Product Managers are professional gamblers.
Every sprint, the company hands the Product Manager thousands of dollars in labour, and the Product Manager makes a bet on where to spend it. The PM’s challenge is to make more money than is lost.
Avg daily rate * # of Developers * days in a sprint = Betting Stakes
Example: $800 * 5 * 10 = $40,000
If someone actually gave you $40,000 at the race track, and your livelihood depended on making money, how would you place your bets?
What you wouldn’t do is bet the farm based on one person’s opinion. Or spend it on gut feel; because you liked the name or the pretty colours.
You would evaluate a number of different options. You would want to understand the odds and shop around for the best returns. You might talk to the bookies, research the owners, check the rider’s past performance, get a weather report and look for inside information. Essentially you would do everything to de-risk your bets, maximise your return and bet with confidence (not with your heart in your mouth).
As a Product Manager, you are most likely responsible for gambling $40K (or more) every fortnight. So are you taking the time to de-risk your bets enough? Do you know what the odds are if you win? How confident are you with each bet?
It can be easy – particularly in larger companies – to fall into the trap of seeing the Development pipeline as never-ending. The company has deep pockets, and there’ll always be next Sprint if we don’t back a winner in this one.
It’s equally easy for senior management to want to choose the horses to back. In this scenario, the PM becomes the bookie’s assistant. They see it as their money. They’ve been coming to the track for years. And purple is their lucky colour.
Reframing features as bets keeps everything real. It forces you to do your research and gather the right data. You should be that confident on the return on your bet, that you’d place your own money on it succeeding.
Beware cognitive biases at play here. Most Product Managers would say they are confident each sprint in what they team is working on. That false bravado would fall away pretty quickly if you were asked to bet your paycheck on an upcoming sprint moving the needle thought, wouldn’t it?
So whilst researching your bets, ask yourself some guiding questions:
- What is the risk of this feature failing?
- What is the return of this feature if it succeeds?
- How confident am I this is a winner?
In fact, Product Managers have an ace up their sleeve any punter would envy; the ability to back a horse after it’s left the gates. Iterative betting is key to making a good living in software. Before that, you’ll need to know how to outline a bet. More on that next.
Cutler, J. (2018). Great One-Pagers. [online] Medium. Available at: https://medium.com/@johnpcutler/great-one-pagers-592ebbaf80ec [Accessed 8 Jan. 2019].