The tech industry continues to struggle with getting product management right. In an uncertain market, PMs face higher firing rates than any other role, as more and more companies are announcing they're eliminating PMs altogether.

Despite the awareness on product management reaching all-time highs, with a wealth of resources available and great product managers out there, companies are still operating in the exact same fashion. PMs, product leaders, and founders I talk to daily lament the very same challenges companies faced 10 years ago. Wonder why is this happening?

Back to basics, what product management really is

Product management is a business function, and it can exist only at an organizational level, if the company decides to build that function and how it chooses to implement it. To understand if a PM and their team are doing product management right, we first need to zoom out and assess if the entire company has properly established a product function.

This is why I've been insisting for a few years on having a clear and actionable definition of product management, a single sentence that helps draw the line between good product companies and the rest.

Here is the latest version of my definition from the article above:

Product management is the company function accountable for product decisions, ensuring they result from team collaboration, fulfill customer needs, and achieve business objectives.

What is productwashing

Looking at how organizations deal with product management, there are only three types of companies out there:

1. Companies that need PMs and do product management right. We love you, thank you for existing, and we need more of you! What do these companies look like? In line with the definition above, in these companies PMs actually get to make product decisions, and they do so collaboratively, aiming to solve customer problems and hit business objectives.

2. Companies that choose not to have a product function. That's perfectly fine: if an organization understands what product management means, but believes they don't need PMs doing all of the above, then they should simply go ahead and operate the way they prefer. Some founders are very successful with this approach.

3. Companies that put in place a half-assed product management function, or hire a bunch of PMs without even giving any thought to what product management exactly entails. These companies end up in a messy state, having established a product function, but lacking clarity at an organizational level on how to make product decisions and what PMs are there for. I call these productwashing companies.

If you look carefully, out of these three types of organizations, only one is dysfunctional regarding product management: productwashing companies.

The other two, whether you agree with their approach or not, are perfectly functional. Some call case 1 "product-led" companies, and case 2 "sales-led" or "founder-led" companies. I am not a big fan of these labels because they lack clarity and often lead to ambiguity. I prefer to start with a clear and actionable definition of what product management is, and then distinguish between companies with good product management and those without any real product management.

It’s important to note that productwashing companies also include those that claim they don’t need product management, but still employ PMs (the bottom right quadrant, in the picture above). While going into specific examples is not the goal of this article, I will say that in the past two years a growing number of such companies have emerged, and it would be fascinating to know what they think their PMs are actually doing.

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Why companies are productwashing

There are several reasons for companies to end up productwashing, and they are not mutually exclusive. In fact, when I assess an organization, I usually find a combination of these. Despite the entanglement, I am trying to keep the list in order of importance:

1. Scaling: the single root cause is that founders cannot keep up with handling the growing complexity of managing their products and services, and they are forced to delegate.

2. Ignorance: the second most important reason is that the majority of companies do not understand what product management actually is.

3. Control: as a result of the two points above, some founders believe they can hire people to delegate product responsibilities, without giving up what they would never want to delegate: their decision-making power.

4. Fragmentation: as a direct consequence of all the above, founders believe they can come up with "their version of PMs", because the PM role varies from company to company. This is a fundamental mistake, which is why I like to start with a clear definition.

5. Shortsightedness: founders underestimate the effort and budget necessary to establish the product function correctly, resulting in hiring the wrong product leaders.

6. Misutilization: companies hire the right product leader but, not understanding product correctly, CEOs don’t give that person the necessary room and support to establish the function in the right way.

7. Success: things go well for a number of (other) reasons, companies end up making money, and nobody in their leadership cares if a function they don’t fully understand is operating poorly.

8. Imitation: as incredible as it may sound, some companies are just cluelessly thinking "Everyone has PMs, perhaps we should have them too? We've got this!”

The damage of productwashing

Productwashing companies are the biggest imposters in the tech world: starting from job descriptions, recruiters and hiring managers liberally use terms like "empowered product teams", "OKRs", "discovery", being "customer-first", and being "data-driven", while they are well aware they aren't doing any of that, and that their many attempts at operating that way have resulted in a gigantic mess.

This disconnect between rhetoric and reality is at the heart of the productwashing problem, and the resulting damage is huge:

• Damage to themselves: these companies are dysfunctional at their core, which means they waste money, are overstaffed, have a poor culture, and as a result people hate working there. Don't get me wrong, they may even end up being successful and make money, but they are doing so poorly anyway.

