Mike Ditson of Alchemy Systems: Product Managers Build a Good Business

Product managers don’t just build software products, they need to build a good business too is what Mike Ditson, vp of product at Alchemy Systems, shared when we talked for my interview series, Austin VOP. Our interview has been edited for clarity.

What was your path to product management?

I started out as a tech writer for Digital Equipment. Unfortunately, it had hit its peak and six months later I was laid off. I then became a tech writer at FTP Software, the first provider of the TCP/IP stack on PCs. It was a newly public company and we were a large team of 30 tech writers. I didn’t like tech writing too much: it was slow. I got myself “loaned out” to the marketing communications team where I spent a few years doing content data sheets, layouts for printing boxes, labels for discs — all of this back in the day when people bought software physically. I had a technical background so I was sent over to the product management team to get the technical marketing copy that was needed. The PM’s liked working with me because I had a technical background and could do solid first drafts of their data sheets. One day, the head of product management said, “Come on Ditson, we’re going to make you a product manager.” Turned out to be my best boss ever and a career. I have been bouncing between product management and product marketing ever since.

How do you learn and grow in this field?

For product thought leaders, I return often to Marty Cagan when I have a problem I re-encounter. A lot of his stuff is “oh yeah, of course!” I just like how he puts you back on course. I also read Rich Mironov. Austin’s own Scott Sehlhorst writes a great blog called Tyner Blain. Twenty years ago, none of this great “how to be a PM” content was around. Pragmatic Marketing was the only show in town for articles, which was great, but today there’s an explosion of content!

Managing a team of product managers is much different from being an individual contributor. You get separated from the ins-and-outs of the product and technology, which is what most product people really get jazzed about. It’s difficult because nothing substitutes for being in the day-to-day stand-ups or design meetings and the “thick” of things every day. I like trying to stay close to the technology. I have been in enterprise software for over ten years now. The new markets and customer problems are what’s interesting because the technology is all the same: it’s “forms on a workflow engine, with some business rules and reports.” And for some reason, every customer thinks “offline support” is the most important thing on Earth. I like to stay on top of the technology only because I want to understand what is possible. It’s useful talking to customers so you can see opportunity, and of course, it’s useful for prodding software engineers to get more. Sometimes, the latest buzzword (“Cloud, Machine learning, whatever”) is just the same technology repackaged, but it’s the buzzword your marketing should use to try to surf the latest wave.

In B2B software, you have to remember that you are not trying to build the perfect technology product, but more importantly you are building a business.

B2B is just rife with trade-off decisions - time/cost/features. In many markets, if you’re “polishing the apple,” you’re probably going too slow.

I’m going to get in trouble here, but every company seems to have a “grumpy” software architect. I actually love these guys. They’ve usually been there from early on, they know everything, and if he leaves, “we’re screwed!” I love these guys because they’re smart and interesting, but I really love them because they can speak truth to power. As a product manager, don’t ever tell the founder CEO his “baby is ugly!” Let this guy tell him! You’ll still be employed, and maybe your product will get better. By the way, they’re not really “grumpy” people, it’s that every software company has some B.S. in it, and these guys are usually critical and get a pass to be grumpy about the B.S. Invaluable! I like to ask these guys about the influencers they follow and read. I don’t code, but I can understand the concepts, and these guys always help make me smarter about what I present to customers and the management team.

You are passionate about agile. Why is it important for product?

It is 2017 and there are more companies out there doing crap Agile than ever before! “Bad agile” involves going through the motions. “We have standups so we must be agile!” In my mind, the absolute biggest problem with agile is that senior management teams do not understand Agile or their critical role in it. They frequently don’t understand the critical piece of the compact (at least in Scrum), you can change direction between sprints, but to build velocity, you agreed to not mess with the team mid-sprint. You can’t build velocity or momentum without it, and 75% of the time, it’s the management team’s fault. One of my “soapbox” topics I guess.

Agile is amazing — IF you stick to the discipline. Most companies don’t.

Continuous Delivery and Test Driven Development (TDD) are huge opportunities. Unfortunately, there’s a real lack of leadership from technology types to inform the business about the benefits of these things. TDD and other continuous delivery practices build momentum. The software industry seems to have forgotten what it’s built on. Back when we printed software on disks and shipped them in printed boxes, management teams understood where their money was made. The software engineers wrote it once, and then we sold it a “gazillion times.” With 90% gross margins those disks felt “free!” Today, the delivery methods are a million times better, but management teams are unwilling to take the time or make the investments that build velocity and drive margins. Most software CEO’s have no idea what Continuous Delivery is or how it drives value. Go read the Phoenix Project! These are valuable software development methodologies that do require more time to get in place but pay for themselves over and over again. Nobody has the luxury of tons of time, so there are tradeoff decisions, but as product managers, if we better articulated the benefits of these things, we’d drive more value for our companies.

What advice do you give to aspiring product leaders?

Many product managers come from a technical background or role: development, QA, tech support or even sales engineering. I always give the same two pieces of advice. First, if you can, when you’re young, and it’s easier to get into, do a stint in sales. You need to get over your “technical person’s” fear of sales. Many people with a tech background have this perception that sales is somehow “icky.” My advice is to fall in love with the sales process, salespeople, and how you can contribute. It’s fun!

