Today’s Product Pulse:

1. “Don’t be a fool. Don’t become a PM”: A product leader with 10 years of engineering and 8 years of PM experience recommended folks don’t become PMs. But why? I share an exclusive interview with Mario Di Nucci.

2. What makes a great feature results writeup template: The experiment review template that Patreon used has been released. I examine what lessons it holds for to make our FRWs better.

3. Why the job hunt feels so terrible: PMs and product leaders continue to get laid off, while those who have a job are scared to look given how frozen the market seems. I examine some of the underrated factors in the situation.

4. Thinking big from Sam Altman: OpenAI faces a constraint, the circuitry to run its models, and so Sam is proposing to raise up to $7 trillion to remake the world of AI chips. I explore Sam’s reminder of bold thinking for product leaders.

5. The end of TechCrunch+: The traditional tech media industry continues to get rocked with a series of layoffs and changes. The latest news is the end of TechCrunch’s paid subscription. I examine what it says about the future of content.

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1. Exclusive Interview with 'Don't be a Fool. Don't become a PM' Author

In December, a German product leader wrote ‘Don’t be a Fool. Don’t become a PM’ on Medium. It was definitely a contrarian take.

In the following weeks, the article went viral - not just on Medium but also X and LinkedIn.

I got in touch with the author, Mario Di Nucci, to secure you exclusive deeper insights. We’ll cover:

1. His story: how he came to develop this view on PM

2. His thoughts on PM: what ratio actually makes sense

3. His thoughts on engineering: where the field will go as AI develops

4. What’s next: for him as a PM

Part 1 - About Mario

Can you tell us the background of your career story? Why did you make the shift from Engineer to Product Manager to begin with?

I worked in Italy (my home country) as a SW Engineer in hospitals for around 5 years.

But after 2008, when the Economic crisis hit the market, I moved to Berlin to work as a Software Engineer for one of the many Rocket Internet startups.

After this experience, with a friend of mine we founded our own startup. It was a marketplace for musicians and party makers, more or less a digital booking agency. I eventually became CTO of this company, which entered in a Bulgarian accelerator and won the best pitch of that year.

This was the very first time I was on the frontline of product development. I was deeply involved in any discussion with every possible stakeholder (including VCs) and I loved it. I was turning users feedbacks into improvements and features with instant rewarding from our customers. It was great!

After selling our company, I decided to be an employee again to recover a bit from the overhead of being an entrepreneur. I joined Ebuero, a company which convinced me once and forever that I didn’t want to be a SW developer anymore.

We were just implementing a kind of Scrum. I was barely involved in any decision. I had to fight to have any interaction with our users.

This was my turning point. I resigned and joined Takeaway / Just Eat as product owner of 2 teams.

Since then, you’ve worked as a PM at several companies—including OLX, Tesla, and Mister Spex. Where were you laid off? What happened?

I quit Tesla. It was a really demanding job. One day off, and you were literally left behind.

After Tesla, I joined Tribe (a very small startup) right before it got acquired by Mister Spex. I became Product Lead of the Digital apps.

After few months with a poor strategy, Mister Spex decided to have multiple rounds of layoffs, affecting the whole former Tribe team - only 2 iOS developers are still there - and the product team, besides a few old team members.

After Mister Spex, I took a couple of months to job search. With 2 offers in hand, I took the wrong one. So, after one month and half, we made a common agreement to stop my contract.

Since May ‘23, I’ve been traveling the world. I’m doing interviews, but I don’t want to compromise on salary and career, so it’s taking a bit longer than expected.

Part 2 - About PM

In your piece, you explain 3 primary reasons why PMs in general are on the frontline for layoffs, alongside QA and recruiting:

1. Product is typically too layered

2. It’s challenging to quantify PM’s work

3. Most PMs are middlemen

Let’s talk about that first one. Why is product typically too layered? What is the ideal size for a product team as a ratio to engineering and design?

It depends on how the products are being developed.

