Guide to Building and Structuring a Great Product Team

A potion to boil a great product team is quite simple. Add a pinch of the experiment, a dash of insight, a dollop of creative juices, and the blood of the youngest unicorn in a family. But well, it’s just a start!

Jokes left aside, 9 of 10 startups fail. Guess what one of the most serious problems is? 18% of failures are connected to problems with teamwork.

However, the problem is not with skills or people but with the way you assemble your product teams. All of us know stories about how large enterprises announced default and garage startups achieved impossible heights. Fortunately, many companies share their stories of how to build a good product development team to help startup founders and team leads not make the same mistakes. 

That is why we’ve conducted thorough research, united it with our corporate experience, and there you have it! Scroll down and read the overview of key ingredients to a successful product team. 

When and Why to Consider Product Team as a Service

Product Team as a Service (PTaaS) provides organizations with an on-demand, dedicated team for their software development needs. Choosing this option can be a strategic move for businesses facing various challenges or seeking specific benefits. Key scenarios and reasons to consider Product Team as a Service:

• Limited In-House Expertise or Resource Constraints. If your in-house team is already at capacity or lacks specific skill sets, dedicated team can supplement your workforce, ensuring project continuity and preventing burnout.
• Cost Management. Dedicated team can be a more cost-effective alternative, providing high-quality work without the associated overhead costs, in case if budget constraints prevent you from hiring a full-time in-house team.
• Need for Rapid Development. Need speed and agility? PTaaS is a perfect option when a project requires fast-tracked development to meet market demands or capitalize on a timely opportunity.
• Project-Based Requirements. Product Team as a Service is a temporary solution without the need for long-term commitments for projects with a defined scope and timeline.
• Risk Mitigation. When launching a new product or entering an unfamiliar market, PTaaS can help mitigate risks by providing seasoned professionals with relevant experience.

So what are the benefits that PTaaS offer? Let's take a look:

• Strategic Advantage. Leveraging Product Team as a Service enables your company to adapt quickly to market changes, innovate continuously, and stay ahead of competitors.
• Cost Efficiency. PTaaS eliminates costs associated with hiring, training, and retaining full-time employees thus being more cost-effective.
• Scalability and Flexibility. Respond quicker to changing requirements without long-term commitments by scaling the team up or down based on project needs.
• Access to Latest Technologies. Product Team as a Service providers are often at the forefront of technology trends, ensuring your project benefits from the latest tools, frameworks, and best practices.
• Faster Time-to-Market. A dedicated team focused solely on your project can accelerate development timelines, helping you bring products to market faster.
• Focus on Core Business. Outsourcing product development allows your internal team to concentrate on core business functions, enhancing overall productivity and strategic focus.

Steps of Creating a Good Product Development Team

We build houses brick by brick. The same goes for establishing a product development team. There are some crucial aspects (“bricks”) on your way from hiring to career progression that must be taken into account.

Hiring

Hiring is the first and most complicated stage in product team development. Without a doubt, you want to have only jacks-of-all-trades on your team. As follows, you need to keep in mind the following pieces of advice:

1. Use all search channels and be proactive when looking for talent. 

According to the Society for Human Resource Management, 92 percent of people never finish online job applications. What is more, top performers do not even start filling out forms. 

So, if you’re looking for a cool and top-performing talent for your product team, be ready that they will not apply for open jobs by themselves. Skilled professionals usually sit back and wait for great working opportunities to come to them. To make it happen and appear in the right place and time, use such platforms as LinkedIn, Indeed, StackOverflow, and your trusted network referrals to bring on the best talent. 

2. Both hard and soft skills are essential. 

Although there’s a rising trend in hiring people for their soft skills, it’s no longer applicable in 2024. There’s no good in hiring a great communicator who lacks technical experience or a programming dragon who cannot work in a team. Therefore, you cannot have only communication wonderkids on your team, you’ll also need profound technical expertise. 

As follows, the right fit is a mix of hard and soft skills. Tech knowledge combined with the ability to solve problems, communication skills, teamwork, and flexibility is needed to build a great product team. 

