tl;dr:

I’ve heard lots of people wrestle with defining what a product is. Those discussions always leave me confused. Because it’s a lot simpler than anyone seems to describe it. The short answer to “what is a product?” Is EVERYTHING. Everything is a product as long as you look at it through a product lens.

This article describes how to do that. If you want the punchline, you can skip to the end.

If you haven’t read prior articles describing the essentials of product thinking: output, outcome, and impact, you should first read this article or watch this short video.

Let’s get started

Product thinking and products

I talk about product thinking a lot.

But, I’m pretty sure we don’t all have the same idea in our head when we say the word “product.” So, here’s what I think a product is.

Normally if you were to think of a product, you might think of something in a box, something you would go and buy. You might show up at a store, turn the box over, look at it, and you will see that it has some features and benefits, and then decide to buy it. You could do this with a tube of toothpaste, a lightbulb, or a refrigerator. Although it’s hard to turn over the box on a refrigerator.

But, there’s lots of other kinds of products, Services you sign up for like Netflix or Spotify. They’ve got features and benefits also. But, they’re not in a box on a shelf.

Then there are other types of services like a bank account, a credit card, or an insurance policy.

And services like your power, your water, or your mobile phone service. These seem more like necessities or utilities. But, all these kinds of services have features and benefits too.

Finally, software these days seems more like a service. I pay for Microsoft Office 365 monthly like a service. It gets turned on. And, if I don’t pay my bill, it’ll get shut off. And unlike software decades ago that came in a box, we don’t have to wait for the next upgrade to get new features. Twenty-first software changes and improves continuously. We’ve come to expect that out of our mobile apps and the software we use for our business.

All these things are products. And all of them have features and benefits. And FOR the companies that make them, the hard part is deciding what features and benefits go into them. And then creating, launching, operating, and, for software products especially, continuously improving those products.

Now, here’s the trick. What’s most important about products isn’t what’s inside: those features and benefits. It’s what’s outside. It’s what’s outside the product that determines what’s inside. And, if you’re clear about what’s outside, it makes it a lot easier to decide what’s inside.

Let me explain what I’m thinking.

Customers and value propositions

The first most important thing to think about outside is YOU, the customer. Or, the other word for customer is “chooser.” If you are the chooser you are the one that has to make the decision about signing up for that service or buying that physical product. You’re the one that’s going to look at it and its features and benefits and decide whether you want to buy it. You’ll do that by thinking about your needs and how the product meets them. Sometimes we talk about that as a value proposition. The value that you hope to get when you buy or subscribe to that product.

Now, after a customer makes a buying decision, takes it off the shelf and pays for it, or signs up for it… they’ll unbox it and try to figure out how they’ll get that value from it. That’s when they become a user.

Users and use

When you’re the user you will have to figure out how to set it up, how to use it for the first time, and how to keep using it routinely. If you don’t end up using it routinely, you won’t get that value proposition – the value you imagined back when you were a chooser. It’s the using that gets you the value.

When I think of a consumer product, I imagine one where the customer, or chooser, is also the user. I buy and use my soap, my socks, and my subscription to Spofify.

When users aren’t choosers

A business to business product is different. The users and choosers are usually different people. Someone in your organization might be responsible for signing up for company-wide subscriptions for Microsoft Office, Salesforce, or Atlassian’s JIRA. When they do that they’re thinking about the value proposition your company gets and not necessarily any individual user.

If you work for your organization and use these sorts of tools you use, you KNOW you’re not the chooser. If you decide you hate the product and refuse to use it, there’s a good chance that this could be a “career limiting move.”

Like all products, to get the value out of them they’ll need to be used. People in lots of different job roles will need to actually use Microsoft Office, Salesforce, or JIRA for your organization to get the value out of it.

Alternatives

There are other things outside your product you need to be aware of also. The first things I think about are alternatives.

Alternatives are all the other ways users and choosers can meet their needs. Obviously, those could be other products. But they could also be workaround solutions, manual processes, things like that. Or, they could just live with their problem. So when a customer is trying to make a choosing decision, they’re going to compare the value they think they’re going to get with these alternatives. If they don’t see your product as a better alternative, they won’t choose it. They also may not choose to change what they’re doing today if the cost of making that change looks high. Look to BJ Fogg for more explanation on that.

Vision and strategy

Some other things outside the product to think about come from inside your organization. Your business has the need to sell more of its products and services to sustain itself. Ideally leadership has a vision for where they see your organization years from now, and a step by step strategy for how it might get there. Ideally your organization’s vision and strategy is anchored in the value that they hope customers and users will get and not just the money they intend to earn. Because, your company can’t make money from a product that customers don’t choose and users won’t use.