The same boss who first hired me into product management once told me, “Mike, get with sales!” You have to be careful not to fall into “sales support.”

But if you have your nose turned up to salespeople, and the sales process, you’ll never be a good product manager. Sales is everyone’s job!

As a product manager, you need to have one foot in sales and the other foot in engineering. Sales is intimidating to some people and you might feel more comfortable sticking with the technology. But revenue is the name of the game. You can’t just focus inward on the technology and spend time refining spreadsheets to prioritize features. If it’s between time with the best salesperson and time on your JIRA board…do the smart thing. Ask to sit in a pipeline meeting. Listen to how your vp of sales “sweats” his team on a daily/weekly basis. Understand the sales funnel and process. You’ll build a new appreciation for “icky” sales.

The second piece of advice is non-sexy but critical.

Work to become the absolute best public speaker you can be. It is like adding twenty IQ points.

You will outstretch that much-smarter-than-you-went-to-MIT peer that can’t sell his or her ideas. There just isn’t anything that I can’t think of that will propel you further or make you more money in your career, than being able to speak well in front of people.

How you sell your ideas — whether it’s impromptu hallway conversations or in formal meetings — is critical to your success. As a product manager, one of the biggest career opportunities you’ll ever have is the annual sales meeting. We’ve flown in every sales rep in the world to the same crappy hotel conference room (usually the second week of February, because the vp of sales is taxed, and we’re starting the new year late). You need to fight to get on the agenda! This is the show! If you have 30 minutes to present, you better prep for twenty hours. Nailing this presentation in front of the people that make the company money is career gold. Don’t screw it up! If you nail it, the next thing that happens is that the best sales rep in the company will take you on an important call. Make sure you prep for that one too. Don’t screw it up the way I did!

Tell me about the product you are working on now?

Alchemy Systems builds a B2B software product for the quick service restaurant (QSR) space. (QSR examples are Starbucks, Subway and Chipotle.) Our goal is to enhance the operational performance of stores with a mix of training and operational procedure support. Every store has been given an operating system — a big instruction book — by the franchisor on how to run it well and at a profit; our product supports that process. The product also helps with communications between stores and franchisors. If you have one thousand stores, it is hard to communicate and be nimble. How do I introduce something new or change some procedure and communicate it effectively? The product also helps with communication from stores up to the franchisor. How do I get word back that customers do not like this item or are leaving to buy things at a competitor? So it is an ear to the ground for the franchisor to better understand their market.

To me, the interesting thing about this product is the potential market — it’s ridiculously huge.

What is your biggest product challenge currently?

One of my challenges is geography. Much of the team I have is in Toronto. There’s a battle for top talent there that makes hiring the right team tough.

The other challenge is meeting all the needs at a worldwide scale. For one of our big QSR customers, we will be in every one of their stores worldwide by the end of the year. This is eighty-five different countries and almost twenty languages. We have to keep up with this expansion across countries with different regulations and cultures. Scaling is a topic of discussion for us every day. We’re doing it, but it takes a ton of effort.

What differentiates Austin from other tech centers?

I worked for almost twenty years in Boston and I loved it. However, I would say that Austin is way more accessible. Here, you can talk to anybody. People are way more accessible. Even if you are starting out, you can talk to anyone to get mentorship and advice. You’re one degree from everyone, and most people, when they have time, are eager to help.

What is missing?

I don’t know as this is an original thought, but Austin just has not had many big wins recently. Dell was a big win twenty-something years ago. We have had other wins, but they have not been big. The Austin VC of note did a bunch of roll-ups which was good, but we have not had another Dell that reinvented a market. A large portion of the startups in Austin are “features” masquerading as a company. It is so much easier to do startups now than twenty years ago, so you can get started on something pretty easily. It’s all good, but we need a breakout.

I think Austin has great promise in organizations like TechStars, Capital Factory, and Tech Ranch. A lot of Austin entrepreneurs and founders want to give back and are willing to help. Chris Taylor, CEO of Square Root, whom I worked for is a TechStars advisor. I saw him give back to new startups again and again, and I really admire that. It seems like Austin has a lot of successful people with that mindset, and I think that’s great for Austin.

Last question, what is your favorite product?

It changes all the time, but since I work in B2B, I try to find a product in that space that does things well. I started business travel twenty years ago and Expensify is the best thing that has happened to business travel, at least in my lifetime. When you travel, you always end up spending some of your own money because you lose receipts or don’t remember to expense something. The Expensify team has really thought through every single thing a business traveler will encounter — they have really nailed the personas and the design. Now, I almost treat it like a game to get my expenses done the same day I finish a trip. The app on the phone makes it so easy. It’s not just taking a picture of the receipt, but scanning it, recognizing the text and classifying it, and incorporating into your report. All you have left to do is submit it. I used to procrastinate all the time so that I could avoid using some crappy tool (I hate Concur!) or spreadsheet. I am no longer spending hours right before the end of the quarter getting all my expenses in.

Thank you, Mike!

Austin VOP is an interview series with product leaders to build a stronger product and tech community in Austin. Please like, share and tweet this article if you enjoyed it.

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