This problem becomes even more pronounced in times of technological disruption. AI is a clear and current example.

Who is best placed to understand which AI investments will actually pay off? It requires someone with a deep grasp of technical realities and a strong understanding of high-level business priorities. That intersection is precisely where middle management operates.

Yet, over-involvement of senior leadership in AI investment decisions is one of the major reasons many AI initiatives are failing. When the AI wave hit, what did many companies do? They laid off middle managers — the very people most capable of identifying where and how AI could be effectively leveraged. It is no surprise that we are now seeing a wave of re-hiring.

Consider Klarna, the fintech “buy now, pay later” company. In 2022, CEO Sebastian Siemiatkowski unilaterally decided to lay off 700 employees and replace parts of the organization with AI. As customer satisfaction declined sharply, he later admitted that the company had gone “too far” with AI.

This is not an isolated incident. An MIT report suggests that nearly 95% of generative AI pilots at companies are failing. In many cases, this reflects leadership pushing AI projects into areas where middle managers — had they been empowered to speak candidly — would have flagged a high likelihood of failure.

Middle managers who bring a healthy dose of skepticism and have the courage to question leadership initiatives are exactly the people who could have prevented many of these misinvestments. Ironically, these are often the first roles eliminated during post-pandemic layoffs.

The Solution: Empowered Middle Managers as Change Agents

Organizational change is hard. Sustainable change, especially in complex tech organizations, must be driven by people in the middle — those who understand both the strategic context and the operational realities.

Effective middle managers combine big-picture thinking with attention to detail. They adapt quickly to changing trends, challenge existing assumptions, and translate abstract strategy into day-to-day execution. Without this layer functioning well, even the strongest leadership vision remains theoretical.

Middle Management Hiring Mistakes

Most organizations rely primarily on internal promotions to fill middle management roles. This is often the wrong approach.

If middle managers are expected to drive meaningful change, they must bring fresh perspectives and new ways of working. That often requires hiring from outside — people who have seen different organizational models, industries, and cultures.

Adaptability matters more than deep specialization at this level. Strong middle managers tend to be generalists who have operated across functions or companies, and who can connect dots others miss.

Finally, effective middle managers must be strategic operators. They should focus on sense-making, prioritization, and decision-making, while relying on a strong layer of frontline managers for detailed execution.

Conclusion

When middle management is ignored, underpowered, or systematically removed, organizations do not become flatter or faster — they become weaker. In an era defined by rapid technological change and constant disruption, companies cannot afford to sideline the very people who connect strategy with execution. Empowered, respected, and well-chosen middle managers are not a cost to be minimized; they are a strategic advantage to be cultivated.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

Quarterly Revenue targets compromise long term product investment

Building a Product is a long game (especially for early stage and growth stage products). Short term revenue targets take the focus away from long term investment and incentivize short term “Growth hacks”. Some of these hacks (like pricing changes) can compromise customer satisfaction even if quarterly revenue targets are achieved. Focus should be on long term (1 year or more) revenue targets rather than short term (quarterly).

Sales-Led Companies

In a predominantly sales-led organization in the Enterprise SAAS world, PMs need to prioritize the roadmap for major deal-wins. In this case, PMs play a supporting role to Sales, and the Sales team is the revenue owner.

Product-Led Companies

In a predominantly product-led organization, Marketing team is responsible for lead generation and product team is responsible for the Freemium/Trial experience and Free/Trial to Paid conversion. Here, it makes sense for the Product Leader to own revenue. But revenue can be impacted by lead generation (owned by Marketing) as well, hence it makes more sense for Product Leaders to own the conversion metric rather than revenue itself.

Product-Led Expansion

If your Product has multiple Pricing Tiers like Basic, Premium, Enterprise, etc., then it makes sense for the Product Leader to be responsible for customer expansion from a lower tier to a higher tier (called Expansion Revenue). PMs can expose premium features in the User Experience and generate upgrades. Here’s an example from Spotify:

Product-Led Acquisition

Many self-serve products have viral loops or referral loops for customer acquisition. For example, Survey Monkey asks users who fill out Surveys to create their own surveys, thereby making people sign up for the product. This is called Product-led Acquisition through viral loops, which can absolutely be owned by Product Managers. Here PMs are responsible for the revenue generated from in-product referrals.

Conclusion

In a Product-led SAAS company, PMs should own parts of the Revenue (especially related to expansion and viral acquisition). But the focus should be on long term revenue rather than quarterly. There are several other metrics (like Conversion metrics, retention and engagement metrics) that are better for Product Leaders to own to ensure long term sustainable growth of the product.

Let me know what you think and share your perspective in the comments below.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

In reality, the way you design your product organization often decides whether your company can move fast, adapt to customers, and scale effectively—or whether it gets stuck in internal bottlenecks.

The right org design depends on three key factors: market competitiveness, product portfolio strategy, and the tradeoff between decision speed and organizational efficiency.

Let’s unpack these with real-world examples.

1. Market Competitiveness: Speed Requires Autonomy

In highly competitive industries, where customer expectations shift quickly, teams cannot afford to wait for approvals from layers of hierarchy.

• Horizontal structures (see figure) —where decision-making authority is pushed down to autonomous squads—work best in these environments.

• Each squad must be self-contained: product, engineering, design, marketing, and growth roles embedded together.

• Decisions on features, growth experiments, and customer feedback happen directly inside the squad.

Spotify is a classic example of a horizontal org structure. Its Squad model empowered small, autonomous teams to experiment rapidly with recommendations, playlists, and sharing features. This allowed Spotify to outpace bigger players like Apple in delivering personalized music experiences. The org structure itself became a competitive advantage.

2. Product Portfolio Strategy: Alignment Requires Centralization

If your company has multiple products sold to the same customers or market segments, a more vertical structure becomes critical. This is shown on the right hand side of the figure.

Why? Because the portfolio of products must work seamlessly together. Customers don’t buy products in isolation—they evaluate the bundle, pricing, and overall value.

• In this case, CXOs (see figure) need authority to ensure products complement each other as well as integrate seamlessly

• Decision-making must be centralized to align bundling, cross-product integration, and roadmap priorities.

