Do you run a spreadsheet loaded up with market data and demographics evaluating the potential revenue impact for all of the features you're thinking of including in the next release?
And so on and so forth. Product management is a full-time job on a substantial product. It may be that in small start-ups people wear many hats and you don't need it as a separate function. But if your team ever gets to the point that you can justify a full-time development manager, your team probably needs someone else with nearly full-time product management responsibility.
In addition to that, there are sometimes some benefits to separating product management from development management. Sometimes. Being a little divorced from the product's inner workings can provide a certain useful perspective. Hopefully, the product manager isn't wedded to the feature that a developer just spent three weeks building and can jettison it to ship on time :-)