With hybrid setups, or even fully remote jobs, I had the chance to work in companies which compensated the lack of control (or trust). There were multiple controllers, such as managers of managers of managers. I was in a Lead role, which consisted in Performance reviews, 1 to 1s and development plans, which were a way to quantify product managers jobs—so controlling them.

I would say smaller teams are much leaner, and with enough seniors one PM would be enough for a team of max 10 people. Trust is the key, so you cannot control what cannot be controlled. With proper OKRs system in place, you can synch teams across the company and making sure they are all performing (or maybe not) toward the same goals.

I would say with a CPO in place, you would need an head of product for every 4-5 PMs, just to keep the teams together and aligned, and providing proper personal development to the PMs.

Now let’s talk about the second reason. Why is it challenging to quantify a PM’s work? How do you better quantify a marketer or engineer’s work?

In response to my post, folks have proposed KPIs like conversion rate or user satisfaction to measure the work of a PM. According to my personal experience, these quantities are owned by multiple teams in the company, and maybe they are measurable successfully in the middle to long run. But, for sure, they cannot give the measure of what a single PM does.

In order to evaluate a PM, I was personally looking at the capacity of the person to manage stakeholders, prioritizing the team work, solving impediments, and being a fit into the company culture. How can you quantify this?

To me for a developer is a bit easier. You can see how many tickets are getting solved, reopened and so on. You can check the number of merging requests and so on. There are plenty of ways to measure the cleaning of the written code.

For marketers I can image is about budgets, turning money into customers.

For PMs I cannot find anything like these.

And finally the third reason. Why are PM middle-men? In an empowered environment where PMs drive the discovery and choice of solution, are they adding enough value?

Yes, when you are fully empowered to solely drive discovery, and choose the solution (the WHAT), PMs are not middle-men.

But I personally found my self spending a great deal of time with other people to get enough resources to respect even a rough deadline.

Here’s what happens: In order to have a proper roadmap, engineering managers had to provide me team capacity, estimations. But these were always unreliable, because people turn over, or there is technical debt which occurs right in the middle of the quarter.

Same for stakeholders. You make a plan for the upcoming quarter, everybody agrees, and suddenly after the first week in to the quarter, someone comes to you with the highest priority item on Earth. You say NO, but then you become the serial complainer of the company. Thing are getting escalated. So, screw the plan—making the developers very upset.

I’m exaggerating here. But I hope you get my point. I believe many (if not all) PMs can relate to this story.

You mentioned in the piece that this normally only happens at product-focused companies. For you, those were 1 out of 10. What do you think broadly that ratio is? And what are the signs someone can use before joining a company to see if it is that way?

When the product team is run by CEOs, CTOs or even COOs, it’s already a sign that maybe the company doesn’t have a broader view on product management. Most probably, these are managers who were never in any product management role. So again it will be hard to let them understand what is our role about.

Personally I worked only in one company where PMs were really empowered to say no, making their point in any discussion with key stakeholders, budget plannings and OKRs. This was only because of one director of product who really fought to embrace this product culture in to the company.

Part 3 - About Engineering

On your LinkedIn post, a former colleague commented that you felt the same way about engineering in 2015 (that it is on the precipice of becoming replacable). What has changed about engineering now?

Before, as software developers we were in a position where we were just getting tickets and try to solve them. We almost couldn’t ask why we were doing something. It was when Scrum was not really a thing in these companies.

Now though, engineers are deeply involved in any aspect of the planning. They have to ask WHY—even if a good PM should always start with the WHY—even before the WHAT.

And what do you think is the future of engineering? How many engineers will work at software companies of the future, where they are about 30% of staff?

I guess the biggest question here is how AI will affect software development.

With no code tools and AI empowered IDE, I’m not sure what can happen.

But I’m pretty sure for other 10 years engineers will be still key roles in software products companies.

Part 4 - What’s Next for Mario

You’re back on the market. What types of roles are you looking for? How do you think about the role security of PM and Engineering?

That’s a question I’ve been trying to answer since October, when I started sending my applications to companies, and being in interviews which are really upsetting (to say the least).

