A Product Guy Dilemma: Navigating Power Plays in Balancing Investors and Founders

Introduction

I am going to share about this topic from my experiences gained working in start-ups, scratch start-ups and helping organization to build product capabilities. Before, I move ahead and share more on the topic, let me quote from experiential leanings:

Imagine being caught in a tug-of-war between two colossal forces: on one side, the vision-driven founders of a startup and on the other, the ROI-focused investors fueling it. As the person responsible for shaping the product, you become the rope in this metaphorical struggle. Welcome to the Product Guy Dilemma.

"In the tug-of-war between vision-driven founders and ROI-focused investors, the Product Guy becomes the rope, not just pulled in two directions but responsible for holding the fabric of the startup together."

What I felt as a Product Guy while working closely with with Founders and Investors

Being a Product Guy, it is like being a modern-day orchestra conductor—coordinating the symphony of development, design, marketing, and data analytics while aligning the company's long-term vision with the immediate demands of the market. However, one of the most challenging aspects of this role is undoubtedly the dual expectation of satisfying the company's founders and investors. I have learned some valuable lessons during my tenure, and I'd like to share those insights in the hope that they might aid you in the product journey.

Section 1 - Navigating Stakeholder Perspective

The Investor Perspective

Investors typically desire one thing: growth. They've invested their money in the expectation of a significant return, and they will relentlessly track metrics like Monthly Active Users (MAU), Customer Acquisition Cost (CAC), and Life Time Value (LTV) to gauge progress.

Exp Gained 01: Clear Communication Avoid the "spray and pray" tactic. Providing investors with too much data will only confuse them. Be strategic in the metrics you choose to share; ensure they are directly aligned with your strategic objectives. Be transparent about both successes and setbacks to build trust.

The Founder Perspective

Founders have their life's work invested in the venture. They often have a deep emotional connection to the product and a granular understanding of its capabilities and limitations.

Exp Gained 02: Emotional Quotient Over Intelligence Quotient Emotion often trumps logic in founder-investor relationships. Recognize the emotional investment of founders and validate it while communicating your strategy. Sometimes, a founder needs reassurance that their vision is still at the heart of the product.

Section 2 - Bridging GAP

Often, the expectations of investors and founders can seem irreconcilable. Here’s how I managed to find a middle ground:

Exp Gained 03: Common Shared Language - A Visual Framework / Canvas Create a common shared language or a visual canvas/framework that helps both parties to understand. It could be a roadmap that aligns business metrics or monetisation (loved by investors) with feature releases or scaling (loved by founders).

Prefer to have a "Visual Canvases / Frameworks" that helps all people to see what we are talking and building common understanding

Section 3 - Working in B2B product model Challenges

Challenge 1: Serving Multiple Stakeholders - From Sales to C-Suite

The Issue: In a B2B enterprise, your product is not just aimed at end-users but also has to meet the expectations of various stakeholders, from the sales team to the C-Suite, each with their own KPIs and objectives.

Approach: Establish a "Stakeholder Map" early on, outlining what each internal group expects from the product. Keep this map updated and use it as a touchstone for decision-making.

Challenge 2: THE ROI vs Innovation Paradox

The Issue: Investors and the C-Suite often want to see quick returns, pressuring the team to focus on "safe" features that guarantee immediate revenue. On the other hand, the founders and engineering team push for innovation, which is inherently risky.

Approach: Maintain a dual-track development approach: one for innovation and one for ROI-centric features. This balances the needs of both stakeholders and allows for portfolio diversification, mitigating risks.

Challenge 3: Compliance, Customisation and Penalty

The Issue: Enterprise products often have to meet various regulatory compliance requirements, which can clash with the customizability that many B2B customers desire.

Approach: Implement a modular architecture that allows for easy toggling of customizable components without affecting compliance modules. This enables the product to be flexible yet secure. Include you business and regulatory compliance so that your cost of change would be lower and can be done easily.

Include you business and regulatory compliance in your development so that your cost of change would be lower and can be done easily.

Challenge 4: The Long Sales Cycle and Feature Roadmaps

The Issue: B2B enterprise products often have long sales cycles, making it challenging to align the product roadmap with the sales strategy.

Approach: Establish a clear channel of communication with the sales team to understand their pipeline and upcoming client needs. Adjust the product roadmap accordingly but always maintain a core set of features that adhere to your product's vision. Align your stakeholder map wisely.

Section 4 - Working in Start-ups Challenges

Challenge 5: Speed to Market vs Product Perfection

The Issue: Investors in a pre-revenue start-up are keen on seeing quick market validation—sometimes any validation—of the product. The CEO, or founder, may insist on perfecting the product before any kind of launch.

What kind of discussion you might see/observe: Tensions may peak in business roadmap meetings. Investors may push for a Minimum Viable Product (MVP) to be released ASAP, to validate and gain traction, whereas, the CEO may insist on further development to meet their vision.

Approach: A potential approach involves as market and iterative launch. Release a well-polished MVP first, collect user data, and iterate on the product as you move forward. This approach can serve both immediate validation needs and long-term vision.

