Need to innovate? Don’t hire for industry knowledge

 

A mistake many companies make when hiring Product Managers is that they overvalue industry knowledge.

At first, it doesn’t look like a mistake. It looks logical.

You need someone who can start fast. Someone who already understands the market. Someone who knows the customers, the competitors, the regulations, the acronyms, the common traps. You don’t have time to train them. You don’t want to wait six months until they “get it”.

So you hire someone from the industry.

And often, it works.

They speak the language. They know the obvious mistakes. They bring contacts, context and hard-earned know-how. They can probably make good decisions faster than someone completely new to the space.

But there is a catch.

With industry knowledge often come industry boundaries.

People who know the industry well also know what is “not possible”. They know what failed before. They know why customers won’t buy it. They know why sales won’t sell it. They know why compliance will block it. They know why engineering will hate it. They know why the business model won’t work.

And quite often, they are right.

That is exactly the problem.

Experience protects you from stupid ideas

Let’s be fair: industry knowledge has real value.

• If you need to maintain a complex product, it helps.
• If you need to stabilise a business, it helps.
• If you need to avoid expensive mistakes, it helps.
• If you operate in a heavily regulated environment, it helps a lot.

There are many situations where you don’t want someone to rediscover every painful lesson from scratch.

Experience protects you from stupid ideas. It helps you understand the invisible constraints. It saves time. It reduces risk.

But innovation is not only about reducing risk.

Sometimes innovation requires questioning the risk model itself.

And that is where deep industry knowledge can become a disadvantage.

Industry experts often know too much

The more time people spend inside one industry, the more they internalise its assumptions.

They stop seeing them as assumptions. They start seeing them as facts.

• “This is how customers buy.”
• “This is how pricing works.”
• “This is how onboarding has to happen.”
• “This is how the sales cycle works.”
• “This is what users expect.”
• “This is how competitors do it.”
• “This is how the market works.”

Some of these statements may be true. Some were true five years ago. Some were never true, but everyone repeats them often enough that they sound like laws of physics.

This is how industries become trapped in their own logic.

Everyone copies everyone else. Everyone benchmarks against the same competitors. Everyone hires from the same talent pool. Everyone attends the same conferences. Everyone reads the same market reports.

Then they wonder why all products start looking the same.

First principles thinking needs some ignorance

First principles thinking sounds very fancy, but at its core, it is simple.

You strip away inherited assumptions and ask: what is actually true here?

• Not what the industry believes.
• Not what competitors do.
• Not what the sales deck says.
• Not what the previous roadmap assumed.
• Not what the loudest stakeholder insists is obvious.

What is actually true?

• What problem are we solving?
• Who has this problem?
• Why does it matter?
• What are they trying to achieve?
• What constraints are real, and what constraints are just habits?
• What would we build if we didn’t already know how this industry is supposed to work?

To ask those questions properly, you need some productive ignorance.

Not stupidity. Not arrogance. Not “I don’t need to learn the industry”. That would be just as bad.

But you need enough distance from the industry to notice that some of its rules are not rules at all. They are conventions. They are old compromises. They are scars from previous failures. They are business models pretending to be customer needs.

A good PM with varied experience can bring exactly that distance.

Multiplicity beats narrow expertise

If you truly need a novel solution, I’d rather look for multiplicity of experience than narrow industry expertise.

A PM who worked across different domains has seen more patterns. They can compare how marketplaces solve trust, how fintech solves risk, how gaming solves engagement, how B2B SaaS solves adoption, how consumer products reduce friction, how logistics deals with operational complexity.

They may not know your industry on day one.

But they can learn it.

What is harder to learn is the ability to move ideas across contexts.

That is where innovation often comes from. Not from asking, “What do other companies in our industry do?” but from asking, “Where else has a similar problem been solved differently?”

• A payments onboarding problem may have something to learn from gaming tutorials.
• A healthcare workflow problem may have something to learn from logistics.
• An enterprise reporting product may have something to learn from consumer search.
• A marketplace trust problem may have something to learn from insurance, identity, or community products.

Innovation often happens when a pattern from one world is applied to another.

But if you only hire people from your world, you mostly get your world repeated back to you.

So should you ignore industry knowledge?

No.

That would be a lazy conclusion.

Industry knowledge matters. But it depends on what job you need the PM to do.

If the job is to optimise, stabilise, scale or navigate a highly constrained environment, industry knowledge may be essential.

If the job is to challenge the category, rethink the product, find a new business model, or create something meaningfully different, industry knowledge should not be your main hiring filter.

In that case, look for:

• strong product judgement
• fast learning
• curiosity
• structured thinking
• comfort with ambiguity
• evidence of solving different types of problems
• ability to separate real constraints from inherited assumptions
• ability to work well with domain experts without becoming captured by them

The last point matters.

You don’t need every PM to already be an industry expert. You need them to know how to use industry experts well.

A great PM can learn from sales, support, operations, compliance, customers, data, competitors and internal veterans. But they don’t have to fully inherit their worldview.

That separation is valuable.

The hiring question companies should ask

Instead of asking:

“Do they know our industry?”

Ask:

“Can they learn our industry fast enough, while still seeing what we can no longer see?”

That is a much better question.

Because when companies say they want innovation, they often still hire for familiarity.

• They want someone different, but not too different.
• They want fresh thinking, but only from people who already agree with the industry logic.
• They want change, but with a CV that looks exactly like the past.

And then they get exactly what they hired for: competent repetition.

There is nothing wrong with that if repetition is what you need.

But if you need to innovate, don’t over-index on industry knowledge.

Hire someone who can learn your industry.

But more importantly, hire someone who has not yet learned all the reasons why change is impossible.