What is a product?
A product is actually really hard to define. Most product managers implicitly know what a product is when they see it. But it is very hard to articulate concisely, and even harder to educate or evangelise this across teams of ‘non techy people’.
I think it is so hard mostly because of the internet, creating a confusing array of definitions, opinions and points of view. Coupled with some pretty shocking anti patterns and the intangibility of the thing, especially in a digital age. Then it is no wonder it has taken me 5 years to write down the very definition of my job role.
Whilst the definition of a product, below, covers all products. I have only worked with technology enabled ones in the past. I will call out specific references to technology enabled examples.
A product is thing created and made available to a market, providing significant value (by solving problems) for a specific group of customers that sustainably maintains a viable business model (monetisation).
This can be anything, from a book [creates entertainment, or shares knowledge], in return for $$. To facebook, [Creates advertising opportunities via user engagement and interest graphs in return for $$]. Granted, 2 very different business and product models, but still products.
NB. Services; Software as a Service (SaaS), agencies and coaching services. These I would still consider products. As you create a coaching plan, to provide valuable education in return for a subscription model
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.
Product = customers x technology x business
It hasn’t escaped me that this diagram looks like every illuminati meme on the internet, maybe because the definition has been so elusive for so many years! Coincidence?
Also if anyone reading can design this better, Iwill happily pay a small fee, and post design credit on this blog. My design skills leave much to be desired!
I hope this is self explanatory, but product is really a combination of things, and if it doesnt meet all 3, then it is not a product. For services, and non tech enabled products technology could be just as easily replaced with ‘Time & Materials’.
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.
- 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
- 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
- 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)
Going back to the definition, if we were simply to count the number of products Netflix has it is one! It has by and large the same customer needs, satisfied with the same core product, monetised in the same way (just to differing amounts).
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:
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.
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.
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
Features, components and channels (collectively known functionality) are not usually sufficient by to be a product. But they are absolutely necessary. These things solve the feasibility risk to a product. And there are many other teams, user research, data analytics, revenue and finance, marketing teams that all solve different and critically important product risks. It is therefore completely incorrect to suggest that this isn’t critically important work which is somehow lessened because they don’t have the title of being a ‘product’. Quite the opposite they are critical and need teams of people to maintain and progress them! But calling them a product, suggests the team needs a set of cross-functional skills that wouldn't be required.
Let me know what you think, or if I have missed something, in the comments below.