Funding Structure and Product Management

One thing I’ve been thinking about a lot these days is the impact of the individual in the company relative to the impact of the company itself. As an individual contributor, how much of your performance and impact is determined by you, and how much is determined by the context in which you operate?

It’s a question that has serious career implications. The answer potentially implies a big change in the kinds of narratives we tell ourselves about our careers and the careers of others.

As I saw the news about Squarespace being acquired by the PE firm Permira the other day and was reflecting on my own career, I was shocked to realize how much of the work I did as a product manager was really determined by the funding structure.

I’ve worked underneath several funding structures in my career: subsidiaries that had been acquired by large companies, a VC-backed firm, an Angel-funded firm seeking VC funding, a SPAC company, and a PE-owned company.

When I think about it, the funding structure guided almost everything, because it determined the company’s motivations and incentives. At the subsidiaries, pure revenue and company performance weren’t the guiding principle; it was whatever the parent company’s priorities were. At the VC-backed companies, all of the work and cadence were dictated by what we could show at the next board meeting. The SPAC company was all about spending money and the ability to raise more money. And on and on.

A lot discussions of product management treat the discipline as if it exists in a bubble—there’s a “good” way to operate and decide what you work on regardless of where you’re at. But, in practice, to me, it seems that the organizational incentives from things like funding structure dictate the majority of what you actually work on. Maneuver within the lines best you can, but it’s never an open field of opportunity.

The funding structure determines the end goal of what the company views as valuable. And that perspective on value dramatically narrows the range of “valid” initiatives you can actually pursue.

When interviewing, this comes in to play. Interviewers often judge you on what you worked on or perhaps how you decided to pursue an opportunity. But how much of that was really up to you? And are most interviewers sensitive to the layers of incentives that exist in an organization that bear down on all that? I don’t think most do, even if they’re product managers themselves.

If you’re evaluating a place to work, don’t discount the funding structure - it may be more impactful on you than the company’s product, industry, leadership team, or any other factors we usually consider.