What is a digital product company?

by Konstantin Weiss on November 5, 2018

Since I've been talking a lot about the digital product lately, here's my definition of what a digital #product is in a #service company (aka the product), versus a people-lead service (aka the operations or OPs).

Definitions

First, let me postulate some definitions here. (*1)

Product (def):
A digital product is a system where technology delivers direct #value to customers, without any human involved in the process. Value is what customers want and are willing to pay for (directly or indirectly).

OPs company (def):
A human-operations-lead company is a company where people deliver the value to customers. They may use digital tools (IT tools) in order to do so. The core people are the operations people.

Product company (def):
A digital product company is a company who's primary service proposition is delivered through a digital product. It needs people too, of course. Product Developers (IT) develops the technology, while operations teams train the machine, support with special cases and anything the machine can't handle just yet.

The role of IT

IT in a OPs-lead company:
Since OPs-people create value, they need IT for their support. IT is a support. It provides tools for OPs teams. OPs create the requirements; they demand what they need to do the operations better, easier, faster, more efficient. IT team is a cost center.

IT in a product-lead company:
Since the digital product is the value-generator, and the IT builds this product, the IT is at the core of the company. Hence, the product development team is in lead. IT needs OPs teams' wisdom of subject matter and customers' needs, as well as to take care of the exceptional cases.

Scaling

Scaling in an OPs-lead company:
Hire more people. Then dividing up teams that get too big. Then deal with handovers from one team to another. Then hire middle management to lead teams. Then deal with overhead.

Scaling in a product-lead company:
Connect more servers. Balance hiring of more developers and OPs people to do support and technology scaling issues.

From OPs to Product

If you want to take a company from OPs-lead to product-lead, you will have to change the company's #culture. And according to Stuart Brand's #pacelayering (read more), to change culture is to change the slowest layer. It one of the hardest, and most dangerous endeavours of all. In other words - an exciting task!

(*1): My definitions may collide with the definitions you know or learnt. If so, please let me know - I'm rather new to the topic.





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