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What is a 'Product'

“Product”.

Quite an interesting word.

And yet, if you think about it, a bit difficult to define properly. In fact, fun exercise: go ask your nearest “Product Manager” or “Product Engineer” or “Product Analyst” friend the ultimate question – What is a ‘product’?

I can bet an arm and a leg, most people who have ‘Product’ in their job titles or are proud of working at a ‘Product Company’ would not be able to give you a very satisfactory answer – one that helps you definitively categorise something as a product or not. 

You would have heard many things being called ‘products’. Probably, the phone you are holding is called a ‘product’ by the company that manufactures it. Some may argue it is not a product any more, it is a commodity.

How does a product differ from a commodity?

What about a piece of software that helps you sell books on the internet? It hosts PDF files of books that you have authored. It lets one discover books, and then pay via credit card, and afterwards download the book they purchased. I am using such a service to distribute this particular book. The site where I am selling it - a ‘product’ right? Or is it a service? Isn’t this what typically SaaS (Software as a Service) means?

Is the term ‘SaaS Product’ an oxymoron?

In the world of software, where do you draw the line between products and services?

And then there are ‘solutions’. You might have heard of IT solutions providers. To what problems are they providing solutions to? Solutions, then surely, are not products. And if they aren’t services either, then what are they? Many new offerings are coming up these days which claim to “make your software for you using AI”. Typically, what an IT solutions company would promise – give the requirements, and we will build a product for you, is now being claimed that a website can do. You tell it what you need to be built, in English, and it spews out an app or a website. (We will not go into the discussion of whether such a claim is backend by real results. Because while I write this, even if that is not the case, some will argue, a few years down the line it will be a reality).

Anyhow, this upends the very definition of IT solutions, too. A tool that turns your ‘needs’ into ‘apps’ is what? A service? A product? A solution generator?

Does the answer change based on whether there are humans behind the act of turning needs into apps? What if you were told “there are no humans, but a piece of code doing a task”. But in reality it is being done by humans – a practice called (in jest or snide – that I don’t know) as “Service as a Software”. The joke is about SaaS companies that staff a back office in India or Philippines or Indonesia, and does a lot of manual operational work, but is sold as a pure software service to unsuspecting customers in the global west. The infamous story broken recently about the life and work conditions of social media content moderation firms based in south-east Asia made this mainstream discourse, but there are many such extremely human-powered services, which we might think are automated.

As a user of such a website, would you call it a product? When you get to know that things which seem to be automated or being done by AI, are being actually done by humans, moving around data in Excel sheets, generating invoices on a Word file — does that make you change your classification of it from product to service?

Let me try to conclude a few thoughts here, to build up towards a definition of ‘product’ that you and I both can eventually concur on.

  1. We do want to differentiate services from products.
    While there is a classical economic idea of products are tangible, services are intangible it will not hold up in the world of software. A better way to probably decide what is a service is where resources are rented out.

  2. Yet, we want to call many services as products.
    In this worldview we are painting, we do often call something a ‘product’ even though it clearly falls in the classical definition of a service. Someone working at Stripe or Razorpay would like to take offence at being told “you’re not making a product, you’re simply running a service”. In fact, your typical PM at a payment gateway would want to define the concept of having an outsourced ‘accounts department’ that raises invoices to your clients as a ‘service’, versus the concept of generating payment links via their software as a ‘product’. But if you have read through this whole exercise of threading the needle between a product and service, you probably are already smiling. Payment gateways definitely are services. Nevertheless for the purpose of this book, and the audience which typically will read it, that will be an uncomfortable thought. So let’s hold on to it for a while.

  3. It is not a product anymore after it becomes a commodity
    The whole idea of working on building products hinges on a certain essence of creativity, innovation and ‘crafting’. (Reminds me of the typical MBA-esque urge of the more sophisticated kind to call skills as crafts — mostly to just make the plebs feel a bit better about the work they do, but let’s not digress into too many hot takes so early). Dyson making their latest cleaning equipment will be called a product launch, and yet, you’d hardly call a company making mops or brooms as making products.

Today, no discourse is quite complete without hearing the opinion of ChatGPT on the topic as well. So let’s also make space for that. Very well knowing that I’ll get the most garbage answer, basically the lowest common denominator of all online discourse on this topic ever, I went and asked GPT to describe a product.

A product is a good or service that is created to fulfill a need or desire of a customer. This can include physical goods such as a piece of clothing or an electronic device, as well as services such as consulting or transportation. Products are typically created by a company or organization in order to generate revenue and provide value to their customers. The design, development, and marketing of a product all play important roles in its success in the marketplace.

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