Over the last few months, while talking to a range of Indian and Global tech companies, I noticed an interesting trend in the determination of location for key functions, specifically product management.
Global MNCs: During conversations over the last few months with some North America based technology MNCs, I observed that a lot of them plan to create product management functions for local markets and ensure better insights by placing the product managers in the local markets. By this, they plan product functionality and global roadmaps accordingly.
Most people who have worked with global MNCs will, time and again, have observed that products are not created for Indian (or emerging) markets. Most product managers continue to design products for their home markets (typically the more mature markets), with limited focus on local market insights.
India Based Product Companies: In a majority of these companies, more so the startups, senior management executives are either based out of, or are relocating to their largest markets (read North America, maybe South East Asia). The logical reason is to be close to the key markets and customers.
The rest of the functions (operations, product management and engineering, service delivery, shared services), continue to be based in India.
And this is where I started thinking about the ideal location for product management.
Typically, Indian product startups focus on building a customer base (and credibility) in India, and once established, extend to more mature and higher revenue markets e.g. North America. As they expand, they locate their sales teams there, but continue to have their product management teams based in India.
Extending the logic of creating products suited for the key markets, shouldn’t product management at Indian product companies be based in the potentially largest markets? The refrain often is that they cannot afford to have product managers based out of the higher cost markets.I recognize that there is no easy solution, and companies choose different approaches to manage this.
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Location Options
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Typical Company
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Advantage
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Challenge
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Located with Development
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About 50-60% of companies, Indian and Global
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Ensure that the product development matches product definition
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Not enough market exposure for the product managers
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Split between Development and Market locations
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Taken by SI firms, where the product manager travels specifically for large opportunities
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Balance between development and market needs, being an effective bridge
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Customer meetings are for closures, not for discovery – thus, not able to really get deep proactive insights into the market
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Extended Product Management teams in the market
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Taken by about 15% of companies, having an advanced roadmap
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Get market feedback and also be able to effectively engage with the development teams
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Presales / solution responsibilities are pushed onto local product managers, limiting market feedback and insights
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Located in the Market
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About 5-10% of companies (mainly Global)
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Capture direct and deep market feedback to ensure product truly meets market needs
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Limited engagement with the development teams
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My belief is that while there may be no one answer, it is fundamentally linked to the stage the company is in, and the ability to effectively capture market feedback into the company’s product management teams.
The Location Matters
For product startups, however, it becomes extremely critical to get the right market insights (on an ongoing basis) so that they can actively differentiate and continue to retain their market edge as compared to some of their better entrenched competitors. Having local market feedback could well be the key differentiator that could help them build and deliver significant value to their customers. And could result in the long term growth and survival. When one evaluates the employee costs of keeping the product management function in the key markets against the opportunity costs, it becomes apparent that the benefits derived can easily justify the investments. However, the choice of the right product manager is also critical, otherwise you may end up getting pre-sales and reactive insights, which is not what the goal is.
Of course, an extreme option could be to follow Dogbert’s advice:
Look forward to your insights on approaches that have worked for product companies across multiple markets.