Salaries really dropped (in Berlin) while the life cost almost doubled in last 2-3 years.

Many job ads are there just to show to the outside world that the company is apparently doing well since it is hiring. But reality is much different.

So, I guess investing some time in learning AI/ML at the moment is the best investment you can make to secure your job in one of these companies which are in the AI domain, now that AI is a buzzword everywhere.

Amazing. Well thank you so much for being here. How can readers help you?

Thank you. Any constructive feedback or advise would be much appreciated. I have sometimes strong opinions, but I’m always happy to change my mind!

And what about Aakash’s thoughts?

I find Mario's story so relatable, and his concerns about PM quite persuasive.

It's fairly hard to argue with most of his three points. Indeed…

1. Many executives seemed to have agreed that product orgs were too layered: that’s why we’ve seen so many layoffs this year

2. PM's work products are indeed far less visible than designers or engineers: I’ve been saying that for years

3. PMs do tend to be middlemen when they're not empowered. We both clearly agree on that

It's kind of an existential question for PMs who are thinking on the 25-year scale of, "will this still be my job?" All three of these things look more bleak over time.

As the GPT of 2031ish is likely to achieve ASI, engineers and designers will be more empowered than ever. PMs will become even more middlemen-like.

Where does this mean we land?

The future of PM is in flux. But the most important element to happiness and success in work is not: You need to like your work.

So, if you don't like creating consensus, influence, and writing, you won't like the future of PM.

But if you’re up for that challenge, it can still be a very rewarding career.

2. What makes a great feature results writeup template

As a product leader, feature results writeup’s were always my favorite documents to read. They were the quickest way for me to be able to uncover new insights to share with my peers.

led product and growth at Patreon for 4 years. In his newsletter, he released their experiment doc template. It’s very thoughtful.

So I put together this Miro to analyze it:

Go to the Miro

There are a couple lessons for PMs and product leaders putting together their own templates here:

1. A great experiment document isn’t just filled out by the PM. It’s a cross-functional document that has clear ownership points from data science and engineering as well.

2. Create stages in the document. The first 1.5 pages justifies the experiment and requires sign-off from the respective experiment owners in PM, engineering, data science (DS) and design. Then only do you move on to the next stage of filling out the rest.

3. Make it hard to mess up experimentation. There’s so many pitfalls to bad experimentation. And the problem with them is: you end up learning the wrong things, which impede your long-term process. Adding in the clear steps for engineering, for the team to justify why there’s an experiment, and for the team to pre-calculate time to significance ends up paying dividends over the long-run.

The one nit pick I shared with the document is that the problem it aimed to solve was purely a metrics experiment. A great experiment, typically, in my experience, also solves a user problem.

This document is a best fit for Medium-Large companies because in situations smaller than that, you may not have a dedicated DS or PMM resource. In that case, this document would likely be overkill for already busy PMs.

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In Today’s Issue

Words: 2,677 | Est. Reading Time: 13 minutes

1. What you can learn from Palworld: The viral gaming hit dubbed “Pokemon with guns” has dethroned PUBG to become the top concurrent users game on Steam. I examine what lessons product & growth practitioners can take away.

2. Most PMs are in non-tech companies: Examining the data of open PM jobs, only about 27% of open PM jobs are at tech companies. The rest are in other industries. I cover the implications.

3. More talk of Product being overrated: We reflect on the latest in the parade of comments on product. This time, nuanced thoughts from Venture Capitalist Rex Salisbury on whether, as a business focus, it matters in B2B enterprise.

4. Product growth benchmarks: We cover interesting data on the MRR growth, R&D spend, CAC payback, and churn across a variety of B2B and B2C subscription companies.

5. Should you be building for Vision Pro? An exploration of the 600 apps for Vision Pro available on launch, with predictions and analysis of who should be taking a look at what *could* be the next computing platform.

6. Google’s two new 100M subscriptions: Google recently crossed 100M subscribers for both YouTube Premium and Google One. I explore what we can learn from these two giant products.