• Damage to product managers: some productwashing organizations employ great product managers, only to relegate them to mere project managers. Others build a facade of being “good” product companies, packaged with a fabricated culture, fancy frameworks and tools, while in reality their PMs hardly get to make any product decisions. These skilled product managers pour their heart and soul into their work, yet most people in the organization, from the CEO to sales, from marketers to engineers, don’t even know what their job is. Consider how much product work gets wasted — customer interviews, experiments, analytics— all dismissed because someone at the top chooses to make arbitrary decisions. Thousands of PMs reading this are all too familiar with the deep frustration productwashing brings, and that’s one of the main drivers for them to leave.

• Damage to the entire industry: what will a founder or a CEO think of product management, in an industry where the majority of companies trying to establish the product function are a mess? They'll think that it sucks, that it's useless, and that they need to get rid of PMs as fast as they can, or perhaps blend PMs with marketing, or perhaps replace PMs with AI, or with a new coffee machine. In their minds, anything is better than having PMs, and the widespread nature of productwashing appears to justify their misconception.

How many companies are productwashing?

That's a great question, one I get asked quite often, and there’s no ultimate stats here. My sense, speaking on a daily basis to PMs, product leaders, and founders, is that the minority of companies are doing good product management, a fair share of companies don't need and don’t have a product function, and the majority do productwashing.

How many exactly? I would say the split between companies doing good product / no product / productwashing is 10 / 30 / 60. That's based on my experience and, while I've worked with many companies from 3 to 300,000 people, it obviously doesn't hold statistical value.

Want to help in understanding where the real split is? Let's do a very simple poll: is your company productwashing too?

I bet you are now wondering where the part on how to fix this mess comes in. In my next articles, I will continue to explain the impact of productwashing on companies and how to make product management better in the real world. Subscribe to stay tuned, this is going to be fun.

Hi, this is Paolo! I’m a product leader and advisor, helping companies establish and scale product management the right way. I also love teaching product to Master’s at the University of Economics in Prague, and to executives at biz schools like Berkeley-Haas and INSEAD.

Credits: special thanks to Stefano Vergani for being a fantastic sparring partner on these thoughts, as one of the best engineering leaders I know.

Why we need a new definition

Across the entire tech industry, there's a still a colossal confusion around product management, and that applies to everyone: engineers, designers, sales and marketing, including many founders, product leaders, and PMs themselves.

Companies tend to adopt "their own" definitions of product management, often shaping it into something it's not meant to be, or having no clarity at all about their product function. The result is a fragmentation in understanding what product product management actually is, that ultimately ends up hurting businesses and impacting PMs.

The scope of this article is to provide a correct, clear, and concise definition of what product management is. The challenge with that is bringing together simplicity and clarity: product management is a complex beast but, like everything else, if you cannot explain it simply and clearly, it means you don’t fully understand it.

Other definitions: while there are several definitions in use, I know I am not the only one who finds them to be either incomplete, complicated, or incorrect. Most focus on what PMs do, rather than what product management is, and almost all omit who actually makes product decisions and how. Even Marty Cagan's widely-adopted four risks definition, which I also used for years, is no longer sufficient for me, as I’ve explained in my article "Sorry Marty, I love you but I don't use your definitions of Product anymore".

Product management definition

While crafting a new definition, the goal was to meet all of the following criteria:

• Brief: it does not contain bullet points, or a set a long list of stuff PMs need to do.

• Complete: it comprises all key aspects of modern product management, including addressing the elephant in the room, on who actually needs to make the product decisions.

• Clear and simple: despite the tons of complexity hidden behind it, this definition must be self-explanatory and it needs to feel simple to read.

• Actionable: as a result of all the points above, it can have actionable implications that make a difference when adopted.

Let’s get to it:

Product management is the company function accountable for product decisions, ensuring they result from team collaboration, fulfill customer needs, and achieve business objectives.

This definition consists of four key points, as shown in the picture above:

1. What it is: product management is a company function, or a business function.

2. Why it exists: product management exists to make the best possible decisions on products and services.

3. How it operates: product management collaborates across all other company functions and teams.

4. What are its goals: the two interlaced goals of product management are to address customer needs, or problems, and at the same time to achieve business objectives.

An open definition

During my 2O+ years in product, I’ve been adopting, discussing, and iterating on this definition with many product folks. My teams to start with, dozens of product leaders and founders I worked with, peers from other companies, my master students, and executives I’ve been teaching to at business schools.

But I know that's not enough, this is why I like to think of it as "open":

• Open to feedback: you can connect with me on LinkedIn at any time and drop me a message with your thoughts, or discuss it in this post.

• Open to change over time: clearly defining something is always challenging, especially for complex matters like product management. I have iterated on this definition several times, and I am sure we'll go back to update it again in the future.

• Open to be tested: this definition is designed to be put into practice. It provides a clear framework that companies can adopt to establish a strong product management function. If you do that, let me know what outcomes you get and we can incorporate them in here.

