too, with the legacy businesses is typically, people had their own software budgets under each GM who was like business focused, and then they could control whatever they built. So now they're going,”Oh, if you want to start talking about product strategies, are you going to centralize it or going to take away my ability to execute because I can't get paid then?” And that is a legitimate concern. And I've actually worked with a lot of companies on that concern, seen it in real time happens all over the place.
So in these cases, you do want to start from a perspective too, of how do we make sure that these GMs or the people who are in charge of these businesses understand that by working with product, they're actually going to get more results, more money, right? Because they probably have a lot on the line when it comes to bonuses or something like that. That happens all over the place. So let's empathize with that for a minute. Let's think about that and think about how they're rewarded. How can you now change your pitch from, “Hey, we got to get together to figure out these long term product strategies.” to “Hey, what are your goals for the end of the year? What are you trying to hit? What are you being measured for success on?” “Oh, that's okay.” Did you know that if we can start getting this stuff right over here with product, we're probably going to be able to hit that and then some for you. You want to start to put these things in terms of how it's going to help them and how it's going to shift the business. So, for example, I worked with a company that's in this exact situation, and a lot of people were really nervous about it. And what they started to understand was that from the way that they used to work, they were operating on lower margins. But as soon as I started talking to the executives about how much margins SaaS businesses get, they were like, “Wow, we would like that.” Because they're around 90%, right? Like, they were like, “Whoa, we can double our margin percentage. That's amazing. Let's do that.” You got to start speaking to this in the terms of what they think about. And they're thinking about revenue, they're thinking about costs, they're thinking about their own goals. How does software help them do that? That's how we manage up and that's how we get those people on the same page with us.
So I want you to really step back and think about what's scary for them. And it does sound like you did that a little bit too by saying, “I think they're worried about control.” Yes, they're worried about control, but why do they care about control, right? That's the thing that's going to help you make your pitch to them. So a lot of this is less about telling them how product management works and more about empathizing with them and showing them it's not scary and then taking them on this journey to then educate them. Once you break down those barriers now, I understand where they're coming from and I know why they're worried. And it's about getting the right people in the right room to talk these things through. So in some of these cases as well, the CEO has to be like, “Hey guys, I know that we used to do your bonuses or judge you based on X, Y, and Z. We are going to give some of these numbers a pass.” While we're going through this effort to change into more of a product-led company, we're going to make sure that we adjust for that and don't worry, your bonuses will not be in jeopardy for you doing software. Those types of things actually do really help in these situations as well. So you might need a little bit of help from that as well. But with financial institutions, worked with a bunch of them, I can tell you that a lot of these people have been there for a very long time, and they know a lot of things. And I think you do have to go in there respecting that and saying, “Great, I'm going to put the software pieces on here, though, and what I want to do, though, and this is how software works.”
We can actually save money by managing a smaller subset of products that do more for our customers and for us internally. And we can grow those and scale those. And that means that we don't have to build one off things over and over and over again. But that will help us reach these goals and make sure you know what the goals are right, make sure you know what the business goals are and relate it back that way. That usually helps, but it is hard. It is a big cultural change. People have been there probably for a very long time. But ask them questions like, listen, don't just try to dictate how things should work. Listen to them about what they know and what they know to be true, and then maybe start from that assumption perspective that I talked about too. That could really help. I've seen that work wonders in these different situations. All right, last question. Another culture question, which is good?
Dear Melissa, I recently left a midsize company where I had great product leaders because after the company was acquired, I was no longer passionate about the mission, and I didn't think I'd be able to move from a PM role to a director of product position without a stop at another company on my resume. I joined an internal product team at a company where I'm very passionate about the mission. The team is only two years old and took over the technology solutions from an IT leader. I took a PM role because of the mission and the opportunity to help shape the organization, which I thought would help me hone my skills for a future director role. Now, what I'm finding is that the leaders of the product team say that they want to move towards being a product-led company, but rarely take the steps to get there, and we're always too busy to try. I knew that it wouldn't be easy. And I'm trying to do things like bring in product analytics tools to help drive more data informed cultures, set up monthly forums for discussions around products, best practices for the team to discuss how we can get better, and create interview guides that help ensure we're hiring the right type of product people. While you've talked about how hard this type of work is, and I understand that this type of cultural shift takes time. At what point should I start thinking about whether I've done enough to gain the skills I need to move into product leadership at another company where I can start fresh without having to convince my own team, let alone others?
Yeah, so this is hard. So you signed up for a cultural shift, and I don't know if you really wanted to do that or if you just wanted to be a director of product. Now, cultural shifts do take a long time, but they can set you up nicely to gain some of those skills that you need as a director of product. But for you to think about, “Is it the right time to leave?” You got to think about director of product skills. So ask yourself, like, “Can I steer a team towards a larger product vision and have them execute towards that?” “Can I handle crafting more complicated product strategies and more complicated product visions and oversee a lot larger of a scope?” “Then can I steer my team towards that?” “Can I coach them effectively to be great product managers?” “Can I set up the infrastructure that they need to succeed?” “Can I manage up to executives and other people in the organization and get my points across clearly and confidently so that they have faith in me?” Now, that's that last skill that you're really working on here during that culture change. So if you do want to stay for a little bit, here's what I would advise to try to maybe open up the conversation a little bit more and see what could happen.
Now, if everybody's too busy to try, what are you asking them to do? Like, are you trying to get other people to change what they're doing? Or are you just doing stuff and showing them what good looks like? Because in a lot of culture shifts, it's actually easier to just kind of like, mind your own business a little bit and just execute. And don't ask for permission. Just do it. The best product leaders I see out there will give you the same advice. I ask them to give people advice all the time, and this is what they say. They're like, “Don't ask for permission. Just do it.” Show people what good product management looks like. Show people that you are capable of doing that. Get some people who are excited about it on the team. Bring them in, rope them in, but just like, do it. Don't keep asking people that, “Hey, should we do this?” No, just do it right for the things that you can't do by yourself because you're an individual contributor and there is a lot that's where you have to start to work on your persuasion skills and managing up and having good conversations about it. So, like, in the last question, I was saying, you really need to be able to talk the business with the people that matter in the executive team. Can you show them how your product stuff relates back to improving their margins and their revenue and their costs and all of those things connect it up there. That's when they start paying attention. They're like, “Oh, I like money. I'll listen to things that will get me money.” Work on telling that story. I think that's really, really important. And then also, because you're doing a cultural shift, maybe take a step back and just say, “What do you guys think product led actually means?” Because a lot of people don't know what that means. And you might find out that there is actually no common definition for product led. And so there is no vision for that organization of what they want to be one day when they grow up. Right? That's your opportunity to help craft that vision.
Do it in a working group. Bring people in, say, “This is best practice.” This is what people do. Here's the overarching vision of how this should all work. At the end of the day, here's how you fit in. Here's how we fit in. Here's how we collaborate together, and we will do this all together. Paint that vision for them and see if maybe that helps a lot. Because a lot of times we'll get into these tactics like you're talking about, which are great, yes, we want data. Yes, we want to do get the right people in there to hire them too, with these interview guides. But you might be doing things that are a little too tactical instead of painting a larger strategy. So maybe start there, because that is also key for running product teams. If you came in to do this as a VP instead of an individual contributor, and I don't know if there's a VP there, that's where you would start in a cultural shift. So if there is no VP or there's nobody doing this, try that. Try doing this. I think that actually will probably help you a lot.
All right, that's it for Dear Melissa this week. Again, if you have any questions for me, please pop them into dearmelissa.com. I always love to see what you are thinking about, and I'll see you next week. Bye.