Lately I’ve been working with 5+ SaaS companies all hiring their first VP of Product. Most around $6m-$10m ARR, although one just past $2m ARR. And critically, most have a really strong CEO-CTO partnership. Both are great leaders, and both are great at scoping out the product and its future. That means often it’s not entirely clear who the first VP of Product should report to.
A few general learnings:
- A VP of Product that Reports to CTO / Engineering Rarely Meets With That Many Customers. I just see this time and time again. A VP of Product that’s inside of engineering becomes very internally focused. That can be fine for an API or similar service, but I find it a big trade-off for an enterprise SaaS or one with significant customer-facing features and workflows.
- A VP of Product That Has Never Managed Engineers Often Struggles to Get the Respect of Engineering. This is also a truism. Time and time again, I see a stretch head of product or even VP of Product hired that never really managed any engineers before. And the dev team then sort of rejects them, in part. They just don’t speak with the right authority. Make sure you ask and find this out of all VP of Product candidates.
- A VP of Product is not a Replacement for a VP of Engineering. One reason the decision gets cloudly here is that as a SaaS company scales, the CTO needs help on product as the sheer complexity explodes. So it naturally seems to make sense the VPP would report to the CTO. But often what they really need to help scale is a VP of Eng. That can at least take over the more repeatable / proven / non-novel parts of dev (recruiting, tech ops, dev ops, tech debt, database, etc.).
- Most VPs of Engineering Don’t Really Want the VP of Product to Report to Them. When you realize this, it’s a bit of an “A-Ha” moment. Most VPs of Eng want Product to be their partner, their wing person, to go out and do the external work, and then be their partner in deciding what gets built. Far more early-stage founder-CTOs want VPP to report to them than seasoned VPs of Eng. That’s telling.
There’s no perfect answer here, but before you decide as co-founders, a few suggestions:
- First, make sure you recognize the above trade-offs — and discuss them. Go through the bullet points above together.
- Second, make sure you don’t also need a VP of Eng. You probably need both.
- Third, if the CEO is more of the VP of Product, it makes sense for the VPP to report to the CEO. Even if the CTO is doing the heavy lifting.
- Fourth, the less customer-facing the needs are, the more it makes sense to have a VPP that reports into engineering, that really was an engineer themselves.
- Fifth. the best hack is to hire a VP of Product that has managed an engineering team themselves at some point. They’ll get the trade-offs. It could have been a small team, an outsourced team, and they don’t need to be a real coder themselves. But if they’ve directly managed a dev team over an extended period, they get it.
In the end, most enterprise and workflow SaaS products should have a VP of Product reporting to the CEO for the above reasons. But at least go through the thought exercise above before you decide.