What is a product?

Components of a product

Almost all modern software products have 3 component parts as defined by SVPG and I agree, although this is neither wholistic enough, or specific enough. You can tell this by searching google and it will spit out 20 different variations on the ‘formula for a winning product’. Attached is a reference diagram to cover most definitions with the SVPG definition at it’s core.

A diagram of the things needed to build a product. A triangle, each point representing customers, technology and business. Each side depicting an intersection of 2 points; design, functionality, and monetisation. Finally the area of the triangle depecting 4 risks, Value, feasibility, viability and usability.
The product triangle — depicting things needed to build a product, and the risks involved.

Levels of product

Now we know what fundamentally makes up a product, it is worth putting this to practice, either with a company you know, or a product you work on. I’m going to use Netflix. Adam Alter uses ‘levels of product’ to make this easier.

  1. Core Product- This is the value part of the equation. What do customers get from your product? For Netflix this could be; to be entertained or to relax & switch off
  2. Actual product- This is the thing that is actually made (the creation part). Again taking Netflix; aggregated, convenient watching experience for a catalogue of TV
  3. Augmented product- This is usually the differentiating services around the the acutal product, brand, after sales care, positioning etc. Again take Netflix they have different subscriptions neither the core, nor actual product change; Basic (1 screen 720p), Standard (2 screens 1080p) and Premium (4 screens, 4K HDR)

What is not a product? — Software edition

Lots of ‘things’ are often conflated with the definition of a product, here is a list of the most common sources of confusing, and explicitly not what I mean by product:

Features

For example the Amazon search box.

  • This doesn’t create significant customer value. People don’t buy amazon prime because of easy search functionality. They get that for free on google! 📦
  • Yes this is a necessary subset of the product, but it is not sufficient.

Components

For example a micro service or Backend API (e.g showing the payment screen on booking.com )

  • Again, not sufficient value. But in this case, more about availability. You don’t make the API endpoints available to booking.com customers, and your customers don’t care about payment components. They care about holidays! 🏝
  • But, again it isn’t that simple. This might be an example of a product if the component was built by Braintree or stripe. Because customers will then pay for this service.

Channels

An application or a website, I would also argue generally are not products. This is because, usually, the app and the web create the same value for the same user. You don’t do something different on the john lewis app vs the john lewis website. You still by home merchandise. There are a few notable exceptions though.

  • When the channels serve significantly different users and / or their problems. E.G facebook web vs FacebookLite App is another (serves users in developing countries with poor connectivity)
  • When the business viability (monetisation strategy) is significantly different. E.G web = advertising and the app= subscription

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Sam Buddington

Sam Buddington

A new product mentor, figuring the best way to learn new stuff, and teach it in less time than I took to learn it.