Challenge 6: Short Term Gains vs Long-Term Vision

The Issue: Investors often push for rapid growth, looking for strategies that will quickly increase revenue. Founders, on the other hand, may have a longer-term vision that involves creating a deeply impactful product.

What kind of discussion you might see/observe: Discussions can quickly heat up around budget allocation. Should more money go into marketing to rapidly acquire new users, or should the funds be directed towards R&D to create a groundbreaking feature?

Approach: Transparency and Creating Clarity are key. Present a budget plan that demonstrates how short-term gains will fund the roadmap for the long-term vision, satisfying both parties.

Challenge 7: Funding Allocation

The Issue: Investors often want their capital to go towards aggressive user acquisition and marketing to prove market fit. CEOs might prefer this early funding to go into product development and talent acquisition.

What kind of discussion you might see/observe: You might observe Budget allocation debates can get especially tense when the company is yet to make revenue. Each expense feels heavier, and disagreements can escalate quickly. From my exp - Investors wanted a 60-40 split favoring marketing, while the CEO wanted the exact opposite.

Approach: A balanced budget, with allocation for both user acquisition and product development, might be the middle ground. Back up this compromise with industry benchmarks and success stories to make it palatable for both parties. Try NOT to create Obligation or overhead.

Challenge 8: The Razor’s Edge of Monetization

The Issue: Investors may push for early monetization strategies, such as in-app purchases or advertisements. CEOs might fear that such moves could alienate early adopters and degrade the user experience. Investors usually want to see revenue streams, while CEOs are often more concerned with user experience and long-term engagement.

What kind of discussion you might see/observe: You might observe suggestion to introduce in-app purchases in our free-to-use platform led to tension. The CEO was afraid it would deter our still-growing user base. Or, This often comes to the forefront when discussing feature roadmaps, where adding monetization elements could divert resources from other features deemed critical by the CEO.

Approach: You may use your approach:

# Offer to run small, controlled tests to validate whether early monetization affects user experience and retention. Use data to inform decisions, thereby mitigating emotional biases.

# Running small, controlled tests and sharing the results can also give both parties the information they need to make more aligned decisions.

Try NOT to create Obligation or an overhead.

Conclusion

The Product Guy Dilemma is a perpetual balancing act. While the scales may tip in favor of one party at times, the trick lies in maintaining equilibrium without compromising the product or relationships. Transparent communication, negotiation skills, and data-backed decisions are the navigational tools that help steer through this challenging yet exhilarating journey.

Navigating the dynamic relationship between co-founders is not just essential for personal well-being; it's crucial for the success of your startup. The Co-founder's Dilemma is not an insurmountable obstacle, but rather a challenge that, when addressed head-on, can transform into an opportunity for both personal growth and organizational success. After all, two heads are often better than one—provided they're working in the same direction.

The co-founder journey is an exhilarating roller-coaster through a landscape of high stakes, greater rewards, and endless learning. It's about balancing on the knife's edge between passion and pragmatism, between your team's culture and your investors' expectations, and between your co-founders' diverse views and your own convictions. And amidst all this, it's crucial to remember that while you may be walking a tightrope, you're never walking it alone.

Eventually:

As a Product Guy in a B2B enterprise, you'll find yourself straddling different worlds, each with its own language, expectations, and interests. It's a challenging role but one rich in opportunities for those willing to understand the complexities and subtleties involved. It's less about choosing sides in a divided house and more about building bridges that connect these worlds, finding that elusive balance that keeps both the dreamers and the pragmatists satisfied.

Anubhav Sinha
Anubhav Sinha is a Co-founder of Product Capability Uplift and he is a contributing as a Course Developer for major tracks of the Product Capability Academy courses. In this role, Anubhav leads the Capability Building of the Product Academy as well as works as the Product Thinker of the Product Capability Uplift Product Academy.

Anubhav Sinha is a product coach, a product management practitioner and technology product geek with around one and half decade plus of the product management and development experience that ranges widely in the B2B, B2B2C and B2IB product space.

He is known for contributing and creating products majorly in the start-up space, helping start-ups in their early stages and contributing industry product organisations as user-experience flow optimiser. He had served industry as Principal Product Owner [co-founder], Product and Design Thinking Coach, Product Owner and Transformation Coach.

Anubhav holds a Post-Graduation in Marketing - IB and Bachelor of Engineering in Electrical and Electronics.

Image credit

<a href="https://www.freepik.com/free-photo/business-man-pulling-rope_896372.htm#query=tug%20of%20war&position=4&from_view=search&track=ais">Image by onlyyouqj</a> on Freepik

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A Product Guy Dilemma: Navigating Power Plays in Balancing Investors and Founders

A Product Guy Dilemma: Navigating Power Plays in Balancing Investors and Founders

Introduction

Section 1 - Navigating Stakeholder Perspective

Section 2 - Bridging GAP

Section 3 - Working in B2B product model Challenges

Section 4 - Working in Start-ups Challenges

Conclusion

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