On the 21st and 22nd of June, the Config conference, by the company Figma, whose main product is a collaborative interaction design tool, took place in San Francisco. At the end of the first day, there was a session where Dylan Field, CEO and co-founder of Figma, interviewed Brian Chesky, co-founder and CEO of Airbnb. The title of the session was “Leading Through Uncertainty: A Design-led Company.” Figma is a company that makes products for designers, its CEO is a designer and Brian Chesky is also a designer. Naturally, the conversation turned to the importance of design for companies. Even at the beginning of the conversation, Dylan introduces Brian as CEO and co-founder of Airbnb and comments right after that he looked at the entire list of Fortune 500 companies (a list produced and published annually by Fortune magazine, with the 500 largest companies in the US, ranked by revenue), researched the CEOs of these companies, and says that Brian is the only designer-CEO on the list. Brian replies that if there are any others he would love to meet. And the audience applauds effusively.
Shortly after the presentation, Dylan says that “Last week we were talking and you told me that at some point in the company’s journey, you sat down and realized that you were doing things in a very conventional way, despite your design training and perhaps can you tell us more about that, how was that perception”.
At that moment, Brian starts his answer, which lasts almost 10 minutes, where he tells how the company went through the pandemic crisis, which could be fatal for Airbnb, a company that had been quite successful so far and was preparing for an IPO. At one point he comments:
The two people who never run companies are designers and heads of HR. I started to wonder why that is and I think it’s because design is fragile in a way because companies are organized around the scientific method and the creative process is something that takes courage. Over the years, I started to lose heart and I brought in a lot of people from a lot of different companies and they brought their way of working to us. So what did we do? We had divisions, about 10 different divisions, they had 10 different subdivisions, we were run by product managers, we had a multitude of A/B experiments and what I started to realize is that the more people we added, the more projects we pursued, the less our app changed and the cost increased. And I didn’t know what to do, it was the end of 2019 and I tell Joe and Nathan, my co-founders, I didn’t know what to do because we were about to go public and completely change the company right now that you are getting ready to go public is a bad time.
Then he talks about how the pandemic brought down the company’s revenue. Initially, there was an 80% drop in revenue from China. 2 months later, they lost 80% of Airbnb’s total revenue and the headlines about them went from being “One of the Hottest IPOs” to “Is this the end of Airbnb?”. At that moment he says that he had never had the courage to run the company as a designer but that at that moment he wanted to do that, lead the company with a designer mindset, and he starts to list the things he did:
Despite the skepticism, the company not only survived, it thrived, generating nearly $4 billion in free cash flow over the last three years.
Before any criticism or conclusion, we need to understand the context I have just described. Brian didn’t wake up one day and say he was going to end the product management role. This decision was taken together with several others, such as changing the company from an organization by business units to a functional organization, considerably reducing the number of ongoing initiatives, centralizing roadmap decisions with the CEO and releasing twice a year to users 80% of what is being done. I recommend watching the entire interview to better understand the context.
I always mention in my classes that product management and product marketing are two separate functions when it comes to digital products.
In the non-digital product industry, such as consumer goods, it might make sense for these two functions to go together, as release cycles for new versions are long. The same goes for hardware companies like Apple. With these long release cycles, there is little room for experimentation and, consequently, time to focus on product marketing themes (pricing, promotion, sales channel, go-to-market strategy, sales enablement, etc.) .
On the other hand, when we talk about software, we can change it every day. If we want, we can change them several times a day to run tests and experiments that help us achieve the company’s goals while solving our users’ problems. It is the responsibility of product managers, along with designers and engineers, to think of experiments to achieve these results.
During the pandemic, Brian decided to change Airbnb’s management model. Even though it was software and could be changed every day, he decided to only have two release cycles a year for 80% of the stuff that was going to be released. In addition, he took decisions about what to do with the product to himself. In a situation like this, the workload of a product manager decreases, becoming more like the workload of a product manager at a consumer goods company, or at a hardware company like Apple. In a scenario like this, it might make sense to combine the product management function with that of product marketing. So much can make sense, which brought very positive results. But it is worth remembering that the positive results are not due exclusively to this change. It was a large set of changes that were made that ended up generating the results described.
Short answer: NO. There will always be a need for someone who connects business and technology, and that is the role of product management. In some contexts, such as consumer goods companies and hardware companies, due to long release cycles and more centralized decisions, it may make sense to expand the scope of this role, combining it with product marketing responsibilities. The phrase Brian said in the interview (“we got rid of the classic product management function”) was not the right one, so much so that he corrects it right away, saying:
Well, let’s be careful, wait, we do, we have product marketers, we combine product management with product marketing, and we said you can’t develop products unless you know how to talk about the products.
That is, they still have product management, which has been combined with product marketing, since release cycles are slower and product decisions are made by the CEO.
I’ve been helping companies and their leaders (CPOs, heads of product, CTOs, CEOs, tech founders, and heads of digital transformation) bridge the gap between business and technology through workshops, coaching, and advisory services on product management and digital transformation.
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