Apple is a perfect illustration of a vertical org structure. Its highly centralized org structure ensures products like the iPhone, iPad, and Mac are tightly integrated. Features like Air Pods switching seamlessly between devices or iCloud syncing across the ecosystem are only possible because portfolio-level leadership aligns design and engineering choices. Without centralization, the Apple ecosystem would feel fragmented instead of seamless.

3. Decision Speed vs. Org Efficiency: Finding the Balance

Every org design faces the classic tradeoff:

• Vertical (centralized) structures → Slower decision-making, but higher efficiency through teams that avoid duplication and reuse shared platforms and infrastructure.

• Horizontal (autonomous) structures → Faster decision-making, but less efficient. Squads may duplicate efforts, rebuilding similar modules in parallel.

Amazon demonstrates how to balance this tradeoff. It introduced the famous “two-pizza teams” concept. i.e. A team should be small enough that it can be fed with two pizzas (usually 6–10 people). This gave squads autonomy to innovate in retail, cloud, and devices. At the same time, Amazon built centralized platforms like AWS infrastructure, payments, and logistics that all teams could leverage. This hybrid structure created both speed (autonomous teams) and efficiency (shared resources)—allowing Amazon to scale across multiple industries without collapsing under complexity.

4. Why Generative AI Products Need Horizontal Structures

Generative AI products are still in fast-evolving markets. Success depends on:

• Close collaboration with customers to refine outputs, usability, and trust.

• Cross-functional squads that bring together product, engineering, design, and growth (adoption).

A Horizontal structure empowers teams to run rapid iterations, respond to feedback, and adapt quickly.

This is why many AI-first startups organize into small, nimble squads, rather than traditional vertical hierarchies. Centralized decision-making would slow them down in markets that demand speed. Unfortunately, in larger organizations, leadership tends to get involved in AI products as there is keen interest to monitor progress. But this makes it harder for larger organizations to move faster with Generative AI.

5. The Hybrid Reality: Most Companies Sit In-Between

Very few organizations can run fully horizontal or fully vertical structures. The ideal design often sits somewhere in between:

• Cross-functional squads for speed and autonomy.

• Light vertical oversight for portfolio alignment and shared infrastructure.

• Matrix elements (like security, compliance, or GDPR initiatives) that cut across squads.

Google illustrates this hybrid approach well. While product teams operate with autonomy, a matrix structure ensures organization-wide initiatives like privacy, compliance, and AI ethics are applied consistently across Search, YouTube, Ads, and Cloud. The tradeoff: some decisions move slower. But the payoff is global consistency and trust across products that billions use.

Final Takeaway

Your org structure is not just an internal design choice—it is a strategic lever. It determines whether your company innovates quickly, scales effectively, and delivers customer value.

The right structure depends on:

• How competitive your market is,

• The nature of your product portfolio, and

• Whether you need speed or efficiency

Get this wrong, and even the best product strategy will struggle to deliver results. Get it right, and you unlock both growth and resilience.

Need to discuss your organizational design with me? Message me on Linkedin.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

One of the most common challenges I’ve observed among startup founders and CEOs is a lack of clarity around PM hierarchy, specializations, roles and responsibilities. This isn’t entirely unexpected—many founders haven’t worked within mature product organizations. Yet, it is vital to get this right, especially for startups that are beginning to scale because PM organization is the conduit through which decision making is delegated to frontline teams.

In this article, I’ll focus on the first building block of PM org design—understanding what different PM roles entail and how responsibilities are distributed. In subsequent posts, I’ll explain the principles of PM organizational design—specifically, what types of orgs deliver what kinds of outcomes, and the trade-offs involved.

The Two Parallel Tracks in Product Organizations

A mature Product organization typically includes two parallel growth tracks (see infographic):

1. Individual Contributor (IC) Product Managers

2. People Manager Product Managers

Both tracks are essential, but they serve distinct purposes.

• IC PMs are responsible for execution—owning product outcomes, feature development, collaborating with engineering and design, managing sprints, and analyzing product usage data. Their day-to-day focus lies in delivering value through tangible product improvements.

• People Manager PMs are focused on scaling product portfolios and platforms. They bring cross-functional cohesion in decision-making. They remove obstacles for product teams, invest and fine tune product systems and processes. They coach PMs, define product strategy tradeoffs, and ensure that execution remains aligned with business priorities. Their impact is less about shipping features and more about creating leverage through systems, frameworks, and culture.

As a founder or executive, it’s important to recognize that these are not hierarchical in a traditional sense—some of your most impactful IC PMs may not want to move into people management, and that’s perfectly valid. The key is to align structure with strengths.

Balancing Strategic Vision and Operational Execution

Another important distinction is between strategic and operational responsibilities across PM levels.

PMs at the top of the hierarchy are more strategic and focused on putting the systems in place to ensure high quality decisions that are aligned to the company strategy and goals. They are best positioned to drive decisions that involve trade-offs across functions—such as growth vs. retention or short-term revenue vs. long-term

Junior PMs at the bottom of the hierarchy are focused more on product outcomes and operations - owning the backlog, ensuring coordination with design and engineering, and driving feature releases.

Despite this distinction, it is vital to ensure everyone from top to the bottom are aware of strategic trade-offs, decision authority and have skin in the game.

Decision Types: Reversible vs. Irreversible

Jeff Bezos popularized the idea of Type 1 and Type 2 decisions, and it’s a useful mental model for Product organizations.

• Type 1 decisions are irreversible or very costly to reverse. These include choices like entering a new market, restructuring your pricing model, or sunsetting a major feature. These decisions typically require knowledge of the long term implications and impact on other products and functions. Senior Product leaders with a lot of experience need to make these decisions

• Type 2 decisions are reversible and lower-stakes—such as UI tweaks, copy changes, or A/B tests with limited exposure. These should be handled autonomously by frontline PMs to avoid unnecessary bottlenecks.

Product leaders need to educate their teams to recognize which type of decision they’re making—and equip them with the authority accordingly. This is one of the fastest ways to increase speed without sacrificing product value.

Generalists vs. Specialists: Making the Right Trade-Offs

This is where many startups get things wrong.

