Listening to Mark Juliano, whose 20-plus year technology career has taken him from entry-level engineer to his current post as CEO of Haley Systems, the concept of entropy applies to technology firms as well as to physical systems. Entropy, also known as the Second Law of Thermodynamics, is the principle that things fall apart over time.

That tendency toward chaos and disorder is especially apparent among technology firms who have survived their initial product introduction. “The first version of a product often comes out on time because everybody in the company is driving toward one goal,” Juliano observed. “But by subsequent versions, there’s all kinds of distractions. And that’s where things start falling apart and you start getting huge slips in later versions – perhaps missing a date by months or even years.”

Ultimate responsibility

For many companies, the answer – or at least a key part of the answer to holding distractions down and keeping company staff focused on the next release – is product management, according to Juliano. It is a process he sees as seamlessly spanning the decision-making involved in product management, product marketing, and marketing communications – three areas of activity which he feels cannot be separated, even if they’re performed by different individuals. “It’s the central coordination function. Somebody must ultimately be responsible for all these products from cradle to grave – the whole life cycle,” he said.

Without it, products tend to be released on a seemingly haphazard schedule. And when they do come out, things are often missing including documentation, demos, price lists, data sheets, Web site postings, sales training, service manuals, financing plans, promotional materials, and so on, he pointed out. “It’s everything you need to turn an engineering development into a real product,” according to Juliano. “It’s what is generally called ‘productization’.”

“You can do product management on the fly, at the beginning. But you can’t do that when a company is bigger – it doesn’t work. The company will continue to operate as a very small company because in essence, product management is still being done by the startup’s founders. Problem is, as your company gets bigger, the founders are not involved day-to-day anymore. And then things start to fall apart because you have all these departments and they’re all going in different directions. Product management brings it all together,” he said.

Juniors need not apply

At FORE Systems/Marconi, in one of his previous posts, Juliano was not among the very first handful of employees, but he was close. “At FORE Systems, there were 15 employees when I started. I started doing some product management right away, but I did a lot of marketing at the beginning because they had no marketing staff. By the time the next version of the product came out, I had hired some dedicated product management people. You don’t need product management for that very first thing out the door. But once you get into product releases and dot releases and major releases and minor releases and national or global sales forces and everything else, you’ve just got to have it.”

By the time he joined FORE, Juliano had already accumulated 12 years of engineering, product management, and marketing experience, in addition to a Stanford University MBA. Arriving with strong credentials and an impressive business background proved critical to his success in that function. But sometimes companies fail to recognize the importance of deep experience in their haste to bring a product manager aboard. That can be a fatal flaw.

“You shouldn’t hire a junior guy as your first product management guy,” he said. “If this guy is going to be the key point man for your products, he has to negotiate with the founders, with Engineering, with customers, and you can’t have a junior person doing it. The classic case is where companies put in a junior product manager and nothing really happens. They get some data sheets out. They write a product requirements document. They get a Web site done. Great. But there’s no infrastructure. There’s no repeatable model.”

“A second fatal flaw is having product management report to engineering,” he said. “Engineering’s job is to make product; it’s not to position or market them or to make sure the sales force has what they need to ultimately sell the products. Another fatal flaw is if product management reports to Sales. Sales is driven by quotas and revenue targets this quarter. Product management is much more of a medium- to long-term function. Of course it does involve some short-term activities. But it’s doing them thinking ‘what are the sales of this product line going to be over time?’ as opposed to ‘am I going to close this deal next week?’ So reporting to Sales is another classic mistake.”

Special PM skill sets

While having the credibility of experience in the industry is essential to a successful product manager, other qualities of mind and habit are just as important. “One of the things the person definitely has to have is project management skills – the ability to make a project out of something as opposed to seeing it as just a series of separate disjoint activities,” Juliano said.

“Another trait is creativity. You can’t keep marketing or dealing with customers the same way it’s been done for the past 20 years. Creativity is a key because you’re always looking for new ways – especially when you’re a tiny company. Because when the incumbent is large, competitors are spending a pile of money doing marketing, so you have to do something different. And creativity is a real important aspect of it,” he said.

“The other key is the ability to understand the whole organization. So if someone who’s just been in Engineering becomes a product manager, he or she doesn’t really know about finance and service and technical support and sales and all the other functions.” he said. “But the product manager’s job is to cut across all these departments. A product manager will usually tell you ‘I own the whole product.’ When you own a house, for example, it means you have to take care of everything – the mortgage, the lawn, the decorating, the maintenance, and so on. If you own a product, you just can’t say ‘oh, I’m just a Marketing guy, let Sales worry about sales.’ So that’s another key skill: understanding across organizational issues. It’s the total product strategy.”

It can also be a promising career trajectory. “Product management is one of the most likely jobs to turn into general management because you have to understand the whole company,” Juliano said. “That’s how I did it. It’s a very common career path.”

From zero to small

In the Pittsburgh area, as elsewhere, placing product managers with the requisite skills can be critical to the growth and success of the region’s technology startups. “A lot of people are saying that in Pittsburgh we don’t have enough of those skills. And they’re right,” he said. “Because it is a critical function and it’s one of the key reasons why a lot of the companies here go from zero to small and never get to medium or large. So to get past small, product management is one of the keys. It’s certainly not the only reason, but it’s one of the critical elements.”

So just where does product management fit into the scheme of things at an early-stage technology company? There’s a critical gap, according to Juliano, and it falls right between engineering and sales. “A lot of startups, if you look at their structure, will tell you that they’ve got Engineering and they’ve got Sales. And that’s fine for a while. But it’s not scalable. Without that piece in the middle, you can’t get to the next stage. You can’t get the products that Engineering builds to market, and you can’t get the customer requirements from Sales for future products. That piece in the middle is really the key to the whole thing. It doesn’t include Engineering or Sales – it’s everything in between. That’s exactly what product management and product marketing are – all that stuff in between those two, and then some.”

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