Product management 2023 retrospective and 2024 outlook

The end of last year was a rush with the launch of my new book and I ended up publishing much less at the end of 2023 than I had been publishing previously. Now that the book is finished and released, I’m going back to my normal rhythm of one article per week.

I start 2024 with an article where I make a 2023 retrospective and share some outlooks I see for 2024 for product management.

2023 was a difficult year for technology companies and, consequently, for product development teams with people from engineering, design, and product management. Due to the challenging economic scenario of the past year, many technology companies ended up changing from a strategy strongly focused on growth to one strongly focused on profitability, which made many of these companies use mass layoffs or, in English, layoffs, as one of the tactics to achieve profitability. Google, Meta, Microsoft, Amazon, Uber, Airbnb, Netflix, Spotify, and many others have taken this path. The graphs below show what layoffs were like in Brazil and around the world in technology companies.

The graphs above show that layoffs in technology companies continue to happen, with Brazil having a large wave of layoffs in December, which did not happen globally.

These layoffs were hard on the entire product development teams, engineering, design and product people. However, product people were dealt an additional blow by two interviews given by Brian Chesky, co-founder and CEO of Airbnb:

• The first was on June 22, at the Config conference, from the company Figma, whose main product is a collaborative interaction design tool, during a session titled “Leading through uncertainty: a design-led company”, where Dylan Field, CEO and co-founder of Figma, interviewed Brian Chesky. In this interview, after explaining what happened to Airbnb during the pandemic crisis, he says that, among the various changes made, they “got rid of classic product management, and combined product marketing and product management, like Apple does”, which caused a lot of noise in the market.
• The second was published on November 12th, on Lenny’s Podcast, a podcast very focused on product management. The episode with Brian Chesky is titled “Brian Chesky’s new playbook” and at around 28:29 minutes, Brian says that during the pandemic he started “reviewing all the work, creating the CEO review where I go back to get involved weekly in all product and marketing initiatives” and that they continue to do so today. In other words, disempowering product teams and bringing the decision to the CEO, which is known as the command-and-control management model. Marty Cagan wrote a great article about this Brian Chesky interview commenting on how he is moving Airbnb into a command-and-control mode of operation, with feature teams. Mike Fischer, former VP of engineering at PayPal and former CTO at Etsy, who also consulted for Locaweb in 2008/2009, also wrote a great article criticizing Brian Chesky’s new playbook and how it will affect scaling, morale, and innovation.
• A segunda foi publicada no dia 12 de novembro, no Lenny’s Podcast, um podcast bastante focado em gestão de produto. O episódio com Brian Chesky tem o título de “novo playbook de Brian Chesky” e por volta dos 28:29 minutos, Brian diz que na época da pandemia ele passou a “revisar todo o trabalho, criando o review do CEO onde eu volto a me envolver semanalmente em todas as iniciativas de produto e de marketing” e que eles estão rodando assim até hoje. Ou seja, desempoderando os times de produto e trazendo a decisão para a pessoa CEO, o que é conhecido como modelo de gestão comando-e-controle. Marty Cagan escreveu um ótimo artigo sobre essa entrevista do Brian Chesky. Mike Fischer, ex-VP de engenharia do PayPal e ex-CTO da Etsy, e que tb prestou consultoria para Locaweb em 2008/2009, também escreveu um ótimo artigo criticando o novo playbook do Brian Chesky.

These discussions serve to generate doubts about the relevance of the role of product management. For people who are outside of product development or who are new to this world, the roles of engineering and design are reasonably tangible, that is, for those who are not from product development it is possible to understand what engineers and designers do. However, for these people who are not familiarized with product development, the role of product management may not be as immediately tangible.

On the other hand, the year 2023 had a lot of cool things in technology. There has been a lot of talk about AI in general, and more specifically about Generative AI, and what AI can do. As a Beatles fan, I was very happy to see them reunited once again, thanks to technology, more specifically AI, in the beautiful “Now and Then”:

Besides AI, another topic that appeared briefly in June was spatial computing with virtual and augmented reality brought by Apple in its Apple Vision Pro, promised for the beginning of 2024.