At the leadership level, it is critical to have generalist PMs—those who can operate across multiple product domains and collaborate effectively with functions like marketing, finance, sales, and operations. Generalists bring a broader perspective, and they’re more likely to introduce novel ideas by connecting patterns across industries and bringing in fresh ground breaking ideas.

On the other hand, junior or mid-level roles are often the right place to introduce specialist PMs—for instance, those with expertise in growth, data, AI, or consumer behavior. These specialists are often highly effective when focused on a specific segment of the product, provided they operate within the company’s strategic framework.

Common PM Specializations and When to Use Them

As your product and team scale, you’ll likely find value in hiring for specialized PM roles. Below are a few of the most common specializations and when each is appropriate:

A Platform PM focuses on infrastructure, internal tools, APIs, and shared systems that power various parts of your product ecosystem. This role is best suited for organizations that have multiple products or teams building on shared backend services. Platform PMs play a crucial role in scaling internal developer efficiency and promoting reusability across the organization. A common example would be leading the development of a unified authentication or identity service that supports several product lines.

A Growth PM is responsible for driving user acquisition, improving onboarding, increasing engagement, monetizing user activity, and enhancing retention. These PMs are most effective in startups that have achieved product-market fit and are looking to optimize and scale growth levers. Growth PMs lead growth teams that typically run continuous experiments across the funnel to find conversion opportunities. For example, they might lead A/B tests on onboarding flows to improve the rate at which free users become paying customers.

An Outbound PM focuses on go-to-market strategy, sales enablement, and product messaging. This role is especially important for complex enterprise products where close coordination with marketing and sales is essential. Outbound PMs often help organizations break into new verticals or support product launches with strong GTM narratives. A typical example would be working closely with the sales team to develop demo flows, FAQs, and provide roadmap clarity to key customers.

Domain-Specific PMs, such as those with expertise in AI, data, B2C, or fintech, bring deep subject matter knowledge within a particular industry or technology area. These roles are valuable in companies building AI-first products, data platforms, or regulated consumer-facing technologies.

Closing Thoughts

Understanding the different roles within a Product Management organization is a critical first step toward building a high-performing product team. As your company scales, clearly defining PM responsibilities and decision-making authority enables faster execution, better alignment, and stronger ownership at every level.

In the next post, I’ll go deeper into the principles of organizational design—different organizational structures and the varied results they are designed to produce and how to trade-off between them.

Let me know what you think and share your perspective in the comments below.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

1. Clarity reduces wastage

   There is a lot of wastage in companies: unimpactful work getting prioritized, work not aligned to goals, duplicate efforts, etc. Your job as a Product Leader is to provide clarity on what the strategy is, what the goals are, and why. Also, be clear on what trade-offs we are willing to make to reach the goals (including what not to do). This will not only eliminate waste but also give employees a sense of purpose.

2. Small things have big impact – You don’t need the latest LLM-based feature to have a big impact on your goals. It is often the small things that have the highest impact. These could be things like improving discoverability of a useful feature, educating sales teams on a new feature your team developed, etc.

   

3. Busy work is the enemy of impactful work – PMs have a lot on their plate and often spend the majority of their time answering questions and unblocking their teams. But the most impactful work requires deep thought – how are you going to beat your competitors? What’s the next game-changing feature you should introduce? Unless you block your calendar for deep work, these tasks will never get done.

4. Decision quality – How decisions are made (and the quality of those decisions) is what separates the best orgs from the mediocre ones. Your job as a Product Leader is to provide teams clarity on what decisions they can make, what requires your approval, and so on up the chain. You should also provide clarity on the goals, frameworks, and data to use to back up decisions.

5. Align with customers – You are the voice of the customer in meetings. You represent the customer. The deeper you know your customers, the more successful you will be. Have a regular cadence to talk to customers and look at customer data and insights.

6. Managing change upward – This is the most impactful, albeit risky, thing you can do as a PM. Managing change down is easy. To really move the needle, you often need to make changes that require approval from higher-ups. This is often not easy, especially in smaller companies. Use data, evidence on best practices, and customer feedback to get approval for the changes you want to make.

7. Passion comes from ownership – Teams will be more passionate and dedicated if you give them more ownership. But unless you introduce a culture of quality decision-making, it is hard to provide them with decision authority. Also, to delegate authority, you need to hire experienced PMs.

8. Product Management is often misunderstood – Your boss has probably never been a PM and will not know what a PM is supposed to do. Many equate it to Project Management – or even worse – Quality Assurance (“Deliver this on time, and make sure there are no issues!”). It’s important to set expectations and clarify to your boss what PMs are supposed to do and who is responsible for what. I would highly recommend one of Marty Cagan’s books or courses to educate your leadership team about Empowered Product Teams.

9. PMing is risky, not for everyone – PMs should give credit to the team when things go well. But PMs are the only ones responsible for the results when things don’t go well. Just like any business role, there are multiple factors beyond a PM’s control, and it’s easy to miss goals and business outcomes. PMs are also the first in the development team to be laid off in a downturn.

10. Yes, you are alone in this – Being a PM is a lonely job. You are often operating alone, questioning people, overriding decisions, dealing with conflicts. All this can make you unpopular with the team you work with every single day – although you try your best to be nice. But seeing the customer impact and the business results often more than makes up for this. Spending time with other PMs outside your own company is a great way to exchange notes, hone best practices, and just be surprised how similar your challenges are to other PMs in different organizations in different industries!

Product Management is still the most intellectually rewarding job in tech as it gives you the broadest perspective on the business as your work spans multiple functions.

Let me know what you think and share your perspective in the comments below.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

Thinking about your business strategy doesn’t have to be complex. Here, I will present a structured way to think about strategy.

Defining Strategy

Business Strategy - according to me - is simply defined as bringing together the firm's best strengths to solve a customer problem. Notice there are two elements here:

1) Firm’s strengths

2) Customer problem

The bringing together of these two elements is the company's strategy. The bigger (and more unique) the firm’s strengths and the bigger the customer problem, the more solid the strategy will be.

Answering “What’s the strategy?”

