Deciphering PM Offers in the Cannabis Industry

Welcome to our Product Newsletter, a biweekly email highlighting top discussions, and learning resources for product managers.

What We Will Cover In This Edition:-

Top Discussions: 

1) Seeking advice for a new PM role in the cannabis industry

2) Comparing 2 PM offers. Considering taking a position that pays less

3) How much did you make in Series A, B startup acquisition?

Top Learning Resources:

1. Sequencing business models: the types of marketplace

2. The A16z marketplace 100: 2021

3. How to kickstart and scale a marketplace business – phase 1: crack the chicken-and-egg problem

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Top Discussions

Question 1) Seeking advice for a new PM role in the cannabis industry

Hello everyone! I’ll be starting a new position as a PM in the cannabis industry soon and could use some advice!

I landed a PM position at a startup in the cannabis industry but have never been a PM before. I would really appreciate some advice!

I originally got my bachelor’s degree in business management with the dream of becoming a product manager, unfortunately, I graduated at the beginning of a global pandemic! So with nowhere hiring, I attended a software Bootcamp and am now a full-stack developer too!

Okay, so long story short I have an AWESOME opportunity to be a PM for a startup in the cannabis industry. I’m super excited and am looking for anything to read about new PMs.

Also, while I have a lot of experience managing projects from both college and my coding Bootcamp, I’ve never actually held a PM position so I’m not sure what to expect as far as programs.

Does anyone have tips or advice for someone JUST starting out and for a new PM beginning at a start-up in the cannabis field?

Thank you so much for any advice you may have!!!

– Pauline Francis

Discussion

A] “Product Manager” can mean different things, from doing actual product management to being a Product Owner (scrum) or Project Manager or a mix and combination of those. Your first task will be to figure out what your job is.

Here is my take on this:

• Take copious notes on absolutely everything, don’t make people repeat themselves. Make yourself useful by taking and sending meeting minutes after each meeting.
• Manage your own to-do list. Have your boss prioritize it weekly and have them check for anything missing.
• Each day, take your prioritized list from above and start from the most important/urgent item. If you’re stuck on how to approach something, try to break it down into as many bits as possible. If you don’t know how to see the next point.
• ASK QUESTIONS. But before asking a question, google the shit out of it. NEVER ASK A QUESTION GOOGLE CAN ANSWER. It is a cardinal sin in my book. Don’t be afraid to ask too many questions. People rarely get fired for asking too many questions, but the opposite happens a lot.
• Ask people for feedback on how you’re doing and what you can improve.

Educate yourself. Grab a couple of PM books and read them front to back. “Cracking the PM career” seems like a decent start. Read it cover to cover 2-3 times. Makes notes and flashcards. Quiz yourself.

Grab a book on scrum/agile. “The professional product owner” by Don McGreal is good.

– Dhiraj Mehta

B] I support everything in the post above except this.

“Never ask a question google can answer”

Even though Google can answer most of the questions with enough searching – Human interactions matter much more than the ability to google.

People will forgive ignorance, mistakes, and lack of skill if they enjoy working with you if you can connect with them on a human level. We judge those we like based on their intentions, we judge others based on their results. Try to be liked.

You asking questions shows you are not afraid of your ignorance, and you are taking steps to address it. It shows a level of integrity and professionalism. It also shows that you are a team player and that you value others’ knowledge/opinions.

– Marco Silva

C] You must be mistaken. I never said human interactions don’t matter. They matter to a HUGE degree. But someone skilled at human interaction will avoid wasting people’s time (and losing respect) by asking painfully obvious questions that can literally be answered by a 15-second Google search.

The point I was making is that time and patience of a manager, colleagues, and stakeholder is limited. Why waste people’s time and energy on obvious things that are just one Google query away? If you’re not sure, you can still ask the question, but at least you have some kind of baseline answer to wrap things around.

I see this problem way too often, especially in junior staff. Maybe these things are obvious to you, but in my experience, many people need to be told.

