2023 was a difficult year for technology companies and, consequently, for product development teams with people from engineering, design, and product management. Due to the challenging economic scenario of the past year, many technology companies ended up changing from a strategy strongly focused on growth to one strongly focused on profitability, which made many of these companies use mass layoffs or, in English, layoffs, as one of the tactics to achieve profitability. Google, Meta, Microsoft, Amazon, Uber, Airbnb, Netflix, Spotify, and many others have taken this path. The graphs below show what layoffs were like in Brazil and around the world in technology companies.
The graphs above show that layoffs in technology companies continue to happen, with Brazil having a large wave of layoffs in December, which did not happen globally.
These layoffs were hard on the entire product development teams, engineering, design and product people. However, product people were dealt an additional blow by two interviews given by Brian Chesky, co-founder and CEO of Airbnb:
These discussions serve to generate doubts about the relevance of the role of product management. For people who are outside of product development or who are new to this world, the roles of engineering and design are reasonably tangible, that is, for those who are not from product development it is possible to understand what engineers and designers do. However, for these people who are not familiarized with product development, the role of product management may not be as immediately tangible.
On the other hand, the year 2023 had a lot of cool things in technology. There has been a lot of talk about AI in general, and more specifically about Generative AI, and what AI can do. As a Beatles fan, I was very happy to see them reunited once again, thanks to technology, more specifically AI, in the beautiful “Now and Then”:
In 2023, the term AI entered our vocabulary:
In other words, new technologies continue to be created and made available to help us create increasingly better solutions to our problems.
In short, the year 2023 had positive and negative aspects for the product area. From a negative point of view:
On the other hand, the main positive aspect of 2023 was:
Anyone who knows me knows that I’m not one to make predictions. My intention here is to bring what I see as an outlook, i.e., a set of possibilities for product management in 2024. First, however, let’s talk about the 2024 scenario:
Search for profitability and the constant emergence of new technologies. This will be the scenario for 2024 and, most likely, the following years for product management and product development teams. And what to do in this scenario? Two things:
I’ve already talked a lot here about the importance of delivering results and that the product is the vehicle for delivering results. And for product team leaders? I’m talking here about GPMs, product heads, directors, VPs, CPOs, and that CTO or technology head person who also leads the product area. What are your prospects for 2024?
If you thought about generating results, you are partially right. When a person is in a leadership role in a product team, they continue to have the responsibility to generate results with the product, yes, but with the best possible return on investment. Developing products is expensive. In Brazil, considering an average monthly salary of R$12,000, the annual cost of a team of 6 people is approximately R$ 864,000 without considering labor costs. In the USA, with an average monthly salary of around US$100,000 per year, the cost of the team is U$ 600,000. In Europe, with an average salary of around US$60,000 per year, the cost of the team is U$ 360,000. This does not include the costs of tools and infrastructure necessary for the development and operation of the product. Now imagine that you lead 3 such teams of 6 people, for a total of 20 people. It’s more than R$2.5MM per year in Brazil, U$1.8MM per year in the USA, and U$1MM in Europe. It’s a lot of money. CEOs, C-levels, other company leaders, founders, board, shareholders, and the entire company expect that this investment will yield a return, even more so in the current scenario where profitability is the main focus.
As product leaders, we have a responsibility to seek the best possible return on this investment in people, tools and infrastructure for product development and operations.
Here are 2 more slides that I use in my classes to talk about this topic:
As I mentioned previously, I am one of the group of people who always see the glass as half full. Despite the uncertain economic scenario, which will make companies continue to focus on profitability, the constant emergence of new technologies will open up many opportunities for people who know how to connect technology with business. This is exactly what a product manager does, connects technology with business, solving customer problems.
Therefore, increasingly all companies, and not just technology companies, will need people who manage products, capable of making this connection between technology, business, and customer. This was one of the motivations for me to write my latest book on Digital Transformation and Product Culture, to help companies understand how to get better results from their investments in technology, bringing people experienced in product management to their teams.
May we all have an incredible 2024 full of great results! 🙌
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