If you like it, you can adopt this product management definition by clicking on the button below. The more we are, the more clarity and consistency we will bring to the tech industry!

Adopt this definition!

In my next articles, I will extensively write about the implications of a strong product definition and how I’ve applied it as a foundation in several product organizations.

Hi, this is Paolo! I’m a product leader and advisor, helping companies establish and scale product management the right way. I also love teaching product to Master’s at the University of Economics in Prague, and to executives at biz schools like Berkeley-Haas and INSEAD.

We’ve all been following the drama over the past few months: product management has been in the eye of the storm, beginning with Airbnb CEO introducing his new playbook without PMs, and culminating with a Paul Graham essay that glorifies this approach as the new “founder mode” paradigm, a valid alternative to “skillful liars” managers.

My recent post on the topic questioning the approach received polarized reactions, with PMs and company leaders unsurprisingly in favour of more empowerment, and a few founders (the minority, to be fair) raising more or less legitimate objections. Here are the top ones:

• You cannot label founder mode as micromanagement.

• Airbnb is worth $70+ billion, so Chesky must be right.

• You’re not a founder and you cannot understand this matter (you’re right, that’s the funniest).

• A company’s market cap is not an indicator of the CEO’s performance.

As I will explain in this article, there is really nothing new in this whole story.

Anatomy of the “founder mode”

After deciding to bring some clarity into this mess, I spent a few hours during the weekend going once more through Brian Chesky’s playbook at Lenny’s podcast to break down his - so called novel - approach.

Here is a recap for you:

• The product management function has been dismantled. Chesky considers himself the CPO of Airbnb but, the product function not being there anymore, he doesn’t hold a CPO title.

• The program management function has been strengthened, on the other hand.

• The CEO calls the shots on every single feature in the product, together with his group of top 30 executives.

• The CEO owns a 2-year rolling roadmap and the teams can only work on roadmap features, releasing every 6 months.

• Every week, the CEO personally reviews the status of those features, using a green-yellow-red status report created by the aforementioned program managers.

• If things are not on track to ship, the founder personally jumps in to fix the issue at hand.

• A/B testing is still happening, but it’s secondary to (likely the CEO’s) hypotheses and intuition.

Chesky believes he should run Airbnb like Steve Jobs ran Apple. He also mentions having merged PMs with PMMs in order to work on the overall product messaging better. While some people gave this aspect importance, I don't see it as worth of notice as it's redundant to the first point above.

Another “breakthrough” introduced in the playbook is that managers need to be in the details, and also competent in their specific domains. I am going to dismiss this one too as nonsense, since I have yet to see a job description looking for managers without experience in their area, or requiring them to ignore what’s going on in the company.

Is founder mode something new?

Looking at Chesky’s playbook, I guess anyone can see how a spreadsheet with yellow, red and green statuses is nothing groundbreaking really! The resonance that has been given to Chesky and Graham's approach as something new is, in my view, vastly overblown.

But let’s go in order and have a look at the main points we can take away from Chesky’s founder mode:

1. Centralized decision-making, as opposed to empowering product teams.

   “I stopped pushing decision-making down. I pulled it in.”

2. Output over goals and outcomes. Chesky does not mention any goal system like OKRs in Airbnb. He doesn’t need one, as he believes that by calling the shots on every single feature he can personally make sure the product goes in the right direction.

   "Metrics are going to be subordinate to the calendar.”

3. Micromanaging through project management. That’s the natural consequence for leaders who think they’re always right and whose only concern is speed of execution. They end up obsessing with green, yellow and red status reports and Gantt charts in a constant attempt at pushing product teams to deliver against deadlines.

   “What everyone really wants is to be able to row in the same direction really quickly.”

By distilling all the above we get to the final formula:

founder mode = centralized decisions + output over outcomes + micromanagement

That doesn't strike as shockingly new, right? Correct, we’ve all been there in countless organizations, especially startups. Yet Graham goes as far as positioning this as an entirely new paradigm, literally believing he's discovered something that nobody knew existed before.

It’s clear that the CEO is the top manager of a company, therefore “founder mode” is simply a style of management. Not only, it’s the most trivial form of management: as a founder you oversee everything personally and people are mere executors of your ideas. If there is a decision to make, or a problem to fix, you have to jump in personally to make an arbitrary call.

Differently from what Graham believes, this approach is well known to business schools as poor, dysfunctional management, and the alternative to that is of course good management. If you are a founder, that’s harder though, because it requires empowering teams in doing there job, and putting in place ways of working that enable people to make those difficult decisions and fix those problems. Without you. Like you would do. Better than you.

