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With slow economic recovery after COVID-19 and Russia’s invasion of Ukraine, our global economy is faced with elevated inflation and reduced investments.
SaaS companies haven’t been spared from this economic downturn. Tech companies, big and small, are facing massive layoffs, budget cuts, and increasing difficulty with fundraising.
Despite this uncertain climate, many SaaS companies are still thriving and preparing for further product growth. How can product managers adapt to our changing economic circumstances to not only survive, but also thrive?
Big VC funds like Y Combinator advise startup founders to plan for the worst, and cut costs to extend their runway. Product managers face a number of challenges because of this change.
In our recent LinkedIn poll, budget cuts and buy-in were pointed out as the top concerns for SaaS companies.
With engineering resources already being scarce, hiring freezes may halt new projects indefinitely. Or worse, if product teams try to pursue too many projects at once, they may burn out their engineers because they are buried in outstanding tasks.
That leaves product managers in a difficult position. The last thing they need is a team of burnt-out engineers. However, they can’t afford a significant slow-down of product growth in an already challenging time.
How do you cope with this?
During previous recessions, there have always been companies that came out stronger. Think about the many tech companies that were founded during the 2008 recession and thrived. Uber, Airbnb, Slack, Square,… Their products catered to the needs that arose due to the recession.
Now more than ever, innovative product managers are listening to their customer’s needs and their changing consumer behavior. The companies that focus on building products that help their customers navigate this new and changing climate will thrive.
A great example is Joist, a mobile app for contractors to estimate, invoice and collect payments. This year, their Senior Product Manager Growth, Ryan Chong, is prioritizing features that help their customers deal with economic uncertainty on their roadmap.
Catherine Horgan from KeyPleaz, a platform that connects busy real estate agents with available agents to take over home showings, proactively thinks about ways to provide more opportunities to their product users in this changing climate.
For companies that aren’t in a financially difficult position right now, there is a massive opportunity to support customers who might be struggling, according to Madalina Tanasie, Chief Technology Officer at data intelligence market leader Collibra.
We asked different product and engineering leaders how they are adapting to the economic downturn. Below, we’re highlighting some recurring thoughts and trends.
Agile product teams focus on iterative design and incremental development. Rather than sharing big-bang feature releases, engineering teams deliver small improvements and features in short cycles.
Although rapid experimentation has always been part of their culture, Senior PM Ryan Chong confirms it is now more important than ever. Their product team doubles down on validation before passing projects along to the development team. “We want to make sure we flesh out the viability and eliminate all risks before the engineering team puts their fingers to the keyboard and starts coding,” says Ryan.
With short sprints, product teams can respond quicker to changing market conditions and adjust product direction. Smart product teams will focus on the most valuable features first, and iterate fast on customer feedback.
User research, prototyping and light MVPs are only a few tools product managers can use to validate their product ideas in the market much faster, and to unburden their engineering team. This way of operating reduces the risk of investing too much time and resources on product features their customers may not even find valuable.
Many businesses are cutting back budgets for innovation. Big new innovation projects are outside of their focus. But budget cuts don’t mean you can’t innovate with the resources you have. Solving your customer’s most important problems in a smart way will help you stand out from competitors, without losing focus on your most important OKRs.
Unusual circumstances are pushing companies to be more creative in their problemsolving. Whether it’s by building new features or improving existing capabilities. Devon Willitts, Product Manager at legal contract software company LexCheck, gives a few examples of innovations they are currently exploring.
Besides new features, LexCheck also sees innovation opportunities in existing product capabilities. “The software we’re building is quite complicated,” says Devon. “Especially new innovations like ChatGPT are adding another layer of complexity to contract software. We’re having conversations about how we can incorporate this type of AI capability into our stack.”
In times of hiring freezes and budget cuts, product managers are keeping the “work-with-what-you-have” mentality. With the same amount of resources, there are ways you can improve your team’s efficiency without adding more responsibilities to the pile.
The most successful product teams are sharpening their focus. Teams that know exactly what they’re working on, and which results they are working towards, will be able to maintain a steady ship and good morale.
We asked Devon and Ryan what they believe the number one priority should be for product managers right now. Both replied without hesitation: focus.
“In our near-term product plans, we’re focusing on proven initiatives that have been revenue-generating,” says Ryan. “I’d recommend product managers to be super dialed into the problem they’re solving for their existing customers, because they are the ones to carry you through times of economic uncertainty.”
“If I have to recommend one thing, it would be focus,” says Devon. “We have been ruthless with our prioritization. We focus on the things we can do well quickly, and on improvements that will deliver value to our customers in a short period of time. We aim for some big and quick wins in the next 3 to 9 months.”
Before the economic slowdown, when the tech sector was booming more than it is now, many SaaS companies were focused on hypergrowth. With new fundraising, they would hire as many people as possible in all areas where they could use support.
The few companies that are succeeding in fundraising today are thoughtful in their hiring decisions. Devon explains their reasoned hiring strategy after LexCheck raised a $17M Series A in December 2022.
Madalina (Collibra) also sees opportunities for the tech industry in nearshoring and offshoring to lower costs.
Now more than ever, product teams who use engineering resources in a focused way are thriving. By prioritizing features that bring the most value to your customers, SaaS products will stay relevant and bolster their growth.
Do you get a lot of reporting requests from product users, but don’t have the time and resources to build analytics features? With Luzmo’s embedded analytics platform, product managers can rapidly create and deploy customer dashboards while keeping their engineering team focused on the core product. Try it free for 10 days, or request a demo with our product experts.
Experience the power of Luzmo. Talk to our product experts for a guided demo or get your hands dirty with a free 10-day trial.