3. Identify lacking skills. 

In the very beginning, creating a skills inventory may seem to be time-consuming and unnecessary work. Still, you will understand its voodoo magic in the long run. This exercise helps you focus resourcing efforts on the skills you lack in your product team structure. 

4. Assess skills using the right methods. 

When deciding on potential new members of your product team, make sure that you use the right type of skills assessment methods. For instance, if you’re looking for a Java developer, you can ask candidates to pass a test on Java knowledge. Yet, if you are in need of a product manager, you can use frameworks like PMwheel to assess a candidate’s skills.

This will ensure that you aren’t wasting time with a potential team member who doesn’t meet your requirements and role expectations. 

Establishing Leadership

Leadership is the next important factor that ensures a great product team structure. Establishing leadership is closely connected to setting the right product culture. It gives team members a vision of where to move and sets clear expectations from the leadership. 

Here’s what Mark Zuckerberg, CEO of Facebook, is saying about company product culture: 

I think as a company, if you can get those two things right — having a clear direction on what you are trying to do and bringing in great people who can execute on the stuff — then you can do pretty well.

Besides, leadership and how you establish product culture influence whether your product is appealing to customers. In the book Start with Why Simon Sinek says that “customers will never love a company until the employees love it first.”

And the way that you encourage your employees to love your company is by clearly communicating your expectations and vision for where the product development team should go. The basic characteristics product teams look for in leaders are clarity and the ability to pull them in the right direction. 

Another crucial thing for leaders in product teams is the ability to empower rather than micromanage. 

Top performers never want to work “for” a company, they strive to work “with” a company and “with” people. It means that good professionals do not need a leader watching over their shoulders. They need trust, team spirit, resources, and support. And that’s it - the full recipe of your product team's success!

Internal Processes

All of us prefer working in a team where the processes are well-set. Therefore, companies establish specific internal procedures to enable smooth product team development. Below, you can find some things to consider when setting up internal processes in a product team:

1. Define the product team structure. 

To boost the efficiency of your product team, you need to choose the right structure for it. The right team structure impacts the progress of all employees working in it. If you get this wrong, the results will be impeded significantly, and you will not be able to reach the project milestones in time.

Embedded, centralized, and flexible are three common structures used for organizing work in a product team. 

 As per the embedded product team structure, product development members are assigned to different teams throughout the organization in a cross-functional way. Although such an approach results in a greater focus of every employee on product development, it has a significant flaw. Notably, you may often receive duplicated work because team members do not sync up and don’t know what each of them is doing.

In a centralized product team structure, all employees work in a single team and one location guided by one decision-maker. The advantage of this approach is that you can assign your product developers to different projects when needed and do not wait for confirmation from other teams. However, centralized product teams are somewhat isolated from the whole organization and other teams, so you should be ready for misalignments. 

Lastly, in the flexible team setup, there’s a mix of two previous approaches. Developers are integrated into different teams, but still, they have to report to the key decision-maker. Most frequently, the head of product management is the one who unifies the approach and receives all reports. 

Yet, there’s no cure-all for a product team structure. Your choice of team setup should be made based on the specifics of your company and product. 

2. Optimize design and development team collaboration with tools.

A great rule for all life cases: optimize everything that can be optimized! And it relates to the collaboration between design and product development teams in the first turn. 

There’s a variety of fantastic tools that streamline the cooperation of design and development departments. For example, your product team can use Lucidchart for brainstorming and visual planning. Tools like Craft.io and monday.com can be used for building product roadmaps and milestones definition. Finally, Figma or Sketch work great for creating error-free prototypes. 

3. Create a product development roadmap.

Have you ever done something without a plan? How long did it take when the scope began to increase and lost its limits? 

One of the best ways to avoid blurry deadlines is to create a product development roadmap. It helps the founders to see the future of their products and the greater “what, why, and how.” A product roadmap aligns the expectations of all decision-makers and guides the product team to clear and concise deliverables. 

Here’s what Richard Holmes, a director of the Department of Product, writes about the importance of product roadmaps: “A world without roadmaps is like trying to live in a world without gravity.”

