As a Product Manager, you need to be generating 3x-50x return on your compensation.

Read that again. Let it sink in.

Product Managers and leaders who can’t generate — and can’t articulate — those returns end up sidelined. Reduced to task managers. Ignored. Undervalued.

Sadly, this describes most of Product Management.

Left unresolved, you risk stalling your career, even losing your job, unable to communicate your impact in interviews.

“But, Shardul,” I can hear the protests now, “we're not sales or marketing, so we can’t drive revenue.”

Wrong.

Every role is an investment. Every person is an investment. Investments must deliver a return. Including you.

Product Management has the responsibility of driving the financial performance of the product.

This makes many PMs uncomfortable. They’ve grown up on romantic ideals — “We make customers successful” or “We focus on the long-term.”

Meanwhile:

The result is you become indistinguishable in a sea of PMs who’ve given up their agency.

So, today, I’m going to unpack how we got here, why ROI accountability matters for PMs, and what you can do about it.

The last 10-15 years has seen an explosion in PM headcount. Three forces drove it:

Near-zero interest rates fueled massive investment in tech. Big Tech and startups hired armies of engineers, designers, and PMs. Big Tech APM programs even pulled in people straight out of school.

An entire generation of PMs were taught product management the Big Tech and Silicon Valley way, where compensations were fat and there was no pressure to have a clear line from the PM’s work to P&L.

They learned their product management at companies with:

Many of these PMs later became “product coaches” and consultants, trading on Big Tech credentials to promote their way as the way. They preached long discovery, A/B testing, MVPs, design thinking, growth hacking, and product-led growth.

Naturally, people listened. “This guy was PM at BigTechCo and worked on Name-Brand-Product, so obviously they must know everything product management.”

And so, the cycle continued, breeding more PMs in their image.

Unfortunately, their disciples hit walls when they landed in companies with:

Why? Because what they were not trained on — nor held accountable for — was commercial outcomes.

Startups and traditional companies racing to digitize the world all needed CTOs. Many were promoted from senior engineering and mid-level management roles, with little commercial or executive experience.

These CTOs needed someone to write requirements and manage development. So they hired a bunch of PMs.

They said they wanted PMs who could “understand the business” and “be the voice of the customer.” They said, “PMs should be spending time with customers.”

But in reality these PMs were pushed into project management type roles, with closer ties to engineering than to the commercial side or with customers.

These PMs learned to value task management, technical skills, wireframing, prototyping, “engineering speak,” stand-ups, delivery timelines, engineering velocity, DevOps, and release management.

And Jira.

Many of these PMs rose to Director and VP roles (often still reporting to the CTO), training PMs under them in the same mold.

And so, the cycle continued, breeding more PMs in their image.

What they were not trained on — nor held accountable for — was commercial outcomes.

Everyone started hating Waterfall.

Development folks got fed up with long project timelines and shifting requirements. They didn’t want to read big documents. They tired of having things “thrown over the wall.”

And, so, Agile was the answer.

“We need a lightweight framework to implement Agile,” declared some. And so, Scrum was born.

And Scrum realized it needed someone to “ensure the team backlog is aligned with customer and stakeholder needs” so as to “maximize the value being produced by the team.”

And, so, Scrum declared: “Let there be a Product Owner.”

Executives didn’t really get all this. And they didn’t actually care. What they wanted was fast and cheap. And, when Agile was pitched to them, that’s all they heard. So they gave it the thumbs up.

This created a massive opportunity. An entire industry of Agile coaches, consultants, associations, and trainings sprung up.

And then came SAFe.

With the increasing demand for PMs, a Certified Scrum Product Owner certification was an entry ticket to a product manager gig.

(Cue the endless meaningless debates between “Product Manager” and “Product Owner.”)

These PMs were trained to value user stories, acceptance criteria, “definition of done,” grooming, sprint planning, story points, velocity, burn down, burn up, agile ceremonies, and backlog management.

And Jira.

This led to a generation of PMs drunk on the Agile Kool-Aid. Challenges with product success wasn’t the fault of product management. The organization just “didn't get it.”

“If they just implemented Agile correctly,” they cried, “good outcomes will follow.”

They built up an Agile-splaining vocabulary to justify their existence and make themselves sound smart.

