WHAT IS A DIGITAL PRODUCT?

 

As product managers and owners, the products we deal with are fundamental to our work: they shape our daily activities and determine our responsibilities. We develop a product strategy and roadmap, manage the product portfolio and use a minimum of viable products and product increments. But what is a product? While this may seem like a trivial question, I have met with several organizations that understand what a digital product is. This can lead to confusion, unclear roles and responsibilities, and poor product management practices. This post explains what a product really is and how it differs from features, components, bundles and user experience.

Product

Product What is a product? It can be tempting to say something that can be marketed or sold. But when it comes to digital products, this definition has only limited applicability. Take the search function on your company's website. Is it a product? Or is the entire website the product? And how would other people, including people in development, marketing and sales, answer this question? I see a product as something that creates specific value for a group of people, customers and users, and for the organization that develops and delivers it, as shown in the image below. The first is achieved by solving a problem - Google or Bing search that takes up the challenge of finding information on the Internet - or by offering an advantage - Facebook that allows people to stay in touch with their family and friends. The creation of value for the company is achieved by directly generating revenue, as Microsoft Office and Adobe Illustrator do, by helping to sell another product or service, as in the case of iTunes and Google Chrome, or by increasing productivity and reducing costs, as internally developed computer applications do. Finding a problem worth solving - or a benefit that people wouldn't want to miss once they've experienced it - and discovering a viable business model are two essential prerequisites for successfully delivering a product.
Products go through different stages of their life cycle: they are created and launched; they develop, grow, mature and eventually die. Some digital products have been around for many years, even decades. One of my clients, a company that specializes in digital engineering products, has a product with a code that is 30 years old, for example. That's what distinguishes products from projects.

Product vs. project

A project provides a product version - think Windows 10 or iOS 9.3 - and it is a temporary undertaking: the project is completed when the new version is available. But products have a different lifecycle and usually exist for longer. The ancestor of Windows 10, Windows NT, was launched in 1993, and iOS was introduced with the first iPhone in 2007, for example. Similarly, products have different success criteria for projects. A project is successful if the new version is deployed on time and within budget, and if it reaches the agreed scope. A product, on the other hand, is successful if it meets its business objectives. Revenue-generating products generally become profitable when they are adapted to the market and begin to develop. This can take months, and in some cases years, after completion of the initial development project. The work of a product manager (or owner) is therefore different from that of a project manager: the people working on the product are there for the long term - assuming the product thrives and develops.

Characteristics and components

 If a good does not create value for its customers and users and for the company, then I do not consider it as a product. Take an e-commerce site like Amazon.com or JohnLewis.com. Both of these sites offer search and payment functions so that customers can find and purchase goods. While these are important steps in the user's journey and may require a complex technical solution using third-party systems, I would argue that they are not products but functionality: they do not provide any distinct value to the customer. I don't go to Amazon or John Lewis to search or buy. I want to buy the right product at the right price with a minimum of hassle. So a feature is a capability of the product that people can interact with, a part of the product that users can use. But it does not meet a need or solve a problem by itself. On the contrary, several features must interact to create the desired value for customers and users. Similarly, a user interface layer or a (micro) service that talks to a payment gateway are not products but components, or more precisely basic elements of the architecture - even if they are developed by a specialized team. These two basic elements may offer an advantage to a group of people - the developers of other components and services - but they do not create any measurable value for the company.

Web vs. mobile

Digital products are often supplied in different forms. Google Search and Facebook are both available as websites and mobile applications, for example, and mobile applications are available on all major mobile operating systems, including Android, iOS and Windows Phone. Does this mean that the mobile version is a product in its own right? Also, are Android, iOS and Windows Phone applications separate products? My answer to both of these questions is no. Here's why: Assets do not differ in the value they create for their customers and users and for the company that provides them. They may consist of separate code bases developed by different teams and the mobile version may offer less functionality, as in the case of Facebook. But the fundamental value proposition is the same - just as a book is offered in print and electronic format, but the content remains the same. So I see mobile versions of a product as different product variants, variations of the same product.

Unbundling of features and product bundles

It is interesting to note that features and components can become products in their own right. Take the Facebook Messenger application for example. The messaging function was part of the main Facebook application until its unbundling in April 2014. This streamlined Facebook's main application and evolved the Messenger application by adding new features, such as sending money to friends, direct communication with companies and the use of chatbots. If we take a look at Facebook.com, we can see that the messaging functionality is still offered, in addition to the information flow and other features. So I see the Facebook site as a collection of products, a collection of related products, including news feed, messaging and gaming applications. While some products become bundled offerings, as Facebook has undoubtedly done, others are intentionally bundled in order to offer added value to customers and users and/or to increase sales. Microsoft, for example, decided in the late 1980s to bundle several applications, including Word, Excel and PowerPoint, into Microsoft Office. The following image shows the relationship between product bundling, product, function and component. A product bundle contains several products and a product has one or more features and components.

Unbundling Features and Product Bundles
It is interesting to note that features and components can become products in their own right. Take the Facebook Messenger application for example. The messaging function was part of the main Facebook application until its unbundling in April 2014. This streamlined Facebook's main application and evolved the Messenger application by adding new features, such as sending money to friends, direct communication with companies and the use of chatbots. If we take a look at Facebook.com, we can see that the messaging functionality is still offered, in addition to the information flow and other features. So I see the Facebook site as a collection of products, a collection of related products, including news feed, messaging and gaming applications. While some products become bundled offerings, as Facebook has undoubtedly done, others are intentionally bundled in order to offer added value to customers and users and/or to increase sales. Microsoft, for example, decided in the late 1980s to bundle several applications, including Word, Excel and PowerPoint, into Microsoft Office. The following image shows the relationship between product bundling, product, function and component. A product bundle contains several products and a product has one or more features and components.

User Experience

The user experience, finally, occurs when people interact with a product. So it's not about the product. While the appearance and functionality of the product may trigger a specific experience - think of slow loading websites, complex menus or cryptic error messages that can test our patience or leave us confused - it's important to recognize that people's experience is also determined by their mindset. If I'm stressed, upset or angry, I'm much more upset when I'm confronted with a slow loading site, for example, than when I'm in my normal state of mind. We have to do everything we can to provide a pleasant user experience, but we can't make people experience the product in a specific way. The image below illustrates the difference between the user experience and the product.