The reasons why projects are not products

There are great projects. You can go to the moon. You can build a house. You can write a novel. Completing a project does not mean that there is a product.

What is the difference between a project and a product?

So what makes a product different from a project? Lots of organizations claim to be product-focused. But they typically are selling projects. We will build you what you want. This is a pull-based model. The client is requesting delivery, and that is a boolean result. The vendor will manage to scope/time/budget. When they are done, they are done. The client's business results are entirely for them to manage. The vendor steps away and whatever happens, happens.

Products are an evolving, continuous investment. Building a product means that there is an ongoing commitment to continuously improve the deliverable, seek a business result, and explore new opportunities. For an external firm to truly be committed to product development for their clients, they must have a vested interest in the business outcome - not just the deliverable.

Projects start and end - products are forever.

This means that there is consistent, open-ended risk to product development. There is a daily risk of failure with endless upside on success. To engage in product development, you need to accept that there is no definition of done. There is no acceptance process outside of the market.

Products mean that risk is open-ended

A product is the packaging of assets to meet the need of a market at a price point where value is being maximized for the producer and the consumer. This is not finite. Telecom companies consistently reconfigure their offerings to address new markets. They bundle, unbundle, discount, and reposition each offering to meet the needs of a particular market. Bakeries can make cakes but they can also make muffins and donuts and if they want - pot pies and quiche. Product teams need to consistently evaluate how they can maximize the value gathered from existing markets and how to expand into additional markets.

Products are never done. If products were done, we wouldn't have an iPhone 11 or the Google Pixel 4. Product teams need to continuously evaluate how they are delivering to the market and where their differentiation leads to price advantages. Working on a product means endless refinement and discovery of markets, and repackaging assets to fit a price point where those markets will buy.

This means that there is consistent, open-ended risk to product development. There is a daily risk of failure with endless upside on success. To engage in product development, you need to accept that there is no definition of done. There is no acceptance process outside of the market.

Projects are about boundaries

On the contrary, projects are defined by the fact that their risk can be identified, managed, and mitigated. A project has a defined deliverable, a budget, and a timeline. Products may have milestones, but these milestones are an endless march towards continuous improvement. Projects have milestones that are mile markers in a marathon - they are a percentage complete or some level of estimating proximity to done.

Projects are the meat of outsourcing and consulting because they have boundaries that protect them from risk. A consultancy can define what they are willing to do and what they are to be paid for. They will write contracts that define these boundaries, and good ones will be sure to memorialize where their responsibilities start and end as to not get involved in things beyond their scope. My meat and potatoes has been technology consulting. We will build you a mobile app. But we will not ensure you get downloads (unless we get paid), we will not ensure you get in-app purchases (unless we get paid), we will not ensure that anyone loves your app besides you (and then we REALLY need to get paid!).

Outsourcing companies do not build products. They build assets for their clients to productize at their own risk.

Build your own products and use projects to be cost effective

Once you understand that a product is the amortization of an asset, and that projects build assets - then we can effectively begin to place our bets.

If an external firm wants to build your product - as the buyer you need to determine what assets you need to have built. A house is either constructed or it is not. Bread is either baked or it is raw. Create projects that build assets that you can add to a portfolio.

Products are the commercialization of assets. Once you have a software platform or a technology, the goal of a product team is to find the ways to position, package, and price the asset so that it can generate revenue. Project teams do not have any alignment with revenue - they deliver what they are asked to deliver. If you are selling product development services - you must be prepared to share the risk in the market of how the asset that is being sold is adopted by the consumer.

Ryan Norris Ryan Norris

Ryan is the former Chief Product Officer at Medullan, CTO at Be the Partner, and CTO and General Manager at Vitals. He currently works as a fractional CTO offering strategy as a service to growth-stage companies in health care and education.

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