4. Organize sync-ups for the product team.

Meetings are significant for managing projects and uniting people's efforts. Regular sync-ups help team members to be up to date with what’s going on with the product they’re developing. 

You can mix daily stand-ups, 1-on-1 meetings, and team sync-ups to streamline understanding and collaboration levels in your product development team. 

5. Evaluate performance with appropriate metrics.

It’s crucial to measure and monitor the performance on the way of product development. Product teams do regular performance evaluations to see how the progress is going and whether they need to make adjustments to team structure or deadlines. 

The most used framework product development teams apply is the Objectives and Key Results system (OKR). It allows to determine and track goals. The “objective” part mentions what you need to achieve, and the “key results” part states what it will take to reach this goal. In this way, you link all your goals for product development and move faster.

Product team OKRs are widely used by such big names as Google, LinkedIn, Intel, and Amazon. Naveen Gavini, SVP of Products in Pinterest, says that adopting OKRs “really forces you to look at what is that long term outcome and objectives, and how you are going to measure it.”

Career Progression

The feeling of being a part of the team is enough initially, but people join companies to grow professionally and personally. That is why you need to think of career paths for your product team so that they can feel heard and valued. 

Besides, top performers cannot always do one job. They need challenge and change to deliver results. 

A career progression helps employees feel the stability of a workplace and knowledge of where they stand. Also, clear career paths positively influence employee retention rates and maintain auspicious morale. 

As follows, career progression can be horizontal and vertical. If some of the product team members do not strive to be supervisors or managers, horizontal career changes are for them. Shoehorning employees into management roles can negatively impact the overall performance. 

At Buffer, a social media management startup, leadership decided to embrace horizontal career growth. Katie Wilde, Buffer’s VP of Engineering, says that “to deliver great software, we need to encourage engineers to grow horizontally: to grow their knowledge and thought leadership as engineers and do the job they are good at even better. Management should not be the only option for growth and advancement!”

Nonetheless, more companies have started practicing a Y-shaped career progression framework. The key idea of this model is to give employees a choice between moving up the career ladder to the management roles or improving expert knowledge and growing horizontally. Such an approach has gained wide recognition among  Spotify employees.

What to Pay Attention to in Product Development Team

We want to begin this section with a spoiler: when building a product, assemble the right people together rather than focus on developing a solution. 

Perhaps, you all have heard the phrase “it’s all about people” and have never gotten it seriously. But this is the time your start believing in it. 

In the book Inspired: How to Create Tech Products Customers Love, Marty Cagan says, “If you’re only using your engineers to code, you’re only getting half their value.” That is why we’ve prepared an overview of aspects that can help you get total value from your product development team and enjoy their smooth collaboration.

Team size

Scrum methodology suggests having a product development team that consists of 3-9 members. Kanban, in its turn, doesn’t have any limitations on the team size. Nonetheless, it doesn’t mean that a mammoth-sized product team will advance the development process. 

Many startup founders use the approach to product team size introduced by Jeff Bezos. The two-pizzas rule says that if you can’t feed your entire team with two pizzas, your team is too large. In other words, each pizza has eight slices, and each team member typically needs two pieces. So, the maximum number of people on your product team should be no more than eight. This rule is used to ensure innovation and autonomy in teams. 

Another useful tip relating to product team size is that communication complexity increases as you onboard more and more employees. Take a look at the picture below. In the image, points are equal to team members, and the lines are the communication paths between people in the product team.  

As you add more professionals, charming patterns appear. But it is only attractive in the picture, and in reality, it results in communication complexity. Sync-ups and the daily meetings will become overcrowded, and it will be impossible to communicate effectively with all product team members. In addition, the coordination of tasks will also be more difficult. 

Team scope

There is no single rule on how to define the product team scope. Most frequently, founders or project management opt for two approaches. 

As follows, the first approach organizes the team scope according to the type of work that should be done. In this case, the product development team has responsibility for such project-related tasks as new feature development, performance optimization, and quality assurance.

