As population growth slows and the economy declines, the era of high growth in the internet sector is over, with various industries and their scales gradually stabilizing. This means that companies are changing their expectations for product managers, requiring higher qualifications and more significant contributions. So, in this new environment, aside from the essential foundational skills, what other abilities should an excellent product manager cultivate? Let’s take a look.
First Insight: By 2024, Functional Product Managers Will Fade Away
Why make such a statement?
For the internet industry in 2022, several buzzwords became familiar: cost reduction, efficiency increase, layoffs, organizational restructuring, and business contraction.
The wave of layoffs began in December 2021, with iQIYI and Kuaishou among the first to announce layoffs. What initially seemed like normal business and organizational adjustments quickly escalated into a significant trend throughout 2022, with companies like Baidu, Didi, Tencent, JD.com, Alibaba, Zhihu, ByteDance, Xiaomi, and others all laying off staff during the year.
In response to this shift, the highest-valued companies in China’s internet industry adopted operational strategies focused on cost-cutting and improving efficiency. This "internet winter" has made many realize that the era of high growth driven by population dividends is over, and we are entering a period of market competition for existing resources. New products and companies are becoming scarcer, and industries are stabilizing.
As a result, companies are no longer pursuing a "big investment for big returns" strategy but are now seeking higher profits through improved management and operational efficiency.
How This Affects Product Managers
This shift means that companies are increasingly raising the bar for product managers’ abilities and outputs. Job requirements reflect this: for entry-level positions (1–3 years of experience), companies focus on basic skills like competitor analysis, prototyping, documentation, and requirement execution. For mid-level positions (3–5 years), companies look for skills in product architecture and commercialization, such as product strategy planning and business thinking.
So, what specific abilities should a product manager cultivate in this new era?
1. Industry Insight
Product managers need to quickly understand an industry, especially as cross-industry trends are becoming more prevalent. Companies like Alibaba, Tencent, and Xiaomi are developing cross-industry ecosystems, investing in and operating in different sectors. This requires employees to have knowledge and skills across multiple industries.
More than just quickly understanding an industry, it’s essential to develop deep insights into industry trends. Product managers should ask themselves: How big is the market in this industry? What are the development trends over the next five years? Who are the competitors, and how are they positioning themselves? What are our accumulated advantages in this industry?
Only by clearly answering these questions can product managers make better business decisions for their company.
2. User Insight
One of the daily responsibilities of a product manager is to understand users—day in and day out, year after year.
Many methods equate “user insight” with “user research and analysis,” suggesting that data analysis and user profiling can guide business decisions. While not entirely wrong, this approach only helps avoid significant misunderstandings about users.
User insight goes beyond data; it treats users as people, not just statistics.
A great product manager must not only understand user research methods but also grasp human psychology and behavior.
3. Commercialization Ability
The demands of the mobile internet industry have evolved over the years.
Around 2012–2013, as mobile internet was taking off, the industry focused on “user experience” due to the rapid emergence of new apps with varying quality. By 2016, the focus had shifted to “growth,” with companies competing for users. More recently, the emphasis has shifted again—this time toward “commercialization and monetization.”
Now, more than ever, companies are eager to make money.
Several factors contribute to this, including natural industry cycles and the accelerated impact of the pandemic. In challenging economic times, companies’ ability to generate profits is a crucial defense against worsening economic conditions.
As a result, product managers who can help companies monetize are increasingly valuable.
4. Product Planning Ability
Once you’ve developed industry insight, a deep understanding of users, and strong commercialization thinking, the next critical skill is product planning.
Product planning involves aligning the company’s strategic goals with current industry and business conditions. It’s about setting priorities and creating the most reasonable, cost-effective roadmap for product development. A product manager must define the goals for the next quarter or year and determine what actions need to be taken.
The ability to create effective product plans is a key differentiator between entry-level and senior product managers. While the former often play a supporting role, the latter lead the product team, guiding the core strategies and roadmaps.
At first glance, product planning might seem like just another PowerPoint presentation, but without deep industry, user, and competitor insights, it’s hard to develop meaningful plans or bring real value through product iterations.
Final Thoughts
From the above points, it’s clear that excelling as a product manager in today’s world is no easy task. You need to understand the industry, the users, have a commercialization mindset, and strong product planning abilities. Each skill requires significant time and effort to develop.
Returning to the initial point, my argument isn’t that functional product managers have no value. Their contributions depend on the specific needs of the business, but their roles are increasingly marginalized. It’s becoming harder for them to command high salaries or negotiate better compensation.
Therefore, aim to be an industry-focused product manager, not a generalist functional manager.
