Product Management Marty Cagan

Defining Product

In the consumer packaged goods industry, most people have a pretty clear image in mind when you refer to the “product” that they manage or work on.   You can hold the bar of soap or the razor in your hand.  However, in the Internet world, when we refer to “product” it is much less clear.  First of all, most of the time we’re not even referring to a physical item but rather to software.  Second, most of the time the software isn’t even installed on your computer but rather it’s running on a some remote server, or even more abstract, it’s running “in the cloud.”

Add to this the fact that for most Internet businesses, the site itself is so big that we break it up artificially into many smaller “products.” Big Internet companies break their site up into many (typically dozens) of smaller “products” even though this is primarily a construct to suit our internal organizational needs and not something visible to the user.

I have written earlier about the key factors we use in deciding how to break up our larger sites into more manageable teams.  But today I wanted to talk about what we really mean when we refer to “product.”  This discussion applies whether the granularity is the entire site or just one area.

Honestly I am not sure why I haven’t written about this specifically before, as I think it’s a very important topic.  I think that for most teams they do what they need to do naturally.  However, for some organizations, the way they define product and structure their teams makes it very difficult if not impossible to create good products.  After meeting a few of these organizations, I realized that maybe it would be helpful to get this out on the table.

Here is how I typically define “product” for Internet companies:

Product = Holistic User Experience = Functionality + Design + Monetization + Content

– Functionality is referring to product’s capabilities.

– Design is referring to the resulting blend of interaction design, the visual design and, for physical devices, the industrial design.

– Monetization refers to the revenue strategy; it might be some of the various forms of advertising, subscriptions, or transactions.

– Content may be original, user generated, or aggregated.

This is obviously not rocket science, but to me there are two important points:

1. you can’t separate form and function; you must look at the product holistically.

2. the person responsible for this area of the site must balance the functionality, design and content with the monetization strategy.

For example:

– If your designers are not working side by side with your product managers and engineers, you will limit what each of you can do.

– If you have tried to slice up your site into people working on good stuff for your users, and then other people working on advertising, then it’s very hard to optimize for the holistic experience.  Instead, you end up working against each other.

– If you have some people working on the functionality, and have little spots carved out for content, you may not be taking advantage of the power of the combination.


– If you work at a true e-commerce company, then the definition of “product” is broadened to include the fulfillment, packaging, customer service and return policies.  Also, to avoid confusion, we usually refer to the items that are sold on the site as “merchandise” to avoid the ambiguity with “product.”

– If you work at a media company, then the editorial role is typically responsible for the content component, but it still contributes into the holistic definition of product.

– This all works best when the product team is a dedicated team, and they are measured via a product scorecard.

If you’re a product manager or designer or developer working on an Internet service, try to think about the impact you can have if you look holistically at the potential combination of functionality, design, monetization and content.