The career path of a product manager

Building a career as a PM is like building a product - you must actively manage and direct the process. It won't happen magically by itself.

Product Management entry points

Let's start with breaking into product management. There are three common entry points:

  1. New graduate hire
  2. Former entreprenuers
  3. Near-PM career switchers

#1: New graduate hire

This is the most straight forward, but rarest, path into product management because only limited APM positions are available and the resume requirements tend to be the most codified. For example, for undergraduates, tech companies draw candidates primarily from top schools and favor those who have a technical degree (e.g., CS, EE, ME, etc). So if you're a CS major from Stanford, Harvard or MIT, you're in great shape for the resume screen.

If not, don't fret! This is the least common way that anyone enters the product management profession. As "software eats the world" and the need for PMs grows (which we discussed in the hiring companies section), smart companies are widening the aperture in both the type and number of schools they recruit from and the degree qualifications they seek.

#2: Former entreprenuers

Given the wide spectrum of core duties that a PM has (see discussion on the PM job here), many companies like to hire former entreprenuers into product management roles (e.g., Facebook has a very strong bias toward entreprenurial PMs).

The logic here is that entreprenuership is one of the few other career tracks that requires and tests people on a such a diverse range of capabilities. While many entreprenuers don't see their current role as a way to break into product management (obviously they want their current company to thrive!) it can be great training for the PM role.

Also, it's critical to note that this is not limited only to full time entreprenuers (e.g., a "side-hustle" or side-business requires the same skill set). So if you've got an entreprenurial streak, picking up or starting a side project can be an effective way to stand out.

In addition, people that can demonstrate an entreprenurial streak

#3: Near-PM career switchers

This is the biggest feeder into the PM profession - so if you're not a CS undergrad or a former entreprenuer, don't worry! There is another path and it's a great one.

The "foot in the door" strategy

This is essentially a three-step path into product management: 1) first land a role that works, in some capacity, with a PM and 2) begin to help that PM with various tasks to gain experience and 3) ultimately, transition into a PM role at that company or parlay that experience into a PM role at different company.

While this is a slower route to becoming a PM, it boasts a few key benefits.

First, working closely with a PM before actually doing the PM role full time will give you a no-holds barred, full access glimpse of what the job is really like. If that's envigorating, great. If not, that's fine too but at least you learned that before doing it full time.

Second, if you do proceed down the PM path, you'll have intimate knowledge of one of roles that PMs must interact with (because you did that job formally) and that can be incredibly helpful as a PM. For example, if you transition from marketing into product, you'll likely bring excellent marketing intuition and communication skills to the role. If you come out of the customer support organization, you'll likely bring a deep understanding of customer pain points and frustrations (which can be a font of insight as a PM).

The PM Career ladder (directional guidance)

Warning! This is a straw man career ladder to provide directional guidance. Below, we've enumerated the key drivers of variance (e.g., company size, equity compensation).

TitleTenure (yrs)Salary ($)Responsibilities
Associate Product Manager 2 - 3 $80K - $100K
  • Launching small features
  • Collecting user feedback
  • Analyzing usage data
Product Manager 2 - 3 $100K - $160K
  • Launching features
  • Managing product roadmaps
  • Driving inter-team collaboration
Senior Product Manager 2 - 4 $160K - $200K
  • Leading a sizable product line(s)
  • Acting authority on his/her product
  • Interfacing with company execs
Group Product Manager 2 - 6 $200K - $250K
  • Managing a few PMs
  • Managing a few products (via team)
  • Owning large parts of company roadmap
Director / VP of Product Management n/a $250K+
  • Managing multiple PM teams
  • Managing multiple product lines
  • Helping define company strategy
  • Representing company externally

Drivers of variance in the PM career ladder

Equity

Equity grants skew total compensation wildly. Full stop.

The range of outcomes in startup equity is staggering. Let's look at a quick example.

Jane and John join different startups at the same time as PMs. Each receives 0.25% equity stake that vests over 4 years and each company is currently valued at $20M. Thus, initially Jane and John are each granted equity worth $50K at current value. However, let's say that 5 years from now Jane's company is bought for $1B and John's company ran out of money and shut down. Jane's stake will be worth $2.5M and John's stake will be worth $0 (setting aside complicating factors like dilution, etc.).

Here's the kicker: for every Jane, there will be, at least, 50 Johns.

This contrasts sharply with equity grants at public, or near public (e.g., Uber, Airbnb) companies, which either have liquid markets for their equity or have valuations which have been vetted and stress tested repeatedly over a series of fund-raising activities (note: this doesn't mean they couldn't collapse, just that it's much less likely than an early stage startup).

At these types of companies, annual equity grants are typically in the range of 25% to 75% of annual salary. However, there is room to exceed that based off 1) performance bonuses and/or 2) if you land a job in a hot category (e.g., autonomous cars).

Responsibility set

The responsibility examples above try to capture the range of responsibilities on the PM ladder at established tech companies like Google, Twitter or Lyft.

Since these companies have established PM organizations, hiring practices, promotion criteria and responsiblities, their salaries bands tend to be more calibrated. At startups, this is rarely true.

Title inflation is a key driver of variance in the startup world. This means that a Director of Product at a startup might have a responsibility set that looks like a Sr. PM or GPM at an established tech company. Why? Because at startups titles are often (but not always) used as a recruiting tool. This is why PMs at acquired startups often go through a re-leveling (e.g., a Director becomes a Sr. PM).

Promotion cycles

Similar to responsibility, promotion cycles tend to vary less the older the company is (e.g., a company like Amazon will have a more rigid promotion cycle than a late stage startup like Wealthfront).

For example, it would be extremely rare for someone to join Amazon as a PM out of an MBA program and two years later be a Director of Product. However, at a startup, this example is definitely possible. Why? Startups are more incentivized to promote top performers quickly because it's more effective when they don't have lots of cash to pay big bonuses or liquid equity to hand out.

In addition, given that a startup is definitionally smaller than a company like Amazon, the relative importance of each team member is higher (i.e., Amazon could have a few terrible PMs in the org, but it won't tank the company... the same is not true for a startup). Thus, the risk of hiring new people is higher which means that promoting existing team members (who are known quantities) is relatively more attractive.

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