Product Management - The New Exit Op?

Product Management intrigues me. I had always understood it to be a highly interdisciplinary role drawing on elements of engineering, finance, marketing, and (obviously) management, but I hadn’t done any in-depth analysis. I’ve recently given the field a closer look, however, as the trend out here on the West coast seems to be to jump ship from Analyst gigs one year in to take up PM roles at startups. In fact, two good friends of mine left their Analyst roles (one at a BB and one a former colleague) to do just that. Both left after a single year in banking, and both couldn’t be happier at their new jobs. What seems to be the incredible appeal?

A bit of Googling led me to this definition: “product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product at all stages of the product lifecycle.” To draw an analogy, and this is the analogy my former colleague used in support of the argument that he was qualified for the role, product management is basically sell-side M&A, but with a product rather than a company. It’s like inventing, but with guardrails. As a PM you OWN a product from its inception. You could “own” the Facebook timeline, Google+, the “Like” button…or more tangibly Air Jordans, the Stratocaster, or those crazy Japanese toilets that talk to you…you get the picture. You reap the rewards if your product succeeds, and the blame falls squarely on you if your product fails – but therein lies the appeal.

The responsibility and autonomy granted to product managers can be enormous, especially at startups. And I can certainly see the appeal after a year of grinding away as an Analyst monkey underling. Beyond the merits of the role itself though, what I find to be most interesting is the fact that banking arms us with a skill set that is so readily transferrable to product management. Think about it – think about all the market analysis you do in your pitch books and marketing materials. Developing competitive landscapes, drawing upon Porter’s Five Forces, drafting pro forma projections, analyzing risks, assessing mitigating factors, even formatting things to look pretty for your MD – these are all frameworks and skills that can be applied to the marketing of a product. Whether we’re selling it internally or generating buzz in the marketplace, we could all theoretically jump ship. But why don’t we?

Are we just not creative enough? Is it just the money? Is it the fact that we like finance more and want to stay a step removed from the operations? Is it the fear associated with veering off that fabled “track” to glory…or is it something else? I’m genuinely curious to hear people’s responses...in fact, WSO Patrick – what are your thoughts? We’re all using your product right now!

 

Not to be a naysayer, but it's not that easy to move into a product management role. You often need real a real technical background or at least a design based background. It's not like you can just jump from working in M&A to managing new products at Facebook (especially without a ton of high-end programming ability.)

Also, a lot of people could've gone into those types of roles (which are much more marketing-oriented), but would have to take less pay than you get in banking. For instance, if you join a company out of college in "product management," you'll essentially be a junior marketing person and need to work your way up the chain. Yes, it sounds like an interesting job, but just be prepared to make $50 - $60K all-in for a few years.

 

i'd like to add that Product Management focuses on developing a strategic direction for a product or service... not necessarily a new one. PM's appeal (from my experience as finance support to PM at a blue chip tech firm) is the high level of DIRECT impact the role has compared to other business roles... no hockey pockey Strategy Consultant bullshit that may or may not be implemented. no screwy DCFs that supposedly demonstrate "value" through synergies. PMs find out what customer's want, determine whether it's technologically feasable and financially beneficial, and then make it happen.

though it usually doesn't pay as much as banking or private equity, definitely a very cool role.

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?
 

I can tell you that at my company Product Managers are about 90% marketing and 10% finance. They fall squarely within our marketing group.

Also, I work for an older, slower paced F500 so it really is a core marketing role. There is little to do with lifecycle management (launching and shutting down products). A PM at a startup, facebook or google is probably really cool. A Product Manager at P&G probably isn't all that exciting.

Patrick, at my company with only a year of experience you will not come in at the management level (in any role really, not just Product Managers). Your compensation and responsibilities are just not that intriguing at those levels.

twitter: @CorpFin_Guy
 
accountingbyday:
I can tell you that at my company Product Managers are about 90% marketing and 10% finance. They fall squarely within our marketing group.

Also, I work for an older, slower paced F500 so it really is a core marketing role. There is little to do with lifecycle management (launching and shutting down products). A PM at a startup, facebook or google is probably really cool. A Product Manager at P&G probably isn't all that exciting.

Patrick, at my company with only a year of experience you will not come in at the management level (in any role really, not just Product Managers). Your compensation and responsibilities are just not that intriguing at those levels.

interesting, thanks accountingbyday

 

Most PM's I've worked with had undergrad Engineering degrees.

Maybe it's just my company but most of the PM's I've worked with have been: undergrad CS -> developer -> PM or undergrad CS -> developer -> MBA -> PM or whatever major -> Strategy Consultant (MBB) -> PM (with an MBA in there some where usually) rather than analyst -> PM.

PM is actually a very common route for developers who don't want to write code anymore and want to do more big picture stuff. As a dev, I'm very suspicious of anyone without significant tech skills as a PM.

 

Product management is a very, very, very broad term. It means completely different things across many industries. B2B or B2C? Technology or manufacturing or CPG? So many factors. Even titles vary (Product Manager at Google is the same this as PROGRAM Manager at Microsoft, while Product Manager at Microsoft is a Product Marketing Manager at Google).

