Everything that's in the product is the product
Now that I’m a few years out from the world of product management, it’s time to reveal a secret. When I was just getting into product, a leader recommended a specific book1 saying it was something all PMs should read, especially new PMs. And dutiful do-gooder I was, I bought it for my kindle and started going through it. And then of course I never finished it.
And surprisingly, this was not for the normal reasons (being lazy, having a bit of a philosophical bugbear against both the notion of doing unpaid/free time professional development work, and the whole notion of an “always be growing” career mindset2, etc) but instead because I ragequit after two specific sections.
The book, or what I read of it, really drives into the idea of customer-first product development, where you should think of your products not as a set of features to deliver, but as a set of problems to solve and solutions that both rise out of those real customer problems, and solve them in ways that work for customers.
Which, to be clear, yeah! That’s generally3 a much better approach than the alternatives! But what burned me where the two specific examples called out within quick succession: TurboTax, and Uber.
Both are products that have a lot to recommend them, and that can work as example cases for bits and pieces of this product approach. But the way they were framed, looking exclusively at them as a customer-facing product that solved sets of user problems, and then implicitly or explicitly drawing a line to say that is the sole reason for their “success”, seemed to me naive to the point of irresponsibility. Because those two in particular are ones where it’s worth looking closer at what their “product” really is.
TurboTax
TurboTax is used in the book as an example for how to break down high-level user needs into lower-level ones. And insomuch as that’s the goal of the example, it’s actually fine. It calls out that the core need of “Help me do my taxes” is actually composed of several needs, such as “Help me prepare my return,” “Maximize my deductions”, etc. And sure! That’s reasonable and true!
However the example sets up a context of saying the problem being solved is the need to file taxes, and laying out a solution space that pits TurboTax against options like filling out paper forms or hiring a tax professional. And in that context, TurboTax is a pretty customer-friendly solution to the problem. And implicitly by its inclusion as a positive example in the book, suggesting it’s doing something right!
But that context is incomplete. For most people, the IRS has all of the same forms that you and your employer have, and so the process of tax preparation is essentially that you do your taxes with your copies of the forms, send them in to the IRS, IRS does its versions of your taxes using their copies of the forms, and compares and makes sure it’s correct, and if not then it audits you.
But if the IRS has the forms and has to check your math anyway, why doesn’t it just do the taxes itself? What if instead of you doing math for the IRS to check, the IRS does the math for you to check? What if “doing your taxes” was as simple as looking over the form the IRS sends you, and then signing if it looks good? And that would virtually guarantee no audit risk, since you’re not even the one preparing it anyway!
This is of course, what several other countries do, because yeah it seems like a great idea.
Now in this version of the context, the user problems may still be the same, but TurboTax has stiff competition as a solution on a lot of the problems that make up “taxes.” You could imagine in this case it can’t really compete on things like saving time or reducing audit risk, but it could still be valuable for things maximizing deductions.4
Given the catastrophic competitive risk that would pose to the product, it’s probably not surprising that Intuit (the parent company of TurboTax) and other tax preparation tools lobby the government aggressively to prevent the IRS from providing that pre-filled tax return solution.
And so to just look at TurboTax as an app is to cede ground to the context it created: yeah it’s a theoretically great product for preparing taxes, but only in a world where the actual best option is illegal. And TurboTax is invested in keeping that world!
If the product couldn’t succeed without the lobbying investment to keep it viable, then one can (and should!) reasonably argue that that lobbying is part of the product: TurboTax is both a lobbying apparatus to create a favorable tax preparation climate, and then an app to help users navigate that climate.
Uber
Picking too hard on the TurboTax example does feel a little mean-spirited upon reflection, because really it was just illustrative of “how do you take a big problem and make it multiple smaller problems.” But the Uber one, lol.
Uber is included as an example of a disruptive company where its successful disruption is predicated primarily on solving unmet user needs with regards to transportation, and specifically by going beyond just solving the “important” user needs of getting from A→B, and by doing it in a more “satisfying” way via the combo of its app experience and its marketplace approach5.
The book then explicitly ties that to its success, saying:
"It’s clear that Uber addressed multiple underserved needs that were in the upper left quadrant of high importance and low satisfaction. As a result, Uber has seen incredible success since starting in 2009”
But again, similar to TurboTax, what actually is Uber’s product?
One view, and the view implicitly taken in this part of the book, is that Uber is:
A mobile app for helping you find a ride where and when you need it, and pay for your ride seamlessly via your phone, and
A platform for facilitating drivers giving rides and earning money
Sure! It is!