Every time you are asked, “what’s the strategy?”. Your response should be “Customers really need XYZ. Our company’s unique strength is ABC. Hence our strategy is use our strength ABE to solve XYZ customer problem”.

Example 1

Let’s take a simple example: The iPad. In this case, Apple’s strength is ownership of the entire technology stack from hardware to operating system to the user interface. Customer need here is to access the internet on the go. Building a solution to this customer need will require innovating on the hardware, software as well as the user interface to ensure optimal experience, and performance. Which company is uniquely suited to solve every component of this problem stack? It is Apple. Competitors will not be able to replicate Apple’s success because they don’t own all components of this stack.

Hence in this case, the company’s strength is really helpful and unique providing it a competitive advantage. Therefore, this strategy for iPad is strong.

Example 2

As another example, consider the problem of whether or not the food delivery company Swiggy must venture into grocery delivery.

We break down this strategy problem into two parts:

1. Company strengths: Swiggy’s strength is its vast network of delivery partners who fulfill customer orders in minutes. Swiggy has already built this network for food delivery. The same network can be used to deliver groceries also. Similarly, Swiggy app is convenient to use (instead of dictating the grocery order over phone to the nearby grocery store).

2. Customer need: There is no doubt that customers have a need to get groceries delivered on time and in a convenient fashion.

Putting the two together, Swiggy’s unique strength (barring competition from the likes of Zomato) can be put to good use to solve customer’s need for instant grocery delivery. This is another example of a solid strategy.

Customer needs assessment

Strategy is about bringing together the firm’s unique strengths to solve a customer problem. The two elements of a good strategy are 1) Firm’s strength 2) Customer need. In this section, let’s deep dive into the second aspect which is customer need.

How do we identify customer needs? How do we know we are solving the right problem? We can think of a customer problem along two dimensions: size of the problem and frequency of the problem.

In the customer needs assessment framework, we determine if a customer problem is rare or frequent (horizontal axis) and small or big (vertical axis). If there are multiple customer problems being considered, all of those problems can be plotted on this 2x2 framework. This framework becomes a handy framework for product feature Prioritization as well.

Customer problems that fall on the top right of the 2x2 matrix are the most favorable to solve as they are frequent and large problems that customers will be willing to purchase a solution for.

Consider the following three businesses:

• BigBasket - A grocery delivery platform

• Matrimony.com - An online match making portal

• Cleartrip.com - A travel booking site

If we arrange these businesses on the customer needs matrix, they will look something like this:

Matrimony or finding a suitable match for marriage is no doubt a big problem, but it is fairly infrequent (hopefully!). On the other hand, booking a flight (Cleartrip example) is fairly more frequent. Ordering groceries (BigBasket) is the most frequent.

Features or business opportunities that lie withing the top right of the matrix are the most favorable ones to invest in.

Company strengths assessment

The second element of a good strategy is to see if there are unique company strengths that can be leveraged to solve a customer need. Some of the unique company strengths include:

• Existing go-to-market channel to serve the target customer

• Bundling with existing products

Let’s look at these in detail.

Existing go-to-market channel

It takes time to build a distribution channel to reach customers. The distribution channel can be:

• Direct marketing (Website, Ads) - In the case of B2C segment

• Direct sales (own sales team) - In the case of enterprise segment

• Channel sales (reseller network) - In the case of SMB segment

Each of these channels requires time, effort and money to build. Distribution channel is one of the key strengths of a company.

While evaluating potential new investments, it gives a company an enormous advantage if:

• The new product is targeted at the same customer base as the company’s existing product, or

• The new product uses the company's existing go-to-market channel to target a different set of customers

How does one evaluate which go-to-market channel is the best for a product? It could be argued that a company can use both direct sales as well as resellers for a given product. However, there is always an optimal channel for a given product. Many acquisitions have failed because there is a mismatch between the acquiring company’s existing channel and the channel required for the product being acquired.

The following framework is useful to determine the optimal channel needed for a product.

If the product is complex to understand and deploy, it requires a high-touch sales team: either direct sales team or reseller network. Direct sales is not viable if the sale value per customer account is small. Reseller network is the only viable channel in this case (Low account value and high product complexity). If the product is not Complex and is easy to deploy, online sales is more cost effective.

The framework is populated with examples below. Complex high value products like ERP/CRM systems can afford direct sales teams (top right of the matrix). Complex but low value products like 3D design software require resellers (top left of the matrix) because direct sales teams will become unviable for low value accounts. Resellers will also increase the reach manyfold, which is required to sustain high volumes that low value products require to ensure viability. Products that are not complex, like productivity software, can be sold online (bottom left of the matrix).

A mature company with existing products would have built expertise in one of these channels. This is the company’s strength.

Many mergers and acquisitions have gone wrong because there is a mismatch between a company’s existing channel and the channel required for the product being acquired. For example, I have seen a company with predominantly direct sales team and no reseller network acquiring a complex, low-value-per-account product. Such a product required multiple reseller networks with incentives to sustain high sales volumes. Resellers are also required to provide ancillary services and hardware for the products being sold. Without resellers, the acquired product really suffered and could not reach the high volume needed to sustain good revenue.

Similarly, when considering a new venture or product within an existing company, the product is likely to be more successful if it utilizes a company’s existing strength in a particular channel.

For example, Microsoft could leverage its distribution network among enterprises to distribute Teams in addition to Office products. This pretty much guaranteed the success of Teams.

Bundling with existing products

If the new product under consideration can be bundled with existing products, it will create a defensible moat against competition. For example, Teams bundled with Office subscription, smartwatch bundled with smartphone, are good examples. An important consideration here is that the customers being targeted for all the products in the bundle must be the same.

Conclusion

Any new strategic moves like investing in a new product or segment can be assessed using the strategy definition framework, which in turn relies on the customer needs assessment and go-to-market evaluation frameworks as shown below. Together they form a useful mental map for defining strategy.

I would love to hear your thoughts. Do add your valuable comments below.

If you liked this post, check out my other post Designing a Winning Product Strategy for the year ahead.

