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Mar 15, 2022

How to structure a great product team w/ examples

Alberto Incisa

The key for developing a successful digital product is forming a well-oiled product team to handle its development and maintenance. Product teams are mobile and adaptable, and help get the most out of a digital product.

Building a product team is one of the most important things a company can do. It’s the team that is responsible for dreaming up, designing, building, and launching products.

But how do you structure it? Many companies struggle to organize their product teams effectively to improve efficiency and optimize lead teams. In fact, product organizational structure is one of the most important aspects of this process.

Once you’ve crafted the perfect product team, the issue then turns towards tracking the success of your next digital product. That’s where businesses are turning towards smart user analytics tools like June.so to watch user engagement and retention. In this article, we’ll explore how best to structure your product team. Looking at examples of how some of the most successful companies around the world structure their product teams will unlock the answers for how best you should structure your product development team for your next SaaS product.

What is a Product Team?

Firstly, we’ll explore what a product team actually is. This is an organizational structure that focuses on adaptability and agility first and foremost and whose main priority is to create and design a product users love. Product teams are small, cross-functional teams designed to focus solely on delivering a holistic product. By cross-functional, we mean that they handle the planning, design and engineering all within this team.

Marty Cagan, author of Inspired: How to Create Tech Products Customers Love, states that product teams should be “focused on outcomes instead of outputs”. By this, he means that product development groups aim to deliver business results instead of features. Product teams contrast with feature teams – who are themselves cross-functional but aim to ship product increments instead. However, product teams’ true opposites are component teams. These are monofunctional – for example, an engineering team or a design team. The issue here with component teams is that they don’t have that same focus on business objectives and are often “output” orientated. This makes, in theory, less successful products – especially at launch and during the early stages of a product’s lifecycle.

What size should your product team be?

To keep your team agile, you should keep product development teams small. This is because, in a large team, effective team communication can become difficult and unwieldy. For a product manager (whose role we’ll discuss later) to have daily one-to-one communication with all their team members, we recommend keeping product teams to less than 11-12 people. In fact, 6-8 is the sweet spot.

For example, Amazon’s Jeff Bezos sticks by the “2 Pizza Rule”. This is a practice that states product teams should be so small that they should easily be able to be fed by two pizzas. Any larger and those direct communication channels start to break down. Why are large teams so dangerous? It increases the likelihood that managers’ messages and sentiments get diluted. Product teams need to be razor-focused on business objectives, and this dilution hampers their effectiveness.

Product Development Team Roles

A cross-functional team that is both small and effective requires strictly defined and recognisable team roles that directly match with members’ skills. All product teams should represent these key team roles:

Product Manager

An effective product team starts at the top – with product management that is laser-focused on the outcome and business objectives. Intuitively, a product manager is responsible for product management. Product management refers to the skills needed to conceptualize a product, bring it to launch and handle its marketing. Product managers are those responsible for identifying customer needs, relating that to business objectives and organizing the rest of the product team to achieve this.

Product managers are also responsible for client liaison – this involves meeting with clients, drafting progress reports and presenting product roadmaps.

How do product managers work in practice? Derek Jamieson, a senior product manager at Salesforce notes that the key to PM’ing a cross-functional team is “Transparency and Humility”.

“It’s important to share your thoughts as to why you are making the decisions you are making and to be honest when you take the team down the wrong path” – Derek Jamieson.

Application Developer

These are the engineers that write the code and are responsible for technical planning. With the small nature of product teams, there’s little room for knowledge gaps here.

Developers working in your product dev team should be full-stack, have a wide knowledge of libraries and frameworks. API development skills are also desirable.

Product Designer

The bastion of UX, a product designer is responsible for branding, visual design, UI planning and prototyping. Designers need to have a deep understanding of how software products are used, and how UX principles need to be implemented. They work with engineers and other members of the product team to create prototypes and test products with users.

Product designers are essential members of product teams. They help to ensure that products are well-designed and easy to use. Their focus on the user experience helps to ensure that products meet user needs and are successful.

QA Tester

A QA tester is a quality assurance professional who tests products for defects and compliance with requirements. They are responsible for periodically testing all parts of the product to ensure it meets the project requirements, and will aid engineers and the product manager in planning responses to broken code or bad QA.

The job of a QA tester is important, as it helps to ensure that products are free of defects and meet customer expectations. In a product team, the QA tester is responsible for verifying that the product meets requirements and is fit for release.

Product Marketing

The product marketer is responsible for creating and driving the marketing strategy for a product. They work with the product team to identify and understand customer needs, and then create a plan to meet those needs. This may include creating product messaging, developing product positioning, creating sales materials, and more.