But also, Uber has famously been a money-losing business for most of its entire operation, aggressively so at the point in time this book was written. From the S1, Uber operated at a -78%, -58%, and -26% loss in 2016/17/18. In those early years the strategy explicitly was to ignore the ballooning deficits and leverage billions in venture capital funding in order to subsidize the fact that passenger fares could only cover a portion of the total cost. This then would, in theory, translate into rapid customer adoption, which would translate into enough market power for Uber to adjust one or both profitability levers:
Raise prices for customers,
Lower wages for drivers, or
the hail-mary pass of invent self-driving cars to lower driver wages to zero
Allegedly, much of the profit improvement (such as it is) from 2016→2018 was mostly that middle lever, pushing effective driver pay to sub-minimum wage.
So we can add to the list of “what is Uber’s product”:
Billions of dollars of venture-funded customer price subsidies
And in order to get those billions, Uber needed to convince venture capitalists of a strategy that would pay back those investments handsomely. I’m not a VC, so who knows what was going on in their brains, but it seems to me like an attempt to repeat the playbooks of internet giants like Google/Facebook (where investing in user growth helps to aggressively build up demand and network effects, and by virtue of being purely internet-based there’s functionally zero marginal cost to serve additional users) or Amazon (where investing in user growth helps build up gigantic moats in things like data center operations or fulfillment services that can benefit from economies of scale to have low (though non-zero) marginal costs going forward.)
Instead Uber is a services company where every new ride has a significant marginal cost in the form of the driver, which can’t be waved away like the virtual case of Google/Facebook, nor minimized by economies of scale like Amazon (once you build a warehouse, shipping each individual package is relatively cheap, but there’s no equivalent to that for independently contracted drivers.)
And so, this is at least inspired by a line I’m stealing from someone but I swear to god can’t remember who6, another key part of Uber’s product is:
Creating pitch decks that can convince investors you’re a tech company
Again, it’s not that the things pointed out in the book are wrong: Uber, when thought of as a customer-facing app, is correctly positioned as tackling dissatisfactions with the traditional taxi market. But if all Uber did was build a better app, it would not be Uber. And to argue otherwise is to say the billions in price subsidies were a total waste, and Uber would’ve been fine without them! So either Uber necessarily includes the pricing and subsidy element, or the VCs were dumb I guess!
Is part of this just me justifying why I was too salty to read a book once? Yes. But I do think I’m glad these examples have been rolling in my head for my (brief) product career, and showed up early in it, because they are illustrative of the fact that so many things impact what a product is and how it can succeed or fail.
The framing of the product as just the things on the screen can be limiting even in the best cases. Depending on how a product organization is designed and what roles and responsibilities fall to which people, you can have situations where there’s a key mismatch between what’s being worked on and what might move the needle; if you staff a team to think of the product as a specific page, then you can have a lot of investment in how to best lay out a screen or place a button, and that can end up doing nothing because the product is priced too high or no one wants the service itself.
And in the worst cases, it provides cover to companies like TurboTax and Uber, which can leverage that framing to ignore the elements that are destructive, and that involve both creating the problems and the solution to “fix” them.
So to paraphrase a podcaster, everything that’s in the product is the product!
I’m not gonna say what book it is 🤐
A side note: one of my forever, fundamental tensions with the product manager role has been being someone skeptical of growth as an inherent good or even neutral baseline. I don’t think that’s something one should accept at face value! And that’s at odds with how almost all product roles are constructed, where growth is the inherent goal! Alas!
I say generally because, if we’re doing all our medium-spice takes in post, I do think some of the narrative around product development is misguided in how it exclusively focuses on customer problems as the framework to innovation, rather than having that as one tool in addition to other methodologies, particularly research-based ones (aka the “see if we can push a technical frontier and then productize it later” approach.) It probably is the best approach for a startup, since the research-based approach inherently requires a lot of capital and patience, so I don’t think it’s wrong, but I do think saying anything like it’s the only way to innovate is incomplete.
Though at that point likely feel squeezed on the high end by dedicated tax professionals that can likely provide better guidance than a software suite.
Which, very pedantic and annoying, is not what “disruption” means in the Clayton Christensen sense. Uber is neither providing a good-enough low-end solution with a disruptive cost structure (low-end disruption) nor, for consumers at least, serving a new market that wasn’t ever able to get a taxi before (new market disruption.) Maaaybe it’s new-market disruption on the driver front, but on the consumer front it’s not disruptive, it’s just leveraging technology (and regulatory arbitrage/price subsidies) for a service that’s strictly better and more convenient than taxis.
Also, maybe it was about WeWork instead of Uber