About the Author

Teja Vepakomma is a freelance Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies like Adobe. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

Current Squad Structure

If you are like most modern Software Product companies, you organize your teams as Product Squads. Each Squad comprises of Software Engineers, Designers and Product Managers. This is what a typical team structure looks like:

Of course, the exact number of Engineers and Designers per squad will vary by the nature of the industry, competitiveness, lifecycle stage and tech stack. There may be additional shared resources like Marketers, Data Analysts, etc. supporting the squad. For the purpose of this discussion, we will be focusing on PMs, Designers and Engineers only.

Impact of Gen AI on Squad Roles

Let’s look at the impact of Generative AI on each of the 3 major roles in a Product Squad:

• Software Developers: Software Developers are more productive today with code generation tools like GitHub Copilot, Replit, Cursor, etc. In the Gen AI era, the focus of Software Developers will be more on architecture, reviews of AI generated code, and solving hard problems. More experienced (and fewer) developers will be needed for these tasks. Of course, the quantum of productivity gains will depend on factors specific to your product (e.g. Legacy code vs New code, dependencies, etc.) but various studies have pegged the average productivity gains at 35% for Software Developers.

• Designers: Today AI can generate on-brand designs. Designers can now scale using AI tools like Uizard, Galileo, and Figma AI. PMs can quickly create prototypes that can be converted into code (instead of creating user stories). However, a Designer is still needed to ensure production quality designs are shipped. Due to Gen AI driven productivity gains, we will need fewer Designers on a squad. Various studies have pegged the average productivity gains at 40% for Designers.

• Product Managers: A Product Manager’s job is to ensure maximum customer value is derived from features being developed. This requires

  a) Research, Analysis & Prioritization

  b) Scoping & Definition

  c) Review & Approval of Design & Development

  d) Customer Adoption & Refinement

  Among all of these tasks, Scoping & Definition is the only one that can be sped up to a significant extent by Generative AI. Generative AI can help marginally speed up some research & analysis tasks as well, but human oversight will be required.

  For Gen AI feature development, PMs will have to perform additional tasks such as Model performance, price, bias and hallucinations evaluation & management.

  All of these mean that Product Managers have a lot more to do in the Generative AI era and the net productivity gain for PMs maybe zero.

Squad structure with Gen AI Assistants

If you have empowered your Product Squads with Generative AI tools like the ones described in the section above, you may want to rethink your squad sizes due to potential productivity gains. A word of caution: It may take some time for your team to achieve productivity gains and the quantum of gains varies by a number of factors. Here’s how would a Product Squad would look like before and after Generative AI assistants:

Note that we have reduced Developers by 33%, Design by 50% and PM strength remains the same. The reason for this is detailed in the section above. But in general, PMs are expected to now create prototypes, which can then be converted into user stories or code.

Other Roles with Gen AI assistants

Other roles on a squad like Project Managers may not be needed unless you have complex dependency tracking requirements on other teams. However, with AI generated code, you need to rethink if you want to have shared components in the architecture (therefore creating dependencies and slowing down the teams) or if you prefer each team to generate and maintain their own platform.

A note on Hierarchy in the Gen AI era

Your squads are more productive and able to create more software. How do you ensure they are working on the right priorities and that they are producing the right customer outcomes? That’s where managers come in. If your squads are lead by a PM, you will need PM Managers to manage multiple squads to ensure they are working on the right priorities tied to the company goals. This is absolutely critical and often overlooked leading to wastage of resources.

It is more critical in the Gen AI era to work closely with customers so that innovations are relevant to what customers need. You may want to embed Solutions Consulting / Account Managers / Pre-sales teams along with your PM Managers so that squads are solving the right problems in the right way and limitations with Generative AI are identified early to avoid wasted effort.

Conclusion

Generative AI tools offer maximum productivity gains for Software Developers and Designers as they produce tangible outputs that can be automated. Since Product Managers are involved in producing intangible outcomes (like Customer Value) and complex measurable gains (like customer and revenue growth), it is hard to automate the tasks a PM performs. PMs are also required “humans in the loop” for review and approval at every stage (Design, Development, Deployment, Customer Adoption etc.).

Aim to reduce your squad strength by 30-40% for Software Developers and Designers. Keep PM strength the same. PMs should focus more on customer value and outcomes and rely on AI tools for documentation and project tasks. Ensure co-innovation with customers and customer facing teams. Embed customer facing teams with PM Managers who are responsible for 3-4 squads.

Do share your thoughts in the comments below.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India. You can follow or reach out to him on LinkedIn.

In B2B SaaS, product-market fit is just the starting line. Sustaining that fit—especially as markets crowd and copycats emerge—requires building strategic moats. These moats make your product harder to replicate or compete against effectively.

Given below are six strategies that successful B2B SAAS companies have used to not just survive but grow steadily for decades.

1. Company-Generated Content moat

Creating and distributing ready-to-use templates can significantly increase competitive advantage. For example, most of the SEO traffic for apps like Canva comes from users searching for specific templates or jobs to be done. By providing more templates, Canva effectively corners much of the traffic from search terms and converts incoming users into trial and eventually paid plans. For competitors to copy Canva, it takes time and effort to create these templates.

Take another example: HubSpot provides thousands of marketing templates for businesses that remove friction, improve conversion and sign-ups. Because of the power of compounding, HubSpot has accumulated thousands of useful templates overtime. It takes time and effort for new competitors to replicate HubSpot’s vast template library, effectively creating a moat against competition.

2. User-Generated Content moat

You don’t need to create all the templates yourself. By offering the right incentives, you can encourage your users to contribute their own templates to a shared marketplace. This approach not only scales content creation but also builds community engagement.

For example, Notion operates a robust template marketplace where users contribute and access a wide range of templates tailored to various use cases.

As more user-generated templates are added, the marketplace drives increased SEO traffic and product utility. This creates a feedback loop—more content brings more users, and more users create more content. For competitors, replicating this is difficult. It requires time, scale, and deep user engagement. If you already have a large user base, UGC moat is a powerful way to turn it into a long-term competitive moat.

3. Marketplace Plugins and Integrations: Ecosystem moat

Integrations are more than nice-to-haves—they embed your product into your customers’ workflows. For example..