In essence, the CEO adopting an individualistic management approach like founder mode sees the team as a an execution machine for their ideas, and answers the call: “How can I make sure the team delivers efficiently what I want?”. Whereas empowering leaders see themselves as part of the team, and respond to the question: “How can I make sure teams effectively contribute to our objectives?”.

In the picture below, I made it easy to see where founder mode falls within the management spectrum:

Is founder mode really more effective?

Now that we understand that Graham's founder mode has actually been there forever, it is still legit to wonder if it's anyhow working, and especially if, as he claims, it's more effective than traditional management for scaling companies.

As Graham points out, every company obviously starts in founder mode, and I have tons of respect for entrepreneurs like Chesky who are able to change an entire industry and impact millions of people. But to respond to one of the objections in my post comments “He took Airbnb from zero to $73B, so he must be right”, the question here is whether that approach actually helps the company scale from that point.

I also agree with Graham on the reasoning that every company is unique in finding its balance over time, but when it comes down to picking a side I personally believe founder mode to be bad management and, as such, unfit for a scaling company. As a leader, I never want to be the smarter person in the room, and I stand for good, empowering management.

I am also convinced there are several advantages for companies to go this way:

• People are better motivated when they feel their impact.

• Everyone is aligned around shared goals.

• There’s no bottleneck to innovation.

When we look at the data, since the adoption of the new playbook, Airbnb did not get anywhere close to the 10x growth Chesky talks about. On the contrary, their stock went down 21% in the last year, with profits declining 15% in 2024.

Another example of a superhuman CEO trying to scale in founder mode is Elon Musk, who has reviewed Graham's essay as well. Looking at Tesla, its stock has been going down over 20% in the last two years with sales slumping for several quarters in a row. X, a company which is also being managed by Musk in “founder mode”, has been losing millions of users and over $500 million (or 80%) in yearly revenue since he took over.

Moreover, even for those who would like to rightfully consider Airbnb results positive, there’s a huge price on culture companies managed this way have to pay. We can get a glimpse from a few Glassdoor reviews I found, all subsequent to Chesky’s new approach:

“Apple with worms. Brian controls everything, which is fine but his ‘intuitive, gut, creative instinct’ goes against data and yet no one will tell him ‘no’. You are micromanaged to death and not allowed to have any ideas on strategy.”

“The CEO is a lovely human, but unable to steer the ship in a world vastly more complex than his mental models. The Board should bring in a mature decision-maker who can make tradeoffs and has managed a business, not a religion.”

“Executive leadership team is inept, lacks vision, shows no curiosity. C-suite create toxic and political culture. CEO is an egomaniac trying to be Apple.”

“The CEO should be listening to his people - the people he hired to do a job - rather than making top down decisions arbitrarily based on his 'gut'.

“Micromanagement. No impact. Top down culture.”

“Toxic working environment due to poor leadership”

Founders vs Managers, a foolish war

One final, but pivotal point to address is the notion of founders being in a league of their own, almost with superhuman abilities. At the climax of his leaderistic delirium Graham writes: “There are things founders can do that managers can’t, and not doing them feels wrong to founders, because it is”. This pairs well with some of the comments on my post that essentially say “you’re not a founder, you can’t get it.”

Founders are people like everyone else, and as such they come with their own qualities and limitations. There’s a long list of widely successful tech founders who run their companies in empowering and inclusive ways, or decide to hire leaders who are able to. Only Paul Graham seems never to have heard of them.

In comparison to Airbnb’s decline in the past years, its competitor Booking.com, a company led by one of its long-tenured managers, saw its stock go up 103% with a continued profit growth over the same period. Booking is also well known for its culture of experimentation, where everyone can deploy and test their code in production.

Even Google founders decided to bring in Eric Schmidt as CEO, who harvested ideas from every single employee in the company and turned Google into a world icon of innovation.

Bill Gates, one of the few tech founders of the same caliber as Steve Jobs, also stepped down, and he established such a culture of empowerment at Microsoft that one of his software engineers would later succeed him as the CEO. I was lucky enough to work as a product manager under Satya Nadella’s leadership, who grew the company 10x (this time for real) taking it from $300 billion to $3 trillion. On his first day as CEO, he wrote:

“Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.”

Overall, I believe “founder mode” is not a thing. Paul Graham is totally wrong on this one, and the battle between founders vs managers exists only in his head. In practice, every founder becomes a manager the very moment they decide to step up as the CEO of their companies.

And from there, the only debate worth having is between good vs bad management.

In my next post, I will expand more on the root causes of bad management with a special focus on scale-ups. 

Hi, this is Paolo! I’m a product leader and advisor, helping companies establish and scale product management the right way. I also love teaching product to Master’s at the University of Economics in Prague, and to executives at biz schools like Berkeley-Haas and INSEAD.