Great Products, Bad Companies

Marty Cagan argues that great products are necessary but not sufficient for a great company, because a company known for strong products attracts predatory investors and executives who strip value for quick financial gain. He describes watching founders lose control of companies they built and pleading with boards not to replace leaders over short-term misses. He reviews Eric Ries's new book Incorruptible, which focuses on corporate governance structures that protect 'mission-locked' companies from such predators. Cagan admits governance has been outside his expertise and that he deferred to lawyers and business experts, which he now sees as a possible mistake. He concludes that product people should consider governance when choosing where to work, since it shapes culture and their ability to make an impact.

01Key takeaways

• Strong products are necessary but not sufficient; a company also needs protection from those its success attracts.
• Board members who replace leaders over short-term misses often end up harming the company and themselves.
• Governance structure directly shapes your day-to-day experience and the culture you can succeed in as a product person.
• Before joining or founding a company, examine its governance and whether it is designed to protect its mission.
• Don't defer governance entirely to lawyers and business advisers; product leaders should understand how it affects their work.

02Key sections

Why great products attract predators

Strong products make a company an attractive target for people seeking quick financial wins who may take control from founders. Cagan says this destroys the trust and value product people work to build.

Failed attempts to protect leaders

Cagan recounts pleading with board members to keep leaders through normal setbacks, but explains that he struggles to convince non-product investors of the long-term case.

Rethinking governance as a solvable problem

Cagan had accepted this outcome as unavoidable, but Ries's book challenges that view by showing alternative governance structures that resist predatory takeovers.

Implications for product people

Understanding governance helps product leaders grasp board and investor incentives, and helps those considering a startup or a new job choose a mission-driven, protected company.

03From the post

“I have long argued that great products are what powers great companies. And while I still believe that great products are necessary for great companies, it’s become quite clear over the years that great products are not sufficient. In fact, as counter-intuitive as this sounds, I have seen too many examples where great products can... The post Great Products, Bad…”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.