Imagine you have half an hour a week of 1:1 time with the head of product. Don’t waste it asking:

• “What does ‘KPI’ mean?”
• “what’s SCRUM?”
• “I never did a marketing plan before. what’s a marketing plan?”
• “How do I set up a meeting in Outlook, I’ve never used it before”

Instead, ask:

• “I’ve never put a marketing plan together, but based on my research, here are the different components that I need to come up with. Does that make sense at all?”
• “Here are some ideas for the marketing plan we talked about. Am I on the right track at all?”
• “Here’s my first draft of the next few milestones for the product, I’d be interested to hear your feedback”
• “I am trying to wrap my head around the SCRUM methodology. What’s the difference between a product owner and a project manager”?

Of course, it’s not forbidden to ask basic questions if it’s part of a natural flow of conversation. It’s a general rule, not Nazi Germany.

– Dhiraj Mehta

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Question 2) Comparing 2 PM offers. Considering taking a position that pays less

Here’s the situation – I’m here with 2.5 years of experience in tech consulting. I was lucky enough to get 2 awesome PM job offers, and I’m considering taking the one with less TC (by a lot). Note that I live in the bay area.

Job 1:

• PM at a large bank for new mobile app
• TC: $240k (203k base and 20% target bonus)
• I would be working 40 hours a week and have a WLB, however, I would be going into work in business casual clothes and my co-workers are probably older
• Concerned I won’t learn that much and this will look poorly on a resume in the future. Also, I want to have friends at work so I’m concerned that I won’t make many friends from a bank

Job 2:

• PM at an apparel company that’s going to IPO before the end of the year
• TC: ~$180k ($140k base and $27k stock at evaluation from last round of funding, but probably will be worth $45k at the price they are going to IPO at)
• I would probably be working hard, but nothing too crazy.
• This is a ‘fun’ company and thinks I would really get along with everyone.
• I think I will learn a lot, and this company would be a great resume builder.

People always say go where you will learn, and I think I will learn more at Job 2, however that’s a BIG difference in comp. After taxes that’s about $40k, if you multiply that by 4 years that’s $160k which is a down payment on an $800k house! I’m concerned if I take Job 2 I will never get to the comp I can get in Job 1 again.

I would like to hear this community’s thoughts or comments on my situation. I need to get a decision soon so I’m in a little of a time crunch!

PS: I already negotiated salary with Job 2 and the amount I wrote above is the highest they will go

– Dave Kim

Discussion

A] I like the sounds of job 1. You can do stretch assignments and whatnot there to build experience, or work at a level above’s work scope. Or you can chill @ 40 hrs a week when you don’t feel like it and have actual WLB and only step up more for the career-enriching experiences.

Also, starting high tends to give you a higher salary point to keep negotiating higher and higher off. Lifetime earning potential is likely to be more and more stable.

Ultimately up to you though

– Risa Butler

B] I’m not sure that an apparel company gives you that much edge over a bank, particularly if you’re building a new mobile app as opposed to some old crust in maintenance.

If you’re concerned about the fit, have another chat with the hiring manager or the recruiter and let them know your concern and see what they say. It’s a lot of money to pass up.

– Marco Silva

C] Based on your post and subsequent comments, it’s clear you want job 2. Folks here have given you good reasons to take job 1 but their perspectives don’t seem to be resonating with you.

Take a moment and be honest with yourself – are you actually just looking for validation and taking job 2?

All that said, It really comes down to what skills you’re looking to build. A pre-IPO company is more likely to throw a lot at you at once. By the end of your time there, you’ll have scratched the surface of everything and you’ll have a sense of what works and (just as important) what doesn’t. Banking will have more mature processes in place and have the funding to keep people/teams in their lane.

You’ll have honed your skills and should learn industry best practices that you can apply elsewhere.

– Donovan O’Kang

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Question 3) How much did you make in series A, B startup acquisition?

I’m getting a lot of job calls lately for series A, and B startups (30-100 employees). These are AI/ML-based enterprise products – payments, monitoring/observability, s/w for sales teams etc. Was curious to know how much money folks made off stock options when you joined series A or B startup, and which was acquired after another 1-2 rounds of funding.

– Cathryn Cui

Discussion

A] In an acquisition, you’re only worth what someone will pay. I’ve seen acquisitions go for book value, which means your equity isn’t worth much more than what you paid for it, and I’ve seen them go for a 25x multiple of their Series-A value depending on the sector, IP, and profitability of the company.

