The scariest thing that can happen is to find yourself dead in the water - unable to innovate or unable to develop your product. That means you've already achieved whatever upward potential you had and there's no direction to go but down.
No matter what other issue you may face, it's possible to dig yourself out of it with smart product development. Don't have data? Go acquire it. Have a bug? Go fix it. Missing network effects? Go social. But an inability to develop means you're managing a "dead product walking". It's just a matter of time before you lose.
This can happen for a number of reasons:
- You're drowning in technical debt.
- Your release process is hopelessly broken.
- The development team is burnt out or or frustrated or laid off.
- Neither the company values nor the development process allow for taking risks.
Being a local in Washington, DC, I can't help but draw the analogy to politics. The USA faces many issues, but is still clearly on top of the world economically, militarily, and in at least some ways socially. That's great, but it's merely a matter of time before it falls behind. The government is stalled because of systemic issues that prevent it from moving forward at the same pace as the rest of the world. Partisan politics guiding all decisions, complex tax law with thousands of loopholes, filibusters, etc. all contribute to a government that cannot adapt. There are far more ways of stopping something from happening than there are to make new things happen.
Some incredible new politician could come along tomorrow and be perfect in every way. But if the system remains as is, it would nullfiy his/her natural abilities and prevent any substantial influence whatsoever.
This effect can take place in the corporate world, too, and in fact, it frequently does. Multiple business units all with veto power over any new product enhancement will slow innovation to a crawl. A values system oriented toward preventing mistakes will establish a culture of fear. Relentless focus on poorly defined performance metrics that can easily be "gamed" will misguide everyone.
If you are a product manager working in an environment like this, the first thing you need to do is fix it. You could come up with 100 brilliant new product ideas, but they're all doomed if the approval process is overly cumbersome or the development is inept or the architecture is fundamentally broken.
That's the scariest scenario for a product manager.