7. Google’s OKRs: Google has been one of the main drivers of the adoption of OKRs across business. We take a look at its hilariously vague leaked 2024 Corporate Objectives and read between the lines.

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1. What you can learn from Palworld

These are just a few of the insane stats that Palworld - “Pokemon with guns” - has racked up in 2 weeks after launch:

1. 19M players, compared to the last Pokemon game which sold 23M copies

2. Biggest 3rd party game launch in Xbox Game Pass History

3. 2.1M concurrent players on Steam, passing PUBG to #1

And it did all of this on a budget of $6.75M.

By comparison, Bethesda’s Starfield had a budget of $400M and peaked at 30,000 concurrent players on Steam.

The story is inspiring:

• Created by people who were not experts in developing a video game

• Shifted from Unity to Unreal Engine half way through development

• Their balance guy is a 20 year-old who was a cashier at a gas station before

What lessons can product & growth leaders take from the game’s rise?

1. The Japanese ‘DNA Model’

2. It’s worth having fresh eyes even in established markets

3. Platform for going viral + perfect execution = viral formula

Let’s go through each.

Lesson 1 - The Japanese ‘DNA Model’

It’s tempting to think Palworld has no creativity or originality. But it’s actually a really cool example of the Japanese game development concept, the DNA Model.

The DNA model is a cross: you take the gameplay from one genre, and you take the systems from another, and you just cross them. That’s what Palworld does. It takes the gameplay from Fortnite and the systems from Pokemon, and it puts them together.

The mash-up is alive and well.

Lesson 2 - It can be worth having fresh eyes to a market you don’t understand

Here’s what CEO Takuro Mizobe said in his epic blog post (worth reading in full):

Because we were a group of amateurs… I started out not knowing everything…

It was because we were a group of amateurs that we were able to create a method that was not bound by industry conventions.

This is counter-intuitive for most.

It’s tempting to hire people who are perfect fits background-wise for a role. But passion, dedication, and love for what you’re doing mean a lot.

Lesson 3 - Platform for going viral + perfect execution = viral formula

Steam is a viral hit platform. Before Palworld, there was Among Us, Goose Goose Duck, Stardew Valley, and many more.

Palworld took all the lessons from those before them and executed on the template: a niche, with a couple developers, and less than $30.

You need to study your platform and learn from the best.

You may want to continue by taking this to your browser:

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2. Most PMs are in non-tech companies

With all the layoff news in the tech industry - much of which we have covered in the Product Pulse - it can seem like there are no open PM jobs.

There are, they just aren’t in tech.

Subscriber Salil Sethi shared interesting data from Prosper Circle on what industries the open PM jobs are actually in:

It’s crazy to see that long tail. Fully 73% of the open PM jobs are outside the tech industry.

And the good news is: these industries are experiencing far less layoffs and job freezes. Instead, their PM orgs just continue to grow.

Of course, the Prosper data set isn’t a full sample of jobs. So it would be interesting to get a sampling of Product Growth readers:

I’ll report back on the results next week.

You can find templates to expense Product Growth here:

Expense Templates

3. More Talk of Product Being Overrated

Rex Salisbury, former A16Z partner who is now a VC on his own at Cambrian, had a spicy take on why product is overrated:

MBAs, as he points out, tend to think that product is the sexiest role to work in.

But in enterprise fintech, solutions, sales, and customer success actually tend to be closest to the customer.

The same can be said for enterprise software generally. Because the customer is the most important person, the org closest to it tends to be important.

These are interesting points. The takeaways make sense for MBAs.

But for your average PM, this is just a reminder to stay close to your customers. As it relates to the future of PM, it doesn’t really mean much.

Even at enterprise fintechs - like Affirm, where I worked - you still need PMs to do the hard work of translating the voice of the customer into the product, alongside design and engineering.

As a result, this seems like a less frontal attack than the one we discussed last week, when we talked about the ratio of Engineers:PMs potentially decreasing over time.

I mainly include this topic in today’s newsletter to reflect back on that piece. In that piece, I asked you all what ratio of Engineers:PMs you think PM will settle on.