What the OP is talking about I feel is tech product management, which REQUIRES a technical background. Another little history lesson: Google had non-technical PMs back in its early days but programmers got so frustrated with non-technical PMs that they don't hire them anymore (few exceptions for top MBA grads). When you're looking at spec requirements and you throw ideas against the wall, a developer will shake his head and say "you know how many requests per second that takes?" Or "this language doesn't even DO THAT." (for a good example, google "zerg rush" right now. That is only possible with the rise of HTML5, not Java).

Also...

Product management has been around FOREVER before tech. It's historically been a marketing field (I know, I was a marketing major).

Also...

Product management is not glorious. Often times it's working on a small aspect of a product. For example, you're product manager over Facebook chat. Seeing how it's compatible across different countries and browser sizes. Seeing whether its response time is .5 seconds or .47 seconds, and seeing at what point do users get pissed off on, and what sacrifices you have to make in functionality to reach that efficiency point.

And often times there's several product managers on the same product. You're not doing sexy stuff for awhile.

"the grass is always greener." Right? Sounds cool in theory though...

 
Most Helpful

PM lurker here. I work at a tech company in the Bay Area and have to say Product Management is one of the best careers out there.

Comp - If you start out at any of the 1st or 2nd tier tech companies (FANG, Uber, Twitter, Dropbox, Yelp, Airbnb, etc), you're looking at $135-$180K comp your first year as an associate PM. - By your third year you'll get a significant bump in comp as you move to full PM. This is usually around $160-$220K*. - Senior PMs (4-5 years in) make anywhere between $200-$350K depending on the company and position. Search and Machine Learning PMs are on the higher end, due to high demand/low supply of qualified talent. - If you get promoted to Group Product Manager (manager of PMs), you're looking at $250K-$1M comp. Again it depends on your product area coverage and how many PMs report to you. The vast majority of that comp will be in the form of equity. - After 10+ years or if you get lucky and join a startup early on, you'll be considered for a VP or SVP of product role in the company, and the comp easily tops $1M. Executive-level product folks are also highly qualified for C-suite roles (see Sundar Pichai and Satya Nadella), as you have the business and technical background.

*You could also get lucky with the equity component and make more sooner. I've had a friend who joined FB out of undergrad just two years ago and is now making $300K all-in due to equity refreshers + stock appreciation.

Lifestyle - It varies a bit depending on the product area and company, but I've had friends who have 10am-4pm workdays and others who have 9am - 10pm workdays, with lunch and dinner comped. - I don't think I've met a single PM who doesn't like their job - It's the hottest job in Silicon Valley because you influence what gets built. It's also incredibly difficult to get because you need a rare combination of engineering, analytics, design, and business skills. Of the 20 friends I've referred to product management from consulting, IBD, engineering (often with Ivy or near-Ivy pedigrees), only 1 got an offer.

The Work - At the junior levels you're doing a ton of data analysis to inform the product roadmap. You'll also be working with designers and engineers to "execute" on the product roadmap, making sure the right things are prioritized and built. - As you get more senior, you may have your own engineering team and create a roadmap with your engineering manager counterpart. You either have a lateral (i.e. data analytics, search, etc) or vertical focus (specific features/products). - As a group product manager you report to the VP of product if it exists or the CEO, and influence the roadmap of the PMs who report to you.

Exit Opps - Few people leave Product Management but people leave their companies all the time (better comp elsewhere, more interesting product areas, more equity upside, etc). - If you're looking to switch industries, PM -> Venture Capital is possible.

 

Thanks for this, super insightful... currently at a top tier business school, double majoring in ee and cs with two years of IB internships. I'm really not sure what to do out of undergrad, go work for the bank i'm interning at this summer as an FT analyst, or recruiting for software development role. I really want to explore that intersection of business and tech, but on paper, I don't have the technical experience other than my degrees and courses. I would really appreciate if you could shed some light on my situation.

 

Quasi aut placeat dicta a ex fugit id dignissimos. Qui excepturi voluptatem corrupti voluptatum officia aperiam doloremque. Sit itaque ut voluptatem voluptatem dolor.

Reprehenderit quisquam doloribus quae et asperiores sit. Sunt voluptatum iste molestiae consequatur. Est voluptas inventore sunt.

Enim suscipit dolores sint placeat omnis. Eaque corporis exercitationem voluptatem minima voluptatem ducimus ipsa. Exercitationem accusamus quisquam facilis eos tenetur maiores perspiciatis. Numquam aut cupiditate perferendis cum hic corrupti omnis. Molestiae officiis impedit earum. Id perspiciatis repellat harum quo inventore non et dolores.

Magni delectus totam et. Nobis quis voluptatem qui doloremque deserunt. Aliquid itaque et ut ipsam.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
kanon's picture
kanon
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
CompBanker's picture
CompBanker
98.9
9
DrApeman's picture
DrApeman
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”