What is a Product?
A solution to a common problem that can be sold to many customers.
According to Merriam-Webster, a product is “something (such as a service) that is marketed or sold as a commodity.” And the Oxford Dictionary describes it as “an article or substance that is manufactured or refined for sale.”
My definition of a product is similar— a product is a solution to a common problem that can be taken to market and sold to many customers. At its core, it is a generalized solution to a common problem that can be produced at scale; and because it is produced at scale, a reasonable solution may be provided to a market that might not otherwise seek a custom solution.
The Product Archetype
It is helpful to consider the other business models to clarify what a product is and is not. In the Business Model Archetypes, there are 3 primitive types – product, service and trade. So what is a product that differentiates it from these two types?
In its purest sense, a product is something that is created and then purchased by a customer—and that product directly conveys value to the customer. Compare this to a Service, where people do bespoke work in return for a fee, or Trade where the primary value aggregating good and profit comes from arbitraging between what you can buy it for and what you can sell it for. So relative to thes types, a product is something you build once, sell it at scale, and thus provide a “good enough” solution for a broad audience, at a good price.
There are also hybrid types that come from combining these 3 primitives. The two hybrids that overlap with Product are a Subscription (Product + Service) and a Marketplace (Product + Trade). Rather selling your solution for a one-time fee, it coule also be one of these hybrid types.
Product vs Service
The line between Product and Service can be subtle so it is worth discussing. They hallmark of Services is that its typically bespoke work that is commissioned by a customer, rather than a company investing to build the solution/capability themselves and then selling it to as many customers as possible.
Product/Service hybrids can also be found that blur the lines between products and services, as well as some that stack services on top of a foundational product. For example, enterprise platforms that sell subscription licenses but also provide services to customize and integrate the product for the organization.
Typically though, Products are a mass-market solution and the scale of reach helps bring down the price for everyone. With Services, the individual customer who commissioned the solution, must pay the cost to build what is requested, but the solution is their’s alone.
Conclusion
To summarize, a product is a solution to a common problem that can be generalized and sold as a commodity to many customers. It is differentiated from custom services and trade arbitrage, which are the other two foundational business model types. As a Product Manager, you will typically work on either a pure product or something that is a hybrid of product plus service or trade.