You all tended to agree with me, with a 10:1 ratio of Engineers:PMs the dominant guess:

With everyone from Elon to Rex taking digs at PM, that prediction seems increasingly more likely.

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In Today’s Issue:

1. Brex laying off PMs and burning $17M/month: Examining Brex’s alumni list, leaked financials, and what they all say about the current state of the private Fintech Industry.

2. Were there too many PMs to Engineers? With everyone from Elon Musk to Sahil Lavingia talking about more engineers:PMs, I explore whether product leaders over-hired PMs in the ZIRP-era.

3. The right way to handle a valuation reset: Figma is setting a good example of how to treat employees with care after a shocking M&A outcome, in an effort to retain them.

4. MBA job-switchers are finding it tough to break into PM: The market for PM and tech roles for career switchers remains very rough, as the data from MBA programs confirms.

5. Why Netflix is axing its basic ad-supported tier and what it means for your pricing & packaging: Netflix is getting rid of its cheapest non-ads plan, as it continues to dominate the streaming market.

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1. Brex laying off PMs and burning $17M/ month

Buried amidst all the news out of Brex this week, many missed the details of its layoff.

I got a copy of co-founder Pedro’s e-mail (at the bottom of this post) and the alumni list. Here’s what you need to know.

Who was hit by the layoffs?

The list includes 186 of the 282 employees Brex laid off. At 2/3rds, it’s a fairly representative sample. Here’s who was hit:

• 8 PMs (4.3% of the list): 1 PM, 5 Senior PMs, 1 Principal PM, and 1 Group PM

• 8 Technical Program Managers (4.3% of the list): 2 TPMs, 2 Senior PMs, 4 Staff PMs

• 91 of those laid off were Engineers (50.8% of the list): 10 Engineering Managers, 38 engineers, 39 senior engineers, 4 staff engineers

• Basically every department was on the list: Sales (7.6%), Finance (7.0%), Analytics (7.0%)

Check My Numbers

Like most layoffs, it appears to have hit the lower and mid-levels the most. There is a single Director and no VPs on the list.

But, there could be more senior employees not on here. We do know that the COO and CTO are out.

In his message to employees on the layoff, Brex co-founder Pedro said the company is flattening its org structure:

The data supports that. There are a lot of ‘first level managers’ on this list.

Given he uses the exact same language as Zuckerberg, it’s clear Pedro is taking cues from the Meta leader.

The targeting of the TPMs adds to this as well. Zuckerberg took an axe to them once already this year at Instagram, and Business Insider reports he is about to again broadly at Meta.

Clearly, there is now increased pressure on the TPM role across tech.

So what drove Brex’s layoff specifically? A few things:

Burn

My friend Mark Matousek at The Information broke several interesting stats about Brex’s 2023 financials:

• Net revenue: $279M / year, up 32% YoY but flat for H2

• Burn: $200M / year, down 23% YoY

• Runway: 2 years

These aren’t great numbers.

Starting at the top, Brex’s revenue was flat in the second half of 2023 because it saw a big boost in revenue in H1 from the fall of Silicon Valley Bank. But since then, growth has been sluggish.

Lack of growth always puts pressure on unprofitable companies.

In this market, lack of growth means: the burn was clearly too high.

Inflated Valuation

This high burn was driven by a high valuation.

Brex was a prototypical case of growing too hot, too fast. The company had grown from 0 to $12.3B, on paper, in 5 years:

Along the way, it bloated its way up to 1,400 employees. That’s just too many for its scale.

That’s an ARR per employee of $197K — far below examples that we recently profiled like Notion, which is estimated to be 5x that.

Like so many overvalued companies, Brex began overspending.

A Performance Management Philosophy?

Interestingly - Brex is no stranger to layoffs.

This is its third one:

1. June 2020: 62 employees, 17% of staff

2. October 2022: 136 people, 11% of staff

3. January 2023: 282 people, 20% of staff

Notably, the first two of those happened while Brex was still on its J-curve of growth.