Product marketers must have a deep understanding of their products and the markets they serve. They must also be able to think strategically about how to reach and appeal to customers. Excellent communication and writing skills are also essential, as they will need to be able to effectively communicate with a wide range of stakeholders.

How do you structure your Product Development Team?

A basic product team structure is easy enough to understand. But, as products grow, how do you scale them?

Teams often follow one of these three principles when deciding their product team structure:

  1. Product ownership
  2. Skills-based PM
  3. Product squads

We’ll explore two of these approaches here:

Product Ownership

You could structure product teams to be responsible for a singular product or product feature. This is the product ownership route. This is the most common product development structure.

As such, these product managers will be responsible for a variety of tasks with teams overseeing customer research, marketing, sales, and product development.

Underneath the product manager are the traditional roles we covered above.

Some considerations you need to make if you’re considering the product ownership approach is:

  • How many developers would you assign to your product teams? Often, especially if a product becomes too large for one small team to handle, managers make product teams larger without hiring an additional project manager. This commonly leads to an unwieldy, inefficient product team.
  • Who will these project managers report to? PMs are usually intermediate-level roles. Who keeps them in check?

Product Squads

Spotify has – since 2012 – structured its development organization into eight-member large product development teams known as “product squads”. These are extremely agile and adaptable development teams that contradict the traditional product team approach.

These developers are entirely cross-functional and each product squad will be responsible for specific areas of a product.

What is unique to Spotify’s product squad strategy is that each squad has high levels of autonomy, especially with their ability to bring their work to market.

How has this helped their engineering culture?

Firstly, it encourages small and frequent releases thanks to these small teams and complete autonomy. Also, these product squads aim to “cross-pollinate” their skills and working methods to other teams. This is in contrast to the traditional standardized training methods.

Moreover, autonomous squads with clear responsibilities and goals help foster a community between developers outside of their teams. Spotify’s teams love to share their expertise with each other – without the fear of treading on someone’s toes or helping “competing teams”.

How real-world companies handle product development teams

We’ve briefly introduced you to the way Spotify works. But the Swedish audio streaming service isn’t the only tech firm using product teams. Here are some examples of how successful SaaS companies are structuring their product teams.

Shopify: Strong Talent Acquisition and Onboarding

A blog post by Shopify Engineering on company culture by Larry Lumsden, gives us an insight on how Shopify handles scaling their development teams.

Lumsden reveals that Shopify places a keen interest on building close relationships with their talent acquisition teams. He notes that new talent’s ability to fit into workplace culture is just as important as technical ability.

It is for this reason that Lumsden believes in making sure recruitment teams understand the culture and working environment of your product teams in order to understand which new talent will be the right fit.

Lumsden also comments that Shopify uses pairing to better onboard and introduce new hires to their working environment. Pairing is to let new folks code together with experienced developers, getting them up to speed much faster than if they were left by themselves. This pairing culture extends further than the initial onboarding stages, however, with all team members encouraged to work together. Shopify even has pairing rooms in all their offices for this very reason.

Amazon: 2 Pizzas

We’ve already touched on how Amazon uses the two-pizza rule to limit the size of their product development teams. To recap, teams should be small enough that they can be fed with two pizzas.

Expanding on this, Amazon makes use of the Single-Threaded Owner (STO) approach – where a leader is responsible for one or two product “two-pizza” teams. This ensures that these teams stay focused and an STO is responsible for driving Amazon’s business priorities.

How does Amazon keep track of the success of product teams? They use regular business reviews, program reviews, roadmap reviews and audit STOs to make sure deliverables are kept under check.

Microsoft: Agile, iteration-based development

Microsoft uses what they call agile developmentto guide how they approach their product teams.

At Microsoft, development should favor individuals and interactions over processes, tools and outputs. Also, their product teams focus on iterations and releases as their project goals. They see each iteration as like a small independent project.

Why do they do this? It separates their project development lifecycle into sprints, and affords them a great level of flexibility. This small-scale iteration-based approach allows for requirements to evolve and change. The focus is more on meeting customer demands than project completion.

Track your Product Progress and Success with June.so

Once you’ve developed an effective product team, the focus then turns to managing your product and tracking its success. The key here is using a quality product analytics tool. This is because collecting data on user engagement and retention can be particularly difficult without an analytics tool.

June.so automates this process so you can focus more on development and less on data gathering.

You can automate retention tracking by connecting your segment account to June. Acquired by Twilio, Segment is a platform for collating your customer usage data into one easy-to-access place. With Segment, you can automatically collect user metrics from hundreds of software tools like Google Analytics and Stripe. With June, you can easily generate attractive and functional engagement and retention graphs and reports.

Get started today at June.so and access BS-free, accessible and beautiful product analytics for B2B SaaS companies.


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