Measure outcomes

Understanding this changes what we measure too. Of course your organization will measure how much money it earns and spends. But, once they understand that it’s customers and users and the value they get that drives that, they’ll start measuring how often people use their product, how long it takes them to learn it, and if they’re really getting the value they’d hoped for. Again: your company won’t succeed unless those customers and users succeed.

Your company won’t succeed unless those customers and users succeed.

When your users keep using the product, and customers get the value they’d hoped for, that’s what drives increases in revenue, decreases in cost, and improvements in reputation and market share. That’s the Business Impact your organization needs to sustain itself.

Understand products outside-in

All those things I just talked about outside the product drive what’s inside the product. And I can usually learn a lot more about a product by asking about its customers, users, and what their alternatives are. I’ll ask about the organization’s vision and strategy. And, I’ll learn more from those questions than asking “what does your product do?” This is outside-in thinking.

Outside-in thinking: Look to the customers and users outside the product to understand what should be inside the product.

Anything can be evaluated as a product

Now, here’s what’s interesting: anything you make or do can be considered a product if you use a bit of that outside-in thinking. Anything.

We can treat anything we make or do as a product simply by looking at it’s customers and users, value proposition, and use.

Let me give a couple examples.

Internal job roles

Let’s say you’re a lawyer and you work in a legal department inside your company reviewing legal documents and warning your organization about risk. You might be writing legal documents that your organization needs like contracts or license agreements. Think about the people who decide they need your services. They’re your customers. Think about how the work you do will ultimately be used. The people that use it are your users. If you’re a product thinker you’ll evaluate success based on whether you have a service that is better than your customer’s alternatives, and whether what you do really gets used, how easily, and how often.

I know the lawyer-you has lots of work to get done. And of course you need to finish it in a reasonable amount of time. But the product thinking lawyer-you will evaluate success not by whether you got everything done, but by whether what you did got used, and if your organization benefited from that use. If it didn’t get used, you’ll seriously question why you did it at all.

Internal products

Many of you likely work inside an organization building things that will get used by others in your organization. Let’s say you work for a bank and build tools that people in the call center of your bank use to do their jobs. You know who your users are – those people in call centers. But, they’re likely not your customers since it’s not their choice to use the product. It’s usually someone in call center operations managing them that tells them they must. That’s your customer. If you’ve got your product hat on you’ll measure success by whether call center employees use what your building and are more efficient and effective as a result. You’ll be a good product creator if you can identify ways to make call center employees more productive thus saving your business money and making it better for the banking customers that call the call center.

I know if you’re the team building call center apps that there’s a long list of asks from your business. They want more of their list completed faster. But, what you don’t do is evaluate success based on whether we deliver more things faster. Because we all know the best products aren’t those with the most features. They’re the products we can really use and get value from. In fact, since you’ve got your product head on you won’t focus on delivering more, you’ll focus on trying to deliver less.

You’ll try to make the product smaller and at the same time deliver more value. You’ll focus on making the jobs of call center employees more efficient and effective. You’ll likely come up with ideas your business hasn’t – because you know the technology better. And, you also deeply understand the job call center employees do. Since you focus on successful outcomes, that all leads to bigger business impact. You’re a product thinker so you look to minimize the amount of work done while maximizing the value we get from it.

Minimize output, maximize outcome and impact.

Watch out for the build trap

Melissa Perri coined the term in her book Escaping the Build Trap. The build trap can catch you two ways:

You can assume your product and feature ideas are always great, so you invest big money in building them without understanding your customers needs and alternatives. And then fail to pay attention to outcomes after release and just hope for profit. More about this here.
If you’re the team building new products or features, you can assume someone else has chosen the right thing to build and it’s your job to build what’s required. Instead of seeing good outcomes as the goal, you’ll start to see delivering more faster as the goal. More about that here.

I’ll often see those two failure modes in the same organization. Leaders are often guilty of the first failure mode, and teams are guilty of the second. So, watch out for that.

Put your product hat on

Try looking at any area of your organization with your product hat on.

Who are the customers or choosers?
Who uses what gets created?
Do they really use it? How efficient and effective are they?
Do you have some metrics you can track to measure their use?
How does their use ultimately deliver value to someone? Do you have metrics for that?
Do you have a vision for how you see those customers and users working in the future?
Do you have a strategy for getting them there step by step?

Now you’re a product thinker.

Next steps?

I’ve got a couple variations of product canvases I’ll ask people to use to define their products outside-in. You could give one a try for your product.

Everything is a product