Another approach tells to define the team scope depending on the amount of work and pertains to your company specifics. In some companies, product teams work on developing the entire solution. Yet, in others, the product team can be accountable for smaller product parts. For instance, they can work on developing specific functionality or progressive web application. Besides, the product team can oversee the development of a solution for a particular device. 

Team autonomy

The product development team is no different from any sports team. Every team member has a specific skill set, and without the collaboration of all team members, the milestone will not be achieved.

Like a football team and its purpose to win, the product development team has its own goal - building cool and customer-oriented products. And although all team members share one objective, they act autonomously. Autonomy is the fundamental strength of a product team. 

As per Marty Cagan, a thought leader in product development, teams feel motivated when leadership gives them autonomy. It minimizes the dependencies between different departments and allows to solve problems in the best way. 

The most famous example of team autonomy is Wise, formerly TransferWise, a currency transfer app. The currencies team is accountable for establishing new currency paths such as transferring Euro to USD. Without a doubt, it is more complicated than just adding a button to a cart or an extra option to a drop-down. The launch of a new currency path requires the opening of bank accounts in the target country and aligning rules with the state money-laundering and securities conditions. 

Such operations need a legal department to review the terms and conditions and a team of banking professionals to help with registering accounts. However, Wise has found its own way to it. The product team at Wise doesn’t include only designers, developers, product managers, and quality assurance but also a lawyer and a banker. It gives Wise’s team the necessary autonomy to make decisions and no need to wander across different departments seeking help. 

Team composition

The next vital question for the product team is its composition. Which professionals to include and what is a must? 

Yet, there are no obligatory rules for building a product team. It depends on your product type, the industry you’re in, the company size, and more. However, all digital products need the same things: roadmap, design, development, testing, and release. So, teams face similar stumbling blocks. Take this tip into account when building your product team, and review the team examples of your competitors. 

So, let’s check out the most common roles for a product team. All the roles can be divided into three groups. The first group is general roles. They include:

• Product manager,
• Project manager,
• Team lead,
• Software developer,
• Product designer,
• Marketing professional,
• Business analyst.

The second group are management roles, and it includes only two roles — Head of product and Head of software development. Last but not least, there are support roles, which include:

• DevOps,
• Data analyst,
• Quality Assurance specialist,
• User Research specialist.

Once you have decided on team size, scope, composition, and autonomy degree, it’s a high time to think about timelines and duration.

Team duration

Unlike the common agile teams, durable teams are primarily established to solve the specific business challenge and aren’t immediately terminated when the goal is achieved. Such product teams continue working together on multiple projects with only slight changes. 

You will agree that it takes a lot of effort and time to fine-tune the communication and collaboration in a team. This is why durable teams capitalize on their strengths in future projects. Moreover, such product teams have group memory and experience basis acquired from the previous projects. 

Besides, people always need time to get to know each other, understand working habits, and establish ties to the product they’re building. With a durable team, you get a fully-composed crew that has the necessary expertise and knows how to behave with digital products. 

Team collaboration   

The success of a team has always been a critical point for companies. Google spent two years and studied more than 180 teams to discover what is essential to get a high-performing team. 

The findings were shocking! No one knew that truth was on the surface. According to Project Aristotle, a product team has the potential to become a successful unit only with real collaboration and togetherness. Individual talents alone bring no significant influence. The difference lies in how people interact with each other and work together. 

Therefore, in high-performing product teams, technical expertise and collaboration go side by side.

Tips and Tricks

Cherish Your PM

The first and foremost tip is to remember that your product management team is the bottleneck for other departments. Far too many startups and enterprises allocate enormous budgets to hire additional software developers, marketing professionals, designers, and salespeople. However, they forget to enhance their PM team as the company grows. 

Product managers impact all the downstream teams, take important product decisions, and coordinate development. Not to fail with your dream product and drag your company’s ability to execute effectively - cherish your PM. 

Focus on ‘how’ instead of ‘what’

All of us have been taught to ask questions before doing something, and the most frequent question we’ve learned is “what.” 