Each and every year we have new technology appearing. In previous years the themes were NFT, Multiverse, and Blockchain:

In 2023, the term AI entered our vocabulary:

In other words, new technologies continue to be created and made available to help us create increasingly better solutions to our problems.

Product management 2023 retrospective

In short, the year 2023 had positive and negative aspects for the product area. From a negative point of view:

• The difficult economic scenario made technology companies seek profitability and, consequently, ended up using the tool of mass layoffs to do so.
• This search for profitability and faster results, combined with interviews with important figures in our industry such as Brian Chesky, CEO and co-founder of Airbnb, cast doubt on the need for the role of product management within product development teams.

On the other hand, the main positive aspect of 2023 was:

• technology that has advanced quickly with great applicability in our daily lives. In 2023 AI, through generative AI, has shown once again how useful and powerful technology can be in helping us create innovative solutions to our problems. In the previous 2 years, we had some interesting technologies such as NFT, Multiverse, and Blockchain, but with restricted applicability in our daily lives to specific scenarios.

Product management 2024 outlook

Anyone who knows me knows that I’m not one to make predictions. My intention here is to bring what I see as an outlook, i.e., a set of possibilities for product management in 2024. First, however, let’s talk about the 2024 scenario:

• The economic scenario for 2024 seems a little better but companies are far from abandoning the objective of profitability, of generating results. On the contrary, companies will continue to seek to operate in a healthier way, generating profits. In fact, VCs have been valuing profitability more than growth when evaluating investment opportunities in startups. Of course, growth is important, but not growth at any cost. The path(s) to profitability must be clear. How will this company generate money to finance its activities?
• Furthermore, new technologies will continue to emerge. 2023 was the year of popularization of AI, reinforcing the power that technology has to help create solutions to problems or meet everyday needs and, consequently, generate more results for the companies that build these solutions. Since the 2000s, a mere 23 years ago, many new technologies have appeared that we now have as part of our daily lives. Some examples are social networks, smartphones, online maps, online video and video and audio streaming, electric cars, 3D printing, the Internet of Things and its sensors, and so on. One thing we can be sure of is that new technologies will be created. Apple has already announced its Apple Vision Pro for the beginning of 2024, bringing virtual and augmented reality and the concept of spatial computing. And new technologies will continue to appear.

Search for profitability and the constant emergence of new technologies. This will be the scenario for 2024 and, most likely, the following years for product management and product development teams. And what to do in this scenario? Two things:

1. Understanding the role of technologies: I recommend looking at technologies from 3 perspectives. The first is the impact that technology may have on product development. New programming languages, new databases, new frameworks, GenAI for code development, etc. The second is from the perspective of your product’s user interface. First, the products were used only on the web, then via smartphones, then on watches, and, for a while, on glasses. Now, with the anticipated launch of Apple Vision Pro, how will your product need to adapt? Finally, the third aspect is what I call the unknown. What does this new technology allow that would not be possible without it? How can this technology impact the resolution of the problem we are seeking to solve? Note that this understanding of how new technologies can impact the product must be done by everyone on the product team, and not just by product managers.
2. Focus on delivering results: I have repeated in several talks and podcasts that, despite our function of being product management, this is not our reason for existing. Our reason for existing is to generate results and achieve the company’s objectives, and the product is a means, a vehicle for this. We don’t wake up in the morning to create products, features, websites, apps, and algorithms. We make products, features, websites, apps and algorithms to achieve results. We cannot forget that. I have already written about the topic of delivering results in this article, which is part of my book on Digital Product Leadership and my newest book on Digital Transformation and Product Culture. Delivering results is one of the 4 essential principles of a successful product culture, which is the core of my latest book. Here are 2 slides I use to explain this principle in my presentations:

Bonus: 2024 outlook for product team leaders

I’ve already talked a lot here about the importance of delivering results and that the product is the vehicle for delivering results. And for product team leaders? I’m talking here about GPMs, product heads, directors, VPs, CPOs, and that CTO or technology head person who also leads the product area. What are your prospects for 2024?

