We created a preliminary Product Tech Market Map to bring some structure to this complex, emerging ecosystem of companies that are streamlining product workflows.

LLR has been closely watching the evolution of Product Technology (“Product Tech”), which we define as the ecosystem of software and technology that enables the ideation, vision, measurement, and optimization of digital products.

In this GrowthBit, I’ll explore the drivers behind its relatively recent rise, examine some of the exciting developments on the horizon, and share a preliminary product tech market map as an attempt to bring some structure to this exciting ecosystem.

Entering the era of product management

The product management role has evolved significantly in the last 20 years. The original big tech giants like Google and Amazon drove the initial formation of the role and helped popularize it throughout the technology industry. The first generation of product managers played a very tactical role. They were often seen as the “traffic cop” of product, responsible for writing requirements, coordinating across siloed teams and, most importantly, delivering the product on time and within budget.

Today, product managers are strategic leaders, responsible for defining the product vision and roadmap, gathering user feedback, conducting market research to stay a step ahead, and coordinating workstreams across several functions. They have grown from intuition-driven and feature-focused to data-driven and customer-focused.

The emergence of Product Tech

Despite their role’s significant progression, the product manager’s toolkit has not advanced at the same pace. Most product managers still rely on generic communication tools to drive their complex workflows, and the budget for specialized tooling often lies outside of their team (e.g. in design or UX research). This budget and tool sharing makes sense given the inherently cross-functional nature of the product role, but it can lead to disjointed, suboptimal workflows.

Enter Product Tech: the ecosystem of companies that are streamlining product workflows in areas like idea management, collaboration, roadmapping, design, product analytics, digital experience, user onboarding and user research.

 

Product Tech segments to watch in 2023: Collaboration, roadmapping and experience

There have been some exciting developments among the big players and first movers in the Product Tech market, and we believe this is only the beginning. At LLR, we are particularly excited about three segments of Product Tech.

Product Collaboration. As hybrid work environments become the norm, tools for capturing and collaborating on ideas are essential. Collaboration in the product context includes tools for generative research, whiteboarding and design. These areas are inherently cross-functional, and we forsee additional convergence into broader platforms over the next five years. Pay attention to large players like Zoom and Box, which both released whiteboard tools in the past year, and companies such as Mural and Miro that are championing specialized functionality for product teams.

Product Roadmapping. Companies like Productboard and Aha! have pushed the market forward, but there is much more room for innovation. Roadmapping platforms are most likely to become the systems of record for product—a place where feedback and performance metrics are tracked and aligned across the product lifecycle. The creation of this system of record and standardization of product KPIs has the potential to be as transformative for product management, much like CRM was for sales.

Product Experience. The early success of companies such as Mixpanel, Amplitude and Pendo have evangelized the market and created space for innovative new product analytics and digital experience companies like Fullstory. We expect to see more convergence in these quantitative and qualitative areas along with workflow linkage to collaboration and roadmapping products. For example, when quantitative data indicates user friction with a certain feature, and session tracking provides a zoomed in view of user interactions, the problem can be identified and automatically added to Jira and noted in a whiteboard for future reference.

Emerging leaders and investor funding are driving momentum in Product Tech

Investor interest in Product Tech ramped up over the last 2 years, driven by the massive greenfield market opportunity and exciting tailwinds.

There has been a wave of recent IPOs, including Amplitude, Braze, WalkMe and UserTesting, and we’ve seen several high-profile financings like Miro ($400M Series C in 2021), LaunchDarkly ($200M Series D in 2021), Mixpanel ($200M Series C in 2021), Quantum Metric ($200M Series B in 2021), ContentSquare ($600M Series F in 2022) and ProductBoard ($125M Series D in 2022).

This influx of capital should help drive growth of Product Tech companies over the next 5 years and accelerate the trends we are seeing today.

Mapping the future of Product Tech

Product Tech experienced a growth spurt in the past few years, and its pace will only accelerate in future. Where is it headed? We have some predictions bulleted below.

  • The Chief Product Officer’s voice will continue to rise in the organization. They will take more and more ownership of the product vision, strategy and execution.
  • As product teams grow, roles will specialize and ultimately standardize; a common lexicon will define roles for product managers, product owners and product ops.
  • The budget for specialized tooling will increase and centralize. Product managers will evolve from influencers in purchase decisions to the primary owners.
  • A battle for the product management system of record will take the main stage, and the winner will be a comprehensive workflow integrator.
  • The ecosystem of specialized Product Tech solutions will flourish, continuing to draw favorable attention from venture capital and growth equity investors.

LLR is excited about these trends, and we created a preliminary market map, organized by the workflow segments shown above, in an attempt to bring some structure to this emerging market.

*Product Tech Market Map logos are representative and non-exhaustive.

 

Here’s the bottom line.

Over the next few years, as the product management function matures and vendor innovation accelerates, we predict tremendous growth in Product Tech. LLR is actively monitoring and analyzing the space as it evolves, and the market map shared here represents our jumping-off point for this complex and evolving category.

We welcome and encourage input from vendors, practitioners and other stakeholders that can help us improve, iterate and expand on the current version. What did we get right or wrong? What should we add? Contact me at cmckernan@llrpartners.com to create a dialogue.