However, Kevin Scott, the CTO of Microsoft and leader who built LinkedIn and AdMob product teams, says if a team asks “how” instead of “what,” they’ll work their way towards a durable product. Answers to the “how” questions are more strategic and can lead to in-depth answers, while the “what” questions are prone to change and give only a temporary solution. 

As follows, Kevin Scott emphasizes that “for teams of engineers, discussing “the what” is alluring — but figuring out “the how” is enduring.”

Strong company culture 

In the 21st century, strong company culture has become a necessary differentiator for companies of all sizes. Kevin Scott advises coming up with a company culture document stating the goals, vision, and mission. Such a manifesto helps to understand on which basis the company operates and how your product team will function. Lastly, company culture facilitates decision-making and tips on potential hires that meet your expectations. 

Specific product culture 

Product culture is a core aspect of product management, and it focuses on the primary beliefs of product development. Speaking the human language, product culture is the way how the company does things. 

Therefore, there’re four types of product cultures, notably engineering-driven, data-driven, design-driven, and sales-driven. 

As follows, engineering-driven companies thrive off of the unique technical insight that becomes the most significant element of their product. The range of such companies includes Google, Microsoft, and Stripe. Data-based product teams like LinkedIn, PayPal, and Facebook pioneer their industry due to specific product metrics. Since Apple, Airbnb, and Snapchat are design-driven, they emphasize every detail of user experience. Lastly, sales-driven companies like Salesforce and Oracle prosper on the incentive of using data gathered through customer success and sales operations. 

However, all these approaches share one common thing - empowerment. For instance, Hubspot’s product culture involves empowerment and growth, Google focuses on experience empowerment and elevating their products, and Spotify’s product culture emphasizes empowered product teams. 

Let’s look at what empowerment means in detail in the next section. 

Diversity and Empowerment

Introduced by Marty Cagan, the concept of an empowered product team is central to modern product development. It denotes the team that owns the digital product and has enough expertise and freedom to act autonomously within defined goals. What is more, Cagan notes that such a product team’s success in innovation, speed, agility, and quality is inevitable. 

Apart from autonomy and ownership, empowered product teams have the feeling of being “in a team,” not “working for a team.” Every team member is trusted to make necessary decisions and take accountability for them. 

Nowadays, diversity stands side by side with the empowerment of product teams. The preferences of people become more and more diverse, and it results in different innovative digital solutions and versatile teams that build these products. If product managers master diverse skills and have an open mindset, they can expect more positive outcomes from what they do. 

Finally, McKinsey & Company’s research proves that companies with diverse product teams are in a better position to drive customer satisfaction and attract top performers. In addition, ethnically-diverse companies are more predisposed to outperform financially. 

Excellent communication 

Excellent communication means not talking to your product team more frequently or providing them with granular tasks. It is about making sure that all team members understand what you are doing and why it is important. 

Communication is rated second on the list of skills that product teams lack the most. Moreover, 56% of employees are not happy with the process of articulating product goals. 

Ineffective communication and difficulties in understanding product strategy can derail your product. The product development team might define the wrong success metrics, while the product marketing team can fail to determine the right user persona. As a founder or product manager, you might not hear that your development professionals aren’t equipped to implement your ideas, and the sales team might focus on the wrong product advantages that don’t appeal to the target audience. Shockingly, all these problems are because of miscommunication! 

The most common way to articulate the product strategy right and ensure excellent communication in a team is to actually communicate and share product information. To do this, host sync-ups and present information live, answer questions in 1-on-1 meetings, refer team members to the roadmap, and create ad hoc product documentation.

The Bottom Line

Assembling a product team is one of the toughest challenges a startup founder can encounter. Nonetheless, in this article, we have gathered the crucial steps and tips that can assist you in building a successful product development team. 

Pay attention to team size, scope, autonomy, composition, and collaboration whilst structuring it.  Remember your greater “why” and explain to your team members why their work matters. In this case, you will not go wrong and ship an amazing product the world will love!

Lastly, if you want to experience working with a coordinated and talented team — contact us, and let's discuss our cooperation!