• Shopify App Store lets merchants extend their store’s capabilities by connecting to adjacent apps.

• Stripe App Marketplace offers plug-and-play extensions for billing, compliance, and reporting.

The broader and deeper your integration ecosystem, the more costly it becomes for customers to migrate to competitor apps. Competitors can’t replicate your entire plugins network overnight.

4. Localization moat

Winning new markets often comes down to being the first to adapt. Key moves include:

• Supporting local languages and cultural norms.

• Integrating regional payment methods.

• Navigating local compliance and data laws.

Stripe, for instance, is present in 46 countries. Early movers who localize well can dominate markets before global giants catch up.

5. Bundling as a Pricing Moat

Offering a suite of products under a unified bundled price can enhance value proposition and customer retention. For examples Adobe Creative Cloud bundles tools like Photoshop, Illustrator, and Premiere Pro, providing a comprehensive solution for creatives at a consolidated price.

Such bundling not only offers cost advantages to users but also increases the platform's stickiness, as users become reliant on multiple integrated tools. Competitors can copy 2 or 3 products from your bundle, but it will be impossible for them to replicate all products in your bundle. Bundling is one of the most powerful strategies used by highly profitable software companies like Adobe and Microsoft

6. Vertical moat

Vertical SaaS wins by solving everything a customer segment needs, end to end. For example:

Zenoti serves spas and salons with scheduling, billing, inventory, payroll, and more—all in one product.

By offering a comprehensive solution, vertical SaaS companies can dominate their chosen niches, making it challenging for new competitors to penetrate these markets with a single point solution.

Strategic moats aren’t built in a quarter. But the earlier you start investing in them—content, ecosystems, bundling, localization—the harder you become to displace. In an increasingly saturated SaaS world, defensibility is the new growth strategy.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India.

In his free time, Teja loves to travel the world and indulge in Landscape photography.

Moreover, the traditional techniques of competitive advantage thought in b-school like Porter’s five forces are not relevant for the software industry. New frameworks and tools are the need of the hour for SAAS Product Strategy.

I will be introducing one such strategic framework in this post, and many more in the future posts. Hope you find these useful (let me know in the comments below). I also hope that you customize these frameworks to think strategically about your own product and industry.

Feature usage distribution (Long Tail)

Consider any mature product from your industry. Imagine it has 100 features (Horizontal axis in the figure below). On the vertical axis, plot each feature by number of customers who used it - say over the last 3 months - to create a histogram. You will get an exponential decay function like the one in the figure.

In the figure above, I arranged the features (on the horizontal axis) in descending order of the number of customers who used that feature. The feature most used is to the extreme left (Feature 1), the 2nd most used next to it, and so on.

The resulting curve that we get is called a Long tail. Most mature products have a feature usage distribution similar to a long tail. Think about it: 20% of your product’s features are used by nearly 80% of your customers (the left extreme of the curve above). Let’s call them the Core Features. 80% of your product’s features are used by less than 20% of your customers (this is represented by the right 80% of the curve above). Let’s call these the Non-Core Features or the Long Tail.

Competitive Strategy based on Long Tail

Now imagine you are going to compete with this mature product. You need to have your team start building features. Which features will you build?

An obvious answer would be to start building features from the left to right (in Figure 1). Will this make your product competitive? No, because you will be similarly placed to your competitor, even after building all the features. What you need to do is to build the Core Features first.

After that, you need to focus on a completely different set of features from Non-Core area. You need to make them shine, make them the core value proposition of your product and place them in highly discoverable areas of your product. That’s how you differentiate!

How will you pick what Non-Core features to focus on? That’s where your ICP (Ideal Customer Profile) comes in. Imagine plotting the same graph as Figure 1 but for a specific customer segment. You will find that a certain set of non-core features are very important for your ICP (shown by the elevated bars below).

This is what you’d prioritize in your MVP. So your

MVP = Core features + Non-Core ICP features

This is how you’d position your product against competition. So for your ICP, your product becomes much more valuable than competition.

Strengthening your Competitive Differentiation

How do you build on this differentiated product feature set that we discussed in the section above to further buttress your product’s competitive advantage?

There are 2 ways:

1. Build entirely new features that your ICP needs that are not being offered by any of your competitors. For example, Canva was one of the first Creative software vendors to introduce a feature to schedule your completed design to Social Media (like Instagram). This was required for Canva’s original ICP which was small business owners.

2. Bring in features and functionality from adjacent products that your ICP is using. Combine them into your own. For example, Zenoti provides complete end-to-end solution for Spas and Salons: from online to in-store, payments to payroll, front desk to back of the house. By bundling multiple products that your ICP needs, you virtually eliminate competition for your ICP from established players who are focused on the broader market.

By looking for adjacent features that your competitors will never offer, your product positioning now creates a competitive advantage allowing you to charge more from your ICP.

Getting your team aligned

By clearly articulating to your employees..

(1) Who your ICP is, and

(2) What your product’s positioning is

..you have empowered them to make trade-off decisions

What features should your team prioritize? What features they should not build? How should they perform user research? How should your marketing team target the ICP? The entire company is much more aligned and wastage is reduced, positioning is strengthened when you - as a product leader - clearly define the ICP and product positioning.

Such is the power of being strategic about your positioning. You will start to reap rich rewards for the long term.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India.

In his free time, Teja loves to travel the world and indulge in Landscape photography.

But, adding features also means increasing the complexity of the product. It is very important to keep the customer and market need in mind while deciding when to accelerate and decelerate feature development.

Customer Needs Spectrum

Customers have a spectrum of needs. In the case of B2B SAAS products for example, at the lower end of the spectrum are consumers and small businesses who demand a certain amount of features (and therefore a certain product complexity) and at the higher end of the spectrum are the large Enterprise customers whose demand for new and bespoke features never seems to end.

Customers’ feature needs (and therefore product complexity demanded) increase steadily over time.

Product Complexity Lifecycle

To meet this customer demand, the product team develops new features rapidly, increasing the product complexity as an S-curve.

Why do product feature additions increase like an S-curve? Most products take some time to gain momentum in feature development, then enter growth phase (the steep part of the ‘S’) and finally enter the maturity phase (the fag end of the S-curve to the top-right).