If you thought about generating results, you are partially right. When a person is in a leadership role in a product team, they continue to have the responsibility to generate results with the product, yes, but with the best possible return on investment. Developing products is expensive. In Brazil, considering an average monthly salary of R$12,000, the annual cost of a team of 6 people is approximately R$ 864,000 without considering labor costs. In the USA, with an average monthly salary of around US$100,000 per year, the cost of the team is U$ 600,000. In Europe, with an average salary of around US$60,000 per year, the cost of the team is U$ 360,000. This does not include the costs of tools and infrastructure necessary for the development and operation of the product. Now imagine that you lead 3 such teams of 6 people, for a total of 20 people. It’s more than R$2.5MM per year in Brazil, U$1.8MM per year in the USA, and U$1MM in Europe. It’s a lot of money. CEOs, C-levels, other company leaders, founders, board, shareholders, and the entire company expect that this investment will yield a return, even more so in the current scenario where profitability is the main focus.

As product leaders, we have a responsibility to seek the best possible return on this investment in people, tools and infrastructure for product development and operations.

Here are 2 more slides that I use in my classes to talk about this topic:

Half full glass

As I mentioned previously, I am one of the group of people who always see the glass as half full. Despite the uncertain economic scenario, which will make companies continue to focus on profitability, the constant emergence of new technologies will open up many opportunities for people who know how to connect technology with business. This is exactly what a product manager does, connects technology with business, solving customer problems.

Therefore, increasingly all companies, and not just technology companies, will need people who manage products, capable of making this connection between technology, business, and customer. This was one of the motivations for me to write my latest book on Digital Transformation and Product Culture, to help companies understand how to get better results from their investments in technology, bringing people experienced in product management to their teams.

May we all have an incredible 2024 full of great results! 🙌

Summing up

2023 Retrospective:

• In 2023, the difficult economic scenario caused technology companies to seek profitability and, consequently, they ended up using layoffs as one of the main tools to do so.
• This search for profitability and faster results, combined with interviews with important people in our industry such as Brian Chesky, CEO and co-founder of Airbnb, cast doubt on the need for the role of product management within product development teams.
• On the other hand, in 2023 we had AI and, in particular, generative AI, showing once again how technology can help us create innovative solutions to customer problems and needs.

2024 outlook:

• The economic scenario for 2024 seems a little better but companies are far from abandoning the objective of profitability, of generating results. On the contrary, companies will continue to seek to operate in a healthier way, generating profits.
• Furthermore, new technologies will continue to emerge. In the last 23 years, we have seen the emergence of social networks, smartphones, online maps, online video, video and audio streaming, and much more. 2023 was the year of the popularization of AI. 2024 will certainly bring new technologies, and Apple has already promised the Apple Vision Pro for the beginning of the year.
• As a result, product managers need to understand how new technologies can impact the product, in development, in its interface with users, and in new ways, which we are yet to discover.
• In 2024, product managers should focus even more on delivering results, both for the customer for whom the product will solve a problem and for the company that has clear objectives for that product.
• And product leaders should, in 2024, not only focus on delivering results. Developing a product is expensive, a product development team, more tools, more infrastructure for product development, and operation cost a lot. Therefore, product leaders must focus even more on improving the return on investment made in product development and operation.
• With the increasing emergence of new technologies, all companies, not just technology companies, will need people who manage products, capable of connecting business and technology, to solve customer problems.
• May we all have an incredible 2024 full of great results! 🙌

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• Digital transformation and product culture: How to put technology at the center of your company’s strategy
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