I am currently trying to find out which individuals are apart of one or more the 5 different product groups. I figured I could use member is not in X and member is in Y to find who is associated with what product line. Is the only solution to create 5 smart lists and follow the member is in and member is not in?
It depends, you might need to create more than 5 smart lists if you're looking to be more granular, especially if you're trying to meet the "one or more" requirement. Are you trying to pull metrics on number of unique product group members, or are you trying to identify the overlap in people across the different product groups?
then, yes, you would need a matrix of every scenario with several smart lists.
Is your filter multi select? Is it string? what is this?