You’re Doing It Wrong: Talking About Revenue

Hot take: If you are a manager of a product team and you’re talking to your product managers about revenue, you’re doing it wrong.

In a vacuum, ask anyone what “product” does and we’ll say something like “we translate user needs and pain points into solutions”. (Wow, I’m good.) That’s why product is hard and complex and nebulous: we listen, we observe, we think, we hypothesize, we (work with) design, we challenge, we assume, we don’t assume. Nowhere in that formula (and I’m happy to admit it is incomplete at best) does it say “counts dollar signs”.

(I don’t know who needs to hear it, but…) We don’t sit there and rank features based on which customer needs it and how much money they bring in: mostly because if that’s what our features look like, then we’ve already lost.

So when our leaders walk in — metaphorically, because we’re all remote — and start telling us which users or customers to care about and what we need to do for them, they’re doing us a disservice and making our job harder and worse. Yes, revenue is important, and should be part of the equation (this is BuSiNeSs after all), but we all know — and many of us have experienced — the horror story that results from prioritizing your one high-revenue customer at the expense of needs that might be more relevant to and cross-cut more of your other numerous middling-revenue customers. All of a sudden you have 8 teams working on this one thing that only this one customer needs, and while you’re not paying attention you’ve become a one-trick pony that’s behind in every other area…

Appeasing high-revenue customers is a shortcut to showing investors value, but it’s a short-term solution. It’s a more interesting, rewarding, and better solution to actually DO product: understand the market, develop for and ahead of the majority of customers, and look for diversified success.

I like to think of high-revenue customers as bad boyfriends. You stay with them because you’re afraid they’ll take something critical if they leave: lots of money. (Fear of abandonment, yada yada yada.) But what are you giving up in return? You don’t know which of your average customers — or which several of your average customers — might replace or exceed that lost revenue, when in the meantime if you’re spending all your energy / money / time pleasing that bad boyfriend, you’re losing a lot in the process: your self (your vision, your mission), your other friends (customers), your own capacity (employees, skills, critical thinking…).

And when that bad boyfriend leaves you anyway because some other bitch rolled up and she’s 5 years younger and hotter or whatever, you are now even less-equipped than you were before to service your remaining customers.

I’m not saying anything new: everyone knows this intellectually, but doing it in practice seems to be hard. C-suite execs are under pressures like the aforementioned “counting dollar signs” and shareholder opinions and other such nonsense that, ideally, would never reach us peons in the trenches of product design and development. Bad managers take this Business Speak Gobbledegook and just funnel it downwards, passing us information like “we need to do X for Y customer because $”. Then we have to do it to keep our jobs (we do count our own dollar signs), and in the process become wardens of nonsense roadmaps and development plans that (a) we didn’t design and (b) we don’t believe in. This robs us of our autonomy, intelligence, creativity, and the whole reason for doing product, and instead replaces it with task lists designed to appease fidgety Wall Street types.

Good managers should filter these imperatives, push back on leadership, understand from us what we believe is important and why, and, maybe even with our assistance, spin that back up the chain into “we hear your revenue concern but we have a different solution and it’s even better”. We’re product managers after all: give us a problem, we’ll find you a solution. Any PM worth her salt can tell you why her solution is the right solution and will be worth more to the company in the long term and will ultimately generate more revenue. Good managers should be giving us this opportunity. Don’t tell me what to do. Let me do my job.