Disruption Zone

Product feature additions often overshoot the needs of most customers, creating a “Disruption Risk” area (see figure below). This happens when the product enters maturity phase. Why does this happen? Enterprise customers are always demanding bespoke features. Also, customers in each segment or industry need a different set of bespoke features. This often puts pressure on the product team to deliver many different bespoke features that results in high product complexity (therefore low usability) for new customers.

This sets the stage for a new disrupting product to enter the market with a simpler solution (often using new technology or business model).

For example, Tally has emerged as a competitor to the popular Forms product Typeform with a powerful free version (new business model) and simplicity as key differentiator.

So, how can founders and product leaders ensure that their product doesn’t overshoot customers’ need and become too complex (as a result of adding too many features)? The answer lies in course correcting from the “normal evolution path” to following the “Complexity Horizon” path (see figure below).

Avoiding Disruption

Product leaders need to deliberately course-correct to slow down new feature development and instead focus on improving user experience and optimizing growth. This need to happen at the point (Y) as shown in the figure above.

So, how do product leaders know when to step off the accelerator pedal and shift gears away from feature development? In my product consulting practice, I have found the following metric helpful:

New Feature usage as % of Product MAU drops

Let’s say you released a new feature and it was used by 3% of your Monthly Active Users in the last month. Now, let’s say that out of all the features released in the year, the average usage of the features as a % of MAU is 3%.

If you plot the average usage of features released each year, over the past several years, and you notice the usage of new features as % of MAU that year steadily dropping (as shown in the figure below), it is a sure sign that adding new features is producing diminishing returns for users, while continuing to increase product complexity.

Instead of MAU, one can use WAU or DAU over the appropriate time period as per your users’ typical product usage behavior. The important thing is to observe if the new features are showing a clear trend of diminishing usage over time or not.

If this is the case, Product leaders need to intervene to slow down feature development and instead allocate more resources towards improving user experience, engagement, feature discovery and reducing complexity. This is akin to moving along the Complexity Horizon as shown in Figure 4.

Managing high product complexity

What if the product has already overshot the complexity horizon and is in the disruption zone? Most companies find their products in this state. The best thing to do in this case is to invest in a new product which is a simpler version of the existing product using the latest business models and tech stack. This is what Adobe has done with the new Rush product which is much similar compared to the Premier Pro product which is a lot more complex.

In addition to launching a new simpler product with modern tech stack and business model, Adobe also invested in improving the onboarding experience of Premier Pro for new users.

This dual approach of improving onboarding for existing product and introducing a new product to avoid competitors disrupting you, can be a good strategy in this case.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India.

Common pitfalls in implementing GenAI features

1. Adding AI for the Sake of AI: Simply slapping "AI-powered" onto your product without a clear purpose dilutes its value. Features that don’t address real customer pain points often confuse users rather than delight them.

2. Focusing Solely on Competitor Parity: Building features just to "keep up" with competitors can lead to undifferentiated solutions that fail to stand out in the market.

3. Ignoring Data Quality: AI solutions are only as good as the data they’re built on. Poor data quality leads to irrelevant insights and frustrated users.

4. Underestimating User Experience: Overly complex AI features that are hard to use can alienate customers, making them less likely to adopt or appreciate the technology.

Instead of falling into these traps, focus on building AI features that solve meaningful problems, leverage your unique strengths, and enhance user productivity. Here’s how to do it right:

1. Embrace First Principles Thinking

To build lasting differentiation with GenAI, start by fundamentally reimagining the problem statement. Challenge existing paradigms and explore disruptive solutions that could even outpace your current product. This first-principles approach can open up avenues to solve problems in entirely new ways.

Examples:

• Stock Photography: Companies like Getty Images traditionally rely on massive libraries of stock photos. With GenAI, they can shift to generating high-quality, unique images based on user prompts, eliminating the need for static photo libraries.

• Content Creation Products: Canva, known for its template-based designs, can now empower users to create customized templates through text prompts, enabling hyper-personalized templates, instead of having users choose from existing templates.

• Research Products: A company like Gartner can use GenAI to predict future technology trends by analyzing the improvement rates of patents, such as GetFocus does, offering actionable foresight to their clients. This is different from its traditional approach of providing research articles.

By using first principles to solve your customers’ core challenges with GenAI, you can enhance your product’s value and leapfrog competitors.

2. Leverage Your Own Data to Deliver Insights

If your product generates significant data for users, GenAI can transform this raw information into actionable insights. Summarizing vast troves of data, highlighting key patterns, or offering predictive analytics are just some ways to create exceptional value.

Why It Matters:

Investing in analytics and data gathering pays off in a GenAI-driven world. Your proprietary data becomes a powerful differentiator, enabling you to:

• Provide personalized summaries and insights.

• Highlight trends that your users might miss.

• Make data-driven recommendations at scale.

Example:

If your product provides analytics dashboards, use GenAI to summarize essential insights directly on the home screen. For instance, rather than showing raw data, a generative AI-powered dashboard could say:

"Sales increased 15% this quarter, driven by a 25% rise in conversions in the Asia-Pacific region."

This not only delights users but also positions your product as a must-have for decision-making.

3. Offer AI Agents in your product

AI agents—autonomous tools designed to perform specific tasks—can dramatically improve user efficiency and satisfaction. They automate workflows and enhance user productivity. For instance, in B2B software, an AI agent might automate lead scoring by analyzing customer behavior and engagement data, helping sales teams focus on the most promising opportunities. By automating repetitive tasks, you not only reduce user effort but also justify premium pricing for your product.

How to Leverage AI Agents:

Identify repetitive actions your customers perform and design AI agents that can:

• Mimic user behavior.

• Learn from historical patterns.

• Automate routine tasks with minimal input.

Example:

In Sales Lead Management software, allow users to build custom AI agents to handle repetitive actions, such as:

• Categorizing and prioritizing incoming leads.

• Sending follow-up emails based on predefined templates.

• Automatically flagging high-priority leads based on historical success rates.

Salesforce exemplifies this with its "AgentForce" offering, enabling customers to build AI-powered workflows tailored to their needs.

