How Important is Subject-Matter Expertise When Hiring SaaS Product Managers?
Learning a new industry is usually easier and faster than becoming a great PM
TL;DR - When hiring PMs, you sometimes must choose between candidates with more relevant subject-matter expertise vs. candidates with better generalized SaaS PM skills. Generalists usually work out better, because it’s usually easier for a great PM to learn a new industry than for an industry expert to become a great PM.
In my experience, a product management candidate’s existing subject matter expertise is much less important than their ability to quickly gain subject matter expertise.
Obviously you want both: a PM with both great generalist skills and excellent subject matter expertise. But when forced to compromise on one or the other, I lean towards experienced PMs without same-industry experience over industry experts without strong PM skills.
After 15+ years managing PMs, hiring PMs, and working with PMs at both BigCos and startups, I’ve repeatedly seen great PMs come up to speed on a new customer segment, technology, and competitive landscape within a few months. It's a joy to watch how fast this learning process can be for PMs who are good at quickly getting inside the heads of new customers and quickly understanding what it takes to satisfy those customers' needs.
The reverse—subject matter experts without PM (or PM-like) experience who can quickly become great PMs in a small SaaS startup—seems to be fairly rare. I've also seen cases where industry experience can be as much of a hindrance as an advantage. PMs who are too familiar with "how things have always been done" might be bringing too much baggage and not enough critical distance and open-mindedness to the table.
I'm not implying that industry experience is irrelevant, only that it tends to be easier and faster for a great PM to learn a new industry than for an industry expert to become a great PM.
When recruiting, I think that the sweet spot is PMs who have solved similar problems for similar customers in an unrelated industry and whose background and personality suggests empathy for our customers. I call this “PM/Customer Fit”. For example, when hiring a PM for a veterinary practice software startup, healthcare PM experience would be preferred but optional, but “liking pets” would probably be required. Another example: most of the customers of my last company Cantaloupe were multi-generational family-run businesses who employed mostly blue-collar workers. PMs who had an affinity for family businesses and blue-collar work would have a leg up.
Of course, not all PM experience is transferrable across products and industries. For example, consumer vs. B2B products also tend to require somewhat different PM skills. But what makes Consumer<=>B2B transitions challenging isn’t the PM’s lack of industry knowledge. Instead, the habits and expectations learned as a Consumer PM might lead PMs astray in a B2B business, and vice versa. It’s usually these kinds of higher-level patterns and habits—not facts or connections in a particular industry—that determine PM success.
Caveat: I’m not saying that you should *never* require industry experience. For example, if you’re building a highly-technical product and the PM is expected to deeply understand the technical design (e.g. a database or API product) then it’d be really challenging for PMs to be successful without strong technical skills and some experience targeting developers as customers. But my general point with this post is that those “industry experience required” cases are both rarer and less specific than you might think.
This post is an edited version of an answer I wrote on Quora several years ago.