Many of these PMs elevated into Director and VP roles, training PMs under them in the same mold.

And so, the cycle continued, breeding more PMs in their image.

What they were not trained on — nor held accountable for — was commercial outcomes.

These waves of product managers and leaders — along with a cottage industry of coaches, consultants, podcasters, and influencers — convinced companies that:

“Product Management isn’t commercial people. We can’t be held accountable for short-term commercial outcomes.”

And:

“We also can’t be held accountable for any deadlines or dates.”

This was a head scratcher for executives and commercial folks. But they went along with it. Why?

Product people like to think it’s because they successfully sold them on the proposition that, “We’re about making customers successful and longer-term horizons.”

In reality, executives tolerated it because engineering wanted translators to write PRDs and Jira tickets.

And, sadly, product leaders went along with this, ceding their agency to CTOs.

So, now, we had a bunch of PMs and their managers earning nice salaries with zero accountability for commercial success.

How long could that last?

Soon, PMs felt jaded.

Bouncing from task to task.
Pulled in different directions.
Ignored in key conversations.
Undervalued.
Unsupported by their managers.

They blamed their orgs.

But when you point one finger, four fingers point back.

A CFO once asked me:

“We’re spending $6M on your product team. But your product is less than 5% of our business. What are we getting from this investment?”

In my 1:1 mentoring calls, I often hear PMs complain that their budget was cut or the company won’t give them more resources. I ask them: “Do you know what your product team costs?”

They often have no clue.

If you don’t know how much is being invested in your product, how can you measure the impact of your efforts?

Take a typical team of 1 PM, 1 designer, and 5 engineers. With salaries and overhead, that’s a cost of $260K per quarter, or a bit over $1M per year.

Say this team generates $2M in revenue, as measured by new customers won and existing customers renewed as a result of their efforts.

That’s a 100% return. Sounds good, right?

Nope. They’re not even breaking even.

One CPO told me: 75% of features they shipped the previous year had zero business impact.

75%.

Apply that 25% success rate to our example team above. It would mean only $250,000 worth of that team’s cost is associated with generating the $2M revenue. $750,000 is spent on failed efforts.

To justify the full $1M investment, the team would need to generate $1M / 25% = $4 million.

This means the team needs to generate twice as much value as it’s currently producing to justify its spend — or a 4x return on its cost.

Because the successes must cover the losses to offset the failures.

And CFOs see it clearly:

Now, we can never get a 100% success rate on product ideas. Even the best PMs see at least half their bets flop.

So, in our $1M example team above, realistically they would need to generate a 4x return from at least 50% of their efforts.

They are woefully short of this.

Many product teams are failing in this way. And many product leaders miss this entirely.

If Product Management’s job is to get more out of engineering capacity, then this is an extremely poor record.

Is it any wonder why execs question the value they get from product management?

Executives are always hassling us about dates. PM, Design, Engineering — we hate dates. I do too. And I’ve pushed back against them.

At the same time, here’s the truth: missed dates destroy ROI.

Let’s say our example $1M team from above needs to deliver a feature to reduce churn, worth $1.25M. It’s a 3-month effort, which means it costs $250K. That’s a 5x return.

But the project stretches to 6 months. Here’s the impact:

THIS is why stakeholders get frustrated. Missed deadlines turn valuable opportunities into net negative outcomes.

And then when we spew our agile-speak and techno-babble about processes and prioritization schemes, and are dogmatic about “no dates on roadmaps,” we’re seen as obfuscating at best, tone deaf at worst.

Speed-to-market matters. It’s why executives push dates and hold us accountable to them. It’s not just about beating the competition. It’s about getting to revenue and profitability fast.

Teams that chronically miss dates are seen as liabilities, regardless of output quality or sprint velocity.

And everyone always wants to eliminate liabilities.

Here’s what you can do as a:

If your product team isn’t generating 3x–50x of its cost annually, you’re operating at a loss.

Teams that grasp this survive layoffs.

PMs and leaders that master it enjoy unlimited career growth.

Those who don’t? They’re on the street.

That’s it for this Saturday.

Have a joyful week, and, if you can, make it joyful for someone else too.

cheers,
shardul

Shardul Mehta
I ❤️ product managers.

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