It also is highly dependent on when you joined and at what level. I would be very wary if the companies calling you are pitching you on the potential payout through an acquisition. Yes, there are those $B unicorns, but they are very few and far between. On average your comp + equity payout at a start-up will break even with what you’d make at a decently paying FAANG. Also, M&A deals can be very fickle and fall through for any reason.

Noting there’s noise in the data, the US BLS reports that 50% of businesses fail after five years, which is about the time you’d get a company off the ground and a couple of rounds of funding done on average.

If you’re going to jump into the start-up life, you really got to believe in the mission and product of the company as well as the team they’ve put together. Think of yourself as an investor, but instead of cutting a multi-million-dollar check, you’re investing your time and effort into the company as an employee.

– Marco Silva

B] Some pretty good advice here but I’ll add my two cents. I work in a finance organization so I not only see full cap tables/salary info I also talk shop about this stuff quite frequently.

In general, when I’m asked these questions I always caveat with everyone’s experience is different.

The nature of startups is that they’re wildly different so there isn’t really a template.

• the biggest thing I’m seeing is a sort of lack of understanding as it relates to acquisition. No one can answer that because no one knows what the acquiring price will be or how much dilution has occurred between your joining and the M&A transaction. To give a simple example, you join post A and get .2% fully diluted. They raise A, B and C, each diluting the company by 20%. Again, keeping it simple means you’ve been diluted twice, each time by 20%. You now own approximately .139% of the company, fully diluted. If they’re sold that percentage of the price is approximately how much you’ll receive. Other folks have made great points that it’s not typically all cash, you may be purchasing newco stock as a swap or something like that.
• literally, no one knows if the acquiring price will be 50M, 500M, or 5b, so you should be talking in percentages here. If you’re really looking for equity I really liked the comment about truly believing in the org. I’ve heard it phrased as finding your personal PMF. I’m a bit towards the other comment in that I undervalue my equity quite a bit. Doesn’t enter my calculus as much, just a nice to have.
• your stated range (30-100 employees, series A-B) is actually a huge range. If you’re on the smaller size, not huge raises, and you’re one of the first (read: first two, maybe three) product folks you may be able to get .5% initially. That’s on the higher end though, the only reason I’m even giving that is because of how frothy the market is. I’ve had to rubber stamp offers for tier 2/3 folks with outrageous comp packages in the last six months.
• at the higher end of your range, I’d wager you’ll get a better salary and maybe .1-.2% of the company. Always opt for refreshers if you perform though.
• The only thing I’ll push back a smidgeon that’s in the comments is that 5% is a crazily high number for literally any role at the stage you’re talking about. Like smoking gun poaching a rockstar CTO equity level there. The last three C-suite offers I’ve been a part of were 15-20 year veterans with crazy resumes, CTO, CPO, and CMO. No one got more than 3.5%. Typical “Head of”, and “VP” folks at these stages are looking at .5-1.5%, maybe 2%.

Sorry, I can’t be more specific without knowing more. The fact that it sounds like you’re looking at a TPM role with some managerial responsibilities will certainly help your case. The last two technical roles I hired for (TPM, 7 YOE, ML Eng. Manager, 9 YOE, in your stated employee range, got around .2% or less IIRC)

I know I’m not a PM or anything but I hope that helped a bit, FWIW I joined the sub like a year ago because I enjoy working with you folks a ton. Super enlightening group of people.

– Richard Soneva

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Top Learning Resources

Sequencing business models: the types of marketplace

This first list of aphorisms is more general; I’ll share observations on particular themes too. I also try and be explicit on the usage of Product Management (a discipline) and product generally (the stuff we create).

The A16z marketplace 100: 2021

What I’ve learned is that there is a profound difference between how the very best product companies create technology products and the rest. And I don’t mean minor differences. Everything from how the leaders behave, to the level of empowerment of teams, to how the organization thinks about funding, staffing and producing products, down to how product, design and engineering collaborate to discover effective solutions for their customers.

How to kickstart and scale a marketplace business – phase 1: crack the chicken-and-egg problem

When considering such a career move, Cagan and Jones’s categories can offer some guidance for sniffing out strong product companies before you join. Here are just a few examples of questions you can ask during a job search.

View learning resources

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