Brex seems to be eternally optimistic - over-hiring, and then needing to layoff.

The Overheated Private FinTech Industry

What Brex is facing is a recalibration of the private fintech markets to better match the multiples in public markets.

Its 44x net revenue valuation is far above the 5.7x that public fintechs boast.

As Anand Sanwal showed, it would more likely be worth something like $1.4B in the public markets:

That’s why Brex’s competitor Ramp, which is said to have a better Rule of 40 than Brex, raised a down round at a 28% valuation cut last year.

What does it mean for techies?

If you’re not in fintech, there’s not too much to read into Brex’s PM layoffs. The space is experiencing a tough time.

And Brex, in particular, is not winning in the market. As Delian Asparouhov of Founders Fund shared:

As a result - there’s not a larger takeaway about the job market for PMs getting dramatically worse than last week. Brex layoffs are mainly a Brex problem.

This week, Microsoft predictably joined the party. It was a predictable cut about 10% the size of last year, concentrated in the gaming divisions post the Activision acquisition.

But if you’re a TPM, it’s worth batting an eye. First Instagram, then more of Meta, now Brex, and soon to be many more copycats are pressuring the function.

The more “middle management” your job seems, the more likely it is at risk of being cut.

BTW, I’ve written a few new variants of ways to ask to expense a subscription:

New Templates

2. Were their too many PMs to Engineers?

The data points keep piling up that the PM function may have expanded too quickly in the ZIRP era.

Two I saw recently:

A. The PM:Eng ratio at X

B. Gumroad CEO’s thoughts on PMs

A. The PM:Eng ratio at X

Another friend of the newsletter, Peter Yang, interviewed Chris Bakke, a PM at X.

Chris shared that X has very few PMs:

Peter: How many PMs do you have for 200-300 engineers?

Chris: To my knowledge, we have 6 people in product.

That’s 33:1 or 50:1 engineers per PM — quite a far-cry from the 5:1 or 7:1 PM:Engineer ratios we were seeing at the peak of the ZIRP-era.

The ratios matter for how many PM jobs are out there. Just to run the numbers on the estimated 1.6 million software engineers in the US:

• 5:1 ratio → 320K PM jobs

• 7:1 ratio → 230K PM jobs

• 33:1 ratio → 48K PM jobs

• 50:1 ratio → 32K PM jobs

(Note: more and more US-based PMs are leading developers in other parts of the world, so the numbers could be a bit higher than that. This is just napkin math.)

B. Gumroad CEO’s thoughts on PMs

Sahil Lavingia, the founder and CEO of Gumroad, posted this tweet that got a lot of traction on X:

He’s been a well-known PM-skeptic for years.

But there’s a reason posts like this are guaranteed a lot of social engagement: a lot of people feel the same way.

Especially CEOs, like Elon and Sahil - which is not a good sign for PM.

What Ratio Can We Expect?

No one thinks the function is going away - even Sahil and Elon - but it is getting pressured.

As a product leader in this era, I use the ‘we’ to say: we over-hired PMs in the ZIRP era.

The era of 5 engineers for a single PM is probably gone for good.

At the same time: the X and Sahil ratios only seem possible up until 200-300 engineers.

After that, communication breaks down. This is because the amount of it you need to do - with customers, stakeholders, and the rest - grows exponentially.

Engineers and designers begin to spend all their time doing what a PM could be.

The takeaway?

→ Startups probably over-hired.

→ But bigger tech companies still need PMs.

I expect the ratio to stabilize more around the 10:1 range over the next year or so.

This means that there will be less PM jobs than before.

But it’s not going to be a huge ax to the industry.

What do you think? Let’s crowd-source your thoughts, and I’ll report back in a future issue:

3. The employee-friendly way to handle a valuation reset: Figma’s example

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Product Pulse is a new series in Product Growth covering the latest product news and tech news relevant to product folks. Have a source? Send me a message.

The product world has had an eventful start to 2024. In this issue of the Product Pulse, we’ll cover:

1. How many …

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