#Software

Product Tech

Product Tech encompasses the ecosystem of software and technology that enables the ideation, vision, measurement, and optimization of digital products. 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 in Collin’s GrowthBit below 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 it. What did we get right or wrong? What should we add? Contact Collin McKernan to create a dialogue.

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.

Collin McKernan, Vice President at LLR Partners

Entering the Era of Product Management

Trends Creating a Unique Moment for Product Tech

 

Proliferation of digital products

In the “end-user era,” customers demand a seamless, digital experience characterized by quality and consistency. Remote work expanded the number of use cases to support and integrate research, design and planning processes for remote teams.

Product-led as go-to-market motion

More companies are following a paradigm shift to a product-led growth (PLG) model in order to demonstrate GTM efficiency, operating leverage and scalability.

Maturation of product function

The Product Tech category is quickly evolving to equip product teams with specialized tooling, and we expect its ecosystem to catch up to other functions.

Investor attention & funding

Product Tech funding quadrupled since 2016 with 60%+ of capital in later stage rounds. With over 75% of Product Tech companies privately held, the category is expected to see a rise in M&A activity.1

Product Tech Segments to Watch

 

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.

Product Roadmapping

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.

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References

  1. Nigel Fenwick and Caleb Ewald. “New Tech: Digital Product Management Tools And Tech, Q2 2021LLR proprietary calculations,” Forrester, 2021. Report licensed for individual use.
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.