Business and product: two sides of the same coin

I often find a division between the business and product areas in my mentoring and consulting sessions. On the one hand, teams are responsible for strategy, operations, market analysis, revenue generation, and customer relations. On the other hand, there are teams focused on product development, evolution, and improvement, comprising product managers, product designers, and product engineers.

This division is very common in traditional and born-digital traditional companies, as I explained in another article and summarized here:

• Traditional companies sell products and services that are not digital but are learning to use digital technologies to enhance their business.
• Born-digital traditional companies: their products or services could exist without technology, but it is incorporated from the beginning, enhancing their operations and results.

Examples:

• Netflix‘s product is video content. We don’t subscribe to Netflix because the app is amazing or because the algorithm makes good recommendations; we want to watch series and movies, so much so that the content creation and selection area is one of the most strategic in the company.
• Nubank, a Brazilian digital bank that offers services such as checking accounts and credit cards, was born digital. It uses technology to deliver a differentiated experience via online channels, eliminating the need for a physical branch network.

Beyond Traditional and Born Digital

This division also occurs in digital companies, whose main product is the software or technology they develop. In many of these companies, whether SaaS or on-premise software, the product development team often executes demands from current or potential customers brought by the sales and support teams.

Confusion in the use of the word “product”

Another recurring point is the confusion regarding the term product. While in product development teams, we have product managers, product designers, and product engineers, the business areas often state that they are the ones who define the product.

An example where I found this situation was an edtech, where the people who developed the academic content said they were responsible for the product. After all, the products sold to customers were the courses. Another example is my clients in the financial market, fintechs, who often say, rightly, that the product is credit, checking accounts, investment accounts, that is, the financial products they offer their clients.

Solution

In these situations, I usually suggest using compound terms, such as academic product and digital product in the edtech, or financial product and digital product in the fintechs. This approach was reported to bring widespread relief to my clients, helping to clarify roles and responsibilities.

In traditional and born-digital traditional companies, the product delivered is a sum of the digital product and the non-digital product. At Nubank, for example, they provide financial products (such as cards and accounts) delivered via digital products. At Netflix, on the other hand, the product is the sum of the content and the platforms that deliver the content.

Business and product: the limiting dichotomy

Technology has established itself as a central element in corporate strategies. For this reason, this dichotomy between business and product becomes a significant obstacle to growth and innovation. To overcome it, it is essential to integrate business, product and technology strategically.

How to Do This Integration?

The first step is to change how we operate, that is, our organizational culture. Culture is how a group reacts to situations, its “agreements.” When making strategic decisions, companies that place technology at the center of their strategy place product, technology, and business on the same level. This only works when the culture is guided by clear principles:

• Deliver early and often: you can’t expect to innovate and make new products by delivering code monthly or quarterly. Short cycles allow for continuous validation and reduce the risk of making big wrong bets.
• Focus on the problem: understand the problem well and only then think of possible solutions. Test different hypotheses to see which one solves the problem best and fastest.
• Results delivery: Products, apps, or features are not goals; they are means to generate real impact on business and customers. Success is measured by the results delivered, not by the delivery volume.
• Ecosystem mindset: Companies must consider the different interdependencies of their stakeholders, aligning solutions that benefit the entire ecosystem.

Beyond Culture: Steps for Strategic Integration between Business and Products

Once we begin to evolve our organizational culture with the principles above, we must direct efforts on the following topics:

1. Unified Vision: The product is the sum of the digital and non-digital products. It is impossible to imagine Nubank without technology or a financial product, just as Netflix without content or its delivery platforms. The product vision must contemplate these aspects integrated, ensuring that all decisions are based on a deep understanding of the problem to be solved.
2. Putting Technology at the Center: Technology must be treated as a catalyst for customer experience and a vehicle for differentiation, not as a mere channel for delivering products and services. This enables fast and frequent deliveries, which is essential for quickly validating hypotheses and continuously iterating.
3. Goal Alignment: shared goals strengthen collaboration. Business goals (such as growth and profitability) must be linked to product success goals (such as engagement and satisfaction). The focus on delivering results is the convergence point between these dimensions.
4. Speed ​​and Adaptability: technology allows us to quickly test hypotheses, validate offers, and adjust routes with agility, fostering continuous innovation. These short cycles are only possible with fast and frequent deliveries, one of the pillars of product culture.
5. Personalization and Scale: digital products allow us to anticipate customer needs and offer personalized experiences on a large scale, creating competitive advantages. This level of personalization is only possible with a deep understanding of the problem the product seeks to solve.
6. Multifunctional Teams: we must avoid the separation in which business defines “what” and technology only executes. Instead, it is essential to assemble multidisciplinary teams where strategy, technology, and market are discussed together. This approach allows the team to see the customer as part of a larger ecosystem, ensuring more integrated and effective solutions.

Conclusion

The separation between business and product is a remnant of a time when technology was not the heart of operations. Today, integrating them is essential to increase the chances of success for companies.

This is the secret of companies like Netflix, Nubank, and Amazon: treating business, product, and technology as interdependent dimensions of the same coin, essential for strategy and execution.

Workshops, coaching, and advisory services

I’ve been helping companies and their leaders (CPOs, heads of product, CTOs, CEOs, tech founders, and heads of digital transformation) bridge the gap between business and technology through workshops, coaching, and advisory services on product management and digital transformation.

Digital Product Management Books

Do you work with digital products? Do you want to know more about managing a digital product to increase its chances of success, solve its user’s problems, and achieve the company objectives? Check out my Digital Product Management books, where I share what I learned during my 30+ years of experience in creating and managing digital products:

• Digital transformation and product culture: How to put technology at the center of your company’s strategy
• Leading Product Development: The art and science of managing product teams
• Product Management: How to increase the chances of success of your digital product
• Startup Guide: How startups and established companies can create profitable digital products