When Should You Stop Clinging to Product and Hire Your First PM? Advice From a Founder and CPO

Saumil Mehta outlines a framework for early-stage founders on timing the first product manager hire.

Outline

Giving away your LEGOS has become a core tenet of scaling startups. But in practice, the act of transferring ownership is often far more painful for most founders — especially if they have a favorite child in one area of the business. Product is, understandably, one of the hardest LEGOs to hand to someone else. Maybe a founder was CPO at a previous company. Maybe they think roadmap planning is where they can add the most value. Or maybe they just have a desire to hang on to control over something that's so core to the company’s success.

That’s one reason hiring your first PM can be difficult. Another is timing. At what scale do you actually need a PM? And how’s AI changing all this?
Over the years, we’ve collected a ton of valuable advice about how to hire a PM, but less on when it makes sense to do so, especially for founders who are at the pivotal moment where they’re considering bringing on their first product manager.

So we wanted to give early-stage founders a few heuristics for this decision from someone who’s gone through the process firsthand. Saumil Mehta is Global President at Ticketmaster, but before that, he spent nearly a decade in product leadership positions at Square, which acquired the company he founded (where, for a long time, he acted as both CEO and PM).

He acknowledges there’s no one-size-fits-all answer but instead, thinks about when to hire a PM based on the signals you’re receiving from the business and the product, and where your time as a founder will have the most impact.

With that, here’s Mehta.

As an early-stage startup founder, I had two titles: CEO and, unofficially, IC PM.
Things were going great. My company, LocBox, just raised our Series A and brought on a handful of engineers. We had a sales and account management team. Our customer roster of local businesses was quickly multiplying.

But my colleagues kept nudging me to hire our first PM. Turns out I was a bottleneck for engineering and design.
I was torn. I’d spent my whole career in product up until starting my company. I felt overprotective of every single product decision. I was tight with each engineer and designer.

But the financial realities of a cash-burning startup also loomed large. Should our next incremental dollar of spend go toward a full-time engineer, designer, account executive — or do we really need a PM?

While mulling over the decision to hire the first PM, an old startup adage kept ringing through my ears: "If you’re not building, and you’re not selling, why the hell are you even here?"

This was 15 years ago, but today’s founders still wrestle with this same question. And the decision has only gotten more complicated as AI upends roles and org charts even at the smallest startups.

While there’s no one-size-fits-all answer, I developed a litmus test to help make the decision. After selling my startup to Square, I spent nearly ten years there as a General Manager and later Chief Product Officer. Now I tell every founder to use the same system I used to make the decision for my startup.

Here’s my rule of thumb: Hire your first PM once the marginal hour you spend on product work is worth less than the same hour you might spend on go-to-market or company building.
This recognizes that while founders should keep the reins of the product strategy, there comes a point when the product work in a company gets highly tactical and competes with other equally valuable work.

Use these four simple heuristics to help you decide if you’re ready to bring on your first PM.

1. The rate (and frequency) of inputs for decision-making

At its core, the PM role is about making good decisions in highly uncertain circumstances. This requires signal-gathering and synthesis across multiple input sources.
On day zero of any startup, there are only two sources of input — the founders’ own hypotheses about the market, and prospective customers’ opinions about their pain points. Product-market fit is a successful marriage of the two. Unsurprisingly, at this stage, hiring a full-time PM is actually counterproductive, as it’s the founders’ job to navigate the idea maze and find PMF.

Once you clinch nascent PMF, you start building more features and upping your GTM focus. In the first three to six months, you may bring on the first few engineers, designers and business hires. Within six to nine months, you may have landed design partners to test the product and give feedback. You’ve likely gained some traction and are seeing signals across product usage and website traffic, and you’re analyzing and optimizing different channels.

So within 12-18 months, what was once just the founders themselves grows into a fast-moving startup with inputs coming from engineers, designers, prospective and current customers and analytics sources.

Even if the overall product strategy is set in stone, this step change of input volume demands rapid, tactical product decision-making. You’re confronted with decisions you never had to make before. Should you build Feature X or Feature Y first? Should you overhaul the roadmap to make your highest-paying customer happy, or build out requests from ten smaller customers? Where do you draw the line for good enough on Feature Z? Are you shipping at the right efficient frontier of quality and velocity?

I remember tackling many of these questions as the founder-PM at LocBox. We started seeing some worrisome churn patterns and wondered if the problem was our sales process, our ICP, our account management — or simply the product’s failure to get onboarded customers to use multiple features (thus reducing churn).

The number of inputs and time-sensitive tasks were creating demands on my time that working more hours simply couldn’t compensate for.

But it’s not just the divergent sources of input. It’s also the rate at which input arrives.
With most consumer apps, for example, new data and feedback arrives hourly. Funnels change weekly in response to product work.
With AI startups, there’s a new foundational model or technology development just about every week.

Someone has to do the legwork to keep up with the breakneck rate at which new inputs arrive.

2. Customer-facing surface area

Many years ago, I was having a conversation about two very different areas of Square: our payments platform that processes payments across the customer base and our CRM tools for small businesses.
As you’d expect, payments was far more important to Square’s brand identity, not to mention its financial success.
But she made a comment at the time that stuck with me: "Payments is an inch wide but a mile deep. These CRM tools are a mile wide but an inch deep. Act accordingly."

This encapsulates the second heuristic: The need to hire the first IC PM is directly correlated with the amount of customer-facing surface area in a product.
In this case, “surface area” describes the unique number and the complexity of the screens a customer could interact with.
If your product supports iOS, Android, web and has complex integrations, it’s plausible that you might need to bring on your first PM a lot earlier.

Customer-facing surface area is shared by prospects, current customers, salespeople, marketers, designers, frontend engineers and server engineers.
Given the number of stakeholders and their divergent opinions — there’s a need for signal-gathering and synthesis. PMs are uniquely suited to do that.

3. The impact of AI

There’s a lot of hyperventilating about how AI will eliminate the PM role. While AI will surely impact where PMs spend their time — as is true for every type of knowledge work — I believe that the productivity boom from AI will, on balance, result in startups hiring the first PM sooner than they would have in a pre-AI world.

The first reason is that engineering and design productivity have changed. The average startup feature ships much faster than five years ago. That means there are more decisions to make, more input sources to navigate at a higher rate and more taste-making required.
As coding becomes more efficient, teams will need more product management work.

The second reason startups will hire PMs sooner is that the non-deterministic nature of LLM responses changes the actual nature of software development.
This added level of chaos can impact product planning, customer research, small iterations and more.

4. The opportunity cost of your time

All startups are in a race against the clock. In this race, founder time and attention is the most valuable fuel to propel the company forward. The final heuristic relies directly on a detailed opportunity cost analysis of the founder-PM’s time.

Here is a simple but concrete analysis for the founder to consider.

Log the time you spend on tactical product work.
Track which activities you couldn’t get to.
Define the opportunity cost.

This simple three-step process will bring into sharp focus where a founder’s time is going and how the company may benefit if that time were put somewhere else.