Understanding Products

Products are all around us. You likely have a notional sense of what a product is — but that definition varies widely. For this course, we will use a precise definition: a product is the carrier of value that customers pay for directly. Not the app, not the hardware, not the individual features — the value itself.

This distinction matters because the industry often uses the term "product" differently internally and externally. Understanding this difference is critical to your actual job as a product manager.

The product is the value, not the delivery mechanism

Take Instagram as an example. Instagram is the product: users pay for it with their attention by engaging with the image feed, filters, and hashtag search. These are features within Instagram, but the product is the whole experience that delivers value to the user.

Inside Instagram, the image feed team, the filters team, and the search team each have their own product manager. Each feature is called a "product" internally because it has become complex and valuable enough to need dedicated ownership.

This is not a contradiction; it is a consequence of scale. Early Instagram had one product manager who managed the entire app. As the product grew, its subsystems became individually valuable and complex. Each subsystem became a product internally.

The value of the whole product is the sum total of value delivered by its subsystems — plus the value of how they are assembled.

This is the entire product management profession in one line. If you cannot answer what the core value is that the customer pays for, you are not ready to build or ship.

Example: Instagram’s subsystems as products

This dual perspective is common in modern digital products. The end user sees one product; the company manages many products internally.

Why this confusion exists

Modern products have become too complex for one person to manage the entire value delivery. Founders once wore multiple hats, including product management. Now, an army of product managers manages subsystems.

For example, Instagram started with a single PM. As it scaled, the image feed, filters, and hashtag search became individually valuable subsystems, each needing dedicated product managers.

This leads to the industry practice where features are called products internally. But for the customer, these are features inside a single product.

Product as the sum of subsystems

The product is the sum total of value delivered by its subsystems plus the value of how they are combined. Each subsystem delivers value to other subsystems, like components in a factory assembly line.

You can visualize features feeding into each other internally, resulting in the final product value delivered to the user.

For the paying user, the product is what provides value directly.

This framing is essential to understand your scope and responsibilities as a product manager.

Product is the core value you pay for

It is essential to keep this distinction clear. The product is the core value that you pay for, delivered via an app, hardware, or a combination.

For example, an independent consultant’s expertise is the product. The documents or verbal advice they deliver are the delivery mechanisms.

Similarly, a doctor’s advice is the product; prescriptions and instructions are the delivery.

Your actual job is to focus on the value the customer is paying for, not just the delivery mechanism.

The marketing perspective: three levels of product

From marketing, products are framed in three layers, as defined by Philip Kotler:

This frame helps marketers and product managers think about investment priorities at different stages.

A washing machine’s core product is the convenience of clean clothes without effort. The actual product is the machine itself. The augmented product is the warranty and installation.

The modern view: product as a customer engagement platform

The classical definition of product as a sum of features is incomplete. A product should be viewed as a platform for customer engagement that delivers value worth paying for.

If your engagement platform is well built, customers keep coming back.

Example: iPhone home button

As the product manager responsible for the iPhone home button, you build features that enable ongoing engagement with the device.

Example: office chair

Consider a non-tech product like an office chair. The core value is a comfortable seating experience.

But viewed through a modern lens, the chair can become a platform for engagement if it includes features like an indicator reminding users to stand and move to stay fit.

The exact implementation depends on many factors, but it illustrates the engagement perspective.

This engagement lens applies equally to software, hardware, and services.

Connecting the dots: product management implications

Understanding product as the carrier of value and as an engagement platform clarifies the product manager’s role:

• Focus on the core value customers pay for, not just features or delivery mechanisms.
• Recognize when subsystems become products requiring dedicated ownership.
• Design for sustained customer engagement, not just one-time feature delivery.
• Balance the whole product experience, including augmented elements like support.

This clarity helps you prioritize your efforts and communicate effectively with stakeholders.

Test yourself: Distinguishing product from feature

Where to go next

• If you want to understand what product management actually is: What Is Product Management
• If you want to learn how to think about product opportunities: Assessing Product Opportunities
• If you want to develop user research skills: User Research Methods
• If you want to learn how to translate product strategy into execution: Product Vision and Strategy