Combining functions in a SaaS business is a terrible idea
Ok, here is the punch line:
No two SaaS functions should be coupled together. Any combination forces conflicts of interest and while you and the board are busy charting out your world domination strategy, this dysfunctional org design will eat the company from the inside out.
The long form:
Combining Product and Engineering
Why it’s a terrible idea: Simply put, you end up munging the “what” and the “how”. If it’s led by a Product manager, you risk de prioritizing important architectural decisions. Conversely, if it’s led by an engineer, you can end up losing that commercial edge, and risk building elegant Ferraris when the market wants Hondas. What’s worse is that in totality this generates twice as much emotional attachment to written code vs. what the market is telling you. Separating PM and Eng keeps the checks and balances intact.
Combining Product Management and Product Marketing
Why it’s a terrible idea: I say this with respect to product managers but the best of ‘em can think that they are great communicators. I get it – you want to be the one who frames how your product is perceived and consumed. If your Jobsor Musk, by all means. Otherwise, most PMs want to talk about whats been built. Product marketing on the other hand, is about simplifying and stripping the message down to its essence so that the field and buyers are engaged by what’s at the tip of the spear. Good product marketers are stonkingly ruthless editors and that’s hard. As the famous writer, Blaise Pascal famously said: “I wanted to write a shorter letter, but I ran out of time.”
Combining Customer Success and Sales
Why it’s a terrible idea: If you’re looking for a sales driven cult in CS, then have at it. But if you’re looking to make choices that are born out of maniacal focus on making the customer succeed, CS and Sales needs to have separate seats at the table when the company needs to make choices about what/whether to build for revenue, for up-sells or for NPS. Nick Mehta, CEO of Gainsight has some solid thinking on this in this podcast at SaaStr.
Combining Customer Success and Product
Why it’s a terrible idea: I see this less often but it exists. CS function is one-part upsells / renewals, and one-part fanatical customer success. This has something to do with product but also with sales and support. Parking it under product skews the governing principles for what makes CS a success.
Whilst this seems like SaaS 101, it’s shocking how rampant this still remains.
Look, sometimes temporary parking under a trusted executive is fine. But that’s it. The reality is that when we do combine these functions more permanently, it is never because we’re optimizing for our customers, the market, or our employees; it’s simply a (deadly) internal management convenience.
Just don’t do it.
(Comments rolling in on LinkedIn)