Final Thoughts

To ensure your product’s GenAI features offer durable competitive advantage:

1. Think Differently: Use first principles thinking to disrupt your industry’s status quo.

2. Harness Data: Transform your proprietary data into insights that create unparalleled user value.

3. Automate Smartly: Introduce AI agents that elevate productivity and simplify complex workflows.

By embedding these strategies into your product roadmap, you can position your company as an industry leader and capture long-term customer loyalty.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India.

Here are the 3 most important factors and related frameworks that will help you strategize for the year ahead.

Anticipate the Future with Lifecycle Curve

Every industry or product goes through a life cycle of development, growth, and eventual decline. This lifecycle can be plotted as an S-shaped curve for SAAS companies that have annual recurring revenue.

The three stages of this S-curve and the common strategies are outlined below.

Introduction Stage

• The focus at this stage is to get to product-market fit by continuously learning and iterating.

• Ensure adequate feedback channels are in place for both qualitative and quantitative feedback.

• Discover the right target customer.

• Discover the right GTM channel.

• Invest in customer acquisition.

Growth Stage

• The focus at this stage is rapid feature development.

• Measure and improve retention and engagement.

• Invest in product-led growth and build a culture of experimentation.

Maturity Stage

• The focus at this stage is catering to the target segment by offering vertically integrated features and services specific to the segment.

• Build strong relationships with the target segment.

• Communicate value by onboarding customers to new features.

As you set strategy for the new year, anticipating and planning your strategy ahead for the next stage in the lifecycle is important. Part of a product leader’s job is to figure out where you are currently on the life-cycle curve and how quickly you will get to the next stage. The pace of the life-cycle depends on the industry. In highly competitive and dynamic industries, you get to the maturity stage very quickly. By plotting ARR figures on the vertical axis of the life-cycle curve, you can actually see how the curve is trending.

Prepare for Profitability Shift with Value Chain analysis

One of the earliest signs of an industry threat is the reduction in pricing power or profitability. Profitability is closely tied to commoditization. If many competing products in the market are good enough, then there will be downward pricing pressure and erosion of profits (e.g., Hotel and airline industry have low differentiation and many good-enough competitors). This is called commoditization. We are seeing commoditization starting to happen in SAAS as well. Usually in SAAS, commoditization will result in bundling of the product into a larger unit (e.g. Bundling of Teams into Microsoft Office makes it difficult for communication players like Slack to maintain high prices).

The focus of strategy setting should be to figure out which parts of the value chain are getting commoditized and which will be profitable. Harvard Professor and father of Innovation theory Clayton Christensen has presented a beautiful framework to figure out which areas in the industry will see profits. See Where Will the Profits Be? Essentially, if the competing products in an industry are good enough to get the job done, then the industry is getting commoditized. In such scenarios, companies are unable to differentiate based on innovation, leading to the industry becoming price-sensitive.

What should industry participants do in a commoditized market?

Integrate Vertically

Companies like Apple developing their own chips shows the potential of owning the still profitable part of the value chain (i.e. chips). Smartphone markers are commoditized, but chips are still profitable. Microsoft expanding from game development to gaming hardware with Xbox is another example of vertical integration within the ecosystem.

In the SAAS world, we are seeing the emergence of Vertical SAAS companies. For example, Madwire provides business management and marketing products for small businesses and franchises. Classy is a vertical SaaS company that provides an online fundraising platform specifically for non-profit organizations.

Multi-Product Bundle

One of the sure-shot ways to beat commoditization is to bundle products into a compound offering. This has been highly successful for companies like Microsoft and Adobe with Office and Creative Cloud bundles respectively. Bundles are a powerful moat against competition as competitors cannot replicate all products in your bundle.

In SAAS, we are seeing the idea of a “Compound Startup” emerging with companies like Rippling offering multiple products within the HRMS space. This offers high durability in a competitive world.

Catch the Next S-curve of Growth

While it is important to focus on the current business, it is equally important to diversify and focus on catching the next growth wave that is adjacent to your current business. This is especially true if your product is in the maturity stage of the industry life cycle. Allocate a percentage of your R&D budget to new bets that will pay off far in the future.

This is how Apple shifted from PCs, to Smartphones and then to smart watches all the while leveraging their core strength which is to own the entire stack from hardware, operating system to the user interface.

In India, we are seeing food delivery companies invest in quick-commerce, leveraging their core strength of 10-minute delivery.

In The Art of High Tech Management (MIT Sloan Management Review), Modesto and Robert explain how investing in catching the next growth wave also means that the company has to adapt from a culture of process and efficiency to one of risk-taking and experimentation. This inherent conflict of change is what led to the downfall of many companies. Being cognizant of this conflict and having different expectations for risk and efficiency for new products versus existing products is an important part of strategic leadership.

Operationalizing your Strategy

The three methods described above allow you to think strategically about your products and set the roadmap for the year ahead.

In order to operationalize this strategy, here are a few steps to follow:

Go Big on a Few Focus Areas

After you have decided on the focus areas for the year ahead, it is important to strictly prioritize the top three areas and put the maximum resources behind these priorities. The best investing ideas are pointless if you have allocated only 2% of your portfolio to the idea. Similarly, your best bets need substantial investment to grow. Investing based on sound strategic principles will give you the conviction to place big bets on new investments.

Set Up Goals to Ensure Alignment

Now that you have a great strategy, how will you ensure everyone in your company is aligned with the strategy? Convert the strategy into initiatives and assign measurable metrics (Key Results in the OKR framework) to each of these goals. This will ensure teams are aligned toward the strategy.

Communicate

A great strategy will remain on paper if it is not communicated in every meeting. Is everyone on your team making decisions that are aligned with the strategy? If not, you need to do a better job of communicating strategy and asking questions to ensure the roadmap aligns with the strategy. Strategy needs constant communication.

About the Author

Teja Vepakomma is a Product Strategy and Growth consultant to companies. He has many years of experience working in Product Management leadership roles in Global SAAS companies. He’s currently based in Bangalore, India.

In his free time, Teja loves to travel the world and indulge in Landscape photography.