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Navigating the Differences: Product Management in Startups vs. Agencies

This article explores the distinct challenges and nuances faced by product managers in startups and agencies, providing insights into how these roles adapt to their unique environments.
Yoav Farbey

Group product manager building B2B products with purpose, ING

The principles of product management are generally the same across the board: product managers are responsible for the successful delivery of product releases. But in every company, the role of product management is slightly different, depending on the circumstances and culture of each enterprise. There are also clear differences in the product manager’s role when you compare what they do in an agency to what they do in a startup.

In this article, I look at the differences between product manager roles in agencies and startups at different stages in the product development cycle and when working with stakeholders in general.

At the Initial Stages of Product Development

Startups: At a startup, the product manager works closely with founders, taking time to understand the business needs and technology requirements for the company’s product. Once the full feature list is defined, the product manager collaborates with design and UX teams to visualize these features and prepare for user testing and feedback. The product manager prioritizes features against user feedback and de-scopes features that did not work during user testing.

Example: At a health tech startup, the product manager might work directly with the CEO and CTO to define a feature that allows users to track their health metrics. Based on user feedback, features might be adjusted to improve user experience and engagement.

Agencies: In contrast, the business rules and desired features come from the client. A client may choose to push ahead with features that are not well-received in research or do not make sense. The product manager’s responsibility is to advocate for rational decisions and try to convince the client to reconsider.

Example: An agency working on a retail app for a client might face pushback when suggesting the removal of an underperforming feature. The product manager must diplomatically present data to persuade the client to make informed decisions.

During the Development Process

The development process in an agency is very similar to that in a startup. Product managers start this process by documenting all the features and writing tickets into a tracking system such as JIRA, Trello, or Pivotal Tracker. The style of writing tickets depends on the company rather than whether it is an agency or a startup.

Startups: The product manager explains the requirements to developers and works through the ticket list with the team to estimate the difficulty of each task. This creates an estimated product backlog for the development team.

Agencies: The development team needs to work to a client-determined deadline. This means the product manager must juggle what can realistically be achieved within the given timeframe to complete as many of the client's requested features as possible. This often involves continuous negotiation between the team and the client.

Example: A product manager at a startup may find it easier to adjust deadlines and priorities internally, whereas an agency product manager must manage client expectations and internal team capabilities within fixed deadlines.

The office environment for a product manager can differ from business to business  

At Product Delivery

Startups: The product manager continues working with various parts of the business to develop the long-term roadmap. The measure of success is the product's success in the marketplace.

Agencies: Delivering a finished product to a client may signal the end of the product manager’s involvement, at least temporarily. Long-term plans with the client may fall to other agency team members.

Example: At a startup, a product manager might be involved in planning future updates and iterations based on user feedback, while in an agency, the product manager might transition to new projects after delivery.

Working with Stakeholders

Startups: The product manager collaborates closely with key stakeholders such as the founder, CEO, and business development team to ensure the product supports business success. They share a common goal of advancing the business and product success in the market.

Agencies: The goals of the client and the product manager may not be aligned long-term. The client’s product success is usually beyond the agency’s product manager's control, who won’t have the same influence on the business team.

Example: In a startup, the product manager's close relationship with the CEO can lead to more cohesive and aligned decision-making, while in an agency, the product manager must align the client's vision with practical delivery constraints.

Emerging Trends

To stay relevant, product managers must adapt to new trends such as AI-driven product management tools, increased emphasis on user privacy, and evolving Agile practices. Tools like Asana, Monday.com, and AI-powered analytics platforms are becoming integral to modern product management.

Commonalities Between Agency and Startup Product Managers

Despite the differences, product managers in both agencies and startups share several core responsibilities and skill sets:

  • User-Centric Approach: Prioritizing user needs and experiences. Using product discovery methods and data analysis to better understand the user: their goals, struggles and needs.  
  • Cross-Functional Collaboration: Working with design, development, marketing, and sales teams to achieve the best product experience for your customers.
  • Roadmap and Strategy Development: Defining product vision and setting clear goals: from milestones on the product roadmap, using sprint goals and defining a long term vision.
  • Prioritization: Making decisions about feature development based on various factors.
  • Data-Driven Decision Making: Using data to guide product development and measure success.
  • Stakeholder Management: Balancing the expectations of internal and external stakeholders.
  • Continuous Improvement: Implementing iterative processes and refining products based on feedback.
  • Innovation: Seeking new opportunities and leveraging new technologies.

I hope I have shown here that there are significant differences between the role of the product manager in a startup and in an agency, which should be considered for roles in both environments. However, it’s important to remember that the one thing product managers always have in common is to – for however long they are responsible for a product – ensure its success.

Weather you are in a startup or an agency or somewhere in-between, product management is often a tough role to balance and succeed in. Contact me to discuss how I can help you improve your product strategy with storytelling and a user focused approach. Visit my MentorCruise profile to learn more.

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