e-Book

Battle of The Product Managers Part II: The SaaS Startup vs. The Global Enterprise

Foreword By Jake Sorofman, Pendo CMO

The story continues…

In our previous installment of Battle of the Product Managers, we explored the differences in product management styles between East Coast, West Coast, and UK companies. Based on the positive feedback we received, we realized there was an opportunity to tell another chapter in the story.

We know what you’re thinking: The sequel is never as good as the original. But in this case, we think you’ll be pleasantly surprised, because in this case, we’re telling an underdog story. In Battle of the Product Managers, Part II, instead of comparing product management styles by geography, we explore the differences in product management styles between SaaS startups and global enterprises.

Traditionally, this head-to-head matchup — startups versus enterprise — has been seen as a David versus Goliath scenario. After all, enterprise companies are typically bigger, more established in the marketplace, and have more access to capital, whereas startups are typically smaller, less established, and scrappier. However, as we’ve seen time and time again here at Pendo, these perceived “weaknesses” of startups often translate into product management advantages.

Bigger doesn’t always mean better.

More and more, the giants are looking to the little guys for insights into how they can become leaner, drive innovation, and attract top talent. In fact, one of the most eye-opening findings from Battle of the Product Managers, Part II is that SaaS startups have been more successful at hiring experienced product leaders than their enterprise counterparts. Specifically, a whopping 62% of startup product leaders have 10+ years of product management experience, compared to just 28% of enterprise product leaders.

To clarify, we’re not saying that one type of company is necessarily better at product management than the other. The takeaway is that these two types of companies approach certain aspects of product management differently, while on balance, they’re more similar than not. Both have the same goals of building incredible products, delighting customers, and helping them become more successful. After reading this guide, we hope you’ll have a better understanding of how they accomplish these goals, so you can apply the same tactics at your company (regardless of its size).

Meet the Product Managers

Before we examine the core differences (and similarities) between SaaS startup product managers and enterprise product managers, let’s address the elephant in the room:

HOW EXACTLY DOES ONE DEFINE “SaaS STARTUP” AND “ENTERPRISE?”

The reality, of course, is that there’s no single, universally agreed-upon answer. While some base their definitions of “SaaS startup” and “enterprise” on number of employees, others base their definitions on available budget or overall valuation. At Pendo, we used survey data from our annual State of Product Leadership report to craft our own definitions, which are based on two key factors: 1) how companies sell their products and 2) how much those companies earn in annual revenue. Here’s what we came up with…

SaaS startup

A software-as-a-service provider that generates less than $100 million in annual revenue.

Enterprise

An on-premise software provider or a hybrid software provider (mix of on-premise and SaaS) or a self- identified “traditional enterprise” that generates more than $500 million in annual revenue.

As you can see, when we compare SaaS startup product managers to enterprise product managers, two distinct profiles emerge.

SaaS startup product managers, who we’ve dubbed “the industry experts,” have more experience overall, are more likely to come from a business background, and are more likely to source product ideas from their competitors. They also tend to have higher salaries, see themselves as having an edge when it comes to feature adoption and usage, and — from an organizational structure standpoint — they’re more likely to report to an individual line of business than to a dedicated product team.

In contrast, enterprise product managers, who we’ve nicknamed “the revenue whisperers,” are more likely to come from technical backgrounds and to source product ideas from their customers. Overall, they have less product management experience, and, unfortunately, their salaries seem to reflect this, as they tend to earn less annually than their SaaS startup counterparts. Enterprise product managers see driving revenue as their biggest strong suit, and they tend to report to dedicated product teams.

While the differences between SaaS startup and enterprise product managers are plentiful, these two groups still find common ground in several areas. For example, both value having strong alignment with marketing over any other department, both use prototyping tools more regularly than any other product management tool, and — based on their abysmal job satisfaction ratings — both groups believe there is plenty of room for improvement in the field of product management.

Keep reading for a more in-depth analysis of the key differences and similarities between SaaS startup and enterprise product managers.

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